Jewell v. Triple B. Enterprises, Inc.

614 P.2d 135, 47 Or. App. 281, 1980 Ore. App. LEXIS 3071

• Court: Court of Appeals of Oregon
• Decided: July 21, 1980
• Docket: No. A7806-09179, CA 15244
• Status: Published

Opinions

JOSEPH, P.J.

Defendant appeals from the trial court’s award of attorney fees to plaintiff following a jury verdict for damages in an action for breach of contract.

In October, 1975, plaintiff and defendant entered into a contract by which plaintiff enrolled as a student in defendant’s school to receive training as a barber and cosmetologist. Defendant terminated plaintiff from the program involuntarily in May, 1976. Plaintiff filed this action, alleging that the termination violated the terms of the enrollment contract and that he had been damaged by the wrongful termination in the amount of $7,275, which included tuition, additional costs for a replacement program and loss of earnings due to inability to take the barber’s exam as scheduled. Plaintiff also prayed for reasonable attorney fees. Following a jury verdict for plaintiff, the court took evidence over defendant’s objection¹ on reasonable attorney fees and awarded $1,750 to plaintiff.

The enrollment contract contains a clause which, by its express terms, allowed defendant to seek attorney fees in an action to enforce provisions for plaintiff’s payments under the contract:

"Time is of the essence in the agreement and if the student fails to make any payments when due, the school may, at its option, declare the entire amount of the indebtedness, plus any accrued collection charges, immediately due and payable. The maker further understands and agrees to pay all costs, and charges for attorney’s fees necessary for the collection of any amount not paid when due.”

The basis of the award of attorney fees to plaintiff was ORS 20.096(1):

"In any action or suit on a contract, where such contract specifically provides that attorney’s fees and costs incurred to enforce the provisions of the contract shall be awarded to one of the parties, the prevailing party, whether he is the party specified in the contract or not, at trial or on appeal, shall be entitled to reasonable attorney’s fees in addition to costs and necessary disbursements.”

Defendant claims that the award of attorney fees was error in that ORS 20.096(1) would allow a student to recover attorney fees under this contract only if the school were to bring a collection action against that student and fail to win its case on the merits, i.e., the statute does not allow attorney’s fees to be awarded when a student brings an action to recover damages for breach of the contract. We agree.

The legislative history of ORS 20.096(1) shows that its purpose was to make one-sided contractual provisions for attorney fees reciprocal. McMillan v. Golden, 262 Or 317, 497 P2d 1166 (1972). The statute is expressly applicable to litigation "to enforce the provisions of the contract,” but it does not establish "an independent right to attorney fees in the prevailing party greater than he would have enjoyed had the contract expressly provided for them.” North Pacific Lumber Co. v. Oliver, 286 Or 639, 666, 596 P2d 931 (1979). The contractual provision here would have permitted the school to recover its reasonable attorney fees only if plaintiff failed to make payments when due, i.e., failed to perform his payment obligations under the contract, and it successfully sued to obtain that money. Plaintiff’s action was brought to enforce other express or implied terms of the enrollment contract to obtain the benefits that he bargained for, but to allow him to recover an attorney’s fee would apply ORS 20.096(1) beyond the bounds of reciprocity. That can best be seen by asking what basis there would have been for an award of an attorney’s fee to the defendant if it had prevailed.²

Reversed and remanded for entry of a judgment consistent with this opinion.

1 Defendant objected that the allowance of reasonable attorney fees was improper under ORS 20.096(1). He does not question the procedure of the court conducting an evidentiary hearing to determine the reasonable attorney fees following a /«/yverdict. See Nicoletti v. Damerow Ford, 40 Or App 587, 595 P2d 1286 (1979); Shipler v. Van Roden, 288 Or 735, 608 P2d 1162 (1980). We note that Nicolettimay be subject to some misunderstanding. The action there was in tort, not in contract, and ORS 20.096(1) ought to have had no application at all. However, the defendant there, for whatever reason, chose not to challenge the application of the statute on that ground at trial or on appeal.

2 See Harris v. Cantwell, 47 Or App 211, 614 P2d 124 (1980); see also Undula v. Bauman, 271 Or 383, 532 P2d 785 (1975).