Cash Flow Investors, Inc. v. Union Oil Co. of California

Decision Date02 December 1993
Citation862 P.2d 501,318 Or. 88
PartiesCASH FLOW INVESTORS, INC., Plaintiff, v. UNION OIL COMPANY OF CALIFORNIA, a California corporation, dba UNOCAL, Defendant. USDC Civil 92-321-MA; SC S40159.
CourtOregon Supreme Court

Roger Tilbury, Portland, argued the cause for plaintiff. With him on the brief were Robert P. Johnson, Roch Steinbach, and Roger McAulay, Certified Law Student, Portland.

John Dudrey, of Williams, Fredrickson & Stark, P.C., Portland, argued the cause for defendant. With him on the brief was Michael D. Williams.

Rex Armstrong, of Bogle & Gates, Portland, argued the cause for amicus curiae McDonald's Corp. With him on the brief were Richard A. Hayden and Christopher L. Reive.

John D. Burns, Gregory A. Chaimov, and Jerry B. Hodson, of Miller, Nash, Wiener, Hager & Carlsen, Portland, filed a brief on behalf of amicus curiae Mobil Oil Corp.

GRABER, Justice.

This case comes to us on a certified question from the United States District Court for the District of Oregon. 1 That court stated the relevant facts as follows:

"Plaintiff sought contribution from defendant Union Oil Company of California under ORS 465.255(5)(b) for its costs incurred in a state-mandated cleanup of a former gas station site [contaminated by gasoline that had leaked from underground storage tanks]. Plaintiff was the owner of the underlying property and defendant was formerly the franchisor of the gas station and lessee of the property.

"After trial of two and one-half days, this court held defendant to be strictly liable under ORS 465.255(1)(a) for contribution to plaintiff's 'remedial action costs.'

"The court found plaintiff's reasonable remedial action costs, for tank removal, excavation and trucking of the contaminated soil, and geotechnical services, [were] $107,720. Applying equitable considerations as mandated by ORS 465.325(6)(a), the court determined that defendant must pay 75% of those costs."

Consequently, plaintiff's recoverable damages, after equitable apportionment, were $80,790. Judgment was entered for that sum, plus prejudgment interest.

Thereafter, plaintiff submitted two petitions for attorney fees. The first was for "pre-litigation" fees, that is, fees incurred incident to negotiations with the Oregon Department of Environmental Quality (DEQ) during the course of the cleanup. The second petition asked for "litigation" fees and related expenses incurred in prosecuting the statutory contribution claim against defendant. It is the second fee petition that occasioned the certification of the question herein.

We restate the certified question, 2 for the sake of simplicity: 3 "Do 'remedial action costs' as defined in ORS 465.200(16) [set out below] include attorney fees incurred by a private party in a successful contribution proceeding under ORS 465.255 and 465.325(6) against another private party to recover environmental cleanup expenses?"

The general rule in Oregon is that

"[t]he right to recover attorney's fees from an opponent in litigation does not exist at common law. The general rule is that such an item of expense is not allowable in the absence of a statute or some agreement expressly authorizing the allowance of attorney's fees." Draper v. Mullennex, 225 Or. 267, 271, 357 P.2d 519 (1960) (citations omitted).

Accord: Mattiza v. Foster, 311 Or. 1, 4, 803 P.2d 723 (1990). The exceptions to the general rule are narrowly construed. As this court explained in Lewis v. Dept. of Rev., 294 Or. 139, 142, 653 P.2d 1265 (1982):

"We start with the general rule that attorney fees are not recoverable in the absence of a statute or contractual provision authorizing the award. In Riedel v. First National Bank, 287 Or 285, 290-91, 598 P2d 302 (1979), we quoted with approval the following language from Hughes v. Bembry, 256 Or 172, 177-78, 470 P2d 151 (1970):

" 'We have adopted a narrow policy on the allowance of attorney fees and held that they will not be allowed unless expressly authorized by a statute or a contract.' (Emphasis added by our decision in Riedel, supra.)"

Moreover, this court has established a method of construing statutes, which we apply to the statute under consideration. Our task is to ascertain the intention of the legislature when it enacted ORS 465.200(16). See ORS 174.020; PGE v. Bureau of Labor and Industries, 317 Or. 606, 610 859 P.2d 1143 (1993) (in interpreting a statute, this court's task is to discern the intent of the legislature). In determining the intent of the legislature, we begin with the text and context of the provision. ORS 174.010; PGE v. Bureau of Labor and Industries, supra, 317 Or. at 610, 859 P.2d 1143. Other provisions of the same statutory scheme are part of that context. Id. at 611, 859 P.2d 1143. Whenever possible, provisions of a statute are construed so as to give effect to each. ORS 174.010; PGE v. Bureau of Labor and Industries, supra, 317 Or. at 611, 859 P.2d 1143.

ORS 465.200(16) provides: 4

" 'Remedial action costs' means reasonable costs which are attributable to or associated with a removal or remedial action at a facility, including but not limited to the costs of administration, investigation, legal or enforcement activities, contracts and health studies."

The words "remedial" and "action" are words that can, in some contexts, refer to legal proceedings. However, the context here--related provisions of the Hazardous Waste and Hazardous Materials Act, ORS chapter 465 (the Act)--establishes that a legal proceeding for contribution to recover environmental cleanup costs is not a "remedial action," the costs of which would be "remedial action costs."

ORS 465.200(15) defines "remedial action":

" 'Remedial action' means those actions consistent with a permanent remedial action taken instead of or in addition to removal actions in the event of a release or threatened release of a hazardous substance into the environment, to prevent or minimize the release of a hazardous substance so that it does not migrate to cause substantial danger to present or future public health, safety, welfare or the environment. 'Remedial action' includes, but is not limited to:

"(a) Such actions at the location of the release as storage, confinement, perimeter protection using dikes, trenches, or ditches, clay cover, neutralization, cleanup of released hazardous substances and associated contaminated materials, recycling or reuse, diversion, destruction, segregation of reactive wastes, dredging or excavations, repair or replacement of leaking containers, collection of leachate and runoff, onsite treatment or incineration, provision of alternative drinking and household water supplies, and any monitoring reasonably required to assure that such actions protect the public health, safety, welfare and the environment.

"(b) Offsite transport and offsite storage, treatment, destruction or secure disposition of hazardous substances and associated, contaminated materials.

"(c) Such actions as may be necessary to monitor, assess, evaluate or investigate a release or threat of release."

ORS 465.200(15), defining "remedial action," refers to and enumerates various physical or technological methods of preventing, minimizing, or controlling a release 5 or threatened release of a hazardous substance from a facility into the environment. The term "remedial action" as used in the Act thus pertains only to the actual physical process or processes of remedying such a release. See also ORS 465.250(2)(c) (where there is a reasonable basis to believe that there may be a release of a hazardous substance at a facility, DEQ may enter the facility to "carry out removal or remedial action"); ORS 465.315 (a "remedial action" "shall attain a degree of cleanup of the hazardous substance and control of further release * * * that assure protection of present and future public health, safety, welfare and of the environment"; director of DEQ shall select a "remedial action" that protects human health and the environment, is cost effective, and uses permanent solutions and alternative treatment or resource recovery technologies); ORS 465.320 (before approving a "remedial action," DEQ shall publish a notice and brief description of the proposed action and provide time for, and consider, public comment on the action); ORS 465.325(7)(d)(E) (in entering an agreement to perform a "remedial action," the director of DEQ may provide a person subject to the agreement with a covenant not to sue; in assessing the appropriateness of such a covenant, the director shall consider "[t]he extent to which the technology used in the * * * remedial action is demonstrated to be effective").

A statutory contribution proceeding by a private party against another private party to recover environmental cleanup expenses is not, then, a "remedial action." ORS 465.200(16) defines "remedial action costs," however, to include "costs of * * * legal and enforcement activities" that are "attributable to or associated with" a remedial action. And, "costs of * * * legal and enforcement activities" may be read to include attorney fees in some situations. The question therefore remains whether litigation expenses in a contribution proceeding are "attributable to or associated with" a remedial action.

Again, the statutory context answers that question. The fact that, in the context of the Act, the term "remedial action" pertains to the actual physical process or processes undertaken in response to a release or threatened release of hazardous substances suggests that the term "remedial action costs" in ORS 465.200(16) refers only to those costs--including costs of legal and enforcement activities--"attributable to or associated with" the carrying out of that physical process, and not to costs "attributable to or associated with" a separate legal proceeding to recover, from another party, the expenses of having carried out the physical process--that is, a claim...

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