Case Title: Joe's Concrete and Lumber, Inc., et al v. Concrete Works of Colorado, Inc., et al

Citation: 

Docket Number: S-10-0036

State: wyoming

Court: Wyoming Supreme Court

Date: 2011-05-02T00:00:00Z

Document:
JOE'S CONCRETE AND LUMBER, INC. and ENERCREST, INC and ENERCREST PRODUCTS, INC.,  Wyoming Corporations v. CONCRETE WORKS OF COLORADO, INC., a Colorado Corporation, and HARTFORD CASUALTY INSURANCE COMPANY, an Indiana Company, doing business as a Foreign Insurance Company2011 WY 74Case Number: No. S-10-0036Decided: 05/02/2011NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so correction may be made before final publication in the permanent volume.
APRIL 
TERM, A.D. 2011

 
 

JOE'S 
CONCRETE AND LUMBER, INC., ENERCREST, INC., and ENERCREST PRODUCTS, INC., 
Wyoming Corporations,Appellants (Plaintiffs),v.CONCRETE 
WORKS OF COLORADO, INC., a Colorado Corporation, and HARTFORD CASUALTY INSURANCE 
COMPANY, an Indiana Company, doing business as a Foreign Insurance 
Company,Appellees (Defendants).

 
 

Appeal 
from the District Court of Sublette County

The 
Honorable Marvin L. Tyler, Judge

 
 
Representing 
Appellants:

Andrea 
L. Richard of The Richard Law Firm, P.C., Jackson, 
Wyoming.

 
 
Representing 
Appellees:

William 
H. Twichell, Pinedale, Wyoming.

 
 
Before 
KITE, C.J.,* and HILL, VOIGT**, BURKE, JJ., and SKAR, 
D.J.

 
 
*  Reassigned to Chief Justice Kite on 
January 20, 2011.

**Chief 
Justice at time of expedited conference.

 
 

KITE, 
Chief Justice.

 
 
[¶1]      After a jury 
found that Concrete Works of Colorado, Inc. (CWC) breached its contract with 
Joe's Concrete and Lumber, Inc. (Joe's Concrete), Joe's Concrete presented 
evidence documenting its claim for attorney fees.  The district court declined to consider 
the documentation on the ground that it was not presented at trial, concluded 
the evidence presented at trial did not support an attorney fees award and 
denied the attorney fees claim in its entirety.  On appeal, Joe's Concrete contends the 
district court erred in failing to consider the evidence.1  We reverse and remand.    

 
 
 
 
ISSUE

 
 
[¶2]      The issue for our 
determination is whether the district court properly denied attorney fees.  

 
 
 
 

FACTS

 
 
[¶3]  In 2006, the town of Marbleton, Wyoming 
awarded CWC a contract to perform work on a curb and gutter infrastructure 
project.  Prior to receiving the 
award, CWC posted a performance bond which was issued by Hartford Casualty 
Insurance Company (Hartford).  After 
being awarded the project, CWC contacted Joe's Concrete and requested concrete 
pricing, which Joe's Concrete provided.  

 
 
[¶4]  Between September and early October of 
2006, Joe's Concrete delivered approximately fifty mixer truck loads of concrete 
to CWC.  With each delivery, Joe's 
Concrete provided invoices which contained the following provision:  

 
 
[P]urchaser 
also notes that all collection costs and attorney fees will be charged to this 
account if forced collection on this account is necessary.

 
 
[¶5]  In January of 2007, Joe's Concrete filed 
a complaint against CWC alleging claims for breach of contract, breach of the 
covenant of good faith and fair dealing in tort and contract, unjust enrichment 
and conversion.2  Joe's Concrete also sought punitive 
damages and attorney fees.  Prior to 
trial, the district court dismissed the tort claim for breach of good faith and 
fair dealing and the punitive damages claim. 

 
 
[¶6]  Trial was convened on May 18, 2009.  On May 19, after Joe's Concrete had 
informed the jury in opening statement that it was seeking attorney fees and 
submitted proposed jury instructions on the issue of attorney fees, the district 
court suggested that counsel take a look at the discussion in Gose v. Hess, 822 P.2d 846 (Wyo. 1991) 
concerning "attorney's fees and how those are handled."    

 
 
[¶7]  On May 20, Joe's Concrete presented one 
of its employees to testify concerning its attorney fees.  After some preliminary questioning, CWC 
asked to approach the bench.  The 
district court excused the jury and a discussion occurred with counsel that was 
not transcribed.  The district court 
then stated on the record:

 
 
We're 
here without the presence of the jury to take up the testimony or offer of 
proof, however you wish to do it, [counsel for Joe's Concrete], of [the witness] 
on the issue of attorneys' fees.  We 
will proceed however you want.

 
 
[¶8]  Counsel for Joe's Concrete proceeded to 
ask the witness generally about the attorney fees charged in the case.  The witness broke the fees into four 
categories:  pre-litigation 
activities, including demand letters and initial discovery; discovery, including 
depositions and motions; trial, including motions, trial preparation, the trial 
itself, travel and expenses; and post-trial fees.  The witness also testified generally 
that he thought the fees were reasonable.  
When counsel indicated she had no more questions, the district court 
inquired whether she understood the statutory factors it would consider in 
awarding fees and suggested she and the witness address the factors, "because 
you only get one shot at this to prove up fees."  With the court's encouragement, counsel 
established through the witness's testimony that in his opinion the hourly fee 
of $225 to $250 charged to Joe's Concrete was reasonable given the skill 
exhibited by counsel.  The trial 
continued and the jury found that CWC breached the contract and the covenant of 
good faith and fair dealing and awarded Joe's Concrete damages of $232,367.25. 

 
 
[¶9]  In June of 2009, in accordance with the 
district court's directive, the parties submitted proposed findings of fact and 
conclusions of law on the attorney fees issue.  In addition to summarizing the trial 
testimony concerning attorney fees, Joe's Concrete attached detailed invoices 
that were not introduced as exhibits during trial, setting forth actual fees and 
costs incurred and the actual hours worked.  Joe's Concrete explained that the 
invoices for certain pretrial activities and the trial itself were not available 
at the time of trial.  CWC filed an 
objection to the presentation of evidence of fees after the close of the 
evidence and conclusion of trial.  
Joe's Concrete responded, citing W.R.C.P. 54 and arguing that the rule 
expressly authorizes a party to submit an attorney fees application and invoices 
after trial.   

 
 
[¶10]  In August of 2009, the district court 
issued a decision letter and order on attorney fees.  The district court stated that in 
addition to the witness testimony presented during the trial, Joe's Concrete 
submitted "ex parte documents which were not items of evidence admitted at the 
trial."  The court stated it "does 
not, and cannot, rely in any way upon these documents" and ruled that the 
documents were inadmissible.  The 
court then outlined the testimony presented at trial in support of the attorney 
fees claim, noted that no billing statements were offered into evidence and 
concluded that Joe's Concrete failed to meet its burden of proving its 
fees.  The decision 
states:

 
 
The 
Court was not provided with any itemized billings during the presentation of 
testimony and evidence . . . so as to determine "whether the fee charged 
represents the product of reasonable hours times a reasonable rate.". . .  The testimony of [the witness] revealed 
that the only billing statements which had been reviewed by him for the period 
of October 31, 2006, through February 28, 2009, contained "costs, attorneys' 
fees, third-party fees, electronic research costs, investigator fees, and court 
reporter fees" in unspecified sums.  
He did not testify as to the attorneys' fees charged, and the billings 
were not admitted into evidence.

 
 
The 
district court denied the attorney fees claim in its entirety.   

 
 
[¶11]  In October of 2009, the district court 
entered its judgment.  Fourteen days 
later, Joe's Concrete filed an application for attorney fees and costs pursuant 
to W.R.C.P. 54.  The district court 
did not rule on the motion.  Joe's 
Concrete timely appealed from the judgment.

      

 
 

STANDARD 
OF REVIEW

 
 
[¶12]  We review a district court's denial of 
attorney fees for abuse of discretion.  
Ultra Resources, Inc. v. 
Hartman, 2010 WY 36, ¶ 149, 226 P.3d 889, 935 (Wyo. 2010).  A court abuses its discretion only when 
it acts in a manner which exceeds the bounds of reason under the 
circumstances.  Id.  The burden is placed upon the party who 
is attacking the district court's ruling to establish an abuse of discretion, 
and the ultimate issue is whether the court could reasonably conclude as it 
did.  Id.  

  

 
 
DISCUSSION

 
 
[¶13]  Joe's Concrete asserts it was entitled 
to an attorney fees award under the plain terms of the contracts, its Rule 54 
motion was timely and the district court erred in not considering the evidence 
it submitted with its motion.  Joe's 
Concrete further contends the district court improperly disregarded the 
procedures set forth in Rule 54 and denied it a full and fair opportunity to 
prove its attorney fees.  It asserts 
it could not have presented the final fees during trial because work was still 
underway.  

 
 
[¶14]  CWC contends the district court properly 
exercised its discretion in accordance with Rule 54, which allows the court to 
control the manner in which attorney fees are addressed.  CWC asserts the district court made it 
clear that Joe's Concrete would have only one opportunity to present evidence to 
prove its claim.  Thereafter, CWC 
contends, the district court properly declined to consider additional evidence 
attached to pleadings filed after the close of the evidence and conclusion of 
trial.  

 
 
[¶15]  Generally, Wyoming subscribes to the 
American rule regarding recovery of attorney fees, making each party responsible 
for its own attorney fees unless an award of fees is permitted by contract or 
statute.  Garwood v. Garwood, 2010 WY 91, ¶ 32, 
233 P.3d 977, 984 (Wyo. 2010).  In 
this case, the jury found the invoices Joe's Concrete presented to CWC with each 
truckload of concrete constituted contracts and that CWC breached the contracts 
when it failed to pay the invoice amounts in full.  The contracts provided that in the event 
Joe's Concrete was forced to take action to collect on the accounts, CWC would 
be charged for the costs and attorney fees incurred in the collection 
efforts.  Joe's Concrete did, in 
fact, take action to collect on the accounts and a jury awarded it $232,367.25 
in damages.  In accordance with the 
terms of the contracts, CWC was obligated to pay costs and attorney fees.   

 
 
[¶16]  The issue of attorney fees may be 
addressed as an element of damages, or it may be addressed through the filing of 
a post-judgment motion as described in Rule 54.   Garwood, ¶ 24, 233 P.3d  at 983-84.  W.R.C.P. 54(d) provides in pertinent 
part as follows: 

 
 
Rule 
54.  Judgment; 
costs.

. 
. . .

(d) 
Costs; Attorney's 
Fees.

            
. . . .

            
(2) Attorney's Fees.

            
(A) When allowed by law, claims for attorney's fees and related 
nontaxable expenses shall be made by motion unless the substantive law governing 
the action provides for the recovery of such fees as an element of damages to be 
proved at trial.

 . . . .

            
(D) The court may establish special procedures by which issues relating 
to such fees may be resolved without extensive evidentiary hearings.  

  

[¶17]  Pursuant to the language in paragraph 
(A), claims for attorney fees are to be made by motion unless the substantive 
law governing the action provides for their recovery as an element of damages to 
be proved at trial.  Accordingly, in 
Carolina Power & Light Co. v. Dynegy 
Marketing & Trade, 415 F.3d 354, 359 (4th Cir. 2005), where the parties' 
contract provided that legal costs were part of the damages available in the 
event of its breach, the court concluded the attorney fees fell within the 
substantive claim exception to F.R.C.P. 54 and were to be proven at trial, not 
by post-trial motion.  In contrast, 
where the contract at issue provides for the recovery of fees by the prevailing 
party, such fees are not an element of damages to be proved at trial but are 
collateral to the merits of the case requiring a Rule 54(d)(2) motion.  Capital Asset Research Corp. v. 
Finnegan, 216 F.3d 1268, 1270 (11th Cir. 2000).   

 
 
[¶18]  The contracts at issue in the present 
case did not provide that attorney fees were an element of damages to be proved 
at trial nor did they expressly provide that the prevailing party was entitled 
to fees.  The contracts provided 
only that in the event Joe's Concrete was forced to take action to collect on 
the accounts, CWC would be charged for the attorney fees incurred in the 
collection efforts.  However, it is 
logical to conclude the parties intended that CWC, as the buyer, would only be 
obligated to pay attorney fees if Joe's Concrete successfully proved CWC 
actually owed the amounts claimed to be due under the contracts.  In essence, these contracts were 
prevailing party contracts.  As 
contemplated by the contract language, Joe's Concrete was forced to take action 
to collect amounts due on the accounts.  Joe's Concrete filed a breach of contract 
action in which it prevailed.  It 
was, therefore, entitled to recover its fees.  Under these circumstances, we hold that 
the attorney fees were not an element of damages to be proved at trial but were 
collateral to the merits of the case.  

 
 
[¶19]  The case is reversed and remanded with 
instructions that Joe's Concrete is contractually entitled to attorney 
fees.  The district court must 
consider all attorney fees evidence currently contained in the record and 
determine whether:  1) the fee 
charged represents the product of reasonable hours times a reasonable rate; and 
2) other factors of discretionary application should be considered to adjust the 
fee either upward or downward.  Grommet v. Newman, 2009 WY 150, ¶ 63, 
220 P.3d 795, 818 (Wyo. 2009).

            

 
 
 
 
FOOTNOTES

 
 

1Joe's Concrete was purchased by Enercrest, 
Inc.

 
 

2The complaint also alleged claims against Hartford for bad faith handling 
of claims and breach of the covenant of good faith in tort and in contract.  The district court dismissed all claims 
against Hartford.