Case Name: JEWELL Petitioner, v. TRIPLE B. ENTERPRISES, INC., Respondent
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1981-04-28
Citations: 290 Or. 885
Docket Number: CA 15244, SC 27234
Parties: JEWELL Petitioner, v. TRIPLE B. ENTERPRISES, INC., Respondent
Judges: DENEGRE, C. J.
Reporter: Oregon Reports
Volume: 290
Pages: 885–897

Head Matter:
Argued and submitted January 6,
reversed April 28, 1981
JEWELL Petitioner, v. TRIPLE B. ENTERPRISES, INC., Respondent
(CA 15244, SC 27234)
626 P2d 1383
Cynthia L. Barrett, Portland, argued the cause and filed the briefs for petitioner.
Peter H. Glade, Portland, argued the cause for respondent. With him on the brief were O’Connell, Goyak, Hagen, Elliott & Krage, P. C., Portland.
DENEGRE, C. J.

Opinion:
DENECKE, C. J.
The sole issue is whether plaintiff is entitled to a judgment for his attorney fees.
Plaintiff and defendant entered a contract by which plaintiff enrolled as a student in defendant's school to receive training as a barber and cosmetologist. Defendant terminated plaintiff from the program. Plaintiff brought this action alleging that the termination violated the terms of the enrollment agreement and that he had been damaged by that wrongful termination in the amount of $7,275, which included tuition paid to the defendant, the costs of replacement schooling and the loss of earnings due to plaintiff's inability to take the Board of Barber's licensing examination as scheduled. He further sought reasonable attorney fees: After a jury verdict for plaintiff for $1,265, the trial court awarded $1,650 to plaintiff as attorney fees.
The enrollment contract was on a printed or mimeographed form and provided:
« The maker further understands and agrees to pay all costs and charges for attorney fees necessary for the collection of any amount not paid when due."
Defendant appealed the award of attorney fees. The Court of Appeals reversed, with the majority holding that there was no basis for an award of attorney fees under ORS 20.096(1). 47 Or App 281, 614 P2d 135 (1980).
ORS 20.096(1) provides as follows:
"In any action or suit on a contract, where such contract specifically provides that attorney fees and costs incurred to enforce the provisions of the contract shall be awarded to one of the parties, the prevailing party, whether that party is the party specified in the contract or not, at trial or on appeal, shall be entitled to reasonable attorney fees in addition to costs and necessary disbursements."
The statute requires reciprocity of recovery of attorney fees. The issue is whether the statute should be construed so that where a contract allows a seller attorney fees if he prevails in an action for collection, the buyer's right to attorney fees should also be limited to an action for collection or should the buyer's right be extended to cover actions for breach by the seller of other provisions of the contract the seller was obliged to perform. We adopt the broader approach and allow plaintiff his attorney fees.
The majority of the Court of Appeals chose the narrower construction, holding that:
" ORS 20.096(1) would allow a student to recover attorney fees under this contract only if the school were to bring a collection action against that student and fail to win its case on the merits, i.e., the statute does not allow attorney's fees to be awarded when a student brings an action to recover damages for breach of the contract. " 47 Or App at 284.
The legislative history of ORS 20.096(1) shows that it was "directed to the inequality of bargaining power which is so common in many commercial transactions." McMillan v. Golden, 262 Or 317, 320, 497 P2d 1166 (1972). The purpose was to allow the buyer and the seller the same right to collect attorney fees despite onesided contractual provisions, and thereby "equalize the rights of disfavored parties to adhesion contracts who lacked bargaining power." North Pacific Lumber Co. v. Oliver, 286 Or 639, 665, 596 P2d 931 (1979).
As Judge Warren stated in his dissent, the import of the decision of the majority of the Court of Appeals was to allow the seller to subvert that legislative intent and avoid true reciprocity of attorney fees "by limiting its own right to attorney fees to duties under the contract which can only be breached by the other party." 47 Or App at 285. The remedial and reciprocal purpose of the statute is subverted if by skillful drafting the seller in a contract has the security of attorney fees if he prevails in an action to enforce the primary contractual obligation of the buyer, but the buyer is not allowed fees if he wins in an action to enforce the reciprocal primary contractual obligation of the seller.
ORS 20.096(1) provides that where a contract provides that attorney fees incurred to enforce the provisions of the contract shall be awarded to one of the parties, the prevailing party, whether the party specified in the contract or not, in an action on that contract, shall be entitled to attorney fees.
"[T]he provisions of the contract," as that phrase is used in ORS 20.096(1), refers to "provisions of the contract" containing the obligations of the person who the contract obliges to pay attorney fees; in this case the student. In the contract the student has only one obligation; that is, to pay tuition. The statute uses the plural, "provisions"; however, in the present contract there is only one provision containing the one obligation of the student. With but one obligation the attorney fees clause is similar in effect to one providing that "attorney fees and costs incurred to enforce the provisions of the contrtact shall be awarded to" the school. The reciprocal right of the other party to the contract, the student, would be to be entitled to attorney fees in litigation to enforce any of the obligations of the school. We, therefore, hold that attorney fees are awardable to the prevailing party (the plaintiff student) for enforcing any or all of the provisions of the contract containing the obligations of the school.
Webster v. General Motors Accept., 267 Or 304, 516 P2d 1275 (1973), supports our present decision but in a limited way. In Webster, the plaintiff purchased a truck and executed a conditional sales contract. The plaintiff defaulted, foreclosure proceedings were instituted, the truck was sold and a surplus was generated. Plaintiff successfully prosecuted an action for the surplus and sought attorney fees. We concluded the contract provided that the seller was entitled to attorney fees incurred in collecting any deficiency; therefore, under ORS 20.096(1) the buyer was entitled to attorney fees for collecting a surplus. We, in effect, concluded that the right to a surplus was the reciprocal to the right to collect a deficiency, and if the seller had a right to attorney fees for collecting a deficiency under the statute, the buyer had a right to an attorney fee for collecting a surplus.
A party drafting a contract imposing several obligations on the other party could limit the drafting party's right to recover attorney fees to the enforcement of one obligation. We express no opinion on the right of either party to attorney fees when the enforcement of other obligations of the contract is in litigation.
Reversed.
The clause was apparently copied from a clause in a promissory note. Maker must mean student. Neither party raises any issue regarding "maker."
ORS 20.096(1) was modeled after a California statute. A California Court of Appeals interpreted the California statute more restrictively than we do. Sciarrotta v. Teaford Const. Co., 167 Cal Rptr 889, 110 Cal App3d 444 (1980).