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Bridgestar Capital Corporation v. Nguyuen

Court of Appeals of Oregon

February 14, 2018

BRIDGESTAR CAPITAL CORPORATION, Plaintiff-Appellant,
v.
Anna NGUYUEN, Defendant-Respondent, and RIVERMARK COMMUNITY CREDIT UNION, et al., Defendants.

          Submitted September 29, 2016

         Multnomah County Circuit Court 140405623; Marilyn E. Litzenberger, Judge.

          Lukasz I. Wozniak and Wright, Finlay & Zak, LLP, fled the briefs for appellant.

          Jeffrey A. Long fled the brief for respondent.

          Before Ortega, Presiding Judge, and Egan, Chief Judge, and Lagesen, Judge.

         Case Summary: In this judicial foreclosure action, plaintiff appeals a supplemental judgment awarding attorney fees to defendant Nguyen. Plaintiff asserts that the trial court erred in awarding attorney fees to Nguyen because, in plaintiff's view, Nguyen failed to plead an entitlement to fees as required by ORCP 68 C(2)(a). Held: Because Nguyen did not allege, or attempt to allege, the facts, statute, or rule that provided the basis for the award of fees, the trial court erred in awarding fees to Nguyen.

         [290 Or. 205]

          EGAN, C. J.

         In this judicial foreclosure action, plaintiff appeals a supplemental judgment awarding attorney fees to defendant Nguyen.[1] The trial court entered the supplemental judgment after granting summary judgment for Nguyen on plaintiff's claims and entering a general judgment dismissing the action without prejudice. Plaintiff asserts that the court erred in three ways: (1) in designating Nguyen as the prevailing party on plaintiff's claims; (2) in allowing attorney fees to Nguyen although, in plaintiff's view, Nguyen had failed to plead an entitlement to fees as required by ORCP 68 C(2)(a); and (3) in determining that the amount charged by Nguyen's counsel was reasonable. We reject plaintiff's first contention without further discussion. However, we agree with its second contention, that the trial court erred in awarding attorney fees to Nguyen and, accordingly, reverse and remand the supplemental judgment. That disposition obviates the need to consider plaintiff's third contention.

         The relevant facts are procedural. In its complaint, plaintiff sought to foreclose its mortgage and alleged that, under the mortgage note and deed of trust, it was entitled to recover "its attorney fees and costs of foreclosure." It expressly sought attorney fees under a provision in the note. In her answer, Nguyen denied all of plaintiffs allegations and asserted 12 affirmative defenses. Neither that part of Nguyen's pleading nor the associated prayers, which assert that plaintiff is not entitled to the relief it seeks and that Nguyen is entitled to dismissal of the action, mentions attorney fees. In the same pleading, Nguyen alleged three counterclaims, based on the Fair Debt Collection Practices Act, 15 USC §§ 1692-1692p; the Oregon counterpart to that federal statute, ORS 646.639; and a tort theory of invasion of privacy. Nguyen alleged the right to attorney fees on each counterclaim.

         Plaintiff moved to dismiss Nguyen's counterclaims under ORCP 21 A(8), contending, among other things, that Nguyen had failed to allege facts sufficient to state a [290 Or. 206] claim on any of her counterclaims. The trial court granted the motion and dismissed the counterclaims with leave for Nguyen to refile. Nguyen did so, again without mentioning attorney fees with respect to plaintiffs claims and again seeking attorney fees on the three counterclaims. Plaintiff again moved to dismiss on the same ground, and the trial court granted the motion, again granting Nguyen leave to refile. Nguyen filed a second amended answer that, again, did not mention attorney fees with respect to plaintiff's claims but sought attorney fees on the three counterclaims.

         Plaintiff moved for summary judgment on its claims and Nguyen's counterclaims, and Nguyen filed a cross-motion for summary judgment on plaintiff's claims. Nguyen did not respond to plaintiffs arguments in favor of summary judgment on the counterclaims. The trial court denied plaintiff's motion for summary judgment, granted summary judgment for Nguyen on plaintiff's claims, and entered a general judgment dismissing the action without prejudice.[2] Nguyen sought attorney fees under the fee provision in the note and ORS 20.096, which makes a one-sided fee provision in a contract reciprocal.[3] After a hearing, the trial court entered a supplemental judgment awarding the fees Nguyen sought.

         On appeal, as it did before the trial court, plaintiff asserts that Nguyen failed to allege any entitlement to attorney fees on plaintiff's claims. Consequently, in plaintiff's view, Nguyen failed to comply with ORCP 68 C(2)(a), which requires a party to "allege the facts, statute, or rule that provides a basis for the award of fees in a pleading filed by that party" and provides that "[n]o attorney fees shall be awarded unless a right to recover fees is alleged as provided [290 Or. 207] in this paragraph or [another paragraph not applicable here]."[4]

         In Mulier v. Johnson,163 Or.App. 42, 49, 986 P.2d 742 (1999), rev'd in part,332 Or. 344, 29 P.3d 1104 (2001) (Mulier I), we held that a defendant had sufficiently complied with ORCP 68 C(2) where it had not sought attorney fees in its motion responding to the plaintiffs complaint but had sought fees in the attached memorandum. Our holding was based on ORCP 12 B, which provides, "The court shall, in every stage of an action, disregard any ...


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