Case Title: Holmes v. LG Marion Corporation

Citation: 

Docket Number: 982638

State: virginia

Court: Virginia Supreme Court

Date: 1999-11-05T00:00:00Z

Document:
Present:  All the Justices 
 
TERONNIE HOLMES 
 
v.  Record No. 982638     OPINION BY JUSTICE ELIZABETH B. LACY 
 
 
 
November 5, 1999 
LG MARION CORPORATION 
 
FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY 
Frank A. Hoss, Jr., Judge 
 
 
In this appeal, Teronnie Holmes challenges the amount of 
the damage and attorneys' fee awards entered in his favor 
against LG Marion Corporation (LG Marion) for a willful 
violation of the Virginia Consumer Protection Act (VCPA), Code 
§§ 59.1-196 through –207.  Holmes also asserts that the trial 
court erred in striking Holmes' claim for a violation of the 
Magnuson-Moss Warranty Act (the Warranty Act), 15 U.S.C. 
§ 2301, et seq. (1996).  We will affirm the judgment of the 
trial court because we conclude that the trial court did not 
abuse its discretion in determining the amount of the 
attorneys' fee award or in refusing to enhance the amount of 
actual damages pursuant to Code § 59.1-204.  Although the 
trial court erred in striking Holmes' claim for a violation of 
the Warranty Act, such error was harmless. 
On March 21, 1996, Holmes purchased a 1989 Isuzu Impulse 
Turbo automobile from LG Marion.  The Isuzu had previously 
been owned by Rian Kirkman.  In 1993, when Kirkman purchased 
the vehicle for $5,790, the odometer showed 27,941 miles.  
According to Kirkman, the vehicle leaked oil "like a sieve," 
emitted white smoke from the tailpipe, the transmission made 
noises, and he had performed little maintenance on the 
vehicle.  In 1996, Kirkman sold the vehicle to Tyson's Ford 
for a trade-in cash value of $1,600.  LG Marion purchased the 
vehicle from Tyson's Ford for $2,100.   
Prior to his purchase, Holmes visited the dealership and 
test drove the vehicle with Marion Cloud, the owner and 
principal salesman of LG Marion.  Holmes asked Cloud about a 
"whining noise" coming from the vehicle.  Cloud told Holmes 
the noise was the sound of the turbo-charged engine.  Holmes 
again asked about the "whining noise" when he returned to 
purchase the vehicle, and was again told that it was the sound 
of the engine.  
 
Holmes paid $5,695 for the vehicle and $795 for the 
"Wynn's Product Warranty Program."  This program was described 
as a "limited warranty agreement" between Holmes and Wynn Oil 
Company.  It provided for reimbursement to Holmes by Wynn of 
up to $3,000 for certain costs incurred to repair or replace 
parts for two years following the purchase of the vehicle.   
Holmes also received a "Buyers Guide" indicating that the 
vehicle was being sold without a service contract and "as is;" 
however, Holmes was not asked to and did not sign an 
acknowledgement in the "Buyer's Guide" stating that the 
vehicle was sold "as is."  At the time Holmes purchased the 
vehicle, the odometer showed 83,945 miles. 
 
2
Within a few days of the purchase, while changing the oil 
in the vehicle, Holmes discovered that the oil had turned 
black.  Following a trip to Kentucky in early April, the 
vehicle began to emit smoke, make noises, shake, and use large 
quantities of oil.  According to Holmes, the vehicle ran "like 
a lawnmower."  LG Marion refused Holmes' request to repair the 
vehicle.  At this point, the odometer showed over 89,700 
miles.  In May, Holmes took the vehicle to an Isuzu dealership 
and was told that the whining noise came from the 
transmission, and that the engine, transmission, and exhaust 
systems required overhaul or replacement.  The dealership 
estimated the cost of these repairs to be at least $5,000.  
Holmes did not seek repair under the Wynn's Product Warranty 
Program.  The vehicle subsequently stopped running. 
 
Holmes filed a motion for judgment against LG Marion 
alleging a violation of the Warranty Act, common law fraud, 
constructive fraud, violations of the VCPA, and breach of 
contract.  At a bench trial, following presentation of Holmes' 
liability evidence, the trial court granted LG Marion's motion 
to strike Holmes' claim under the Warranty Act.  At the close 
of all evidence, the trial court awarded Holmes $4,000 in 
actual damages, and found that LG Marion had willfully 
violated the VCPA by misrepresenting the condition of the 
vehicle to Holmes prior to the sale.  The trial court denied 
Holmes' motion seeking reconsideration of its ruling striking 
 
3
his Warranty Act claim and refusing to increase the damage 
award under Code § 59.1-204(A) of the VCPA. 
 
Following this ruling, the parties presented further 
evidence and argument to the trial court on Holmes' request 
for $18,532 in attorneys' fees, $1,389.81 in costs, pursuant 
to Code §§ 59.1-204(B), 14.1-178, and -198, and $2,757.30 in 
attorneys' fees and costs as sanctions under Rule 4:12(c).1  
The trial court awarded Holmes $4,000 in attorneys' fees 
pursuant to Code § 59.1-204(B), and $1,500 in costs pursuant 
to Code §§ 14.1-178 and -198, and Rule 4:12(c).  
On appeal Holmes assigns error to the actions of the 
trial court in failing to increase the damage award under Code 
§ 59.1-204(A) to reflect LG Marion's willful violation of the 
VCPA, in "limiting Mr. Holmes' attorneys' fees under Code 
§ 59.1-204(B) to his awarded damages," and in striking his 
claim under the Warranty Act.   
I.  Enhanced Damages 
Holmes does not challenge the amount of actual damages 
awarded by the trial court.  He asserts, however, that the 
trial court should have trebled the $4,000 actual damage award 
because it found that LG Marion engaged in a "willful" 
violation of the VCPA.  Holmes bases his request on Code 
                     
1 Code §§ 14.1-178 and -198 were repealed in 1998.  Code 
§§ 17.1-601 and -626, effective October 1, 1998, are the 
successor statutes, respectively, and contain no substantive 
 
4
§ 59.1-204(A), which states that "[i]f the trier of fact finds 
that the violation [of the VCPA] was willful, it may increase 
the damages to an amount not exceeding three times the actual 
damages sustained, or $1,000, whichever is greater."  Code 
§ 59.1-204(A).  This section, Holmes asserts, represents the 
General Assembly's intent that willful violators of the VCPA 
suffer a punitive sanction in the form of enhanced damages. 
The purpose of Code § 59.1-204(A) is to provide a penalty 
for intentional violations of the VCPA in addition to 
restitution for damages incurred.  The General Assembly, 
nevertheless, did not mandate the imposition of such penalty, 
but left that decision to the discretion of the trier of fact.  
Therefore, on appellate review, we will not disturb the trial 
court's decision unless we find that the decision was an abuse 
of discretion. 
LG Marion's violation of the VCPA was willful, according 
to the trial court, because LG Marion knew there were problems 
with the vehicle.  When Holmes asked about its condition, LG 
Marion either intentionally misrepresented the condition of 
the vehicle or purposely failed to ascertain its true 
condition.  In determining the damages, however, the trial 
court expressed concern over its ability to ascertain the 
damage which flowed from this misrepresentation.  Holmes drove 
                                                                
changes.  For purposes of this opinion we will refer to the 
provisions by their former statutory designations. 
 
5
the vehicle over 6,000 miles after he noticed the problems 
with it and before he had the vehicle independently evaluated 
in order to determine its true condition.  Holmes' actions in 
this regard not only had an adverse effect on determining the 
actual damages Holmes incurred, but also on the extent 
punitive sanctions should flow from the willful 
misrepresentation. 
While the VCPA is remedial legislation and should be 
liberally applied, the statutory authorization to impose 
enhanced actual damages is not a requirement to do so.  Under 
the facts of this case, we cannot say that the trial court 
applied erroneous principles of law or otherwise abused its 
discretion in declining to impose enhanced damages under Code 
§ 59.1-204(A). 
II.  Attorneys' Fees 
Holmes' next assignment of error is that the trial court 
erred "by limiting Mr. Holmes' attorney's fees under Section 
59.1-204(B) to his awarded damages."  We reject this 
assignment of error on two grounds.  First, although Holmes 
asserts that the trial court "limited" his attorneys' fee 
award to the amount of his actual damages, nothing in the 
record, other than the fact that the amounts are identical, 
supports this conclusion. 
Holmes argues that he introduced sufficient evidence to 
support his claim that the requested fees of over $18,000 were 
 
6
reasonable.  LG Marion, Holmes asserts, presented no evidence 
rebutting the reasonableness of these fees and thus, in 
awarding only $4,000 in attorneys' fees, the trial court 
ignored Holmes' evidence and improperly limited the amount of 
the attorneys' fees award to the amount of his damage 
recovery.  We disagree. 
In discussing Holmes' request for attorneys' fees, the 
trial court did not make any statement reflecting either a 
belief or a requirement that the amount of the attorneys' fees 
should be limited to the amount of actual damages.  Rather, 
the trial court evaluated the nature of the litigation and the 
work performed by counsel.  The trial court concluded that the 
fee amount Holmes requested was "unreasonable" for a "case of 
this nature."  This record simply does not support the 
assertion by Holmes that the trial court limited its award of 
attorneys' fees to the amount of the damage award. 
We also reject this assignment of error to the extent it 
includes an argument that the attorneys' fees award was 
inadequate.  When, as here, recovery of attorneys' fees is 
authorized by statute, the fact finder must determine "from 
the evidence the amount of the reasonable fees under the facts 
and circumstances of each particular case."  Tazewell Oil Co. 
v. United Virginia Bank, 243 Va. 94, 111, 413 S.E.2d 611, 621 
(1992).  The trier of fact must "'weigh the testimony of 
attorneys as to the value of the services, by reference to 
 
7
their nature, the time occupied in their performance, and 
other attending circumstances, and by applying to it their own 
experience and knowledge of the character of such services.'"  
Beale v. King, Administratrix, 204 Va. 443, 446, 132 S.E.2d 
476, 478-79 (1963) (citation omitted).  On appeal the trial 
court's determination of the amount of the attorneys' fees to 
be awarded will be set aside only upon a finding of abuse of 
discretion.  See Coady v. Strategic Resources, Inc., 258 Va. 
12, 18, 515 S.E.2d 273, 276 (1999); RF&P Corporation v. 
Little, 247 Va. 309, 323, 440 S.E.2d 908, 917 (1994); Rappold 
v. Indiana Lumbermens Mutual Ins., 246 Va. 10, 15-16, 431 
S.E.2d 302, 306 (1993). 
Holmes produced numerous records and the affidavit of an 
expert witness to support the reasonableness of his fee 
request.  LG Marion did not contest the hourly fee rate of 
Holmes' counsel, but it did object to the inclusion of a 
number of items which it asserted were "excessive, redundant 
or otherwise unnecessary."  The items challenged by LG Marion 
included time spent in seeking to disqualify LG Marion's 
counsel, time LG Marion alleged was spent as a result of lack 
of preparation by Holmes' counsel, and time spent on claims 
upon which Holmes did not prevail.  Furthermore, although 
Holmes submitted expert opinion evidence regarding the 
reasonableness of the fees, the trial court was not bound by 
that testimony.  Beale, 204 Va. at 446, 132 S.E.2d at 478.  
 
8
As recited above, the trial court considered the evidence 
before it, the circumstances of the litigation, and its "own 
experience and knowledge of the character of such services" in 
reaching its decision.  It determined that the amount 
requested was unreasonable and that an award of $4,000 in 
attorneys' fees was reasonable.  Based on this record we 
cannot say that the trial court abused its discretion in 
determining the amount of the award of attorneys' fees.2  
III.  Warranty Act Claim 
Count I of Holmes' motion for judgment alleged that LG 
Marion breached the Wynn's Product Warranty Program and 
breached the implied warranty of merchantability in violation 
of the Warranty Act.  The trial court dismissed Count I, 
holding that Holmes failed to prove that LG Marion violated 
the warranty contained in the Wynn's Product Warranty Program.  
Dismissal of the entire count was error because the claim for 
                     
2 Holmes also argues here, as he did before the trial 
court, that the amount of attorneys' fees should be calculated 
by the so-called "lodestar" award method.  That method 
requires identification of the hours reasonably incurred in 
the litigation multiplied by a reasonable hourly rate and then 
adjustment of the award by consideration of a number of 
specific factors.  Hensley v. Eckerhart, 461 U.S. 424 (1983).  
Because we conclude that the attorneys' fee award is 
reasonable in this case, we do not address this argument.  
Nevertheless, as LG Marion points out, many of the factors 
cited within the "lodestar" approach are included in the 
elements considered by the trial court here, including the 
novelty and difficulty of the questions raised, the skill 
required, and the "overall relief obtained by the plaintiff in 
relation to the hours expended on the litigation."  Id. at 
435.  
 
9
breach of the implied warranty of merchantability in violation 
of the Warranty Act was a separate claim unconnected to the 
alleged breach of the Wynn's Product Warranty Program.  For 
the reasons that follow, however, we conclude that the trial 
court's error was harmless because it did not deny Holmes the 
ability to recover any sums in addition to those awarded by 
the trial court.  
As Holmes conceded, the actual damages he would be 
entitled to recover resulting from a violation of the VCPA and 
of the Warranty Act are the same.3  Holmes has not challenged 
the amount of actual damages awarded by the trial court and a 
litigant is not entitled to double recovery of actual damages.  
See Tazewell Oil Co., 243 Va. at 113, 413 S.E.2d at 621-22.  
Therefore, striking the allegations of a violation of the 
Warranty Act was harmless as to the amount of actual damages 
which Holmes could recover in this action. 
                     
3 The VCPA states in relevant part: 
Any person who suffers loss as the result of a 
violation of this chapter shall be entitled to 
initiate an action to recover actual damages. . . .  
 
Code § 59.1-204(A).   
 
The provision of the Warranty Act relating to damages 
states: 
[A] consumer who is damaged by the failure of a 
supplier, warrantor, or service contractor to comply 
with any obligation under this chapter, or under a 
written warranty, implied warranty, or service 
contract, may bring suit for damages and other legal 
or equitable relief.   
 
 
10
The VCPA and the Warranty Act allow recovery of 
attorneys' fees.4  Both statutes require that the award of 
attorneys' fees be reasonable as determined by the trial 
court.  As discussed above, the trial court in this case 
determined that Holmes' requested attorneys' fees were 
unreasonable and awarded an amount it considered reasonable 
for this case.  There is no indication that the determination 
of reasonable attorneys' fees would be different if made 
pursuant to the Warranty Act.  
The only possible difference between recovery under the 
VCPA and the Warranty Act is the potential recovery of costs 
and expenses of litigation.  The VCPA provides recovery for 
"court costs" and the Warranty Act allows recovery of "cost 
and expenses . . . determined by the court to have been 
reasonably incurred by the plaintiff for or in connection with 
                                                                
15 U.S.C. § 2310(d)(1). 
 
4 The provisions relating to attorneys' fees state: 
 
[I]n addition to any damages awarded, such 
person also may be awarded reasonable attorney's 
fees and court costs.   
 
Code § 59.1-204(B).   
 
If a consumer prevails . . . , he may be 
allowed by the court to recover . . . a sum equal to 
the aggregate amount of cost and expenses (including 
attorneys' fees based on actual time expended) 
determined by the court to have been reasonably 
incurred by the plaintiff . . . ."   
 
15 U.S.C. § 2310(d)(2). 
 
11
the commencement and prosecution of such action . . . ."  15 
U.S.C. § 2310(d)(2).  Costs and expenses recoverable under the 
Warranty Act could include recovery for trial–related expenses 
such as expert witness fees, which are not recoverable under 
the rubric of "court costs" allowed by Code § 59.1-204(B). 
However, in addition to the court costs authorized by the 
VCPA, Holmes sought recovery of litigation expenses pursuant 
to Code §§ 14.1-178 and -198, and Rule 4:12(c).  Holmes' 
request pursuant to Code §§ 14.1-178 and -198 included not 
only filing fees, service fees, and subpoena fees, but also 
reasonable costs for depositions taken out-of-state and the 
"fees and/or costs to secure" the services of two of Holmes' 
witnesses.  The total requested for these items was $1,389.81.5
Holmes also sought $2,757.30 as sanctions under Rule 
4:12(c) for attorneys' fees, costs, and expenses incurred for 
the services of his automotive expert Godfrey and to conduct 
the deposition of Kirkman.  Approximately $1,600 of this 
amount was designated as attorneys' fees, and the remaining 
amount was for the same witness' expenses listed in Holmes' 
request for costs under Code §§ 14.1-178 and -198.  
The trial court considered all these requests and awarded 
Holmes $1,500 pursuant to Code §§ 14.1-178 and –198, and Rule 
                     
5 We note that although this amount is less than the sum 
of the amounts assigned to each element of expense sought, it 
is the total amount Holmes requested under these statutory 
 
12
4:12(c).  This award for litigation expenses was not limited 
to the court costs allowed under the VCPA.  The only 
limitation on the award imposed by these sections and this 
rule is that the amount of the award be reasonable, in the 
opinion of the trial court.  This same limitation – 
reasonableness – is imposed on litigation expenses recoverable 
under the Warranty Act. 
Under these circumstances, we conclude that the expenses 
requested and recovered by Holmes encompassed the same type of 
expenses he could have recovered under the Warranty Act.  
There is nothing in this record to indicate that any expense, 
and certainly no significant expense, related to the 
litigation was omitted from Holmes' request for recovery of 
costs and expenses presented to the trial court.  The 
rationale of reasonableness was applied by the trial court to 
Holmes' requests.  There is no indication that a different 
result would have been reached had the trial court applied the 
standard of reasonableness under the Warranty Act.  
In summary, because there would have been no difference 
in the amount of actual damages, reasonable attorneys' fees, 
court costs, and reasonable litigation expenses had Holmes 
pursued and prevailed in his claim for a breach of the implied 
warranty of merchantability in violation of the Warranty Act, 
                                                                
provisions in both his pleadings and argument before the trial 
court. 
 
13
the trial court's error in striking Holmes' claim under the 
Warranty Act was harmless. 
For the above reasons, we will affirm the judgment of the 
trial court. 
Affirmed.
JUSTICE KINSER, with whom JUSTICE HASSELL joins, concurring in 
part and dissenting in part. 
 
 
I respectfully dissent from the majority’s decision with 
regard to the issue of attorneys’ fees.  While I recognize 
that this Court should reverse an award of attorneys’ fees 
only when the trial court has abused its discretion, see Coady 
v. Strategic Resources, Inc., 258 Va. 12, 18, 515 S.E.2d 273, 
276 (1999), I am convinced that such an abuse occurred in this 
case. 
 
Teronnie Holmes presented detailed records in support of 
his request for attorneys’ fees in the amount of $18,532.  
Holmes also submitted an affidavit from an attorney 
experienced in the area of consumer rights litigation, who 
opined that the amount of time expended on this case and the 
hourly fees charged were reasonable, necessary, and fair.  LG 
Marion Corporation presented no countervailing evidence, but 
only argued that some of the hours billed were unnecessary.  
LG Marion characterized the requested amount of attorneys’ 
fees as “perhaps the biggest travesty of this case, that it is 
three times the cost of the car.” 
 
14
Based on this evidence, the circuit court concluded that 
the amount requested was “unreasonable.”  However, the court 
did not make any factual findings but merely stated, “I feel 
like the money store. . . . I think it is . . . shameful to 
have to spend $20,000 on a case of this nature.”  While I do 
not necessarily disagree with the circuit court’s comments, I 
do not consider the statements to be a proper evaluation of 
the attorneys’ fees requested by Holmes.  In Mullins v. 
Richlands Nat’l Bank, 241 Va. 447, 403 S.E.2d 334 (1991), we 
said that “[i]n determining a reasonable fee, the fact finder 
should consider such circumstances as the time consumed, the 
effort expended, the nature of the services rendered, and 
other attending circumstances.”  Id. at 449, 403 S.E.2d at 
335.  See also Tazewell Oil Co., Inc. v. United Virginia 
Bank/Crestar Bank, 243 Va. 94, 112, 413 S.E.2d 611, 621 
(1992).  I cannot determine from the record whether the 
circuit court considered any of these factors. 
Nevertheless, the majority concludes that the circuit 
court did not limit the amount of attorneys’ fees awarded to 
an amount equal to the amount of Holmes’ actual damages.  
Absent evidence of a reasoned analysis by the circuit court of 
the amount of the requested fees, the only inference that I 
can draw from the record is that the circuit court did limit 
the amount of attorneys’ fees to the amount of damages awarded 
to the Holmes.  An award of attorneys’ fees calculated in that 
 
15
manner is improper.  See Riverside v. Rivera, 477 U.S. 561, 
575-79 (1986) (rejecting contention in civil rights action 
that attorneys’ fees should be proportional to damages awarded 
because attorneys should be encouraged to represent persons 
with legitimate civil rights complaints); Cieri v. Leticia 
Query Realty, Inc., 905 P.2d 29, 48 (Haw. 1995) (in action 
under state consumer protection act, “the amount of fees need 
not be restricted to the amount of actual damages”); Bittner 
v. Tri-County Toyota, Inc., 569 N.E.2d 464, 465 (Ohio 1991) 
(“reject[ing] the contention that the amount of attorney fees 
awarded . . . must bear a direct relationship to the dollar 
amount of” damages in action under state consumer protection 
act). 
For these reasons, I conclude that the circuit court 
abused its discretion and therefore respectfully dissent.  
However, I join the majority opinion with regard to the other 
issues presented in this appeal. 
 
16