Strawn v. Farmers Insurance

210 February 22, 2013 No. 7

753 Or v. 22, 2013 Ins. Co.

3

Strawn Farmers

2013

February

IN THE SUPREME COURT OF THE

STATE OF OREGON

Mark STRAWN,

on his own behalf and as representative of

a class of similarly situated persons,

Petitioner on Review/Respondent on Review,

v.

FARMERS INSURANCE COMPANY OF OREGON,

an Oregon stock insurance company;

Mid-Century Insurance Company,

a foreign corporation;

and Truck Insurance Exchange,

a foreign corporation,

Respondents on Review/Petitioners on Review,

and

FARMERS INSURANCE GROUP INC.,

a foreign corporation,

Defendant.

(CC 9908-09080; CA A131605;

SC S057520 (Control), S057629)

On petitions for attorneys fees filed June 23, 2011, August

11, 2011, and February 13, 2012; resubmitted January 7,

2013.

Richard S. Yugler, Landye Bennett Blumstein LLP,

Portland, filed the petitions for attorney fees and costs for

Petitioner on Review/Respondent on Review.

P. K. Runkles-Pearson and James N. Westwood, Stoel

Rives LLP, Portland, filed the responses/objections to the

petitions for attorney fees for Respondents on Review/

Petitioners on Review.

Before Balmer, Chief Justice, and Kistler, Linder,

Landau, Brewer, and Baldwin, Justices.*

______________

*  Walters, J., did not participate in the consideration or decision of these

petitions.

Cite as 353 Or 210 (2013) 211

LINDER, J.

The petitions for attorney fees for proceedings following

the decision of the Court of Appeals are allowed in part and

denied in part as follows. Strawn is awarded $72,724.75

in attorney fees and expenses not part of attorney fees

($70,299.90 and $2,424.85 respectively), that amount to

be paid by Farmers under ORS 742.061(1). Strawn also is

awarded another $297,850.74 in attorney fees and expenses

not part of attorney fees ($291,012.10 and $6,838.64

respectively on all three fee petitions), that amount to be

paid from the punitive damages award in this case. Strawn

is awarded a $5,000 class incentive fee to be paid from the

punitive damages award in this case. The request for class

administration fees is denied without prejudice to Strawn

seeking an award of those fees by appropriate application

to the trial court. Farmers’s motion to stay issuance of the

appellate judgment is dismissed as moot.

Mark Strawn, plaintiff in a class action case against defendant Farmers

Insurance Company of Oregon et al. (Farmers), had prevailed on review in Strawn

v. Farmers Ins. Co., 350 Or 336, 258 P3d 1199, adh’d to on recons, 350 Or 521,

256 P3d 100 (2011), cert den, ___ US ___, 132 S Ct 1142, 181 L Ed 2d 1017 (2012).

Strawn then petitioned for awards of attorney fees, some to be paid by Farmers

and others to be paid from the punitive damages awarded on behalf of the class.

Strawn also sought a $5,000 incentive fee for serving as the class representative.

Farmers opposed the petitions. Held: (1) On the facts of this case, it was appropriate

for the court to check the amount of attorney fees calculated using a lodestar

method (reasonable hours times reasonable hourly rate) by comparing it to the

amount recovered on behalf of the class; (2) on the facts of this case, Strawn’s

attorneys were not entitled to a multiplier of their reasonable attorney fees to

compensate for their having taken the case on a contingent fee basis; (3) Strawn

was allowed expenses that were not part of his attorney’s hourly rate; (4) Strawn

was not entitled to post-decision, prejudgment interest on attorney fees awarded

by the Court of Appeals and the Supreme Court; and (5) Strawn was entitled to a

$5,000 class incentive fee.

The petitions for attorney fees for proceedings following the decision of the

Court of Appeals are allowed in part and denied in part as follows. Strawn is

awarded $72,724.75 in attorney fees and expenses not part of attorney fees

($70,299.90 and $2,424.85 respectively), that amount to be paid by Farmers under

ORS 742.061(1). Strawn also is awarded another $297,850.74 in attorney fees and

expenses not part of attorney fees ($291,012.10 and $6,838.64 respectively on all

three fee petitions), that amount to be paid from the punitive damages award

in this case. Strawn is awarded a $5,000 class incentive fee to be paid from the

punitive damages award in this case. The request for class administration fees is

denied without prejudice to Strawn seeking an award of those fees by appropriate

application to the trial court. Farmers’s motion to stay issuance of the appellate

judgment is dismissed as moot.

212 Strawn v. Farmers Ins. Co.

LINDER, J.

Mark Strawn, the plaintiff in this class action

case, has petitioned for an award of attorney fees and costs

incurred for the appellate work done on review before

this court in Strawn v. Farmers Ins. Co., 350 Or 336, 258

P3d 1199, adh’d to on recons, 350 Or 521, 256 P3d 100

(2011), cert den, ___ US ___, 132 S Ct 1142, 181 L Ed 2d

1017 (2012). In addition, Strawn seeks two supplemental

fee awards: one for the cost of litigating the fee petition,

and the other for the cost of defending against a petition

for certiorari in the United States Supreme Court after

this court issued its decision. Finally, Strawn asks this

court to award him a $5,000 incentive fee for his service on

review as class representative. As we discuss in more detail

later, the attorney fee awards that Strawn seeks are of

two kinds. One is a so-called “fee-shifting award” pursuant

to ORS 742.061(1) (set out later in this opinion), which

would be paid by defendants Farmers Insurance Company

of Oregon et al. (collectively, Farmers).1 The other is a

so-called “common-fund” award, which would be paid from

the punitive damages recovery in the class action. Farmers

raises various challenges to the fees requested in the main

fee petition, in both supplemental fee petitions, and in the

motion for an incentive fee.

Preliminarily, we observe that this court often

resolves attorney fee petitions by order, rather than written

opinion. The court does so because most fee petitions present

few or no legal issues, and instead entail fact-bound or case-

specific questions of entitlement to and reasonableness of

the fees requested. This case, likewise, presents certain

disputes that are fact-bound and case-specific. We resolve

those issues with limited discussion, consistent with our

practice of ordinarily resolving them by order.

In this instance, however, the petitions and

objections also present legal issues that are appropriate to

resolve by opinion. Those issues include: (1) the appropriate

method for determining the amount of a reasonable fee

award in a case that involves both a statutory fee-shifting

1

There are three defendants in this case: Farmers Insurance Company of

Oregon, Mid-Century Insurance Company, and Truck Insurance Exchange.

Cite as 353 Or 210 (2013) 213

award and a common-fund award; (2) the propriety of

applying a multiplier to the awards; (3) how fees should

be apportioned between the fee-shifting and the common-

fund awards; (4) whether this court has authority to award

attorney fees for work done in opposing a petition for writ of

certiorari to the United States Supreme Court; (5) whether

a court has authority to award post-opinion, prejudgment

interest on court-awarded attorney fees; and (6) whether an

appellate court may award a class representative a class

incentive fee on appeal and review.

I. BACKGROUND

We begin with a brief outline of this litigation, to

provide background for our discussion of the requested

fees. Strawn filed a class action against Farmers raising

two contractual claims (breach of contract and breach

of the covenant of good faith) and one common law claim

(fraud) in connection with auto insurance policies written

by Farmers.2 The contractual claims were premised on the

common legal and factual theory that Farmers did not pay

personal injury protection (PIP) benefits in the full amount

owed under the auto insurance policies; the fraud claim

was premised on the related theory that Farmers deceived

the plaintiff class members by preventing them from being

aware that Farmers was not paying their PIP benefits in the

full amount owed. Strawn, 350 Or at 343, 352-53. The jury

found for the class on the contractual claims and the fraud

claim, and it made a single award of compensatory damages

on those claims. In addition, and for the fraud claim only,

the jury awarded punitive damages. Consistently with the

jury’s verdict, the trial court entered a judgment awarding

the class approximately $900,000 in compensatory damages

(which included prejudgment interest) and $8 million in

punitive damages. Id. at 344. The trial court also awarded

Strawn attorney fees totaling over $3.1 million. Of that

amount, over $2.6 million was a fee-shifting award to be

paid by Farmers; about $500,000 was a common-fund award

to be paid from the punitive damages awarded to the class.

2

Strawn also sought and prevailed on a declaratory judgment claim, but that

claim is not a basis for the attorney fees that Strawn seeks.

214 Strawn v. Farmers Ins. Co.

Farmers appealed. The Court of Appeals rejected

Farmers’s challenges to liability but agreed with Farmers

that the $8 million awarded in punitive damages was

excessive under federal due process standards. See Strawn

v. Farmers Ins. Co., 228 Or App 454, 485, 209 P3d 357

(2009), aff’d in part and rev’d in part, 350 Or 336, 258 P3d

1199 (2011). The Court of Appeals determined that punitive

damages of four times plaintiffs’ actual harm was the most

that was constitutionally permissible; consequently, the

court remanded the case for a new trial on punitive damages,

unless plaintiffs agreed to remittitur of punitive damages to

approximately $3.6 million (the maximum punitive damages

that the court found constitutionally permissible, plus

interest). Id. The Court of Appeals also rejected Farmers’s

challenge to the amount of the fee-shifting award that the

trial court ordered it to pay. See id. at 457 (summarizing

court’s conclusions). The court later issued a second opinion

awarding Strawn attorney fees for work done on appeal

totaling $585,441 (according to our calculations). The bulk

of that amount ($544,305) was awarded as a fee-shifting

award payable by Farmers; the remainder ($41,136) was

a common-fund award payable from the punitive damages

recovery. See Strawn v. Farmers Ins. Co., 233 Or App 401,

410, 418, 422, 426, 226 P3d 86 (2010) (figures not including

cost awards).

Both Strawn and Farmers sought review by this

court. Strawn asserted that the Court of Appeals had erred

in reducing the punitive damages award. Farmers argued

that the Court of Appeals had not reduced the punitive

damages enough to comport with constitutional standards;

Farmers also raised challenges that went to its liability on

the contractual and fraud claims. Strawn, 350 Or at 339. In

their respective petitions for review, neither party raised

any issue about the attorney fee awards made by the trial

court or the Court of Appeals.3

3

Farmers filed a separate petition for review asking this court to vacate the

fees awarded by the Court of Appeals in the event that Farmers prevailed in this

court on its challenges to the trial court’s award on the merits. That petition,

however, did not otherwise raise any substantive challenge to the previous awards.

Cite as 353 Or 210 (2013) 215

This court allowed both petitions for review.

Ultimately, this court rejected Farmers’s challenges to

liability. Id. at 344-62. On the punitive damages award, this

court agreed with Strawn that Farmers had failed to raise

its challenge on appeal in a way that permitted to Court of

Appeals to reach the issue. Consequently, this court did not

reach the parties’ due process arguments about the amount

of punitive damages that could constitutionally be awarded;

instead, we affirmed the $8 million punitive damage award

because of the procedural posture of Farmers’s challenge.

Id. at 369-70. On Farmers’s petition for reconsideration, this

court issued a written opinion adhering to its prior opinion.

Strawn v. Farmers Ins. Co., 350 Or 521, 256 P3d 100 (2011).

II.  ATTORNEY FEES

As we previewed at the outset, Strawn seeks two

types of attorney fee awards. The first is a statutory fee

award pursuant to ORS 742.061(1).4 That statute directs

trial and appellate courts to award attorney fees against the

defendant in an action to recover on an insurance policy, if

the plaintiff’s recovery exceeds the amount of any tender in

the case. Such an award typically is referred to as a “fee-

shifting” award, because the prevailing party’s attorney

fees are shifted to the losing party. In this case, as Strawn

agrees, ORS 742.061(1) authorizes a fee-shifting award

against Farmers for the work done only on the contractual

claims (breach of contract and breach of implied covenant of

4

The citation is to the 1997 version of ORS 742.061, which provided, in part:

“(1)  Except as otherwise provided in subsections (2) and (3) of this section,

if settlement is not made within six months from the date proof of loss is filed

with an insurer and an action is brought in any court of this state upon any

policy of insurance of any kind or nature, and the plaintiff’s recovery exceeds

the amount of any tender made by the defendant in such action, a reasonable

amount to be fixed by the court as attorney fees shall be taxed as part of the

costs of the action and any appeal thereon.”

In 1999, the legislature amended ORS 742.061 to add an exception that

potentially bars recovery of attorney fees in a case such as this. Or Laws 1999,

ch 790, § 1 (exception when insurer fails to pay PIP benefits if insurer accepted

coverage, only issue is amount of benefits, and insurer consented to submit case

to binding arbitration). Although Farmers argued that the amendment applied

retroactively to this case, the Court of Appeals rejected that argument, and that

issue was not presented to this court on review. See Strawn, 228 Or App at 486-87

(analyzing amendment). Accordingly, we apply the 1997 version of the statute to

this case. All citations in this opinion are to that version.

216 Strawn v. Farmers Ins. Co.

good faith and fair dealing). That statute does not authorize

attorney fees on the common law fraud claim or the punitive

damages award.

Consequently, for work in furtherance of the fraud

claim and associated punitive damages, Strawn seeks

attorney fees from the punitive damages award itself,

pursuant to the so-called “common-fund” doctrine. That

doctrine generally applies when a party has litigated to

create or preserve a monetary fund on behalf of others,

as occurs in a successful class action for damages. Rather

than shift the plaintiff’s litigation expenses to the losing

party, the common-fund doctrine permits the burden of

those expenses to be shared among those who benefitted

from the litigant’s efforts by allowing plaintiff’s lawyers to

be paid from the common fund created or preserved by the

litigation. The doctrine is an equitable one, premised on the

theory that those benefitted by the common fund would be

unjustly enriched if they did not share in the cost of creating

or preserving that fund that would otherwise be borne by

the party that pursued the litigation. See Strunk v. PERB,

341 Or 175, 181-84, 139 P3d 956 (2006) (discussing common-

fund doctrine). In the context of class-action litigation

specifically, the common-fund doctrine permits attorney fee

awards from a monetary judgment that benefits the class.

See generally Alba Conte & Herbert B. Newberg, 4 Newberg

on Class Actions § 14:2, 512 (4th ed 2002) (“When the class

action successfully recovers a fund for the benefit of a class,

it is long settled that the attorneys who created that class

recovery are entitled to be reimbursed from the common

fund for their reasonable litigation expenses, including

reasonable attorney’s fees.”). The Oregon procedural

rule governing class actions, ORCP 32, appears to codify

the common-fund doctrine by authorizing a reasonable

fee award to be paid from any recovery awarded to the

class when the judgment can be divided for that purpose.

Compare ORCP 32 M(1)(c) (“If the prevailing class recovers

a judgment that can be divided for the purpose, the court

may order reasonable attorney fees and litigation expenses

of the class to be paid from the recovery.”) with State Farm

Mut. Auto. Ins. v. Clinton, 267 Or 653, 657, 518 P2d 645

(1974) (describing common-fund doctrine in similar terms).

Cite as 353 Or 210 (2013) 217

A.  Methodology for Determining Attorneys Fees

1.  Prevailing Methodologies for Fee Awards

For an attorney fee awarded either pursuant to

a fee-shifting statute or the common-fund doctrine, the

touchstone for the amount of the award is the same—

reasonableness. See ORS 742.061(1) (court to fix fee in

“reasonable amount” in action on insurance policy); ORCP

32 M(1)(c) (court may order “reasonable attorney fees” in

class action); Strunk, 341 Or at 184 (common-fund doctrine

permits award of “reasonable fees” assessed to the fund).

In determining what amount of fee is reasonable, two

basic methods of calculation are generally available. One

is the so-called “lodestar” method, by which the attorney is

awarded a fee based on a reasonable hourly rate, multiplied

by a reasonable number of hours devoted to work on the

case, with certain adjustments potentially made to that

amount for factors such as the risk of loss and the quality

of the attorney’s work. See Conte & Newberg, 4 Newberg

on Class Actions § 14:5 at 541-42. The other is the so-called

“percentage method” (percent-of-fund) method, which sets

the fees by calculating the total recovery secured by the

attorneys and awarding them a reasonable percentage of

that recovery. Id. § 13:80 at 493. In general, the lodestar

methodology is thought to more directly account for the

amount of work done, while the percent-of-fund method

more directly reflects the result achieved. See generally id.

§ 14:5 at 541; Alba Conte, 1 Attorney Fee Awards § 1:8, 23-24

(3d ed 2004).

Traditionally, in both state and federal courts, the

percent-of-fund method has been the prevalent means of

calculating the reasonable fee award in common fund cases.

Conte & Newberg, 4 Newberg on Class Actions § 13:80 at

493. During the 1970s, however, the lodestar approach

gained favor in common fund cases, largely as a result of

the federal Third Circuit Court of Appeals decision in Lindy

Bros. Bldrs. v. American R. & S. San. Corp., 487 F2d 161

(3d Cir 1973) (reversing trial court attorney fee award

based on the percent-of-fund methodology). The favor was

relatively short-lived. In the mid-1980s, the Third Circuit

convened a task force to review the “widespread belief that

218 Strawn v. Farmers Ins. Co.

the deficiencies of the [lodestar approach] either offset or

exceed[ed] its benefits.” Third Circuit Task Force, Court

Awarded Attorney Fees, 108 FRD 237, 246 (1986). The task

force concluded, among other problems, that calculating

a lodestar and adjusting it for factors such as quality of

representation and risk undertaken created an unwarranted

“sense of mathematical precision,” was insufficiently

objective, was burdensome and unmanageable for courts,

and encouraged lawyers to devote excessive or unnecessary

hours to the litigation. Id. at 246-49.5

Because of “myriad problems posed” by calculating

attorney fees under a Lindy-type lodestar approach, the

task force made various recommendations for change. Id.

at 273-74. Foremost among them was the importance of

distinguishing between traditional common fund cases

and cases involving statutory fees, which reflect differing

policies. Id. at 250. In a common fund case, the goal is

to equitably share the burden of litigation among those

benefitted by the fund. Statutory fee cases, on the other

hand, shift the burden of litigation to the losing party to

serve other goals. In many statutory fee provisions, the

goal is to “encourage private enforcement of the statutory

substantive rights,” both economic and noneconomic. Id.

Many statutory fee cases thus involve “important issues of

social policy or civil rights,” and may result in either very

low monetary recoveries or, as in the case of declaratory or

injunctive relief, no monetary recovery at all. Id. at 253.

The task force therefore concluded that the basic lodestar

methodology, as refined by recommendations that the task

force made, should be retained in most statutory fee cases.

Id. at 259. But it advocated abandoning the lodestar method

in traditional common fund cases, as well as in statutory

5

As the task force further observed:

“Perhaps the sharpest attack on the Lindy regime is the claim that

its preoccupation with attorneys’ time and market rates encourages the

expenditure of excessive or unnecessary hours * * *. Quite understandably,

district judges find it difficult, indeed, in most instances, impossible, to police

these matters by looking over the shoulders of lawyers to monitor the way

they handle their cases. To impose that obligation on the Bench is unrealistic,

unduly time-consuming, and typically will amount to little more than an

exercise in hindsight.”

Id. at 262 (footnote omitted).

Cite as 353 Or 210 (2013) 219

fee cases that are likely to result in a settlement fund from

which adequate counsel fees can be paid. Id. at 255-56. For

those cases, the task force concluded, a percent-of-fund

method was the preferable approach. Id.

In the years since the Third Circuit’s report, the

lodestar method of fee calculation, despite the criticisms it

has faced, has become the prevailing approach in statutory

fee-shifting cases, largely because a formula based on a

percentage of the recovery is not usually available. See

Conte, 1 Attorney Fee Awards § 2:7 at 85 (describing trend

in the law during and after 1980s). In common fund cases,

however, federal and state courts alike have increasingly

returned to the percent-of-fund approach, either endorsing

it as the only approach to use, or agreeing that a court

should have flexibility to choose between it and a lodestar

approach, depending on which method will result in the

fairest determination in the circumstances of a particular

case. Conte & Newberg, 4 Newberg on Class Actions §13:80

at 496 (describing many federal jurisdictions as having

either abandoned lodestar approach or given trial courts

flexibility to use percent-of-fund analysis in its place; state

courts “overwhelmingly” use percent-of-fund method rather

than lodestar approach).

Finally, because neither method has proven to be

without flaws, courts do not always confine themselves to

one or the other.6 Rather, there is a trend towards using

a blended approach, in which a court may calculate the

fee based on the percent-of-fund method and then, by

comparing that fee to what the lodestar approach would

produce, check the reasonableness of the result. Conte,

6

As Conte observes in his treatise on attorney fee awards, neither method is

inherently better than the other or particularly satisfying in terms of predictability

or consistency:

“What has now emerged in most fee-award decisions is a recognition that

fee determinations in both common-fund and statutory-fee situations are

incapable of mathematical precision because of the intangible factors that

must be resolved in the court’s discretion based on the circumstances of each

particular case. There is also the recognition that rigid adherence to any fee-

formula approach which attempts to assign precise weights or multipliers

to particular factors is an exercise that gives an impression of artificial

precision to what essentially must be a sound judgment call by the court after

considering the relevant factors as applied to the particular case involved.”

1 Attorney Fee Awards § 2:7 at 85 (footnote omitted).

220 Strawn v. Farmers Ins. Co.

1 Attorney Fee Awards § 2:6 at 69, 78 (describing tandem

use of lodestar and percent-of-fund approaches as cross-

check on reasonable fee; growing recognition of shortfalls

of lodestar approach); Conte & Newberg, 4 Newberg on

Class Actions § 13:80 at 496-97 (state and federal courts

often use hybrid approach to cross-check reasonableness

of fee award). That approach has been most often used in

so-called “hybrid” class actions that are initiated under a

statute with a fee-shifting provision, but that later, through

settlement or judgment, result in a common fund recovery

for the class. Conte & Newberg, 4 Newberg on Class Actions

§ 14:10 at 605. The blended approach is usually used to

ensure the reasonableness of a percent-of-fund award.

Conte & Newberg, 4 Newberg on Class Actions § 14:7 at

172 (Supp 2012). Courts also have used it, however, to test

the reasonableness of a fee calculated through the lodestar

method by checking the lodestar fee against what the

percent-of-fund method would yield when there is a common

fund available for that purpose. Id. Conte, 1 Attorney Fee

Awards § 2:6 at 69-70 (in practice courts often compare

results of both methods).

2.  Methodology in This Case

This court has never attempted to assess the

appropriate methodology to be applied to common fund and

statutory fee-shifting cases generally. Nor have the parties

done so in this case. Rather, as they did at trial and on

appeal to the Court of Appeals, the parties have assumed

that the lodestar methodology is the appropriate one to use

for both the statutory fee-shifting and the common-fund

awards; likewise, the trial court and the Court of Appeals,

without discussing the correct methodology, used the

lodestar approach for both the common fund and fee-shifting

awards. Strawn, however, invites something of a blended

approach through his arguments to this court. In particular,

in assessing the reasonableness of the lodestar fee and the

adjustments to it that he proposes, Strawn compares the

overall fee that he requests to the amount that his attorneys

would have received under his contingent fee agreement

with them, which was based on a percentage of the damages

awarded.

Cite as 353 Or 210 (2013) 221

The lodestar approach that the parties have used

is at least a permissible one under the statutes involved.7

Because the parties have structured their principal

arguments around that approach, we begin there as well. We

also conclude, however, that a percent-of-fund methodology

is a helpful cross-check on the lodestar calculation, for two

reasons. First, this case is a “hybrid” one—that is, it is a class

action that resulted in a significant common-fund award,

even though it was brought at least partially pursuant to a

statute authorizing a fee-shifting award.8 A percent-of-fund

methodology fits with the nature of the relief that plaintiff

and the class recovered in this case. See Strunk, 343 Or at

246 (in cases that result in a common fund recovery, the

“fund itself is a primary measure of success”).

7

Neither a lodestar or a percent-of-fund approach is mandated by the statutes

involved, although both are potentially permissible. ORS 20.075 sets out criteria

to assess the reasonableness of all court-awarded attorney fees. That statute does

not specify any particular methodology for the award, but it does instruct the court

to consider the amount of time required by the case, given the difficulty of the

questions involved and the skill necessary. ORS 20.075(2)(a). The emphasis is

expressly on the time required by the issues involved, not the time actually spent;

the lodestar method initially measures the latter. Actual time spent, however,

is at least relevant to assessing the time required. At the same time, the statute

also looks to the “amount involved in the controversy and the results obtained,”

ORS 20.075(2)(d), which the percent-of-fund approach more directly measures in

a common fund case or other case involving a significant monetary award. We

therefore conclude that the statute, although not mandating either a lodestar or

percent-of-fund methodology, does not foreclose either.

The same is true of the provision governing fee awards in class actions.

Among other factors, the applicable rule explicitly considers “[t]he time and

effort expended by the attorney,” as well as the “[r]esults achieved and benefits

conferred upon the class,” ORCP 32 (M)(1)(e)(i) and (ii). The rule suggests that

either or both a lodestar and percent-of-fund method of fee calculation can be

appropriate, depending on which methodology best arrives at a fair award given

the circumstances of the particular case.

8

Worth noting in that regard is that ORS 742.061(1) applies to actions

brought on insurance policies of any kind. The statute thus provides for an award

of attorney fees in essentially private contractual disputes whether they involve a

modest loss to an automobile owner, a massive loss to a corporation, or a dispute

between insurers. Unlike many statutorily authorized fee-shifting awards, the

award authorized by ORS 742.061(1) is not designed to ensure the availability of

counsel to pursue socially desirable policies in cases that counsel might otherwise

not be willing to pursue. The statute instead serves the different purpose of

encouraging settlement of insurance claims without litigation. Compare Chalmers

v. Oregon Auto. Ins. Co., 263 Or 449, 452, 502 P2d 1378 (1972) (identifying that

as the purpose for the statutory predecessor to ORS 742.061(1)) with Honeywell

v. Sterling Furniture Co., 310 Or 206, 213, 797 P2d 1019 (1990) (fees available in

unlawful trade practices cases assure that wronged consumers can obtain counsel

to prosecute claims that would otherwise be impractical to bring).

222 Strawn v. Farmers Ins. Co.

Second, plaintiffs prevailed on two independent, if

related, types of claims: contract-based and fraud. Both are

fee-generating claims, but each looks to a different source for

the fee. As we have already described, for the contract claims,

Strawn’s attorneys are entitled to a fee-shifting award to

be paid by Farmers. For the fraud claim and the punitive

damages component of the case, the attorney fee award

comes from the common fund itself. In a case involving both

a fee-shifting award and a common-fund award, counsel

appropriately should be paid reasonable fees from both

authorized sources to further the purpose of each award;

conversely, “allowing recovery under only one partially

thwarts the object of the other.” Honeywell v. Sterling

Furniture Co., 310 Or 206, 213, 797 P2d 1019 (1990). Because

this case generated a significant monetary recovery on both

types of claims, some of which ($900,000 in compensatory

damages) is attributable equally to both, but much of which

($8 million in punitive damages) is attributable only to one

(the fraud claim), a percent-of-fund method is particularly

appropriate to test the reasonableness of the attorney fee

awards to be made. Quite simply, it would overlook the

realities of this litigation—in which the incentive to pursue

the litigation was the potential monetary recovery—to not

account for the amount of the fund recovered in determining,

or at least cross-checking, the total amount of attorney fees

that Strawn’s attorneys will receive.9

B.  Main Fee Petition

As we earlier described, Strawn has filed a series of

petitions and supplemental petitions seeking attorney fees

to be paid in part by Farmers and in part from the punitive

damages awarded to the class. We consider each of those

petitions, and the issues that they raise, in turn, beginning

with Strawn’s main fee petition.

9

As Conte observes:

“A common-fund fee award that does not consider the amount of the fund

produced as the controlling guideline in setting a reasonable fee under

prevailing market conditions runs afoul of the economics and practicalities of

a plaintiff-litigation practice.”

1 Attorney Fee Awards § 2:7 at 105.

Cite as 353 Or 210 (2013) 223

1.  A Reasonable Base Lodestar Fee

Strawn’s main petition for attorney fees requests

fees for work done in seeking review by this court, in

resisting Farmers’s petition for review, and in briefing the

merits on both petitions. In that petition, Strawn presents

billings listing the number of hours worked on those

stages of the case, multiplies those hours by the billing

rates for the attorneys and other staff who worked them,

and calculates a base lodestar accordingly. Strawn then

argues for adjustment of that lodestar through a multiplier,

principally to compensate his attorneys for the contingent

nature of any fee they would receive, which in turn entailed

the risk of nonpayment and delay in receiving any fee from

either the common fund or Farmers.

Farmers challenges some of the discrete billings

by Strawn’s attorneys, arguing that they are for work that

the attorneys either should not have performed or for which

they should not have billed. With one exception, we reject

those challenges without further discussion. The exception

is a $575 charge for 2.5 hours that an attorney spent

driving to and from Salem to deliver replacement pages

for Strawn’s response brief, which Strawn now concedes

are not allowable. We agree with Strawn’s concession and,

accordingly, we have deducted the amount of that billing

from all figures in this opinion.

Farmers’s more significant challenge is to the

reasonableness of the overall time spent by Strawn’s

attorneys on the briefing and other work involved in

litigating the case at this court’s level. In total, for work

done after the Court of Appeals decision and until this

court issued its opinion, Strawn’s attorneys spent a total

of 1,252.55 hours. For those hours of work, Strawn seeks a

base fee award of $412,807.00. In addition, Strawn asks this

court to apply multipliers to the base amounts, resulting in

a total requested fee of $760,063.12 for work done on review

to this court.10

10

Strawn applies different multipliers for the fee-shifting and common-fund

awards that he seeks (1.6 times amounts attributed to the fee-shifting award, and

2.0 times amounts attributed to the common-fund award). We later discuss how the

hours are apportioned between the two fee categories. We omit that information

here, however, because including it would unnecessarily complicate the process of

determining whether the total number of hours incurred was reasonable.

224 Strawn v. Farmers Ins. Co.

In response, Farmers does not challenge the hourly

rates claimed by Strawn’s counsel, but it does challenge the

reasonableness of the number of hours. See ORS 20.075(2)(a)

(requiring court to consider the amount of time required by

the case, given the difficulty of the questions involved and

the skill necessary). In support of that challenge, Farmers

offers the testimony of an expert that 614.3 hours would

have been reasonable for the work done before this court,

for a total fee award of $202,719. Farmers also opposes the

use of any multipliers to the base fee award.

We have evaluated the factors prescribed by ORS

20.075,11 and we agree with Farmers that those factors do

not support the amount of fees that Strawn requests. In

particular, we have considered the novelty, difficulty, and

skill needed to perform the legal services required of the

case on review by this court. In that regard, we have taken

into account the fact that the issues had been previously

and extensively briefed at the Court of Appeals level, that

Strawn’s attorneys were already intimately familiar with the

record, and that many of the issues turned on fairly narrow

procedural points that were neither novel or unusually

11

ORS 20.075(2) directs the court to consider the following factors in

determining the amount of fees to be awarded:

“(a) The time and labor required in the proceeding, the novelty and

difficulty of the questions involved in the proceeding and the skill needed to

properly perform the legal services.

“(b)  The likelihood, if apparent to the client, that the acceptance of the

particular employment by the attorney would preclude the attorney from

taking other cases.

“(c)  The fee customarily charged in the locality for similar legal services.

“(d)  The amount involved in the controversy and the results obtained.

“(e)  The time limitations imposed by the client or the circumstances of the

case.

“(f)  The nature and length of the attorney’s professional relationship with

the client.

“(g)  The experience, reputation and ability of the attorney performing the

services.

“(h)  Whether the fee of the attorney is fixed or contingent.”

Subsection (2) of ORS 20.075 requires the court to consider, in addition, “the

factors specified in subsection (1).” Subsection (1) lists factors that ordinarily are

considered in deciding whether to make a discretionary award of fees. We do not

list those factors here, because we conclude that they do not inform the proper

disposition of this particular fee petition.

Cite as 353 Or 210 (2013) 225

difficult (such as preservation).12 The case was complex,

but not unusually so for a civil case involving such a large

damages award, and not as complex as many cases that come

before this court. In our view, the approach that both parties

took to the case complicated it more than necessary and the

court was less aided by the parties’ advocacy as a result. See

generally Chalmers v. Oregon Auto. Ins. Co., 263 Or 449,

455-56, 502 P2d 1378 (1972) (in determining reasonable

attorney fee, court considers assistance provided by party

seeking fee, including efficiency of briefing and helpfulness

of advocacy). Strawn, as the party seeking an award of

fees, has the burden of establishing the reasonableness

of the fee amount that he requests. Hillsboro v. Maint. &

Const. Serv., 269 Or 169, 172, 523 P2d 1036 (1974) (where

opposing party objects to attorney fee request, burden

of proving reasonableness of fees rests on party seeking

them). We have considered Strawn’s arguments in favor of

the number of hours his attorneys expended (1,252.22) as

against the estimate by Farmers’s expert of a reasonable

number of hours for the work done at this court’s level (614.3

hours). We are persuaded by Farmers’s expert.13 Multiplied

by the average rate of $330 per hour charged by Strawn’s

attorneys,14 we conclude that a reasonable lodestar fee for

the work done on review to this court is $202,719.

12

As the Court of Appeals aptly observed in its opinion awarding attorney fees

in this case for the work done on appeal:

“Appellate work is not identical to trial work. As the prevailing party at trial

and the respondent on appeal, plaintiffs were entitled to certain favorable

standards of review. The prosecution of the case at trial was more risky than

the defense of the judgments on appeal. In addition, plaintiffs’ efforts in

arguing from a closed record on appeal cannot be equated with their efforts in

creating that record at trial.”

Strawn, 233 Or App at 417.

13

We have reviewed the attorney fee orders that this court has awarded from

the year 2000 forward. Strawn’s requested amount of fees appears unprecedented.

Equally unprecedented would be an award at the reduced amount that Farmers’s

expert identified as reasonable. Although that fact is not determinative, it does

have legitimate bearing, especially given that this case is not the high water mark

of complex cases coming to this court.

14

Farmers’s expert relied on that average rate to calculate a reasonable fee

based on the total hours that he concluded would have been reasonable to devote

to the work involved. Although Strawn, in response, took issue with the expert’s

opinion on the reasonableness of the hours devoted to the case, Strawn did not

take issue with the average hourly rate that the expert used.

226 Strawn v. Farmers Ins. Co.

2.  Whether to Adjust the Lodestar for Contingency

ORS 20.075(2)(h) directs a court, in setting a

reasonable attorney fee, to consider whether the attorney

fee is fixed or contingent. Strawn relies on ORS 20.075(2)(h)

as supporting an enhanced award in this case through the

use of a multiplier. He contends, essentially, that a mere

hourly award would compensate his attorneys significantly

below the amount that they would receive if they were paid

on a contingent fee basis, thus failing to account for the risk

that his attorneys incurred agreeing to undertake the case.15

In support, Strawn compares the amount of attorney

fees already awarded by the trial court and Court of Appeals

to the amount that his counsel would have been entitled to

receive under the terms of the contingent fee agreement that

Strawn and his attorneys negotiated. The contingent fee

agreement with Strawn (as class representative) entitles his

attorneys to a percentage of the “gross recovery to all class

members”—50 percent if the case goes to appeal.16 Strawn

asserts that the gross recovery for the class is $12,114,305,

which consists of the general judgment of $8,900,000,

plus fee-shifting attorney fee awards against Farmers of

$2,670,000 by the trial court and $544,305 by the Court of

Appeals. Strawn asserts that the attorney fees awarded to

date are only 31 percent of that gross recovery—well below

the 50 percent provided in the contingency fee agreement.

15

As Conte explains:

“It is axiomatic that attorneys who work on a contingent-fee basis must

charge a higher fee than those who work on a noncontingent-fee basis, to

compensate them for the risk of loss and the risk of receiving no compensation

for services rendered and to permit them to earn an income that would be

competitive with colleague who get paid, win or lose.”

1 Attorney Fee Awards § 1:8 at 23-24 (footnote omitted). Neither party in this

case has explored the legislative history of ORS 20.075(2)(h) to determine

whether, as Strawn assumes, the legislature intended that provision to authorize

a multiplier to account for contingency. For present purposes, we may assume,

without deciding, that it does, because (as we later explain) we conclude that the

fees awarded are reasonable without any multiplier. In this case, therefore, it

suffices to note that courts that have used the lodestar methodology to determine

a reasonable fee have divided over the question of how any enhancement to the

lodestar for contingent fee cases should be calculated, a division illustrated by the

three opinions in Pennsylvania v. Del. Valley Citizens’ Council, 483 US 711, 107 S

Ct 3078, 97 L Ed 2d 585 (1987).

16

More specifically, the fee agreement entitles counsel to the greater of 50

percent of the class recovery or the fees actually awarded by the court.

Cite as 353 Or 210 (2013) 227

As we earlier noted, that comparison by Strawn

invites a percent-of-fund method of calculating the attorney

fee as a check on the lodestar calculation. And as we have

already explained, such an approach seems particularly

appropriate in this case, because this litigation resulted

in a significant common fund for which a percent-of-fund

approach is generally considered to be an appropriate way

to calculate a reasonable attorney fee. Strawn’s calculation,

however, reflects three significant errors.

First, Strawn incorrectly includes the fee-shifting

attorney fee awards as part of the gross recovery subject to

the contingent fee. Doing so amounts to a form of double-

counting. The client would be charged a percentage of

not only the fund recovered under the judgment, but also

an added percentage based on the attorney fees that the

attorney will recover from the other side. Because of that

double-counting problem, fee-shifting attorney fee awards

may not be considered as part of the gross recovery subject

to a contingent fee, at least in the absence of a specific fee

agreement to the contrary. See Chalmers, 263 Or at 453-54

(noting possibility of holding that fee-shifting award could

“be added to the amount of the judgment in determining

the total amount of recovery subject to the contingent fee

percentage,” but rejecting such a rule absent a specifically

negotiated fee agreement that so provides).17 The fee

agreement in this case, which is part of the record, does not

17

Chalmers noted the “basic unfairness” to a client who expects the attorney

to be fully paid by the contingent fee, only to learn that the attorney will claim

both the contingent fee and a fee awarded by the court. 263 Or at 454. The court

recognized that an attorney and client might (subject to the attorney’s ethical

obligations) negotiate a fee agreement to calculate the fee in that or some other

way, because an agreement would not create any surprise or unfairness. Id. In the

absence of a specific provision, however, any fee-shifting award must be credited

against the amounts due under the contingency fee agreement:

“If * * * the contingent fee agreement makes no specific reference to any

possible attorney fee which may be awarded by the court and makes no

specific provision for the manner in which any such fee is to be considered in

computing the amount, source, and manner of distribution of the contingent

fee, we hold that any attorney fee awarded by the court shall be offset as a

credit or deduction from the amount of the agreed contingent fee, as computed

upon the basis of the amount of the judgment.”

Id. If the fee-shifting award is large enough, then the client would be entitled to

the full amount of the judgment, despite the contingent fee agreement. Id. at 454-

55.

228 Strawn v. Farmers Ins. Co.

provide for the contingent fee to be calculated by adding

any fee-shifting award to the damages. We conclude, then,

that the fee-shifting attorney fee awards made in this case

should not be included in the total recovery for purposes

of calculating the contingent fee. Instead, the contingent

fee applies only to the total damages (compensatory plus

interest, and punitive damages) awarded to the class based

on the jury’s verdict: $8,900,000. So calculated, the amount

of attorney fees that Strawn’s attorneys have received to

date (that is, at trial and before the Court of Appeals) is not

31 percent, as Strawn claims. It is, instead, 42 percent.

The second error is that Strawn’s calculations fail

to reflect the statutory limit on the contingent fee that could

be collected in this case. The class was awarded $900,000

in compensatory damages and $8 million in punitive

damages, for a total of $8.9 million. Strawn assumes that

the contingent fee would be half of that, or $4.45 million.

But the legislature, by statute, has limited the contingent

fee that may be paid from a punitive damages award.

Specifically, under former ORS 18.540(1)(a) (1999),18 no

more than 20 percent of a punitive damages award may be

awarded to a plaintiff’s counsel as attorney fees. In this case,

the maximum contingent fee amount payable to Strawn’s

counsel from the punitive damages award would be $1.6

million. That amount, added to half the compensatory

damages ($450,000), equals $2,050,000.

That figure—slightly over $2 million—represents

the largest contingent fee that, consistently with former

ORS 18.540(1)(b) (1999), Strawn’s attorneys could have

received from the class recovery for litigating this case,

notwithstanding the negotiated fee agreement. Necessarily,

Former ORS 18.540(1)(a) (1999) provided, in part:

18

“Forty percent [of the award of punitive damages] shall be paid to the

prevailing party. The attorney for the prevailing party shall be paid out of the

amount allocated under this paragraph, in the amount agreed upon between

the attorney and the prevailing party. However, in no event may more than 20

percent of the amount awarded as punitive damages be paid to the attorney

for the prevailing party.”

Former ORS 18.540 (1999) has since been renumbered as ORS 31.735 and was

amended in 2011. Or Laws 2011, ch 689, § 1; Or Laws 2011, ch 597, § 311. Those

amendments are not relevant to the disposition of this case.

Cite as 353 Or 210 (2013) 229

then, it is also the “reasonable market expectation” that

Strawn’s attorneys would have had for taking the risk of

litigating this case for a contingent fee. The trial court

and Court of Appeals, however, have already awarded

Strawn’s attorneys over $3 million in attorney fees. Thus,

relative to the amount they would have received under the

contingent fee agreement, Strawn’s attorneys are not being

undercompensated by the base lodestar fee.

The third error in Strawn’s calculation is his use

of a 50-percent contingent fee that he and his attorneys

negotiated as the appropriate comparison for a percent-of-

fund analysis. As Strawn concedes, a court is not bound by

that agreement in determining a reasonable fee to be paid

from the class recovery under the common-fund doctrine.19

Strawn nevertheless presumes that a 50-percent fee would

be appropriate in this case. We disagree.

For individual litigation, the normal range for a

reasonable contingent fee is between 33 and 40 percent of

any recovery, with 50 percent usually serving as the upward

limit. Conte, 1 Attorney Fee Awards § 2:8 at 123 (describing

usual range) and § 2:8 at 106 (stating general upward limit).

Class actions, however, generally benefit from significant

economies of scale and generate proportionately larger

common funds than do individually litigated cases. Id.

§ 1:9 at 27 and 2:7 at 104.20 Because of that reality, courts

frequently reduce the percentage of the fund awarded below

what would be awarded in individual litigation. Id. § 2:7 at

104. Thus, for complex class actions that result in substantial

economic recoveries, the normal fees tend to be between 20

to 30 percent of the recovered fund, with deviations from

19

Specifically, Strawn acknowledges:

“[G]iven a court’s unique authority in class-action proceedings and the

necessity of ensuring that no conflict or adversity arises between the class

and class counsel, the proper procedure in Oregon should ensure that attorney

fee awards in class-action proceedings are always subject to the control of

the court in which the class-action proceeding is pending, regardless of any

written fee agreement.”

(Emphasis in original.)

20

Said another way, from a contingent-fee practice market-based perspective,

“class action lawyers working to generate common funds are in big business, while

individual contingent-fee practitioners are in small business, generally speaking.”

Conte, 1 Attorney Fee Awards § 1:9 at 26.

230 Strawn v. Farmers Ins. Co.

that range when the fund is extraordinarily large or small

relative to the hours of work reasonably expended by the

attorneys. Id. § 2:8 at 106-14; see also Conte & Newberg,

4 Newberg on Class Actions § 14:6 at 550 (20 to 33 percent

is usual range for securities and antitrust litigation). A

50 percent-of-fund fee remains the usual upward limit, so

that the fee does not consume a disproportionate portion of

the fund recovered. Conte, 1 Attorney Fee Awards § 2:8 at

106; Conte & Newberg, 4 Newberg on Class Actions § 14:6

at 550. But such a percentage is extraordinary. The median

of the usual range—25 percent—is used by many courts

as a reasonable starting point for common-fund awards in

class actions, with deviations made based on circumstances

justifying an upward or downward adjustment. Conte,

1 Attorney Fee Awards § 2:8 at 113.

Here, the contingent fee agreement that Strawn

and his attorneys entered into was at the upward limit: 50

percent of any fund awarded. For present purposes, we will

assume (but need not decide) that that percentage might have

been appropriate if this case had been litigated for Strawn

in his individual capacity only. In this class action, however,

Strawn’s attorneys benefitted from significant economies of

scale. They were able to rely on evidence that was common

to all the class members, rather than having to produce

individualized proofs of the terms of their contracts, the

acts that breached those contracts, and the reliance by the

class members that was necessary to prove the fraud claim.

Strawn, 350 Or at 340-44 (describing legal and factual basis

for claims); id. at 351-62 (holding that reliance for fraud

claim did not have to be established through individual

proofs, but could be inferred from evidence common to

class). And the class action aspect of the case undoubtedly

aided Strawn in obtaining the $8 million punitive damages

award, which depended on proof of reprehensibility through,

among other class-based evidence, a showing of repeated,

rather than isolated, wrongdoing. See generally Goddard

v. Farmers Ins. Co., 344 Or 232, 253, 179 P3d 645 (2008)

(discussing reprehensibility factor that supports award of

punitive damages). Thus, because this was a class action

case, Strawn’s attorneys likely generated a much larger

common-fund award for significantly less effort than would

Cite as 353 Or 210 (2013) 231

have been entailed in bringing individual claims for each

class member.21

The remaining question is: What should an

appropriate percent-of-fund fee be in this class action? The

parties have not considered that question, and we conclude

that we need not identify a particular percentage at this

juncture. The total amount of attorney fees that Strawn’s

attorneys received at trial and in the Court of Appeals

already amounts to 42 percent of the common recovery

awarded to the class, and therefore already exceeds the

normal range for class actions awards. This is not a case

that has resulted in an exceptionally small common-fund

award, which might justify going above that normal range.

Thus, the comparison demonstrates that no enhancement of

the lodestar calculation is warranted.

On Strawn’s main petition for attorney fees,

then, we reject Strawn’s request for a multiplier or other

enhancement of the base award of $202,719.

3. Apportioning Fees Between Fee-Shifting and

Common-Fund Awards

What we have discussed so far is independent of

how the fees should be allocated between the fee-shifting

and common-fund awards. On that issue, Strawn asserts

that about 40 percent of the fees sought in the main petition

qualify for the fee-shifting award against Farmers, while

60 percent of those fees qualify for the award from the

common fund. Farmers does not dispute Strawn’s allocation,

with the exception of the percentage allocation that Strawn

seeks for the post-opinion proceedings and the attorney fee

petition. We accept Strawn’s proposed allocation, to the

extent that Farmers does not dispute it.22 Of the $171,600

21

Indeed, such efficiencies are a prerequisite to maintaining a class action.

See ORCP 32 B (trial court must find that “a class action is superior to other

available methods for the fair and efficient adjudication of the controversy”).

22

Strawn has allocated all common work performed on the fee-shifting

(contract) and common-fund (fraud) claims to the fee-shifting award only. That

approach seems problematic. This is not a case that involves both a fee-generating

and non-fee-generating claim. See, e.g., Estate of Wesley E. Smith v. Ware, 307 Or

478, 481, 769 P2d 773 (1989) (statutory fees can be awarded for work on both fee-

generating and non-fee-generating claims, where work done on claim for which

fee is authorized would have been incurred regardless of the non-fee-generating

232 Strawn v. Farmers Ins. Co.

in attorney fees whose apportionment Farmers does not

dispute, we therefore conclude that $59,268 should be

apportioned to the fee-shifting award and $112,332 to the

common-fund award. We turn to the disputed allocation for

the post-opinion proceedings and the attorney fee petition.

In that regard, Strawn asks this court to attribute to

the fee-shifting award 99 percent of the time spent preparing

the fee petition and responding to two post-opinion motions

filed by Farmers: a petition to reconsider the opinion, and a

motion to recuse one justice and, because of the recusal, to

rehear the case. This court denied both motions by written

opinion. Strawn, 350 Or at 521. Farmers’s expert asserts that

only 10 percent of the time spent responding to the petition

to reconsider and the motion to recuse should be attributed

to the fee-shifting award, while the time spent preparing

the attorney fee petition should be divided equally between

the fee-shifting award and the common-fund award.

We agree that Strawn’s allocation of 99 percent

of that time to the fee-shifting award is not appropriate.

Significant portions of the work necessarily benefitted the

common-fund claims only. On reconsideration, for example,

the only issue presented related to this court’s holding as to

the fraud claim (i.e., the petition for reconsideration asserted

that this court had improperly eliminated the reliance

requirement of fraud by permitting classwide reliance

to be inferred from evidence common to the class rather

than established by individualized proof).23 As we have

claim). Rather, here, both the contract and fraud claims are fee-generating claims,

with the fees payable from different sources. To the extent that work on the claims

was common to both, so that either claim would have required that same work

regardless of the existence of the other, the more logical approach would be for

the two sources for the awards to bear the fees for the common work equally.

See Honeywell, 310 Or at 213 (to further purpose of each award, reasonable

attorney fee award should be paid from both authorized sources where case

involves both statutory fee award and common-fund award from punitive damages

recovery). Farmers has not objected to Strawn’s allocation on that basis, however.

Consequently, we accept Strawn’s proposed allocation without agreeing that his

method of allocating all work common to both claims to the fee-shifting award is

the appropriate one.

23

Farmers’s petition did also seek reconsideration based on the same facts

that underlay Farmers’s motion to recuse. Recusal and rehearing would have

affected the two contractual claims that were subject to a fee-shifting award under

ORS 742.061(1), as well as the fraud claim. Strawn’s response to the petition for

reconsideration, however, merely incorporated by reference his response to the

Cite as 353 Or 210 (2013) 233

noted and as Strawn has conceded, the fee-shifting award

authorized by ORS 742.061(1) does not apply to the fraud

claim. Consequently, reasonable fees for time that Strawn’s

attorneys spent responding to the petition to reconsider

should be borne by the class, not shifted to Farmers.

Similarly, although Strawn’s petition for attorney

fees included time subject to a fee-shifting award, the petition

addressed two matters that are not subject to a fee-shifting

award: the requests for a common-fund award and for class

administration fees. By definition, Strawn’s entitlement to

a common-fund award was independent of the fee-shifting

award. And although the class administration fees may be

recoverable from the trial court under ORS 742.061(1), those

fees had nothing to do with the issues on appeal or review,

and the Court of Appeals had already ruled that they were

not properly sought on appeal, Strawn, 233 Or App at 410

(a ruling that Strawn did not challenge before this court).

For those reasons, we are satisfied that Strawn’s

proposed allocation—one percent to the common-fund award

and 99 percent to the fee-shifting award—is not justified.

The problem, however, is that the time records presented

by Strawn provide insufficient information to determine

the correct allocation. Strawn, as the party seeking the

award, has the obligation to provide sufficient information

to justify the fee award. Farmers has agreed, however, that

10 percent of the amount spent responding to the petition to

reconsider and motion to recuse ($1,131.90 of $11,319) and

50 percent of the amount spent responding to the attorney

fee petition ($9,900 of $19,800) are properly apportioned to

the fee-shifting claims. In light of Farmers’s position, we

will apportion the hours attributable to the post-opinion

proceedings and the attorney fee petition to the fee-shifting

award accordingly. We conclude that the remainder is

properly payable from the common fund.

Accordingly, we apportion the $202,719 in attorney

fees that we have approved in connection with the original

fee petition as follows. Strawn is awarded $70,299.90

(the $59,268 undisputed portion of the fee award plus

motion to recuse. Thus, the hours attributable to the motion to recuse fully account

for the time Strawn’s attorneys spent working on that issue.

234 Strawn v. Farmers Ins. Co.

$11,031.90 of the fees incurred in connection with the post-

opinion proceedings and attorney fee petition) as a fee-

shifting award payable by Farmers under ORS 742.061(1),

which equals approximately 35 percent of the reasonable

fees incurred. The remaining amount, $132,419.10, which

is approximately 65 percent of the total, is awarded under

the common-fund doctrine, to be paid from the punitive

damages recovery in this case.

D.  Supplemental Fee Petitions

Strawn has filed two supplemental petitions for

attorney fees. The first supplemental fee petition seeks

additional fees incurred to address post-opinion proceedings

in this court as well as to prepare for an anticipated petition

for certiorari to the United States Supreme Court by

Farmers. The second supplemental fee petition seeks fees

incurred in contesting Farmers’s certiorari petition before

the United States Supreme Court. Farmers objects to both

supplemental petitions.

We begin with Strawn’s first supplemental petition

for attorney fees. Strawn asks for $22,945 in fees, part of

which is attributable to addressing Farmers’s objections

to the original attorney fee petition, and part of which

is attributable to responding to an anticipated petition

for certiorari to the Supreme Court of the United States.

Farmers objects to the time sought by the first supplemental

petition that related to Farmers’s expected petition for

writ of certiorari to the United States Supreme Court—

specifically, time that Strawn’s attorneys spent discussing

the petition for certiorari, responding to Farmers’s motion

for stay pending certiorari, and negotiating with Farmers

about the supersedeas bond. Farmers asserts that those

fees were premature, because Strawn’s request in the

first supplemental fee petition preceded the filing of the

certiorari petition. That is no longer true; Farmers since has

petitioned the United States Supreme Court for certiorari,

and the Court has since denied that petition. Accordingly,

we overrule Farmers’s only objection (that the request is

premature) and allow those fees.

Neither party addresses to what extent the

attorney fees claimed in the first supplemental fee petition

Cite as 353 Or 210 (2013) 235

should be apportioned between the fee-shifting award and

the common-fund award. As Strawn concedes in his second

supplemental petition, however, the work done in responding

to Farmers’ certiorari petition is fairly attributable only to

the fraud claim, which presented a potential federal question

and was the exclusive focus of that petition. Likewise, the

work done in anticipating the certiorari petition was also

fairly attributable only to the fraud claim. Strawn has

provided no documentation that would permit this court

to determine what portion of the remaining fees sought

in the first supplemental fee petition should be awarded

against Farmers and what portion should be awarded from

the common fund. We therefore decline to make such an

allocation between the two awards. We conclude, however,

that the fees requested by the first supplemental fee petition

are reasonable in amount, and that they were reasonably

incurred by Strawn’s attorneys in defending the damages

awards that accrued to the benefit of the class as a whole.

Those amounts are therefore appropriate to award from the

common fund. Accordingly, we award Strawn $22,945 in

attorney fees on the first supplemental fee petition, to be

paid from the punitive damages as a common-fund award.

We turn, then, to the second supplemental fee

petition. In that petition, Strawn seeks fees that his counsel

incurred in defending against Farmers’s petition for

certiorari to the United States Supreme Court. Strawn seeks

a base award of $135,648 as compensation for 274.5 hours

of legal work. As with the original fee petition, Strawn asks

this court to impose a multiplier to those fees to compensate

for the contingent nature of the award. Strawn concedes that

none of those fees is attributable to the fee-shifting award;

he seeks them only as a common-fund award. Farmers

objects on a several grounds.24

24

Strawn argues that we should not consider Farmers’s objections, asserting

that they are untimely because they were filed more than 14 days after Strawn

filed the second supplemental fee petition. See ORAP 13.10(6) (allowing 14 days to

object to attorney fee petition).

Strawn’s position is not well-taken. Strawn’s second supplemental fee petition

was deficient because it lacked the proof of service required by our rules. See

ORAP 1.35(2)(d) (“Anything filed with the Administrator shall contain * * * proof

of service in the form of a statement of the date and manner of service * * *.”).

This court issued a notice of deficiency requiring Strawn to submit a certificate

of service within 14 days or “the defective document will not be considered by the

236 Strawn v. Farmers Ins. Co.

Farmers first objects that this court lacks authority

to award fees incurred before the United States Supreme

Court. Relatedly, Farmers objects that there is no authority

to award attorney fees to Robert Peck, Strawn’s counsel of

record in the Supreme Court, because that attorney is not

admitted to practice in Oregon.

If Strawn were seeking to recover for that work

through the fee-shifting award authorized by ORS

742.061(1), Farmers’s arguments might be well taken

because the statute authorizes a fee award only on an action

brought “in any court in this state.” In this instance, however,

Strawn seeks those fees only from the punitive damages

award under the common-fund doctrine. As we have already

explained, the common-fund doctrine is an exercise of equity

to prevent unjust enrichment. The right to recover for unjust

enrichment does not depend on the unjust enrichment

having occurred in court proceedings. See Dan B. Dobbs, 1

Dobbs Law of Remedies § 4.1(2), 557-63 (2d ed 1993) (listing

broad categories of cases where plaintiff may be entitled to

restitution from defendant for unjust enrichment, including

when defendant breached contract, when defendant

obtained title to property by wrongdoing, or when plaintiff

conferred benefit on defendant by contract based on mistake

or unforeseen change in conditions). The question, then, is

not whether fees resulted from attorney representation in

this court, or in any court at all. The question is whether

the other class members would be unjustly enriched by

receiving the benefits of that representation without having

to pay for it. We have already concluded that they would.

Accordingly, we have authority to award the requested fees

from the common fund.

Farmers additionally asserts that Strawn’s

attorneys incurred an unreasonable number of hours in

opposing the petition for certiorari. Among other responses,

Strawn asserts that Farmers’s petition contained numerous

factual misrepresentations. For that reason, he was obligated

court.” See ORAP 1.20(2) (authorizing court to strike any document that does not

conform to any statute or rule). Because this court had given notice that the fee

petition might effectively be stricken, the time for Farmers to respond to the fee

petition was tolled. Farmers filed its objections within 14 days of the deficiency

being cured.

Cite as 353 Or 210 (2013) 237

to file a brief to correct those perceived misstatements, or

risk waiving any objection to them. See S Ct Rule 15.2 (party

potentially waives objection if brief in opposition does not

address any perceived misstatements made in the petition

for certiorari, including factual misstatements). Farmers did

not submit any expert affidavit that would otherwise bring

into question the reasonableness of the number of hours

expended by Strawn’s counsel to respond to the petition for

certiorari. For those reasons, we reject Farmers’s argument

that the number of hours were unreasonable.

Finally, Farmers objects to Strawn’s request for

a multiplier on the attorney fees claimed in the second

supplemental petition. We agree with Farmers that a

multiplier is not appropriate for the same reasons that we

concluded that a multiplier or other enhancement to the

lodestar was not appropriate in connection with the original

fee petition. We need not repeat that analysis at any length.

As we have explained, the amount of fees that Strawn’s

attorneys have received to date (42 percent of the total

class recovery) already compares favorably—and, indeed,

potentially exceeds—a properly calculated reasonable

percent-of-fund fee. With the attorney fees that we are

awarding for work done on review to this court, Strawn’s

attorneys will receive an amount that equates with an even

greater percentage of the total recovery (approximately 46

percent).25 An enhancement to the lodestar fee that we have

already determined is reasonable therefore is not warranted.

25

To be clear, the amount of attorneys fees awarded through all stages of this

case (trial, appeal, and now review) is slightly over $4 million, which is about 46

percent of the total common fund, but most of that amount is not being paid from

the common fund. When the final math is done, the total amount of fees shifted

to Farmers, given the multipliers applied by the trial court and Court of Appeals,

exceeds $3.2 million, which is about 80 percent of the total attorney fees awarded.

The class, on the other hand, will bear a total of $837,148.10 (including the fees

awarded in this court), or about 20 percent of the total attorney fees awarded for the

litigation. As those numbers reveal, from a percent-of-fund perspective, Farmers

has significantly subsidized the fees that would otherwise be due from the punitive

damages recovery. That is true even though Farmers is responsible for shifted fees

only on the contractual claims and the compensatory damages recovery (about

$900,000) and is not responsible for the work done on the fraud claim and punitive

damages award ($8 million). Whether those respective amounts, viewed from

a percent-of-fund perspective, represent a fair apportionment of the fees is not

before us, because it is a consequence of the amounts awarded by the trial court

and the Court of Appeals, which have not been drawn into question on review.

238 Strawn v. Farmers Ins. Co.

On the second supplemental fee petition, then, we

award Strawn $135,648 in attorney fees, payable from the

punitive damages award under the common-fund doctrine.

II.  EXPENSES NOT PART OF HOURLY RATE

Strawn has asked this court to award him expenses

that are not part of his attorneys’ hourly rates, such as

internal photocopying and computerized legal research.

Strawn sought expenses of $6,928.15 in his main fee petition,

$686.99 in his first supplemental fee petition, and $1,648.35

in his second supplemental fee petition. Farmers poses

no objection to those expenses. We therefore allow them.

See Willamette Prod. Credit v. Borg-Warner Acceptance,

75 Or App 154, 159, 706 P2d 577 (1985), rev den, 300 Or

477 (1986) (“Modern electronic accounting methods allow

a more specialized billing for attorney fees. Courts should

recognize the reality of modern legal business practices and

include expenses specially billed to the client in the attorney

fees award when they are properly documented and are

reasonable.”).

The $1,648.35 in expenses sought by Strawn’s

second supplemental fee petition is payable entirely from

the common-fund award. Similarly, we conclude that the

$686.99 in expenses sought in Strawn’s first supplemental

fee petitions also should be paid entirely from the common

fund; those expenses should follow the underlying attorney

fees sought by that supplemental fee petition, which (as we

have already explained) are payable only as a common-fund

award. The expenses sought by the original fee petition,

however, must be apportioned between the fee-shifting

claims and the common-fund claims. Neither Strawn nor

Farmers makes any suggestion as to how those expenses

should be apportioned. Because the expenses relate

principally to the work done during the petition for review

and merits stages of the proceeding before us, we conclude

that it is appropriate to apportion the expenses in the same

ratio that we apportioned the attorney fees awarded on the

main fee petition: 35 percent to the fee-shifting award and

65 percent to the common-fund award.

Cite as 353 Or 210 (2013) 239

Accordingly, we award Strawn $2,424.85 in expenses

as a fee-shifting award, all from the original fee petition.

We also award Strawn $6,838.64 in expenses as a common-

fund award, representing expenses of $4,503.90 from the

original fee petition, $686.99 from the first supplemental fee

petition, and $1,648.35 from the second supplemental fee

petition.

III.  POST-DECISION, PREJUDGMENT INTEREST

ON FEE AWARD

Strawn asks this court to award him post-decision,

prejudgment interest on the appellate attorney fee awards—

interest that begins accruing when the fees are granted,

not when the appellate judgment issues. Thus, Strawn

seeks interest on the Court of Appeals’ attorney fee award

beginning January 27, 2010, the date that the Court of

Appeals issued its opinion granting those fees. Similarly,

Strawn asks that interest on this court’s attorney fee awards

begin accruing on the date that this court awards them, not

on the date that the appellate judgment issues.

Generally, interest cannot be awarded in the

absence of either a contract or a statutory provision

authorizing it. See Dowling v. Albany Planing Mill, 238

Or 425, 431, 395 P2d 143 (1964) (“[I]n the absence of an

agreement to pay interest, interest can be recovered only

in those circumstances authorized by statute.” (citation

omitted)); Sorenson v. Oregon Power Co., 47 Or 24, 34, 82 P

10 (1905) (“In the absence of a contract to pay interest, the

right to exact it must be found in the statute[.]” (citation

omitted)). As statutory authority for prejudgment interest

here, Strawn invokes ORS 82.010(1)(a), which authorizes

an award of interest on “[a]ll moneys after they become

due.”26

26

Specifically, ORS 82.010(1) provides:

“The rate of interest for the following transactions, if the parties have

not otherwise agreed to a rate of interest, is nine percent per annum and is

payable on:

“(a)  All moneys after they become due; but open accounts bear interest

from the date of the last item thereof.

“(b)  Money received to the use of another and retained beyond a reasonable

time without the owner’s express or implied consent.

240 Strawn v. Farmers Ins. Co.

As we observed in McDowell Welding & Pipefitting v.

US Gypsum Co., 345 Or 272, 288-89, 193 P3d 9 (2008), most

claims for prejudgment interest arise under ORS 82.010

when the person from whom prejudgment interest is sought

has breached a duty to pay money (subsection (1)(a)) or has

wrongfully failed to return money to the person to whom it

belongs (subsection (1)(b)). Litigation may be necessary to

determine that the duty to pay or return money has been

breached. But if a plaintiff prevails in such an action, the

breach does not occur at the time of judgment. It is, instead,

a past event. For litigation of that kind, the question whether

the court may order prejudgment interest usually reduces

to whether the amount due was readily ascertainable. See,

e.g., Public Market Co. v. Portland, 171 Or 522, 625, 138

P2d 916 (1943) (prejudgment interest can be awarded on

unliquidated damages for contract breach when “the demand

is of such a nature that its exact pecuniary amount was

either ascertained, or ascertainable by simple computation,

or by reference to generally recognized standards such as

market price” (quoting Theodore Sedgwick, 1 A Treatise on

the Measure of Damages § 300, 571 (9th ed 1912) (emphasis

in original)).

An appellate court’s award of attorney fees is not

in that posture, however. To be sure, when an appellate

court by order or decision awards attorney fees to a party,

the amount becomes ascertainable. It does not, however,

immediately become due. Rather, by statute, an appellate

court attorney fee award is not effective until the appellate

judgment issues. See ORS 19.450(2) (“appellate judgment is

effective when a copy of the appellate judgment is entered

in the [appellate] court’s register and mailed by the State

Court Administrator to the court from which the appeal

was taken”). In effect, entry of judgment creates a monetary

obligation that does not exist until that event occurs. An

appellate court decision or order awarding the fees declares

that such fees should be paid and sets their amount, but the

legal obligation to pay arises only once the court’s appellate

judgment is entered in the register.

“(c)  Money due or to become due where there is a contract to pay interest

and no rate specified.”

Cite as 353 Or 210 (2013) 241

That result is consistent with the justification for

the general rule, reflected in ORS 82.010(1)(a), that interest

accrues on money only after it “becomes due.” Once due,

the debtor has the use of money to which the debtor is not

entitled, while the delay in payment deprives the creditor

of that use. See 1 Dobbs Law of Remedies § 3.6(1) at 333

(“Interest is the sum paid or payable for the use or detention

of money. Just as rent is money paid for the use of property,

interest is money paid for the use of other money.”). To

agree with Strawn that Farmers owes prejudgment interest

on the appellate court attorney fee awards, we would have

to conclude that Farmers was immediately obligated to

pay Strawn’s attorney fees once the Court of Appeals set

the amount of fees, even though the entire review process

remained outstanding. Farmers did not, however, default

on any legal obligation to pay Strawn’s attorney fees when

it failed to do so on January 27, 2010. As to the fee-shifting

award, then, we deny Strawn’s request to award post-

decision, prejudgment interest on the attorney fee awards.

As to the common fund recovery, we need not decide

whether an award of prejudgment interest is authorized

and appropriate for an attorney fee to be paid from such

a fund.27 We have already compared the amount of court-

ordered fees Strawn’s attorneys have been awarded to date

and compared that amount to what they would recover

pursuant to a reasonable percent-of-fund approach. Based

on that comparison, we declined to enhance the lodestar

fee that we determined to be reasonable to compensate for

the risk of nonpayment and delayed payment of the fees.

For those same reasons, even assuming (without deciding)

27

Our authority to make that award would arise, not by statute, but under the

common-fund doctrine. Again, the common-fund doctrine is an equitable doctrine

that is intended to prevent unjust enrichment. See Strunk, 341 Or at 181 (the

equitable common-fund doctrine “is primarily ‘employed to realize the broadly

defined purpose of recapturing unjust enrichment.’ ” (citation omitted)). We have

held that, in equity, courts have discretion to award interest on an amount due

and owing when, “under all the circumstances of the case, [it] seems equitable

and just.” Emrich v. Emery et al, 216 Or 88, 99, 335 P2d 604, on reh’g, 337 P2d

972 (1959) (alteration in original; citations and internal quotation marks omitted).

When the issue is attorney fees for work undertaken on a contingency basis, and

prejudgment interest is sought as a way to compensate for delay in the payment

of attorney fees, it is difficult to see why that concern is not subsumed within the

analysis of whether to apply a multiplier or other enhancement for the contingency

nature of the fee.

242 Strawn v. Farmers Ins. Co.

that we may, pursuant to our equitable authority, assess

prejudgment interest against the common fund class

recovery, we decline to do so in this case.

IV.  MOTION FOR CLASS INCENTIVE AWARD

Strawn asks this court to award him $5,000 as an

incentive fee for serving as the class representative in this

case, such award to be paid from the punitive damages

award. Farmers opposes the request.

Strawn’s motion to award a class incentive fee

duplicates similar motions that Strawn filed in the trial court

and the Court of Appeals. The trial court awarded Strawn

$20,000 as an incentive fee; Farmers did not challenge

that award on appeal, so the validity of that award was

not presented to either the Court of Appeals or this court.

The Court of Appeals, however, denied Strawn’s motion

requesting a $5,000 incentive award on appeal. Strawn, 233

Or App at 423-24 (so explaining). Strawn has petitioned

this court for review of that ruling, and that petition has

been held for this case.

Incentive fees are intended to address a cost burden

that class actions disproportionately impose on the class

representative. Every class action must have one or more

named representatives (see, e.g., FRCP 23(a); ORCP 32

A), and those representatives incur costs—monetary and

otherwise—that the other members of the class do not.

Those costs may include spending time learning about the

case; being subject to the time, expense, and intrusiveness

of discovery; and in some types of cases, such as employment

discrimination actions, facing potential retaliation or loss

of reputation. Theodore Eisenberg & Geoffrey P. Miller,

Incentive Awards to Class Action Plaintiffs: An Empirical

Study, 53 UCLA L Rev 1303, 1305 (2006).

“In some cases—consumer class actions, where the typical

class-member recovery is low, being an example—a class

member may even experience a net loss from acting as class

champion because the small recoveries normally gained

from the case are not enough to cover the increased costs of

serving as the named plaintiff.”

Id. at 1305-06.

Cite as 353 Or 210 (2013) 243

Those costs may lead to what is sometimes termed

a “free rider” problem, in which all the class members hope

that someone else will assume the burden of serving as

class representative. Id. at 1306. The costs also give the

class representative an incentive to minimize his or her

participation “because the named plaintiff gains only a

fraction of the value added by his or her efforts on behalf of

the class.” Id.

To address those problems, courts across the nation

have awarded incentive fees to class representatives in

roughly 28 percent of all successful class actions. Id. at

1307. Generally, the awarded incentive fees represent

only a small fraction of the sum recovered by the class—on

average, 0.16 percent of the class recovery, with a median

incentive fee of only 0.02 percent of the class recovery. Id.

at 1308. “The average award per class representative was

$15,992 and the median award per class representative was

$4,357.” Id.

Yet the award of incentive fees to the class

representative is not without controversy. There are even

problems justifying the award conceptually. Writing for the

Seventh Circuit Court of Appeals, Judge Richard A. Posner

has noted:

“The basis for an award of fees in a common-fund case

is, as we said, restitutionary, and the law of restitution

(excepting salvage in admiralty) generally confines the right

to restitution to professionals, such as doctors and lawyers.

2 George E. Palmer, The Law of Restitution, ch. 10 (1978).

If you dive into a lake and save a drowning person, you are

entitled to no fee. The named plaintiff is not a professional;

he is, at most, a public-spirited member of the class.”

Matter of Continental Illinois Securities Litigation, 962 F2d

566, 571 (7th Cir 1992). Judge Posner went on to explain,

however, that courts generally had not followed that

reasoning:

“Yet the usual formulations of the common-fund doctrine

describe the plaintiff rather than his lawyer as the person

entitled to be compensated for the expenses he has incurred

in conferring a benefit on the (other) beneficiaries of the

common fund. The principal expense is the attorney’s fee,

244 Strawn v. Farmers Ins. Co.

but there can be others, provided they are not personal.

Since without a named plaintiff there can be no class action,

such compensation as may be necessary to induce him to

participate in the suit could be thought the equivalent of

the lawyers’ nonlegal but essential case-specific expenses,

such as long-distance phone calls, which are reimbursable.”

Id. (citations omitted).

In the context of approving settlement agreements,

courts have often expressed concern that granting extra

benefits to the class representatives may encourage

improper behavior. As one court explained:

“Although it is laudable that plaintiff undertook to

prosecute this litigation, the court perceives no circumstances

warranting a special award. A class representative is

a fiduciary to the class. If class representatives expect

routinely to receive special awards in addition to their share

of the recovery, they may be tempted to accept suboptimal

settlements at the expense of the class members whose

interests they are appointed to guard.”

Weseley v. Spear, Leeds & Kellogg, 711 F Supp 713, 720

(EDNY 1989).28 Those concerns, however, are limited to

the settlement context; they do not come into play when (as

here) the parties litigated the case to a final decision.

In this case, we are persuaded that Strawn should

be awarded an incentive fee from the punitive damages

award. The incentive fee that Strawn received from the trial

court does not account for the risk he undertook on appeal.

By serving as class representative through the appeal and

review process, Strawn incurred a substantial risk of being

required to pay Farmers’s costs, even if large portions of the

28

See also Holmes v. Continental Can Co., 706 F2d 1144, 1148 (11th Cir 1983)

(“Settlements entailing disproportionately greater benefits to named parties are

proper only when the totality of circumstances combine to dispel the cloud of

collusion which such a settlement suggests.” (Internal quotation marks and citation

omitted).); Shelton v. Pargo, Inc., 582 F2d 1298, 1315 (4th Cir 1978) (trial court

evaluating pre-certification settlement of class action must focus on possibility

of collusion between class representative and defendant; in doing so, trial court

should “conduct a careful inquiry into the terms of the settlement, particularly the

amount paid the plaintiff in purported compromise of his individual claim and the

compensation to be received by plaintiff’s counsel, in order to insure that, under

the guise of compromising the plaintiff’s individual claim, the parties have not

compromised the class claim to the pecuniary advantage of the plaintiff and/or his

attorney”).

Cite as 353 Or 210 (2013) 245

award were upheld on appeal. See ORAP 13.05(3) (costs may

be awarded to party who obtains substantial modification

of judgment on appeal). Strawn has estimated—and our

own review suggests—that those costs could have exceeded

$20,000. That risk was not shared with the rest of the class;

because Strawn is the only named plaintiff, he was the

principal person who could be required to pay those costs.

See ORCP 32 M(1)(b) (“If under an applicable provision of

law a defendant  * * * is entitled to attorney fees, costs, or

disbursements from a plaintiff class, only representative

parties and those members of the class who have appeared

individually are liable for those amounts.”). At the same

time, Strawn’s personal share of the judgment against

Farmers was only $1,450.64, plus the $20,000 incentive fee

approved by the trial court.29 In other words, Strawn put

himself at distinct risk among the class of being subject to

a cost award that could easily have eliminated his entire

recovery in the action, and that could have been more than

30 times greater than his actual damages, even if he was

largely successful in defending the verdict and the other

class members mostly retained the benefit of the judgment.30

Under those circumstances, we conclude that it

would be unjust for the class members to retain the benefit

of Strawn’s defense of the judgment on appeal and review

without compensating him for the personal risk that he

undertook on their behalf. Accordingly, we award Strawn

a $5,000 incentive fee, payable from the punitive damages

award.

V.  CLASS ADMINISTRATION FEES;

MOTION TO STAY APPELLATE JUDGMENT

In both the original fee petition and the second

supplemental fee petition, Strawn requests an award of fees

29

The general judgment awarded Strawn $412.50 in compensatory damages

plus $197.22 in interest, for a total compensatory damages award of $609.72. Each

class member was also awarded $840.92 as their share of the punitive damages

award; Strawn received $20,840.92, which included the incentive fee.

30

That is, in fact, essentially what had happened in the Court of Appeals

before this court heard the matter on review. Because the Court of Appeals had

reduced the punitive damages award substantially, Farmers likely would have

been designated the prevailing party and been awarded costs that would have

wiped out Strawn’s recovery. The other class members, however, still would have

recovered all actual damages, albeit with a lesser award of punitive damages.

246 Strawn v. Farmers Ins. Co.

incurred in administering the class post-trial, together with

expected class administration fees in the future. As Strawn

admits, the Court of Appeals denied those fees, directing that

they should be sought from the trial court. See Strawn, 233

Or App at 410 (so noting). No party challenged the propriety

of that ruling on review, and we decline to consider the merits

of that conclusion. See ORAP 9.20(2) (generally, court will

consider on review only those questions “that the petition or

response claims were erroneously decided by” the Court of

Appeals). Strawn “simply request[s] that this Court identify

clearly whether or not the class administration fees and

costs * * * are included in its award, * * * so that there will

be no dispute over whether [Strawn has] the right to include

those fees and costs in a supplemental submission to the

trial court.” We deny the request for class administration

fees here, without prejudice to Strawn seeking an award of

those fees by appropriate application to the trial court.

One final motion requires disposition. Farmers

filed a motion to stay issuance of the appellate judgment

while it sought a petition for certiorari from the United

States Supreme Court. While this matter was pending, the

Supreme Court denied the petition. Accordingly, we dismiss

the motion for stay as moot.

VI. CONCLUSION

The petitions for attorney fees for proceedings

following the decision of the Court of Appeals are allowed

in part and denied in part as follows. Strawn is awarded

$72,724.75 in attorney fees and expenses not part of attorney

fees ($70,299.90 and $2,424.85 respectively), that amount to

be paid by Farmers under ORS 742.061(1). Strawn also is

awarded another $297,850.74 in attorney fees and expenses

not part of attorney fees ($291,012.10 and $6,838.64

respectively on all three fee petitions), that amount to be

paid from the punitive damages award in this case. Strawn

is awarded a $5,000 class incentive fee to be paid from the

punitive damages award in this case. The request for class

administration fees is denied without prejudice to Strawn

seeking an award of those fees by appropriate application

to the trial court. Farmers’s motion to stay issuance of the

appellate judgment is dismissed as moot.