Court Opinion

ID: 9624779
Source: CourtListenerOpinion
Date Created: 2023-08-22 07:17:17.602423+00
Date Added: 2024-06-11T12:08:23.029313
License: Public Domain

RICHARDSON, J.,
concurring in part; dissenting in part.
I do not agree that defendants’ motion to offset the judgments should have been allowed.
Hartford Accident v. Pyle, 271 Or 97, 530 P2d 843 (1975), is the leading Oregon case relating to equitable setoffs against judgments that have been assigned to attorneys. The court said:
“A perusal of the cases shows a surprising lack of unanimity. Possible fact situations are multiple and cases can be found which will justify almost any position one wishes to take. In general, an analysis of the cases discloses the following factors to have been considered important by courts in disposing of like problems:
“1) were both judgments in existence when the assignment was made to the attorneys?
“2) if both judgments were in existence at the time of the assignment, did the attorneys-assignees know of the judgment against their assignor?
“3) was the client-assignor insolvent at the time of the assignment?
“4) did the two judgments arise out of the same transaction or related transactions?
“5) do both judgments include attorney fees so that, in effect, attorney fees will be set off against attorney fees?
“We are not prepared to say how many of the above factors, when found to be positive, are sufficient to justify a set-off. However, when all of the above questions have to be answered in the affirmative, as is the case here, it is our opinion that equity should allow a set-off. If it were otherwise, plaintiff not only would have to pay its own attorney’s fees *131from its independent funds since it would not be able to collect any part of its judgment from its insolvent opponent, but plaintiff also would have to pay its insolvent opponent’s attorney fees as well. When the judgments arise out of the same controversy, such a result would be unconscionable despite defendants’ services being responsible for the judgment for attorney’s fees in favor of their clients. Upon weighing the equities, it appears that those of plaintiff preponderate.” 271 Or at 100-01.
This case is almost the precise opposite of Hartford Accident v. Pyle, supra, in that the answer to all but one of the factors is no. The 1985 judgment did not exist when it was assigned (factor 1); there is no evidence that plaintiff was insolvent when he gave the assignment (factor 3); the judgments did not “arise out of the same transaction or related transactions” (factor 4); and neither judgment provides for attorney fees (factor 5).
Only the second factor can arguably be answered affirmatively.1 Intervenor knew about the 1981 judgment when the assignment was given. The majority treats that fact and that factor as independently decisive. I agree with the majority that Hartford Accident v. Pyle, supra, left unresolved the number and mix of factors that had to be answered positively for an equitable setoff to be justified. I am unable to agree, however, that the second factor alone can be decisive in favor of a setoff here (if it ever can). As explained in Hartford Accident, an equitable setoff has the purpose of protecting parties against disproportionate expense for their and their opponents’ legal services in connection with multiple actions involving the same controversy. Given that purpose, the role of the second factor is to introduce an independent equity into the equation — that of an attorney-assignee who is unaware that a judgment against his client exists. Stated otherwise, the second factor might provide a basis for disallowing a setoff that the other factors would militate in favor of granting, but I do not agree that the second factor was intended to serve as the sole basis for allowing a setoff.
I agree that the first of the Hartford Accident factors — whether both judgments existed at the time of the *132assignment — is not particularly important in this context (and is not particularly understandable in any context). Nevertheless, the majority’s attempt to read it out of existence is unpersuasive. The majority posits that the court in Hartford Accident contemplated that the first factor can be relevant only “where the assignment is made by the party obtaining the first judgment,” and that it has no application to assignments of “future judgments.” (96 Or App at 126.) Whatever logic there may be to the majority’s analysis, it disregards one critical fact: The first factor would be meaningless if it only applied to existing judgments, because the very question it asks is whether there are existing judgments. The significance of my comment is not so much that the majority has given too little ultimate weight to the first factor, but that it has gone to heroic lengths to explain why it begins its dispositional analysis with the second factor. More significantly, the majority never does explain why it also ends its analysis with the second factor and does not consider the three remaining ones, which are of obvious importance in this case.
The majority refers at various places to a “right” of setoff. (See 96 Or App at 124.) That word choice may reveal the underlying assumption which leads the majority to the result it reaches, and it is an assumption I do not share. As the court made clear in Hartford Accident v. Pyle, supra, there is no right to a setoff. It is an equitable remedy, and an extraordinary one.
Because I would reverse the order allowing the setoff for the reasons stated, it is unnecessary for me to address the majority’s disposition of plaintiffs and intervenor’s alternative arguments for reversing it. I concur in the affirmance of the judgment in the declaratory judgment action. Joseph, C. J., and Warren and Newman JJ., join in this opinion.

 I assume for present purposes that the conditional phrase “if both judgments were in existence at the time of the assignment” in factor 2 is surplusage. If it is not, that factor, like the others, militates against a setoff.