Court Opinion

ID: 9545902
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:21:57.718364+00
Date Added: 2024-06-11T15:15:44.114255
License: Public Domain

*235LINDE, J.
A dispute between the parties to a construction contract led the owner to terminate the contract. The construction contractor demanded the amount he claimed to be owing under the contract, and upon the owner’s refusal to pay, the contractor filed a claim of lien, followed by a suit to foreclose the lien. As the contract provided for arbitration, the circuit court abated the proceeding pending arbitration.1 The arbitrators awarded the contractor $64,089.71 plus interest. The contractor then moved for a decree foreclosing the lien in a total amount comprising the arbitrators’ award, interest, lien preparation and recording fees, court costs, and reasonable attorney fees incurred in the arbitration as well as in the judicial proceeding. Defendant, the owner, tendered the amount of the award, with interest, and when plaintiff rejected this tender as insufficient, the circuit court dismissed the foreclosure suit on defendant’s motion.
The Court of Appeals reversed the dismissal, holding that an arbitration provision alone does not waive the contractor’s right to file a construction lien to secure eventual payment of his claim, and that plaintiff was entitled to have judgment in the foreclosure suit for all items included in the arbitration award that were properly covered by the lien. The court also held that plaintiff was entitled to costs and attorney fees related to the filing of the lien and the foreclosure proceeding, but excluding attorney fees incurred in the arbitration, and it remanded the case to the circuit court for determination of the proper amount of the judgment. 50 Or App 223, 623 P2d 662 (1981). The only issue before us on review is whether plaintiff is entitled to reasonable attorney fees incurred in arbitrating the amount of his claim.
*236 Plaintiff relies on statutory grounds and on the arbitration provision of the construction contract for his right to recover attorney fees for the arbitration. The construction lien law directs that in suits to enforce a lien “the court shall allow as a part of the costs a reasonable amount as attorney fees to the prevailing party.” ORS 87.060(4).2 Plaintiff argues that the larger part of attorney fees in foreclosing a disputed construction lien arises not in filing the lien claims and the complaint but in litigating the amount of the claim, and that such fees should be recovered even if this phase of the dispute occurs before arbitrators rather than in court.3 Insofar as this part of an attorney’s time and effort would be expended in court and recoverable as part of costs if it were not transferred into the arbitration tribunal, plaintiffs argument is not unreasonable. On the other side, it may be said that arbitration is not imposed by law as a phase of litigation, but is chosen by the parties precisely as an alternative to litigation, on terms set by the parties themselves. Indeed, if the dispute had been arbitrated according to the contract without reaching any occasion to invoke the lien law, the costs of arbitration would be governed by the contract, and plaintiff could not invoke ORS 87.060(4), supra, to recover attorney fees. We doubt that when that section speaks of attorney fees to the “prevailing party” as a part of “costs” in a lien foreclosure proceeding, it means to include more than the statutory procedures themselves, or that it means to invite foreclosure suits as a step toward obtaining attorney *237fees for an arbitration under a contract that does not provide for such fees. Cf. Beach Resorts Intern. v. Clarmac Marine Const., 339 So2d 689 (Fla App 1976), Oakdale Park Ltd. v. Byrd, 346 So2d 648 (Fla App 1977).
Plaintiffs second argument, however, is that this contract did preserve for the parties such rights to attorney fees as the parties would have had in the absence of the arbitration clause. The contract was a standard form construction contract published by the American Institute of Architects. Two provisions are relevant to the present issue.
The arbitration article begins:
“7.9.1. All claims, disputes and other matters in question between the Contractor and the Owner arising out of, or relating to, the Contract Documents or the breach thereof * * * shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then obtaining unless the parties mutually agree otherwise. * * * The foregoing agreement to arbitrate shall be specifically enforceable under the prevailing arbitration law. The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.”
Nothing in the record elucidates the reference to the “Construction Industry Arbitration Rules of the American Arbitration Association,” and there is no evidence that either contracting party knew what they were. The arbitrators’ award ordered that the association’s fees and expenses and those of the arbitrators be borne equally by the parties, but there is no suggestion that either the arbitration rules or the award covered attorney fees.
Plaintiff contends that when the last sentence of art. 7.9.1., supra, refers to entry of judgment on the award “in accordance with applicable law,” the “applicable law” includes the attorney fee provision of the lien law and thereby also includes attorney fees for the arbitration. Assuming plaintiffs premise that “applicable law” in art. 7.9.1 includes more than the “prevailing arbitration law” mentioned in the preceding sentence, nevertheless this clause only provides for the entry of judgment upon the award itself. It says nothing about attorney fees which the “applicable law” allows for the enforcement of a lien.
*238Plaintiff has a stronger argument under a general provision of the contract. Article 7.6.1. provides:
“The duties and obligations imposed by the Contract Documents and the rights and remedies available thereunder shall be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law.”
The question is what “duties, obligations, rights and remedies” are reserved by this clause.
The record does not offer any explanatory material bearing on the intended meaning and scope of art. 7.6.1. of the standard form contract. We disregard “duties and obligations” as referring most likely to the substantive performance required of the respective parties. Their “rights and remedies” clearly extend to the contingency of nonperformance. One of the standard remedies that must have been contemplated in this provision is the security of a construction lien and its eventual foreclosure, a procedure which in Oregon gives the prevailing party a right to attorney fees. The lower courts held that, despite art. 7.6.1., lien foreclosure had to await the result of arbitration under the contract. Had the dispute ended with the award, or with its enforcement under the arbitration statute, there would be no right to attorney fees for art. 7.6.1. to reserve. Cf. Oakdale Park Ltd. v. Byrd, supra. But the Court of Appeals held that after the award foreclosure was proper, and that holding is not challenged here. Article 7.6.1. provides that the rights and remedies under the contract (which includes the remedy of arbitration) shall not be a limitation of rights and remedies otherwise available by law. It does not seem the most likely reading of this reservation of rights that it meant to sacrifice attorney fees which the law allows when all phases of the foreclosure remedy are litigated in court. Rather, it seems more consonant with the apparent objective of including a reservation of rights to read art. 7.6.1. as disavowing such a limitation on the otherwise available right to attorney fees.
Accordingly, we conclude that the contract between the parties reserves to the prevailing party in a lien foreclosure suit the full “reasonable” attorney fees available in such a suit under ORS 87.060(4), determined to *239include those fees “reasonable” for the arbitration proceeding but not exceeding what would be “reasonable” if all issues had been litigated in the foreclosure proceeding. These attorney fees are to be set by the trial court on the remand ordered by the Court of Appeals.
Affirmed as modified.

 ORS 33.240:
“If any action, suit or proceeding is brought upon any issue arising out of an agreement which contains a provision for arbitration of the matter in controversy in such action, suit or proceeding, then, upon application, any judge of a circuit court, upon being satisfied that the issue is referable to arbitration, shall abate the action, suit or proceeding so that arbitration may be had in accordance with the terms of the agreement. The application shall be heard similarly to hearings on motions.”

 ORS 87.060(4):
“When notice of intention to commence suit to foreclose the lien has been given, pleaded and proven as provided for in ORS 87.057, the court, upon entering judgment for the lien claimant, shall allow as part of the costs all moneys paid for the filing or recording of the lien. In suits to enforce a lien created by ORS 87.010 the court shall allow as a part of the costs a reasonable amount as attorney fees to the prevailing party, except as provided in subsection (2) of ORS 87.039 and subsection (3) of ORS 87.057.”

 Plaintiff seeks to bolster this argument by citing the provision of the arbitration statute that judgment shall be entered on an arbitration award “as upon the verdict of a jury, and execution may issue thereon, and the same proceedings may be had upon the award with like effect as upon a verdict in a civil action.” ORS 33.310. The terms “execution,” “the same proceedings,” and “like effect as upon a verdict in a civil action” appear to refer to the enforceability of the award; we are not persuaded that they carry into the arbitration statute the attorney fee entitlement of the construction lien law.