From the Desk of Melanie Rose:
Arbitration laws can be difficult to parse through, but the Oregon Court of Appeals recently made the task a bit easier, finding that any arbitration award that is reduced to judgment must contain post-judgment interest as a matter of law.
In this case, the Oregon Court of Appeals looked at the result of an arbitration over unpaid attorney’s fees to decide when post-judgment interest starts to accrue. The Court ultimately decided that, under ORS 82.010, post-judgment interest does not begin to accrue after an arbitration award is rendered but will begin to accrue after a judgment confirming the arbitration award is entered.
Albertazzi v. Jones, 321 Or. App. 486 (2022).
Attorney and Respondent had previously entered into a written fee agreement where Attorney agreed to provide legal services to Respondent. After Attorney’s representation of Respondent ended, a dispute arose over the amount that Respondent still owed Attorney and whether the Respondent was required to pay interest on the outstanding attorney’s fees under the fee agreement. Attorney submitted these questions to the Oregon State Bar Fee Dispute Resolution Program, who decided in arbitration that Respondent had not agreed to pay any interest under the fee agreement and, therefore, Attorney was not entitled to interest on the amount of fees. The arbitrators also decided the fee amount that Respondent owned Attorney and issued a money award in favor of Attorney without any “post-award interest.”
Attorney then filed a petition with the local trial court, seeking an order confirming the arbitration and money awards pursuant to ORS 36.700.
Attorney filed a proposed judgment and money award that included statutory post-judgment interest at 9% per annum. The trial court accepted Attorney’s proposed judgment and entered a judgment stating that Attorney was entitled to the 9% interest.
Respondent took issue with the judgment requiring 9% interest and filed a motion to modify the judgment in accordance with the arbitrator’s no interest award. Attorney argued that, even though the arbitrator had found that he was not entitled to a post-judgment interest award, an arbitration award is distinguishable from a judgment of the circuit court and all civil judgments are required to include the post-judgment interest pursuant to ORS 82.010.
After the hearing, the trial court modified the judgment back to the original no interest award, concerned about the repercussions of including an interest rate in a judgment that was not included in the presiding arbitrator’s original award.
Attorney appealed the modified judgment, which removed the statutory post-judgment interest.
To being, the appellate Court evaluated the purpose of post-judgment interest. Post-judgment interest acts as a penalty for delayed payment on a judgment. Chase and Chase, 354 Or 776, 783, 323 P3d 266 (2014) (quoting Highway Comm. v Delong Corp., 275 Or 351, 358, 551 P2d 102 (1976)). ORS 82.010(2) discusses legal rates of post-judgment interest and when interest rates attach. Further, post-judgment interest under this statute “is imposed on all judgments by operation of law.” Young v. State of Oregon, 346 Or 507, 515, 212 P3d 1258 (2009).
ORS 36.700 contains a mechanism for converting an arbitration money award into a formal judgment. The statute states that after a party to an arbitration receives notice of an award, the party may make a petition to the court for an order “confirming” the award to a judgment.
Further, ORS 36.715 states that “upon granting an order, confirming, vacating . . . modifying, or correcting an award, the court shall enter a judgment in conformity with the order.” This means that once an arbitration award is confirmed under ORS 36.700, a judgment, in accordance with confirmation, may be entered with the trial court under ORS 36.715.
In this case, the Oregon Court of Appeals analyzed ORS 36.700 and 36.715’s effect on ORS 82.010(2) to determine whether post-judgment interest accumulates after an arbitration award. On appeal, Attorney argued that a general judgment entered pursuant to ORS 36.715 accrues post-judgment interest under ORS 82.010(2), even when the arbitrator found, in the original arbitration proceeding, that Attorney was not entitled to any interest.
The Court ultimately agreed with Attorney’s argument, drawing a distinction between arbitration awards issued by the arbitrators and judgments confirming arbitration awards entered by the Circuit Court. The Court found that even though arbitration awards are not “judgments” pursuant to ORS 82.010(2), that judgments entered under ORS 36.715, that confirm arbitration awards, are judgments for the purposes of ORS 82.010(2). The Court continued by stating that “[o]nce a judgment confirming an arbitration award is entered, the interest provided for in ORS 82.010 attaches to that judgment.”
Based on this reasoning, the Court found that because the trial court confirmed Attorney’s arbitration award pursuant to ORS 36.700, and then entered a judgment of the confirmation under ORS 36.715, the 36.715 judgment did begin to accumulate interest under ORS 82.010.
The Court, therefore, concluded that Attorney was entitled to the 9% post-judgment interest under ORS 82.010(2).
Even though arbitration awards are not judgments for the purposes of post-judgment interest accrual under ORS 82.010(2), a judgment confirming an arbitration award under ORS 36.715 will being to accrue statutory interest from the day the judgment is entered.