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Jones v. Four Corners Rod And Gun Club

Court of Appeals of Oregon

March 21, 2018

Rich JONES, Plaintiff-Appellant,
v.
FOUR CORNERS ROD AND GUN CLUB, an Oregon non-profit corporation, Defendant-Respondent.

          Argued and submitted August 31, 2016

          Marion County Circuit Court 13C12103 Kip W. Leonard, Judge.

          Conrad E. Yunker argued the cause for appellant. With him on the briefs were David Schuck and Schuck Law, LLC.

          Brian A. Buchanan argued the cause and fled the brief for respondent.

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

         Case Summary: Plaintiff, who brought three wage claims against defendant, appeals a judgment that (1) concluded that defendant prevailed on plaintiff's minimum wage claim because the value of lodging and utilities provided to plaintiff "zeroed out" plaintiff's wages, (2) granted attorney fees to defendant as the prevailing party on that claim, and (3) determined that plaintiff prevailed on his second and third wage claims but declined to award plaintiff attorney fees on those claims. On appeal, plaintiff challenges the trial court's ruling that defendant prevailed on plaintiff's minimum wage claim and the denial of attorney fees to plaintiff.

         Held: The trial court did not err in determining that defendant prevailed on plaintiff's minimum wage claim. However, the court erroneously concluded that plaintiff was not entitled to a mandatory attorney fee award for prevailing on his second claim for relief, and, as to plaintiff's third claim for relief, the court failed to provide a sufficient explanation for its decision to deny plaintiff a discretionary attorney fee award.

         Judgment reversed and remanded as to attorney fee award; otherwise affirmed.

          [290 Or. 812] ORTEGA, P. J.

         In a case involving Oregon's wage-claim statutes, plaintiff appeals a judgment that concluded that defendant prevailed on plaintiff's minimum wage claim, awarded defendant attorney fees, costs, and disbursements on that claim, and denied plaintiff's request for attorney fees on his second and third wage claims. On appeal, plaintiff raises issues related to the trial court's determination that defendant prevailed on plaintiff's minimum wage claim, the award of attorney fees to defendant, and the denial of attorney fees to plaintiff. Plaintiff also challenges the trial court's authority to "setoff" plaintiffs minimum wage recovery with the value of lodging and utilities that defendant provided to plaintiff. We reject plaintiff's assignments related to the trial court's "setoff of any minimum wage recovery, but conclude that the trial court's ruling on attorney fees was erroneous in part. We reverse and remand the judgment as to the attorney fee award.

         BACKGROUND

         The following facts are undisputed. Defendant employed plaintiff as a groundskeeper and maintenance worker from April 2009 to April 2012. Plaintiff signed an employment contract that provided that he would work in exchange for being allowed to live in a home owned by defendant that was located inside the gated entrance to defendant's property. Plaintiff never received a paycheck, paycheck stub, or any monetary wages during his employment. Further, defendant failed to keep any record of deductions from plaintiff's wages to account for the lodging and utilities provided to plaintiff, and plaintiff never authorized any such deductions in writing. In April 2012, defendant terminated plaintiff's employment and evicted him from the home through a forcible entry and detainer (FED) action.

         On February 7, 2013, plaintiff sent defendant a letter demanding full payment of unpaid wages in an amount "between $53, 731.20 to $73, 801.20, " plus civil penalties for failing to pay minimum wages and failing to timely pay all wages at termination, and notifying defendant that he intended to file a claim for recovery of those wages and penalties.

          [290 Or. 813] On February 19, 2013, plaintiff brought an action against defendant based on Oregon's wage-claim statutes. Plaintiff's first claim for relief sought a minimum wage "in the approximate amount of $73, 801.20" under ORS 653.025[1] for all hours plaintiff worked between April 2009 and April 2012. He also alleged an entitlement to a civil penalty under ORS 653.055(1), [2] as well as attorney fees under ORS 653.055(4)[3] and ORS 652.200(2).[4] Plaintiff's second claim sought a civil penalty under ORS 652.150[5] based on defendant's failure to make payment of final wages upon plaintiff's termination of employment. See ORS 652.140(1) (requiring payment of all wages earned and unpaid at the time of an employee's discharge or termination "not later than the end of the first business day after the discharge or termination"). Plaintiff also sought attorney fees, costs, and disbursements related to that claim under ORS 652.200(2). In his third claim, plaintiff alleged that, without complying with the requirements of ORS 652.610, [6] defendant unlawfully deducted amounts from plaintiff's wages for lodging and utilities. As a result of the deductions, plaintiff asserted that ORS 652.615 entitled him to "actual damages" or $200, [290 Or. 814] whichever was greater, for each unlawful deduction and a reasonable sum for attorney fees under ORS 652.615.[7]

         Defendant admitted that it owed plaintiff a minimum wage for the hours that he worked, although defendant disputed the accuracy of the number of hours claimed by plaintiff. Defendant also admitted that it owed plaintiff a civil penalty of $2, 112 for its failure to pay wages on termination of employment under ORS 652.150. Defendant further admitted that it had violated the requirements of ORS 652.610(3) when it deducted lodging and utilities from plaintiffs wage without keeping proper track of the deductions in its records. Accordingly, defendant admitted that it owed an additional civil penalty of $7, 200 for 36 months of violations of ORS 652.610(3).

         Defendant, however, asserted several affirmative defenses and counterclaims. As relevant on appeal, defendant claimed as an affirmative defense that it was entitled to "set off" plaintiff's minimum wage by the value of lodging and utilities furnished to plaintiff "for his private benefit." Defendant also asserted that any relief granted to plaintiff should be set off by $1, 478, representing money owed to defendant from plaintiff pursuant to its FED action against plaintiff.

         In addition, defendant asserted counterclaims for unjust enrichment and quantum meruit, claiming that it had conferred a "valuable benefit" to plaintiff in the amount of $46, 892.07 by furnishing plaintiff with lodging and utilities during his employment. Those counterclaims implicated ORS 653.035(1), which provides that "[e]mployers may deduct from the minimum wage to be paid employees * * * the fair market value of lodging, meals or other facilities or services furnished by the employer for the private benefit of the employee." Defendant also pleaded a right to attorney fees under ORS 653.055(4).[8]

          [290 Or. 815] The case proceeded to trial for the jury to resolve three factual issues: (1) the number of hours plaintiff worked during his employment, (2) whether the lodging and other services provided to plaintiff by defendant were provided for his "private benefit" under ORS 653.035(1), and (3) the value of lodging and utilities provided by defendant to plaintiff. The jury found that plaintiff earned $38, 796 as a minimum wage for the time he worked for defendant. The jury also found that defendant's provision of lodging and utilities was for plaintiffs "private benefit" and that the value of that benefit was $43, 403.

         After the verdict, the parties each sought attorney fees and costs, and both parties submitted memoranda arguing about the proper form of judgment and the amount of any money award. Plaintiff asserted that, as the prevailing party on his first two wage claims, he was entitled to a mandatory attorney fee award under ORS 652.200(2), and that ORS 652.615 and ORS 653.055 provided the basis for a discretionary attorney fee award on his third claim. In total, plaintiff sought $45, 798 in attorney fees and $6, 010 in costs.

         Further, plaintiff argued that a judgment should be entered that, as to his first claim, entitled him to the minimum wage found by the jury, a civil penalty of $2, 112, and prejudgment interest. As for his second claim, he asserted that the judgment should reflect a penalty wage of $2, 112. And, as for his third claim, plaintiff argued that he was due "actual damages" equal to the wrongfully withheld wages of $38, 642, plus prejudgment interest. He also argued that defendant was not entitled to "any reduction" in damage amounts, asserting that a "setoff" was not appropriate in "law or equity" because a party "cannot use equitable principles to avoid obligations and liabilities imposed by statute." Accordingly, plaintiff urged the trial court to enter a judgment with a money award for plaintiff of $81, 508 plus prejudgment interest, costs, disbursements, and attorney fees.

         Defendant objected to plaintiff's attorney fee request and his proposed judgment and money award. As to the proposed judgment, defendant argued that because the value of the lodging and services provided to plaintiff exceeded the minimum wage that he was due, plaintiff had no "actual [290 Or. 816] damages" on his first claim. Further, in defendant's view, it was entitled to judgment on its equitable counterclaims for the value of lodging and utilities, plus prejudgment interest, and expenses incurred in defendant's FED action. As for attorney fees, defendant asserted that, because the value of lodging and utilities exceeded the minimum wage owed to plaintiff, defendant had prevailed on plaintiff's first claim and was therefore entitled to attorney fees under ORS 653.055(4). Defendant also argued that, although plaintiff prevailed on his second claim for relief, he was not entitled to a mandatory fee award under ORS 652.200(2) because he had "unreasonably failed to give notice of claims to defendant prior to filing this action." Regarding plaintiff's third claim, defendant asserted ...


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