FILED: January 5, 2000
SHAUNA DEACON,
Respondent,
v.
GARY GILBERT and STEPHANIE
GILBERT,
Defendants,
and
DAVID WOODRUFF, dba Woodruff
Construction,
Appellant.
On respondent's motion to dismiss appeal filed July 1, 1999, and appellant's opposition to motion to dismiss appeal filed July 15, 1999.
R. Daniel Lindahl and John T. Kaempf for appellant.
Alan Gladstone and Abbott, Davis, Rothwell, Mullin & Earle, P.C. for respondent.
Before Haselton, Presiding Judge, and Armstrong and Brewer, Judges.
HASELTON, J.
Motion to dismiss denied.
HASELTON, J.
Defendant(1) appeals a judgment entered on an arbitration award,
challenging only the trial court's denial of defendant's exceptions to the arbitrator's award
of attorney fees to plaintiff. Plaintiff moves to dismiss the appeal, asserting that, under
ORS 36.425(3), defendant's failure to file a notice of appeal and request for trial de novo
of the action pursuant to ORS 36.425(2)(a) precludes defendant from challenging the
court's disposition with respect to attorney fees. Plaintiff relies particularly on Loving v.
Portland Postal Employees Credit Union, 124 Or App 373, 862 P2d 556 (1993). We
conclude that Loving is not controlling and, particularly, that ORS 36.425(6), which was
enacted after Loving, contemplates appeal and review of the attorney fee disposition in
these circumstances. Accordingly, we deny the motion to dismiss.
The material facts are undisputed. Following mandatory court-annexed
arbitration, the arbitrator awarded plaintiff damages of $1,386 and attorney fees of
$11,374. On February 18, 1999, plaintiff filed the arbitration award with the trial court
pursuant to ORS 36.425(1). On February 24, defendant filed written exceptions directed
solely to the attorney fee award pursuant to ORS 36.425(6).
The trial court failed to enter a decision within 20 days on defendant's exceptions.
Consequently, the fee award was affirmed, by operation of law, on March 16. See ORS
36.425(6). On March 26, the trial court entered judgment on the arbitration award.
Defendant appealed from that judgment on April 23, 1999.
Plaintiff moves to dismiss the appeal, asserting that, because defendant did
not seek a trial de novo of the entire arbitrator's award pursuant to ORS 36.425(2)(a)--but, instead, filed exceptions to the attorney fee award only--the court's March 26
judgment was final and nonappealable under ORS 36.425(3). Defendant counters that
ORS 36.425(6) provides that, even if a party does not challenge the "merits" of the
arbitration award, that party may, nevertheless, challenge an arbitrator's award or denial
of attorney fees. Defendant further contends that, as a matter of statutory construction
and practical necessity, ORS 36.425(6) qualifies the finality principle of ORS 36.425(3)
and provides for appellate review of the trial court's disposition of timely exceptions to
the arbitrator's award or denial of fees. Defendant reasons:
"The result requested by plaintiff would mean that a party that has no
desire, and, more importantly, no legitimate basis (in some cases) to
appeal the entire arbitration award, including the liability and damages
findings, would nonetheless be required to do just that in order to
preserve for appeal to this court any objection to the arbitrator's attorney
fee award. The result would be a trial in the circuit court concerning
issues that neither party wanted reviewed. But if plaintiff's interpretation
of ORS 36.425(3) and 36.425(6) is correct, a party such as defendant
must file such an appeal in order to preserve his objection to the
arbitrator's attorney fee award because if the party files exceptions to the
attorney fee award (as permitted under ORS 36.425(6)), and does not
receive a ruling within 20 days, then the party is left without any recourse
whatsoever if the party has not also filed an appeal under ORS 36.425(3).
Thus, plaintiff's interpretation of the statutes is a prescription for clogging
circuit courts with appeals of the entire arbitration award where the only
issue actually in dispute is the attorney fee decision." (Emphasis in
original.)
We begin with the text of ORS 36.425. Three provisions are pertinent.
First, ORS 36.425(2)(a) provides, in part:
"Within 20 days after the filing of a decision and award with the
clerk of the court under subsection (1) of this section, a party against
whom relief is granted by the decision and award or a party whose claim
for relief was greater than the relief granted to the party by the decision
and award, but no other party, may file with the clerk a written notice of
appeal and request for a trial de novo of the action in the court on all
issues of law and fact."
ORS 36.425(3) provides:
"If a written notice is not filed under subsection (2)(a) of this
section within the 20 days prescribed, the clerk of the court shall enter the
arbitration decision and award as a final judgment of the court, which
shall have the same force and effect as a final judgment of the court in the
civil action and may not be appealed."
Finally, ORS 36.425(6) provides, in part:
"Within seven days after the filing of a decision and award under
subsection (1) of this section, a party may file with the court and serve on
the other parties to the arbitration written exceptions directed solely to the
award or denial of attorney fees or costs. Exceptions under this
subsection may be directed to the legal grounds for an award or denial of
attorney fees or costs, or to the amount of the award. * * * If the judge
fails to enter a decision on the award within 20 days after the filing of the
exceptions, the award of attorney fees and costs shall be considered
affirmed. The filing of exceptions under this subsection does not
constitute an appeal under subsection (2) of this section and does not
affect the finality of the award in any way other than as specifically
provided in this subsection."
For reasons that will soon become apparent, we emphasize that ORS 36.425(6) was
enacted in 1995(2)--12 years after
the enactment of ORS 36.425(2) and (3)(3) and nearly two
years after our holding in Loving. At the time we decided Loving, the text of the present
subsection (6) was incorporated in a Uniform Trial Court Rule, UTCR 13.230.
In Loving, the arbitrator, following court-annexed arbitration, awarded the
plaintiff $200 in damages on a breach of contract claim but denied the plaintiff's request
for attorney fees. After the award was filed with the trial court, the plaintiff, pursuant to
former UTCR 13.230 (which was substantially identical to the present ORS 36.425(6)),
filed timely exceptions to the arbitrator's denial of fees. Twenty-two days after the award
was filed, and 19 days after the filing of the exceptions, the court informed the parties
that it was allowing the plaintiff's exceptions and directed the plaintiff to submit a motion
and affidavit in support of fees pursuant to ORCP 68. Before the plaintiff could do so,
however, the court entered a "judgment of arbitration" that incorporated the arbitrator's
award in its entirety, including the denial of fees. The court subsequently entered a
"judgment order" awarding the plaintiff attorney fees. Loving, 124 Or App at 376.
The plaintiff appealed from the "judgment of arbitration," asserting that it
erroneously adjudicated the fee issue. The defendant appealed from the subsequent
"judgment order," contending that the original judgment was final and precluded any
subsequent allowance of fees. The defendant also asserted that the plaintiff's appeal
should be dismissed because the "judgment of arbitration" was final and nonappealable
under ORS 36.425(3)--that is, because the plaintiff had not requested a trial de novo of
the arbitrator's entire award pursuant to ORS 36.425(2)(a), the entire award (including
the denial of fees) became final within 20 days of filing, and any appeal from the
judgment embodying that award could not be appealed.
We allowed the defendant's motion to dismiss the plaintiff's appeal from
the "judgment of arbitration." In so holding, we concluded:
"In a case referred to arbitration, the arbitrator is authorized to award any
relief that could have been granted by a judgment of the court, ORS
36.410(2), including costs and attorney fees, subject to the court's
authority under UTCR 13.230 to uphold or modify an arbitrator's award
of costs or fees in response to a party's written challenge. If the court
does not exercise that authority within 20 days after the filing of the
award, the challenge is deemed denied. Unless a party files a timely
notice of appeal and request for trial de novo, ORS 36.425(3) requires the
clerk to enter the award as a final judgment of the court. That judgment
'may not be appealed.' ORS 36.425(3). Under those rules, plaintiff's
challenge to the denial of fees and costs was deemed denied under UTCR
13.230, and the award, including the denial of fees and costs, became a
final, nonappealable judgment." 124 Or App at 377-78.(4)
Here, plaintiff, not surprisingly, invokes Loving as controlling. We
disagree, for two related reasons. First, there has been a material change in the statute:
when we decided Loving, ORS 36.425 did not include subsection (6). Second, although
in Loving we parenthetically referred to then-UTCR 13.230, we did not focus on the
content of that rule or its relationship to ORS 36.425(2)(a) and (3). That was proper
because the rule had not been codified at that time. See generally ORS 1.002(1)(a)
(describing Chief Justice's authority to promulgate the UTCRs). Now, however,
subsection (6) is part of the statute, and its application must be squarely addressed.
As we concluded in Loving, subsections (2)(a) and (3), if read in isolation,
would compel the dismissal of this appeal. We conclude, however, that the subsequent
enactment of subsection (6), with its particular prescription for review of attorney fee
dispositions, prevents us from reading subsections (2)(a) and (3) in isolation and alters
the result when the only issue on appeal is the propriety of the trial court's allowance or
denial of exceptions taken pursuant to subsection (6).
We return to the statutory text. At first blush, subsections (2)(a) and (3)
and subsection (6) are in irreconcilable conflict. The former provide that if a party does
not request a trial de novo on "all issues of law and fact" within 20 days of the filing of
the award, the award shall become final. Conversely, subsection (6) provides that a party
may file exceptions to the arbitrator's fee disposition within seven days of the filing of
the award, and if the court fails to enter a decision on that matter within 20 days "after
the filing of the exceptions"--i.e., up to 27 days after the filing of the award--the
exceptions will be deemed denied. Thus, if subsection (2)(a) and (3) are taken at face
value, the award becomes final on the 20th day after filing--while seven days may still
remain on the subsection (6) decisional/finality "clock."
When faced with such a "conflict," our obligation is to give effect, if
possible, to each part of the statute. ORS 174.010; see Dept. of Human Resources v.
Trost, 160 Or App 656, 662 n 5, 983 P2d 549 (1999) (explaining and applying
principle). The key to resolving the ostensible conflict here lies, textually, in the final
sentence--and, particularly, in the final phrase--of subsection (6):
"The filing of exceptions under this subsection does not constitute an
appeal under subsection (2) of this section and does not affect the finality
of the award in any way other than as specifically provided in this
subsection." (Emphasis added.)
That sentence carves out an exception to the automatic finality principle of subsections
(2)(a) and (3): Where no request for an omnibus trial de novo has been filed, but a party
has filed timely exceptions to the arbitrator's attorney fee disposition, the arbitrator's
award becomes final on the 20th day after filing with respect to all matters except for
those attorney fee matters "preserved" by virtue of the subsection (6) exceptions. The
judgment entered on the award is, congruently, final and nonappealable by virtue of
subsection (3). Conversely, if exceptions are taken under subsection (6), the attorney fee
issues are not rendered final and nonappealable 20 days after the filing of the award.
Thus, for example, if a person filed exceptions pursuant to subsection (6)
five days after the filing of the award, the court would have up to the 20th day to decide
those exceptions; otherwise, they would be deemed denied on the 25th day. Upon
subsequent entry of judgment embodying the trial court's disposition of exceptions
pursuant to subsection (6), a party can appeal, with the appeal being limited solely to the
court's disposition of the exceptions.
In sum, with the enactment of subsection (6), ORS 36.425 describes two
distinct schemes or "tracks" of finality and appealability: one for challenges to the
arbitrator's entire award, including the substantive merits of that award, ORS
36.425(2)(a); and the other for attorney-fee related challenges only, ORS 36.425(6).
Given the statute's historical evolution and the contextual reconciliation of subsections
(2)(a) and (6), subsection (3) pertains to the former but not to the latter.
We note, finally, that our construction of ORS 36.425 not only effectively
harmonizes subsections (2)(a), (3), and (6) by giving meaning to each provision, but also
comports with practical reality and the overarching statutory policy of promoting
efficient dispute resolution. See generally Christopher Simoni, Court-Annexed
Arbitration in Oregon: One Step Forward and Two Steps Back, 22 Willamette L Rev
237 (1986).(5) As defendant points out, it makes no sense to require a party who wishes
only to dispute attorney fees to litigate a full-dress trial de novo on the merits in order to
obtain appealable review of a fee dispute. That incongruity--indeed, absurdity--is
heightened where the party seeking review of the arbitrator's attorney fee disposition
prevailed on the merits of the arbitration. ORS 36.425(6), properly construed and
applied, avoids such incongruous results.
Motion to dismiss denied.
1. "Defendant" refers solely to defendant David Woodruff, the only appellant.
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2. Or Laws 1995, ch 618, §14a.
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3. Those provisions were initially codified as ORS 33.400. Or Laws 1983, ch 670, § 6.
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4. We further concluded that the trial court erred in entering the subsequent "judgment order" because "[t]he court had no authority to grant a request for attorney fees and costs after entry of a judgment under ORS 36.425(3) that, by operation of law, denied fees and costs and was final and not appealable." 124 Or App at 378.
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5. Our research of the legislative history of the 1995 amendments to the arbitration statutes reveals that the archived history does not refer particularly to ORS 36.425(6).
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