Case Title: SPENCER v. OKLAHOMA GAS & ELECTRIC COMPANY

Citation: 

Docket Number: 103404

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2007-10-09T00:00:00Z

Document:
SPENCER v. OKLAHOMA GAS & ELECTRIC COMPANY  SPENCER v. OKLAHOMA GAS & ELECTRIC COMPANY 2007 OK 76 171 P.3d 890 Case Number: 103404 Decided: 10/09/2007 THE SUPREME COURT OF THE STATE OF OKLAHOMA THERESA SPENCER, Plaintiff/Appellant, v. OKLAHOMA GAS & ELECTRIC COMPANY, Defendant/Appellee. CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION I ¶0 A disabled mother of three, the plaintiff/appellant, Theresa Spencer (Spencer/customer), filed an application for housing assistance. Because the defendant/appellee, Oklahoma Gas and Electric Company (OG&E/electric company), refused to open an account in Spencer's name, the application was denied. The electric company asserted that the customer had an outstanding balance on a 2002 account of $483.32. Spencer filed suit seeking a declaration that, having paid the account in full, she did not owe the electric company any further monies joined with a plea for damages. After a year of litigation, OG&E offered to confess judgment in the amount of $5,000.00, exclusive of costs and attorney fees. After accepting the offer, Spencer sought $8,775.37 in attorney fees and costs. OG&E opposed the award and countered for an award of attorney fees and costs in its favor. The trial court awarded Spencer $2,500.00 in attorney fees and the Court of Civil Appeals affirmed. We determine that: 1) the failure to follow the directives of Burk v. Oklahoma City, COURT OF CIVIL APPEALS OPINION VACATED; TRIAL COURT AFFIRMED IN PART AND REVERSED IN PART; REMANDED FOR DETERMINATION OF APPEAL AND CERTIORARI RELATED ATTORNEY FEES. Jerry L. Colclazier, COLCLAZIER & ASSOCIATES, Seminole, Oklahoma, for plaintiff/appellant, William P. Tunell, RAINEY, ROSS, RICE & BINNS, P.L.L.C., Oklahoma City, Oklahoma, for defendant/appellee. WATT, J.: ¶1 To dispose of the certiorari petition, we must resolve two issues. The first is whether the trial court abused its discretion in reducing the requested attorney fees of $8, 775.37 by more than $6,000.00. It is apparent from the transcript of the hearing on the attorney fees issue that: 1) there was no real attempt to determine the amount to be awarded under the standards of Burk v. Oklahoma City, ¶2 The second issue requiring resolution is the appropriate fee to be awarded for Spencer's representation in the underlying cause. Under the facts and the evidence presented, we hold that $7,104.50 in attorney fees should be awarded as costs against OG&E. FACTS a. Underlying cause. ¶3 The facts of the underlying action are highly disputed. Nevertheless, it is uncontested that Spencer, a disabled mother of three, paid her account with the electric company in full on November 13, 2002. The debt of approximately $484.00 was paid in cash for which the customer received a receipt. Two years later, Spencer applied for housing assistance. ¶4 In January of 2005, Spencer filed suit seeking a declaration that she had paid her debt in full to OG&E and requesting damages. OG&E answered in March raising affirmative defenses of insufficient service, unclean hands, limitations, failure to mitigate, Spencer's negligence and federal preemption. In addition, OG&E counterclaimed for breach of contract alleging that, at the customer's request, the cash payment had been refunded and replaced with her personal check which was returned for insufficient funds. The electric company sought payment for the outstanding bill. OG&E's answer and amended answer and counterclaim were followed a month later with a motion to dismiss adding arguments of improper venue and lack of authority to award damages in a declaratory judgment action. Attached to the motion to dismiss is an affidavit of an OG&E employee explaining the activity report of the electric company indicating that Spencer made the cash payment on her account, requested its reversal and substituted a check which was returned dishonored. The record contains a copy of Spencer's cash receipt. b. Attorney fees issue. ¶5 On May 19, 2005, the trial court overruled OG&E's motion to dismiss. A year after the customer filed her petition, the electric company offered to confess judgment in the amount of $5,000.00 exclusive of "any costs or attorney fees." ¶6 In the alternative, OG&E asserted that Spencer's application for attorney fees lacked trustworthiness. The assertion was based on discrepancies existing between the submitted request and a draft billing statement Spencer provided to OG&E on January 26, 2006. ¶7 The hearing on Spencer's attorney fees and costs application was held on April 21, 2006. The trial court found that Spencer was entitled to attorney fees under ¶8 At the hearing, Spencer's attorney testified as to the reasonableness of his hourly rate of $180.00 for out of court time and $250.00 for court appearances. The attorney also explained the differences between the draft statement submitted to OG&E and the statement submitted with his application for attorney fees as having resulted from computer difficulties in his office requiring him to reconstruct the statement from his office records. The attorney testified that the reformulated statement was extremely accurate and that he believed the 47.68 hours reflected in the statement were reasonable, especially considering the electric company's statements indicating they had a minimum of 125 hours of attorney time invested in the cause. ¶9 The trial court announced its decision at the conclusion of the hearing, listing the factors to be considered under Burk v. Oklahoma City, ¶10 Spencer appealed asserting that the trial court abused its discretion in reducing the requested attorney fees over $6,000.00 and arguing that, rather than being reduced, the requested attorney fees should have been increased under Burk v. Oklahoma City, ¶11 a. The failure to follow the directives of Burk v. Oklahoma City in setting the attorney fees and to make an award consistent with the evidence presented constitutes an abuse of discretion requiring reversal ¶12 Spencer asserts that the trial court abused its discretion in reducing the requested fee of $8,775.37 by more than $6,000.00. OG&E argues that there was no abuse of discretion and that the award should stand. We disagree with the electric company's contention. 1) Burk analysis. ¶13 A trial court's attorney fees award is reviewed for abuse of discretion. ¶14 The factors set out in Burk v. Oklahoma City are: time and labor required; novelty and difficulty of the questions; skill requisite to perform the legal service; preclusion of other employment; customary fee; whether the fee is fixed or contingent; time limitations; amount involved and results obtained; experience, reputation and ability of the attorneys involved; risk of recovery; nature and length of relationship with the client; and awards in similar causes. An attorney seeking an award must submit detailed time records and offer evidence of the reasonable value of the services performed based on the standards of the legal community in which the attorney practices. ¶15 In Burk, we set forth the following directive to trial courts: A particular word of caution to the trial judges of Oklahoma is here warranted. When a question on appeal presents the issue of reasonableness of attorney's fees awarded by the court, abuse of discretion by the trial judge is the standard of review. Therefore, the trial court should set forth with specificity the facts, and computation to support his award. While the compensatory fee is not all that difficult a problem on review if the trial court has made findings into the record regarding hours spent and reasonable hourly rates, the value placed on additional factors will be different in each case. Obviously, the reasonable value to be given for incentive fees should bear a reasonable relationship to the aggregate hourly compensation. Here, the trial court listed the Burk factors in making his ruling. 2) Evidence relating to the attorney fees issue. ¶16 Neither party presented an independent witness to testify on the appropriate hourly rate to be charged for attorney fees. Spencer's attorney testified that he had been practicing law for seventeen years and that his rates of $180.00 per hour for out of court time and $250.00 per hour for court appearances were appropriate, reasonable and consistent with the rates of other attorneys in the Seminole area. ¶17 Considering Spencer's proposed in court and out of court hourly rates applied to the reconstructed billing statement, the amount sought as attorney fees is $8,775.37. If only the lower of the two hourly rates presented by Spencer is applied to all time expended, the attorney fee award would be $8,582.40. Applying OG&E's proposed hourly rate, the award would be $6,606.64. When the rates as proposed by Spencer are accepted and applied to the draft statement, which OG&E insists is the more accurate estimation of the time involved in the case, the award would be $5,325.37. Finally, if the $840.00 billed for time expended on a motion to vacate judgment entered when the attorney failed to appear at the disposition docket is subtracted from this total, the proposed attorney fees would be reduced to $4,487.37. ¶18 None of the proposed amounts, ranging from almost $9,000.00 to a low of approximately $4,500.00, bears any rational relationship to the trial court's award of $2,500.00. When divided by the hours Spencer had in the case, the amount awarded is less than $53.00 per hour for attorney time, one-third of the hourly rate proposed for a rural attorney in the Tulsa area by OG&E, and a rate considered reasonable by this Court almost thirty years ago. ¶19 b. Under the facts and evidence presented, $7,104.50 in attorney fees should be awarded to the customer. 1) Lodestar fee. ¶20 We now turn to the issue of the attorney fees to be awarded. As noted Spencer sought $8,775.57 in attorney fees before the trial court. OG&E argued that no attorney fees should be awarded. In the alternative, it asserted that the requested amount be reduced by $3,450.00 for discrepancies between its draft statement and the reconstructed statement necessitated by a computer crash. The electric company also contended that Spencer's attorney should not be allowed to bill for $840.00 resulting from his negligence in the necessity of the filing of a motion to vacate after missing a disposition docket. Had the trial court accepted the figures OG&E proffered, the net amount of attorney fees award would have been $4,487.37. ¶21 The time expended by Spencer's attorney, 47.68 hours, is less than half of the 125 hours counsel for OG&E admits were put into the cause. The only evidence presented by Spencer on the hourly rate charged was the testimony of her attorney that he charged hourly rates of $180.00 for out of court time and $250.00 per hour for court appearances. The electric company presented a 2002 Oklahoma Bar Association Survey report urging the trial court to rely on the mean average of $138.55 for non-metro attorneys. However, when the report is examined, it is apparent that 40.48 percent of non-metro attorneys surveyed charge between $126 and $150 per hour. ¶22 Under the facts presented, it appears that a reasonable calculation for a lodestar fee is 47.68 hours at the rate of $150.00 for a total of $7,152.00. Nevertheless, we also agree that it would be egregious to require either the attorney's client or OG&E to bear the burden of paying for the attorney's mistake in failing to appear for the disposition docket. Therefore, 4.65 hours times the hourly rate of $150 for a total of $697.50 shall be deducted from the lodestar fee. ¶23 The lodestar fee, which exceeds Spencer's award by $1,454.50, is not unreasonable when compared to the $5,000.00 confessed judgment. The attorney fees awarded are thirty percent more than the award. While we are committed to the rule that a fee for legal services must bear some reasonable relationship to the judgment, we have never identified a percentage above which a fee's relationship to the damage award must be deemed unreasonable per se. ¶24 In Southwestern Bell Telephone Co. v. Parker Pest Control, Inc., 2) Incentive fee. ¶25 Spencer asserts that the awarded fee should be enhanced specifically when considering the following Burk factors: time and labor required; novelty and difficulty of the questions; the fact that billing the client for any fees would have been futile as she was unable to pay the same; the amount at issue and the results received; and the undesirability of the cause. Undoubtedly, OG&E opposes enhancement on grounds that the original award of $2,500.00 was a reasonable fee. ¶26 Although this cause began as a simple declaratory judgment action with the hope of some money damages to be collected, it quickly became much more complicated. OG&E raised affirmative defenses of insufficient service, unclean hands, limitations, failure to mitigate, Spencer's negligence and federal preemption. Ultimately the electric company filed a motion to dismiss adding arguments of improper venue and lack of authority to award damages in a declaratory judgment action. Furthermore, this is a cause that Spencer's attorney took knowing that he would most likely not receive any fee from the disabled mother with three dependents. ¶27 Conversely, Spencer has been awarded fees based on a reasonable hourly rate and the time dedicated to this cause most certainly did not prevent the taking on of additional clients or caseloads. Under all these facts, we determine that the reasonable loadstar fee of $6,454.50 should be increased as an incentive by $650.00, approximately ten percent. CONCLUSION ¶28 Discretion is abused, so as to warrant reversal, when a trial judge makes a clearly erroneous conclusion and judgment, against reason and the evidence. ¶29 Spencer requested appeal related attorney fees in a separate section of the brief in chief filed on December 22, 2006. The request complies with Rule 1.14, Supreme Court Rules, 12 O.S. 2001, Ch. 15, App. 1. Appeal related attorney fees may be awarded in cases where there is statutory authority to award a fee for legal services rendered in the underlying cause. COURT OF CIVIL APPEALS OPINION VACATED; TRIAL COURT AFFIRMED IN PART AND REVERSED IN PART; REMANDED FOR DETERMINATION OF APPEAL AND CERTIORARI RELATED ATTORNEY FEES. EDMONDSON, V.C.J., OPALA, KAUGER, WATT, TAYLOR, COLBERT, JJ. concur. WINCHESTER, C.J., HARGRAVE, J. concur in result. FOOT