Trent v. Connor Enterprises, Inc.

165

467 v. Connor Enterprises, Inc.

Trent 30016,

October Or2019

App

Argued and submitted August 2, reversed and remanded October 16, 2019

Gina TRENT,

an individual,

Plaintiff-Appellant,

v.

CONNOR ENTERPRISES, INC.,

a domestic corporation,

dba Best Western New Oregon,

Defendant-Respondent.

Lane County Circuit Court

17CV02841; A167572

452 P3d 1072

In this wage action, plaintiff accepted an offer to allow judgment in the

amount of $2,500, resulting in a general judgment in plaintiff’s favor. Plaintiff

subsequently requested an award of attorney fees and costs, pursuant to ORS

652.200(2) and 29 USC § 216(b). The trial court awarded costs, but it denied

attorney fees on the basis that plaintiff had acted unreasonably and in bad faith

in the litigation and therefore was not entitled to an award under either statute.

In denying attorney fees under ORS 652.200(2), the court also relied on plain-

tiff’s attorney having not given adequate notice of plaintiff’s claim before filing

an action. Plaintiff appeals the supplemental judgment, challenging the denial

of attorney fees. Held: The trial court erred in concluding that plaintiff is not

entitled to attorney fees under either statute. Under the terms of both statutes,

plaintiff is entitled to an award of attorney fees, although the trial court will have

discretion on remand in deciding a “reasonable” amount to award.

Reversed and remanded.

Charles D. Carlson, Judge.

David A. Schuck argued the cause for appellant. Also on

the briefs were Stephanie J. Brown, Karen A. Moore, and

Schuck Law, LLC.

Gregory T. Lusby argued the cause for respondent. Also

on the brief were Ariana Denley and Arnold Gallagher P.C.

Before Armstrong, Presiding Judge, and Egan, Chief Judge,

and Aoyagi, Judge.*

AOYAGI, J.

Reversed and remanded.

______________

* Egan, C. J., vice Schuman, S. J.

166 Trent v. Connor Enterprises, Inc.

AOYAGI, J.

Plaintiff brought this wage action against defen-

dant, her former employer, under state and federal law.

About 10 months after plaintiff filed her original complaint,

defendant made an offer to allow judgment in the amount

of $2,500, pursuant to ORCP 54 E, which plaintiff accepted,

resulting in a stipulated general judgment. Plaintiff there-

after requested attorney fees and costs under ORS 652.200(2)

and 29 USC § 216(b). The trial court awarded costs, but it

denied attorney fees on the basis that plaintiff had “acted

unreasonably and in bad-faith” in the litigation and there-

fore was not entitled to an award under either statute. On

appeal, plaintiff challenges the denial of attorney fees.

Because we agree with plaintiff that the trial court miscon-

strued the fee statutes, we reverse and remand for further

proceedings.

FACTS

The relevant facts are minimal and largely proce-

dural. Historical facts are stated consistently with unchal-

lenged factual findings by the trial court.

Plaintiff worked for defendant until November 2016,

when her employment was terminated. On January 18, 2017,

plaintiff’s counsel notified defendant of a $511.87 wage defi-

ciency. A week later, on January 25, plaintiff filed a complaint

in the circuit court alleging a state wage claim, which she

later amended to add a federal wage claim. On January 27,

without knowledge of the complaint, defendant mailed a

check to plaintiff in the amount of $1,044.74. Plaintiff did

not cash the check and, on January 30, authorized her attor-

ney to proceed with the litigation. On March 20, defendant’s

counsel initiated settlement discussions with plaintiff’s

counsel, which continued, unsuccessfully, until November 14.

On November 14, defendant made an offer to allow

judgment pursuant to ORCP 54 E. See ORCP 54 E (limiting

attorney fees if a party does not accept a qualifying pretrial

offer and then recovers less than the offer amount at trial).

Specifically, defendant offered to allow judgment in plain-

tiff’s favor “in the sum of $2,500.00 to resolve all claims,

Cite as 300 Or App 165 (2019) 167

including counterclaims, with costs, disbursements and/or

attorney fees to be determined by the Court per ORCP 68.”

Plaintiff accepted the offer. The trial court entered a stip-

ulated general judgment, awarding $2,500 to plaintiff and

dismissing defendant’s counterclaims. As to costs, disburse-

ments, and attorney fees, the general judgment states, “Yes,

to be determined pursuant to ORCP 68.”

After entry of the general judgment, plaintiff filed a

statement of attorney fees and costs, seeking approximately

$45,000 in fees and $733 in costs. The trial court ultimately

awarded the requested costs, but it denied attorney fees

on the basis that plaintiff had acted unreasonably and in

bad faith. As relevant to the denial of fees, the trial court

adopted written findings and conclusions, describing the

history of the litigation and culminating with the following

paragraph:

“Pursuant to ORS 652.200(2) and 29 USC § 216(b), the

Plaintiff has acted unreasonably and in bad-faith resulting

in the Plaintiff not being entitled to an award of attorney

fees * * * because Plaintiff failed to comply with the notice

requirements,[1] moved forward filing a suit on a theory

that the Plaintiff had a prior violation of ORS 652.140 in

the previous year when that was not true, [and] failed to

accept the timely tendered check in the amount $1044.74

which would have amply covered the Plaintiff’s claim espe-

cially with the Plaintiff subsequently acknowledging in

court filings that her wage claim totaled just $266.73 while

Defendant acknowledged that any such wage computations

errors were De Minimis and totaled only $27.29 which the

timely check sent to Plaintiff’s counsel in the amount of

$1044.74 more than covered. Thus, the Plaintiff shall not

be awarded any attorney fees in this matter.”

In so ruling, the trial court specifically rejected an

alternative approach, which defendant had suggested, of

concluding that plaintiff was statutorily entitled to attor-

ney fees but awarding a reduced amount as a “reasonable”

award based on the factors in ORS 20.075. ORS 20.075 sets

1

Based on the trial court record and the arguments made below, we under-

stand “the notice requirements” to refer to ORS 652.200(2), which contains a

notice provision relevant to plaintiff’s state-law claim.

168 Trent v. Connor Enterprises, Inc.

out the various factors that a court must consider “in deter-

mining the amount of an award of attorney fees in any case

in which an award of attorney fees is authorized or required

by statute.” As defendant pointed out, those factors include,

among others, the objective reasonableness of the parties

and the diligence of the parties and their attorneys during

the proceedings, the objective reasonableness of the parties

and their diligence in pursuing settlement, the novelty and

difficulty of the legal issues, and the amount involved in

the controversy and the results obtained. See ORS 20.075

(1)(e) - (f); ORS 20.075(2)(a), (d). The trial court rejected that

portion of defendant’s proposed findings and conclusions.2

Instead, it ruled that plaintiff was not “entitled” to attorney

fees under ORS 652.200(2) or 29 USC § 216(b).

Plaintiff appeals the denial of attorney fees. In her

first assignment of error, plaintiff asserts that the trial

court erred by denying her attorney fees under 29 USC

§ 216(b).3 In her second assignment of error, plaintiff asserts

that the trial court erred by denying her attorney fees under

ORS 652.200(2). In her third assignment of error, plaintiff

asserts that the trial court “abused its discretion” in deny-

ing her attorney fees because “there is no evidence in this

record to support a finding that Plaintiff had knowledge of

facts that rendered her attempts to settle this case unrea-

sonable, in bad faith, or lacking in diligence.”

We address each issue in turn. In doing so, we

review the trial court’s “legal determinations with respect to

entitlement to attorney fees for errors of law,” and we review

exercises of discretion for abuse of discretion. Johnson v.

O’Malley Brothers Corp., 285 Or App 804, 812, 397 P3d 554,

2

Defendant proposed findings on several ORS 20.075 factors, and, on appeal,

plaintiff challenges at least one of those proposed findings—regarding the nov-

elty or difficulty of the legal issues—which suggests some confusion as to which

findings were adopted. The supplemental judgment specifies the page and line

numbers of the adopted findings. The trial court did not adopt the proposed ORS

20.075 findings.

3

In her first assignment of error, plaintiff also assigns error to the denial of

costs. However, as previously noted, the trial court ultimately did award costs to

plaintiff—in the amount requested—by order entered March 27, 2018, and sup-

plemental judgment entered April 17, 2018. As such, we address only the issue of

attorney fees.

Cite as 300 Or App 165 (2019) 169

rev den, 362 Or 300 (2017) (quoting Barber v. Green, 248 Or

App 404, 410, 273 P3d 294 (2012)).4

ATTORNEY FEES UNDER 29 USC § 216(b)

Under 29 USC § 216(b), when an employee is awarded

judgment on a claim under sections 206 or 207 of the Fair

Labor Standards Act (FLSA), the court “shall, in addition

to any judgment awarded to the plaintiff or plaintiffs, allow

a reasonable attorney’s fee to be paid by the defendant, and

costs of the action.” In this case, the trial court determined

that plaintiff had “acted unreasonably and in bad-faith” in

bringing and maintaining the action and, on that basis, con-

cluded that plaintiff was not entitled to attorney fees under

29 USC § 216(b).

In her first assignment of error, plaintiff challenges

that ruling, arguing that an award of attorney fees is man-

datory under the FLSA. Because judgment was entered in

her favor, plaintiff contends, “the trial court was required to

award her reasonable attorney fees and costs and had no dis-

cretion to decline to do so.” Defendant responds that plain-

tiff was not entitled to attorney fees because plaintiff did not

“prevail” on her FLSA claim; because there was no determi-

nation that defendant “actually” violated 29 USC § 206; and

because any violation of 29 USC § 206 was de minimis.

We agree with plaintiff that an award of reason-

able attorney fees under 29 USC § 216(b) is mandatory, not

discretionary. That is apparent from the face of the statute

and is not seriously in dispute. See 29 USC § 216(b) (the

court “shall” award a reasonable attorney’s fee and costs);

Newhouse v. Robert’s Ilima Tours, Inc., 708 F2d 436, 441 (9th

Cir 1983) (“The FLSA grants prevailing plaintiffs a reason-

able attorney’s fee.”). In the trial court, defendant argued

that plaintiff nonetheless was not entitled to attorney fees

because of a “bad-faith exception” to fee awards under 29

USC § 216(b). Defendant does not reprise that argument

4

Defendant argues that we should reject each of plaintiff’s assignments of

error as unpreserved because the preservation sections of plaintiff’s opening

brief do not comply with ORAP 5.45. Defendant does not argue that the issues

are not actually preserved, however, and we conclude that at least the first and

second assignments of error are preserved and address them on their merits.

170 Trent v. Connor Enterprises, Inc.

on appeal.5 Instead, defendant makes new arguments, as

described above, which it did not make to the trial court and

on which the trial court did not rely in reaching its decision.

We may affirm a trial court ruling on an alterna-

tive basis that was not raised in the trial court when certain

conditions are met. Outdoor Media Dimensions Inc. v. State

of Oregon, 331 Or 634, 659, 20 P3d 180 (2001). However,

our consideration of such alternative bases for affirmance

“is a matter of prudential discretion and not compulsion.”

Biggerstaff v. Board of County Commissioners, 240 Or App

46, 56, 245 P3d 688 (2010). In this case, we decline to exer-

cise our discretion to consider the alternative bases to

affirm, even assuming the predicate conditions are met.

As a preliminary matter, defendant has not asked

us to exercise our discretion and, consequently, has not

explained why it is appropriate to do so here. Further, based

on the existing briefing, defendant has not persuaded us

that any of its alternative arguments are meritorious, and

we decline to try to develop arguments ourselves that were

not made to the trial court, that have not been briefed suf-

ficiently to persuade us of their merit, and that raise poten-

tially complicated issues. See Biggerstaff, 240 Or App at 56

(failure to raise an issue in the trial court may “militate

against” our considering it, even when the issue is purely

legal, especially if it presents a substantial legal issue); see

also WaterWatch of Oregon v. Water Resources Dept., 268 Or

App 187, 213, 342 P3d 712 (2014) (stating, more generally,

that it is not our proper function to develop a party’s argu-

ment for it). Finally, because the general judgment does not

distinguish between plaintiff’s FLSA claim and her state

wage claim, the trial court would have been in a better posi-

tion than we are to address at least two of defendant’s new

arguments in the first instance—whether plaintiff “pre-

vailed” on her FLSA claim, and whether any violation of 29

5

Because the trial court may have relied on that argument, we observe

that the cases cited in defendant’s briefing to the trial court do not support the

proposition that there is a “bad-faith exception” to attorney fee awards under 29

USC § 216(b). Rather, those cases address a very different issue: when a district

court may award attorney fees to a defendant, based on the plaintiff’s bad-faith

conduct in litigation, notwithstanding the lack of any statutory right to fees.

E.g., Roadway Exp., Inc. v. Piper, 447 US 752, 765-66, 100 S Ct 2455, 2463-64, 65

L Ed 2d 488 (1980).

Cite as 300 Or App 165 (2019) 171

USC § 206 was de minimis within the meaning of federal

law. We therefore decline to consider defendant’s proffered

alternative bases to affirm.

Accordingly, we conclude that the trial court erred

in ruling that plaintiff was not entitled to reasonable attor-

ney fees under 29 USC § 216. On remand, the trial court may

apply the appropriate standard to determine what amount

is reasonable under the circumstances, but the statute does

require an award.

ATTORNEY FEES UNDER ORS 652.200(2)

Under ORS 652.200(2), in an action for the collec-

tion of wages, “the court shall, upon entering judgment for

the plaintiff, include in the judgment, in addition to the

costs and disbursements otherwise prescribed by statute,

a reasonable sum for attorney fees at trial and on appeal

for prosecuting the action[.]” Two exceptions apply: if “it

appears that the employee has willfully violated the con-

tract of employment,” or if “the court finds that the plain-

tiff’s attorney unreasonably failed to give written notice of

the wage claim to the employer before filing the action.” ORS

652.200(2).

In this case, the trial court determined that plain-

tiff had “acted unreasonably and in bad-faith” in bringing

and maintaining the action, including by not complying

with “the notice requirements” for ORS 652.200(2), and

that, consequently, plaintiff was not entitled to an award of

attorney fees. Plaintiff challenges that ruling in her second

assignment of error, arguing that ORS 652.200(2) requires

the court to award attorney fees to a prevailing plaintiff

on a wage claim. Plaintiff argues that neither statutory

exception applies in this case. In particular, she argues

that the trial court erred in applying the second exception,

because her attorney gave written notice of the wage claim

to defendant before filing the action, which is all that ORS

652.200(2) requires. Defendant responds that plaintiff was

not entitled to an award because plaintiff did not “prevail”

on her Oregon wage claim; because defendant never admit-

ted to owing any wages under Oregon law; because there

was no determination that defendant “actually” owed wages

172 Trent v. Connor Enterprises, Inc.

under Oregon law; and because plaintiff unreasonably failed

to give notice within the meaning of ORS 652.200(2).

In the trial court, defendant argued, and the trial

court agreed, that plaintiff is not statutorily entitled to

attorney fees because her attorneys acted in bad faith. On

appeal, however, defendant implicitly concedes that there is

no “bad-faith exception” to a fee award under ORS 652.200(2).

The other argument that defendant made in the trial court,

with which the trial court agreed, is that plaintiff is not

entitled to attorney fees under ORS 652.200(2) because she

unreasonably failed to give notice. Defendant maintains

that argument on appeal, and we address it below. As for

defendant’s other arguments—which posit alternative bases

to affirm raised for the first time on appeal—we decline to

exercise our discretion to consider them for reasons similar

to those discussed with respect to the first assignment of

error. See Biggerstaff, 240 Or App at 56.

Returning to the notice issue, ORS 652.200(2)

contains an exception to the mandatory fee provision that

applies, as previously mentioned, if “the court finds that the

plaintiff’s attorney unreasonably failed to give written

notice of the wage claim to the employer before filing the

action.” Here, it is undisputed that plaintiff’s attorney gave

written notice of the wage claim to defendant before filing

the action—specifically one week before filing the action.

Plaintiff’s attorney argues that, because she gave notice

before filing, it cannot be said that she “failed” to give notice

before filing, let alone “unreasonably” failed to give notice

before filing. Defendant counters that the notice was insuf-

ficient because it was provided only a week before filing and

therefore did not provide defendant with a meaningful time

period in which to respond.

A lengthy discussion of the text, context, and leg-

islative history of the statute is unnecessary to resolve the

present dispute. See State v. Gaines, 346 Or 160, 171-72, 206

P3d 1042 (2009) (methodology for statutory construction).

The text of a statute “is the starting point for interpretation

and is the best evidence of the legislature’s intent.” PGE v.

Bureau of Labor and Industries, 317 Or 606, 610, 859 P2d

1143 (1993); Gaines, 346 Or at 171 (explaining why “text and

Cite as 300 Or App 165 (2019) 173

context remain primary, and must be given primary weight

in the analysis”). Here, the text is clear, and, in our view,

forecloses defendant’s argument.

ORS 652.200(2) does not provide that, when the

plaintiff’s attorney failed to give notice within a reason-

able time before filing the action, the court is not required to

award fees. If the statute said that, defendant would have

a persuasive argument that the trial court did not err in

concluding that the notice here was given too close in time

to the filing of the action. Instead, ORS 652.200(2) creates

a narrower exception to mandatory fees: when the plain-

tiff’s attorney “unreasonably failed to give written notice

of the wage claim to the employer before filing the action.”

(Emphasis added.) The only time limitation on giving writ-

ten notice of the wage claim is that it must occur “before”

filing the action. On this record, it cannot be said that plain-

tiff’s attorney failed to give written notice “before” filing the

action.

As for context and legislative history, we recently

discussed the notice provision in ORS 652.200(2) in Mathis

v. St. Helens Auto Center, Inc., 298 Or App 647, 662-63,

447 P3d 490 (2019). For present purposes, it suffices to say

that no one has identified, and we are unaware of, any con-

text or legislative history that supports, let alone compels,

a construction contrary to what we view as the plain text.

Although there might be a good policy argument to require

that notice to be given by a certain date in advance of fil-

ing an action, or within a “reasonable” time before filing an

action, the legislature chose not to impose such a limita-

tion. Consequently, we are construing a statute that sim-

ply requires notice to be given “before” filing an action, as a

condition for a mandatory fee award, and we disagree with

defendant that we can construe “before” to mean more than

a week before. See ORS 174.010 (“In the construction of a

statute, the office of the judge is simply to ascertain and

declare what is, in terms or in substance, contained therein,

not to insert what has been omitted, or to omit what has

been inserted * * *.”).

Accordingly, we conclude that the trial court erred in

ruling that plaintiff was not entitled to reasonable attorney

174 Trent v. Connor Enterprises, Inc.

fees under ORS 652.200(2). The trial court’s determina-

tion that plaintiff “failed to comply with the notice require-

ments”—which we understand to mean that plaintiff unrea-

sonably failed to give notice before filing the action—is

based on a misconstruction or misapplication of the notice

provision. On remand, the trial court will have discretion

in deciding what amount of attorney fees is reasonable to

award under the circumstances of this case, see ORS 20.075,

but ORS 652.200(2) does mandate an award.

ALLEGED “ABUSE OF DISCRETION”

In her final assignment of error, plaintiff contends

that the trial court “abused its discretion” in denying her

attorney fees because “there is no evidence in this record to

support a finding that Plaintiff had knowledge of facts that

rendered her attempts to settle this case unreasonable, in

bad faith, or lacking in diligence.” It is unclear what “dis-

cretion” plaintiff is asserting that the trial court abused. As

we have already ruled, plaintiff is correct that a fee award

is mandatory, not discretionary, under 29 USC § 216(b) and

ORS 652.200(2). And, because the trial court misconstrued

the statutes, it never reached the point of exercising its dis-

cretion in setting the amount of an award—it consciously

chose not to adopt that portion of the proposed judgment. As

such, the trial court does not appear to have exercised any

discretion. Or, if it did, plaintiff has not identified when or

where it did so. See ORAP 5.45(3), (4)(a)(ii) (requiring each

assignment of error to “identify precisely” the challenged

ruling, to “set out pertinent quotations” regarding “where

the question or issue was raised and the challenged ruling

was made,” and to provide record citations). We therefore

reject plaintiff’s third assignment of error.6

Reversed and remanded.

6

We express no opinion as to the sufficiency of the evidence to support the

findings that plaintiff challenges within her third assignment of error. Because

those findings were not the basis for any exercise of discretion, we have no occa-

sion to review them.