Wright v. Pub. Emps. Ret. Sys.
| Docket Number | A177832 |
| Decision Date | 08 November 2023 |
| Citation | 329 Or.App. 64 |
| Parties | RUSSEL WRIGHT, Plaintiff-Respondent, v. PUBLIC EMPLOYEES RETIREMENT SYSTEM, State of Oregon, Defendant-Appellant. |
| Court | Oregon Court of Appeals |
Argued and submitted July 27, 2023
Marion County Circuit Court 20CV39426; A177832 J. Channing Bennett Judge.
Denise G. Fjordbeck, Assistant Attorney General, argued the cause for appellant. Also on the briefs were Ellen F. Rosenblum Attorney General, and Benjamin Gutman, Solicitor General.
William J. Macke argued the cause and fled the briefs for respondent.
Before Joyce, Presiding Judge, and Jacquot, Judge, and Armstrong Senior Judge.
The Public Employees Retirement System (PERS) appeals from a supplemental judgment awarding attorney fees to petitioner. Petitioner sought judicial review of a final order with respect to his retirement benefit, claiming that PERS incorrectly calculated his benefit and failed to comply with a statute requiring it to provide an explanation of applicable statutes and rules. The circuit court held that although PERS correctly calculated petitioner's benefit, it did not sufficiently explain its calculations.
In a supplemental judgment, the circuit court granted petitioner's request for attorney fees and costs in the amount of $28,344. The award included fees for work performed in a previous administrative contested case proceeding and an appeal of the outcome of that proceeding that was decided by this court. PERS assigns error to the circuit court's fee award, raising two arguments: (1) the circuit court did not have authority to award fees for work performed prior to the preparation of the petition for review and that, in any event, (2) the circuit court abused its discretion in awarding fees. We agree with PERS that fees were not authorized for work performed prior to preparation of the November 2020 petition for review, to the extent that that prior work did not contribute to petitioner's ultimate success on judicial review. However, we conclude that the circuit court did not abuse its discretion in awarding fees for work that did contribute to petitioner's ultimate success. Accordingly, we reverse and remand for reconsideration.
Petitioner is a member of PERS who retired in 2011. Wright v PERB, 292 Or.App. 538, 540, 425 P.3d 442 (2018). In May 2011, PERS, as required by ORS 238.450, sent petitioner a "Notice of Entitlement" regarding his retirement benefit and explaining his right to challenge the calculations. Id. Petitioner timely disputed his account balance. Id. Eight months later, in May 2012, PERS responded with a letter stating that it had performed a review under ORS 238.450. Id. at 541.
After receiving the letter, petitioner requested a meeting with PERS, and in June 2012 he met with a PERS employee who informed him that there would be a follow-up meeting or conversation. Id. PERS never followed up with petitioner, and in February 2015 petitioner sent PERS a letter disputing the agency's calculation of his benefit, referencing the May 2012 letter. Id. PERS responded that petitioner's request for review was untimely and told him that he could request a contested case hearing regarding the timeliness of his appeal. Id. at 541-42. Petitioner did so. Id. at 542. The Public Employees Retirement Board (PERB) issued a final order dismissing petitioner's request for a hearing, concluding it did not have jurisdiction over the matter. Id. at 544.
Petitioner sought judicial review of PERB's order,[1]and in June 2018 we reversed and remanded, concluding that PERB's order lacked substantial reason. Id. at 547. Petitioner did not request attorney fees in that judicial review proceeding.
On remand PERS did not address the jurisdiction question. Instead, it issued a Revised Response to Dispute of Notice of Entitlement to petitioner in September 2020. Petitioner petitioned the circuit court for judicial review in November 2020, claiming that PERS incorrectly calculated his retirement benefit; failed to provide a written computation of how it arrived at the balance, as required by ORS 238.450(1);[2] and failed to provide an explanation of applicable statutes and rules, as required by 238.450(4).[3] Petitioner sought a correct computation, an award of past benefits, and reasonable costs and attorney fees.
In May 2021, PERS withdrew the September 2020 order for reconsideration and issued a revised response in June 2021. Petitioner amended his petition for judicial review to reference the revised response, and the matter went before the circuit court in September 2021.
The circuit court determined that PERS had calculated petitioner's benefit correctly. The sole issue then became whether PERS had provided a sufficient explanation of the calculation as required by ORS 238.450(4).
PERS argued that it provided a sufficient explanation of the applicable statutes and rules bearing on the calculation of petitioner's benefits, and that ORS 238.450(4) requires it to refer only to the applicable statutes and administrative rules, not to business rules that constitute internal policies. The circuit court acknowledged that it is not reasonable The circuit court held, however, that PERS's final order did not comply with ORS 238.450(4) because it should have included citations to additional business rules and an additional statute, and further explanation.
Petitioner requested attorney fees in the amount of $27,585 under both the mandatory fee provision and the discretionary fee provision of ORS 183.497(1). That statute provides that, in certain judicial review proceedings, the scope of which we discuss below, the court "(a) [m]ay, in its discretion, allow a petitioner reasonable attorney fees and costs if the court finds in favor of the petitioner," and "(b) [s]hall allow a petitioner reasonable attorney fees and costs if the court finds in favor of the petitioner and determines that the state agency acted without a reasonable basis in fact or in law" unless "the court finds that the state agency has proved that its action was substantially justified or that special circumstances exist that make the allowance of all or part of the attorney fees unjust." ORS 183.497(1).
Petitioner's request for fees dated back to 2015- when petitioner sent a letter to PERS disputing the May 2012 letter-and covered work performed in relation to the PERB contested-case proceeding, the appeal of PERB's order, and the circuit court review of both the September 2020 order and the revised response issued in June 2021. In support of his request for a discretionary fee award, petitioner referenced ORS 20.075, the statute that outlines factors to be considered by a court when the court has discretion to award attorney fees. Petitioner specifically cited ORS 20.075(1)(a), (b), (d), and (e), which provide that, in deciding whether to award fees, a court shall consider:
In applying those factors, petitioner referenced the "many opportunities [PERS had] to comply with the operative statute," that "[PERS] waited until the eve of trial the first time around before withdrawing the final order and issuing a new order," and that "[t]he new final order was still deficient in its explanation * * *." Petitioner also argued that PERS's position that ORS 238.450(4) does not require inclusion of "the rules and explanation of the applicability of those rules" was unreasonable.
PERS opposed petitioner's request for attorney fees, arguing that fees incurred before the drafting and filing of the petition for judicial review at issue were not recoverable, that there was no basis for a mandatory fee award, and that any discretionary fees should be limited.
The circuit court awarded attorney fees to petitioner for the full amount requested under ORS 183.497(1)(a), the discretionary fee provision of the statute. The circuit court did not specifically address the ORS 20.075 factors but pointed to the fact that petitioner "had to litigate for more than five years to receive [a] simple answer * * *." The circuit court agreed with PERS that there was no basis for a mandatory fee award but held that a discretionary award was warranted and "will serve to encourage PERS members to seek full and appropriate explanations regarding their accounts."
PERS appeals, assigning error to the award of attorney fees. AWARD FOR FEES PERFORMED FOR PRIOR WORK
PERS first argues that the circuit court erred in awarding fees for work performed prior to November 2020, which was the date when the petition for judicial review was prepared.[4] According to PERS, ORS 183.497, by its plain terms, authorizes a court to award attorney fees only for the judicial proceeding before the court, not for prior or ancillary proceedings. Petitioner responds that PERS's interpretation of ORS 183.497 is incorrect, that fees are recoverable if they were reasonably incurred to achieve the success that a party ultimately achieves, and that all of the fees that petitioner incurred from the time of the 2015 letter were reasonably incurred to achieve the success that petitioner ultimately achieved....
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