Case Title: Morgan v. Galilean Health Enterprises, Inc.

Citation: 

Docket Number: 88957

State: oklahoma

Court: Oklahoma Supreme Court

Date: 1998-12-22T00:00:00Z

Document:
Morgan v. Galilean Health Enterprises, Inc.  Morgan v. Galilean Health Enterprises, Inc. 1998 OK 130 977 P.2d 357 70 OBJ 59 Case Number: 88957 Decided: 12/22/1998 Modified: 12/22/1998 Mandate Issued: 05/28/1999 Supreme Court of Oklahoma MARILYN MORGAN, as Guardian of DONALD WAYNE QUINTON, Plaintiff-Appellee, v. GALILEAN HEALTH ENTERPRISES, INC., d/b/a BEGGS LIVING CENTER and JOHN DOE, Defendant-Appellant. ON APPEAL FROM THE DISTRICT COURT, OKMULGEE COUNTY; John Maley, Trial Judge. ¶0 Marilyn Morgan brought suit against Galilean Health Enterprises, Inc., d/b/a Beggs Living Center, a nursing home, and John Doe, for abuse and neglect of her ward, Donald Quinton. Trial culminated in a general jury verdict for the plaintiff, awarding her both compensatory and punitive damages. In a postjudgment proceeding, the trial court granted plaintiff a counsel-fee award, prejudgment interest, and costs. By stipulation of the parties, this appeal, retained for disposition by this court, stands confined to assigned errors in granting the counsel-fee award and in basing the amount of that award solely on a contingent-fee contract between the plaintiff and her counsel. THE TRIAL COURT'S JUDGMENT ON JURY VERDICT IS AFFIRMED PURSUANT TO THE PARTIES' STIPULATION; THE POSTJUDGMENT COUNSEL-FEE AWARD IS REVERSED AND THE PLEA FOR THAT ANCILLARY RELIEF REMANDED FOR FURTHER PROCEEDINGS TO BE CONSISTENT WITH TODAY'S PRONOUNCEMENT. Ray H. Wilburn, Scott R. Taylor, Wilburn, Masterson & Smiling, Tulsa, Oklahoma, for Appellant. Stratton Taylor, Vani Singhal, Taylor, Burrage, Foster & Singhal, Claremore, Oklahoma, for Appellee. Karen M. Grundy, Best, Sharp, Holden, Best, Sullivan & Kempfert, Tulsa, Oklahoma, for Amici Curiae, Eufala Manor Nursing Home, Oklahoma Nursing Homes, Ltd., and Ranch Terrace Nursing Homes, Inc. OPINION OPALA, J. ¶1 The issues presented on appeal are: (1) Is the plaintiff entitled to a prevailing-party counsel-fee award authorized by the provisions of the Nursing Home Care Act ( the "Act") I THE ANATOMY OF LITIGATION ¶2 Marilyn Morgan ("Morgan"), guardian of Donald Wayne Quinton ("Quinton"), brought this action against Galilean Health Enterprises, Inc., d/b/a Beggs Living Center, and John Doe, ("Galilean"), alleging that Galilean had been negligent in caring for Quinton, a mentally impaired individual, who was a resident of the Beggs Living Center. In August of 1993, Quinton suffered serious personal injuries as a result of an apparent beating. Morgan claimed that Galilean failed to prevent the abuse and neglected to secure prompt medical attention for Quinton's injuries. ¶3 The court instructed the jury that, with respect to Quinton's care, Galilean was subject to certain statutory duties imposed by the Act. ¶4 Morgan moved for a postjudgment award of an attorney's fee. The trial court ruled that because "violations of the Act" were in issue at trial, Morgan was entitled to a prevailing-party counsel-fee award. ¶5 Before this court reached Galilean's appeal for decision, the parties settled the obligation imposed by the underlying judgment. By their stipulation, appellate review is now confined to whether plaintiff is entitled to a counsel-fee award, and if so, whether its quantum is legally correct. ¶6 We hold that (a) this action was submitted to the triers not solely as a common-law tort, but also as a breach of duties imposed by the Act, and (b) the trial court, in granting a prevailing-party counsel-fee award, erred in allowing the contingent-fee contract (between the plaintiff and her counsel) to serve as the sole basis for calculating the amount of the attorney's fee. II MORGAN'S LAWSUIT WENT TO THE JURY NOT SOLELY AS A COMMON-LAW TORT, BUT ALSO AS A BREACH OF DUTIES IMPOSED BY THE ACT ¶7 Galilean argues that Morgan's suit was tried as a common-law negligence action, not as a claim for breached duties imposed by the Act. It contends that the Act's provisions that relate to an attorney's fee award are hence unavailable to Morgan. We must disagree. In its Instruction No. 11, the court clearly charged the jury that it could consider whether Galilean had breached duties owed to Quinton under the Act. III THE ACT EXPLICITLY CREATES A STATUTORY TORT WITH A PRIVATE RIGHT OF ACTION ¶8 We turn now to whether the inclusion of Instruction No. 11 may in this case serve as authority for an attorney's-fee award. In that instruction, the court charged that, apart from the common-law duties owed to Quinton, Galilean was also bound by certain statutory obligations. The instruction then quoted portions of three of the eighteen "rights" conferred by the Act on nursing home residents (the "Nursing Home Patients' Bill of Rights"). ¶9 WRG Construction v. Hoebel ¶10 The episode that formed the basis for Morgan's claim is one of the scenarios for which the Act plainly intends to provide a remedy. By stipulation of the parties, no corrective relief may now be sought from the judgment (on jury verdict), the terms of which imposed liability on Galilean for the breach of statutory duties owed to Quinton. IV THE ACT AUTHORIZES THE PREVAILING PARTY IN A PRIVATE SUIT FOR BREACH OF A DUTY PRESCRIBED BY THE ACT TO RECOVER AN ATTORNEY'S FEE FROM THE VANQUISHED OPPONENT ¶11 When called upon to assess litigation expenses, we continue to stand firmly committed to the American Rule. Subsection F of § 1-1918 " . . . If a violation or threatened violation of this section shall be established in any action, the court shall enjoin and restrain or otherwise prohibit the violation or threatened violation and assess in favor of the plaintiff and against the defendant the cost of the suit, and the reasonable attorney fees incurred by the plaintiff. . . ." (Emphasis added) We regard the phrase "a violation . . . established in any action" as sufficiently broad to mean that costs, including a reasonable attorney's fee, are the victor's due when any statutorily authorized remedy for redress under the Act is successfully prosecuted. V THE QUANTUM OF AN ATTORNEY'S-FEE AWARD ASSESSED AGAINST A LOSING LITIGANT CANNOT REST UPON A CONTRACT BETWEEN THE PREVAILING PARTY AND THAT PARTY'S LAWYER, BUT MUST RATHER BE BASED UPON THE REASONABLE VALUE OF NECESSARY LEGAL SERVICES PROVIDED TO THE PREVAILING PARTY IN THE ACTION ¶12 Having determined that the trial court was duty-bound to award the victor an attorney's fee, we proceed to examine whether the quantum awarded was correct. On this record we must hold that it is not. ¶13 First, the trial court erred in resting its calculation of the attorney's fee award on the contingency-fee contract between Morgan and her counsel, a contract to which Galilean was a stranger. A fee contract is a matter between the client and the attorney. The amount due under that contract may not serve as a basis for computing an attorney's fee award against the unsuccessful party. It merely reflects the value of those services to the parties bound by that agreement inter se. ¶14 Second, an attorney's fee must in every instance be reasonable. ¶15 Third, unless the prevailing party and the losing litigant tender a stipulated sum as the quantum to be awarded, ¶16 In Burk, we imposed upon lawyers the obligation to provide for the trial court the data necessary to document the method used to arrive at an attorney's-fee award. Lawyers must present to the trial court detailed time records showing the work performed together with evidence of the reasonable value of different types of legal work based on local standards. ¶17 The record is crystal-clear that the award here was based solely upon the provisions of the contingent-fee contract (between Morgan and her counsel). ¶18 On review of any nisi prius counsel-fee award made to a prevailing party, this court is utterly dependent on the proof adduced below in an adversary proceeding. Where as here the fee to be paid by the loser was set entirely by criteria of recovery facially shown not to be permissible -- the victor's contingent-fee contract with her lawyer -- the award is erroneous as a matter of law and must be reversed for want of requisite evidentiary support. In short, this award's reasonableness cannot be tested for want of a record. VI SUMMARY ¶19 The Act (a) creates a statutory tort with a private right of action conferred on harmed patients and (b) provides for the prevailing party's recovery of an attorney's fee in a claim for breach of a statutory duty. The correct measure of recovery under a statute authorizing a counsel-fee award to the victor is the reasonable value of necessary legal services rendered to the prevailing party. The contingent-fee arrangement is just one of many factors that may be considered in determining the reasonable quantum to be awarded, but the amount of the contingent fee (that would be due to counsel for the winner under their contingent-fee contract) may not be used as determinative of the reasonable value of the services for which the award is to be made. ¶20 The error on which we reverse today is shown on the face of the award's memorial. It consists of using the wrong criteria, to the exclusion of those which are legally required, to calculate the recovery sought. In short, we are unable to tell, for want of a record, whether the quantum of the fee allowed is consistent with the reasonable value of the legal services necessarily rendered on behalf of the victorious litigant. ¶21 THE TRIAL COURT'S JUDGMENT ON JURY VERDICT IS AFFIRMED PURSUANT TO THE PARTIES' STIPULATION; THE POSTJUDGMENT COUNSEL-FEE AWARD IS REVERSED AND THE PLEA FOR THAT ANCILLARY RELIEF REMANDED FOR FURTHER PROCEEDINGS TO BE CONSISTENT WITH TODAY'S PRONOUNCEMENT. ¶22 KAUGER, C.J., SUMMERS, V.C.J., and HODGES, LAVENDER, HARGRAVE, OPALA, WILSON, and WATT, JJ., concur; ¶23 SIMMS, J., dissents. FOOT