Court Opinion

ID: 8127611
Source: CourtListenerOpinion
Date Created: 2022-09-09 16:01:08.154046+00
Date Added: 2024-06-11T16:39:18.876659
License: Public Domain

HADLOCK, J.,
dissenting.
Under ORS 31.735(1), 60 percent of any punitive damages award is allocated to the State of Oregon’s Criminal Injuries Compensation Account and 40 percent is allocated to the prevailing party.1 The prevailing party’s attorney is to be paid from the amount of punitive damages allocated to the prevailing party according to the fee agreement between the prevailing party and the attorney. ORS 31.735(l)(a). “In no event,” however, “may more than 20 percent of the amount awarded as punitive damages be paid to the attorney for the prevailing party.” Id. That provision operates to cap the fees that might otherwise be owed to the attorney under his or her fee agreement with the prevailing party. In my view, the provision means precisely what it says: that, “in no event” — i.e., under no circumstances, regardless what side agreements or settlements the parties may have entered into — may the prevailing party’s attorney receive more than 20 percent of the punitive damages award. Because the majority allows the estate’s attorney to obtain a greater share of the punitive damages, I respectfully dissent.
The statutory cap on attorney fees is found in ORS 31.735(l)(a), which provides:
“Forty percent shall be paid to the prevailing party. The attorney for the prevailing party shall be paid out of the amount allocated under this paragraph, in the amount agreed upon between the attorney and the prevailing *122party. However, in no event may more than 20 percent of the amount awarded as punitive damages be paid to the attorney for the prevailing party!’
(Emphasis added.) According to the majority, the 20-percent cap applies only to those “fees an attorney may receive that are based upon the prevailing party’s 40 percent statutory share of a punitive damages award.” 268 Or App at 120. If the prevailing party recovers a greater share of the punitive damages, the majority reasons, the cap does not apply to fees “sought in relation to” that greater amount. Id.
My disagreement with the majority is based on three aspects of ORS 31.735. The first is the overarching purpose of the statute, which reflects the legislature’s view of the appropriate allocation of a punitive damages award. Subsection (1) of the statute sets out the presumptive allocation of that award, with 40 percent allocated to the prevailing party and 60 percent to the Criminal Injuries Compensation Account. By specifying that the prevailing party’s attorney will be paid from the 40 percent allocated to the prevailing party, the legislature ensured that those fees would not be deducted from the share allocated to the Criminal Injuries Compensation Account. And by specifying that the prevailing party’s attorney may recover no more than 20 percent of the total punitive damages award, the legislature ensured that the prevailing party’s relatively small share of the punitive damages award (40 percent) would not be reduced by more than half through payment of attorney fees. In other words, I view ORS 31.735 as ensuring that a total of at least 80 percent of a punitive damages award will be retained by the prevailing party and the Criminal Injuries Compensation Account, regardless of the type of fee agreement the prevailing party has with its attorney.
Second, I find significance in the legislature’s decision to phrase the attorney fee cap in terms of the total amount of punitive damages awarded, not in terms of the amount of punitive damages allocated to the prevailing party. Had the legislature intended the cap to apply only to fees associated with the 40 percent of the punitive damages award that is statutorily allocated to the prevailing party, it easily could have written the statute to reflect that *123intent, perhaps by wording the cap provision something like this:
“Forty percent shall be paid to the prevailing party. The attorney for the prevailing party shall be paid out of the amount allocated under this paragraph, in the amount agreed upon between the attorney and the prevailing party. However, in no event may more than 50 percent of the amount of punitive damages allocated to the prevailing party under this section he paid to the attorney for the prevailing party.”
But the legislature did not enact that hypothetical statute, written in terms of the punitive damages that are allocated to the prevailing party. Instead, it enacted a statute that limits the percentage of the “amount awarded as punitive damages” that may be paid to the attorney for the prevailing party. (Emphasis added.) In my view, the majority conflicts with the legislature’s decision to cap the attorney fees to a percentage of the punitive damages award, not to a percentage of the amount of that award that is allocated to the prevailing party.
Third, the majority’s holding that the fee cap does not apply in all circumstances conflicts with the statutory admonishment that, “in no event” may more than 20 percent of the punitive damages award be paid to the prevailing party’s attorney. ORS 31.735(l)(a). Under the majority’s analysis, in some events, the prevailing party’s attorney may receive more than his or her statutory share.
Because I would reject the majority’s interpretation of ORS 31.735(1), I briefly address the attorneys’ alternative arguments for affirmance of the trial court’s judgment. The attorneys first argue that the money that the state paid to the estate, pursuant to the 2004 settlement, was no longer part of “the punitive damages portion of an award.” I disagree. That money had its source in the state’s share of the $79.5 million punitive damages award and did not lose that character simply because it initially was allocated to the state before the state, in turn, agreed to pay it to the estate. Moreover, the settlement agreement recognized that that sum retained its character as a part of the punitive damages award: the agreement stated that it concerned “allocation *124of recovered punitive damages” between the state and the estate and its attorneys.
The attorneys’ second alternative argument is based on ORS 31.735(5), which provides:
“Whenever any judgment creditor of a judgment which includes punitive damages governed by this section receives any payment on the judgment by or on behalf of any defendant, the judgment creditor receiving the payment shall notify the attorney for the other judgment creditors and all sums collected shall be applied as required by subsections (1) and (4) of this section, unless all affected parties, including the Department of Justice, expressly agree otherwise, or unless that application is contrary to the express terms of the judgment.”
The attorneys argue that, pursuant to that provision, the parties expressly agreed to vary the statutory punitive damages allocation that otherwise would apply.
I agree, but only to a point, and not to a point that benefits the attorneys. ORS 31.735(5) permits the state and a prevailing party to agree to divide their shares of the punitive damages award (a total of at least 80 percent, as explained above) in a way other than the statute contemplates. Nonetheless, ORS 31.735(l)(a) still provides that, “in no event” may the prevailing party’s attorney recover more than 20 percent of the total punitive damages award. Subsection (5) of the statute does not, in my view, alter that complete prohibition against the attorney taking more than his or her 20 percent share. Moreover, even if the statute did permit “all affected parties” to agree to circumvent the attorney fee cap, that did not happen here. The attorneys have pointed to nothing suggesting that the state and the estate expressly agreed that the 20-percent attorney fee cap would not apply to the portion of the punitive damages award originally allocated to the state but then paid to the estate.
I respectfully dissent.

 Like the majority’s, my references to ORS 31.735 “are to the version of the statutory text in effect between 1995 and 2011,” before the 2011 amendments. 268 Or App at 109 n 1.