Samuel v. Frohnmayer

• Decision Date: 19 September 1989
• Parties: Edmonde G. SAMUEL, D.C., Respondent on Review, v. Dave FROHNMAYER and the State of Oregon, Petitioners on Review. TC 137346; CA A47340; SC S36166.
• Court: Oregon Supreme Court

Page 1028

779 P.2d 1028

308 Or. 362

Edmonde G. SAMUEL, D.C., Respondent on Review, v. Dave FROHNMAYER and the State of Oregon, Petitioners on Review.

TC 137346; CA A47340; SC S36166.

Supreme Court of Oregon In Banc.

Argued and Submitted July 5, 1989.

Decided Sept. 19, 1989.

Michael D. Reynolds, Asst. Sol. Gen., Salem, argued the cause for petitioners on review. With him on the petition were Dave Frohnmayer, Atty. Gen., and Virginia L. Linder, Sol. Gen., Salem.

David C. Force, Eugene, argued the cause and filed the response, for respondent on review.

GILLETTE, Justice.

This case raises questions concerning the scope of a trial court's authority to provide "further relief" to a successful party in a declaratory judgment proceeding. The pertinent statute, ORS 28.080, provides in part:

"Further relief based on a declaratory judgment or decree may be granted whenever necessary or proper."

Specifically, the issue is whether an award of attorney fees to the winning party for expenses incurred in pursuing the declaratory judgment may be "proper" further relief under the statute, when only the statute itself is relied upon as the source of the court's authority to make the award. The trial court held that it did not have such authority. The Court of Appeals, one judge dissenting, reversed, holding that ORS 28.080 was sufficient authority for such an award. Samuel v. Frohnmayer, 95 Or.App. 561, 770 P.2d 914 (1989). We reverse the decision of the Court of Appeals and reinstate the judgment of the trial court.

Plaintiff Samuel, a chiropractor, originally brought this declaratory judgment action to obtain indemnification from defendant Frohnmayer, the state's Attorney General and chief legal officer, for expenses Samuel incurred in defending an earlier civil action. The earlier action was brought against Samuel by another chiropractor for damages allegedly caused when a "peer review committee" that Samuel chaired concluded that the chiropractor was rendering unnecessary services to an injured worker. Samuel, who was then president of the Oregon Association of Chiropractic Physicians (OACP), had established the committee at the request of the Workers' Compensation Department to review chiropractor billings for injured workers.

Samuel tendered defense of the civil case to the Attorney General, claiming that his work for the peer review committee was service "performed for and at the request of the State of Oregon." The tender was refused because OACP had never been an agency of the State of Oregon and because the Workers' Compensation Department had not retained, employed or appointed the peer review committee to act as an agent for the state. Samuel then brought the present action seeking a declaration that the Attorney General was obliged to undertake the defense of the earlier case. ¹

After a trial court held that the Attorney General was not required to defend Samuel, Samuel appealed to the Court of Appeals. That court held that the peer review committee was performing investigative functions for the Workers' Compensation Department under sufficient control by the Department to make the committee (and, therefore, Samuel) an agent of the Department. Samuel, the court held, should have been provided a defense by the Attorney General. Samuel v. Frohnmayer, 82 Or.App. 375, 381, 84 Or.App. 80, 728 P.2d 97 (1986), rev. den. 303 Or. 261, 735 P.2d 1224 (1987).

On remand to the trial court, Samuel petitioned for "further relief," viz., the attorney fees he had incurred in bringing the indemnity action against the Attorney General. The trial court denied his petition, and he once again appealed to the Court of Appeals.

The Court of Appeals held that attorney fees could be a "proper" form of further relief under the statute. The court reasoned as follows:

"ORS 28.080 is based on the Uniform Declaratory Judgment Act, which, in turn, is based on the Federal Declaratory Judgment Act, 28 USC §§ 2201, 2202. Federal cases interpreting 28 USC § 2202, which is identical for present purposes to ORS 28.080, thus are helpful in deciding what ORS 28.080 means. See ORS 28.150.

"Several federal courts have construed 28 USC § 2202 (albeit without much analysis) to allow an award of attorney fees in a declaratory judgment action in the absence of contractual or other statutory authority for doing so. * * * None of those cases involved a public official; each concerned a dispute between an insured and its private insurer about the existence or extent of coverage. However, in tort claims against the state and its agents, the Attorney General takes the role of an insurer and assumes an insurer's duty to defend. ORS 30.285(3). For that reason, the cited cases are persuasive by analogy.

"When, as here, the Attorney General fails to discharge his statutory duty and an agent of the state must resort to litigation to force him to perform it, awarding that agent the expense of litigation will often be both 'proper' and fair. In Van Gordon v. Ore. State Bd. of Dental Examiners, 63 Or App 561, 568, 666 P2d 276 (1983), we noted that 'fairness' is a factor that we consider in deciding whether to assess attorney fees against a state agency pursuant to ORS 183.495, when that agency misconstrues a statute. Whether an award is proper requires a case by case consideration and depends on many factors, including benefit to the public at large, see Deras v. Myers, 272 Or 47, 535 P2d 541 (1975), and the reasonableness of the Attorney General's refusal to defend. See ORS 28.120 and ORS 182.090."

95 Or.App. at 564-65, 770 P.2d 914 (footnotes and citations omitted).

Judge Warden ² dissented. He argued that (1) the majority misunderstood the federal precedent on which it relied while ignoring precedent to the contrary; (2) Oregon case law does not permit a court to award attorney fees unless there is authority to do so in a statute or contract; and (3) the only way an award of attorney fees may be made against the Attorney General is pursuant to a statute, ORS 182.090, which authorizes such awards under the particular circumstances described in that statute--circumstances not pleaded or proved by Samuel. We agree substantially with the dissent.

The analysis of the Court of Appeals majority is incorrect in several respects. First, although it is true that our declaratory judgment act was derived from the federal act, federal decisions are not helpful concerning the issue now before us. Concerning the authority of an Oregon court to award attorney fees, the law has long been settled that such an award may be made only when a statute or contract provides such authority. See, e.g., Beaver v. Davis, 275 Or. 209, 217, 550 P.2d 428 (1976); Hollopeter v. Oregon Mutual Ins., 255 Or. 73, 75, 464 P.2d 316 (1970) (declaratory judgment proceeding); First National Bank v. Malady, 242 Or. 353, 360, 408 P.2d 724 (1966) (declaratory judgment proceeding).

It is true, of course, that the legislature could have intended ORS 28.080 to be one of those statutes that empowers a court to make such an award. If that were the legislature's intent, however, it was accomplished without any express language in the statute or any suggestion of such an intent in the legislative history of the declaratory judgment act. Absent a showing of such a legislative intent, we will not imply it.

The declaratory judgment act assures that a class of cases involving rights, status, or other legal relations shall be entitled to declaratory relief, "whether or not further relief is or could be claimed." See ORS 28.010, 28.020. Its principal purpose is to ensure that that class of cases is subject to binding court decision. See ORS 28.010 (prayer for declaratory relief alone is not grounds for objection; declaration shall have effect of a judgment). A contract, for example, may be construed before or after breach. ORS 28.030. Empowering the circuit courts to award attorney fees as "proper" "further relief" under ORS 28.080 would mean, for example, that a party could receive attorney fees in a breach-of-contract case brought as a declaratory judgment action when the same case, pleaded as a traditional contract action, would not permit a court to make such an award. Except in those cases in which some other statute or a contract specifically authorized a prevailing party to recover its attorney fees, attorneys would attempt to characterize every action as a declaratory judgment action. If the legislature were ever to intend such a significant alteration of the Oregon litigative process, we would expect it to be up front about it.

The Court of Appeals majority also erred in relying on its earlier case of Van Gordon v. Ore. State Bd. of Dental Examiners, supra. That case concerned the award of attorney fees to a private party who had successfully challenged an action of an administrative agency through a judicial review proceeding in the Court of Appeals. Former ORS 183.495. ³ The award of attorney fees already was expressly authorized by a statute. Discussion of "fairness" in that case had to do with the standards under which an appellate court should exercise the authority to award fees; it had nothing to do with identifying some source for that authority.

Finally, the Court of Appeals majority seems to have misunderstood the significance of ORS 182.090. That statute provides:

"(1) In any civil judicial proceeding involving as adverse parties a state agency, as defined in ORS 291.002, and a petitioner, the court shall award the petitioner reasonable attorney fees and reasonable expenses if the court finds in favor of the petitioner and also finds that the state agency acted without a reasonable basis in fact or in law.

"(2) Amounts allowed under this section for reasonable attorney fees and expenses shall be paid from funds available to the state agency. The court may withhold all or part of the attorney fees from any award to a petitioner if the court finds that the state agency...