Background
Charles Ringo sued Colquhoun Design Studio, LLC, and Jennifer Cohoon for alleged nonperformance of a contract. Defendants asserted two counterclaims, including a breach-of-contract counterclaim alleging that Ringo failed to pay amounts owed under the agreement. They did not request attorney fees in that counterclaim or allege that the contract lacked an attorney-fee provision.
The case proceeded to arbitration, where the arbitrator ruled for defendants and awarded them attorney fees under ORS 20.082. Ringo filed exceptions to the fee award, but the trial court entered judgment for defendants and awarded the fees specified in the arbitration award. Ringo appealed only the denial of his exceptions and the resulting attorney-fee award.
The Court’s Holding
The Oregon Court of Appeals held that defendants could not recover attorney fees under ORS 20.082 because they failed to satisfy the mandatory pleading requirements of ORCP 68 C(2)(a). When a statute supplies the right to fees, the party seeking them must plead either that statutory basis or all facts necessary to meet the statute’s criteria. For ORS 20.082, those facts include the absence of an attorney-fee provision in the contract.
Defendants neither requested fees in their contract counterclaim nor alleged that the contract lacked a fee provision. The court rejected the suggestion that arbitration excused that omission: Although an arbitrator may award fees where applicable law permits, the mandatory pleading rule still determines whether fees are legally available. The court therefore reversed the portion of the judgment awarding attorney fees and otherwise affirmed.
Key Takeaways
- A party seeking statutory attorney fees must plead the statutory basis or every fact necessary to satisfy the statute’s criteria.
- A claim under ORS 20.082 must allege, among other things, that the contract contains no attorney-fee provision.
- Referral to arbitration does not eliminate ORCP 68 C(2)(a)’s mandatory pleading requirements.
Why It Matters
The decision underscores that a prevailing party may lose an otherwise potentially available fee award by omitting essential allegations from its pleadings. Arbitrators retain procedural discretion when determining fees, but they cannot award fees that applicable substantive and pleading rules prohibit.
The opinion is a nonprecedential memorandum opinion under ORAP 10.30 and may be cited only as that rule permits.