Case Title: Alexander v. S & M MOTORS, INC.

Citation: 28 S.W.3d 303

Docket Number: 1998-SC-0896-DG, 1998-SC-0951-DG

State: kentucky

Court: Kentucky Supreme Court

Date: 2000-06-15T00:00:00Z

Document:
28 S.W.3d 303 (2000) Jeffrey ALEXANDER Appellant, v. S & M MOTORS, INC., d/b/a the Lexus Store of Lexington, Appellee. Ken-Ray Motors, Appellant, v. Wanda Childers and Don A. Pisacano, Appellees. Nos. 1998-SC-0896-DG, 1998-SC-0951-DG. Supreme Court of Kentucky. June 15, 2000. Rehearing Denied October 26, 2000. *304 Don A. Pisacano, Stites & Harbison, Lexington, Counsel for Appellant, Jeffrey Alexander. Paul "Skip" Gaines, Stewart C. Burch, Frankfort, Counsel for Appellee, S & M Motors. Jimmy Dale Williams, Richmond, Counsel for Appellant, Ken-Ray Motors. Don A. Pisacano, Stites & Harbison, Lexington, Counsel for Appellees, Wanda Childers and Don A. Pisacano. JOHNSTONE, Justice. The issue presented in each of these cases involves a question of first impression concerning the award of attorney fees under the Kentucky Consumer Protection Act (KCPA), KRS 367.220(3). We granted discretionary review to resolve a split of authority in the Kentucky Court of Appeals. We hold that the award of attorney fees under the statute is discretionary with the trial court. We begin with a brief discussion of the pertinent facts of each case. On November 29, 1993, Jeffery Alexander purchased a vehicle from S & M Motors, which represented that the vehicle had not been damaged, that it only had one prior owner, and that it was a "Certified Lexus Pre-Owned Car." Approximately one year later, Alexander discovered that the vehicle had sustained heavy damage prior to the date of purchase. Alexander subsequently filed suit against S & M alleging that he was defrauded. In the suit, he sought recovery of his purchase price and punitive damages. The matter proceeded to trial, and a unanimous jury awarded Alexander $6,000 in compensatory damages and $75,000 in punitive damages. However, the trial court denied Alexander's motion for attorney fees under the KCPA, and Alexander appealed this ruling. The Court of Appeals affirmed the trial court. Wanda Childers purchased a used vehicle from Ken-Ray Motors in May, 1994. Childers began having problems with the vehicle within the first hour of purchase. She continued to have problems with the vehicle and ultimately filed a claim against Ken-Ray in November, 1994. In the complaint she alleged, inter alia, fraudulent misrepresentation and violation of the Kentucky Consumer Protection Act (KCPA), KRS 367.010 et seq. A jury trial was held concerning these two issues on January 27, 1997. The trial resulted in a unanimous jury verdict which awarded Childers $6,748.89 in compensatory damages and $25,000 in punitive damages. The award of damages was based on the jury's finding that Ken-Ray committed fraud upon Childers, violated the KCPA, and acted with fraud, malice or oppression. Ken-Ray filed a number of post-judgment motions and Childers filed a motion for attorney fees pursuant to KRS 367.220(3). Childers subsequently filed further motions for additional attorney fees as would be generated from the post-judgment proceedings. The trial court denied all of Ken-Ray's post-judgment motions, and eventually entered an order awarding Childers: (1) the costs necessary *305 to prepare and bring her cause of action to trial; (2) $128.60 in post-judgment costs; (3) nothing for attorney fees generated in preparation for trial or incurred during trial; and (4) $600 in post-judgment attorney fees. The trial court further ordered that Childers not be awarded "any other (additional) costs or attorney fees, as movant has failed to persuade the Court that the additional fees and expenses claimed were necessary." Childers appealed from the portions of this order denying her any award of attorney fees incurred either in preparation for trial or during the course of the trial. The Court of Appeals reversed and remanded to the trial court for reconsideration of the issue of attorney fees and litigation costs. The issue presented in both Alexander and Childers is whether the trial court abused its discretion in denying attorney fees and costs under KRS 367.220(3), which provides: (Emphasis added). Not only have Kentucky courts long construed "may" to be a permissive word, rather than a mandatory word, but our legislature has given guidance in this regard. When considering the construction of statutes, KRS 446.010(20) provides that "may" is permissive, and "shall" is mandatory. Chief Justice Lambert recently noted in White v. Check Holders, Inc., Ky., 996 S.W.2d 496, 497 (1999): We, therefore, read the statute to authorize, but not mandate, an award of attorney fees and costs in an action brought under the Kentucky Consumer Protection Act. Of course, whether to award such is a decision subject to the sound discretion of the trial judge. When a trial court is considering whether to award attorney fees and costs and/or how much to award, the trial court's decision should be guided by the purpose and the intent of providing an award of attorney fees and costs under the act. As Judge Knox, writing for the appellate panel in Childers, ably explained: Childers v. Ken-Ray Motors, Ky.App., 1998 WL 381342, 97-CA-1496-MR, July 10, 1998. Thus, a trial court's polar star when considering a motion for attorney fees under the KCPA is keeping the courthouse door open for those aggrieved by violations of the act. In both cases at bar, neither trial courts' ruling concerning attorney fees penalized either plaintiff for bringing a claim under the act. Nor does either ruling establish a precedent which closes the courthouse for future plaintiffs or makes the door more difficult to open. The jury awarded Childers $6,748.89 in compensatory damages and $25,000 in punitive damages. The compensatory damages represented the maximum amount that could be awarded under the instructions. Childers' attorney submitted an affidavit in support of Childers' motion for attorney fees. According to the affidavit, the amount of attorney fees due as a result of the representation of Childers was $24,965.23 based on a rate of $120 an hour, which, consequently, was just a few dollars less than the punitive damage award. The punitive damage award prevented Childers' favorable judgment from being turned into a Pyrrhic victory. That is, even after factoring in attorney fees and litigation costs, Childers was not made less than whole by the jury's verdict. Further, the denial of an award for attorney fees in this case did not prevent Childers' attorney from making a reasonable return on his efforts. Finally, we do not believe that the denial of attorney fees in Childers' case will deter others aggrieved by violations of the KCPA from bringing suit in the future or attorneys from representing them. The jury awarded Alexander $6,000 in compensatory damages and $75,000 in punitive damages. Alexander's counsel sought $26,594.50 in attorney fees, which the trial court found to be reasonable. The argument that the trial court abused its discretion in denying attorney fees and costs to Alexander is less compelling under the relevant facts of his case than under the relevant facts of Childers' case. For the reasons set forth above, we hereby affirm the Court of Appeals in Alexander v. S & M Motors, Inc. (1998-SC-0896-DG) and reverse the Court of Appeals in Ken-Ray Motors v. Childers (1998-SC-0951-DG). LAMBERT, C.J.; COOPER and WINTERSHEIMER, JJ., concur. STUMBO, J., concurs in part and dissents in part by separate opinion, in which GRAVES and KELLER, JJ., join. STUMBO, Justice, Concurring in Part and Dissenting in Part. Although I agree with the legal reasoning of the majority opinion, I disagree with the result it reaches and therefore must dissent in part. I agree with that much of the majority's analysis which interprets the Kentucky Consumer Protection Act, KRS 367.220(3) as authorizing, but not requiring, the award of attorney fees to the prevailing party in a suit brought pursuant to the Act. However, I believe the trial courts in both cases herein failed to thoroughly consider all relevant factors when considering the plaintiffs' requests for attorney fees, and, consequently, their denial of attorney fees was an abuse of discretion. I believe Judge Knox's opinion for the Court of Appeals in the Childers case articulately and thoroughly sets forth the factors a trial court should consider when considering a request for attorney fees under the KCPA: In my opinion, considering all the proper factors set forth by Judge Knox, and given the services rendered by both plaintiff attorneys and the results realized from said services, the trial courts below should reconsider their refusal to award attorney fees. The trial courts' failure to allow any fee for time spent actually litigating the case and all hourly services leading up thereto is inconsistent with the finding (implicit in Alexander, explicit in Childers) that the jury's award of both compensatory and punitive damages was supported by the evidence and not the result of passion or prejudice, and that the amount of the compensatory and punitive damages were not excessive. Thus, in my view, the trial courts below either abused their discretion or failed to use it at all. I therefore would remand both cases to the trial courts for reconsideration of the plaintiffs' request for attorney fees in view of all the relevant factors set forth above. GRAVES and KELLER, JJ., join.