S054925, Opinion — Powers v. Quigley

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Argued and submitted March 3, decision of Court of Appeals reversed; order of
circuit court reversed, and case remanded to circuit court for further proceedings
December 11, 2008

Elena POWERS,
Petitioner on Review,
v.
William QUIGLEY,
Respondent on Review.
(CC 0406-05930; CA A129463; SC S054925)
198 P3d 919

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# En Banc

On review from the Court of Appeals .*

Christopher T. Hill, of Christopher T. Hill, PC, Portland,
argued the cause and filed the briefs for petitioner on review.

James B. Rich, of Harris, Wyatt & Amala LLC, Salem,
argued the cause and filed the brief for respondent on review.

DURHAM, J.

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

\* Multnomah County Circuit Court, Edward J. Jones, Judge. 212 Or App 644,
159 P3d 371 (2007).

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# DURHAM, J.

This case requires us to resolve an asserted conflict
between ORS 20.080(1), which governs the recovery of attor-
ney fees in tort claims for $5,500 or less, and ORCP 54 E,
which limits recovery of attorney fees after a party presents
its opponent with an offer of judgment. We set out those pro-
visions below. Plaintiff seeks review of a court order limiting
her recovery of attorney fees to expenses incurred prior to
defendant's offer of judgment. Plaintiff argues that ORCP
54 E does not apply to awards of attorney fees under ORS
20.080(1) because those two statutes conflict and ORS
20.080(1) is the more specific statute. The Court of Appeals
concluded that no such conflict existed and affirmed the
order. Powers v. Quigley, 212 Or App 644, 648, 159 P3d 371
(2007). We now conclude that, with respect to attorney fees
incurred after a defendant makes an offer of judgment, there
is a conflict between ORS 20.080(1) and ORCP 54 E. Because
ORS 20.080(1) is the more specific provision, it functions as
an exception to the rule stated in ORCP 54 E, and the offer of
judgment procedure under ORCP 54 E therefore does not
limit a plaintiff's statutory right to an award of attorney fees
under ORS 20.080(1). We therefore reverse the decision of
the Court of Appeals.

We begin with the facts of the case, which the parties
do not dispute. On April 3, 2003, defendant's car rear-ended
plaintiff's car and damaged it. Plaintiff had her car repaired.
On May 21, 2004, plaintiff sent a written demand to defen-
dant and his insurance adjuster for $4,271 as compensation
for the diminished value of her car. Defendant's insurance
adjuster tendered an offer of $3,200 in response, which plain-
tiff rejected. On June 9, 2004, plaintiff filed a complaint in
Multnomah County Circuit Court, in which she alleged that
defendant had been negligent and requested damages of
$4,271, as well as costs and attorney fees under ORS 20.080.
After filing an answer, defendant served plaintiff with an
offer of judgment under ORCP 54 E for $3,636, exclusive of
costs and recoverable attorney fees, dated August 30, 2004.
Plaintiff rejected that offer as well.

The case went to arbitration on March 29, 2005. The
arbitrator awarded plaintiff $3,300 in damages and $828.50

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for attorney fees. Pursuant to ORS 36.425(6),1 plaintiff filed a
written exception to the award of attorney fees, noting that
she had submitted a statement listing her total attorney fees
as $5,482.33. Defendant responded that plaintiff was not
entitled to any recovery for attorney fees incurred after
defendant had served plaintiff with its offer of judgment
because defendant had offered plaintiff a greater amount of
money than the arbitrator had awarded her as damages.

The trial court held a hearing on May 6, 2005, and
concluded that under ORCP 54 E, because defendant had
submitted an offer of judgment for $3,636 and plaintiff had
recovered only $3,300, defendant's offer of judgment would
prevent plaintiff from recovering attorney fees for legal work
performed after August 30, 2004. The court allowed attorney
fees of $1,267.67, and entered an order to that effect.2

On appeal, plaintiff argued that the trial court
should have granted her request for attorney fees. Plaintiff
noted that, under ORS 20.080(1), she was entitled to recover
attorney fees because she had presented defendant with a
written demand for damages more than 10 days prior to fil-
ing a complaint and, although defendant had tendered an
offer of $3,200 in response, plaintiff had recovered more than
that amount in arbitration. Plaintiff then argued that ORCP
54 E did not apply to limit awards of attorney fees under ORS
20.080(1) because, with respect to attorney fees incurred
after an offer of judgment, ORCP 54 E was "necessarily in
conflict" with ORS 20.080(1). Plaintiff noted that, in Colby v.
Larson, 208 Or 121, 297 P2d 1073 (1956), this court identified

1 ORS 36.425(6) provides, in part:

"Within seven days after the filing of a decision and award under subsec-
tion (1) of this section, a party may file with the court and serve on the other
parties to the arbitration written exceptions directed solely to the award or
denial of attorney fees or costs. Exceptions under this subsection may be
directed to the legal grounds for an award or denial of attorney fees or costs, or
to the amount of the award."

2 The arbitrator had also denied costs to both plaintiff and defendant. When
the trial court entered its order awarding attorney fees, it awarded costs to both
parties. On appeal, plaintiff challenged the award of costs to defendant, claiming
that defendant had failed to file and serve his written exception to the arbitrator's
denial of his costs within the time required by ORS 36.425(6). Powers, 212 Or App
at 648-49. The Court of Appeals agreed and vacated the award of costs to defen-
dant. Id. at 652. Neither party requests review of that ruling, and, accordingly, we
do not address it.

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a conflict between ORS 20.080 (1953) and former ORS 17.055
(1953), repealed by Or Laws 1979, ch 284, § 199, an offer-of-
judgment statute similar to ORCP 54 E.3 This court con-
cluded that, "[i]n such a case[,] the particular provisions [of
ORS 20.080] are considered an exception to the general [pro-
visions of former ORS 17.055]" and, therefore, an offer of
judgment would not limit an award of attorney fees under
ORS 20.080. Id. at 126-27.

The Court of Appeals had considered and rejected an
argument similar to plaintiff's in Bell v. Morales, 207 Or App
326, 142 P3d 76 (2006). Bell noted that, under former ORS
17.055, the statute at issue in Colby, an offer of judgment
operated to cut off a plaintiff's recovery of costs, including
attorney's fees, if the plaintiff received less in damages than
the amount that the defendant had offered. However, under
ORCP 54 E, an offer of judgment cuts off only the plaintiff's
entitlement to attorney fees incurred after the offer is made.
The Court of Appeals in Bell interpreted ORS 20.080 as pro-
viding an incentive to settle a case prior to filing a complaint,
while ORCP 54 E provided an incentive to do the same after
the filing of the complaint (and after the offer of judgment is
made). The court concluded that, by enacting ORCP 54 E, the
legislature had "eliminated the conflict that concerned the
court in Colby" by harmonizing the two statutory provisions
so that both "may be given full effect." Id. at 336. Accordingly,
in this case, the court held that Bell foreclosed plaintiff's
argument and agreed with the trial court that ORCP 54 E cut
off plaintiff's statutory right to attorney fees. Powers, 212 Or
App at 648.

3 Former ORS 17.055 (1953) provided:

"The defendant may, at any time before trial, serve upon the plaintiff an
offer to allow judgment or decree to be given against him for the sum, or the
property, or to the effect therein specified. If the plaintiff accepts the offer, he
shall by himself or attorney indorse such acceptance thereon, and file the same
with the clerk before trial, and within three days from the time it was served
upon him; and thereupon judgment or decree shall be given accordingly, as in
case of a confession. If the offer is not accepted and filed within the time pre-
scribed, it shall be deemed withdrawn, and shall not be given in evidence on
the trial; and if the plaintiff fails to obtain a more favorable judgment or decree,
he shall not recover costs, but the defendant shall recover of him costs and dis-
bursements from the time of the service of the offer."

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On review, plaintiff renews her argument that ORS
20.080(1) conflicts with ORCP 54 E and that the specific pro-
visions of the former statute prevail over the general provi-
sions of the latter. Defendant responds that the conflict iden-
tified in Colby no longer exists and that this court should
therefore read the provisions together and give effect to both,
as the Court of Appeals did.

We begin our analysis by examining the text of the
statutes at issue. ORS 20.080(1) provides:

"In any action for damages for an injury or wrong to the
person or property, or both, of another where the amount
pleaded is $5,500 or less, and the plaintiff prevails in the
action, there shall be taxed and allowed to the plaintiff, at
trial and on appeal, a reasonable amount to be fixed by the
court as attorney fees for the prosecution of the action, if the
court finds that written demand for the payment of such
claim was made on the defendant not less than 10 days
before the commencement of the action or the filing of a for-
mal complaint under ORS 46.465, or not more than 10 days
after the transfer of the action under ORS 46.461. However,
no attorney fees shall be allowed to the plaintiff if the court
finds that the defendant tendered to the plaintiff, prior to
the commencement of the action or the filing of a formal
complaint under ORS 46.465, or not more than 10 days
after the transfer of the action under ORS 46.461, an
amount not less than the damages awarded to the
plaintiff."

ORCP 54 E provides:

"E(1) Except as provided in ORS 17.065 through
17.085, the party against whom a claim is asserted may, at
any time up to 10 days prior to trial, serve upon the party
asserting the claim an offer to allow judgment to be given
against the party making the offer for the sum, or the prop-
erty, or to the effect therein specified.

"E(2) If the party asserting the claim accepts the offer,
the party asserting the claim or such party's attorney shall
endorse such acceptance thereon, and file the same with the
clerk before trial, and within three days from the time it
was served upon such party asserting the claim; and there-
upon judgment shall be given accordingly, as a stipulated
judgment. If the offer does not state that it includes costs
and disbursements or attorney fees, the party asserting the

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claim shall submit any claim for costs and disbursements or
attorney fees to the court as provided in Rule 68.

"E(3) If the offer is not accepted and filed within the
time prescribed, it shall be deemed withdrawn, and shall
not be given in evidence on the trial; and if the party assert-
ing the claim fails to obtain a more favorable judgment, the
party asserting the claim shall not recover costs, prevailing
party fees, disbursements, or attorney fees incurred after
the date of the offer, but the party against whom the claim
was asserted shall recover of the party asserting the claim
costs and disbursements, not including prevailing party
fees, from the time of the service of the offer."

Two basic rules govern this court's resolution of a
conflict between statutes. The first is that, when multiple
statutory provisions are at issue in a case, this court, if pos-
sible, must construe those statutes in a manner that "will
give effect to all" of them. ORS 174.010; see State v. Guzek,
322 Or 245, 268, 906 P2d 272 (1995) (noting that when two
statutes deal with the same subject, "the two should be read
together and harmonized, if possible, while giving effect to a
consistent legislative policy"). The second rule is that, if two
statutes are inconsistent, the more specific statute will con-
trol over the more general one. ORS 174.020(2); see Kambury
v. DaimlerChrysler Corp., 334 Or 367, 374, 50 P3d 1163
(2002) (illustrating rule). In short, if the court can give full
effect to both statutes, it will do so, and if not, it will treat the
specific statute as an exception to the general. Guzek, 322 Or
at 268 (citing State v. Pearson, 250 Or 54, 58, 440 P2d 229
(1968)).

It is axiomatic that, to determine whether we can
give effect to both ORS 20.080(1) and ORCP 54 E, we must
decide the effect that the legislature intended those statutes
to have. The text of a statute provides the best evidence of the
intent behind its enactment. In construing that text, we also
consider its context, including "prior opinions of this court
interpreting the same statutory wording." Wal-Mart Stores,
Inc. v. City of Central Point, 341 Or 393, 397, 144 P3d 914
(2006).

Under ORS 20.080(1), a plaintiff who files a tort
claim for $5,500 or less shall recover attorney fees if (1) the

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plaintiff makes a written demand on the tortfeasor for pay-
ment of a tort claim of $5,500 or less, at least 10 days prior to
filing an action; (2) the plaintiff files an action on that claim;
(3) the plaintiff prevails; and (4) the plaintiff obtains a judg-
ment for an amount greater than any prefiling settlement
offer made by the tortfeasor. Johnson v. Swaim, 343 Or 423,
427-28, 172 P3d 645 (2007) (so stating). If the plaintiff satis-
fies those procedural requirements, then the court must
award "a reasonable amount" as attorney fees to the plaintiff.

The legislature originally enacted ORS 20.080 in
1947, and this court "repeatedly has recognized" the policies
underlying it, specifically,

"to encourage settlement of small claims, to prevent insur-
ance companies and tortfeasors from refusing to pay just
claims, and to discourage plaintiffs from inflating their
claims."

Fresk v. Kraemer, 337 Or 513, 520, 99 P3d 282 (2004) (inter-
nal quotation marks omitted). The second of those policies-
preventing tortfeasors and their insurers from ignoring just
claims-is particularly relevant to our inquiry. In the past,
this court has recognized that tortfeasors and insurers fre-
quently rejected small claims, "knowing that the claimant
would often consider it impractical to bring an action if he
had to pay his own attorney's fees." Bivvins v. Unger, 263 Or
239, 243, 501 P2d 1262 (1972). ORS 20.080 therefore allows
plaintiffs to hold tortfeasors liable for their attorney fees to
promote settlement in cases where the plaintiff otherwise
might not be able to afford an attorney. Landers v. E. Texas
Motor Frt. Lines, 266 Or 473, 476-77, 513 P2d 1151 (1973).
The idea that defendants will be "pressured to settle cases
by the potential allowance of attorney's fees" is
"implicit" in ORS 20.080. Heen v. Kaufman, 258 Or 6, 8, 480
P2d 701 (1971). A crucial feature of that "pressure," to which
we will return later, is that it applies prior to filing the action.
By the explicit terms of ORS 20.080(1), a tortfeasor can avoid
an award of attorney fees under ORS 20.080(1) only by mak-
ing an offer of settlement before the plaintiff files a com-
plaint. A tortfeasor's offers made after that date do not affect
the statutory right to attorney fees that ORS 20.080(1)
creates.

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Under ORCP 54 E, on the other hand, a plaintiff's
recovery of attorney fees can be limited if (1) the defendant,
at any time up to 10 days prior to trial, offers to allow judg-
ment against itself for a specified sum; (2) the plaintiff does
not accept that offer, and; (3) the plaintiff fails to obtain a
judgment that is more favorable than the offer. If those pro-
cedural requirements are met, then the plaintiff may not
recover attorney fees "incurred after the date of the offer."
For Counsel, Inc. v. Northwest Web Co., 329 Or 246, 253, 985
P2d 1277 (1999).

A conflict between these provisions is apparent from
their text. ORS 20.080(1) provides that, in tort claims of
$5,500 or less, a plaintiff is entitled to receive attorney fees if
the plaintiff satisfies certain procedural requirements prior
to filing the action. ORCP 54 E, however, allows a defendant
to cut off the plaintiff's right to attorney fees by making an
offer of judgment after the filing of an action but before trial.
Therefore, the offer of judgment procedure under ORCP 54 E
can negate, at least in part, an award of attorney fees that
ORS 20.080(1) requires. For example, a plaintiff might serve
a defendant with a written demand for payment of a tort
claim for $5,500 or less, receive no response, and file a com-
plaint. If that plaintiff prevails at trial, he or she will have a
statutory right to receive attorney's fees. However, the defen-
dant can serve the plaintiff with an offer of judgment under
ORCP 54 E at any time up to 10 days before trial. If the plain-
tiff refuses that offer, and thereafter fails to recover more
than that offer at trial, then the plaintiff's right to recover
attorney fees will not apply to any expenses incurred after
the date that the defendant makes the offer, including trial
expenses.4 In short, ORCP 54 E allows a defendant to nullify,
at least in part, the obligation to pay attorney fees that ORS
20.080(1) creates.

Seen in that light, application of ORCP 54 E in cir-
cumstances like those presented here would undermine the
core purpose of ORS 20.080(1), namely, to prevent tortfeasors

4 This case provides an example of that scenario. By bringing her case to trial,
plaintiff incurred $5,482.33 in attorney fees. However, the trial court held that
plaintiff's right to attorney fees was cut off as of August 30, 2004, the date of the
offer of judgment. Accordingly, plaintiff recovered attorney fees of only $1,267.67,
which amounts to less than 25 percent of the total that she had claimed.

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and their insurers from refusing to pay just claims. By
requiring an award of attorney fees, ORS 20.080(1) requires
a defendant to evaluate the plaintiff's case "and to make an
offer at the risk of having to pay attorney fees if the offer is
inadequate." Landers, 206 Or at 477. Furthermore, the tim-
ing specified in the text of ORS 20.080(1) demonstrates that
the legislature intended to provide an incentive to defendants
to make those evaluations and offers before the plaintiff files
an action, because that statute does not allow a defendant to
limit the liability for attorney fees by making an offer to settle
after the complaint is filed.

It follows from the foregoing that we find a conflict
between ORS 20.080(1) and ORCP 54 E on the basis of their
statutory text alone. Moreover, we must read that text in
light of this court's prior interpretations of it. State v.
McDonnell, 343 Or 557, 563, 176 P3d 1236 (2007). And, in
doing so, we are immediately informed by this court's prior
holding in Colby, 208 Or 121, in which we addressed a nearly
identical claim of statutory conflict.

The plaintiff in Colby sued to recover $372.59 for
damages to his car, caused by the defendant's negligent driv-
ing. The plaintiff also demanded attorney fees under ORS
20.080, claiming that he had made a written demand for that
amount 10 days prior to filing his complaint. The defendant
admitted his liability for the damages but alleged that he had
tendered with his answer and deposited with the court, a
payment of $372.59 for the plaintiff. 208 Or at 123. The
defendant contended that he had made an offer of judgment
under former ORS 17.055, a predecessor of ORCP 54 E, and
that the offer of judgment prevented the plaintiff from recov-
ering any attorney fees if he failed to obtain a more favorable
judgment. The trial court accepted the defendant's argument
and denied the plaintiff's request for attorney's fees. Id. at
124.

On the plaintiff's appeal, the court reversed the trial
court. We noted that, under ORS 20.080, the plaintiff was
entitled to recover attorney fees if he had made a written
demand upon the defendant more than 10 days before com-
mencing the action and if the defendant had failed to tender
$372.59 or more "prior to the commencement of the action." Id.

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at 125 (emphasis in original). On the other hand, under for-
mer ORS 17.055, the plaintiff could not recover costs because
"after the commencement of the action but before trial," the
defendant had made an offer of judgment for $372.59. Id.
(emphasis in original).

This court held that, in light of the purposes of ORS
20.080, a conflict existed between that statute and former
ORS 17.055:

"[ORS 20.080] was undoubtedly enacted for the purpose of
encouraging the settlement without litigation of meritori-
ous tort claims involving small sums. The risk the defen-
dant ran of having to pay the fee of the plaintiff's attorney
was evidently considered a spur to such settlements. * * *
Frequently the injured person might forego action upon a
small claim because he realized that, after paying his attor-
ney, his net recovery would not be worth the time and trou-
ble of a vexatious law suit. The legislature may have found
that [tortfeasors] or their insurance carriers frequently
rejected meritorious claims of this kind because of this
known reluctance of injured persons to litigate. Claims
which in honesty and fairness should have been paid were
not paid, and it was to remedy this evil that the statute was
passed. But, if the defendant's position here were to be sus-
tained, this clear legislative purpose would be defeated by
the defendant ignoring a demand made pursuant to ORS
20.080, secure in the knowledge that if action should be
brought he could escape payment of an attorney's fee and
other costs by offering before trial to allow judgment to be
given against him as provided in [former] ORS 17.055."

Id. at 126. Because the application of former ORS 17.055 in
small tort claims would negate awards of attorney fees under
ORS 20.080, thereby allowing a defendant to ignore demands
made under the latter statute, this court held that there was
a conflict between the two. Accordingly, ORS 20.080, which
applied specifically to tort claims below a certain amount,
would prevail over former ORS 17.055, which applied more
generally to all civil proceedings. Id. at 126-27.

The Court of Appeals did not recognize the implica-
tions of that reasoning in Bell, 207 Or App 326. In that case,
the Court of Appeals noted that, although offers of judgment
under former ORS 17.055 operated to prevent awards of any

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attorney fees, offers of judgment under ORCP 54 E would
merely prevent awards of attorney fees incurred after the
offer was made. Accordingly, the court concluded that the leg-
islature had "eliminated the conflict that concerned the court
in Colby." 207 Or App at 336. We disagree with the reasoning
in Bell. The conflict that concerned this court in Colby was
that, by allowing defendants a second chance to avoid attor-
ney fees after the plaintiff had filed the action, former ORS
17.055 eliminated a tortfeasor's incentive to settle prior to the
filing of the action, which was the goal of ORS 20.080. The
present version of former ORS 17.055, ORCP 54 E, thus
remains in conflict with ORS 20.080. An offer of judgment
under ORCP 54 E no longer completely eliminates a plain-
tiff's entitlement to an award of attorney fees, but it still can
reduce the amount of that award substantially. If a defen-
dant can reduce an award of attorney fees under ORS 20.080
significantly by making an offer of judgment under ORCP
54 E, the defendant's incentive to settle a claim before the fil-
ing of an action is reduced, if not eliminated.

Because ORCP 54 E prevents this court from giving
full effect to ORS 20.080(1), we must treat the more specific
statute as an exception to the more general one. ORS
20.080(1), which applies to tort claims for $5,500 or less, is
more specific than ORCP 54 E, which applies to all civil pro-
ceedings. We therefore hold that the procedure under ORS
20.080(1) is an exception to the procedure under ORCP 54 E.
Because of that exception, an offer of judgment, made after a
plaintiff has filed an action, will not serve to limit a plaintiff's
entitlement to attorney fees under ORS 20.080(1). In this
case, plaintiff is entitled to recover her reasonable attorney
fees, including fees that she incurred after August 30, 2004,
the date of the defendant's offer of judgment.

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