Case Title: BUDD-FALEN LAW OFFICES, P.C. V. ROCKY MOUNTAIN RECOVERY, INC., a Wyoming Corporation

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 2005-07-13T00:00:00Z

Document:
BUDD-FALEN LAW OFFICES, P.C. V. ROCKY MOUNTAIN RECOVERY, INC., a Wyoming Corporation2005 WY 77114 P.3d 1284Case Number: 04-215Decided: 07/13/2005
APRIL TERM, A.D. 2005

 
 
BUDD-FALEN 
LAW OFFICES, P.C.,

 
 
Appellant

(Defendant),

 
 
v.

 
 
ROCKY 
MOUNTAIN RECOVERY, INC.,

a 
Wyoming Corporation,

 
 
Appellee

(Plaintiff).

 
 

Appeal from theDistrictCourtofLaramieCounty

The 
Honorable E. James Burke, Judge

 
 

Representing 
Appellant:

            
Franklin J. Falen, Karen Budd-Falen, Lloyd D. Richenbach and Brandon 
Jensen of

Budd-Falen 
Law Offices, LLC, Cheyenne, Wyoming; and Thomas R. French of Thomas R. French, 
P.C., Ft. Collins, Colorado.  

 
 

Representing 
Appellee:

            
 Keith R. Nachbar and Patrick 
J. LeBrun of Keith R. Nachbar, P.C., Casper, Wyoming.  

 
 
Before 
HILL, C.J., and GOLDEN, KITE, VOIGT, and BROOKS, DJ.

 
 
KITE, 
Justice.

 
 
[¶1]      Rocky Mountain 
Recovery, Inc., (Rocky Mountain) sought to recover monies Bunn & Associates 
(Bunn) alleged Budd-Falen Law Offices, P.C. (Budd-Falen) owed for court 
reporting transcription services.  
Budd-Falen claimed it was not responsible for payment for the 
transcription services.  The 
district court held otherwise and ordered Budd-Falen to pay transcription fees 
in the amount of $12,113.80 plus prejudgment interest of $2,409.14.  Budd-Falen appealed.  We affirm. 

 
 

[¶2]      Budd-Falen 
presents the following issues:

 
 
A.        
Whether 43 C.F.R. § 4.474(d) limits Budd-Falen Law Offices, P.C.'s 
liability for transcription services to the payment of the actual costs 
associated with delivering a copy of the transcripts to Budd-Falen Law Offices, 
P.C.?

 
 
B.        
Whether Budd-Falen Law Offices, P.C., as an agent for disclosed 
principals, is obligated to Bunn & Associates for transcription services 
provided to Budd-Falen Law Offices, P.C.'s principals by Bunn & 
Associates?

 
 
C.        
Whether questions of fact existed regarding reasonableness which would 
preclude the granting of summary judgment improper?  [sic]

 
 

Rocky 
Mountain 
re-states the issues as follows:

 
 
I.          
Does 43 C.F.R. § 4.474(d) entitle Budd-Falen Law Offices, P.C. to the 
daily e-mailed transcripts for free?

 
 
II.          
Did the District Court correctly find that no genuine issue of material 
fact existed and that under "customary business practices" Budd-Falen Law 
Offices, P.C. agreed to be responsible for the charges for the 
transcripts?

 
 
III.         
Did the District Court correctly find that no genuine issue of material 
fact existed regarding the reasonableness of the amount charged for the court 
reporting services?

 
 
IV.        
Should Appellee be awarded its attorney's fees and costs necessary for 
defending the Appellant's frivolous appeal?

 
 
 
 

[¶3]      Budd-Falen 
represented eight clients in an appeal to the Hearings Division of the Office of 
Hearings and Appeals of the Department of Interior (OHA).  OHA hired Bunn to transcribe the 
thirteen-day hearing.  During the 
course of the hearing, Budd-Falen ordered and received daily e-mail copies of 
the hearing transcripts on a next day delivery basis. 

 
 
[¶4]      After the hearing 
and the completion of its services, Bunn submitted bills to OHA and Budd-Falen 
for its services.  OHA paid its 
bill.  Budd-Falen did not, claiming 
that it was not responsible to Bunn for payment of the daily e-mail copies of 
the hearing transcript ordered by Karen Budd-Falen.  After further efforts to obtain payment 
failed, Bunn hired RockyMountain to collect the amount owing from 
Budd-Falen. 

 
 
[¶5]      On July 22, 2003, 
RockyMountain filed a complaint 
against Budd-Falen for breach of contract alleging the firm received services 
from Bunn valued at $14,013.22, which it refused to pay.  RockyMountain sought payment of the amount 
allegedly owed plus interest in the amount of $801.04 and the $75.00 cost of 
filing the complaint.  Budd-Falen 
answered and moved for summary judgment asserting that:  1) as an agent of disclosed principals 
(i.e., its clients) it was not liable for the contract entered into on behalf of 
the principal; 2) the purchase order between OHA and Bunn failed to state the 
amount interested parties such as Budd-Falen would be charged for copies of the 
transcript as required by 43 C.F.R. §4.23, and because of that failure, Bunn was 
not entitled to recover any amount; and, 3) Rocky Mountain was not entitled to 
recover attorney's fees. 

 
 
[¶6]      Rocky Mountain 
also moved for summary judgment, contending simply that Budd-Falen and Bunn 
entered into a contract when Karen Budd-Falen, an attorney acting on behalf of 
the firm, asked Bunn during the hearing to provide her with daily copies of the 
hearing transcript on a next day delivery basis; the court reporter told her 
this service would be expensive; Ms. Budd-Falen asked her to provide the 
transcripts anyway; and the court reporter provided the service as 
requested.  Budd-Falen filed a 
response asserting that RockyMountain failed to demonstrate the absence 
of a genuine issue of material fact on its contract claim and reasserting its 
agency claim. 

 
 
[¶7]      The district 
court held a scheduling conference and heard argument on the cross motions for 
summary judgment on March 10, 2004.  
At that time, RockyMountain moved to amend its complaint to 
add claims for unjust enrichment and promissory estoppel.  The district court granted the motion, 
RockyMountain filed its amended 
complaint and Budd-Falen answered.  The district court then gave the parties 
until April 27, 2004, to file briefs supplementing their summary judgment 
motions.  RockyMountain filed a supplemental memorandum 
on April 28, 2004, in which it presented arguments in support of its unjust 
enrichment and promissory estoppel claims.1  Budd-Falen did not file a supplemental 
memorandum pursuant to the district court's order.  On June 2, 2004, however, Budd-Falen 
filed a motion for leave to file a response to RockyMountain's supplemental memorandum.  The motion contained the response 
Budd-Falen sought leave to file.  In 
the response, Budd-Falen argued summary judgment was not appropriate on 
RockyMountain's unjust 
enrichment claim because, under its agency claim, the clients, not the 
attorneys, were the party to be charged for the transcription services.  Budd-Falen contended summary judgment 
likewise was improper on the promissory estoppel claim because the evidence was 
disputed as to whether Karen Budd-Falen promised Bunn the law firm would pay for 
the transcription services.  Like 
its other filings up to this point, Budd-Falen's response focused on the 
contention that its clients were responsible for payment for the services.   

 
 
[¶8]      On June 9, 2004, 
the district court conducted a pretrial conference.  The following day, stating that the 
district court asked at the pretrial conference about the custom and usage for 
payments to court reporters in federal grazing appeals, Budd-Falen submitted 
supplemental authority citing 43 C.F.R. §4.476 and contending under that 
regulation the federal government was responsible for the reporter's fees and 
Budd-Falen was responsible only for the actual cost of copies furnished at its 
request.  This was the first time 
Budd-Falen cited the federal regulation as a basis for resolving the 
dispute.  RockyMountain moved to strike the supplemental 
authority as untimely. 

 
 
[¶9]      Several days 
later the district court entered an order granting summary judgment in favor of 
RockyMountain and ordering 
Budd-Falen to pay $12,113.80, the total amount charged for the transcripts, plus 
interest in the amount of $2,409.14 and costs.  In its order, the district court 
concluded a contract was formed between Budd-Falen and Bunn, the customary 
business practice was for the attorney to pay costs unless there was a specific 
agreement stating otherwise, the reasonable cost for the transcript was the 
$3.10 per page for testimony and $1.00 per page for concordance billed by Bunn, 
and Budd-Falen was liable for that amount plus interest and costs. 

 
 
[¶10]   Budd-Falen appealed to this Court 
from the summary judgment order.  In 
its opening brief, filed November 24, 2004, Budd-Falen asserted three 
issues.  As reflected in the 
statement of issues set out above in this decision, Budd-Falen's first issue was 
whether the federal regulations limited the law firm's liability to the actual 
cost of copies of the transcripts.  
In support of this argument, Budd-Falen cited the federal regulations and 
the Supremacy Clause of the United States Constitution.  Its opening brief cited no other 
authority supporting its argument.  
Budd-Falen's second issue was whether the law firm, as an agent of 
disclosed principals, was liable for any payment to Bunn. 

 
 
[¶11]   On January 21, 2005, after 
RockyMountain filed its 
appellate brief, Budd-Falen filed a twenty-seven page reply brief.2  For the first time in the entirety of 
this case, Budd-Falen cited case law and other authorities in support of its 
argument that the federal regulations controlled the outcome of this dispute and 
limited its liability to the actual costs of copies of the transcript. 3  

 
 
[¶12]   Three and a half months after 
filing its brief, after RockyMountain filed its responsive brief, and 
just five days before oral argument, Budd-Falen withdrew the second issue, the 
agency claim, from consideration by this Court.  The only issues orally argued before 
this Court were Budd-Falen's claims that the federal regulations limited its 
liability to actual costs and questions of fact existed on the reasonableness of 
the charges.  

 

            

[¶13]   We review orders granting summary 
judgment according to the following standards:

 
 
            
Summary judgment is appropriate when no genuine issue as to any material 
fact exists and the prevailing party is entitled to judgment as a matter of 
law.  A genuine issue of material 
fact exists when a disputed fact, if it were proven, would have the effect of 
establishing or refuting an essential element of the cause of action or defense 
which the parties have asserted.  We 
examine the record from the vantage point most favorable to the party who 
opposed the motion, and we give that party the benefit of all favorable 
inferences which may fairly be drawn from the record.  We evaluate the propriety of a summary 
judgment using the same standards and materials as the lower court used.  We do not accord deference to the 
district court's decisions on issues of law.

 
 

Cordero 
Mining Co. v. United States Fidelity and Guar. Ins. Co., 2003 
WY 48, ¶8, 67 P.3d 616, ¶8 (Wyo. 2003) (citation omitted).

 
 
 
 

 
 
1.         
The Reply Brief

 
 
[¶14]   We begin our discussion with an 
issue not raised by either party.  
Wyo. R. App. P. 7.03 governs reply briefs and provides in pertinent part 
as follows:

 
 
. . . 
the reply brief shall precisely and concisely set forth on the first page those 
new issues and arguments raised by the brief of the appellee which are 
addressed in the reply brief. A reply brief is limited to such new issues and 
arguments, and a failure to comply with these requirements may subject the 
party to sanctions under these rules.  

 
 
[¶15]   This rule very clearly limits reply 
briefs to new issues and arguments raised in the appellee's brief.  RockyMountain raised only one new issue in its 
brief, that is, whether it was entitled to an award of attorney's fees and costs 
for defending a frivolous appeal.  
Yet, Budd-Falen filed a lengthy reply brief in which it devoted nearly 
twenty-three pages to arguing, really for the first time, issues that it failed 
to adequately address either earlier in this appeal or in the district 
court.  Only three pages of the 
reply brief are responsive to the new issue raised by RockyMountain.

 
 
[¶16]   In Furman v. Rural Electric 
Co., 869 P.2d 136, 139 (Wyo. 1994), this Court disregarded a reply 
brief that did nothing more than re-emphasize and re-examine the arguments 
contained in the opening brief.  We 
concluded the brief violated the clear directive of Rule 7.03 that reply briefs 
be limited to new issues and arguments.  
See also Slagle v. Wyoming State Board of Nursing, 954 P.2d 979, 980 (Wyo. 
1998).  More recently, we said, "a 
reply brief is not a second chance to raise an issue or present argument that 
the appellant had the responsibility, but failed, to address in its opening 
brief."  Ultra Resources, Inc. v. 
McMurry Energy Co., 2004 WY 121, ¶11, 99 P.3d 959, ¶11 (Wyo. 2004). 

 
 
[¶17]   To the extent Budd-Falen's reply 
brief addresses the new issue of attorney's fees and costs for a frivolous 
appeal, we will consider it.  We 
disregard the remainder of the reply brief because it presents argument that 
Budd-Falen had the opportunity and responsibility to address in its opening 
brief.  Rule 7.03 does not allow a 
party who fails to cite authority or adequately present argument in its opening 
brief to cure these deficiencies by filing a reply brief.

 
 
 
 

2.         
43 C.F.R. §§4.23 and 4.476(d)   

 
 
[¶18]   The focus of Budd-Falen's claim in 
the district court was the issue it raised on appeal and then withdrew  as an 
agent for disclosed principals, the law firm was not liable for payment of the 
court reporter services.  It was not 
until late in the proceedings, after the summary judgment hearing and the 
summary judgment briefs were filed, that Budd-Falen brought to the district 
court's attention the federal regulations upon which it relies now.  Perhaps because the federal regulations 
were raised late and were not addressed in the summary judgment briefs or at the 
hearing, the district court's ruling focused on the disclosed principals 
argument and did not address the issue that has become the focus of Budd-Falen's 
claim on appeal.  Generally, we are 
reluctant to consider issues not addressed by the district court.  See Wyoming Bank and Trust v. 
Haught, 2003 WY 111, ¶15, 76 P.3d 301, ¶15 (Wyo. 2003) (case remanded where 
claim was raised but district court did not address it.)  In the present case, however, 
interpretation of the federal regulations is a matter of law and we proceed with 
the review.   

 
 
[¶19]   Budd-Falen asserts that it was not 
responsible for payment of transcription services provided by Bunn because the 
federal regulations governing the question provide that the reporter's fees 
shall be borne by the government and other parties requesting copies are 
obligated only for the cost of the copies.  
Budd-Falen contends, without citation of any authority other than the 
regulation, that the costs it was required to pay were the actual costs incurred 
by Bunn in e-mailing the copies to Karen Budd-Falen.  Budd-Falen asserts, again without 
citation of authority, that the $3.10 per page Bunn billed for the email copies 
constituted "fees" within the meaning of the regulation for which the government 
was responsible.  Budd-Falen further 
asserts the district court erred in relying on state contract law principles 
because federal law controls.

 
 
[¶20]   In response, RockyMountain argues first that this Court 
should not consider Budd-Falen's argument given its perfunctory citation to the 
regulations without citation to any other authority interpreting the language 
contained in them.  RockyMountain also questions the relevancy of 
the federal regulations to the common law contract entered into by Budd-Falen 
and Bunn.  Even assuming the 
regulations are relevant, RockyMountain asserts their plain language 
supports Bunn's right to charge and collect for the copies of the transcripts 
Budd-Falen ordered. 

 
 
[¶21]   The federal regulations Budd-Falen 
cites state as follows: 

 
 
Hearings 
will be recorded verbatim and transcripts thereof shall be made when requested 
by interested parties, costs of transcripts to be born by the requesting 
parties. Fees for transcripts prepared from recordings by Office of Hearings and 
Appeals employees will be at rates which cover the cost of manpower, machine use 
and materials, plus 25 percent, adjusted to the nearest 5 cents. If the 
reporting is done pursuant to a contract between the reporter and the Department 
of the Interior Agency or office which is involved in the proceeding, or the 
Office of Hearings and Appeals, fees for transcripts will be at rates 
established by the contract.

 
 
43 
C.F.R. §4.23 (2005).

 
 
(d)  The reporter's fees shall be borne by 
the Government. Each party shall pay for any copies of the transcript obtained 
by him. Unless the parties stipulate to a summary of the evidence, the 
Government will file the original copy of the transcript with the case 
record.       

 
 
43 
C.F.R. §4.476(d) (2005).  Other than 
quoting these provisions, Budd-Falen presented no case law or other authority 
defining the terms "costs" and "fees" as used in the regulations.  Budd-Falen also submitted no affidavit 
or other evidence showing what the custom and practice has been by the Bureau of 
Land Management, court reporters or other parties involved in similar federal 
administrative appeals.  Budd-Falen 
provided this Court with no assistance in interpreting the particular federal 
regulations upon which it relies and our research discloses no cases or other 
authority defining the terms "costs" and "fees" as used in these 
regulations.  We turn, therefore, to 
consideration of the meaning of the terms "costs" and "fees" in common usage. 

 
 
[¶22]   The fallacy we see in Budd-Falen's 
argument lies in its interpretation of the term "costs" as narrowly limited to 
the amount it actually cost Bunn (i.e. the out of pocket expense) to provide 
daily copies of the transcripts to Budd-Falen.  The term "costs" generally has a broader 
meaning than that to which Budd-Falen would have us subscribe.  Merriam-Webster Collegiate Dictionary 
(10th ed.) defines the term as:  

 
 
1 a : 
the amount or equivalent paid or charged for something: PRICE b. the outlay or 
expenditure (as of effort or sacrifice) made to achieve an object 

2 : loss 
or penalty incurred especially in gaining something

3 
plural : expenses incurred in litigation; especially 
: those given by the law or the court to the prevailing party against the 
losing party  

 

Although 
Black's Law Dictionary (6th ed.) confines its definition of "costs" 
to:  "a pecuniary allowance, made to 
the successful party (and recoverable from the losing party), for his expenses 
in prosecuting or defending an action," Black's recognizes in that context that 
the term may include "specified fees and certain court expenses" and is not 
limited to actual costs in the sense that Budd-Falen suggests.  Fed. R. Civ. P. 54(d) expressly allows 
for the recovery of costs other than attorneys fees.  Included among the costs that a federal 
judge may order a prevailing party to pay under 28 USCS §1920(2) (2005) are 
"fees of the court reporter for all or any part of the stenographic transcript 
necessarily obtained for use in the case."  
"Costs" in federal litigation typically are defined by reference to 28 
USCS §1920 and, therefore, include items such as court reporter fees.  Knight v. Snap-On Tools Corp., 3 F.3d 1398, 1404 (10th Cir. 1993).  Given the meaning of "costs" in common 
usage and in federal proceedings, we hold the term "costs" includes the amount 
charged by Bunn for providing copies of the hearing transcripts on a daily 
basis.

 
 
 
 
3.         
Reasonableness of Charges 

 
 
[¶23]   Budd-Falen next argues that 
questions of fact precluding summary judgment existed concerning the 
reasonableness of Bunn's bill.  The 
crux of Budd-Falen's argument is that reasonableness is necessarily a question 
of fact.  RockyMountain responds that Bunn presented 
evidence of reasonableness by way of affidavit, which evidence went unchallenged 
by Budd-Falen.  Having failed to 
present evidence demonstrating a genuine issue of material fact, RockyMountain asserts, Budd-Falen left the 
district court no choice but to grant summary judgment on the issue of 
reasonableness. 

 
 
[¶24]   Ordinarily, the question of 
reasonableness is one of fact.  
Gainsco Ins. Co. v. Amoco Production Co., 2002 WY 122, ¶10, 53 P.3d 1051, ¶10 (Wyo. 2002).  
However, where there are no genuine issues of fact concerning 
reasonableness, summary judgment is appropriate. Id.  
RockyMountain submitted evidence 
that the amount charged by Bunn was reasonable.  Budd-Falen presented no evidence to the 
contrary.  Therefore, no genuine 
issue of material fact existed as to the reasonableness of the charges.  We hold the district court properly 
granted summary judgment.

 
 
 
 
4.         
Sanctions

 
 
[¶25]   RockyMountain asserts it should be awarded 
attorney's fees and costs for defending a frivolous appeal pursuant to W.R.A.P. 
10.05, which provides in relevant part as follows: 

 
 
If the 
court certifies there was no reasonable cause for the appeal, a reasonable 
amount for attorney's fees and damages to the appellee shall be fixed by the 
appellate court and taxed as part of the costs in the case. The amount for 
attorneys' fees shall not be less than one hundred dollars ($100.00) nor more 
than five thousand dollars ($5,000.00). The amount for damages to the appellee 
shall not exceed two thousand dollars $2,000.00). 

 
 

Rocky 
Mountain asked 
for attorney's fees and costs based upon Budd-Falen's failure to provide 
authority or cogent argument supporting its claim under the federal regulations 
or to establish the existence of a genuine issue of material fact concerning 
customary business practices and the reasonableness of the court reporter's 
charges.

 
 
[¶26]   We are reluctant to award 
attorney's fees and damages under Rule 10.05 and do so only in rare 
circumstances.  Drake v. 
McCulloh, 2002 WY 50, ¶24, 43 P.3d 578, ¶24, (Wyo. 2002).  While we are unimpressed by Budd-Falen's 
minimal and belated efforts in this case, we are not prepared to say its appeal 
from a summary judgment order involving questions of reasonableness was without 
reasonable cause.  However, the 
manner in which Budd-Falen approached this case from beginning to end has 
resulted in unnecessary legal expense.  
Its failure to investigate the practice for payment of transcripts in 
federal grazing appeals or to adequately present argument on the issue until 
late in these proceedings was problematic.  
Additionally, the withdrawal of its agency claim after the briefing was 
completed and only days before argument resulted in unnecessary expense.  It is difficult to imagine what led to 
withdrawal of the issue then that could not have been discovered with the 
exercise of due diligence earlier.  
We hold that RockyMountain is entitled to attorney's fees 
and costs for the time and effort expended in responding to Budd-Falen's agency 
argument. 

 
 
 
 

CONCLUSION

 
 
[¶27]   The district court's order granting 
summary judgment is affirmed.  We 
impose sanctions upon Budd-Falen.  
RockyMountain shall submit a 
statement of costs and attorney's fees associated with responding to the agency 
argument.  Upon review, we will 
award an appropriate amount in the form of sanctions.

   

 
 
 
 

FOOTNOTES

1The 
certificate of service on the memorandum was dated April 27, 
2004.

2Budd-Falen's 
opening brief was eighteen pages.

3Budd-Falen's 
opening brief contained a table of authorities consisting of two pages and 
twenty-four citations, only three of which related to its claim that the federal 
regulations limited its liability to actual costs.  In contrast, the table of authorities in 
Budd-Falen's reply brief consisted of five pages and seventy-three citations, 
twenty-five of which pertain to its federal regulations claim.