Title: Woods v. Carl Karcher Enterprises, Inc.
Citation: N/A
Docket Number: S53160
State: Oregon
Issuer: Oregon Supreme Court
Date: October 26, 2006

FILED: October 26, 2006
IN THE SUPREME COURT OF THE STATE OF OREGON
CAROL LEE WOODS,
Petitioner on Review,
v.
CARL KARCHER ENTERPRISES, INC.,
a California corporation,
d/b/a Carl's Jr. Restaurant,
Respondent on Review.
(CC No. 0209-09609; CA A123470; SC S53160)
On review from the Court of Appeals.*
Argued and submitted September 12, 2006.
William A. Drew, of Elliott, Ostrander &amp; Preston, P.C., Portland, argued the cause and
filed the brief for petitioner on review.  With him on the brief was John S. Marandas, of
Marandas &amp; Perdue, Portland.
George S. Pitcher, of Williams, Kastner &amp; Gibbs, PLLC, Portland, argued the cause and
filed the brief for respondent on review.  With him on the brief were Eric J. Neiman and David
C. Campbell.
James E. Mountain, Jr., of Harrang Long Gary Rudnick P.C., Portland, filed the brief for
amicus curiae Oregon Association of Defense Counsel.  With him on the brief was Jona J.
Maukonen.
Before De Muniz, Chief Justice, and Carson, Gillette, Durham, Balmer, and Kistler,
Justices.**
BALMER, J.
The decision of the Court of Appeals and the judgment of the
circuit court are reversed.  The case is remanded to the trial
court for further proceedings.
*Appeal from Multnomah County Circuit Court, Edward J. Jones, Judge. 202 Or App 372, 122 P3d 121 (2005).
**Riggs, J., retired September 30, 2006, and did not participate in the consideration or
decision of this case.  Walters, J., did not participate in the consideration or decision of this case.
BALMER, J.
Plaintiff was injured in a slip-and-fall accident in defendant's restaurant.  More
than 10 days before filing an action seeking damages for her injuries, her lawyer sent a demand
letter to defendant at the restaurant's address stating that her damages were approximately $5,000
and noting that, if she were required to file an action to recover those damages, she would be
entitled to recover her reasonable attorney fees from defendant under ORS 20.080(1). (1)  The
issue before this court is whether plaintiff's demand letter met the requirements of ORS
20.080(1) and therefore required the trial court to award attorney fees.  For the reasons that
follow, we hold that plaintiff's letter was sufficient.  We therefore reverse the contrary rulings of
the Court of Appeals and the trial court and remand the case to the trial court for further
proceedings.
The facts necessary to decide the legal issue of the sufficiency of plaintiff's
demand are undisputed.  Plaintiff slipped and fell at defendant's "Carl's Jr." restaurant on S.W.
Taylor Street in Portland.  Plaintiff and plaintiff's lawyer later corresponded with a company that
apparently processed accident claims for defendant, either as an insurer or as an independent
claims processing firm.  Those contacts did not resolve plaintiff's claim.  In September 2000,
shortly before the statute of limitations was to run, plaintiff's lawyer sent a letter by first class
mail addressed to "Carl's Jr. Restaurant" at the Taylor Street address, asserting that plaintiff had
been injured at the restaurant and had incurred damages of approximately $5,000. (2)  The
letter demanded that sum from defendant and noted that, if plaintiff were required to file an
action to recover her damages, the court could award plaintiff her attorney fees under ORS
20.080.      
Defendant did not settle the claim in response to the demand letter, and plaintiff
subsequently filed an action against defendant.  Plaintiff's case was referred to a mandatory
arbitration program for small claims, and an arbitrator awarded plaintiff damages.  The arbitrator,
however, denied plaintiff's request for attorney fees on the ground that plaintiff's demand letter
was insufficient, and the trial court entered a judgment confirming those aspects of the
arbitrator's decision.
Plaintiff appealed the denial of her attorney fees, and the Court of Appeals
affirmed in a divided, en banc decision.  Woods v. Carl Karcher Enterprises, Inc., 202 Or App
372, 122 P3d 121 (2005).  The majority held that plaintiff's demand letter did not provide
defendant with the notice required by ORS 20.080(1).  The majority construed the words "written
demand * * * made on the defendant" in that statute to require that the demand be made in a
manner "reasonably calculated, under all the circumstances, to apprise the defendant of the
demand and to afford a reasonable opportunity to respond as required."  202 Or App at 378.  To
determine whether plaintiff's demand met that standard, the majority looked to ORCP 7, which
sets out the requirements for service of a summons in a civil action.  The majority noted that
service by mail presumptively meets the requirements of ORCP 7 only if service is by certified or
registered first class mail, return receipt requested, or express mail.  Id. at 378 n 5.  Because
plaintiff's notice was not sent in that manner, it was not presumptively reasonable.  Moreover,
according to the majority, because plaintiff had corresponded with the company that processed
claims for defendant before plaintiff had sent her demand letter, her decision to send the demand
letter to the restaurant where plaintiff was injured, rather than to the claims processor, "was not
reasonably calculated to apprise anyone with the authority to act on it."  Id. at 380. 
In a dissenting opinion, Judge Wollheim, joined by Judges Armstrong and
Rosenblum, asserted that the written notice sent to "Carl's Jr. Restaurant" at the address of the
restaurant was sufficient to apprise defendant, a California corporation that does business as
"Carl's Jr.," of plaintiff's claim.  The dissent rejected the majority's conclusion that proper notice
under ORS 20.080(1) required compliance with ORCP 7, noting that the service of a summons
allows the court to acquire jurisdiction over a defendant and thus serves a different purpose than
a prelitigation demand letter.  202 Or App at 385-86 (Wollheim, J., dissenting).  The dissent also
observed that the majority decision seemed to require that the demand be made by the "most
reasonable" method, rather than focusing on the words of ORS 20.080, which requires only that a
written demand be "made on the defendant."  Id. at 388-89 (Wollheim, J., dissenting).
We allowed plaintiff's petition for review to consider the meaning of the statutory
requirement that the demand be "made on the defendant."  We begin with ORS 20.080(1), which
provides, in part:
"In any action for damages for an injury or wrong to the person or property, or
both, of another where the amount pleaded is $5,500 or less, and the plaintiff
prevails in the action, there shall be taxed and allowed to the plaintiff, at trial and
on appeal, a reasonable amount to be fixed by the court as attorney fees for the
prosecution of the action, if the court finds that written demand for the payment of
such claim was made on the defendant not less than 10 days before the
commencement of the action or the filing of a formal complaint under ORS
46.465, or not more than 10 days after the transfer of the action under ORS
46.461."  
(Emphasis added.)
The statute does not specify how plaintiff's demand is to be "made on the
defendant."  In interpreting that phrase, the Court of Appeals relied on Rodriguez v. The Holland,
Inc., 328 Or 440, 445, 980 P2d 672 (1999), where this court was faced with another interpretive
issue under ORS 20.080 -- the meaning of the phrase "amount pleaded."  In Rodriguez, this court
stated that  "the Oregon Rules of Civil Procedure provide statutory context for construing ORS
20.080, because they 'govern procedure and practice in all circuit courts * * * for all civil actions
* * * except where a different procedure is specified by statute or rule.' ORCP 1 A[.]"  328 Or at
445 (emphasis in Rodriguez). (3)  Applying Rodriguez, the Court of Appeals looked to the
Oregon Rules of Civil Procedure to determine the required means of delivering a demand letter
under ORS 20.080(1).  
The Court of Appeals noted that a demand letter under ORS 20.080(1) is
analogous to a summons because it is directed to a party "over whom the court has not yet
attained personal jurisdiction" and requires that party "to timely respond to the content of the
demand or suffer adverse consequences * * *."  Woods, 202 Or App at 377.  Because of that
potential adverse consequence, the Court of Appeals first determined that, like a summons, a
demand letter must be delivered in a manner "reasonably calculated, under all the circumstances,
to apprise the defendant" of the demand and to afford a reasonable opportunity to respond.  Id. at
376 (quoting ORCP 7). (4)  The court then concluded that, because plaintiff had not used the
method of service that, under ORCP 7, is "presumptively reasonable" (certified or registered
mail, return receipt requested, or express mail), and also had not "ensure[d] that the letter would
reach someone with the authority and knowledge necessary to act on it," the demand was
insufficient. 
Plaintiff argues that the Court of Appeals' reference to Rodriguez and its use of
ORCP 7 as "context" for its interpretation of ORS 20.080(1) are misplaced.  Plaintiff points out
that the issue in Rodriguez was the meaning of the phrase "amount pleaded" in a complaint in a
civil action and, therefore, it was appropriate for the court in that case to examine the Oregon
Rules of Civil Procedure, which govern pleadings in civil actions.  However, plaintiff argues, a
demand under ORS 20.080 necessarily occurs before any civil action has been commenced,
suggesting that the rules that govern civil actions do not provide useful guidance for determining
the proper service of a prelitigation demand.
Plaintiff further argues that, if any rule of procedure provides context for
interpreting ORS 20.080(1), it is ORCP 9.  Plaintiff points out that ORCP 9, which applies to
service of pleadings after an action has been commenced, specifically refers to "every written
request, notice, appearance, demand, offer of judgment, * * * and similar paper * * *."  ORCP 9
A (emphasis added).  ORCP 9 B provides that a party shall serve any such document by
delivering a copy to the party or the party's attorney or "by mailing it to such attorney's or party's
last known address."  Because plaintiff's demand was mailed to defendant's restaurant, plaintiff
asserts that the demand was properly "made on the defendant" for purposes of ORCP 9 and ORS
20.080(1).
In our view, the Court of Appeals' majority read too much into this court's
decision in Rodriguez.  The statement in Rodriguez that the Oregon Rules of Civil Procedure
provide context for interpreting ORS 20.080(1) itself must be read in context.  The
sentence in Rodriguez that precedes the sentence that the Court
of Appeals quoted makes clear that the context of that decision
involved a pleading in a civil action: "ORS 20.080 does not
define the phrase 'amount pleaded,' and the plain words of the
statute do not indicate whether the phrase refers to the original
complaint or to the operative complaint in an action."  328 Or at
445.  Here, the issue has nothing to do with a pleading in a
civil action, but rather with the proper delivery of a written
demand -- a particular legal device described outside of the
Oregon Rules of Civil Procedure -- before any civil action has
been filed.  Nothing in the Oregon Rules of Civil Procedure  or
in ORS 20.080(1) suggests that the legislature intended those
rules to control the interpretation of that statute's requirement
that the demand be "made on the defendant."  
We agree with plaintiff that the Court of Appeals'
reliance on ORCP 7 is misplaced.  The Court of Appeals'
conclusion that a demand under ORS 20.080(1) is similar to a
summons ignores the fact that a demand, standing alone, can cause
no harm to a defendant; rather, the potentially adverse
consequence of being required to pay plaintiff's attorney fees
occurs only if plaintiff properly commences an action, including
serving the summons as required by ORCP 7 and, moreover, prevails
at trial (among other prerequisites).  Service of a summons, in
contrast, serves a different purpose, giving the court personal
jurisdiction over the defendant, imposing on the defendant a
number of immediate obligations (such as filing an appearance and
responding to the complaint) and a host of potentially adverse
consequences.  See McCall v. Kulongoski, 339 Or 186, 191-93, 118
P3d 256 (2005) (rejecting use of ORCP 7 service requirement for
service of notice of appeal, because summons and notice of appeal
serve different purposes).
Although we disagree with the Court of Appeals'
application of the ORCP 7 service requirements to a written
demand in ORS 20.080(1), that court did not err in construing the
statute to require that the demand be "made on the defendant" in
a manner reasonably calculated to apprise the defendant of the
demand.  Woods, 202 Or App at 378.  This court construed an
earlier version of ORS 20.080(1) in Landers v. E. Texas Motor
Frt. Lines, 266 Or 473, 513 P2d 1151 (1973), and stated that
"[t]he purpose of the notice is to give the defendant an
opportunity to settle the case."  Id. at 475.  Elaborating on
that statement, the court observed that the statute was intended
"to coerce tortfeasors and their insurance companies into
settling small, legitimate claims where it is impracticable for
the offended party to employ an attorney to prosecute his claim." 
Id. at 476-77.  See also Fresk v. Kraemer, 337 Or 513, 520, 99
P3d 282 (2004) (purpose of ORS 20.080(1) is "to encourage
settlement of small claims, to prevent insurance companies and
tortfeasors from refusing to pay just claims, and to discourage
plaintiffs from inflating their claims" (quoting Rodriguez, 328
Or at 446)).  Obviously, the purpose of the statute cannot be
accomplished if the plaintiff's demand is not received by the
defendant.  It was eminently reasonable, therefore, for the Court
of Appeals to construe the ORS 20.080(1) requirement that the
demand be "made on the defendant" to require that the plaintiff
transmit the demand in a manner that was reasonably calculated to
apprise the defendant of plaintiff's demand.
Where the Court of Appeals erred was in incorporating
into ORS 20.080(1) the ORCP 7 service requirements, including the
"presumptively reasonable" requirement of service by certified or
registered mail, return receipt requested, or express mail.  Such
a requirement does not further the purpose of encouraging
settlement of small, legitimate claims, perhaps without the
assistance of a lawyer.  Nothing in ORS 20.080(1) indicates that
the legislature intended that the "demand" itself exhibit any
particular level of formality (although it must be in writing) or
that it be "made" in any particular manner, other than that it be
"made on the defendant."  Because the legislature did not specify
any particular manner in which the demand must be "made on the
defendant," we hold only that the demand must be made in a manner
that is reasonably calculated to apprise the defendant of the
demand.  See Landers, 266 Or at 476 (rejecting argument that
demand was insufficient because it failed to demand a specific
amount; stating that "had the legislature intended anything more,
we believe it would have said so").
We now consider whether the manner in which plaintiff
made its ORS 20.080(1) demand was reasonably calculated to
apprise defendant of the demand.  As noted, plaintiff's lawyer,
using defendant's assumed business name, sent a letter by first
class mail addressed to "Carl's Jr. Restaurant" at the address of
defendant's restaurant where plaintiff was injured.  Defendant
argues that, because plaintiff and her lawyer previously had
corresponded with an entity that apparently processed insurance
claims for defendant, plaintiff should have delivered the demand
to that entity.  In our view, even if delivery of the demand to
the claims processing firm would have been reasonably calculated
to apprise defendant of the demand -- an issue that we need not
and do not decide -- plaintiff's action in delivering the demand
to defendant itself by first class mail addressed to defendant's
restaurant where plaintiff was injured also met that standard. 
As discussed above, the legislature intended ORS 20.080(1) to
encourage the early settlement of small claims, even without the
involvement of lawyers.  To require that a demand under that
statute be "made" with the formality that accompanies service of
a summons in a civil action would undermine that purpose. 
Plaintiff's demand here properly was "made on the defendant"
within the meaning of ORS 20.080(1).
The decision of the Court of Appeals and the judgment
of the circuit court are reversed.  The case is remanded to the
trial court for further proceedings.
1. ORS 20.080(1), which we quote below, generally provides that, in any personal injury
action in which the plaintiff seeks $5,500 or less and prevails, the trial court shall award plaintiff
a reasonable attorney fee "if the court finds that written demand for the payment of such claim
was made on the defendant not less than 10 days before the commencement of the action * * *."
2. The demand letter is in the record.  Defendant does not claim that it did not receive the
letter.
3. Although defendant argues that the Court of Appeals decision should be affirmed, unlike
the Court of Appeals, it does not claim that Rodriguez supports its position here.
4. See ORCP 7 D(1) (summons must be served in a manner "reasonably calculated, under all
the circumstances, to apprise the defendant of the existence and pendency of the action and to
afford a reasonable opportunity to appear and defend.").