Lewis v. Department of Revenue

• Decision Date: 30 November 1982
• Citation: 653 P.2d 1265,294 Or. 139
• Parties: Kenneth L. LEWIS, Respondent, v. DEPARTMENT OF REVENUE, State of Oregon, Appellant. TC 1413; SC 28121.
• Court: Oregon Supreme Court

Page 1265

653 P.2d 1265

294 Or. 139

Kenneth L. LEWIS, Respondent, v. DEPARTMENT OF REVENUE, State of Oregon, Appellant.

TC 1413; SC 28121.

Supreme Court of Oregon In Banc.

Argued and Submitted July 15, 1982.

Decided Nov. 30, 1982.

Alfred B. Thomas, Asst. Atty. Gen., argued the cause for appellant. With him on the brief was Dave Frohnmayer, Atty. Gen., Salem.

G. Jefferson Campbell, Jr., argued the cause for respondent. With him on the brief was Foss, Whitty & Roess, Coos Bay.

LENT, Chief Justice.

The issue is whether the Oregon Tax Court could properly award attorney fees to a plaintiff who successfully contended that a gender-based tax exemption statute was unconstitutional where that success did not result in his obtaining the benefit of the exemption but, rather, resulted in no one being entitled to the exemption. We hold the award of attorney fees was improper.

A statute granted to the widow of a war veteran a certain exemption from property tax. Plaintiff was the widower of a war veteran and sought exemption under the statute. The county assessor denied the request for exemption, and the defendant sustained that denial. The Oregon Tax Court delivered an opinion, in which it held the statute to be unconstitutional on the general grounds asserted by the plaintiff in challenging the defendant's order. The Tax Court refused, however, to hold that plaintiff was entitled to the exemption. The result of the Tax Court opinion would be that no person, widow or widower, was entitled to the exemption as the surviving spouse of a war veteran.

The plaintiff had not sought attorney fees in his complaint in the Tax Court, but following the issuance of the opinion in June, 1981, plaintiff filed a motion for an allowance of attorney fees, relying upon ORS 183.495, a statute applicable to judicial review by the Court of Appeals of certain agency actions. The Tax Court forthwith pointed out the inapplicability of that statute, and requested advice as to whether the court could award attorney fees to plaintiff "under the court's inherent equitable powers, permitting the award of attorney fees without resort to statute or contract in rare instances." The Tax Court specifically invited attention to this court's decisions in Gilbert v. Hoisting & Port. Engrs., 237 Or. 130, 384 P.2d 136, 390 P.2d 320 (1964), and Deras v. Myers, 272 Or. 47, 535 P.2d 541 (1975). Following briefing from both parties on that issue, the Tax Court issued its determination, stating in part:

"It appears to the court that the situation thus described is one in which it is appropriate for the court to use its equitable powers to award attorney fees because: (1) the issues involved are regarded as being of extreme importance; (2) the decision in the case will affect not only the plaintiff but a substantial number of other Oregon taxpayers directly and all taxpayers indirectly; and (3) if plaintiffs in the situation of the present plaintiff were forced to pay the usual attorney fees, such actions would often be blocked by financial impediments. See Nussbaum, Attorney's Fees in Public Interest Litigation, 48 N.Y.U.L.Rev. 301 (1973)."

The Tax Court then entered its decree as follows:

"ORDERED, ADJUDGED and DECREED that:

"1. ORS 307.250(4) is declared unconstitutional and void;

"2. Plaintiff is denied the relief requested in his complaint; and

"3. The matter is found to be one in which the award of some part of the plaintiff's attorney fees can be made by the court under its inherent equitable powers.

"IT IS FURTHER ORDERED, ADJUDGED and DECREED that plaintiff is entitled to attorney fees in the amount of $1,200 (the court having granted plaintiff's motion for such attorney fees, following briefing by the parties and full consideration of the propriety thereof)."

The defendant appeals from that part of the decree awarding attorney fees. ¹

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 P.2d 302 (1979), we quoted with approval the following language from Hughes v. Bembry, 256 Or. 172, 177-78, 470 P.2d 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.)

Plaintiff here forthrightly does not pretend that there is a statute or contract authorizing such an award. In the final analysis, plaintiff relies only upon the inherent power of a court in equity to award attorney fees upon the authority of Deras v. Myers, supra, and Gilbert v. Hoisting & Port. Engrs., supra.

In both of those cases, the plaintiffs expressly prayed for an allowance of attorney fees, thus putting the defendants on notice that the success of plaintiffs in the litigation might result in an award of attorney fees to the plaintiffs. In the case at bar there is nothing to put the defendant on notice that should plaintiff prevail defendant might be liable for an award of attorney fees. In Shipler v. Van Raden, 288 Or. 735, 608 P.2d 1162 (1980), a suit in equity, we denied the right to...