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Quick Collect, Inc. v. Higgins

Court of Appeals of Oregon

August 21, 2013

QUICK COLLECT, INC., an Oregon corporation, Plaintiff-Appellant,
BRIAN PATRICK HIGGINS, Defendant-Respondent.

Argued and submitted on May 08, 2012.

Multnomah County Circuit Court 100506548, Edward J. Jones, Judge.

Willard Merkel argued the cause for appellant. With him on the briefs was Merkel & Associates.

Kenneth E. Kahn II argued the cause and filed the brief for respondent.

Before Ortega, Presiding Judge, and Hadlock, Judge, and Edmonds, Senior Judge.


In this appeal, plaintiff challenges the trial court's denial of plaintiff's exceptions to an arbitrator's award of attorney fees to defendant, contending that defendant's fee petition was fatally defective or, alternatively, that defendant was awarded fees for noncompensable work. We affirm, concluding that plaintiff did not preserve its argument that the fee petition was fatally defective, and that the trial court did not abuse its discretion in denying plaintiff's exceptions under ORS 36.425(6), and awarding defendant $15, 800 in attorney fees.

The facts are undisputed. Plaintiff, a debt collection company, originally filed a complaint in small claims court in December 2009 to collect a debt owed by defendant for medical treatment. That case was transferred to circuit court and then dismissed without prejudice by stipulated judgment. Plaintiff again filed suit in circuit court in May 2010, seeking to recover the debt. Several months later, the case was transferred to court-mandated arbitration. See ORS 36.400 (establishing mandatory arbitration program in circuit court for certain cases). In January 2011, before the arbitration hearing, defendant filed counterclaims that alleged that plaintiff had engaged in unlawful collection practices in violation of the federal Fair Debt Collection Practices Act, 15 USC sections 1692 to 1692p, and Oregon's statutory counterpart, ORS 646.639.

After the arbitration hearing, the arbitrator issued an award in favor of plaintiff on the debt, but also issued an award in favor of defendant on his counterclaims for unlawful collection practices. Accordingly, the arbitrator awarded plaintiff $5, 584.00 on its claim, plus pre-award interest and costs, and $3, 062.50 in attorney fees. The arbitrator awarded defendant $1, 200 for his counterclaims, as well as costs, and $15, 800 in attorney fees.

Pursuant to ORS 36.425(6), [1] plaintiff filed an exception to the arbitrator's award of costs and attorney fees to defendant, acknowledging that defendant was entitled to fees by statute, but contending that the fees sought were "unreasonable and unjustified." In particular, plaintiff maintained that defendant could not recover any fees that were incurred before defendant filed his counterclaims. Plaintiff explained that, because defendant had prevailed on his counterclaims, but not on plaintiff's claim on the debt, defendant was only eligible to recover fees incurred while prosecuting his counterclaims. In addition, plaintiff generally objected to the amount of fees awarded for work performed after defendant filed his counterclaims as "unreasonable."

Defendant responded to plaintiff's exception by outlining the history of the case and indicating that defendant, in response to plaintiff's complaint in small claims court, had actually filed an answer and counterclaims back in December 2009. In addition, defendant countered that his fee request was reasonable, particularly because he had reduced it to 62 hours of work from the 73.7 hours his attorney actually spent on the case.

The trial court held a hearing on the attorney fees issue and subsequently entered an order concluding that

"the arbitrator's decision to award the $15, 800.00 [is] reasonable. To the extent there is any issue about the inclusion of hours unrelated to the claim upon which the defendant succeeded, those concerns are adequately addressed by the defendant's voluntary reduction in the number of hours for which payment is sought."

The trial court then entered a general judgment. Plaintiff appeals.

On appeal, plaintiff assigns error to the trial court's denial of its exceptions to the arbitrator's attorney fee award. First, plaintiff argues that defendant's fee petition was fatally defective because it "fails to segregate compensable from noncompensable time so that a compensable fee could be calculated." In particular, plaintiff asserts that the fee petition does not adequately identify which tasks are related to defending against plaintiff's debt claim and which tasks are related to prosecuting defendant's counterclaims. Plaintiff contends, relying on ORCP 68 C(4)(a)(i), that defendant's failure to segregate his time entries in such a manner renders his fee petition deficient in its entirety as a matter of law.

Alternatively, plaintiff challenges the amount of attorney fees awarded to defendant, asserting that "the majority of the task descriptions contained in the fee petition are for noncompensable work." Plaintiff explains that the statutes authorizing attorney fees to defendant, ORS 646.641(2) and 15 USC section 1692k(a)(3), only allow recovery of the fees incurred to prosecute an unlawful collection practices action, i.e., defendant's counterclaims. Plaintiff identifies time periods in defendant's fee petition that it maintains include work that could not be related to defendant's prosecution of his counterclaims. First, plaintiff contends that 17 hours and 29 minutes of time billed between November 30, 2009 and February 23, 2010, was not compensable because that work occurred before plaintiff filed the present action. To the extent that any of the work in that time frame related to the action initially filed in small claims court, plaintiff contends that that time is not compensable because that case was dismissed by a stipulated judgment that "did not provide either party a fee award." Second, plaintiff asserts that 18 hours and 48 minutes of time billed between June 21, 2010 and January 11, 2011, was not compensable because those tasks relate exclusively ...

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