Silberman-Doney v. Gargan

• Jurisdiction: Oregon
• Parties: Lasya SILBERMAN–DONEY, Plaintiff–Respondent, v. David GARGAN and Catia Gargan, husband and wife, Defendants–Appellants.
• Citation: 303 P.3d 333,256 Or.App. 263
• Docket Number: 091352L3,A149857.
• Court: Oregon Court of Appeals
• Decision Date: 17 April 2013

256 Or.App. 263

303 P.3d 333

Lasya SILBERMAN–DONEY, Plaintiff–Respondent,

v.David GARGAN and Catia Gargan, husband and wife, Defendants–Appellants.

091352L3; A149857.

Court of Appeals of Oregon.

Submitted May 4, 2012.

Decided April 17, 2013.

Carlyle F. Stout III filed the brief for appellants.

No appearance for respondent.

Before SCHUMAN, Presiding Judge, and WOLLHEIM, Judge, and NAKAMOTO, Judge.

NAKAMOTO, J.

This residential landlord and tenant case presents a question of civil procedure: Assuming that plaintiff landlord was entitled to seek a new trial under ORCP 64 B after the trial court dismissed the jury during the trial once she and her tenants had entered into a settlement of their dispute, did the trial court have a basis to grant her motion for a new trial because of an “[i]rregularity in the proceedings of the court”? Because, as a matter of law, the trial court lacked a basis to grant plaintiff a new trial for an irregularity or error of law in the proceedings under ORCP 64 B(1) or (6), we reverse and remand for reinstatement of the judgment and further proceedings.

The facts are primarily procedural and are undisputed. Basically, in the underlying rental dispute, defendants had not paid a portion of their rent due under the lease with plaintiff and contended that they did not owe rent and, moreover, that plaintiff owed them money due to breach of the rental agreement, unlawful entry, and statutory violations under ORS chapter 90. Plaintiff sued for rent, and defendants filed counterclaims and asserted a right to attorney fees under the rental agreement, ORS 20.096, and ORS 90.255. Defendants paid $11,000 in rent into the court before trial, and an arbitrator awarded plaintiff $5,250 from the prepaid rent, leaving defendants' counterclaims for trial.

On the second day of trial, the trial court met with counsel regarding several legal issues. First, the court ruled that a one-year statute of limitations applied, which effectively barred defendants' fifth, seventh, eighth, and ninth claims for relief and limited the remaining claims. Second, although no motion was before the court concerning defendants' entitlement to fees at that point, defendants had raised the issue of their prevailing party status and entitlement to fees in their trial brief. On that issue, the court told the parties that, because defendants paid all rent owed to plaintiff into the court before the commencement of the action, defendants would be entitled to attorney fees as the prevailing party under ORS 90.370 if they could prove monetary damages on their counterclaims.¹

The trial court's conclusions prompted the parties to enter into settlement negotiations. Later that morning, the parties reported to the court that they had agreed on a settlement. The parties then stated the terms of their settlement on the record. Plaintiff stated that, “based upon those legal conclusions that the Court arrived at this morning,” the parties “entered into mediation in an effort to arrive at a settlement, and we've arrived at a settlement.” The parties agreed “that the amount currently held by the Court as prepaid rent[ ] would be returned to the [defendants].” Defendants confirmed that the settlement that plaintiff's counsel described for the record was correct and added that the only issue remaining would be the attorney fee issue under ORCP 68. Both plaintiff and defendants stated on the record that they accepted the settlement as recounted by the parties' attorneys. Satisfied with the parties' settlement, the court dismissed the jury.

Two days after the settlement, the trial court notified the parties that, on further reflection, it had made a mistake in stating that defendants would be entitled to attorney fees under ORS 90.370(4). The trial court told the parties that “we need to discuss this issue further” and to “stop the process of preparing a judgment until we have a chance to discuss these issues.” The trial court and the parties then met, although what occurred at that meeting is not in the record.

On April 7, 2011, the trial court issued a letter opinion stating that it had “reached a final decision” on its interpretation of ORS 90.370. The court explained its revised analysis that ORS 90.370(4) would not allow an attorney fee award to defendants. The trial court noted that ORCP 64 B(6) allows new trials for errors of law at trial and proposed two options to resolve the case, despite the existing settlement agreement: (1) reconvene another settlement conference or (2) start a new jury trial. It is unclear from the record whether the parties selected either of those options, although it appears from the ensuing events that the parties rejected the court's suggestion.

Upon learning the trial court's view that ORS 90.370(4) did not apply to allow attorney fees to defendants, neither plaintiff nor defendants filed a motion to avoid or reform the settlement agreement or to contest its enforceability. Instead, plaintiff filed a motion to approve judgment and submitted a proposed judgment that awarded defendants $5,750 in damages against plaintiff but stated that the court would determine which party prevailed under ORCP 68. Defendants opposed the proposed judgment, arguing that the trial court did not instruct the parties to submit a judgment in light of its April 7 letter opinion. At some point, defendants submitted their own proposed judgment, which was similar to plaintiff's proposed judgment except that it listed defendants as the prevailing party. Defendants also filed a motion for sanctions against plaintiff for seeking the court's approval of a form of judgment that did not recognize defendants as prevailing parties.

In July 2011, the trial court held a hearing on defendants' motion for sanctions and the competing forms of judgment that the parties had submitted. Plaintiff's counsel also raised a third issue, namely, “sort of a disguised request for a new trial,” because defendants' counsel, in objecting to plaintiff's form of judgment, had suggested that defendants might file a motion for a new trial. During argument regarding the motion for sanctions and whether plaintiff's proposed judgment was inappropriate, defendants' counsel stated that the court's ruling that defendants would be prevailing parties for purposes of attorney fees was the reason that defendants “entered into settlement negotiations to begin with.”

The court informed the parties that the “only way a judgment could be entered [,] at this stage, would be to enter a judgment based upon the settlement placed on the record.” The court then stated:

“Well, I think that beyond the Motion before the Court, the cleanest way to resolve this, would be to enter a judgment, based upon the settlement put on the record, and then the other side would have an opportunity to file a Motion for a New Trial, based upon the Court's mistake of law. And then the issue, once again would be raised, that I resolved in the April 7th letter, and I would * * * probably follow my April 7th letter, in responding to that Motion. But I think that's procedurally, the way to posture it, especially if * * * we need to make it ripe for appeal.”

The court took the matters under advisement.

Ultimately, the court rejected both proposed judgments and, in August 2011, entered its own general judgment memorializing the parties' settlement agreement. The judgment stated that defendants paid $11,000 into the court; plaintiff received $5,250 of that amount, which was disbursed before the trial; and the remaining amount, $5,750, would be awarded to defendants as damages for its remaining counterclaims. The judgment stated, “Defendants are designated the prevailing parties to the civil action and are awarded their costs and disbursements incurred herein, and their reasonable attorney's fees, which shall be determined pursuant to ORCP 68.”

After the court entered the judgment and before it adjudicated the amount of defendant's fees, plaintiff filed a “motion for new trial” pursuant to ORCP 64 B, which allows the trial court to order a new trial based on, among other things, an “[i]rregularity in the proceedings of the court” preventing the adverse party from having a fair trial, ORCP 64 B(1), or an “[e]rror in law occurring at the trial and objected to or excepted to by the party making the application,” ORCP 64 B(6). Plaintiff argued that the trial court's decision announced during trial, before the settlement, and its revised decision about defendants' entitlement to attorney fees announced after the settlement created an “irregularity in the proceedings of the court” or, in the alternative, was a legal error “occurring at the trial and objected to or excepted to by the party making the application.”

Defendants opposed the motion on two grounds. First, defendants contended that, even if the court's ORS 90.370 ruling was an error, plaintiff did not object or except to that ruling as required by ORCP 64 B(6). Second, without conceding that the proceeding was irregular, defendants asserted that the settlement did not prevent plaintiff from having a fair trial. Defendants noted that plaintiff could have objected to the trial court's ORS 90.370 ruling, preserving the alleged error for review on appeal, instead of stipulating to the settlement agreement on the record.

After hearing the parties' arguments, the trial court took the issue under advisement. In October 2011, the trial court entered an order granting plaintiff's motion for a new trial, citing the record, the parties' arguments, and its April 7 letter reversing its opinion regarding defendants' entitlement to fees under ORS 90.370(4). The order did not otherwise provide an explanation of the grounds for the court's ruling.

On appeal, defendants assign error to the trial court's order granting a new trial, challenging the propriety of the ruling under ORCP 64 B(1) and (6). Defendants reiterate that no “irregularity” occurred and that a...