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International Association of Machinists v. Heil

Court of Appeals of Oregon

January 8, 2020

John HEIL and Beverly Heil, husband and wife, Defendants-Appellants, and ALL OCCUPANTS OR INHABITANTS OF THE REAL PROPERTY LOCATED AT 2203 5TH STREET, TILLAMOOK, OREGON TELEPHONE: UNKNOWN, Defendants.

          Argued and submitted August 29, 2019

          Tillamook County Circuit Court 14LT00553; Jonathan R. Hill, Judge.

          Harry D. Ainsworth argued the cause and fled the brief for appellants.

          William H. Sherlock argued the cause for respondent. Also on the brief was Hutchinson Cox.

          Before Ortega, Presiding Judge, and Shorr, Judge, and James, Judge.

         Case Summary: Defendants appeal a supplemental judgment awarding attorney fees to plaintiff. Defendants objected in the trial court to plaintiff's fee petition, arguing that plaintiff had failed to allege a sufficient basis for fees in its complaint under ORCP 68 C(2)(a). Plaintiff then fled a motion to amend its complaint. The court concluded that plaintiff's initial complaint had sufficiently alleged a basis for fees under ORCP 68 C(2)(a). The court then denied plaintiff's motion to amend as moot. Defendants assign error to the trial court's fee award. Defendants argue that plaintiff had not properly alleged a basis for attorney fees [301 Or.App. 686] in its complaint. Plaintiff responds that its complaint alleged facts that would be sufficient to satisfy the requirements of ORCP 68 C(2)(a). In the alternative, plaintiff argues that any deficiency in its complaint should be disregarded under ORCP 12 B because plaintiff had attempted to amend its complaint to comply with the textual requirements of ORCP 68 C. Held: The trial court erred in awarding fees. Plaintiff's complaint did not allege a statutory or contractual basis for attorney fees, nor did it allege facts that would provide a basis for fees. Plaintiff's argument in the alternative fails because plaintiff's attempt to amend its complaint was not an "error" or "defect" in the pleading under ORCP 12 B.

         [301 Or.App. 687] SHORR, J.

         Defendants appeal from a supplemental judgment awarding costs and attorney fees to plaintiff. Defendants assign error to the trial court's ruling that the facts alleged in plaintiffs complaint were sufficient to provide a basis for an award of attorney fees under ORCP 68 C. For the reasons that follow, we conclude that the court erred by awarding attorney fees because plaintiffs pleadings did not "allege the facts, statute, or rule that provides a basis for the award of fees," as required by ORCP 68 C(2)(a). Accordingly, we reverse the award of attorney fees in the supplemental judgment.

         This case has a long and complicated procedural history, and we state only the following relevant, uncontested facts. The parties entered into a land sale contract for certain real property owned by plaintiff. Defendants failed to make payments pursuant to the contract's terms, leading plaintiff to ultimately file an eviction complaint against defendants. The only facts pleaded in the complaint were as follows:

"1. Defendants are in possession of a dwelling unit, premises and real property described above * * *.
"2. Plaintiff is entitled to possession of the premises because:
"It has fully complied with the requirements set forth in ORS 93.915 and ORS 93.930 and, having recorded the Affidavit of Forfeiture with Tillamook County Deeds and Records, are not required to provide additional notice to Defendants, who are deemed tenants at sufferance [as] a matter of law, and may be removed from possession pursuant to ORS 105.105 to ORS 105.168.
"3. Defendants are unlawfully holding the premises with force.
"4. Wherefore, Plaintiff prays for possession of the premises, costs and disbursements and attorney fees, if applicable?

(Emphasis added.)

         A trial was scheduled, but the trial was cancelled when the parties reached a settlement agreement ahead of the trial date. Among other things, the settlement agreement [301 Or.App. 688] provided that, if defendants failed to pay plaintiff the full purchase price within 90 days, defendants would voluntarily vacate the premises and have judgment entered against them in this case. The settlement also included the following provision for attorney fees and costs:

"6. Attorney Fees and Costs. Should any of the parties successfully prosecute or defend any action, claim for relief or any other proceeding relating to any of the rights, duties or obligations arising under this Agreement, that party shall be entitled to recover the reasonable value of its attorney fees, paralegal fees, costs, disbursements and other expenses, including, without limitation, fees and costs arising before and at any trial, arbitration, mediation, or bankruptcy proceeding and any appeal thereof."

         Ultimately, defendants failed to make the payments pursuant to the settlement agreement. In a separate case (the breach of contract case), plaintiff filed a claim for breach of contract based on defendants' nonpayment and alleged breach of the settlement agreement.[1] Plaintiff initially sought ...

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