345 Or 334 | Omnilex

Testo completo

334
Argued and submitted January 9, decision of Court of Appeals reversed;
supplemental judgment of circuit court reversed, and case remanded to
circuit court for further proceedings October 9, 2008
BARBARA PARMENTER LIVING TRUST,
Respondent on Review,
v.
Steve LEMON
and Kymberly Lemon,
Petitioners on Review.
(CC 12-02-23704; CA A126429; SC S054971)
194 P3d 796

Cite as 345 Or 334 (2008) 	335
CJS, Costs § 125.

335-a 	Barbara Parmenter Living Trust v. Lemon
En Banc
On review from the Court of Appeals.*
Brian D. Cox, of Cox & Associates, LLC, Eugene, argued
the cause and filed the brief for petitioners on review.
William E. Flinn, of Hurley, Lynch & Re, PC, Bend,
argued the cause for respondent on review.
KISTLER,J.
The decision of the Court of Appeals is reversed. The sup-
plemental judgment of the circuit court is reversed, and the
case is remanded to the circuit court for further proceedings.
* Appeal from Lane County Circuit Court, Karsten H. Rasmussen, Judge.
212 Or App 669, 159P3dI174 (2007).

Cite 	345 Or 334 	335-b

336 	Barbara Parmenter Living Trust v. Lemon
KISTLER,J.
This case arises out of a landlord-tenant dispute.
The trial court ruled in landlord's favor on one of its claims
and in tenants' favor on two of their claims. The court desig-
nated both landlord and tenants as prevailing parties but
declined to award either of them attorney fees. Tenants
appealed, arguing that they were the only prevailing parties
and that the trial court should have awarded them attorney
fees. 	A divided panel of the Court of Appeals affirmed.
Barbara Parmenter Living Trust v. Lemon, 212 Or App 669,
159 P3d 117 4 (2007). We allowed tenants' petition for review
and now reverse the Court of Appeals decision and the trial
court's judgment and remand this case to the trial court for
further proceedings.
Landlord brought this action against tenants, alleg-
ing claims for breach of the rental agreement and waste.
Tenants answered and alleged counterclaims for unlawful
entry, ouster, unlawful disposition of personal property, and
unlawful debt collection practices. After a bench trial, the
trial court ruled in landlord's favor on its claim for breach of
the rental agreement and awarded it $345 in damages. The
court ruled in tenants' favor on their unlawful entry and
ouster counterclaims and awarded them $1,396 in damages.
The court ruled against both parties on their remaining
claims. The court entered a general judgment reflecting those
rulings. Neither party appealed from that judgment.
After the trial court entered the general judgment,
both parties sought prevailing party fees, costs, disburse-
ments, and attorney fees. After considering the parties' argu-
ments, the trial court issued an order that addressed two
issues. First, it rejected tenants' argument that, under ORS
90.255, it should designate only one prevailing party and
agreed with landlord that, under ORS 20.077, both tenants
and landlords were prevailing parties. Second, although ten-
ants and landlord were both eligible as prevailing parties to
recover their attorney fees under ORS 90.255, the trial court
declined to award either party any fees. The court reasoned:
"1. 	Both parties engaged in conduct that both caused and
complicated the dispute and prolonged the litigation.

Cite as 345 Or 334 (2008) 	337
"2. 	Both parties presented minor meritorious claims and
significant non-meritorious claims.
"3. 	Granting an award of attorney fees to either party
would merely encourage non-meritorious claims in the
future.
"4. 	An award of attorney fees in this case would not deter
others from bringing meritless claims in the future.
"5. 	Inadequate settlement offers were made by both
parties.
"6. 	Having found that each party is a 'prevailing party'
under Oregon law, the Court awards each party a prevail-
ing party fee. The Court, however, explicitly declined to
award either party an enhanced prevailing party fee.
Hence, this category does not impact the Court's attorney
fee ruling.
"7. 	As the Stocker [v. Keith, 178 Or App 544, 38 P3d 283
(2002),] court indicated, a prevailing party is ordinarily
entitled to attorney fees in [a Residential Landlord Tenant
Act] case. The Court has considered this factor.
"8. 	The outcome sought, the outcome obtained, and the
amount of fees sought in this case are all highly dispropor-
tional. In [its] complaint, [landlord] sought relief in the
amount of $2,308.20. [It] obtained relief in the amount of
$345.00. [Landlord] now seeks attorney fees in the amount
of $32,270.50. In their answer, [tenants] sought a total of
$10,308.50 in relief. [Tenants] obtained relief in the amount
of $1,396.00. [Tenants] now seek attorney fees in the
amount of $40,424.42."
The trial court later entered a supplemental judgment, which
denied both parties' requests for "costs, disbursements and
attorney fees* * *for the reasons set forth [in the trial court's
order]."
Tenants appealed from the supplemental judgment.
Landlord did not cross-appeal. On appeal, tenants argued
that the trial court had erred in designating landlord as a
prevailing party. In tenants' view, there can be only one pre-
vailing party under ORS 90.255, and only they had prevailed.
Tenants also argued that the trial court should have awarded
them attorney fees. As noted, a divided Court of Appeals
affirmed. The majority concluded that tenants' objections to

338 	Barbara Parmenter Living Trust v. Lemon
designating landlord as a prevailing party were not properly
before it. Barbara Parmenter Living Trust, 212 Or App at
672-73. Regarding tenants' attorney fee claim, the majority
agreed with tenants that, except in unusual circumstances,
the prevailing party under ORS 90.255 is entitled to fees. Id.
at 675. The majority concluded, however, that the circum-
stances that the trial court had identified were sufficiently
unusual to warrant denying tenants fees. Id. at 676. The dis-
sent would have held that those circumstances provided a
basis for reducing a fee award but not a basis for denying fees
altogether. Id. 	at 676-77 (Armstrong, J., dissenting). We
allowed tenants' petition for review to consider those issues.
We begin with tenants' argument that the trial court
erred in designating landlord as a prevailing party. Tenants
reason that, under ORS 90.255, there can be only one pre-
vailing party and that, because the net award was in their
favor, only they prevailed. Landlord responds that ORS
20.077, a later enacted statute, points in a different direction.
Landlord argues that, under ORS 20.077, when a case con-
tains multiple fee-generating claims, there are as many pre-
vailing parties as there are fee-generating claims. Because
both 	landlord 	and 	tenants 	prevailed 	on 	fee-generating
claims, landlord concludes that the trial court correctly des-
ignated both of them as prevailing parties.
We need not decide whether ORS 90.255 contem-
plates only one prevailing party and, if it does, whether the
legislature 	modified that 	statute 	when it enacted ORS
20.077. In this case, tenants' challenge to designating land-
lord as a prevailing party presents a purely academic issue.
The designation has not resulted in any harm to tenants.
More particularly, designating landlord as a prevailing party
has not resulted in tenants having to pay landlord any costs
or fees; 1 it did not preclude the trial court from also designat-
ing tenants as prevailing parties; and it played no role in the
trial court's decision not to award tenants attorney fees. It
follows that the question that tenants urge us to decide-
1 In its order, the trial court stated that each party was entitled to a prevailing
party fee. The supplemental judgment, however, did not award either party any
costs, fees, or disbursements. The Court of Appeals concluded that the supplemen·
ta! judgment superseded the order, Barbara Parmenter Living Trust, 212 Or App
at 672, and tenants have not challenged that conclusion on review.

Cite as 345 Or 334 (2008) 	339
whether the trial court erred in designating landlord as a
prevailing party-presents only an abstract question, which
we decline to reach. See Davis v. Board of Parole, 341Or442,
448, 144 P3d 931 (2006) (declining to decide issue when nei-
ther party had an interest in it).2
Tenants raise another issue on review. Relying on
Executive Mgt. Corp. v. Juckett, 274 Or 515, 547 P2d 603
(1976), tenants argue that under ORS 90.255 a prevailing
party should receive attorney fees except in unusual circum-
stances. They contend that the trial court erred in determin-
ing that the circumstances in this case were sufficiently unu-
sual to deny them any fees. Landlord responds that a later
enacted statute, ORS 20.075, gives trial courts greater lati-
tude in deciding whether to award fees and that, in light of
ORS 20.075, Juckett's interpretation of ORS 90.255 is either
no longer good law or of minimal significance.
In analyzing that issue, we begin with the text of
ORS 90.255. We then discuss this court's decision in Juckett
and turn finally to the effect of ORS 20.075. ORS 90.255 pro-
vides, in part:
"In any action on a rental agreement or arising under this
chapter, reasonable attorney fees * * * may be awarded to
the prevailing party together with costs and necessary
disbursements, notwithstanding any agreement to the
contrary."
The text of ORS 90.255 says that a trial court "may" award
the prevailing party attorney fees in an action on a rental
agreement or arising under ORS chapter 90. It does not say
that trial courts must award the prevailing party fees unless
unusual circumstances are present. Tenants argue, however,
that the following passage from Juckett requires that we read
the statutory text to say something different:
"The [tenant] also argues that'[ t]he award of attorney's fees
under [ORS 90.255] is permissive, not mandatory, and the
court need not award fees in every case.' However, we con-
clude that normally a 'prevailing party' would be entitled to
2 Iflandlord had cross-appealed and argued that it was entitled to fees or costs
as a prevailing party, then the question whether the trial court erred in designat-
ing landlord as a prevailing party would present a live issue. Landlord, however,
did not cross-appeal from the supplemental judgment.

340 	Barbara Parmenter Living Trust v. Lemon
recover 	attorney 	fees, 	barring 	unusual 	circumstances
which might arise in any particular case."
Id. at 519. Tenants argue that this passage from Juckett
establishes that, under ORS 90.255, trial courts must award
prevailing 	parties 	attorney 	fees 	except 	in 	unusual
circumstances.
The passage from Juckett is not a model of clarity.
The sentence on which tenants rely contains two qualifiers. It
says that "normally" a prevailing party will be entitled to fees
"barring unusual circumstances." The use of the word "nor-
mally" implies that the proposition-that a prevailing party
will receive fees barring unusual circumstances-does not
always apply and that reasons other than unusual circum-
stances will justify a court's decision not to award fees. Ifwe
give both phrases-"normally" and "barring unusual circum-
stances"-meaning, then the sentence on which tenants rely
reduces to a preference for a fee award to the prevailing
party, not a mandate to award fees. That reading, not the one
that tenants advance, is the only reading that arguably can
be squared with the legislature's use of "may" in ORS 90.255.
Not only do tenants read Juckett for more than it is
worth, but the legislature enacted ORS 20.075(1) after this
court decided Juckett. See Or Laws 1995, ch 618, § 6 (enacting
ORS 20.075). That statute lists eight factors that a court
"shall consider * * * in determining whether to award attor-
ney fees in any case in which an award of attorney fees is
authorized by statute and in which the court has discretion to
decide whether to award attorney fees." ORS 20.075(1). 3
3 ORS 20.075(1) provides:
"A court shall consider the following factors in determining whether to
award attorney fees in any case in which an award of attorney fees is author-
ized by statute and in which the court has discretion to decide whether to
award attorney fees:
"(a) The 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.
"(b) The objective reasonableness of the claims and defenses asserted by
the parties.
"(c) The extent to which an award of an attorney fee in the case would
deter others from asserting good faith claims or defenses in similar cases.
"(d) The extent to which an award of an attorney fee in the case would
deter others from asserting meritless claims and defenses.

Cite as 345 Or 334 (2008) 	341
Among other things, ORS 20.075(1) directs trial courts to
consider such factors as the reasonableness of the parties'
claims and defenses, the extent to which a fee award would
deter others from asserting good faith claims and defenses,
and the extent to which a fee award would deter others from
asserting meritless claims and defenses.
ORS 20.075(1) defines the terms that a trial court
shall consider in exercising its discretion under ORS 90.255.
The variety and diversity of those terms confirms that a trial
court's exercise of discretion under ORS 90.255 is not limited
to 	determining 	whether 	unusual 	circumstances 	exist.
Rather, it extends to the full range of factors that ORS
20.075(1) requires courts to consider. It follows that the ques-
tion on review regarding the trial court's fee decision is not
whether unusual circumstances exist, as tenants argue;
rather, it is whether the trial court abused its discretion in
applying the factors set out in ORS 20.075(1).
We begin our analysis of that question by noting that
ORS 90.255 authorized the trial court to award the prevail-
ing party attorney fees on four claims: landlord's claim for
breach of the rental agreement and tenants' counterclaims
for unlawful entry of premises, unlawful ouster, and unlaw-
ful disposition of property. 4 Tenants prevailed on two of those
claims: (1) unlawful entry of the premises and (2) unlawful
ouster. Landlord prevailed on two of those claims: (1) breach
of the rental agreement and (2) unlawful disposition of per-
sonal property. Of the remaining two claims, tenants pre-
vailed on a claim (waste) for which no fees are authorized and
"(e) The objective reasonableness of the parties and the diligence of the
parties and their attorneys during the proceedings.
"CO The objective reasonableness of the parties and the diligence of the
parties in pursuing settlement of the dispute.
"(g) The amount that the court has awarded as a prevailing party fee
under ORS 20.190.
"(h) Such other factors as the court may consider appropriate under the
circumstances of the case."
4 ORS 90.255 provides that the prevailing party may recover attorney fees "[i]n
any action on a rental agreement or arising under this chapter." Landlord's claim
on the rental agreement falls within that statute, and the three counterclaims
listed above arise under ORS chapter 90. See ORS 90.322 (unlawful entry of prem-
ises); ORS 90.375 (unlawful ouster); ORS 90.425 (unlawful disposition of personal
property).

342 	Barbara Parmenter Living Trust v. Lemon
lost on a claim (unlawful debt collection practices) for which
another statute, ORS 646.641(2), authorizes attorney fees to
the prevailing party. The only question before us is whether
the trial court abused its discretion in denying tenants fees
on the two claims for relief on which they prevailed (unlawful
entry and unlawful ouster).
The trial court made eight findings in support of its
decision to deny tenants fees. Although we review the trial
court's decision for abuse of discretion, the terms on which
the trial court exercised its discretion must be legally permis-
sible. See State v. Cox, 337 Or 477, 490, 98 P3d 1103 (2004)
(recognizing that principle); McCarthy v. Oregon Freeze Dry,
Inc., 334 Or 77, 92-93, 46 P3d 721 (2002) (reversing fee deci-
sion because the premise on which the Court of Appeals
based its decision to award the defendant attorney fees was
legally incorrect). In this case, the trial court made explicit
findings, which aid our review. Cf McCarthy v. Oregon
Freeze Dry, Inc., 327 Or 185, 190-91, 957 P2d 1200 (1998) (on
reconsideration) (explaining that, although courts need not
make lengthy or complex findings under ORS 20.075(1),
courts still "must describe the relevant facts and legal crite-
ria for the court's decision to award or deny attorney fees in
any terms that are sufficiently clear to permit meaningful
appellate review").
As we explain below, some of the findings that
underlie the trial court's decision to deny tenants attorney
fees are not legally permissible. Because it is necessary to
remand this case to the trial court, we discuss all the trial
court's findings to aid its task on remand. We do not discuss
the trial court's findings in numerical order. Rather, we have
grouped the findings that discuss similar or related factors.
We begin with the trial court's second and eighth findings.
The trial court's second finding states that "[b]oth
parties presented minor meritorious claims and significant
non-meritorious claims." 5 (Emphasis added.) The trial court's
5 We note as an initial matter that, under ORS 90.255, tenants may receive
fees only on those fee-generating claims on which they prevailed. In light of that
fact, it is difficult to see why the relative size of their meritorious and nonmerito-
rious claims matters.

Cite as 345 Or 334 (2008) 	343
eighth finding touches on the same point and sheds further
light on the trial court's thinking. That finding states:
"The outcome sought, the outcome obtained, and the
amount of fees sought in this case are all highly dispropor-
tional. * * * In their answer, [tenants] sought a total of
$10,308.50 in relief. [Tenants] obtained relief in the amount
of $1,396.00. [Tenants] now seek attorney fees in the
amount of $40,424.42."
As we understand the trial court's second and eighth find-
ings, they reflect its conclusion that a fee award is inappro-
priate in this case because the amount of attorney fees that
tenants sought was disproportionate to the amount that they
recovered on the two claims on which they prevailed.
The trial court's second and eighth findings are diffi-
cult to square with the legislature's decision to authorize a
fee award in landlord-tenant actions. Authorizing an award
of attorney fees to the prevailing party in landlord-tenant
actions removes a barrier-the cost of hiring an attorney-
that otherwise might discourage injured parties from bring-
ing small but legitimate claims. As this court has explained
in considering statutes similar to ORS 90.255, "[t]he obvious
purpose of th[os]e statute[s] is to encourage settlement of
damage claims where the amount involved is not large." Heen
v. Kaufman, 258 Or 6, 8, 480 P2d 701 (1971) (describing pur-
pose of ORS 20.080(1)); see also Lamy v. Jack Jarvis &
Company, Inc., 281Or307, 313, 574P2d1107 (1978) (noting
that the purpose of attorney fee provision in ORS 652.200 for
unpaid wages is to "assur[e] that one who works in a master
and servant relationship, usually with a disparity of eco-
nomic power * * * shall be assured of prompt payment."). In
the absence of such statutes, an "'injured person might
forego action upon a small claim because he realize[s] that,
after paying his attorney, his net recovery would not be worth
the time and trouble of a vexatious law suit.' " State ex rel
State Scholarship Com'n v. Magar, 288 Or 635, 639, 607 P2d
167 (1980) (quoting Colby v. Larson, 208Or121, 126, 297 P2d
1073 (1956)) (describing ORS 20.080(1)).
The legislature authorized trial courts to award pre-
vailing parties attorney fees in landlord-tenant actions to
encourage litigants to vindicate their statutory rights, even

344 	Barbara Parmenter Living Trust v. Lemon
though the amount recovered may be minor. It follows that
the fact that tenants recovered less than they sought on their
two fee-generating claims provides no basis to deny them
attorney fees on those claims. The principle that underlies
the trial court's second and eighth findings does not corre-
spond with any of the seven enumerated factors listed in ORS
20.075(1)(a) to (g). Although ORS 20.075(1)(h) authorizes
courts to consider other, nonenumerated factors, the propo-
sition on which the trial court based its second and eighth
findings is contrary to the legislature's decision to authorize a
fee award in the first place. 6
The trial court's third and fourth findings address a
different issue. The third finding states that "[g]ranting an
award of attorney fees to [tenants] would merely encourage
non-meritorious claims in similar cases." The logic of that
finding is at odds with ORS 90.255. Under ORS 90.255, a
court may award attorney fees to tenants only on those fee-
eligible claims on which tenants prevailed. By definition,
awarding a party fees on claims on which it prevailed does
not encourage nonmeritorious claims; it encourages merito-
rious claims. The trial court's third finding does not track
any of the enumerated statutory factors set out in ORS
20.075(1)(a) to (g). 7 Although ORS 20.075(1)(h) authorizes
courts to consider additional, 	nonenumerated factors in
deciding whether to award fees, that paragraph does not per-
mit courts to base their fee decisions on incorrect legal
premises.
The trial court's fourth finding states that "[a]n
award of attorney fees in this case would not deter others
from bringing meritless claims in the future." The court did
6 On remand, ifthe trial court decides to award tenants fees on the two fee-gen-
erating claims on which they prevailed and if it finds that tenants' lawyers
expended an unreasonable amount of time on those claims, then the court may
always reduce any fee award to reflect that finding. However, the fact that the
amount of the claims on which tenants prevailed was "minor" provides no basis for
denying fees entirely.
7 ORS 20.075(1)(d) directs courts to consider "[t]he extent to which an award of
an attorney fee in the case would deter others from asserting meritless claims and
defenses." In this case, the trial court substituted the word "encourage" for "deter"
and did so without recognizing that, under ORS 90.255, fees may be awarded only
to a prevailing party.

Cite as 345 Or 334 (2008) 	345
not explain the basis for its statement, which makes the find-
ing problematic. We note that ordinarily, when a party suc-
cessfully defends against a fee-generating claim and the
claim is meritless, awarding that party (the prevailing party
on that claim) attorney fees serves to deter meritless claims
in the future. 8 In any event, the trial court's fourth finding
does not apply to tenants' fee claims. Rather, by its terms,
that finding applies only to a party who successfully defends
against a fee-generating claim-something that tenants did
not do in this case. It thus appears that the trial court erred
in two respects. It denied tenants fees based on a finding
that, by its terms, does not apply to tenants' fee claims, and
the logic of its finding is problematic, at least without some
further explanation.
Each of the trial court's remaining four findings
addresses separate issues, and we discuss each in turn. The
trial court's first finding states that "[b]oth parties engaged
in conduct that both caused and complicated the dispute and
prolonged the litigation." That finding appears to be based on
two 	statutory 	factors-ORS 	20.075(1)(a), 	which 	directs
courts to consider the nature of the conduct that gave rise to
the litigation, and ORS 20.075(1)(e), which directs courts to
consider the objective reasonableness of the parties' conduct
during the litigation.
Regarding the first statutory factor, ORS 20.075(1)(a)
directs courts to consider the "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." That factor focuses on the
nature of the conduct that gave rise to the litigation. For
example, if a party's conduct that gave rise to the litigation
was "reckless, willful, malicious, in bad faith or illegal" and if
the opposing party prevails on a fee-generating claim, then
the nature of the losing party's conduct cuts in favor of
awarding fees to the prevailing party.
In this case, the trial court found that "[b]oth parties
engaged in conduct that * * * caused * * * the litigation."
8 This court has explained, in a related context, that a claim is "meritless when
it is entirely devoid of legal or factual support." Mattiza v. Foster, 311 Or 1, 8,
803 P2d 723 (1990) (footnote omitted).

346 	Barbara Parmenter Living Trust v. Lemon
That finding adds little to the analysis that ORS 20.075(1)(a)
contemplates. That finding does not address whether ten-
ants' conduct was sufficiently blameworthy that it is appro-
priate to deny them fees entirely on the claims on which they
prevailed or whether landlord's conduct was sufficiently
reasonable that it is appropriate to reach the same result. It
may be that the trial court concluded that both parties' con-
duct that gave rise to the litigation was sufficiently egregious
that neither party should recover fees. However, the trial
court did not say that. We need not decide whether that omis-
sion would be sufficient to require us to vacate and remand
the trial court's fee award if that were the only problem with
the trial court's ruling. The problems with the findings dis-
cussed above require a remand, and we note that omission so
that the trial court can clarify its intent on remand.
The second part of the trial court's first finding
states that "[b]oth parties engaged in conduct that * * * com-
plicated the dispute and prolonged the litigation." ORS
20.075(1)(e) directs courts to consider "[t]he objective reason-
ableness of the parties and the diligence of the parties and
their attorneys during the proceedings." As we understand
the second part of the trial court's first finding, the trial court
concluded that tenants' lack of objective reasonableness and
diligence in conducting this litigation cuts against a fee
award, even on the two fee-generating claims on which they
prevailed. That finding is consistent with ORS 20.075(1)(e).
The trial court's sixth finding states that, because it
had declined to award either party an enhanced prevailing
party fee, "this category does not impact the Court's attorney
fee ruling." ORS 20.075(1)(g) directs a court to consider the
amount of any prevailing party fee that it has awarded,
including an award of an enhanced prevailing party fee, in
deciding whether to also award attorney fees. Implicit in that
factor is the proposition that the amount of an enhanced pre-
vailing party fee, which can be as much as $5,000, may obvi-
ate the need to award the prevailing party attorney fees. A
related subsection reinforces that point. ORS 20.190(3) lists
eight factors that a trial court shall consider in deciding
whether to award an enhanced prevailing party fee. Those
factors mirror the factors set out in ORS 20.075(1). ORS
20.190(3)(g), for example, directs courts to consider any

Cite as 345 Or 334 (2008) 	347
award of attorney fees to the prevailing party in deciding
whether to also award an enhanced prevailing party fee.
As 	we 	understand 	ORS 	20.075(1)(g) 	and 	ORS
20.190(3)(g), courts should consider whether awarding a pre-
vailing party both its attorney fees and an enhanced prevail-
ing party fee would overcompensate that party. Conversely,
the decision not to award enhanced prevailing party fees
either is neutral or leaves open the possibility of an award of
attorney fees under ORS 20.075(1). In this case, the trial
court regarded the absence of an enhanced prevailing party
fee as neutral, and we cannot say that it erred in doing so.
The trial court's fifth finding states that "[i]nade-
quate settlement offers were made by both parties." That
finding is based on ORS 20.075(1)(£), which directs courts to
consider "[t]he objective reasonableness of the parties and
the diligence of the parties in pursuing settlement of the dis-
pute." It is not easy to discern the trial court's reasoning from
its finding. The fact that a party offers a low amount to settle
a case does not necessarily mean that the party's settlement
negotiations were not objectively reasonable or diligent.
Much depends on the context in which the negotiations took
place, and merely describing the offers as "inadequate" does
not shed much light on the factual context that persuaded the
trial court that, in this case, tenants' strategy during settle-
ment cuts against a fee award. On remand, further explana-
tion would facilitate meaningful appellate review of the trial
court's decision.
The trial court's seventh finding states: "As the
Stocker court indicated, a prevailing party is ordinarily enti-
tled to attorney fees in [a] RLTA case. The Court has consid-
ered this factor." To understand the trial court's seventh find-
ing, it is necessary to describe briefly the Court of Appeals
decision in Stocker. 	In that case, the Court of Appeals
attempted to reconcile this court's decision in Juckett with
ORS 20.075(1). Stocker, 178 Or App at 551-52. Relying on
Preble v. Dept. of Rev., 331 Or 599, 19 P3d 335 (2001), the
Court of Appeals held that ORS 20.075(1) superseded the
"rule" from Juckett that, under ORS 90.255, a prevailing
party is entitled to recover its attorney fees except in unusual
circumstances. Stocker, 178 Or at 551-52. According to the

348 	Barbara Parmenter Living Trust v. Lemon
Court of Appeals, the rule from Juckett no longer supplies the
governing principle in awarding fees under ORS 90.255;
rather, it "is merely an additional consideration that the
court must take into account under ORS 20.075(1)(h)." Id. at
552. In its seventh finding, the trial court followed the Court
of Appeals decision in Stocker and considered the rule from
Juckett.
As explained earlier in this opinion, we do not read
Juckett as broadly as the Court of Appeals did in Stocker.
Juckett recognizes that a court has discretion to award fees to
the prevailing party under ORS 90.255, and the subsequent
enactment of ORS 20.075(1) confirms that the terms on
which a court may exercise its discretion to deny fees under
ORS 90.255 are not limited to unusual circumstances. We
also disagree with the Court of Appeals that the reasoning in
Juckett is something that a trial court "must take into
account" under ORS 20.075(1)(h). See Stocker, 178 Or App at
552. Rather, subsection (l)(h) requires consideration only of
"[s]uch other factors as the court may consider appropriate
under the circumstances of the case." (Emphasis added.) By
its terms, subsection (l)(h) is permissive, not mandatory. Cf.
Preble, 331 Or at 604 (in reviewing an attorney fee petition,
this court exercised its discretion to consider a factor, articu-
lated in an earlier case, that mirrored some of the statutorily
enumerated factors).
That said, we think that two statutory factors bear
on a related issue. As explained above, the purpose of ORS
90.255 is to encourage litigants in landlord-tenant disputes
to vindicate their statutory rights. That purpose can factor
into the analysis when a court is deciding whether to award
fees to a party who has brought and prevailed on an objec-
tively reasonable claim. See 	ORS 20.075(1)(b) (directing
courts to consider that factor). Similarly, that purpose can
factor into the analysis when deciding whether an award of
attorney fees in this case will deter others from asserting
meritless defenses to such claims. See ORS 20.075(1)(d)
(directing courts to consider that factor). As with all the stat-
utory factors, none is necessarily dispositive, but all must be
considered.

Cite as 345 Or 334 (2008) 	349
Having reviewed the trial court's eight findings that
underlie its fee decision, we conclude that four of those fac-
tors (the second, third, fourth, and eighth factors) are not
legally permissible. Because we cannot say that the trial
court would have reached the same conclusion if it had not
considered these factors, we reverse the trial court's supple-
mental judgment and remand for further proceedings. Our
holding does not preclude the trial court from reaching the
same conclusion on remand. If, however, the trial court
reaches the same conclusion, it must do so after considering
all the required factors and it must base its decision on terms
that are legally permissible under ORS 20.075.
The decision of the Court of Appeals is reversed. The
supplemental judgment of the circuit court is reversed, and
the 	case 	is 	remanded 	to 	the 	circuit 	court for 	further
proceedings.

2 printed pages contain little extracted OCR body text; searchable legal-body completeness has not been established for those pages.

OCR transcription for search; preserved printed pages are authoritative

Argued and submitted January 9, decision of Court of Appeals reversed;
supplemental judgment of circuit court reversed, and case remanded to
circuit court for further proceedings October 9, 2008

BARBARA PARMENTER LIVING TRUST,
Respondent on Review,
v.
Steve LEMON
and Kymberly Lemon,
Petitioners on Review.
(CC 12-02-23704; CA A126429; SC S054971)
194 P3d 796

# En Banc

On review from the Court of Appeals .*

Brian D. Cox, of Cox & Associates, LLC, Eugene, argued
the cause and filed the brief for petitioners on review.

William E. Flinn, of Hurley, Lynch & Re, PC, Bend,
argued the cause for respondent on review.

KISTLER, J.

The decision of the Court of Appeals is reversed. The sup-
plemental judgment of the circuit court is reversed, and the
case is remanded to the circuit court for further proceedings.

# KISTLER, J.

This case arises out of a landlord-tenant dispute.
The trial court ruled in landlord's favor on one of its claims
and in tenants' favor on two of their claims. The court desig-
nated both landlord and tenants as prevailing parties but
declined to award either of them attorney fees. Tenants
appealed, arguing that they were the only prevailing parties
and that the trial court should have awarded them attorney
fees. A divided panel of the Court of Appeals affirmed.
Barbara Parmenter Living Trust v. Lemon, 212 Or App 669,
159 P3d 1174 (2007). We allowed tenants' petition for review
and now reverse the Court of Appeals decision and the trial
court's judgment and remand this case to the trial court for
further proceedings.

Landlord brought this action against tenants, alleg-
ing claims for breach of the rental agreement and waste.
Tenants answered and alleged counterclaims for unlawful
entry, ouster, unlawful disposition of personal property, and
unlawful debt collection practices. After a bench trial, the
trial court ruled in landlord's favor on its claim for breach of
the rental agreement and awarded it $345 in damages. The
court ruled in tenants' favor on their unlawful entry and
ouster counterclaims and awarded them $1,396 in damages.
The court ruled against both parties on their remaining
claims. The court entered a general judgment reflecting those
rulings. Neither party appealed from that judgment.

After the trial court entered the general judgment,
both parties sought prevailing party fees, costs, disburse-
ments, and attorney fees. After considering the parties' argu-
ments, the trial court issued an order that addressed two
issues. First, it rejected tenants' argument that, under ORS
90.255, it should designate only one prevailing party and
agreed with landlord that, under ORS 20.077, both tenants
and landlords were prevailing parties. Second, although ten-
ants and landlord were both eligible as prevailing parties to
recover their attorney fees under ORS 90.255, the trial court
declined to award either party any fees. The court reasoned:

"1. Both parties engaged in conduct that both caused and
complicated the dispute and prolonged the litigation.

"2. Both parties presented minor meritorious claims and
significant non-meritorious claims.

"3. Granting an award of attorney fees to either party
would merely encourage non-meritorious claims in the
future.

"4. An award of attorney fees in this case would not deter
others from bringing meritless claims in the future.

"5. Inadequate settlement offers were made by both
parties.

"6. Having found that each party is a 'prevailing party'
under Oregon law, the Court awards each party a prevail-
ing party fee. The Court, however, explicitly declined to
award either party an enhanced prevailing party fee.
Hence, this category does not impact the Court's attorney
fee ruling.

"7. As the Stocker [v. Keith, 178 Or App 544, 38 P3d 283
(2002),] court indicated, a prevailing party is ordinarily
entitled to attorney fees in [a Residential Landlord Tenant
Act] case. The Court has considered this factor.

"8. The outcome sought, the outcome obtained, and the
amount of fees sought in this case are all highly dispropor-
tional. In [its] complaint, [landlord] sought relief in the
amount of $2,308.20. [It] obtained relief in the amount of
$345.00. [Landlord] now seeks attorney fees in the amount
of $32,270.50. In their answer, [tenants] sought a total of
$10,308.50 in relief. [Tenants] obtained relief in the amount
of $1,396.00. [Tenants] now seek attorney fees in the
amount of $40,424.42."

The trial court later entered a supplemental judgment, which
denied both parties' requests for "costs, disbursements and
attorney fees * * * for the reasons set forth [in the trial court's
order]."

Tenants appealed from the supplemental judgment.
Landlord did not cross-appeal. On appeal, tenants argued
that the trial court had erred in designating landlord as a
prevailing party. In tenants' view, there can be only one pre-
vailing party under ORS 90.255, and only they had prevailed.
Tenants also argued that the trial court should have awarded
them attorney fees. As noted, a divided Court of Appeals
affirmed. The majority concluded that tenants' objections to

designating landlord as a prevailing party were not properly
before it. Barbara Parmenter Living Trust, 212 Or App at
672-73. Regarding tenants' attorney fee claim, the majority
agreed with tenants that, except in unusual circumstances,
the prevailing party under ORS 90.255 is entitled to fees. Id.
at 675. The majority concluded, however, that the circum-
stances that the trial court had identified were sufficiently
unusual to warrant denying tenants fees. Id. at 676. The dis-
sent would have held that those circumstances provided a
basis for reducing a fee award but not a basis for denying fees
altogether. Id. at 676-77 (Armstrong, J., dissenting). We
allowed tenants' petition for review to consider those issues.

We begin with tenants' argument that the trial court
erred in designating landlord as a prevailing party. Tenants
reason that, under ORS 90.255, there can be only one pre-
vailing party and that, because the net award was in their
favor, only they prevailed. Landlord responds that ORS
20.077, a later enacted statute, points in a different direction.
Landlord argues that, under ORS 20.077, when a case con-
tains multiple fee-generating claims, there are as many pre-
vailing parties as there are fee-generating claims. Because
both landlord and tenants prevailed on fee-generating
claims, landlord concludes that the trial court correctly des-
ignated both of them as prevailing parties.

We need not decide whether ORS 90.255 contem-
plates only one prevailing party and, if it does, whether the
legislature modified that statute when it enacted ORS
20.077. In this case, tenants' challenge to designating land-
lord as a prevailing party presents a purely academic issue.
The designation has not resulted in any harm to tenants.
More particularly, designating landlord as a prevailing party
has not resulted in tenants having to pay landlord any costs
or fees;1 it did not preclude the trial court from also designat-
ing tenants as prevailing parties; and it played no role in the
trial court's decision not to award tenants attorney fees. It
follows that the question that tenants urge us to decide-

1 In its order, the trial court stated that each party was entitled to a prevailing
party fee. The supplemental judgment, however, did not award either party any
costs, fees, or disbursements. The Court of Appeals concluded that the supplemen-
tal judgment superseded the order, Barbara Parmenter Living Trust, 212 Or App
at 672, and tenants have not challenged that conclusion on review.

whether the trial court erred in designating landlord as a
prevailing party-presents only an abstract question, which
we decline to reach. See Davis v. Board of Parole, 341 Or 442,
448, 144 P3d 931 (2006) (declining to decide issue when nei-
ther party had an interest in it).2

Tenants raise another issue on review. Relying on
Executive Mgt. Corp. v. Juckett, 274 Or 515, 547 P2d 603
(1976), tenants argue that under ORS 90.255 a prevailing
party should receive attorney fees except in unusual circum-
stances. They contend that the trial court erred in determin-
ing that the circumstances in this case were sufficiently unu-
sual to deny them any fees. Landlord responds that a later
enacted statute, ORS 20.075, gives trial courts greater lati-
tude in deciding whether to award fees and that, in light of
ORS 20.075, Juckett's interpretation of ORS 90.255 is either
no longer good law or of minimal significance.

In analyzing that issue, we begin with the text of
ORS 90.255. We then discuss this court's decision in Juckett
and turn finally to the effect of ORS 20.075. ORS 90.255 pro-
vides, in part:

"In any action on a rental agreement or arising under this
chapter, reasonable attorney fees * * * may be awarded to
the prevailing party together with costs and necessary
disbursements, notwithstanding any agreement to the
contrary."

The text of ORS 90.255 says that a trial court "may" award
the prevailing party attorney fees in an action on a rental
agreement or arising under ORS chapter 90. It does not say
that trial courts must award the prevailing party fees unless
unusual circumstances are present. Tenants argue, however,
that the following passage from Juckett requires that we read
the statutory text to say something different:

"The [tenant] also argues that '[t]he award of attorney's fees
under [ORS 90.255] is permissive, not mandatory, and the
court need not award fees in every case.' However, we con-
clude that normally a 'prevailing party' would be entitled to

2 If landlord had cross-appealed and argued that it was entitled to fees or costs
as a prevailing party, then the question whether the trial court erred in designat-
ing landlord as a prevailing party would present a live issue. Landlord, however,
did not cross-appeal from the supplemental judgment.

recover attorney fees, barring unusual circumstances
which might arise in any particular case."

Id. at 519. Tenants argue that this passage from Juckett
establishes that, under ORS 90.255, trial courts must award
prevailing parties attorney fees except in unusual
circumstances.

The passage from Juckett is not a model of clarity.
The sentence on which tenants rely contains two qualifiers. It
says that "normally" a prevailing party will be entitled to fees
"barring unusual circumstances." The use of the word "nor-
mally" implies that the proposition-that a prevailing party
will receive fees barring unusual circumstances-does not
always apply and that reasons other than unusual circum-
stances will justify a court's decision not to award fees. If we
give both phrases-"normally" and "barring unusual circum-
stances"-meaning, then the sentence on which tenants rely
reduces to a preference for a fee award to the prevailing
party, not a mandate to award fees. That reading, not the one
that tenants advance, is the only reading that arguably can
be squared with the legislature's use of "may" in ORS 90.255.

Not only do tenants read Juckett for more than it is
worth, but the legislature enacted ORS 20.075(1) after this
court decided Juckett. See Or Laws 1995, ch 618, § 6 (enacting
ORS 20.075). That statute lists eight factors that a court
"shall consider * * * in determining whether to award attor-
ney fees in any case in which an award of attorney fees is
authorized by statute and in which the court has discretion to
decide whether to award attorney fees." ORS 20.075(1).3

3 ORS 20.075(1) provides:

"A court shall consider the following factors in determining whether to
award attorney fees in any case in which an award of attorney fees is author-
ized by statute and in which the court has discretion to decide whether to
award attorney fees:

"(a) The 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.

"(b) The objective reasonableness of the claims and defenses asserted by
the parties.

"(c) The extent to which an award of an attorney fee in the case would
deter others from asserting good faith claims or defenses in similar cases.

"(d) The extent to which an award of an attorney fee in the case would
deter others from asserting meritless claims and defenses.

Among other things, ORS 20.075(1) directs trial courts to
consider such factors as the reasonableness of the parties'
claims and defenses, the extent to which a fee award would
deter others from asserting good faith claims and defenses,
and the extent to which a fee award would deter others from
asserting meritless claims and defenses.

ORS 20.075(1) defines the terms that a trial court
shall consider in exercising its discretion under ORS 90.255.
The variety and diversity of those terms confirms that a trial
court's exercise of discretion under ORS 90.255 is not limited
to determining whether unusual circumstances exist.
Rather, it extends to the full range of factors that ORS
20.075(1) requires courts to consider. It follows that the ques-
tion on review regarding the trial court's fee decision is not
whether unusual circumstances exist, as tenants argue;
rather, it is whether the trial court abused its discretion in
applying the factors set out in ORS 20.075(1).

We begin our analysis of that question by noting that
ORS 90.255 authorized the trial court to award the prevail-
ing party attorney fees on four claims: landlord's claim for
breach of the rental agreement and tenants' counterclaims
for unlawful entry of premises, unlawful ouster, and unlaw-
ful disposition of property.4 Tenants prevailed on two of those
claims: (1) unlawful entry of the premises and (2) unlawful
ouster. Landlord prevailed on two of those claims: (1) breach
of the rental agreement and (2) unlawful disposition of per-
sonal property. Of the remaining two claims, tenants pre-
vailed on a claim (waste) for which no fees are authorized and

"(e) The objective reasonableness of the parties and the diligence of the
parties and their attorneys during the proceedings.

"(f) The objective reasonableness of the parties and the diligence of the
parties in pursuing settlement of the dispute.

"(g) The amount that the court has awarded as a prevailing party fee
under ORS 20.190.

"(h) Such other factors as the court may consider appropriate under the
circumstances of the case."

4 ORS 90.255 provides that the prevailing party may recover attorney fees "[i]n
any action on a rental agreement or arising under this chapter." Landlord's claim
on the rental agreement falls within that statute, and the three counterclaims
listed above arise under ORS chapter 90. See ORS 90.322 (unlawful entry of prem-
ises); ORS 90.375 (unlawful ouster); ORS 90.425 (unlawful disposition of personal
property).

lost on a claim (unlawful debt collection practices) for which
another statute, ORS 646.641(2), authorizes attorney fees to
the prevailing party. The only question before us is whether
the trial court abused its discretion in denying tenants fees
on the two claims for relief on which they prevailed (unlawful
entry and unlawful ouster).

The trial court made eight findings in support of its
decision to deny tenants fees. Although we review the trial
court's decision for abuse of discretion, the terms on which
the trial court exercised its discretion must be legally permis-
sible. See State v. Cox, 337 Or 477, 490, 98 P3d 1103 (2004)
(recognizing that principle); McCarthy v. Oregon Freeze Dry,
Inc., 334 Or 77, 92-93, 46 P3d 721 (2002) (reversing fee deci-
sion because the premise on which the Court of Appeals
based its decision to award the defendant attorney fees was
legally incorrect). In this case, the trial court made explicit
findings, which aid our review. Cf. McCarthy v. Oregon
Freeze Dry, Inc., 327 Or 185, 190-91, 957 P2d 1200 (1998) (on
reconsideration) (explaining that, although courts need not
make lengthy or complex findings under ORS 20.075(1),
courts still "must describe the relevant facts and legal crite-
ria for the court's decision to award or deny attorney fees in
any terms that are sufficiently clear to permit meaningful
appellate review").

As we explain below, some of the findings that
underlie the trial court's decision to deny tenants attorney
fees are not legally permissible. Because it is necessary to
remand this case to the trial court, we discuss all the trial
court's findings to aid its task on remand. We do not discuss
the trial court's findings in numerical order. Rather, we have
grouped the findings that discuss similar or related factors.
We begin with the trial court's second and eighth findings.

The trial court's second finding states that "[b]oth
parties presented minor meritorious claims and significant
non-meritorious claims."" (Emphasis added.) The trial court's

5 We note as an initial matter that, under ORS 90.255, tenants may receive
fees only on those fee-generating claims on which they prevailed. In light of that
fact, it is difficult to see why the relative size of their meritorious and nonmerito-
rious claims matters.

eighth finding touches on the same point and sheds further
light on the trial court's thinking. That finding states:

"The outcome sought, the outcome obtained, and the
amount of fees sought in this case are all highly dispropor-
tional. *** In their answer, [tenants] sought a total of
$10,308.50 in relief. [Tenants] obtained relief in the amount
of $1,396.00. [Tenants] now seek attorney fees in the
amount of $40,424.42."

As we understand the trial court's second and eighth find-
ings, they reflect its conclusion that a fee award is inappro-
priate in this case because the amount of attorney fees that
tenants sought was disproportionate to the amount that they
recovered on the two claims on which they prevailed.

The trial court's second and eighth findings are diffi-
cult to square with the legislature's decision to authorize a
fee award in landlord-tenant actions. Authorizing an award
of attorney fees to the prevailing party in landlord-tenant
actions removes a barrier-the cost of hiring an attorney-
that otherwise might discourage injured parties from bring-
ing small but legitimate claims. As this court has explained
in considering statutes similar to ORS 90.255, "[t]he obvious
purpose of th[os]e statute[s] is to encourage settlement of
damage claims where the amount involved is not large." Heen
v. Kaufman, 258 Or 6, 8, 480 P2d 701 (1971) (describing pur-
pose of ORS 20.080(1)); see also Lamy v. Jack Jarvis &
Company, Inc., 281 Or 307, 313, 574 P2d 1107 (1978) (noting
that the purpose of attorney fee provision in ORS 652.200 for
unpaid wages is to "assur[e] that one who works in a master
and servant relationship, usually with a disparity of eco-
nomic power * * * shall be assured of prompt payment."). In
the absence of such statutes, an "'injured person might
forego action upon a small claim because he realize[s] that,
after paying his attorney, his net recovery would not be worth
the time and trouble of a vexatious law suit.'" State ex rel
State Scholarship Com'n v. Magar, 288 Or 635, 639, 607 P2d
167 (1980) (quoting Colby v. Larson, 208 Or 121, 126, 297 P2d
1073 (1956)) (describing ORS 20.080(1)).

The legislature authorized trial courts to award pre-
vailing parties attorney fees in landlord-tenant actions to
encourage litigants to vindicate their statutory rights, even

though the amount recovered may be minor. It follows that
the fact that tenants recovered less than they sought on their
two fee-generating claims provides no basis to deny them
attorney fees on those claims. The principle that underlies
the trial court's second and eighth findings does not corre-
spond with any of the seven enumerated factors listed in ORS
20.075(1)(a) to (g). Although ORS 20.075(1)(h) authorizes
courts to consider other, nonenumerated factors, the propo-
sition on which the trial court based its second and eighth
findings is contrary to the legislature's decision to authorize a
fee award in the first place.6

The trial court's third and fourth findings address a
different issue. The third finding states that "[g]ranting an
award of attorney fees to [tenants] would merely encourage
non-meritorious claims in similar cases." The logic of that
finding is at odds with ORS 90.255. Under ORS 90.255, a
court may award attorney fees to tenants only on those fee-
eligible claims on which tenants prevailed. By definition,
awarding a party fees on claims on which it prevailed does
not encourage nonmeritorious claims; it encourages merito-
rious claims. The trial court's third finding does not track
any of the enumerated statutory factors set out in ORS
20.075(1)(a) to (g).7 Although ORS 20.075(1)(h) authorizes
courts to consider additional, nonenumerated factors in
deciding whether to award fees, that paragraph does not per-
mit courts to base their fee decisions on incorrect legal
premises.

The trial court's fourth finding states that "[a]n
award of attorney fees in this case would not deter others
from bringing meritless claims in the future." The court did

6 On remand, if the trial court decides to award tenants fees on the two fee-gen-
erating claims on which they prevailed and if it finds that tenants' lawyers
expended an unreasonable amount of time on those claims, then the court may
always reduce any fee award to reflect that finding. However, the fact that the
amount of the claims on which tenants prevailed was "minor" provides no basis for
denying fees entirely.

7 ORS 20.075(1)(d) directs courts to consider "[t]he extent to which an award of
an attorney fee in the case would deter others from asserting meritless claims and
defenses." In this case, the trial court substituted the word "encourage" for "deter"
and did so without recognizing that, under ORS 90.255, fees may be awarded only
to a prevailing party.

not explain the basis for its statement, which makes the find-
ing problematic. We note that ordinarily, when a party suc-
cessfully defends against a fee-generating claim and the
claim is meritless, awarding that party (the prevailing party
on that claim) attorney fees serves to deter meritless claims
in the future.8 In any event, the trial court's fourth finding
does not apply to tenants' fee claims. Rather, by its terms,
that finding applies only to a party who successfully defends
against a fee-generating claim-something that tenants did
not do in this case. It thus appears that the trial court erred
in two respects. It denied tenants fees based on a finding
that, by its terms, does not apply to tenants' fee claims, and
the logic of its finding is problematic, at least without some
further explanation.

Each of the trial court's remaining four findings
addresses separate issues, and we discuss each in turn. The
trial court's first finding states that "[b]oth parties engaged
in conduct that both caused and complicated the dispute and
prolonged the litigation." That finding appears to be based on
two statutory factors-ORS 20.075(1)(a), which directs
courts to consider the nature of the conduct that gave rise to
the litigation, and ORS 20.075(1)(e), which directs courts to
consider the objective reasonableness of the parties' conduct
during the litigation.

Regarding the first statutory factor, ORS 20.075(1)(a)
directs courts to consider the "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." That factor focuses on the
nature of the conduct that gave rise to the litigation. For
example, if a party's conduct that gave rise to the litigation
was "reckless, willful, malicious, in bad faith or illegal" and if
the opposing party prevails on a fee-generating claim, then
the nature of the losing party's conduct cuts in favor of
awarding fees to the prevailing party.

In this case, the trial court found that "[b]oth parties
engaged in conduct that * * * caused *** the litigation."

8 This court has explained, in a related context, that a claim is "meritless when
it is entirely devoid of legal or factual support." Mattiza v. Foster, 311 Or 1, 8,
803 P2d 723 (1990) (footnote omitted).

That finding adds little to the analysis that ORS 20.075(1)(a)
contemplates. That finding does not address whether ten-
ants' conduct was sufficiently blameworthy that it is appro-
priate to deny them fees entirely on the claims on which they
prevailed or whether landlord's conduct was sufficiently
reasonable that it is appropriate to reach the same result. It
may be that the trial court concluded that both parties' con-
duct that gave rise to the litigation was sufficiently egregious
that neither party should recover fees. However, the trial
court did not say that. We need not decide whether that omis-
sion would be sufficient to require us to vacate and remand
the trial court's fee award if that were the only problem with
the trial court's ruling. The problems with the findings dis-
cussed above require a remand, and we note that omission so
that the trial court can clarify its intent on remand.

The second part of the trial court's first finding
states that "[b]oth parties engaged in conduct that * * * com-
plicated the dispute and prolonged the litigation." ORS
20.075(1)(e) directs courts to consider "[t]he objective reason-
ableness of the parties and the diligence of the parties and
their attorneys during the proceedings." As we understand
the second part of the trial court's first finding, the trial court
concluded that tenants' lack of objective reasonableness and
diligence in conducting this litigation cuts against a fee
award, even on the two fee-generating claims on which they
prevailed. That finding is consistent with ORS 20.075(1)(e).

The trial court's sixth finding states that, because it
had declined to award either party an enhanced prevailing
party fee, "this category does not impact the Court's attorney
fee ruling." ORS 20.075(1)(g) directs a court to consider the
amount of any prevailing party fee that it has awarded,
including an award of an enhanced prevailing party fee, in
deciding whether to also award attorney fees. Implicit in that
factor is the proposition that the amount of an enhanced pre-
vailing party fee, which can be as much as $5,000, may obvi-
ate the need to award the prevailing party attorney fees. A
related subsection reinforces that point. ORS 20.190(3) lists
eight factors that a trial court shall consider in deciding
whether to award an enhanced prevailing party fee. Those
factors mirror the factors set out in ORS 20.075(1). ORS
20.190(3)(g), for example, directs courts to consider any

award of attorney fees to the prevailing party in deciding
whether to also award an enhanced prevailing party fee.

As we understand ORS 20.075(1)(g) and ORS
20.190(3)(g), courts should consider whether awarding a pre-
vailing party both its attorney fees and an enhanced prevail-
ing party fee would overcompensate that party. Conversely,
the decision not to award enhanced prevailing party fees
either is neutral or leaves open the possibility of an award of
attorney fees under ORS 20.075(1). In this case, the trial
court regarded the absence of an enhanced prevailing party
fee as neutral, and we cannot say that it erred in doing so.

The trial court's fifth finding states that "[i]nade-
quate settlement offers were made by both parties." That
finding is based on ORS 20.075(1)(f), which directs courts to
consider "[t]he objective reasonableness of the parties and
the diligence of the parties in pursuing settlement of the dis-
pute." It is not easy to discern the trial court's reasoning from
its finding. The fact that a party offers a low amount to settle
a case does not necessarily mean that the party's settlement
negotiations were not objectively reasonable or diligent.
Much depends on the context in which the negotiations took
place, and merely describing the offers as "inadequate" does
not shed much light on the factual context that persuaded the
trial court that, in this case, tenants' strategy during settle-
ment cuts against a fee award. On remand, further explana-
tion would facilitate meaningful appellate review of the trial
court's decision.

The trial court's seventh finding states: "As the
Stocker court indicated, a prevailing party is ordinarily enti-
tled to attorney fees in [a] RLTA case. The Court has consid-
ered this factor." To understand the trial court's seventh find-
ing, it is necessary to describe briefly the Court of Appeals
decision in Stocker. In that case, the Court of Appeals
attempted to reconcile this court's decision in Juckett with
ORS 20.075(1). Stocker, 178 Or App at 551-52. Relying on
Preble v. Dept. of Rev., 331 Or 599, 19 P3d 335 (2001), the
Court of Appeals held that ORS 20.075(1) superseded the
"rule" from Juckett that, under ORS 90.255, a prevailing
party is entitled to recover its attorney fees except in unusual
circumstances. Stocker, 178 Or at 551-52. According to the

Court of Appeals, the rule from Juckett no longer supplies the
governing principle in awarding fees under ORS 90.255;
rather, it "is merely an additional consideration that the
court must take into account under ORS 20.075(1)(h)." Id. at
552. In its seventh finding, the trial court followed the Court
of Appeals decision in Stocker and considered the rule from
Juckett.

As explained earlier in this opinion, we do not read
Juckett as broadly as the Court of Appeals did in Stocker.
Juckett recognizes that a court has discretion to award fees to
the prevailing party under ORS 90.255, and the subsequent
enactment of ORS 20.075(1) confirms that the terms on
which a court may exercise its discretion to deny fees under
ORS 90.255 are not limited to unusual circumstances. We
also disagree with the Court of Appeals that the reasoning in
Juckett is something that a trial court "must take into
account" under ORS 20.075(1)(h). See Stocker, 178 Or App at
552. Rather, subsection (1)(h) requires consideration only of
"[s]uch other factors as the court may consider appropriate
under the circumstances of the case." (Emphasis added.) By
its terms, subsection (1)(h) is permissive, not mandatory. Cf.
Preble, 331 Or at 604 (in reviewing an attorney fee petition,
this court exercised its discretion to consider a factor, articu-
lated in an earlier case, that mirrored some of the statutorily
enumerated factors).

That said, we think that two statutory factors bear
on a related issue. As explained above, the purpose of ORS
90.255 is to encourage litigants in landlord-tenant disputes
to vindicate their statutory rights. That purpose can factor
into the analysis when a court is deciding whether to award
fees to a party who has brought and prevailed on an objec-
tively reasonable claim. See ORS 20.075(1)(b) (directing
courts to consider that factor). Similarly, that purpose can
factor into the analysis when deciding whether an award of
attorney fees in this case will deter others from asserting
meritless defenses to such claims. See ORS 20.075(1)(d)
(directing courts to consider that factor). As with all the stat-
utory factors, none is necessarily dispositive, but all must be
considered.

Having reviewed the trial court's eight findings that
underlie its fee decision, we conclude that four of those fac-
tors (the second, third, fourth, and eighth factors) are not
legally permissible. Because we cannot say that the trial
court would have reached the same conclusion if it had not
considered these factors, we reverse the trial court's supple-
mental judgment and remand for further proceedings. Our
holding does not preclude the trial court from reaching the
same conclusion on remand. If, however, the trial court
reaches the same conclusion, it must do so after considering
all the required factors and it must base its decision on terms
that are legally permissible under ORS 20.075.

The decision of the Court of Appeals is reversed. The
supplemental judgment of the circuit court is reversed, and
the case is remanded to the circuit court for further
proceedings.

S054971, Opinion — Barbara Parmenter Living Trust v. Lemon

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