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New Case Law: Attorney Fees – Arbitration vs. Appeal March 22, 2008

Posted by margolinlegal in Arbitration, Attorney Fees, Dissolution, Legal Developments, Property Division.
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As a Portland Oregon divorce lawyer, it is important to keep up to date on Oregon Court of Appeals and Oregon Supreme Court opinions. As a service of The Oregon Divorce Blog, we will be providing updates as new opinions come out.

On March 19, 2008, the Oregon Court of Appeals, in Ornelas and Ornelas, explained the difference between awarding attorney fees in arbitration appeals and appeals to the court of appeals.

In an Oregon divorce case where the parties have no children and no spousal support award is requested by either party the case is sent to mandatory arbitration. If either party disagrees with the result in arbitration, that party can appeal the arbitrator’s ruling for a trial de novo at the circuit court level. That means that a judge will look at the case without referring to the arbitrator’s ruling.

ORS 36.425(4)(c) provides:

“If a party requests a trial de novo under the provisions of this section, the action is subject to arbitration under ORS 36.405(1)(b), and the position of the party is not improved after judgment on the trial de novo, the party shall not be entitled to an award of attorney fees or costs and disbursements and shall be taxed the costs and disbursements incurred by the other parties after the filing of the decision and award of the arbitrator.”

This means that the trial court must make an award of attorney fees to a party who asks for a trial after arbitration and does not receive a better result.

In Ornelas, the husband was upset because his wife not only asked for trial de novo after she was unhappy with the arbitrator’s ruling, but also appealed the trial court’s ruling. She received a worse result on appeal than she did at arbitration or at the trial court level. Therefore, husband argued that wife must pay his attorney fees.

The court of appeals ruled that the attorney fee award language in ORS 36.425(4)(c) only applies to trial de novo and not to appeals. This is because the court of appeals has discretion to award or not award attorney fees on appeal pursuant to ORS 107.105. Meaning that even if you do worse on appeal that at arbitration, you can still receive an attorney fee award.

The court ended up not awarding attorney fees to either party since the final distribution of martial assets put husband and wife on roughly equal financial footing.

The entire opinion can be reviewed at http://www.publications.ojd.state.or.us/A128901A.htm.

New Case Law: Two new Oregon spousal support cases. February 16, 2008

Posted by csstephens in Legal Developments, Spousal Support.
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istock_000001909034xsmall.jpg istock_000004621270xsmall.jpg As an Oregon divorce lawyer, I am always interested in what the appellate court says regarding spousal support.  The Oregon Court of Appeals published two spousal support decisions on February 6, 2008. Both decisions provide some guidance to husbands and wives dealing with spousal support claims at the trial court level.

In Potts and Potts, ____ Or. App ___ (2008), a self employed husband challenged a $7000 monthly award of indefinite spousal support to Wife. The court denied wife’s property appeal, and reduced husband’s spousal support obligation to $5000. Husband’s main argument was that the spousal support award gave wife a much higher net income than him after he paid support. Husband argued that he faced an increase in business expenses that should be deducted from his income, and that wife could earn substantial income from the property received, thus reducing her need for monthly support. The court didn’t buy husband’s “increased business expenses” argument, and found that wife’s potential for investment income should be reduced by the cost of the home she would purchase with her property award. The court still reduced husband’s support to $5000 per month for an indefinite term, holding that the goal of enabling the parties to live separately at a standard of living similar to the marriage could be met at this amount. The court calculated husband’s after tax income to be $139,671, and wife’s to be $88,744. The court considered these figures roughly equal in part because husband received the riskiest, most volatile assets, with wife’s property award being more stable.

In Van Riesen and Cross, ____ Or. App. ___ (2008), the court considered husband’s argument that he should have been awarded maintenance support. The court agreed, holding that husband was entitled to both temporary and indefinite support from wife.

The parties were married in 1979 and divorced in 2004. They have two children. Husband worked full time during the marriage, and was fired from Intel in 1996 after a bad review. He took time off to recover from the emotional blow, and after an 18 month employment hunt, did not seek new employment because his investments were doing well, and he anticipated a $2,000,000 payment from Intel from his employment grievance with Intel for lost compensation. His employment grievance was ultimately denied. Husband then developed diabetes, dyspepsia, and depression. Wife filed for divorce in 2003. At that time she earned about $120,000 per year.

At trial, husband and his experts argued he was unemployable based on his personality, age, and health conditions. The trial court awarded husband $25,000 in transitional support, and the “long half” of the property. (Really not that much more than half, only $31,565 more than wife in a $1,600,000 marital estate) Wife argued on appeal that husband had skills, and that he could work but had voluntarily retired. Husband argued that he could not work based on his age, health, and time out of the workforce. The appellate court found husband capable of work, but not at his previous salary (approximately $120,000 including bonuses.) The court also found that husband’ s unemployment was not voluntary as wife claimed. The court awarded husband maintenance support of $2,500 per month for 4 years until he could draw on his retirement, and that a lesser amount be paid after that time.

There is no magic formula for spousal support. The court considers each claim on a case by case basis, applying the statutory factors in ORS 107.105(1)(d) and existing case law. Both cases are interesting, and informative to parties with similar issues and claims.