Seneca Sustainable Energy LLC III v. Dept. of Rev.

22 	April 6, 2018 	No. 3
IN THE OREGON TAX COURT
REGULAR DIVISION
SENECA SUSTAINABLE ENERGY, LLC,
Plaintiff,
v.
LANE COUNTY
and Department of Revenue,
Defendants.
(TC 5193; TC 5208)
Following litigation of the merits of this case, Plaintiff (taxpayer) submitted
a request for attorney fees, reasonable expenses, and costs and disbursements.
Defendant Department of Revenue (the department) objected to attorney fees,
but not to costs and disbursements. Pursuant to ORS 305.490(2), ORS 305.490
(4)(a)(B), ORS 305.490(4)(a)(A), and using the statutory factors listed in ORS
20.075, the court ruled that taxpayer’s requests for costs and disbursements and
reasonable expenses were granted; taxpayer’s request for attorney fees was denied
with respect to any fees related to defending against the department’s motion to
dismiss; taxpayer’s request for supplemental attorney fees was granted, subject
to an opportunity for the department to object to the amount of supplemental fees
requested. Taxpayer’s request for attorney fees was otherwise granted.
Submitted on Plaintiff’s Request for Attorney Fees,
Reasonable Expenses, and Costs and Disbursements.
Cynthia M. Fraser, Garvey Schubert Barer PC, Portland,
filed the request for Plaintiff (taxpayer).
Marilyn J. Harbur, Senior Assistant Attorney General,
Department 	of 	Justice, 	Salem, 	filed 	the 	response 	for
Defendant Department of Revenue (the department).
Decision rendered April 6, 2018.
HENRY C. BREITHAUPT, Senior Judge.
I. 	INTRODUCTION
This matter is before the court on the request for
attorney fees, reasonable expenses, and costs and disburse-
ments by Plaintiff Seneca Sustainable Energy, LLC (tax-
payer). Defendant Department of Revenue (the department)
has objected to taxpayer’s request for fees, but not taxpayer’s
reasonable expenses or costs and disbursements. Defendant
Lane County (the county) did not file a response. Taxpayer

Cite as 23 OTR 22 (2018) 	23
has responded to those objections, to which the department
has replied.
II. 	FACTS
This case concerned the valuation of a woody bio-
mass cogeneration facility for tax year 2012-13 and 2013-14,
which facility was subject to an enterprise zone exemption
from property tax under ORS 285C.175.1
The department was responsible for appraising the
property under ORS 306.126. The department appraised
the property at a real market value (RMV) of $62,065,350
for tax year 2012-13, and approximately $58,500,000 for tax
year 2013-14.2 In accordance with ORS 285C.175(7)(a), the
assessed value (AV) of the property was placed on the roll for
each tax year as a notation as if it were not exempt.
Taxpayer appealed the department’s appraisal of
the subject property for each tax year to the court.
Even though the facility was largely subject to
an exemption from property tax (except at least as to the
land value), taxpayer appealed the valuation of the facility.
Taxpayer did so in part because it owed certain public con-
tribution payments to the City of Eugene (the city) on the
basis of the RMV of the property in each year.
As part of taxpayer’s appeal to the court, taxpayer
filed claims against the city to require the city to recalcu-
late the public contribution payments in accordance with a
hopeful reduction of RMV. On the city’s motion, the court
dismissed the city as a party because it concluded it did not
have jurisdiction over those claims.
The department also moved to dismiss taxpayer’s
valuation claims on the basis that taxpayer is not aggrieved
1 Unless otherwise noted, the court’s references to the Oregon Revised
Statutes (ORS) are to 2011.
2 In taxpayer’s request for attorney fees, it stated the roll value for tax
year 2013-14 was $55,968,536. The department contends the roll value was
$58,554,330, which is the same value included in taxpayer’s post-trial briefing.
The court’s summation of the RMV listed in the property tax statements attached
to taxpayer’s complaint for tax year 2013-14, which attachments could have been
more clear, results in a total of $58,544,330. Ultimately, these discrepancies do
not affect the result in this order.

24 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
by a notational RMV determination, which would only
result in a tax liability to taxpayer if it was disqualified
from exemption. The court denied the department’s motion
to dismiss because there is no statutory basis for a taxpayer
to “wait and see” whether it needs to challenge the RMV
for a particular tax year. Seneca Sustainable Energy v. Lane
County Assessor, 21 OTR 366, 370 (2014).
The department requested the court enter a limited
judgment on the jurisdictional issue. Taxpayer argued that
a limited judgment on the jurisdictional issue would not be
appropriate where the denial of the motion to dismiss did
not resolve one or more claims. The court determined that
the case should proceed on the merits of taxpayer’s valu-
ation challenge to remove any concern over the ability to
appeal the jurisdictional issue.
As the case proceeded to trial, taxpayer moved in
limine to disqualify the department from offering valua-
tion evidence for tax year 2013-14 for failure to follow the
exchange requirements in Tax Court Rule (TCR) 56 B(2) - (4). 3
The court granted taxpayer’s motion.
After trial, the court determined that taxpayer’s
appraisal was far more persuasive than the department’s
appraisal, and ordered that the rolls be changed to reflect
the values demonstrated by taxpayer.
The court found that the department’s appraiser
improperly took into account the intangible value of a Power
Sales Agreement (PSA), which PSA allowed taxpayer to sell
electricity at rates higher than the market rate. The court
also found that the department’s appraiser improperly cal-
culated the capitalization rate by taking into account the
cost of capital of an identified group of purchasers, and not
the market-perceived risk of the property.
After the court found in favor of taxpayer on the
valuation issue, taxpayer filed its request for attorney fees,
reasonable expenses, and costs and disbursements. 4
3 The department had prepared and exchanged an appraisal for tax year
2012-13.
4 Both parties appealed from the court’s judgment in this matter. Thereafter,
taxpayer dismissed its appeal. The department is still pursuing its appeal to the
Supreme Court.

Cite as 23 OTR 22 (2018) 	25
III. 	ISSUES
There 	are 	three 	issues 	relating 	to 	taxpayer’s
request. The first issue is whether taxpayer is entitled to
the costs and disbursements it requested. The second issue
is whether taxpayer is entitled to the reasonable expenses it
requested. The third issue is whether taxpayer is entitled to
the attorney fees it requested.
IV. 	ANALYSIS
Taxpayer makes three separate requests. The first
request is for costs and disbursements under ORS 305.490(2).
The second request is for reasonable expenses under ORS
305.490(4)(a)(B). The third request is for attorney fees under
ORS 305.490(4)(a)(A). The court will address these requests
in turn.
A. 	Costs and Disbursements
The court first considers taxpayer’s request for
costs and disbursements. As explained in TCR 68, costs
and disbursements are “reasonable and necessary expenses
incurred in the prosecution or defense of an action other
than for legal services.” TCR 68 A(2). The court is autho-
rized to award costs and disbursements by ORS 305.490(2).
That statute provides, in relevant part:
“The party entitled to costs and disbursements on such
appeal [to this court] shall recover from the opponent of
the party the amount so paid upon order of the court, as in
equity suits in the circuit court.”
ORS 305.490(2).
TCR 68 B provides that “costs and disbursements
will be allowed to the prevailing party unless these rules or
any other rule or statute direct that in the particular case
costs and disbursements will not be allowed to the prevail-
ing party or will be allowed to some other party, or unless
the court otherwise directs.”
The department does not appear to object to tax-
payer’s request for approximately $3,000 for costs and
disbursements. 5 The record shows that taxpayer is the
5 The department concluded its response by asking the court to “deny an
award of attorney fees and expenses because it is not justified under the factors

26 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
prevailing party, having prevailed in receiving a reduction
in RMV and AV as shown on the roll as a notation for both
tax years at issue.
The amounts requested by taxpayer are for cop-
ies, faxes, filing fees, in-house photocopies, in-house scans,
and outside document production services. Absent objection
from the department, the court is not inclined to find that
the types or total amount of expenses requested by taxpayer
are either unreasonable or unnecessary.
The court grants taxpayer’s request for costs and
disbursements.
B. 	Reasonable Expenses
The court now considers taxpayer’s request for rea-
sonable expenses under ORS 305.490(4)(a)(B). That statute
provides that the court may award to the prevailing party
“[r]easonable 	expenses 	as 	determined 	by 	the 	court.
Expenses include fees of experts incurred by the individual
taxpayer in preparing for and conducting the proceeding
before the tax court judge and the prior proceeding in the
matter, if any, before the magistrate.”
ORS 305.490(4)(a)(B).
Taxpayer requests approximately $80,000 as rea-
sonable expenses for three items. The first item is prepar-
ing the appraisal report. The second item is expert witness
fees for Tim Landolt, taxpayer’s appraiser, for his testimony
during trial. The third item is a “feasibility study prepared
by Bill Carlson and his trial expert time.”
As with taxpayer’s request for costs and disburse-
ments, the department does not appear to object to taxpay-
er’s request for reasonable expenses. 6
in ORS 20.075.” Even reading that statement broadly so as to encompass an
objection to taxpayer’s request for costs and disbursements, the department’s
arguments under ORS 20.075 only apply to a request for an award of attorney
fees. The department’s response brief only addressed the attorney fee factors
under ORS 20.075, and therefore did not object to taxpayer’s request for costs
and disbursements in any material way.
6 Under the same reasoning as discussed in note 5, the court concludes the
department did not object to taxpayer’s requested reasonable expenses in any
material way.

Cite as 23 OTR 22 (2018) 	27
The record shows that trial lasted eight days.7 The
court has no difficulty concluding that the expenses for the
appraisal report and the testimony of taxpayer’s appraiser,
Tim Landolt, were reasonably incurred. With respect to the
feasibility study prepared by and testimony of Bill Carlson,
taxpayer provided no explanation as to the reasonableness
of the expenses requested.
Even though the department has not objected to tax-
payer’s request for reasonable expenses, ORS 305.490(4)(a)(B)
requires the court to determine which expenses are “reason-
able expenses.” In that endeavor, the court has reviewed the
briefing of the parties relating to the substantive case.
It appears to the court that Carlson’s work was
important to taxpayer’s case. His testimony is materially
cited in taxpayer’s briefing, and taxpayer’s appraiser specifi-
cally relied upon Carlson’s feasibility study in preparing the
appraisal report. The court concludes that the expenses for
the feasibility study and Carlson’s testimony were reason-
ably incurred.
The court grants taxpayer’s request for reasonable
expenses.
C. 	Attorney Fees
The court finally considers taxpayer’s request for
attorney fees. The court is authorized to award attorney fees
to the prevailing party by ORS 305.490(4)(a). That statute
provides:
“If, in any proceeding before the tax court judge involv-
ing ad valorem property taxation, exemptions, special
assessments or omitted property, the court finds in favor of
the taxpayer, the court may allow the taxpayer, in addition
to costs and disbursements, the following:
“(A) 	Reasonable attorney fees for the proceeding under
this subsection and for the prior proceeding in the matter,
if any, before the magistrate; and
“(B) 	Reasonable expenses as determined by the court.
Expenses include fees of experts incurred by the individual
taxpayer in preparing for and conducting the proceeding
7 Trial was held April 6 to 15, 2015.

28 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
before the tax court judge and the prior proceeding in the
matter, if any, before the magistrate.”
ORS 305.490(4)(a).
As discussed in the analysis concerning costs and
disbursements, taxpayer is the prevailing party in this case.
Accordingly, the court is authorized to award attorney fees.
However, the court must still evaluate whether an
award of attorney fees is appropriate. In doing so, the court
first considers the factors contained in ORS 20.075(1) to
determine whether it will award any attorney fees. Preble
v. Dept. of Rev., 331 Or 599, 602, 19 P3d 335 (2001). Then,
the court considers the factors contained in ORS 20.075(2) to
determine the amount of fees that will be awarded.
1. 	Award of Fees
The factors addressing whether to award of attor-
ney fees are addressed below.
a. 	Factor A
The first factor the court considers is “[t]he conduct
of the parties in the transactions or occurrences that gave
rise to the litigation, including any conduct of a party that
was reckless, willful, malicious, in bad faith or illegal.” ORS
20.075(1)(a).
This factor addresses the prelitigation conduct of
the parties. The only prelitigation conduct of the department
relied upon by taxpayer as a potential basis for attorney fees
is that of the department’s unwillingness to adjust its valua-
tion position after receiving a tour of taxpayer’s facility and
a presentation on the non-value added costs of the facility.
The indication is that there were certain pollution-control
costs associated with the facility that did not add value to
the property.
Apparently, Todd Payne, Seneca’s plant manager,
had “used the same method and manner in reporting the
non-value costs of the co-generation project as he had two
previous projects for the Seneca family companies, both of
which had been accepted by the Department of Revenue.”

Cite as 23 OTR 22 (2018) 	29
To the extent that it matters, the court relied on
the income approach to value in its opinion, and made no
finding on whether taxpayer’s treatment of non-value added
costs was correct. 8 Regardless, assuming that the depart-
ment has in fact accepted the same type of accounting twice
before, that fact does not weigh in favor of attorney fees
under this factor.
Taxpayer has not provided enough information for
the court to conclude that the department’s apparent change
of opinion regarding non-value added costs was the result
of recklessness, willfulness, maliciousness, or bad faith, or
that it was illegal. The department’s change of opinion could
have just as likely been the result of more careful scrutiny
of taxpayer’s position. There is insufficient evidence to con-
clude one way or the other.
This factor is neutral, weighing neither in favor of
nor against an award of attorney fees.
b. 	Factor B
The second factor the court considers is “[t]he objec-
tive reasonableness of the claims and defenses asserted by
the parties.” ORS 20.075(1)(b).
The court has previously stated that the test of
objective reasonableness is whether a claim or defense is
“ ‘entirely devoid of legal or factual support.’ ” Patton II v.
Dept. of Rev., 18 OTR 256, 259 (2005) (quoting Patton I v.
Dept. of Rev., 18 OTR 111, 127 (2004)). That test applies both
“when the claim is filed and then on an on-going basis,” as
the reasonableness of a party’s position may change given
certain factual developments or changes in the law. Id.
In evaluating that test, the court applies the stan-
dard of whether “ ‘a reasonable lawyer would know that
each of the arguments * * * is not well grounded in fact or
is not warranted either by existing law or by a reasonable
8 The court stated, “While the cost indicator developed by the appraiser for
taxpayer can serve as something of a check on the reasonableness of the value
determined on the basis of the income indicator, the court places no other reli-
ance on the cost indicator.” Seneca Sustainable Energy, LLC II v. Dept. of Rev., 22
OTR 263, 269 (2016).

30 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
argument for the extension, modification, or reversal of
existing law.’ ” Id. at 261 (quoting McCarthy v. Oregon Freeze
Dry, Inc., 334 Or 77, 87, 46 P3d 721 (2002)).
In this case, there are three main issues that the
court considers. The first issue is whether the department’s
jurisdictional arguments made in its motion to dismiss
were objectively reasonable. The second issue is whether the
department’s arguments regarding valuation of the prop-
erty for tax year 2012-13 were objectively reasonable. The
third issue is whether the department’s failure to prepare
an appraisal report for tax year 2013-14 was objectively
reasonable.
(1) 	Jurisdictional Arguments
With respect to the first issue, the jurisdictional
arguments of the department, the court concludes that the
arguments of the department were objectively reasonable.
The jurisdiction of this court is provided for by statute. ORS
305.410(1) provides, in relevant part, that “the tax court
shall be the sole, exclusive and final judicial authority for
the hearing and determination of all questions of law and
fact arising under the tax laws of this state.”
The statutory language used in ORS 305.410(1)
is broad in scope, the limits of which are not always eas-
ily understood. The Supreme Court has provided a general
framework within which this court can determine whether
it has jurisdiction over particular claims. Sanok v. Grimes,
294 Or 684, 662 P2d 693 (1983). That framework, albeit
helpful, does not alleviate the duty of the court to engage
in careful statutory analysis to determine whether a par-
ticular claim is within its jurisdiction. Compare Perkins v.
Dept. of Rev., 22 OTR 370 (2017) (holding collection claims
relating to the department’s issuance and enforcement
of timber tax warrants are outside the tax court’s juris-
diction), with Christensen v. Dept. of Rev., 22 OTR 384
(2017) (holding that collection claims relating to install-
ment plans with the department are within the tax court’s
jurisdiction).
The jurisdictional question in this case was chal-
lenging. Notwithstanding the fact that taxpayer’s property

Cite as 23 OTR 22 (2018) 	31
was, in each year of its appraisal, exempt from taxation
under an enterprise zone agreement, 9 does the court have
jurisdiction to consider taxpayer’s valuation claim in those
years?
The department argued that the court does not
have jurisdiction over taxpayer’s claims because taxpayer is
not aggrieved by a property valuation when that valuation
does not result in any additional tax because the property is
exempt.10 In making that argument, the department relied
upon a variety of statutes and case law arguably supporting
its position.
For the reasons described in the April 8, 2014, order,
the court disagreed with the department. However, the
court concludes that the department’s jurisdictional argu-
ments were objectively reasonable. They were not “entirely
devoid of legal or factual support.” Patton II, 18 OTR at 259.
(2) 	2012-13 Valuation
With respect to the second issue, the department’s
valuation arguments for tax year 2012-13, the court con-
cludes that the arguments of the department were objec-
tively unreasonable in key respects. The analysis as to the
department’s arguments is contained in the court’s opinion.
Seneca Sustainable Energy, LLC II v. Dept. of Rev., 22 OTR
263, 269-73 (2016). The court will not recreate the entire
analysis here. However, the court will address whether
the two fundamental errors identified in the department’s
appraisal were objectively unreasonable. Those weaknesses
rendered the department’s appraisal “completely without
persuasive value.” Id. at 269.
The first error of the department’s appraisal was
the inclusion of intangible value in contravention of ORS
307.030(2). The department’s appraiser did this in two ways.
9 Except for the land value, which value was subject to assessment and
taxation.
10 The department also argued that the court has no jurisdiction to consider
taxpayer’s claims regarding the public benefit contribution payment, which pay-
ment was based on the value of taxpayer’s property in each year it was exempt
from property taxation. The court agreed with the department, and dismissed
taxpayer’s claims in this regard.

32 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
First, the department’s appraiser relied upon the
Power Sales Agreement to determine what he believed were
the market rates for selling energy, capacity, and renew-
able energy credits. However, the evidence in this case
overwhelmingly supported a finding that the rates under
the PSA were not available in the market. Accordingly, the
department’s appraiser effectively valued the intangible
value of the PSA in contravention of ORS 307.030(2).
The department’s failure to instruct its appraiser to
not consider the intangible value of the PSA, and to instead
only rely upon market evidence, was objectively unreason-
able. Of course, the department cannot tell its appraiser what
the appraisal conclusions must be. However, the department
has a duty to ensure that the appraisal it defends is in rea-
sonable conformity with Oregon law.
The second way in which the department’s appraiser
included intangible value in his appraisal is also objectively
unreasonable. As explained in the court’s opinion:
“The appraiser for the department admitted in testimony
that he valued the entire property and business of tax-
payer, subtracting only an amount of working capital. That
approach is contrary to Oregon law as it has the effect of
making intangible assets subject to assessment in contra-
vention of ORS 307.030.”
Id. at 271.
Unlike the PSA error, which was based at least in
part upon an erroneous factual understanding of the energy
market, this error was purely one of theory, and clearly in
violation of Oregon law. On that basis, the court considers
this to be a much more serious error than the PSA error.
The department’s arguments and its appraiser’s positions
resulted in the clear inclusion of intangible value of the sub-
ject property.
The second fundamental error of the department’s
appraisal was the calculation of the capitalization rate. As
explained in the court’s opinion, the department’s appraiser
determined a capitalization rate by identifying a group of
likely purchasers and evaluating their cost of capital. That
approach is contrary to accepted financial and appraisal

Cite as 23 OTR 22 (2018) 	33
principles, and the department’s appraiser could cite to no
authority supporting his approach. Id. at 271-73. The depart-
ment’s reliance on its appraiser’s findings in this regard
was objectively unreasonable.
In summary, the department’s defense of and reli-
ance on its appraiser’s fundamentally flawed appraisal
report and methodology was objectively unreasonable in
both law and fact.
(3) 	2013-14 Valuation
With respect to the third issue, the department’s
failure to prepare an appraisal report for tax year 2013-14,
the court concludes that the arguments of the department
were objectively unreasonable. However, the court cautions
that the failure to prepare an appraisal report does not, in
this case, support an award of attorney fees. An analysis of
the context surrounding that fact is important.
It must be understood that the failure to prepare
an appraisal report does not mean that the department
intended to offer no evidence of value for tax year 2013-14.
In fact, the department intended to offer trending data
to establish value for tax year 2013-14 based on the value
determined by the department’s appraiser for tax year
2012-13. However, the department was prohibited from
introducing or relying upon that evidence because it failed
to exchange it in accordance with TCR 56. See Seneca, TC
5193 (Apr 6, 2015) (slip op).
Although serious in its effect on the remainder
of the proceedings, the court does not conclude that the
department’s appraisal exchange mistake is an example of
an objectively unreasonable argument or defense. However,
that lack of evidence must be considered with respect to
whether the department’s arguments as to value for tax
year 2013-14 are thereafter objectively reasonable.
In that regard, the court observes that, notwith-
standing the department’s inability to introduce evidence
to establish value for tax year 2013-14, the department
was not proscribed from arguing that taxpayer’s evidence
of value was not persuasive. In fact, the department made

34 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
such arguments as to tax year 2013-14 by reference to the
material differences in appraisal methodology and theory
employed by the parties’ appraisers in their reports for tax
year 2012-13.
Although the department’s arguments were not ulti-
mately persuasive, the court is hesitant to conclude that the
department’s defense as to tax year 2013-14 was objectively
unreasonable solely for the failure to prepare an appraisal
report for tax year 2013-14. The court’s hesitation is based
on the following observations.
First, taxpayer had the burden of proof in these pro-
ceedings. Although the department is required to introduce
evidence of value if it wishes to establish value, nothing in
the tax statutes requires the taxing authority to introduce
evidence of value if it merely wishes to defend the roll value
against a taxpayer’s assertion of value.11
Second, the department’s arguments as to tax year
2013-14 relied upon appraisal evidence relevant to tax year
2012-13. Although each tax year stands alone, the tax years
in this case were consolidated for trial. On that basis, it
is not objectively unreasonable to attempt to persuade the
court that, if an opposing party’s appraiser materially mis-
applied Oregon law or appraisal theory in tax year 2012-13,
the appraiser also likely materially misapplied Oregon law
or appraisal theory in tax year 2013-14.12
However, because the court has concluded that the
department’s arguments relating to tax year 2012-13 were
objectively unreasonable in key respects, the reliance upon
those same arguments in tax year 2013-14 is objectively
unreasonable.
11 Consider an extreme example. A taxpayer that owns a fully rented com-
mercial high-rise in good condition and in a desirable location in downtown
Portland believes that the property is worth only $10. Assume the roll value for
the property is $10 million. If that taxpayer appeals the roll value to the court, it
does not appear to be objectively unreasonable for the taxing authority to merely
defend the roll value, and not seek to establish an independent opinion of value.
12 Of course, it is not clear how effective that line of argument is when each
tax year stands alone, assuming the taxing authority does not have an appraisal
expert testify as to appraisal theory employed by the taxpayer’s appraiser in tax
year 2013-14.

Cite as 23 OTR 22 (2018) 	35
The court concludes that this factor weighs in favor
of an award of attorney fees.
c. 	Factor C
The third factor the court considers is “[t]he extent
to which an award of an attorney fee in the case would deter
others from asserting good faith claims or defenses in simi-
lar cases.” ORS 20.075(1)(c).
Although taxpayer refers to deterrence at various
times in its memorandum supporting its request for attor-
ney fees, taxpayer failed to materially address this factor or
the next factor. The department appears to argue that an
award of fees in a technical valuation dispute would have
an unnecessary chilling effect on future technical valuation
litigation.
As 	discussed, 	the 	court 	does 	not 	consider 	the
department’s jurisdictional defense to have been objec-
tively unreasonable in this case. However, the department’s
objectively 	unreasonable 	valuation 	arguments 	must 	be
taken into account to determine whether an award based
on those arguments would deter a taxing authority in
the future from defending against a taxpayer’s valuation
claims.
To the extent that the court awards fees for severe
shortcomings of the department’s valuation defense in
the form of objectively unreasonable arguments, the court
does not find that an award of attorney fees would signifi-
cantly deter others from asserting good faith claims or
defenses. To the extent of the arguments regarding valua-
tion, this factor does not weigh against an award of attorney
fees.
If the court also awards attorney fees to taxpayer
for responding to good faith arguments of the department,
such as the jurisdictional argument, the court finds that an
award of attorney fees would deter others from asserting
good faith claims or defenses. To that extent, this factor
does weigh against an award of attorney fees.
Final resolution of this factor is discussed below in
the court’s conclusion on whether to award attorney fees.

36 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
d. 	Factor D
The fourth factor the court considers is “[t]he extent
to which an award of an attorney fee in the case would deter
others from asserting meritless claims and defenses.” ORS
20.075(1)(d).
The court does not conclude that an award of fees
as to the department’s jurisdictional arguments would
deter others from asserting meritless claims. The depart-
ment’s jurisdictional arguments were reasonably raised
and argued. To the extent that an award of fees as to such
defense might deter others from asserting meritless claims,
the court does not, as a matter of policy, consider that fact to
be a permissible basis upon which to award fees under this
factor.
However, the department’s claims and defenses
with respect to the valuation issue in this case were with-
out merit. As discussed more fully in factor B, the depart-
ment had a responsibility to ensure that its appraiser was
aware of the requirements of Oregon law. The failure to
properly educate its appraiser, review the appraisal, or both
resulted in the clear inclusion in the appraisal of intangible
value attributable to the PSA. The inclusion of that intan-
gible value into the department’s appraisal was contrary to
Oregon law, and rendered that appraisal entirely without
persuasive value.
Seeking to establish a value or defend the roll value
of this property on the basis of including the value of intan-
gible property is in direct conflict with ORS 307.030(2), and
the department’s claims and defenses on that basis were
entirely without merit. An award of attorney fees on this
basis would deter others from asserting meritless claims
and defenses.
e. 	Factor E
The fifth factor the court considers is “[t]he objec-
tive reasonableness of the parties and the diligence of the
parties and their attorneys during the proceedings.” ORS
20.075(1)(e).
Taxpayer argues that the department was not dil-
igent during the proceedings because the department did

Cite as 23 OTR 22 (2018) 	37
not prepare an appraisal or credible valuation report for tax
year 2013-14.
The department did prepare an appraisal for tax
year 2012-13, and attempted to introduce trending evidence
to demonstrate the value for 2013-14, but the court, on tax-
payer’s motion, excluded the department from introduc-
ing evidence as to tax year 2013-14 for failure to properly
exchange that evidence.
Even though the department was excluded from
presenting evidence as to tax year 2013-14, the court does
not find on this basis that an award of attorney fees is
appropriate. It was not unreasonable for the department to
seriously pursue litigation for tax year 2012-13 based on its
appraisal report in an attempt to demonstrate that taxpay-
er’s appraiser’s approach was erroneous, and then require
taxpayer to sustain its burden of proof on tax year 2013-14.
The court also makes this finding cognizant of the
fact that the property being valued in this case—except as
to the land—was, in tax years 2012-13 and 2013-14, exempt
from property taxation under an enterprise zone exemption.
Accordingly, the department must be allowed some addi-
tional discretion in determining how many resources should
be devoted to the defense of a property valuation case.
The court concludes that this factor is neutral,
weighing neither in favor of nor against an award of attor-
ney fees.
f. 	Factor F
The sixth factor the court considers is “[t]he objective
reasonableness of the parties and the diligence of the parties
in pursuing settlement of the dispute.” ORS 20.075(1)(f).
Taxpayer argues that the department was unrea-
sonable in its settlement negotiations for two reasons.
Taxpayer first argues that the department should
have stipulated to a land value before trial. The record
reflects that taxpayer’s appraiser valued the land for tax
year 2012-13 at $913,225. The department’s appraiser val-
ued the land for tax year 2012-13 at $899,000. Taxpayer

38 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
notes the difference was less than $15,000, which difference
appears to be based on a rounding convention.
Taxpayer offered to stipulate to a land value of
$899,000 for tax year 2012-13, and a land value of $913,225
for tax year 2013-14, on the basis that the department could
not introduce valuation evidence for tax year 2013-14.
The department rejected the offer because it did not
want to engage in piecemeal settlement negotiations, and
because the land value evidence would be introduced in due
course at trial with the appraisal reports.13 Accordingly,
the department informed taxpayer: “You can have your
appraiser spend as little or as much time as you choose
talking about that portion of his report.”
The department’s dismissiveness is worthy of at
least some admonishment, especially when the department
ultimately stipulated to the land value at trial, and the dif-
ference was minor.14 However, the department makes a valid
point, unrebutted by taxpayer, that the cost of determining
the land value had already been incurred, and it was not
apparent what amount of additional cost stemmed from the
department’s refusal to settle the land value.
Ultimately, given the small impact on the overall
value of the property, the eventual stipulation at trial, and
the failure to identify any significant cost associated with
failure to reach settlement during the earlier communica-
tions, the court is not convinced that this fact, alone, sup-
ports an award of attorney fees under this factor.
Taxpayer next argues that the department should
have agreed to settle the value of the property as a whole,
particularly when the department was proscribed from
introducing valuation evidence for tax year 2013-14.
13 The county informed taxpayer that it and the department had “agreed
not to separately negotiate land and improvement accounts,” but also informed
taxpayer that it was “welcome to continue negotiations with DOJ as you see fit.”
14 As the department stated in its response to taxpayer’s request for attorney
fees:
“The parties’ appraisers were only 2% apart on their land values, so this was
a non-issue—certainly not critical to trial preparation. Coincidentally, the
stipulated [at trial] land value is only 2% of the total property value found by
the court for 2012-13.”

Cite as 23 OTR 22 (2018) 	39
The department’s position during settlement nego-
tiations was that the property was worth $55,200,000 for
tax year 2012-13.15 As for tax year 2013-14, the settlement
negotiations occurred after the court had granted taxpayer’s
motion in limine to exclude the department from introduc-
ing valuation evidence for tax year 2013-14, and therefore
the department was left defending the roll value of approxi-
mately $58,500,000.
Taxpayer’s position during settlement negotiations
was that the property was worth $34,900,000 for tax year
2012-13,16 and $19,100,000 for tax year 2013-14.
Taxpayer 	first 	offered 	settlement 	figures 	of
$30,000,000 RMV for tax year 2012-13, and $24,000,000
for tax year 2013-14. The department countered with set-
tlement figures of $50,000,000 RMV for tax year 2012-13,
and $47,000,000 RMV for tax year 2013-14. Taxpayer
rejected the department’s counteroffer, and proposed a final
settlement offer of $30,000,000 RMV for each tax year. The
department did not respond to taxpayer’s final settlement
offer.
The department’s defense may have suffered a
major blow as to tax year 2013-14 by being prohibited from
introducing valuation evidence as to that tax year, but the
court does not find that the department’s unwillingness to
settle is objectively unreasonable.
Taxpayer argues it offered approximately $11 mil-
lion more than its value opinion as to tax year 2013-14.
That may be true, but the department countered with an
offer approximately $9 million less than the roll value. In
addition, it is notable that taxpayer offered approximately
$5 million less than its value opinion as to tax year 2012-13
at the time of settlement discussions.
Numbers aside, a refusal to settle does not necessar-
ily mean that a party acted in an objectively unreasonable
manner. The evidence shows that the parties attempted to
15 At trial, the department amended the value for tax year 2012-13 to
$59,600,000.
16 At trial, taxpayer amended its value for tax year 2012-13 to $38,200,000.

40 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
resolve the valuation portion of this dispute by settlement,
but could not agree on a final number.
Moreover, the fact that the department did not set-
tle as to tax year 2013-14, or in general, is not objectively
unreasonable notwithstanding the fact that the department
was proscribed from introducing valuation evidence as to
tax year 2013-14. On the facts of this case, the department
could reasonably proceed on the basis of using the tax year
2012-13 appraisal to demonstrate critical flaws in taxpayer’s
appraiser’s analysis that might carry forward to tax year
2013-14.
It is worth recalling the standard at this time. The
questions before the court as to this factor are whether the
department was objectively unreasonable and whether the
department diligently pursued settlement. On the record
before the court, it appears the department engaged in set-
tlement discussions, and, while perhaps some parties would
have reached settlement, the court cannot say that the
department’s position during those discussions was objec-
tively unreasonable.17
The court does not find that the department’s rejec-
tion of taxpayer’s settlement offers was objectively unrea-
sonable, and therefore this factor is neutral, weighing nei-
ther in favor of nor against an award of attorney fees.
g. 	Factor G
The seventh factor does not apply to this court. See
St. Mary Star of the Sea II v. Dept. of Rev., 22 OTR 496,
508-09 (2017).
h. 	Factor H
The eighth and final factor the court considers is
“[s]uch other factors as the court may consider appropriate
under the circumstances of the case.” ORS 20.075(1)(h).
17 Compare this case with the settlement discussions in Yu Contemporary,
Inc. II v. Dept. of Rev., 22 OTR 511, 425-27 (2017). There, even though the tax-
payer attempted numerous times to reach settlement with the county, and crafted
its offers to address the specific concerns of the county, the county rejected each
settlement offer with no counteroffer, opting instead to “have the court decide.”

Cite as 23 OTR 22 (2018) 	41
There are two additional considerations worthy of
discussion in this case.
First, there are overtures in the department’s brief-
ing regarding the fact that this case concerned the RMV of
taxpayer’s property as entered as a notation on the assess-
ment roll, but not currently the basis for property taxation.
The relevance apparently being that the department should
be given some amount of latitude for the veracity of its
defense when the court considers an award of attorney fees.
This is an interesting point. As an initial matter,
by making a determination in its jurisdictional order that
taxpayer must appeal the RMV in the current tax year or
forever forfeit its valuation claims, the court set the stage
for the importance of this litigation. Accordingly, it could be
seen as contradictory for the court to now conclude that the
department does not need to seriously engage in litigation
with taxpayer.
However, given the budgetary considerations of the
department, and the looming question regarding whether
taxpayer’s property would ever be disqualified from exemp-
tion, the court cannot say that the department must engage
in full-bore litigation in order to avoid an award of attorney
fees. In some cases, it may indeed be appropriate for the
department to depend upon taxpayer carrying its burden of
proof.
The problem in this case is that key valuation posi-
tions of the department were objectively unreasonable. To
that end, the court does not and cannot consider any budget-
ary considerations of the department or the current exemp-
tion status of the property. To the extent that the depart-
ment defends the roll value against a taxpayer’s valuation
assertion, the department must do so in good faith and with
objectively reasonable arguments.
The second consideration of the court is based on
an observation contained in a footnote in the department’s
objection to taxpayer’s fee request. That observation is as
follows:
“We are aware of no legislative history [pertaining to ORS
305.490(4)(a)] indicating that the legislature intended

42 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
attorney fees to be awarded where the property is exempt
from taxation. Certainly if qualification for or disqualifica-
tion from an exemption is litigated fees are contemplated,
but not where taxes are not at issue.”
Unpacking this observation, it appears that in the
first sentence, the department engages in some form of legis-
lative history analysis of ORS 305.490(4)(a). It appears that
in the second sentence the department is engaging in a tex-
tual analysis of the language contained in ORS 305.490(4)(a).
There are two problems with this observation.
First, the department fails to mention whether the
context of ORS 305.490 or other statutes in the tax or civil
laws might support or contravene its observation or analysis.
See State v. Gaines, 346 Or 160, 206 P3d 1042 (2009) (stat-
utory interpretation requires consideration of the text, con-
text, and legislative history). Accordingly, The department’s
observation is not even a complete analysis, and the court is
not obliged to complete it. Cf. Beall Transport Equip. Co. v.
Southern Pacific, 186 Or App 696, 700-01 n 2, 64 P3d 1193,
adh’d to as clarified on recons, 187 Or App 472, 68 P3d 259
(2003) (noting generally that “it is not this court’s function
to speculate as to what a party’s argument might be” or “to
make or develop a party’s argument when that party has
not endeavored to do so itself”).
If the department wished to argue that the legisla-
ture’s silence as to the exact situation in this case is reason
to deny taxpayer’s fee request, the court expects the depart-
ment would have done so with complete briefing, and above
the line. Absent full briefing on the issue, the court is com-
fortable concluding that this case is generally within the
provisions of ORS 305.490(4)(a), which provides for attorney
fees in property tax matters.
Second, the court concluded in its jurisdictional order
that taxpayer is aggrieved by the department’s appraisal.
Accordingly, to the extent that the department is still attempt-
ing to argue that the valuation of the property for the tax
years at issue in this case is not a legitimate issue, that argu-
ment has been rejected by the court. This case arises gener-
ally within the realm of property taxation, and taxpayer is
entitled to request attorney fees as the prevailing party.

Cite as 23 OTR 22 (2018) 	43
These other factors are neutral, weighing neither in
favor of nor against an award of attorney fees in this case.
i. 	Conclusion as to Attorney Fees
The only factor that weighs against an award of
attorney fees is factor C, and only to the extent that the
court might award fees incurred in responding to the
department’s jurisdictional arguments raised in its motion
to dismiss. Factors B, C, and D weigh in favor of an award
of attorney fees, at least as to the department’s valuation
arguments, claims, and defenses. The remaining factors are
neutral in their application.
The court’s rules provide that it may “deny or award
in whole or in part the amounts sought as attorney fees.” TCR
68 C(2)(f)(ii). In addition, the Oregon Court of Appeals has
stated that a court may “exercise its discretion to limit—or
perhaps even deny—fees for a particular stage of litigation
depending on the conduct of the parties and counsel and the
other factors listed in ORS 20.075(1) and (2).” Goodsell v.
Eagle-Air Estates Homeowners Ass’n, 280 Or App 593, 605,
383 P3d 365 (2016).
In this case, the jurisdictional arguments were
resolved by order after a hearing on the department’s motion
to dismiss early in the case. The valuation arguments were
resolved by opinion after trial. Those are separate stages
of litigation, and involved separate issues. In addition, for
purposes of defending against taxpayer’s valuation claims,
this case did not become “live” until the court ruled on the
department’s jurisdictional defense.
For these reasons and on the basis of the factors
analyzed above, the court in its discretion denies taxpayer’s
request for fees with respect to those amounts incurred in
responding to the jurisdictional issues raised in the depart-
ment’s motion to dismiss. Otherwise, the court concludes
that taxpayer is entitled to attorney fees for the valuation
issues in this case, and other ancillary work necessary to
achieve a judgment in its favor, but not for litigating the
jurisdictional issues raised in the department’s motion to
dismiss.

44 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
2. 	Amount of Fees
Having concluded that taxpayer is entitled to an
award of attorney fees, the court now considers the amount
of fees requested. The department argues that the amount
of fees requested by taxpayer is excessive in both time billed
and billing rate, as well as in relation to the amount of ben-
efit actually received from the judgment in this case.
In evaluating the amount of fees requested, the
court considers the factors discussed above, as well as sev-
eral additional factors found in ORS 20.075(2). With due con-
sideration to the factors previously discussed, and the fact
that the court has already disallowed a portion of taxpayer’s
requested fees, the factors contained in ORS 20.075(2) are
discussed below.
a. 	Factor A
The first factor the court considers is “[t]he time
and labor required in the proceeding, the novelty and dif-
ficulty of the questions involved in the proceeding and the
skill needed to properly perform the legal services.” ORS
20.075(2)(a).
Under this factor, taxpayer argued:
“The valuation of the co-generation facility required the
attorneys to become well-versed in the energy market to
correctly evaluate the multiple variables impacting what
a co-generation property could receive on the market as of
the assessment dates. This required locating and working
with experts in the field and substantial research into the
energy markets. The case also involved understanding the
different types of co-generation facilities to differentiate
costs of construction and operation of facilities.”
The department does not appear to dispute this.
Indeed, the department indicated elsewhere in its objec-
tion that the trial “raised questions of first impression * * *
involving the valuation of a cogeneration facility.”
The court considers the novelty of the valuation
issue in this case, as well as the time and labor required
to understand the varying factors affecting the valuation
of the property in order to make a cogent presentation to
the court at trial. On that basis, the court does not find a

Cite as 23 OTR 22 (2018) 	45
sufficient reason to reduce the amount of fees requested by
taxpayer.
b. 	Factor B
The second factor the court considers is “[t]he like-
lihood, if apparent to the client, that the acceptance of the
particular employment by the attorney would preclude the
attorney from taking other cases.” ORS 20.075(2)(b).
Taxpayer argues that its counsel would have pur-
sued other work if it had not undertaken this particular case.
However, the court only considers that fact if it is “apparent
to the client.” ORS 20.075(2)(b). Taxpayer has introduced no
evidence and made no argument on this point, and the court
will not engage in conjecture.
c. 	Factor C
The third factor the court considers is “[t]he fee cus-
tomarily charged in the locality for similar legal services.”
ORS 20.075(2)(c).
The department has specifically objected to the
hourly billing rates of upwards of $540, $475, and $320
for attorneys David Canary, Cynthia Fraser, and Michael
Mangan, respectively, but has produced no evidence of the
rates customarily charged in the locality for similar legal
services for the years of 2012, 2013, 2014, 2015, or 2016.
However, neither has taxpayer.
Taxpayer has indicated that David Canary has lit-
igated property tax cases for over 30 years. Cynthia Fraser
has reportedly litigated property tax cases since 2005, but
has litigated condemnation cases since 1991. Accordingly,
Fraser has been a litigator for more than 20 but less than
30 years. Taxpayer has not provided any detail on the litiga-
tion experience of Michael Mangan, other than identifying
him as a senior associate. The court will nevertheless take
judicial notice that he was admitted to the Oregon State Bar
in late 2009.
Taxpayer argues that the litigation experience and
skill of its attorneys justified the rates charged in this case,
but has provided no evidence that ties that experience and
skill to the rates generally found in the legal market. Nor

46 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
has the department introduced any evidence of the local
rates charged by attorneys. Moreover, neither party has
requested a hearing on the matter during which evidence
might have been introduced.
At least one court has considered the Oregon State
Bar (OSB) Economic Survey to determine whether the
billing rates charged were reasonable. See Precision Seed
Cleaners v. Country Mut Ins Co, 976 F Supp 2d 1228, 1244
(D Or 2013) (applying ORS 20.075); cf. Blum v. Stenson, 465
US 886, 895, 104 S Ct 1541, 79 L Ed 2d 891 (1984) (consid-
ering reasonable billing rates under 42 USC 1983(b)).18 The
court considers it within its discretion to take notice of and
consider the OSB Economic Survey information in this case
to the extent that it is relevant and helpful to ascertain a
reasonable hourly billing rate under this factor.
The OSB Economic Survey reports on the hourly
rates charged by attorneys generally as well as within spe-
cific subsections of the bar. Those reports are expressed by
way of benchmarks for the average, median, 25th percen-
tile, 75th percentile, and 95th percentile billing rates. The
reports also indicate the highest billing rates reported.
There are two OSB Economic Surveys that are of
interest to the court for this case, the 2012 survey and the
2017 survey.19 Before considering the results of those sur-
veys, the court considers which metrics will be helpful to the
court in determining a reasonable billing rate.
In each survey, the bar reports hourly rate bench-
marks for attorneys in private practice in specific geographic
areas for (1) attorneys generally, (2) attorneys based on
years admitted to practice, and (3) attorneys based on area
of practice. Although the court will consider benchmarks (1)
18 In Precision Seed Cleaners, the district court had received evidence in the
form of affidavits or declarations regarding reasonable billing rates, but the dis-
trict court nonetheless reviewed the OSB Economic Surveys in its analysis. 976 F
Supp 2d at 1243-44. In this case, neither party introduced affidavits or declara-
tions. The court does not consider it inappropriate to consider the OSB Economic
Surveys.
19 No survey was produced for years 2013, 2014, 2015, or 2016. The 2012 sur-
vey contains information regarding the billing practices for 2011. Likewise, the
2017 survey contains information regarding the billing practices for 2016.

Cite as 23 OTR 22 (2018) 	47
and (3), the court concludes that benchmark (2) is the most
relevant to this case.
The court reaches that conclusion based on a find-
ing that this case, being a highly technical valuation case,
is the type of case requiring a seasoned and experienced
attorney. In that sense, “similar legal services” for pur-
poses of ORS 20.075(2)(c) are services requiring seasoned
attorneys. It would be reasonable for a taxpayer to seek
out not just a tax attorney, but a tax attorney with a cer-
tain number of years of experience in these matters and
generally.
With that introduction, the court reproduces cer-
tain portions of the OSB Economic Surveys for 2012 and
2017, which contain billing information for years 2011 and
2016, below.20
Hourly Billing Rates Generally
for Portland-Area Attorneys
Benchmark \ Year 	2011 	2016
Average 	$284 	$324
Median 	$275 	$300
75th Percentile 	$350 	$400
95th Percentile 	$450 	$525
High 	$675 	$850
Hourly Billing Rates Generally for Portland-Area
Attorneys Practicing Tax Law or Estate Planning
Benchmark \ Year 	2011 	2016
Average 	$281 	$357
Median 	$275 	$340
75th Percentile 	$328 	$455
95th Percentile 	$441 	$625
20 The 2012 and 2017 OSB Economic Surveys are available at https://www.
osbar.org/surveys_research/snrtoc.html#economicsurveys.

48 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
Hourly Billing Rates for Portland-Area
Attorneys with 4-6 Years of Experience
Benchmark \ Year 	2011 	2016
Average 	$210 	$249
Median 	$218 	$250
75th Percentile 	$250 	$300
95th Percentile 	$295 	$350
Hourly Billing Rates for Portland-Area
Attorneys with 7-9 Years of Experience
Benchmark \ Year 	2011 	2016
Average 	$258 	$282
Median 	$250 	$280
75th Percentile 	$295 	$340
95th Percentile 	$375 	$400
Hourly Billing Rates for Portland-Area
Attorneys with 21-30 Years of Experience
Benchmark \ Year 	2011 	2016
Average 	$326 	$394
Median 	$333 	$415
75th Percentile 	$399 	$475
95th Percentile 	$470 	$525
Hourly Billing Rates for Portland-Area
Attorneys with Over 30 Years of Experience
Benchmark \ Year 	2011 	2016
Average 	$340 	$413
Median 	$350 	$425
75th Percentile 	$400 	$495
95th Percentile 	$500 	$610
Those rates must then be compared with the actual
billing rates charged to and requested by taxpayer.

Cite as 23 OTR 22 (2018) 	49
The billing entries submitted by taxpayer’s counsel
span four years from 2012 to 2016. Those entries show the
following billings rates for each attorney for each year.
Hourly Billing Rates for Each Attorney by Year
Attorney\Yr 	2012 	2013 	2014 	2015 	2016
Canary 	$495/hr 	$495/hr 	$495/hr 	$520/hr 	$540/hr
Fraser 	$395/hr 	$395/hr 	$395/hr &
$435/hr
$455/hr 	$475/hr
Mangan 	N/a 	N/a 	N/a 	$305/hr 	$320/hr
Taxpayer has represented that David Canary has
litigated tax matters for over 30 years, and the department
has not challenged that assertion. Accordingly, for pur-
poses of considering the reasonableness of his billing rate,
the court will assume that his experience was in excess of
30 years for each of the relevant billing periods, and con-
sider the corresponding survey information.
Cynthia Fraser has for each relevant billing period,
as explained above, litigated cases for more than 20 years
but less than 30 years.21 Accordingly, for purposes of con-
sidering the reasonableness of her billing rate, the court
will consider the survey information corresponding with her
years of experience.
Michael Mangan presents a bit of a challenge to the
court. Without any evidence to show otherwise, the court
cannot assume that he was admitted to any other bar before
his entrance into the Oregon bar, and so therefore the court
cannot assume that he has practiced law any earlier than
2009. His first billing entry is in 2015, when he would have
6 years of experience. That would place him within the
4-6 years of experience range for 2015, but the 7-9 years of
experience range for 2016. The court will consider the appro-
priate survey information corresponding with his years of
experience in each year.
The court will discuss the reasonableness of the
rates requested for each attorney separately.
21 Because she began practicing in 1991, Ms. Fraser would have reached her
21st year of practice in 2012.

50 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
(1) 	David Canary
For years 2012, 2013, and 2014, Canary’s hourly
billing rate was $495 per hour. That rate is commensurate
with the 95th percentile in 2011, and the 75th percentile
in 2016, based on his years of experience. It exceeds the
95th percentile for attorneys generally in 2011, but does not
exceed the 95th percentile for attorneys generally in 2016.
The same can be said for the rates of attorneys practicing
tax law and estate planning.
Taxpayer has represented to the court that Canary
has been “active in legislation of the rules and statutes relat-
ing to the tax court and tax laws,” and that he is recognized
both locally and nationally. On the basis of Canary’s unique
expertise and other attributes, the court concludes that pay-
ing a higher than average billing rate, even near the top of
the range for an attorney with Canary’s years of experience,
is not unreasonable. A client could reasonably conclude that
Canary would bring more than just years of experience to
the litigation in this case.
In reviewing the billing rates for each year, the
court considers that billing rates increased between 2011
and 2016, but with no indication as to when those increases
took place. The court also takes into account the temporal
proximity between the years at issue and the survey years.22
Nevertheless, the court concludes that the requested bill-
ing rate of $495 for Canary was reasonable for years 2012,
2013, and 2014.
For 2015, Canary’s hourly billing rate was $520.
That rate exceeds the 95th percentile in 2011 but is only
moderately above the 75th percentile in 2016, based on
Canary’s years of experience. That rate exceeds the 95th
percentile for attorneys generally in 2011, and is commensu-
rate with the 95th percentile for attorneys generally in 2016.
It exceeds the 95th percentile for tax attorneys in 2011 but
not for 2016.
22 For example, the 2011 survey data is more relevant to the billing rates for
2012 than the 2016 survey data.

Cite as 23 OTR 22 (2018) 	51
The same considerations that apply to years 2012,
2013, and 2014 apply to 2015. In addition, the court places
primary emphasis on the 2016 rates because of the temporal
proximity to 2015. The court concludes that Canary’s rate
for 2015 was reasonable.
For 2016, Canary’s hourly billing rate was $540.
That rate is almost halfway between the 75th and 95th per-
centiles for 2016. It moderately exceeds the 95th percentile
for attorneys generally in 2016, and is precisely halfway
between the 75th and 95th percentiles for tax lawyers in
2016.
The court affords almost no weight to the 2012
survey data, instead relying upon the 2017 survey data.
The court concludes, based on the same considerations dis-
cussed above, that Canary’s hourly billing rate for 2016 was
reasonable.
In summary, the court concludes that no adjust-
ment to David Canary’s billings rates is necessary.
(2) 	Cynthia Fraser
For years 2012 and 2013, Cynthia Fraser’s hourly
billing rate was $395. That rate was commensurate with
the 75th percentile rate for 2011 and the average rate for
2016, based on her years of experience. It was between the
75th and 95th percentiles in 2011 for attorneys generally
and attorneys practicing tax law.
Taxpayer has represented to the court that Fraser
“has been recognized by her peers as a pre-eminent attor-
ney in several rankings” and “is a member of the Oregon
State Bar Tax Section Executive Board.” In addition, she
has prior successful experience with large industrial prop-
erty tax cases. On that basis, the court concludes that pay-
ing a higher than average billing rate for Fraser’s services
is not unreasonable.
The court places primary emphasis on the 2011
rates for the 2012 billing rate because of the temporal prox-
imity to 2012. The court considers both the 2011 and the
2016 rates for the 2013 billing rate, but places more empha-
sis on the 2011 billing rates given its temporal proximity.

52 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
The court concludes that Fraser’s billing rate for 2012 and
2013 was reasonable.
In 2014, Fraser’s hourly billing rate began the year
at $395, but thereafter increased to $435. For the same
reasons as years 2012 and 2013, the court concludes that
Fraser’s billing rate of $395 is reasonable.23 Therefore, the
court needs only to consider the billing rate of $435.
The increased rate is about halfway between the
75th and 95th percentiles for 2011, and moderately about
the median for 2016, based on her years of experience. It is
near the 95th percentile for attorneys generally in 2011, but
is moderately above the 75th percentile for attorneys gener-
ally in 2016. With respect to rates for tax attorneys, Fraser’s
rate is near the 95th percentile for 2011, but is less than the
75th percentile for 2016.
The court considers both the 2011 and the 2016
rates for the 2014 billing rate, but places more emphasis on
the 2016 billing rates given its temporal proximity. Based
upon the considerations above, the court considers Fraser’s
billing rates for 2014 to be reasonable.
For 2015, Fraser’s hourly billing rate was $455.
That rate is near the 95th percentile for 2011 but is less
than the 75th percentile for 2016, based upon her years of
experience. It is commensurate with the 95th percentile for
attorneys generally in 2011, but a little less than halfway
between the 75th and 95th percentiles for attorneys gener-
ally in 2016. It exceeds the 95th percentile for tax attorneys
in 2011, but is equal to the 75th percentile for tax attorneys
in 2016.
The court places primary emphasis on the 2016
rates because of the temporal proximity to 2015. Based upon
the considerations above, the court considers Fraser’s bill-
ing rate for 2015 to be reasonable.
For 2016, Fraser’s hourly billing rate was $475.
That rate equals the 75th percentile, based on her years of
23 To the extent that the analysis changes slightly because it is a year later,
that fact would only support a higher billing rate. The difference between the
2011 and 2016 data shows an upward shift in billing rates.

Cite as 23 OTR 22 (2018) 	53
experience. It is a bit more than halfway between the 75th
and 95th percentiles for attorneys generally, and moderately
above the 75th percentile for tax attorneys.
The court affords almost no weight to the 2012 sur-
vey data, instead relying upon the 2017 survey data. Based
upon the considerations above, the court considers Fraser’s
billing rate for 2016 to be reasonable.
In summary, the court concludes that no adjust-
ment to Cynthia Fraser’s billings rates is necessary.
(3) 	Michael Mangan
For 2015, Michael Mangan’s hourly billing rate
was $305. In 2015, as previously explained, Mangan had
six years of experience. Accordingly, his hourly billing rate
exceeded the 95th percentile in 2011, and was commensu-
rate with the 75th percentile in 2016, based upon his years
of experience at the time. His rate was between the median
and the 75th percentile for attorneys generally in 2011, and
commensurate with the median for attorneys generally in
2016. For tax attorneys, his rate was between the median
and the 75th percentile in 2011, and less than the average
and the median for 2016.
Taxpayer has represented that Mangan was a for-
mer appraiser, and accordingly his time was valuable to the
litigation in this court. On that basis, the court concludes
that paying a slightly higher than average billing rate for
Mangan’s services is not unreasonable.
The court places primary emphasis on the 2016
rates because of the temporal proximity to 2015. In addition
to the considerations just discussed, the court also considers
that for 2015 Mangan would be at the top of the relatively
short experiential range for the 2016 rates, and therefore
a reasonable rate for his services would naturally skew
toward the higher end of the range. On those bases, the
court concludes that Mangan’s hourly billing rate for 2015
was reasonable.
For 2016, Mangan’s hourly billing rate was $320.
That rate is between the median and the 75th percentile for
2016, based on Mangan’s years of experience at the time. It

54 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
is also moderately above the median for attorneys generally
and moderately below the median for tax attorneys in 2016.
The court affords almost no weight to the 2011
survey data, instead relying upon the 2016 survey data.
Based on the considerations above, the court concludes that
Michael Mangan’s hourly billing rate is reasonable.
(4) 	Summary
Based on the foregoing, the court concludes that the
rates requested by taxpayer are reasonable.
d. 	Factor D
The fourth factor the court considers is “[t]he amount
involved in the controversy and the results obtained.” ORS
20.075(2)(d).
In order to properly evaluate this factor, the court
must consider the appropriate amount that was involved in
the controversy. The department argues that the amount to
be considered is only the reduction of taxes applicable to the
reduced land value, which was approximately $35,000 in
total for the two tax years.
Taxpayer argues that the amount to be considered
should, in addition to the savings on the land value, include
the savings it might receive in a related challenge to the
public benefit contribution payment, which payment is based
upon the RMV of the property. That amount is purported to
be approximately $563,031. Taxpayer also argues that the
value determined for tax year 2013-14 by the court is an
adjudicated value that will extend for the next five years,
subject to normal adjustments, which will save taxpayer an
estimated $1,210,000 in taxes.24
The court cannot accept the department’s view of
the benefit conferred in this case. As noted by taxpayer, the
department’s arguments are simply another formulation
of its jurisdictional arguments, i.e., that taxpayer has no
standing to be in this court.
24 Defendant argues that value determined for tax year 2013-14 cannot be an
adjudicated value because, except for the land value, the property was exempted
from property taxation. The court makes no determination on this matter.

Cite as 23 OTR 22 (2018) 	55
In that regard, having previously determined that
the court does have jurisdiction to consider the matter, the
court cannot now conclude that taxpayer did not receive any
benefit by successfully challenging the assessment values
determined by the department and notated on the assess-
ment roll. To do so would be contradictory to the holding in
the jurisdictional order.
Taxpayer notes that its tax liability, assuming it
lost its tax exemption and the claw-back provisions of ORS
285C.240(3)(a) were implicated, would be $648,589 for tax
year 2012-13, and $641,985 for tax year 2013-14.25 Although
these numbers were noted in taxpayer’s reply, The depart-
ment did not object to them in its response to taxpayer’s
reply.26 The court concludes that these numbers must be
taken into account when considering the total amount of
fees requested.
On that basis, in addition to the savings gained
on the land value, the court concludes that no reduction in
attorney fees is necessary, and it does not exercise its discre-
tion to do so. In making this conclusion, the court does not
rely on taxpayer’s adjudicated value argument, or its refer-
ence to the amounts purported to be saved under the public
benefit contribution.27
e. 	Factor E
The fifth factor the court considers is “[t]he time
limitations imposed by the client or the circumstances of the
case.” ORS 20.075(2)(e).
Taxpayer has introduced no evidence and made no
argument under this factor.
f. 	Factor F
The sixth factor the court considers is “[t]he nature
and length of the attorney’s professional relationship with
the client.” ORS 20.075(2)(f).
25 See Seneca, 21 OTR at 369-70.
26 Defendant’s response focused on Plaintiff’s adjudicated value argument,
which argument the court does not consider.
27 The court makes no determination on whether consideration of such
amounts is appropriate. Rather, the court concludes it does not need to reach
those amounts in this case.

56 	Seneca Sustainable Energy LLC III v. Dept. of Rev.
Taxpayer has introduced no evidence and made no
argument under this factor.
g. 	Factor G
The seventh factor the court considers is “[t]he expe-
rience, reputation and ability of the attorney performing the
services.” ORS 20.075(2)(g).
This factor was considered in part in the analysis
under factor C in determining the appropriate billing rate
of the attorneys. No further adjustment is warranted under
this factor.
h. 	Factor H
The eighth factor the court considers is “[w]hether
the fee of the attorney is fixed or contingent.” ORS 20.075
(2)(h).
The fees in this matter were charged at a fixed
hourly rate. Taxpayer represented to the court in its request
for attorney fees that, had the fee arrangement been on a
contingent basis, the amount of fees charged would have
been higher. Taxpayer did not provide any evidence to sup-
port this statement, and the department did not introduce
any evidence to rebut this statement.
The court makes no determination or adjustment
under this factor.
i. 	Conclusion as to Amount of Fees
The court grants taxpayer’s request for attorney
fees. Taxpayer also requested an amount for fees incurred
for requesting attorney fees, which amount would be sub-
mitted by supplemental statement after the court issues
this order. The court is authorized to award so-called “fees
on fees,” TriMet v. Aizawa, 362 Or 1, 403 P3d 753 (2017), and
at least preliminarily does so here.
However, because taxpayer has not already filed its
statement quantifying the supplemental amount of attorney
fees requested, neither the department nor the court has
had an opportunity to consider the supplemental amount of
attorney fees requested. The court grants taxpayer’s supple-
mental request for attorney fees, subject to the department

Cite as 23 OTR 22 (2018) 	57
being afforded the time allowed by the court’s rules to object
to the amount of such supplemental request.
V. 	CONCLUSION
Taxpayer’s requests for costs and disbursements
and reasonable expenses are granted. Taxpayer’s request
for attorney fees is denied with respect to any fees related
to defending against the department’s motion to dismiss.
Taxpayer’s request for supplemental attorney fees is granted,
subject to an opportunity for the department to object to the
amount of supplemental fees requested. Taxpayer’s request
for attorney fees is otherwise granted. Now, therefore,
IT IS ORDERED that Plaintiff’s request for costs
and disbursements is granted.
IT IS FURTHER ORDERED that Plaintiff’s request
for reasonable expenses is granted.
IT IS FURTHER ORDERED that Plaintiff’s request
for attorney fees is granted in part and denied in part; and
IT 	IS 	FURTHER 	ORDERED 	that 	Plaintiff 	is
directed 	to 	prepare 	an 	appropriate 	form 	of 	judgment.
The parties are encouraged to confer as to the separation
of amounts between litigating the jurisdictional issues
in this case and the remainder of the attorney fees, costs
and disbursements, and reasonable expenses requested by
Plaintiff.