It is important to understand the nature of a "tender" because, in many instances, a defendant can thwart a plaintiff's right to recover attorney fees by making a "tender" that equals or exceeds the plaintiff's ultimate recovery. However, a recent Oregon Court of Appeals decision suggests that making an effective tender can be tricky.
In Reed v. Jackson County Citizens League, 183 Or.App. 89, 50 P.3d 1287 (2002), the plaintiff threatened to sue for trespass unless defendant paid $5,500. Defendant's attorney responded with letter that made "a settlement offer in the amount of $200 for a full release of your claims against our client and provisions for confidentiality."
Plaintiff ultimately sued and recovered $200, the amount of defendant's pre-litigation offer. Plaintiff then made a claim for attorney fees. Defendant argued that fees were unavailable because the applicable statute (ORS 20.080(1)) states that "no attorney fees shall be allowed to the plaintiff if the court finds that the defendant tendered to the plaintiff, prior to the commence of the action . . . an amount not less than the damages awarded to the plaintiff." As defendant saw it, plaintiff was not entitled to attorney fees because, before the lawsuit was filed, defendant had tendered an amount "not less than the damages awarded to the plaintiff."
The trial court agreed with defendant's argument, but the Oregon Court of Appeals held that defendant's settlement offer was not a "tender" within the meaning of the statute. The court explained that a "tender" must be unconditional, except that a "tender" could include a condition upon which the tendering party had a "right to insist." The court opined that the defendant had no statutory or contractual right to insist upon confidentiality of the settlement. Because the settlement offer was conditioned upon plaintiff agreeing to "provisions for confidentiality," the offer was not sufficiently unconditional and, therefore, was not a "tender" within the meaning of the statute.
The case left unanswered some important questions, such as whether an offer conditioned upon a release of liability would fail to qualify as a "tender." The important point to take away from the court's decision is that any settlement offer that requires plaintiff's agreement to perform certain conditions might not qualify as a "tender." Consequently, where an offer is made for the purpose of defeating a later claim for attorney fees, the offer should be stripped of any conditions except rights guaranteed by law.