Halperin v. Pitts

Filed: October 4, 2012

IN THE SUPREME COURT OF THE STATE OF OREGON

ERIC HALPERIN

and BEATRICE H. MICHEL,

Respondents on Review,

v.

RAY PITTS

and JOYCE PITTS,

Petitioners on Review.

________________________________________

RAY PITTS

and JOYCE PITTS,

Counterclaim Plaintiffs,

v.

ERIC HALPERIN

and BEATRICE H. MICHEL,

Counterclaim Defendants.

(CC C064436CV; CA A139639; SC S059505)

En Banc

On review of an order of the Court of Appeals denying petition for attorney fees of

petitioners on review.

Argued and submitted January 12, 2012.

Michael J. Morris, Bennett, Hartman, Morris & Kaplan, LLP, Portland, argued the

cause and filed the brief for petitioners on review.

Cody Hoesly, Larkins Vacura LLP, Portland, argued the cause and filed the brief

for respondents on review.

LANDAU, J.

The order of the Court of Appeals is reversed, and the case is remanded to the

Court of Appeals for further proceedings.

Kistler, J., concurred and filed an opinion.

1 LANDAU, J.

2 ORS 20.0801 provides for an award of attorney fees in small tort actions.

3 Subsection (1) of the statute provides for an award to the plaintiff, if the plaintiff prevails

4 in the action. That subsection spells out certain procedural prerequisites to such an award

5 to the plaintiff, including a requirement that the plaintiff must have made a timely written

6 demand on the defendant before initiating the action. Subsection (2) provides for an

7 award of fees to the defendant if the defendant pleads a counterclaim and the defendant

8 prevails in the action. Subsection (2), however, does not mention any prerequisites to the

9 award. In particular, it says nothing about the defendant having to make a timely written

10 demand on the plaintiff. The issue in this case is whether subsection (2) nevertheless

11 should be read to require a defendant to have made a timely written demand as a

12 prerequisite to recovering attorney fees under the statute. The Court of Appeals

13 concluded that ORS 20.080(2) must be read to include the requirement. We disagree.

14 The legislature included no statutory wording that is reasonably capable of being read to

15 require a defendant to tender a prelitigation demand as a prerequisite to recovering

16 attorney fees. We therefore reverse the decision of the Court of Appeals and remand for

17 further proceedings.

18 The relevant facts are few and undisputed. Plaintiffs and defendants own

19 adjacent parcels of land in Washington County. For years, they have disputed the

1

All citations are to the 2007 version of the Oregon Revised Statutes unless

stated otherwise.

1

1 boundary between their properties. Plaintiffs sent defendants a demand letter,

2 complaining about what they regarded as defendants' trespass and asking for $5,500 in

3 damages. Plaintiffs later initiated an action to quiet title and alleging a claim for trespass

4 against defendants. Defendants counterclaimed for trespass and to quiet title, alleging

5 $5,000 in general damages. After a bench trial, the trial court dismissed both parties'

6 trespass claims, concluding that neither party was entitled to relief. The trial court did,

7 however, quiet title in plaintiffs' favor.

8 Defendants appealed, arguing that, among other things, the trial court had

9 erred in dismissing their counterclaim for trespass. The Court of Appeals agreed,

10 concluding that, based on plaintiffs' own admissions, they were liable for trespass as a

11 matter of law. Halperin v. Pitts, 241 Or App 249, 254, 250 P3d 402 (2011).

12 Defendants then petitioned the Court of Appeals for an award of attorney

13 fees pursuant to ORS 20.080(2). Plaintiffs objected, asserting that defendants were not

14 entitled to attorney fees because defendants had failed to send plaintiffs a demand letter

15 before filing their counterclaim for trespass. Defendants argued that ORS 20.080(2)

16 contains no such requirement. Plaintiffs replied that this court nevertheless read the

17 statute to include such a requirement in Bennett v. Minson, 309 Or 309, 787 P2d 481

18 (1990). Defendants rejoined that the suggestion in Bennett that ORS 20.080(2) includes a

19 prelitigation demand requirement was dictum and contrary to the plain wording of the

20 statute. The Court of Appeals sustained plaintiffs' objection to the petition for an award

21 of attorney fees, based on this court's decision in Bennett.

22 On review, defendants argue that the Court of Appeals erred in reading into

2

1 ORS 28.080(2) a requirement that simply is not contained in the statute's wording.

2 Defendants acknowledge that a passage in Bennett is to the contrary, but they argue that

3 the passage addressed a matter that was neither disputed nor briefed by the parties and

4 was not necessary to the court's decision. As such, defendants contend, the passage

5 amounts to obiter dictum and has no precedential force.

6 Plaintiffs concede that ORS 20.080(2) is "silent" on the question whether a

7 defendant must deliver a prelitigation demand letter as a prerequisite to recovery of

8 attorney fees under that subsection. Nevertheless, they contend that this court in Bennett

9 concluded that the statute does impose such a requirement, and, because of the

10 importance of stare decisis, as well as various policy reasons, this court should adhere to

11 that earlier decision. Alternatively, plaintiffs contend that, if this court chooses to follow

12 the wording of ORS 20.080(2) without the gloss that Bennett imposed on it, we should do

13 so prospectively, because they reasonably relied on Bennett.

14 Thus framed, the issue is one of statutory construction. The rules of

15 statutory construction are familiar. Our goal is to determine the meaning of the statute

16 that the legislature that enacted it most likely intended. PGE v. Bureau of Labor and

17 Industries, 317 Or 606, 610, 859 P2d 1143 (1993). To determine the intended meaning

18 of the statute, we examine its text, in context, and, where appropriate, legislative history

19 and relevant canons of construction. State v. Gaines, 346 Or 160, 171-73, 206 P3d 1042

20 (2009). This court has emphasized that, in determining the intended meaning of a statute,

21 "there is no more persuasive evidence of the intent of the legislature than

22 the words by which the legislature undertook to give expression to its

23 wishes. Only the text of a statute receives the consideration and approval

3

1 of a majority of the members of the legislature, as required to have the

2 effect of law. The formal requirements of lawmaking produce the best

3 source from which to discern the legislature's intent, for it is not the intent

4 of the individual legislators that governs, but the intent of the legislature as

5 formally enacted into law[.]"

6 Id. at 171 (citations and internal quotation marks omitted).

7 We begin, therefore, with the words of the statute at issue. ORS 20.080

8 provides:

9 "(1) In any action for damages for an injury or wrong to the person

10 or property, or both, of another where the amount pleaded is $5,500 or less,

11 and the plaintiff prevails in the action, there shall be taxed and allowed to

12 the plaintiff, at trial and on appeal, a reasonable amount to be fixed by the

13 court as attorney fees for the prosecution of the action, if the court finds

14 that written demand for the payment of such claim was made on the

15 defendant not less than 10 days before the commencement of the action or

16 the filing of a formal complaint under ORS 46.465, or not more than 10

17 days after the transfer of the action under ORS 46.461. However, no

18 attorney fees shall be allowed to the plaintiff if the court finds that the

19 defendant tendered to the plaintiff, prior to the commencement of the action

20 or the filing of a formal complaint under ORS 46.465, or not more than 10

21 days after the transfer of the action under ORS 46.461, an amount not less

22 than the damages awarded to the plaintiff.

23 "(2) If the defendant pleads a counterclaim, not to exceed $5,500,

24 and the defendant prevails in the action, there shall be taxed and allowed to

25 the defendant, at trial and on appeal, a reasonable amount to be fixed by the

26 court as attorney fees for the prosecution of the counterclaim."

27 Subsection (1) plainly applies to plaintiffs only. It provides that, if the plaintiff prevails

28 in certain types of tort actions, the court may award attorney fees provided that, among

29 other things, the plaintiff made a "written demand for the payment" of the claim before

30 commencement or transfer of the action. Subsection (2) plainly applies to defendants

31 only. It provides that, if a defendant prevails on certain counterclaims, the court may

32 award attorney fees. Subsection (2) makes no mention of a prelitigation demand

4

1 requirement. It supplies no phrasing that reasonably could be construed to impose such a

2 requirement.

3 The history of what is now codified at ORS 20.080 confirms that reading of

4 the statute. The statute was originally enacted in 1947 without subsection (2), and it

5 provided that,

6 "[i]n any action for damages for an injury or wrong to the person or

7 property, or both, of another where the amount recovered is five hundred

8 dollars ($500), or less, there shall be taxed and allowed to the plaintiff, as a

9 part of the costs of the action, a reasonable amount to be fixed by the court

10 as attorney's fees for the prosecution of such action, if the court shall find

11 that written demand for the payment of such claim was made on the

12 defendant not less than 10 days before the commencement of such action;

13 provided, that no attorney fees shall be allowed to the plaintiff if the court

14 shall find that the defendant tendered to the plaintiff, prior to the

15 commencement of such action, an amount not less than the damages

16 awarded to the plaintiff in such action."

17 Or Laws 1947, ch 366, § 1, codified at OCLA § 10-902a (Supp 1947). As originally

18 enacted, the attorney fee provision applied only to plaintiffs; that is, it authorized a

19 recovery of attorney fees only if a plaintiff prevailed in the action that the plaintiff

20 commenced.2 As this court observed in Colby v. Larson, 208 Or 121, 126, 297 P2d 1073

21 (1956), the statute "was undoubtedly enacted for the purpose of encouraging the

2

It could be argued, although no party in this case does, that the term

"plaintiff" in OCLA section 10-902a was intended to be applied broadly to include

counterclaimants. Such an interpretation is highly unlikely. First, it was well understood

at the time that "counterclaims are pleas of defendants and not of plaintiffs." First Nat'l

Bank v. Noble et al., 179 Or 26, 37, 168 P2d 354 (1946). Second, the legislature

amended the statute in 1955 to refer expressly to counterclaiming defendants, an

amendment that would have been unnecessary if OCLA section 10-902a already applied

to counterclaimants.

5

1 settlement without litigation of meritorious tort claims involving small sums. The risk

2 the defendant ran of having to pay the fee of the plaintiff's attorney was evidently

3 considered a spur to such settlements."

4 The legislature amended OCLA section 10-902a -- which in 1953 had been

5 codified at ORS 20.080 -- to add what is now subsection (2) in 1955. Or Laws 1955, ch

6 554, § 2. The legislative history is sparse. Nothing in it suggests that the legislature

7 intended the prelitigation demand requirement that was stated in the original version of

8 what is now ORS 20.080(2) to apply to defendants.

9 In that regard, we note that the legislature easily could have amended the

10 statute simply to add counterclaims and counterclaiming defendants to the existing

11 phrasing of the law. And, in fact, that is precisely what originally was contemplated by

12 the Oregon State Bar, which proposed the wording that the legislature ultimately enacted

13 as ORS 20.080(2). A 1953 report from the Committee on Minimum Fee Schedules of the

14 Oregon State Bar recommended that the Bar "propose and attempt to secure the

15 enactment" of an amendment to ORS 20.080 to include the following italicized language:

16 "Section 1. In any action for damages, or counter claim for

17 damages, for any injury or wrong to the person or property, or both, of

18 another where the amount [recovered] in controversy is [five hundred

19 dollars $500.] one thousand dollars ($1000.00) or less, there shall be taxed

20 and allowed to the plaintiff, or a counter-claiming defendant, as a part of

21 the costs of the action, a reasonable amount to be fixed by the court as

22 attorneys fees for the prosecution of such action if the court shall find that

23 written demand for the payment of such claim was made on the defendant

24 or plaintiff not less than 10 days before the commencement of such action;

25 provided, that no attorney fees shall be allowed to the plaintiff or defendant

26 if the court shall find that the defendant, or plaintiff tendered to the

27 plaintiff, or defendant, prior to the commencement of such action, an

28 amount not less than the damages awarded to the plaintiff or defendant in

6

1 such action."

2 Oregon State Bar, Minimum Fee Schedules, 1953 Committee Reports 14 (italicization

3 and bracketed material in original). That recommendation apparently was not adopted.

4 The following year, the same committee submitted a revised recommendation that

5 removed references to the defendant from subsection (1) of ORS 20.080 and created a

6 new provision applying only to defendants, in a proposed new subsection (2). Oregon

7 State Bar, Minimum Fee Schedules, 1954 Committee Reports 20. The Bar proposed that

8 version at the next legislative session, and the legislature approved it with minor wording

9 changes of a nonsubstantive nature.3

10 Over the course of the next four decades, the legislature amended ORS

11 20.080 to increase the amount of damages pleaded that would trigger the statute. Or

12 Laws 1979, ch 525, § 2 (increasing amount to $3,000); Or Laws 1985, ch 342, § 7

13 (increasing amount to $4,000). In 1981, the legislature also amended the statute to apply

14 both at trial and on appeal. Or Laws, ch 897, § 1.

15 In 2009, the legislature added three new subsections that spell out in greater

16 detail the information that must be included in the prelitigation demand letter that is

17 required under ORS 20.080(1), as well as the consequences of failing to provide that

3

The bill, as the Bar originally proposed it, provided that, if a defendant

pleads a counterclaim, "and the defendant prevails thereon," the defendant may recover

attorney fees. The legislature altered the wording of the quoted phrase to read, "and the

defendant prevails in the action," a change that the court in Bennett characterized as

"purely semantic." 309 Or at 314.

7

1 information. The new subsections provide:

2 "(3) A written demand for the payment of damages under this

3 section must include the following information, if the information is in the

4 plaintiff's possession or reasonably available to the plaintiff at the time the

5 demand is made:

6 "(a) In an action for an injury or wrong to a person, a copy of

7 medical records and bills for medical treatment adequate to reasonably

8 inform the person receiving the written demand of the nature and scope of

9 the injury claimed; or

10 "(b) In an action for damage to property, documentation of the repair

11 of the property, a written estimate for the repair of the property or a written

12 estimate of the difference in the value of the property before the damage

13 and the value of the property after the damage.

14 "(4) If after making a demand under this section, and before

15 commencing an action, a plaintiff acquires any additional information

16 described in subsection (3) of this section that was not provided with the

17 demand, the plaintiff must provide that information to the defendant, and to

18 the defendant's insurer, if known to the plaintiff, as soon as possible after

19 the information becomes available to the plaintiff.

20 "(5) A plaintiff may not recover attorney fees under this section if

21 the plaintiff does not comply with the requirements of subsections (3) and

22 (4) of this section."

23 ORS 20.080(3) - (5).

24 Of course, the new subsections adopted in 2009 do not provide "context"

25 for the legislature's enactment of ORS 20.080(2) some 50-odd years earlier. See Stull v.

26 Hoke, 326 Or 72, 79-80, 948 P2d 722 (1997) (later-enacted statutes are not context for

27 what the legislature intended an earlier-adopted statute to mean). But that does not mean

28 that they are irrelevant. In fact, this court not infrequently refers to later-enacted statutes

29 for the purpose of demonstrating consistency (or inconsistency) in word usage over time

30 as indirect evidence of what the enacting legislature most likely intended. See, e.g.,

8

1 Gaines, 346 Or at 177 n 16 (later-enacted statutes "can be of some aid in interpreting an

2 earlier one" for the purpose of, among other things, demonstrating the legislature's

3 consistent word usage or adherence to drafting conventions); Clackamas Cty Assessor v.

4 Village at Main St. Phase II, 349 Or 330, 345, 245 P3d 81 (2010) (exceptions to 1907

5 statute adopted years later confirmed the meaning of the original statute); Nibler v. Dept.

6 of Transportation, 338 Or 19, 22-23, 105 P3d 360 (2005) (examining later-enacted

7 statutes to determine whether legislature intended to alter well-established meaning of

8 statutory term); Gladhart v. Oregon Vineyard Supply Co., 332 Or 226, 234, 26 P3d 817

9 (2001) (examining contrasting phrasing of later-enacted statutes as "strong evidence" of

10 what the legislature intended an earlier statute to mean).

11 In this case, the 2009 amendments simply confirm what ORS 20.080(2)

12 itself suggests; namely, that it imposes no prelitigation demand-letter prerequisite to a

13 defendant's recovery of attorney fees under that section. Subsections (3), (4), and (5)

14 fairly clearly refer to the demand letter as something that only a plaintiff is required to

15 tender as a condition of recovering attorney fees. They spell out the information that

16 must be included in the demand letter that subsection (1) requires exclusively in terms of

17 information that is in the plaintiff's possession, or is reasonably available to the plaintiff,

18 which the plaintiff must provide to the defendant or the defendant's insurer, and they

19 conclude with the caution that "[a] plaintiff may not recover attorney fees under this

20 section if the plaintiff does not comply" with the new requirements. ORS 20.080(5)

21 (emphasis added). In fact, interpreting the requirements of subsection (1) to apply to

22 defendants under subsection (2) would create some rather uncomfortable inconsistencies

9

1 with the more recently adopted provisions of subsections (3), (4), and (5).

2 In short, nothing in the wording of ORS 20.080 suggests that the legislature

3 intended the prelitigation demand-letter requirement of subsection (1) to apply to

4 defendants under subsection (2). In fact, the textual evidence is directly to the contrary.

5 Plaintiffs acknowledge that much. They nevertheless insist that Bennett

6 effectively wrote such a requirement into ORS 20.080(2) and that this court is bound to

7 follow the decision as a matter of stare decisis.

8 Certainly, this court's prior construction of a statute at issue is an important

9 consideration. See, e.g., State v. Cloutier, 351 Or 68, 100, 261 P3d 1234 (2011) ("Our

10 analysis of [the statute] is also informed by this court's prior construction of that statute or

11 its predecessors."); Liberty Northwest Ins. Corp., Inc. v. Watkins, 347 Or 687, 692, 227

12 P3d 1134 (2010) ("As part of the first level of analysis, this court considers its prior

13 interpretations of the statute."). At one point, this court went so far as to hold that its

14 prior interpretation of a statute "becomes a part of the statute as if written into it at the

15 time of its enactment," subject to amendment by the legislature alone. Stephens v.

16 Bohlman, 314 Or 344, 350 n 6, 838 P2d 600 (1992). We no longer adhere to such a rigid

17 rule of prior construction. Farmers Ins. Co. v. Mowry, 350 Or 686, 695-96, 261 P3d 1

18 (2011). Still, the court may consider itself bound to follow a prior construction as a

19 matter of stare decisis. Id.

20 When the court's prior construction is mere dictum, however, it has no such

21 precedential effect. See, e.g., Mastriano v. Board of Parole, 342 Or 684, 692 n 8, 159

22 P3d 1151 (2007) ("This court has declined to treat a prior interpretation of a statute as

10

1 authoritative when it is dictum."); SAIF v. Allen, 320 Or 192, 204, 881 P2d 773 (1994)

2 (same). "Dictum" is short for "obiter dictum," Latin for "something said in passing."

3 Black's Law Dictionary 1102 (8th ed 2004). In judicial opinions, it commonly refers to a

4 statement that is not necessary to the decision. See State ex rel. Huddleston v. Sawyer,

5 324 Or 597, 621 n 19, 932 P2d 1145 (1997) ("[T]hat statement was dictum, because it

6 was not necessary to the outcome of the case."); State v. Smith, 301 Or 681, 696 n 10, 725

7 P2d 894 (1986) ("[T]he statement is not necessary to the decision in the case and is

8 dictum.").

9 With the foregoing principles in mind, we turn to this court's prior decision

10 in Bennett. In that case, the plaintiff brought an action for damages against the defendant

11 for personal injuries arising out of a motor vehicle accident. Bennett, 309 Or at 311. The

12 defendant, after tendering a demand letter that the plaintiff rejected, counterclaimed and

13 requested attorney fees under ORS 20.080(2). Id. A jury found that each party was 50

14 percent negligent on each claim and that plaintiff's damages were $14,203.63, while the

15 defendant's damages were $4,000; accordingly, the trial court entered judgment in favor

16 of the plaintiff for $7,101.81 on his claim and in favor of the defendant for $2,000 on his

17 counterclaim. Id. The defendant then moved for an award of attorney fees. Id. The

18 plaintiff objected, arguing that the defendant had not "prevailed in the action" for the

19 purposes of ORS 20.080(2) because there can be only one prevailing party in any action,

20 and that party is the one who receives the net award. In that case, the plaintiff argued, he

21 was the only prevailing party, as he received the net award of approximately $5,000. Id.

22 at 312. The trial court agreed with the plaintiff and denied the request for attorney fees.

11

1 Id. The Court of Appeals affirmed, holding that "[t]here can only be one prevailing

2 party, even in litigation involving counterclaims." Bennett v. Minson, 96 Or App 689,

3 692, 773 P2d 813 (1989).

4 On review, this court identified one -- and only one -- legal issue before it,

5 namely, whether the defendant had "prevailed" within the meaning of ORS 20.080(2).

6 As the court phrased it, "[t]he question is whether 'prevails in the action' in subsection (2)

7 means to prevail on the counterclaim or to prevail in the overall litigation between the

8 parties." Bennett, 309 Or at 313.

9 Answering that question, this court first noted that the wording of the

10 phrase "prevailed in the action" in ORS 20.080(2) reasonably could mean prevail in the

11 overall litigation or prevail on a particular claim or counterclaim. Id. at 314-15. The

12 court then observed that the legislative history resolved the ambiguity. Specifically, the

13 court noted that the purpose of subsection (1) of the statute -- which applies to plaintiffs -

14 - was to encourage prompt evaluation and settlement of claims. Id. at 315. The court

15 then observed that the threat of an attorney fee award under subsection (2) -- which

16 applies to defendants -- was intended to prompt the same behavior. Id. That being the

17 case, the court concluded, it follows that a defendant has "prevailed in the action" if he or

18 she has prevailed on the counterclaim, not just the entire action. "If plaintiff's position

19 here were to be sustained," the court explained,

20 "a plaintiff with a valid larger claim could ignore a smaller counterclaim,

21 secure in the knowledge that, so long as he recovered the net monetary

22 judgment in the case, he or she would not be liable for defendant's attorney

23 fees under ORS 20.080(2) regardless of the merits or the outcome of the

24 defendant's counterclaim. We believe that result would defeat the

12

1 legislative purpose in enacting ORS 20.080."

2 Id. at 315.

3 But the court, having answered the sole issue that had been presented to it,

4 went further. In the last paragraph of its opinion, it added the following statement: "In

5 keeping with our holding regarding the identity of concerns expressed in subsections (1)

6 and (2), we also conclude that the procedural requirements of demand and tender

7 contained in subsection (1) apply to subsection (2), which is silent on those matters." Id.

8 Why the court expressed an opinion on that matter is not clear. The issue

9 had not been mentioned in the briefs in Bennett to this court or to the Court of Appeals.

10 Indeed, the court itself noted that there was no dispute about whether the statute required

11 a defendant to tender a prelitigation demand letter. Id. Certainly, the court's statement

12 was not necessary to its determination of the narrow legal issue before it. Nor was it

13 necessary to the larger issue whether the defendant was otherwise entitled to fees under

14 ORS 20.080, given that the defendant had, on his own, tendered a prelitigation demand

15 letter before asserting his counterclaim; thus, regardless of whether the statute required

16 such a demand letter, the defendant had tendered one. In short, the court's remark about

17 implicit procedural requirements in ORS 20.080(2) cannot reasonably be regarded as

18 anything but obiter dictum. Cf. State v. Ainsworth, 346 Or 524, 539 n 18, 213 P3d 1225

19 (2009) (a statement is not dictum if it concerns "the only issue addressed by the parties on

20 appeal and resolved by the Court of Appeals").

21 The fact that a prior construction amounts to dictum does not, by itself,

22 mean that it was incorrect and without any force whatsoever. It merely means that we are

13

1 not required to follow it as precedent. The prior construction, even if dictum, could have

2 persuasive force because of the soundness of its reasoning.

3 In this case, however, we conclude that the dictum in Bennett lacks such

4 persuasive force. It is one thing to resort to legislative history to resolve an ambiguity in

5 statutory phrasing, which is precisely what the court properly did in Bennett in addressing

6 the issue that was briefed, namely, the meaning of the phrase "prevails in the action" as it

7 is used in ORS 20.080(2). It is another thing entirely, however, to resort to legislative

8 history as a justification for inserting wording in a statute that the legislature, by choice or

9 oversight, did not include. Legislative history may be used to identify or resolve

10 ambiguity in legislation, not to rewrite it. US West Communications v. City of Eugene,

11 336 Or 181, 188, 81 P3d 702 (2003) (explaining that courts may not rewrite statutes to

12 insert what the legislature has omitted); Dilger v. School District 24CJ, 222 Or 108, 112,

13 352 P2d 564 (1960) ("It is axiomatic that the courts cannot in the guise of construction

14 supply an integral part of a statutory scheme omitted by the legislature.").

15 Plaintiff insists that, Bennett aside, this court should not hesitate to read into

16 ORS 20.080(2) a prelitigation demand requirement because the statute is "remedial," and,

17 as such, should be construed liberally. It is, of course, an ancient maxim that remedial

18 statutes are to be construed liberally to effectuate the purposes for which they were

19 enacted. See, e.g., Stanley v. Smith, 15 Or 505, 510, 16 P 174 (1887) (remedial statutes

20 "are to be liberally construed and applied for the purpose of giving full effect to the

21 legislative intent"). But it is a maxim that guides the interpretation of statutory wording

22 that the legislature actually enacted. It is not a justification for supplying statutory

14

1 wording that the legislature did not pass into law. See, e.g., Stockton v. Silco

2 Construction Co., 319 Or 365, 376, 877 P2d 71 (1995) ("This court is not at liberty,

3 however, to read into a remedial statute a remedy that the legislature did not intend to

4 create."); Reynaga v. Northwest Farm Bureau, 300 Or 255, 262, 709 P2d 1071 (1985)

5 ("The Workers' Compensation Act is remedial in character and should be liberally

6 construed in favor of the injured worker, although, of course, this court cannot depart

7 from the language of the statute.").

8 Plaintiffs argue that, because the manifest policy of the prelitigation

9 demand-letter requirement of ORS 20.080(1) is "to encourage pre-litigation settlement of

10 small but meritorious tort claims," failing to read ORS 20.080(2) to incorporate the same

11 requirement would "thwart" that policy. In particular, plaintiffs argue, it would subject

12 plaintiffs to the incentive to settle such claims but relieve defendants of the same

13 incentive to settle counterclaims. According to plaintiffs, "[w]ithout pre-litigation notice

14 of a counterclaim, there can be no pre-litigation settlement of it."

15 Plaintiffs' policy argument is unavailing for at least two reasons. First, as

16 we have noted, even assuming that plaintiffs are correct in their characterization of the

17 legislative policy reflected in ORS 20.080(1), we simply do not have authority to rewrite

18 the terms of a statute to accomplish what we may suspect the legislature intended but did

19 not actually enact into law.

20 Second, while plaintiffs may be correct in identifying the legislative policy

21 reflected in subsection (1) of ORS 20.080, their argument that the same policy must be

22 reflected in subsection (2) does not necessarily follow. The legislature could well have

15

1 determined that requiring a defendant to tender a demand letter before filing a

2 counterclaim would not serve the same purpose as requiring a plaintiff to do so before

3 initiating the litigation in the first place. The legislature could have believed that, by the

4 time that litigation has been commenced by the filing of a complaint, the parties would

5 have discussed all relevant claims and counterclaims arising out of the dispute. Our point

6 is not that the legislature actually reached that conclusion. It is only that the legislature

7 could have done so, thus defeating plaintiffs' contention that no plausible policy

8 justification exists for treating plaintiffs and defendants differently in ORS 20.080.

9 In point of fact, ORS 20.080 is not the only instance in which the

10 legislature has done precisely that. ORS 20.082(2), for example, provides that, in small

11 contract claims, the prevailing party -- plaintiff or defendant -- may recover attorney fees.

12 ORS 20.082(3) then provides that "[a]ttorney fees may not be awarded to a plaintiff under

13 the provisions of this section" unless the plaintiff filed a prelitigation demand letter.

14 (Emphasis added.) The statute says nothing about defendants.

15 Similarly, ORS 20.098(1) provides for an award of attorney fees and expert

16 witness costs to a plaintiff who prevails in certain breach-of-warranty cases, if the

17 plaintiff made a prelitigation written demand and allowed the defendant an opportunity to

18 inspect any property pertaining to the claim. ORS 20.098(2) then provides that, if the

19 defendant prevails on such a claim, "the court may in its discretion allow reasonable

20 attorney fees," without any mention of a prelitigation demand requirement.

21 Plaintiffs finally argue that, if we conclude that ORS 20.080(2) does not

22 impose a prelitigation demand-letter requirement, we should apply that interpretation

16

1 only prospectively. Citing Schlimgen v. May Trucking Co., 335 Or 143, 152, 61 P3d 923

2 (2003), and Peterson v. Temple, 323 Or 322, 332, 918 P2d 413 (1996), they argue that

3 their reliance on Bennett throughout the litigation of this case justifies the exercise of this

4 court's discretion not to apply the statute to them.

5 The cases on which plaintiffs rely, however, pertain to this court's decision

6 whether to give only prospective effect to a rule of its own making. None concerns

7 whether this court has discretion to give such limited effect to its interpretation of a

8 legislative enactment.4 We are not persuaded that we have, or should exercise, discretion

9 to apply our decision in this case prospectively only.

10 The order of the Court of Appeals is reversed, and the case is remanded to

11 the Court of Appeals for further proceedings.

4

The exercise of judicial discretion to apply interpretations of statutes only

prospectively may raise significant constitutional issues concerning justiciability, equal

treatment, and separation of powers. See, e.g., Harper v. Virginia Dept. of Taxation, 509

US 86, 97, 113 S Ct 2510, 125 L Ed 2d 74 (1993) (prohibiting selectively prospective

application of federal law decisions because the courts lack "constitutional authority * * *

to disregard current law or to treat similarly situated litigants differently") (citation and

internal quotation marks omitted); James B. Beam Distilling Co. v. Georgia, 501 US 529,

537, 111 S Ct 2439, 115 L Ed 2d 481 (1991) ("selective prospectivity * * * breaches the

principle that litigants in similar situations should be treated the same"); see also Griffith

v. Kentucky, 479 US 314, 323, 107 S Ct 708, 93 L Ed 2d 649 (1987) (rejecting selective

application of newly announced constitutional principle because "the integrity of judicial

review requires that we apply that rule to all similar cases pending on direct review").

17

1 KISTLER, J., concurring.

2 I join the majority's opinion holding that, under the text of ORS 20.080, the

3 requirements that apply to a plaintiff who seeks fees under subsection (1) do not apply to

4 a defendant who seeks fees under subsection (2). Textually, that conclusion is

5 inescapable. I also agree with the majority that the statement to the contrary in Bennett v.

6 Minson, 309 Or 309, 315, 787 P2d 481 (1990), is dictum and thus not binding.

7 Disavowing the statement in Bennett raises problems, however.

8 Under the majority's opinion, a plaintiff may recover fees under ORS

9 20.080(1) only if the plaintiff makes a written demand on the defendant "not less than 10

10 days before the commencement of the action" and only if any award of damages that the

11 plaintiff receives exceeds any tender that the defendant made before the action began.

12 ORS 20.080(2), however, does not impose those conditions on a defendant's right to

13 recover attorney fees when the defendant prevails on a counterclaim; that is, ORS

14 20.080(2) does not require a written demand before filing a counterclaim, nor does it

15 condition a defendant's right to recover attorney fees on the defendant's recovering more

16 on the counterclaim than the plaintiff had tendered.1

17 It is difficult to see the reason for that difference. If the conditions that

1

It may be that a plaintiff's tender would be effective under ORCP 54 E to

limit any attorney fees that a defendant incurred after the tender; that is, it may be that the

conflict that the court found between ORS 20.080(1) and ORCP 54 E in Powers v.

Quigley, 345 Or 432, 198 P3d 919 (2008), would not exist between ORS 20.080(2), as

the court has now interpreted it, and ORCP 54 E. That issue is not before the court,

however, and the court accordingly expresses no opinion on it.

1

1 plaintiffs must meet to recover attorney fees promote settlement of their claims, then the

2 absence of those conditions removes an incentive for defendants to settle their

3 counterclaims. The message from the court's opinion is clear, however: If the legislature

4 did not intend to excuse defendants from satisfying the same (or comparable) conditions

5 that it requires plaintiffs to meet to recover attorney fees under ORS 20.080, then only the

6 legislature can remedy that problem. This court's obligation is to follow the legislature's

7 intent, as the legislature has expressed it, not to add words to the statute to supply, as the

8 court in Bennett would have, what the legislature has omitted.

9

2