PacifiCorp v. SimplexGrinnell

ORS 20.096 does not create a reciprocal right to recover attorney fees when an indemnification agreement in the contract does not allow one party to recover attorney fees from the other.

A jury found that SimplexGrinnell breached its contract to perform fire inspection services for PacifiCorp, but that SimplexGrinnell was not the cause of PacifiCorp’s damages. SimplexGrinnell then filed a motion to recover attorney fees under ORS 20.096, which makes an attorney fee provision in a contract reciprocal to both parties. The contract between the parties did not contain an attorney fee provision, but it did contain an indemnification agreement where SimplexGrinnell agreed to indemnify PacifiCorp for all costs and damages including attorney fees from the performance or nonperformance of the contract. PacifiCorp argued that this applied to claims between the parties or against third parties, while PacifiCorp argued that it only applied to third parties. The Court found that the contract was unambiguous and can only apply to suits involving third parties; otherwise SimplexGrinnell would never be able to recover in a first-party claim against PacifiCorp because SimplexGrinnell would be on both sides of the action. Since the indemnification agreement would not allow PacifiCorp to recover attorney fees in a breach of contract action against SimplexGrinnell, ORS 20.096 does not apply.