Belknap v. U. S. Bank National Association

FILED: June 16, 2010

IN THE COURT OF APPEALS OF THE STATE OF OREGON

BRAD BELKNAP
and LORRAINE NICOLE BRULC,
individually and on behalf of all persons similarly situated,

Plaintiffs-Appellants
Cross-Respondents,

v.

U. S. BANK NATIONAL ASSOCIATION,
dba US Bank,

Defendant-Respondent
Cross-Appellant.

Multnomah County Circuit Court
030100042
A138636

Ronald E. Cinniger, Senior Judge (General Judgment).

Stephen K. Bushong, Judge (Supplemental Judgment).

Argued and submitted on November 23, 2009.

A. E. Bud Bailey argued the cause for appellants - cross-respondents.  On the opening brief were J. Dana Pinney, Jacqueline L. Koch, and Bailey, Pinney & Associates.  On the reply brief were A. E. Bud Bailey, J. Dana Pinney, and Bailey, Pinney & Associates.

Christopher F. McCracken argued the cause for respondent - cross-appellant.  With him on the briefs were Timothy R. Volpert, Carol J. Bernick, and Davis Wright Tremaine LLP.

Before Sercombe, Presiding Judge, and Brewer, Chief Judge, and Armstrong, Judge.*

SERCOMBE, P. J.

On cross-appeal, supplemental judgment awarding attorney fees reversed; otherwise affirmed on appeal and on cross-appeal.

*Brewer, C. J., vice Edmonds, P. J.

SERCOMBE, P. J.

This case began as a class action by former employees of U.S. Bank National Association (bank) to recover penalty wages.  The class plaintiffs--former employees whose employment had terminated in the three years preceding the filing of the complaint--alleged that the bank had failed to timely pay them all their wages, as required by ORS 652.140.  That statute requires generally that employees who quit or who are fired must be paid all wages earned and unpaid at the time of termination within a certain time period, which varies depending on the circumstances of the separation from employment.  The class plaintiffs sought penalty wages under ORS 652.150 and attorney fees under ORS 652.200.

Pursuant to the class plaintiffs' request under ORCP 32 C, the trial court certified a class composed of those former employees who gave 48 or more hours' notice of intent to terminate employment and who were not paid timely pursuant to the statute.  After years of discovery and motion practice, the bank moved to decertify the class, and the court granted the motion.  The case between the bank and the two named plaintiffs--formerly the class representatives--went forward.  After a three-day trial, the jury returned a verdict in favor of plaintiff Brulc on her claim and in favor of the bank on plaintiff Belknap's claim.  The trial court awarded Brulc nearly $16,000 in attorney fees.

Plaintiffs Belknap and Brulc appeal, raising four assignments of error.  The bank responds with three cross-assignments of error and also cross-appeals, raising two assignments of error of its own.  For the reasons discussed below, we reverse the award of attorney fees on cross-appeal and otherwise affirm.

The relevant facts are largely procedural.  As noted, this case began as a class action.  ORCP 32 H requires that notice be given to the defendant in a potential class action before the action is commenced:  That rule provides, in part:

"H(1)  Thirty days or more prior to the commencement of an action for damages pursuant to the provisions of sections A and B of this rule, the potential plaintiffs' class representative shall:

"H(1)(a)  Notify the potential defendant of the particular alleged cause of action; and

"H(1)(b)  Demand that such person correct or rectify the alleged wrong."

In September 2002, counsel for plaintiffs sent a letter to the bank that purported to be a "Pre-Litigation Notice Pursuant to ORCP 32 H."  That letter stated, in part:

"This office represents potential class plaintiffs in an action against [the bank].  The potential class plaintiffs were employees of [the bank] whose employment ended within the past three (3) years and who were not paid all wages when due as required by ORS 652.140.

"Plaintiffs demand that these violations be cured by making payment of all penalty wages, as calculated by ORS 652.150. * * *

"Pursuant to ORCP 32 H, the representative of the potential class plaintiffs provide this written notice that a Class Action lawsuit will be filed in 30 days, unless all class member claims are cured by [the bank] within that time.

"Unless [the bank] fully cures the alleged wrongs within thirty (30) days, a Class Action lawsuit will be filed for money damages, costs, and attorney fees.  All cure efforts must be made through this office."

Counsel for the bank responded to the letter, asserting that the letter did not meet the requirements of ORCP 32 H.  Specifically, counsel maintained, the letter did not identify the "potential class representative" or the "particular alleged cause of action."  Noting that the bank could not, with only the information in the letter, "adequately investigate the vague allegations" in the letter and "attempt a cure," counsel sought the name of the proposed class representative and the "specific nature of the alleged violation."  In a follow-up telephone conversation, plaintiffs' counsel refused to provide the requested information.  Plaintiffs' counsel ultimately filed a complaint.

After a number of motions and related orders, the trial court certified a class nearly two years later, in July 2004.  In support of their motion for class certification, the class plaintiffs asserted that resolution of the claims in the class action would be accomplished primarily by documentary evidence, so that the potential complexity of the case should not bar a class action.  In its order certifying the class, the court found:

"1.       The class consists of approximately 600 to 1,900 persons;

"2.       There are common questions of law and fact;

"3.       The claims of the representative plaintiffs are typical;