Tag Archives: defendants

An Overlooked Attorney Fee Statute in Oregon

Companies doing business in Oregon should be aware of ORS 20.080, which can provide for attorney fees in cases seeking damages of $10,000 or less.  That statute provides that prevailing plaintiffs may be awarded attorney fees. It is important to be aware that, in ORS 20.080 cases seeking compensatory damages of $10,000 or less, the attorney fees can quickly approach or outstrip the compensatory damages.

This article will explore three key questions that clients generally have when defending against an ORS 20.080 case: 1) How does the plaintiff receive attorney fees?; 2) Do courts require plaintiffs to strictly comply with ORS 20.080?; and 3) How can defendants escape attorney fees in ORS 20.080 cases?

1. How Does the Plaintiff Receive Attorney Fees Under ORS 20.080?

Generally, a plaintiff has a claim for attorney fees under ORS 20.080 if the plaintiff: gives the defendant notice of a claim for $10,000 or less at least 30 days before the plaintiff files a lawsuit; provides enough documentation for the defendant to generally value the claim; and was awarded more at trial or arbitration than the defendant offered before the plaintiff filed the lawsuit. 

ORS 20.080 provides that:

“(1) In any action for damages for an injury or wrong to the person or property, or both, of another where the amount pleaded is $10,000 or less, and the plaintiff prevails in the action, there shall be taxed and allowed to the plaintiff, at trial and on appeal, a reasonable amount to be fixed by the court as attorney fees for the prosecution of the action, if the court finds that written demand for the payment of such claim was made on the defendant, and on the defendant's insurer, if known to the plaintiff, not less than 30 days before the commencement of the action or the filing of a formal complaint under ORS 46.465, or not more than 30 days after the transfer of the action under ORS 46.461. However, no attorney fees shall be allowed to the plaintiff if the court finds that the defendant tendered to the plaintiff, prior to the commencement of the action or the filing of a formal complaint under ORS 46.465, or not more than 30 days after the transfer of the action under ORS 46.461, an amount not less than the damages awarded to the plaintiff.

“(2) If the defendant pleads a counterclaim, not to exceed $10,000, and the defendant prevails in the action, there shall be taxed and allowed to the defendant, at trial and on appeal, a reasonable amount to be fixed by the court as attorney fees for the prosecution of the counterclaim.

“(3) A written demand for the payment of damages under this section must include the following information, if the information is in the plaintiff's possession or reasonably available to the plaintiff at the time the demand is made:

“(a) In an action for an injury or wrong to a person, a copy of medical records and bills for medical treatment adequate to reasonably inform the person receiving the written demand of the nature and scope of the injury claimed; or

“(b) In an action for damage to property, documentation of the repair of the property, a written estimate for the repair of the property or a written estimate of the difference in the value of the property before the damage and the value of the property after the damage.

“(4) If after making a demand under this section, and before commencing an action, a plaintiff acquires any additional information described in subsection (3) of this section that was not provided with the demand, the plaintiff must provide that information to the defendant, and to the defendant's insurer, if known to the plaintiff, as soon as possible after the information becomes available to the plaintiff.

“(5) A plaintiff may not recover attorney fees under this section if the plaintiff does not comply with the requirements of subsections (3) and (4) of this section.

“(6) The provisions of this section do not apply to any action based on contract.”

2. Do Courts Require Plaintiffs to Strictly Comply With ORS 20.080?

The short answer is no.  Although ORS 20.080 requires that plaintiffs make their demands in writing to the defendant AND the defendant’s insurer, if known, courts generally do not require plaintiffs to strictly comply with this portion of the statute.  Under Schwartzkopf v. Shannon the Cannon’s Window & Other Works, Inc., 166 Or App 466, 471, 998 P2d 244 (2000), a person may act as an agent for the defendant (and therefore may be considered “the defendant”) for purposes of ORS 20.080 if that person has authority to defend or settle a claim for the defendant.  Under Schwartzkopf, trial court judges have allowed plaintiff’s lawyers to provide notice to the defendant’s insurer without providing notice to the defendant, even though the plain language of ORS 20.080 requires that the plaintiff provide notice to both.  In these kinds of cases, the insurer has usually already engaged in some kind of negotiations for the defendant or has gathered facts for and on behalf of the defendant, giving the plaintiff evidence of agency.  Therefore, under ORS 20.080 and Schwartzkopf, if the insurer is the only person who receives a demand, practically and generally speaking, the insurer should treat that demand as sufficient notice as long as it was made at least 30 days before plaintiff filed the lawsuit.

Courts do generally require plaintiffs to send any additional written information that the demand would include, such as additional medical bills, to the defendant (or the defendant’s insurer) as soon as possible if the plaintiff obtains such information after the plaintiff has made her written 20.080 demand and before she has filed the lawsuit.

However, in the initial written demand, courts generally give plaintiffs leeway and, as long as the plaintiff has provided the defendant with enough documentation to generally value the claim, the plaintiff generally does not have to strictly comply with the statute and provide all of the documentation “reasonably available at to the plaintiff at the time.”  For example, if you are provided with an ORS 20.080 notice from a plaintiff’s lawyer that includes most of the medical records and bills but does not include copies of the x-rays, a trial judge will generally hold that the plaintiff’s lawyer substantially complied with ORS 20.080 and that the claim may proceed.

3. How Can Defendants Escape Attorney Fees in ORS 20.080 Cases?

The only way the defendant can escape attorney fees in ORS 20.080 cases is if the defendant makes an offer to the plaintiff before the lawsuit is filed that is more than the damages ultimately awarded to the plaintiff. In other words, if the plaintiff recovers $5,000, but the defendant offered $3,000 before the lawsuit was filed, the plaintiff gets her attorney fees.  If the plaintiff recovers $5,000, but the defendant offered $8,000 before the lawsuit was filed, the plaintiff does not receive her attorney fees.

If the lawsuit is filed and the defendant has a counterclaim of up to $10,000 and the defendant prevails in the lawsuit, the defendant gets its reasonable attorney fees.  What is “reasonable” is decided by the court.

In Oregon, it is important to notify your attorney right away after receipt of an ORS 20.080 letter to ensure that you strategize appropriately.  Although it may seem unpalatable, generally the best strategy is for defendant to make its best offer first, to minimize the risk of an award in excess of the offer and exposure to attorney fees. Many times, lawyers don’t receive cases until the lawsuit is filed and, in ORS 20.080 cases, that is usually too late; the plaintiff’s attorney fee claim is already in play.

He Who Sits On His Rights Loses Them

Never Ignore the Statute of Limitations
The Wisconsin Court of Appeal was called upon to resolve a dispute over the application of a statute of limitations in a suit against American Family Mutual Insurance Company, Gage Creighbaum, Sherry Lagios, and Dimitrios Lagios (the “defendants”) who appealed an order denying their motion to dismiss. The trial court held that the defendants waived their statute of limitations defense by not raising it prior to filing their notice of appearance and serving their request for admissions in response to Maas’ amended complaint. In Justin M. Maas v. American Family Mutual Insurance Company, Gage M., No. 2011AP1661 (Wis.App. 08/01/2012) the Wisconsin Court of Appeal resolved the issue.

Background
On August 20, 2007, Creighbaum crashed his vehicle into a vehicle operated by Maas, resulting in personal injury to Maas. On August 18, 2010, two days before the end of the three-year statute of limitations period, Maas filed a summons and complaint against the defendants related to his injuries. Maas failed to serve any of the defendants with the summons and complaint.

Maas filed an amended summons and complaint on February 15, 2011, which he served on the defendants. The amended summons and complaint contained the same cause of action and named the same defendants as the original summons and complaint. The defendants filed an answer to Maas’ amended summons and complaint alleging Maas failed to obtain proper service of process on Creighbaum and the Lagioses and the court therefore lacked personal jurisdiction over them and alleged that Maas’ claim was barred by the statute of limitations.

The trial court denied the motion, concluding that the defendants’ failure to raise their jurisdictional objection prior to filing the notice of appearance and serving the request for admissions constituted a waiver of their statute of limitations objection. The court further held that Maas’ action was properly commenced and that the amended complaint related back to the original complaint.

Analysis
On appeal, the defendants argued that even though Maas filed his original summons and complaint two days prior to the running of the three-year statute of limitations period, his claim is barred because he failed to serve any of the defendants with the summons and complaint within ninety days of the filing as required by Wisconsin statutes.

The Wisconsin Court of Appeal concluded that the statutes are clear. An action to recover damages for personal injuries shall be commenced within 3 years or be barred. An action is commenced as to any defendant when a summons and a complaint naming the person as defendant are filed with the court, provided service of an authenticated copy of the summons and of the complaint is made upon the defendant within 90 days after filing. Thus, if service is not made within ninety days of the filing of the summons and complaint, the action is not commenced. If not commenced within the three-year statute of limitations period, the action is barred.

It was undisputed that Maas failed to serve any of the defendants with the original summons and complaint within ninety days of filing. Wisconsin procedure requires, therefore, that the court conclude his action was never commenced prior to the running of the limitation period and is therefore barred.

Maas’ failure to serve the defendants with the original summons and complaint within ninety days was a fundamental defect which deprived the trial court of personal jurisdiction over the defendants and rendered the original pleading a legal nullity. The trial court conclusion that the defendants waived their jurisdictional objection by failing to raise the objection when they filed their notice of appearance and served their requests for admissions in response to Maas’ amended pleading fails since there was nothing for the defendants to waive.

Conclusion
Maas’ failure to serve the defendants with the original summons and complaint within ninety days resulted in the three-year statute of limitations period expiring without an action having been commenced. The failure was a fundamental defect which rendered the pleading a legal nullity and could not be remedied by the subsequent filing of an amended pleading after the statute of limitations period expired.

Statutes of limitation were designed to protect people against stale claims because, if suit is not filed promptly, memories fade and witnesses can move away from the jurisdiction. Parties and lawyers that wait until the last moment to sue are taking a chance of losing those rights because of their sloth. Mr. Maas is not without a remedy, however, because his lawyer’s failure to serve the defendants within the 90 days allowed by statute might allow for a case against the lawyer for failing to act within the custom and practice of lawyers in his community.

Although the waiver argument was original and successful in the trial court it did not stand up to scrutiny since no one can waive a nullity nor can a cause of action be created by waiver.