MARANDAS FAMILY TRUST, by John J. Marandas, Trustee, Plaintiff-Appellant,
John F. PAULEY, personally and dba Arrow Mobile Home Service, aka Arrow Home Service, aka Arrow Home Service, LLC; and Arrow Home Service, LLC, dba Arrow Home Service, aka Arrow Mobile Home Service, Defendants-Respondents.
and submitted August 11, 2015
County Circuit Court 120405338 Stephen K. Bushong, Judge.
Stutsman argued the cause for appellant. With him on the
briefs was Eli D. Stutsman, A Professional Corporation.
M. Christ argued the cause for respondents. With him on the
brief were Cosgrave Vergeer Kester LLP; Michael D. Kennedy,
Kennedy Bowles, P. C.; Gregory P. Fry and Preg O'Donnell
& Gillett, PLLC.
Armstrong, Presiding Judge, and Egan, Judge, and Schuman,
Summary: Plaintiff appeals a judgment that affirmed an
arbitration award that denied plaintiff an award of attorney
fees under ORS 20.080(1). Plaintiff assigns error to the
determination that, under ORS 20.080(1), it was required to
serve a written pre-litigation demand on an insurer that
plaintiff was not aware had a responsibility to provide
liability coverage for the tort claim at issue.
Held: The arbitrator misconstrued, and consequently
missaplied, ORS 20.080(1) in denying plaintiff an award of
attorney fees, and thus the circuit court erred in upholding
the arbitrator's decision.
Or. 382] ARMSTRONG, P. J.
the Marandas Family Trust, appeals a judgment that affirmed
an arbitration award that denied it an award of attorney fees
under ORS 20.080 (1). After plaintiff hired defendants to repair
the roof of a cabin, plaintiff discovered that, due to
defendants' faulty workmanship, the roof had leaked
rainwater that had caused damage to the interior of the
cabin. In court-annexed arbitration, plaintiff was awarded
nearly all the damages that it sought for the harm caused by
defendants' faulty work, as well as costs and
disbursements. However, the arbitrator denied plaintiff an
award of attorney fees on the ground that plaintiff had
failed to comply with the requirements for an award of
attorney fees under ORS 20.080(1) by failing to serve a
written prelitigation demand on one of defendants'
insurers, Brookwood Insurance Company (Brookwood). Plaintiff
filed exceptions to the arbitrator's decision to deny it
an award of attorney fees, which the circuit court denied. We
conclude that the arbitrator misconstrued and, consequently,
misapplied ORS 20.080(1) in denying plaintiff an award of
attorney fees, and that the circuit court erred in upholding
the arbitrator's decision. We therefore reverse and
following facts are undisputed. Plaintiff owns a cabin near
Mt. Hood. In February 2006, plaintiff hired defendants to
repair the cabin's roof. Defendants completed the work in
April 2006. The roof subsequently began to leak rainwater,
causing damage to the interior of the cabin. Plaintiff
discovered the damage in August 2011 when the cabin had
become uninhabitable due to mold.
March 23, 2012, plaintiff sent a written demand under ORS
20.080 to defendants, to defendants' then-current
liability insurer, to defendants' liability insurer at
the time [286 Or. 383] of the original repair work, and to
defendants' insurance broker for payment of the damage to
the cabin. Plaintiff did not send a written demand to
Brookwood, which insured defendants from June 2008 to June
2010-that is, for the period that began two years after
defendants performed the work on plaintiffs cabin and that
ended more than a year before plaintiff discovered the damage
to the cabin.
brought an action for damages against defendants on April 27,
2012. The case proceeded to court-annexed arbitration, where
plaintiff prevailed. However, the arbitrator denied
plaintiff's request for attorney fees, concluding that
plaintiff had failed to meet the requirements of ORS
20.080(1), which required plaintiff to send a "written
demand for the payment of [its] claim * * * on the defendant,
and on the defendant's insurer, if known to the
plaintiff, not less than 30 days before the commencement of
the evidence presented to the arbitrator in support of
plaintiff's attorney-fee request were two affidavits from
Sill, a paralegal with the law firm that represented
plaintiff. Sill stated that, for "purposes of serving
[an ORS] 20.080 demand notice, " she had searched the
website of the Oregon Construction Contractors Board to
determine which insurance companies provided liability
coverage to defendants. She learned that Century Insurance
Group aka Century Surety Company (Century) provided coverage
that applied at the time of her search (March 2012), and that
Maxum Specialty Insurance Group aka Maxum Indemnity Company
(Maxum) had provided coverage at the time that defendants had
performed and completed the repair work (February to April
2006). Plaintiff sent a written demand under ORS 20.080 to
both Century and Maxum.
also learned that defendants had used A.L. Insurance Group as
their insurance broker over the relevant time period. Sill
spoke with Fritz, an employee of A.L. Insurance Group, and
explained that plaintiff wanted to file a complaint against
defendants and was trying to determine which insurance
companies would need to be served under ORS 20.080 with a
written demand for payment. Fritz told Sill that she was
"the 'official representative' to accept a
claim" and that she "would then pass on the claim,
[286 Or. 384] complaint, or information ...