Case Title: C. JOHN COTTON V. GERRI E. McCULLOH

Citation: 

Docket Number: 05-60

State: wyoming

Court: Wyoming Supreme Court

Date: 2005-12-15T00:00:00Z

Document:
C. JOHN COTTON V. GERRI E. McCULLOH2005 WY 159125 P.3d 252Case Number: 05-60Decided: 12/15/2005
OCTOBER 
TERM, A.D. 2005

 
 
C. JOHN 
COTTON,

 
 
Appellant

(Petitioner),

 
 
v.

 
 
GERRI E. 
McCULLOH,

 
 
Appellee

(Respondent).

 
 

Appeal 
from the DistrictCourtofSheridanCounty

The 
Honorable John C. Brackley, Judge

 
 

Representing 
Appellant:

            
C. John Cotton of Cotton Law Office, Gillette, Wyoming; and Stephen H. 
Kline of Kline Law Office, P.C., Cheyenne, Wyoming.  Argument by Mr. 
Kline.

 
 

Representing 
Appellee:

            
 R. Michael Vang of Brown 
& Hiser, LLC, Laramie, 
Wyoming.

 
 
Before 
HILL, C.J., and GOLDEN, KITE, VOIGT, and BURKE, JJ.

 
 
KITE, 
Justice.

 
 
[¶1]      Attorney C. John 
Cotton appeals from the district court's affirmance of a decision rendered by a 
panel of the Wyoming State Bar Committee on Resolution of Fee Disputes (the fee 
dispute committee).  Mr. Cotton and 
client Gerri McCulloh disagreed about the amount of attorney's fees and costs 
Mr. Cotton was entitled to for representing her in a divorce and other related 
proceedings.  The fee dispute 
committee ordered Mr. Cotton to refund $23,533.16 to Ms. McCulloh.  The district court affirmed the fee 
dispute committee's decision.  
Finding no error, we also affirm.

 
 
ISSUES

 
 
[¶2]      Mr. Cotton 
presents the following issues for our consideration:

 
 

1.                  
Did the 
fee dispute committee and the district court fail to make necessary findings 
regarding mediation and GAL expenses, and regarding effect of appellant 
McCulloh's agreement to pay fees?

 
 

2.                  
Should 
credit be afforded for $6,148.59 in mediation and initial GAL expenses paid at 
the request and the benefit of Gerri E. McCulloh?

 
 

3.                  
Did the 
court award fees in February 1999, or did the parties treat the funds awarded by 
the court as fees modifying the initial cap, including the fees now at 
issue?

 
 

4.                  
Are 
Gerri E. McCulloh's claims that she did not receive the bills, and did not treat 
the amounts disbursed as fees contrary to her own written 
admissions?

 
 

5.                  
Are 
Gerri E. McCulloh's claims barred by principles of contract, laches and 
estoppel?

 
 
Ms. 
McCulloh articulates a single issue:

 

            
Did the fee dispute committee abuse its discretion by the manner in which 
it entered a judgment in the fee dispute arbitration hearing between Ms. 
McCulloh and Mr. Cotton?

 
 
FACTS

 
 
[¶3]      This case is the 
most recent chapter in the ongoing saga of Ms. McCulloh's divorce from John 
Drake.  In McCulloh v. Drake, 2001 WY 56, 24 P.3d 1162 (Wyo. 2001) (McCulloh I), this 
Court reviewed the district court's determinations on the parties' divorce and 
Ms. McCulloh's separate tort claims.  
We reserved discussion of the child custody and support issues because an 
appeal of a post-decree custody modification was also pending before this 
Court.  Id., ¶ 11-12, 24 P.3d  at 1165.  We concluded the district court did not 
abuse its discretion when it divided the marital property.  Id., ¶ 19, 24 P.3d  at 1168. With regard to 
Ms. McCulloh's tort claims, we recognized, under certain circumstances, a spouse 
may assert a claim for intentional infliction of emotional distress for conduct 
which occurred during the marriage and the tort claim should be heard separately 
from the divorce proceedings.  
Id., ¶¶ 26, 29-30, 24 P.3d  at 1170-71.  Consequently, this Court affirmed in 
part, reversed in part, and remanded to the district court for a jury trial on 
Ms. McCulloh's intentional infliction of emotional distress claim.  Id., ¶¶ 29-30, 43, 24 P.3d  at 117-71, 
1173.  

 
 
[¶4]      In 2002, we 
reviewed the district court's decision granting Ms. McCulloh's request for 
modification of the child custody provisions of the original divorce 
decree.  Drake v. McCulloh, 2002 WY 50, 43 P.3d 578 (Wyo. 2002) (McCulloh II).  The district court ruled a substantial 
change in circumstances had occurred since the original decree and awarded 
primary custody of the child to Ms. McCulloh.  Id., ¶ 1, 43 P.3d  at 580.  Finding sufficient evidence to support 
that conclusion, we affirmed the district court's decision.  Id., ¶ 22, 43 P.3d  at 585.  Ms. McCulloh, subsequently, challenged 
the district court's denial of her petition for increased child support in McCulloh v. Drake, 2005 WY 18, 105 P.3d 1091 (Wyo. 2005) (McCulloh III).  We affirmed in part, reversed in part, 
and remanded for a determination of whether she was entitled to an increase in 
child support payments.   
Id., ¶ 29, 105 P.3d  at 1098.  

 
 
[¶5]      The case at bar 
involves an attorney's fees dispute between Ms. McCulloh and Mr. Cotton.  Ms. McCulloh was originally represented 
by another attorney in the divorce proceedings, but, after a failed mediation, 
she sought new counsel.  Ms. 
McCulloh contacted Mr. Cotton, and he identified the potential tort claims.  Ms. McCulloh and Mr. Cotton entered into 
a representation agreement on October 17, 1998, which covered the divorce, 
initial appeal, and the tort claims.  
The fees section of the agreement included hourly and contingency fee 
provisions.  The hourly fee 
provision included a cap on the hourly fees which Mr. Cotton could charge Ms. 
McCulloh.  The agreement provided 
the maximum hourly fees for the divorce would be the greater of $15,000 or the 
amount of hourly fees assessed against the opposing party and the maximum hourly 
fees on appeal would be the greater of $2,500 or the amount of hourly fees 
assessed against the opposing party.  
Under the terms of the representation agreement, Ms. McCulloh was also 
responsible for reimbursing Mr. Cotton for any costs he paid on her behalf.  

 
 
[¶6]      While the divorce 
proceeding was pending, Mr. Cotton filed a motion requesting an award of 
attorney's fees and costs from Mr. Drake, pursuant to Wyo. Stat. Ann. § 20-2-111 
(LexisNexis 2005).1  The district court entered an Interim 
Stipulated Order of Distribution which confirmed the parties' agreement that Mr. 
Drake would pay Ms. McCulloh $50,000 on or before February 12, 1999.  The court's order specifically stated 
that it was not ruling upon Ms. McCulloh's  
motion for attorney's fees and she could use the funds in any way she 
pleased, subject to the requirement she provide an accounting to Mr. Drake.  In response to the district court's 
order, Mr. Drake sent a check to the clerk of the district court with a notation 
written on the memo line which stated "Legal Fees Plaintiff."  Mr. Cotton arranged for Ms. McCulloh to 
sign a limited power of attorney, giving him the authority to execute any checks 
made payable to her from Mr. Drake or the clerk of the district court.  Pursuant to the limited power of 
attorney, Mr. Cotton deposited the $50,000 in his trust account.    

 
 
[¶7]      Mr. Cotton 
prepared an accounting of the $50,000, which showed he disbursed approximately 
$35,000 to himself for attorney's fees.  
He gave approximately $2,800 to Ms. McCulloh and applied the remaining 
funds to the costs of the action.  
The district court held a bench trial and issued a decision letter in 
August 1999, addressing child custody, child support, property division, and Ms. 
McCulloh's tort claims.  The 
district court's property division included a $200,000 cash award to Ms. 
McCulloh.  Ms. McCulloh and Mr. 
Drake both appealed the district court's decision in  McCulloh I.   

 
 
[¶8]      Early in 2000, 
Mr. Cotton and Ms. McCulloh believed the $200,000 cash award from Mr. Drake 
would soon be available.  Mr. Cotton 
told her the check should be made payable to both of them and, if she did not 
agree, he would not continue to represent her in the on-going litigation with 
Mr. Drake.  Ms. McCulloh did not 
agree with Mr. Cotton's claim to the property distribution and wrote a letter 
dated February 1, 2000, to the executive director of the Wyoming State Bar, 
questioning Mr. Cotton's billing practices and requesting a fee 
arbitration.  However, instead of 
sending the letter, she simply read it to Mr. Cotton over the telephone.  As it turned out, the $200,000 property 
distribution was not made available at that time.  

 
 
[¶9]      On June 15, 2001, 
this Court issued its decision in McCulloh I and a few days later Mr. 
Cotton and Ms. McCulloh had a meeting in his office to discuss the outstanding 
fees and costs.  They were not, 
however, able to reach an agreement, and on August 3, 2001, Ms. McCulloh sent a 
letter to Mr. Cotton, again questioning his billing practices.    

 
 
[¶10]   In September 2001, Mr. Drake 
tendered $169,200 to the district court.  
Mr. Cotton sought and received an order from the district court for 
release of the funds to him and Ms. McCulloh.  Ms. McCulloh contacted the district 
court clerk's office and directed them to deliver the money directly to 
her.  Mr. Cotton filed a $138,829.88 
attorney's fees lien against the proceeds, and the funds were tendered to 
him.  Ms. McCulloh fired Mr. Cotton 
and demanded he send the property distribution proceeds to her.  Nevertheless, he used Ms. McCulloh's 
limited power of attorney to disburse: $100,000 to himself for outstanding costs 
and fees; $40,000 to the district court to replenish an account which was held 
jointly by Ms. McCulloh and her minor son; $7,500 to pay Ms. McCulloh's prior 
attorney; and the remaining $21,700 to Ms. McCulloh.    

 
 
[¶11]   On December 13, 2001, Ms. McCulloh 
filed a petition for resolution of fee dispute with the fee dispute committee, 
and, soon thereafter, Mr. Cotton filed his own fee dispute petition.  The fee dispute committee held a hearing 
on both petitions on July 12, 2002.  On March 31, 2003, the fee dispute 
committee issued its resolution order, requiring Mr. Cotton to refund $71,033.16 
to Ms. McCulloh.  The fee dispute 
committee concluded Mr. Cotton's fees for the initial divorce and appeal were 
limited to the hourly fee cap contained in the parties' representation 
agreement, but the subsequent proceedings were not included in the fee 
agreement.  The fee dispute 
committee also awarded him $4,000 for his contingency fee in the tort 
action.  With regard to Mr. Cotton's 
request for reimbursement of costs, the fee dispute committee carefully reviewed 
each of his bills and awarded all of his claimed costs, with the exception of a 
few items which were billed in error.  

 
 
[¶12]   Mr. Cotton filed a motion for 
partial reconsideration, asking the fee dispute committee to credit him with the 
$40,000 he had tendered to the district court and the $7,500 he had paid to Ms. 
McCulloh's prior attorney.  The fee 
dispute committee issued a supplemental order giving Mr. Cotton credit for those 
amounts and revising the amount he owed Ms. McCulloh to $23,533.16.  Mr. Cotton filed a petition for review 
with the district court, and the district court affirmed the fee dispute 
committee's decision.2  Mr. Cotton subsequently filed a notice 
of appeal with this Court.  

 
 
STANDARD 
OF REVIEW

 
 
[¶13]   One of the more difficult aspects 
of this case is determining the standard of review to apply to decisions from 
the fee dispute committee.  The 
district court recognized the problem and stated in its order affirming the fee 
dispute committee's decision:  

 
 
            
Wyoming 
law is unclear as to the legal standard applicable to appeals from the Committee 
on Resolution of Fee Disputes, however, Appellant has presented nothing that 
contradicts the findings or conclusions of the committee under any standard of 
review, including de novo. 

 
 
[¶14]   In resolving this matter, we look 
to the language of the Wyoming Rules for Resolution of Fee Disputes.  "'A rule of this court has the force and 
effect of a statute, and is to be construed in the same manner as a 
statute.'"  Vanasse v. Ramsay, 847 P.2d 993, 
999-1000 (Wyo. 1993) quoting Lapp v. City of Worland, 612 P.2d 868, 
874-75 (Wyo. 
1980).  Consequently, in 
interpreting court rules, we apply our rules of statutory construction.  Anderson v. Hernandez, 2005 WY 142, ¶ 7; 
Vanasse, 847 P.2d  at 999-1000.  The  rules of statutory construction are 
well-known:

 
 
We first 
decide whether the statute is clear or ambiguous.  This Court makes that determination as a 
matter of law.  A "statute is 
unambiguous if its wording is such that reasonable persons are able to agree as 
to its meaning with consistency and predictability."  Allied-Signal, Inc.  [v. WyomingState 
Board of Equalization], 813 P.2d [214,] 220 [(Wyo. 1991)].  A "statute is ambiguous only if it is 
found to be vague or uncertain and subject to varying interpretations."  813 P.2d  at 
219-20.

 
 
            
If we determine that a statute is clear and unambiguous, we give effect 
to the plain language of the statute.

 
 
We begin 
by making an "'inquiry respecting the ordinary and obvious meaning of the words 
employed according to their arrangement and connection.'"  Parker Land and Cattle Company v. Wyoming 
Game and Fish Commission, 845 P.2d 1040, 1042 (Wyo. 1993) (quoting Rasmussen v. Baker, 7 Wyo. 117, 133, 50 P. 819, 
823 (1897)).  We construe the 
statute as a whole, giving effect to every word, clause, and sentence, and we 
construe together all parts of the statute in pari materia.  

 
 

State 
Department of Revenue and Taxation v. Pacificorp, 872 P.2d 1163, 1166 (Wyo. 1994).  If we determine that the statute is 
ambiguous, we resort to general principles of statutory construction to 
determine the legislature's intent.

 
 
 State v. Bannon Energy Corporation, 999 P.2d 1306, 1308-09 (Wyo. 2000) (some citations omitted); see also Wyodak Resources Development Corporation v. Wyoming 
Department of Revenue, 2002 WY 181, ¶ 9, 60 P.3d 129, ¶ 9 (Wyo. 
2002).

 
 

Airtouch 
Communications, Inc. v. Dep't of Revenue, 2003 WY 
114, ¶ 10, 76 P.3d 342, 347 (Wyo. 2003).  

 
 
"When 
the language is not clear or is ambiguous, the court must look to the mischief 
the statute was intended to cure, the historical setting surrounding its 
enactment, the public policy of the state, the conclusions of law, and other 
prior and contemporaneous facts and circumstances, making use of the accepted 
rules of construction to ascertain a legislative intent that is reasonable and 
consistent."  State ex rel. Motor Vehicle Div. v. 
Holtz, 674 P.2d 732, 736 (Wyo. 1983).  The ultimate goal is to determine the 
intent of the legislature.  

 
 

Stewart 
Title Guaranty Co. v. Tilden, 2005 WY 
53, ¶ 18, 110 P.3d 865, 872 (Wyo. 2005).  
"We have held a specific statute controls over a general statute on the 
same subject.  A specific provision 
in a statute controls over an inconsistent general provision pertaining to the 
same subject."  State v. Buggy Bath Unlimited, Inc., 
2001 WY 27, ¶ 23, 18 P.3d 1182, 1189 (Wyo. 2001), quoting Thunderbasin Land, Livestock & 
Investment Co. v. County of Laramie, 5 P.3d 774, 782 (Wyo. 
2000).

 
 
[¶15]   Fee Dispute Rule 9 states:  "Pursuant to W.S. § 16-3-101(b)(1), 
proceedings under these rules are in the nature of arbitration and exempt from 
the Wyoming Administrative Procedures Act (W.S. §§16-3-101 through 16-3-115)." 
 On the other hand, Fee Dispute Rule 
14(a) states that judicial review of a decision of the fee dispute committee is 
commenced by filing a petition for review under W.R.A.P. 12, which pertains to 
judicial review of administrative actions.  
Fee Dispute Rule 14(d) directs the court to "review the record" from the 
fee dispute committee.  W.R.A.P. 
12.09 specifically embraces the standard of review for administrative decisions 
outlined in the Wyoming Administrative Procedures Act, at Wyo. Stat. Ann. § 
16-3-114(c) (LexisNexis 2005).   
Section 16-3-114(c) states in pertinent part:

 
 
            
(c) To the extent necessary to make a decision and when presented, the 
reviewing court shall decide all relevant questions of law, interpret 
constitutional and statutory provisions, and determine the meaning or 
applicability of the terms of an agency action.  In making the following determinations, 
the court shall review the whole record or those parts of it cited by a party 
and due account shall be taken of the rule of prejudicial error.  The reviewing court 
shall:

 
 
            
 * * *

 
 
            
(ii) Hold unlawful and set aside agency action, findings and conclusions 
found to be:

 
 
(A) 
Arbitrary, capricious, an abuse of discretion or otherwise not in accordance 
with law;

 
 
      * * 
*

 
 
(E) 
Unsupported by substantial evidence in a case reviewed on the record of an 
agency hearing provided by statute.  

 
 
[¶16]   On their face, the fee dispute 
rules are inconsistent.  Fee Dispute 
Rule 9 states the proceeding before the fee dispute committee is in the nature 
of an arbitration and the Wyoming Administrative Procedures Act does not 
apply.  Whereas, Fee Dispute Rule 14 
directs that appeals from decisions of the fee dispute committee must be taken 
under Rule 12 of the Wyoming Rules of Appellate Procedure.  W.R.A.P 12 dictates that we look to § 
16-3-114(c) of the Wyoming Administrative Procedures Act for the standard of 
review.  

 
 
[¶17]   It is important to determine 
whether the standard of review applicable to arbitrations or administrative 
decisions applies to appeals from the fee dispute committee because those 
standards of review differ significantly.  
JBC of Wyoming Corp. v. City of 
Cheyenne, 843 P.2d 1190, 1194 (Wyo. 1992).  Wyoming arbitration statutes give courts very 
limited authority to review arbitrators' decisions.  Wyo. Stat. Ann. §§ 1-36-113 through 119 
(LexisNexis 2005).  See also, Pecha v. Smith, Keller & Associates, 
942 P.2d 387, 390-91 (Wyo. 1997); JBC, 843 P.2d  at 1194.  In contrast, judicial review of administrative agency 
decisions, pursuant to § 16-3-114(c), requires a review of the entire record to 
determine whether there is substantial evidence to support the agency's 
determination.  See e.g., KG 
Construction, Inc. v. Sherman, 2005 WY 116, ¶ 9, 120 P.3d 145, 147 (Wyo. 
2005).

 
 
[¶18]   We are able to reconcile the 
inconsistencies in the fee dispute rules by reading the rules in pari materia and giving effect to 
each provision.  Under Fee Dispute 
Rule 9, the procedures set forth in Wyoming's version of the Uniform Arbitration 
Act, Wyo. Stat. Ann. § 1-36-101 through 119 (LexisNexis 2005), should be used by 
the fee dispute committee to conduct the evidentiary hearing.3  Judicial review of the fee dispute 
committee's decision, however, will be conducted in accordance with Fee Dispute 
Rule 14 by employing standards provided in W.R.A.P. 12.  This interpretation of the fee dispute 
rules allows the rule which specifically addresses judicial review (Fee Dispute 
Rule 14) to control over the rule which addresses the fee dispute process in 
general (Fee Dispute Rule 9).  
Moreover, our decision gives effect to the language in Fee Dispute Rule 
14(d) which directs the appellate court to "review the record" of the fee 
dispute committee hearing.  Treating 
the fee dispute committee as an administrative agency for the purposes of appeal 
recognizes the importance of the fee dispute committee's function in resolving 
the factual issues involved in fee disputes.  By applying our standard of review for 
administrative decisions, we give deference to the fee dispute committee's 
findings of fact, while affording the parties the right to judicial review of 
the fee dispute committee's decision to ensure substantial evidence supports 
those factual findings. See 
e.g.,  KG 
Construction, Inc., ¶ 9, 120 P.3d  at 147; Newman v. State ex 
rel. Wyo. Workers' Safety and Comp. Div., 2002 WY 91, ¶ 12, 49 P.3d 163, 168 
(Wyo. 2002).

 
 
[¶19]   Thus, we will scrutinize the fee 
dispute committee's decision in this case in accordance with the procedures for 
judicial review of administrative decisions as set forth in W.R.A.P. 12.01 et. seq. and § 16-3-114(c).  As we have discussed on innumerable 
occasions:

 
 
The 
substantial evidence test is the appropriate standard of review in appeals from 
contested case proceedings when factual findings are involved and both parties 
submit evidence.  Robbins v. State ex rel. Wyo. Worker's 
Safety & Comp. Div., 2003 WY 29, ¶ 18, 64 P.3d 729, 732 (Wyo. 
2003).  Substantial evidence is 
relevant evidence which a reasonable mind might accept in support of the 
agency's conclusions.  It is more 
than a scintilla of evidence.  Even 
if the factual findings are found to be supported by substantial evidence, the 
ultimate agency decision may still be found to be arbitrary or capricious for 
other reasons.  An appellate court 
does not examine the record only to determine if there is substantial evidence 
to support the agency's decision, but it also must examine the conflicting 
evidence to determine if the hearing examiner could have reasonably made its 
finding and order upon all of the evidence before it.  Newman v. State ex rel. Wyo. Workers' Safety 
and Comp. Div., 2002 WY 91, 49 P.3d 163, 172 (Wyo. 2002). 

 
 

KG 
Construction, Inc., 
¶ 9, 120 P.3d  at 147.  The fee dispute committee's conclusions of 
law, however, are not entitled to the same deference as its factual 
findings.  We review the fee dispute 
committee's conclusions of law de 
novo.  DC Production Service v. Dep't of 
Employment, 2002 WY 142, ¶ 7, 54 P.3d 768, 771 (Wyo. 2002).  

 
 
DISCUSSION

 
 
A.        Credit for 
Costs Paid on Behalf of Client

 
 
[¶20]   Mr. Cotton complains the fee 
dispute committee erred by failing to give him credit for two payments totaling 
$6,148.59, which he made on behalf of Ms. McCulloh in February 1999.  The disputed costs include a payment of 
$2,174.12 to the guardian ad litem and a payment of $3,974.47 to a mediation 
firm.  According to Mr. Cotton, 
these costs were incurred by Ms. McCulloh prior to his representation of her, 
but he paid them out of the $50,000 interim award to Ms. McCulloh.  The costs claimed by Mr. Cotton were 
referenced in his accounting of the disbursements from the $50,000 award but 
were not included in his billing statements.      

 
 
[¶21]   Mr. Cotton's financial 
documentation is somewhat difficult to follow.  For example, in comparing the $50,000 
accounting to his bills, there are some costs which are referenced on the 
accounting and are also included in the billing statements and others, like the 
costs at issue here, which are incorporated into the accounting but are not 
included in his billing statements.  
Mr. Cotton claims these costs were not included in his statements because 
they were not incurred while he represented Ms. McCulloh.  To further cloud the issue, in addition 
to the two disputed costs, there is one other cost included in the accounting 
and not reported on Mr. Cotton's bills  an additional guardian ad litem bill of 
$3,974.47.4   Mr. Cotton does not, however, 
argue that the fee dispute committee erred by failing to credit him with that 
cost.  

 
 
[¶22]   Mr. Cotton's pre-hearing memorandum 
contained an itemization of the fees and costs which he asserted Ms. McCulloh 
owed to him.  With regard to the 
original divorce proceeding, he claimed she still owed him $41,400.29 in costs 
and fees.  Mr. Cotton referred to 
the $50,000 accounting in his pre-hearing memorandum but did not explain that 
some of the costs included in the accounting were not included in his billing 
statements.      

 
 
[¶23]   According to Fee Dispute Rule 
11(c), the "attorney is responsible for carrying the burden of proof by a 
preponderance of the evidence.  If 
the attorney fails to carry the burden by a preponderance of the evidence, the 
panel shall enter a resolution order against the attorney."  The fee dispute committee used Mr. 
Cotton's billing statements to fashion its decision.  The resolution order evidences the fee 
dispute committee's meticulous examination of Mr. Cotton's billing statements, 
which were voluminous and somewhat confusing, and awards all costs claimed in 
those bills, except three items which were billed twice in error.  Mr. Cotton does not direct us to any 
evidence in the record where he explained to the fee dispute committee that he 
was entitled to an award of costs not included in his billing statements.  

 
 
[¶24]   Mr. Cotton had ample opportunity to 
present his claim to the fee dispute committee at the hearing.  He testified as a witness and acted as 
an advocate on his own behalf by arguing the meaning of the evidence 
presented.  Under Fee Dispute Rule 
11(c), Mr. Cotton had the burden of proving that he was entitled to be awarded 
fees and costs.  On this record, we 
cannot fault the fee dispute committee for using his billing statements as the 
basis for determining the amounts due to him.  It was not the fee dispute committee's 
obligation to check each bill to make sure Mr. Cotton had included all costs he 
paid on behalf of Ms. McCulloh.  
Consequently, we cannot criticize the fee dispute committee for 
disregarding the two costs at issue here.

 

B.     
      Application of the 
Representation Agreement Fee Cap

 
 
[¶25]   Mr. Cotton argues that the fee 
dispute committee erred by enforcing the limited hourly fee cap contained within 
the parties' representation agreement.  
The fees section of the agreement stated, in pertinent 
part:

 
 
II.

FEES

 
 
            
After review and/or discussion of the factors contained in the paragraph 
"Negotiation of Fees", the client agrees to pay a limited hourly fee and a 
contingent or bonus fee as follows:

 
 
A.        
Limited hourly fee:

 
 
Client 
agrees to provide an initial retainer of $2,500, to be increased to 
$30,000 upon receipt of prior attorney fees from the adverse party.  Attorney will provide work against the 
retainer at the rate of $85 per hour.

 
 
The 
maximum hourly fees to be paid by the client to Attorney shall be the greater of 
(1) $15,000, or (2) the amount of hourly fees assessed against the 
opposing party, provided that if the case is appealed by either party, the 
maximum hourly fees shall be the greater of (3) $2,500 in addition to 
#(1) or (4) the amount of hourly fees assessed against the opposing 
party.  It is anticipated that the 
retainer will be replenished as amounts are used.

 
 
(underlined 
portions indicate handwritten insertions).  
The fee dispute committee made the following findings with regard to the 
fee agreement:

 
 

5)                 
On 
October 17, 1998 Mr. Cotton and Ms. McCulloh entered into a fee agreement.  Said fee agreement encompassed "Divorce 
 Domestic Relations  Torts occurring during marriage[."]

 
 

6)                 
The 
agreement set forth caps for hourly rates on the principal case, the appeal, as 
well as a contingency agreement.

 
 

7)                 
The 
agreement set forth a $15,000.00 cap on Mr. Cotton[']s hourly fee for the 
principal case.  A contingency was 
in the contract that a larger fee would be available to Mr. Cotton if the court 
ordered attorney['s] fee[]s in excess of the $15,000.00 cap.  The agreement also set forth a[n] 
additional $2,500.00 cap on hourly fees if the case was appealed.  A contingency was in the contract that a 
larger fee would be available to Mr. Cotton if the court ordered attorney['s] 
fee[]s in excess of the 2,500.00 cap.

 
 
* * 
*

 
 

32)             
No 
additional attorney's fees were awarded by the District Court in the divorce 
action.

 
 
* * 
*

 
 
34) 
     No attorney's fee 
was awarded in the appeal of the divorce action by the Wyoming Supreme 
Court.

 
 
35) 
     The total fees 
available for the "Divorce  Domestic Relations" action and the "Divorce  
Domestic Relations" appeal pursuant to the written agreement dated October 17, 
1998 is $17,500.00 plus costs.

 
 
[¶26]   Mr. Cotton argues the fee cap 
should not have been enforced for two reasons:  1) the district court awarded attorney's 
fees to Ms. McCulloh; and 2) the parties agreed to waive the cap by their course 
of conduct.  We will examine each of 
his arguments in turn.

 
 
[¶27]   Mr. Cotton claims the fee dispute 
committee incorrectly concluded the district court did not award attorney's fees 
to Ms. McCulloh in the divorce proceeding.  
He maintains that the district court's interim order awarding Ms. 
McCulloh $50,000 in February 1999 amounted to an award of attorney's fees.  The district court's Interim Stipulated 
Order of Distribution stated, in pertinent part:

 
 

1.                  
The 
Court will not decide the Motion for Attorneys Fees at this time, but will 
consider requests for attorney fees at the time of the Hearing scheduled in this 
matter;

 
 

2.                  
In 
accordance with the suggestion of the Court, the Defendant agrees to and shall, 
by February 12, 1999, or sooner if possible, pay $50,000 to the Clerk of the 
Fourth Judicial District Court of Sheridan County, Wyoming for payment to the 
Plaintiff and her attorney, C. John Cotton;

 
 

3.                  
The 
Plaintiff is under no obligations or restrictions with regard to how the 
$50,000.00 distribution is to be spent.  
However, Plaintiff shall keep a detailed accounting of any and all 
expenditures from said distribution, and provide Defendant with a report of the 
accounting upon request.  Defendant 
shall likewise keep an accounting of expenditures, and provide Plaintiff with a 
report of the same upon request.

 
 
[4]. 
      The 
distribution previously set forth shall be taken into account by the Court at 
the time of the ultimate property distribution in this 
case[.]

 
 
[¶28]   Mr. Cotton claims the following 
evidence supports his contention that the district court awarded him attorney's 
fees:  1) he filed motions on behalf 
of Ms. McCulloh requesting an award of attorney's fees from Mr. Drake; 2) Mr. 
Drake wrote "Legal Fees Plaintiff" on the memo line of the $50,000 check; and 3) 
the district court's decision letter and order in the divorce proceeding 
indicated that the property distribution included a consideration of Ms. 
McCulloh's request for costs and attorney's fees.

 
 
[¶29]   We conclude substantial evidence 
supported the fee dispute committee's determination that the district court did 
not order Mr. Drake to pay a specific attorney's fees award to Ms. 
McCulloh.  Contrary to the notation 
placed on the memo line of Mr. Drake's check, the district court's order very 
clearly stated the interim distribution was not an award of attorney's fees 
pursuant to Ms. McCulloh's motion for fees and Ms. McCulloh was free to use the 
funds in any manner she wished.   
The district court's order explained that it was simply approving a 
stipulated agreement between the parties that Mr. Drake would distribute $50,000 
to Ms. McCulloh prior to the final divorce decree.  Furthermore, the district court's 
decision letter in the divorce proceeding clearly provided that, although the 
district court took Ms. McCulloh's need for costs and attorney's fees into 
account in making the property distribution, each party was responsible for his 
or her own attorney's fees.    

 
 
[¶30]   Mr. Cotton's claim that the 
district court's order included a specific award of attorney's fees from Mr. 
Drake completely disregards the procedure employed by district courts in making 
such awards.  Under the American 
system, when a party is entitled to an attorney's fees award from his opponent, 
he must submit his request to the court for a determination of whether his 
attorney's fees are reasonable.  See Wyo. Stat. Ann. § 1-14-126(b) 
(LexisNexis 2005),5 Cline v. Rocky Mountain, Inc., 998 P.2d 946, 951 (Wyo. 2000) (applying the federal lodestar method to determine a 
reasonable attorney's fees award).  
This procedure is required in awarding attorney's fees under § 20-2-111, 
as well.  See e.g., Black v. De Black, 1 P.3d 1244 (Wyo. 
2000).  In this case, the district 
court did not make a determination on the reasonableness of Ms. McCulloh's 
request for attorney's fees.  
Instead, the record is clear that the district court simply confirmed an 
agreement between the parties which required Mr. Drake to make a property 
distribution to Ms. McCulloh to sustain her while she was litigating the 
divorce.  The record contains 
substantial evidence to support the fee dispute committee's finding that the 
district court did not award attorney's fees to Ms. McCulloh.  

 
 
[¶31]   In the alternative, Mr. Cotton 
argues the parties agreed to treat the $50,000 as an award of fees, thereby 
modifying the terms of the representation agreement.  He relies upon a footnote in Schuler v. Community First National Bank, 
999 P.2d 1303 (Wyo. 2000), in support of his argument.  That footnote states:  

 
 
As a 
general rule, if the parties mutually adopt a mode of performing their contract 
differing from its strict terms or if they mutually relax the contract's terms 
by adopting a loose mode of executing them, neither party can go back upon the 
past and insist upon a breach because the contract was not fulfilled according 
to its letter. Quin Blair Enterprises, 
Inc. v. Julien Constr. Co., 597 P.2d 945, 951 n. 6 (Wyo.1979).  

 
 

Id. 
 at 1305, n. 1.  

[¶32]   Mr. Cotton presented this argument 
to the fee dispute committee, but the fee dispute committee obviously did not 
accept it since they calculated his fees according to the terms of the fee 
agreement.  There is substantial 
evidence to support the fee dispute committee's determination.  The legal principle which Mr. Cotton 
relies upon requires a mutual agreement by the parties to perform the 
contract in a manner differing from its actual terms.  A unilateral disregard of the terms of 
the contract will not vary the requirements of the contract.  Quin Blair Enterprises, Inc. v. Julien 
Const.  Co., 597 P.2d 945,  951, n. 6 (Wyo. 
1979).

 
 
[¶33]   Mr. Cotton claims Ms. McCulloh 
agreed to disburse a large portion of the $50,000 interim award to him as 
fees.  In support of his position, 
Mr. Cotton relies upon statements Ms. McCulloh made in her February 1, 2000, 
letter to the executive director of the Wyoming State Bar, which she read to Mr. 
Cotton over the telephone.   
The statement Mr. Cotton primarily relied upon read:  "Since I have already paid more than my 
contract states that I have to pay, I think it is obvious I have not kept the 
cap and am not going to let Mr. Cotton go unpaid."  Mr. Cotton characterizes this statement 
as an admission by Ms. McCulloh that she agreed to waive the fee cap.  He also claims, because she admitted she 
received his bills, she acquiesced to his use of the interim award for fee 
payments above the cap in the representation agreement.   

 
 
[¶34]   The fee dispute committee obviously 
did not agree with Mr. Cotton's explanation of the evidence and the record 
supports its conclusion.  First of 
all, Ms. McCulloh's statement must be read in the context of the entire letter, 
the on-going litigation between Ms. McCulloh and her ex-husband, and the 
business relationship between Ms. McCulloh and Mr. Cotton.  On February 1, 2000, the parties were 
engaged in the appeal of the initial divorce decree, anticipating receipt of the 
$200,000 property distribution from Mr. Drake, and already involved in an action 
for modification of the original decree.  
Mr. Cotton and Ms. McCulloh disagreed about how the property award should 
be distributed.  Mr. Cotton wanted 
the check made payable jointly to him and Ms. McCulloh, and she wanted it made 
out only to her.  The parties had a 
discussion about this matter and that discussion precipitated Ms. McCulloh's 
letter to the state bar.  The 
paragraph containing the statement relied upon by Mr. Cotton, read in its 
entirety: 

 
 
            
I need to make it clear that I have no other representation and I am 
afraid that Mr. Cotton's actions today, and the actions he is contemplating, 
will hurt my case very much.  Mr. 
Cotton is the only person I have to represent me and protect my rights, so this 
misunderstanding and the timing of his insistence on putting his name on my 
property settlement is extremely unfortunate.  I do not want Mr. Cotton to resign, but 
at the same time, I need to know that I am not going to be taken advantage of on 
fees.  I am enclosing the initial 
contract that I signed with Mr. Cotton.  
This contract specifically puts a cap on his fees at $17,500.00.  Since I have already paid more than my 
contract states that I have to pay, I think it is obvious that I have not kept 
the cap and am not going to let Mr. Cotton go unpaid.  I think, though that there can be 
legitimate differences of opinions on how much more I should pay him.  All I know is I want him to finish the 
appeal and the current motions before the court.    

 
 
[¶35]   Ms. McCulloh's statement was simply 
a rendition of how she believed Mr. Cotton had treated the interim award.  The context of the statement makes it 
clear she did not necessarily agree with his actions.  In fact, she was concerned that he would 
treat the property distribution in the same manner as he had treated the interim 
award.  Moreover, Ms. McCulloh's 
statement was made after Mr. Cotton had already unilaterally taken a significant 
portion of the interim award as payment for his fees.  The statement certainly does not evince 
a mutual ­agreement to alter the terms of their initial fee 
agreement.  

 
 
[¶36]   The testimony at the hearing before 
the fee dispute committee also supports Ms. McCulloh's contention that she did 
not agree to waive the fee cap.  She 
testified that, shortly after the trial in 1999, she told Mr. Cotton she did not 
agree with how he had disbursed the $50,000 interim award.  Her concerns were not alleviated and, in 
January 2000, she met with another attorney, Tim Newcomb, to discuss the 
possibility of having him represent her in the appeal of the divorce decree.6  Mr. Newcomb testified Ms. McCulloh was 
distraught about Mr. Cotton charging more than the hourly fee cap allowed.  Mr. Newcomb told Ms. McCulloh that it 
was probably just a misunderstanding and she should try to work out her 
differences with Mr. Cotton.  Very 
shortly after her conversation with Mr. Newcomb, Ms. McCulloh drafted the 
February 1, 2000, letter to the state bar and read it to Mr. Cotton over the 
telephone.  After that, she again 
visited with Mr. Newcomb and told him Mr. Cotton had said he was billing her for 
all the hours he worked on the case only so he would have a basis for a future 
motion to require Mr. Drake to pay her attorney's fees.         

 
 
[¶37]   Other witnesses, including Ms. 
McCulloh's sister and a friend, testified Ms. McCulloh indicated to them she 
believed Mr. Cotton's hourly fees were subject to the cap included in the 
representation agreement and she was concerned he was charging fees in excess of 
the cap.  Consequently, there is 
substantial evidence in the record to support the fee dispute committee's 
decision that the fee cap was applicable to the divorce and initial appeal and 
the parties' conduct did not modify the terms of the representation 
agreement.    

 
 
[¶38]   Our decision that the parties did 
not mutually agree to alter the terms of the fee agreement also decides Mr. 
Cotton's claims that Ms. McCulloh is barred by principles of estoppel and laches 
from arguing the fee cap should apply.  
As detailed above, the evidence presented at the hearing effectively 
established that Ms. McCulloh did not take inconsistent positions and was not 
dilatory in asserting her claim that the hourly fee cap was applicable. 

 
 
C.        Findings of 
Fact

 
 
[¶39]   Mr. Cotton also claims the fee 
dispute committee's decision should be reversed because it failed to make proper 
findings of fact and conclusions of law.  
As we recognized in our discussion of the standard of review, the Wyoming 
Administrative Procedures Act does not apply directly to the fee dispute 
process.  However, in order to apply 
the standard of review applicable to agency decisions, we require appropriate 
findings of fact and conclusions of law from the fee dispute committee. We, 
therefore, analogize to cases which involve review of administrative actions to 
determine whether the fee dispute committee's findings of fact and conclusions 
of law are adequate.  

 
 
[¶40]   In Newman, ¶ 23, 49 P.3d  at 172, we ruled 
an agency's decision may be deemed arbitrary or capricious if it "failed to 
provide findings of fact or conclusions of law."  We explained the agency's obligation in 
Veile v. Bryant, 2004 WY 107, ¶ 22, 
97 P.3d 987, 997 (Wyo. 2004), which quoted State ex rel. Dep't of Transportation v. 
Legarda, 2003 WY 130, ¶ 13, 77 P.3d 708, 713 (Wyo. 
2003):

 
 
"[T]he 
agency must "make findings of basic facts upon all of the material issues in the 
proceeding and upon which its ultimate findings of fact or conclusions are 
based."  Pan American Petroleum Corporation v. 
Wyoming Oil and Gas Conservation 
Commission, 446 P.2d 550, 555 (Wyo. 1968).  This Court needs to know "why" an agency 
decided the way it did.  When an 
agency does not make adequate findings of basic fact, we do not have a rational 
basis upon which to review its ultimate findings and conclusions."  

 
 

Scott v. 
McTiernan, 974 P.2d 966, 969 (Wyo.1999) (citations omitted);  see also Mayland v. Flitner, 2001 WY 69, ¶13, 28 P.3d 838, ¶13 (Wyo. 2001).  It is 
insufficient for an administrative agency to state only an ultimate fact or 
conclusion.  Each ultimate fact or 
conclusion must be thoroughly explained in order for a court to determine upon 
what basis the ultimate fact or conclusion was reached.  Billings v. Wyoming Board of Outfitters and 
Guides, 2001 WY 81, ¶13, 30 P.3d 557, ¶13 (Wyo. 2001).  When an agency does not set forth the 
reasons for its actions--that is, when its findings are conclusory--this Court 
cannot uphold its decision.  Juroszek v. City of Sheridan Board of 
Adjustment, 948 P.2d 1370, 1373 (Wyo. 1997);  Basin Electric Power Cooperative, Inc. v. 
Department of Revenue, State of Wyoming, 970 P.2d 841, 854 (Wyo. 
1998)."

 
 
[¶41]   The fee dispute committee's 
decision in this case cannot be characterized as arbitrary or capricious for 
failing to make adequate findings of fact and conclusions of law.  The fee dispute committee carefully 
reviewed the evidence and detailed its reasoning in extensive findings of fact 
and conclusions of law which were incorporated into the resolution order.  The fee dispute committee's findings of 
basic fact properly explained the rationale supporting its ultimate factual 
findings and conclusions of law.  We 
find no error in the procedure the fee dispute committee used to articulate its 
decision.

 
 
[¶42]   Affirmed.

 
 

FOOTNOTES

 
 

1§ 
20-2-111.  Alimony during pendency 
of action; allowance for prosecution or defense of action; costs, 
states:

 

In every 
action brought for divorce, the court may require either party to pay any sum 
necessary to enable the other to carry on or defend the action and for support 
and the support of the children of the parties during its pendency.  The court may decree costs against 
either party and award execution for the costs, or it may direct costs to be 
paid out of any property sequestered, in the power of the court, or in the hands 
of a receiver.  The court may also 
direct payment to either party for such purpose of any sum due and owing from 
any person.

 

2The district 
court allowed Mr. Cotton to present additional evidence for its consideration 
during the appeal.  Our decision in 
Speight, McCue & Associates, 
P.C.,  v. Wallop, 2005 WY 75, 
115 P.3d 39 (Wyo. 2005), prohibits the district court from taking additional 
evidence in an appeal from the Wyoming State Bar Committee on Resolutions of Fee 
Disputes.  The error was, however, 
harmless because in this case the district court specifically found the 
additional evidence Mr. Cotton presented was irrelevant to its decision and, 
consequently, did not rely upon it in affirming the fee dispute committee's 
decision.

 

3Wyoming's 
arbitration statutes set forth procedures for arbitration hearings, which  include the right to notice of the 
hearing and the right to present evidence, call witnesses, and cross examine 
opposing witnesses at the hearing.  
See § 1-36-110.  There is no claim those procedures were 
not followed in this case.   
Although we recognize Fee Dispute Rule 9 states the hearing will be 
conducted as an arbitration and the Wyoming Administrative Procedures Act does 
not apply, there is little difference between a contested case hearing and the 
hearing procedures set out in the arbitration statutes.  The goal of each is to provide the 
parties a fair hearing.  Compare § 
1-36-110 (arbitration hearing procedures) and Wyo. Stat. Ann. § 16-3-107 
(LexisNexis 2005) (contested case procedures).

 

4It is 
unusual that this guardian ad litem disbursement is for exactly the same amount 
Mr. Cotton claimed he paid to the mediator on behalf of Ms. 
McCulloh.

 
 

5Section 
1-14-126.  Costs in discretion of 
court.

 
 
  * * *

 
 
   (b) In civil actions for which an 
award of attorney's fees is authorized, the court in its discretion may award 
reasonable attorney's fees to the prevailing party without requiring expert 
testimony.  In exercising its 
discretion the court may consider the following 
factors:

            
(i) The time and labor required, the novelty and difficulty of the 
questions involved, and the skill requisite to perform the legal service 
properly;

            
(ii) The likelihood that the acceptance of the particular employment 
precluded other employment by the lawyer;

            
(iii) The fee customarily charged in the locality for similar legal 
services;

            
(iv) The amount involved and the results 
obtained;

            
(v) The time limitations imposed by the client or by the 
circumstances;

            
(vi) The nature and length of the professional relationship with the 
client;

            
(vii) The experience, reputation and ability of the lawyer or lawyers 
performing the services;  
and

            
(viii) Whether the fee is fixed or contingent.      

 
 

6Mr. Newcomb 
ultimately agreed to assist Mr. Cotton with the appeal, and Ms. McCulloh paid 
him $1,000 for his services.