Case Title: RONALD MUELLER, as an individual and Director of the Star Valley Ranch Association; and WILLIAM L. DALEY, an individual V. VINCE ZIMMER, an individual; and STEVE CRITTENDEN, an individual

Citation: 

Docket Number: S-07-0043

State: wyoming

Court: Wyoming Supreme Court

Date: 2007-12-11T00:00:00Z

Document:
RONALD MUELLER, as an individual and Director of the Star Valley Ranch Association; and WILLIAM L. DALEY, an individual V. VINCE ZIMMER, an individual; and STEVE CRITTENDEN, an individual2007 WY 195173 P.3d 361Case Number: S-07-0043Decided: 12/11/2007
OCTOBER TERM, A.D. 2007

 
 
RONALD MUELLER, 
as an individual and Director of the Star Valley Ranch Association; and WILLIAM 
L. DALEY, an individual,

 
 
Appellants

(Plaintiffs),

 
 
v.

 
 
VINCE ZIMMER, an 
individual; and STEVE CRITTENDEN, an individual,

 
 
Appellees

(Defendants).

 
 
Appeal from theDistrictCourtofLincolnCounty

The 
Honorable Dennis L. Sanderson, Judge

 
 
Representing 
Appellants:

Robert John Logan, Logan & 
Powell, LLP, Thayne, 
Wyoming.

 
 
Representing 
Appellees:

John R. Hursh, Central Wyoming Law 
Associates, PC, Riverton, 
Wyoming.

                                    

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

 
 
BURKE, 
Justice.

[¶1]         
Appellants, Ronald Mueller and 
William Daley, appeal the district court's order awarding attorney fees and 
costs to Appellees, Vince Zimmer and Steve Crittenden.  We affirm.

[¶2]         
We 
restate the issue as follows: 

Did the district court abuse its 
discretion in awarding appellees attorney fees and costs in the amount of 
$4,241.99?

[¶3]         
This is 
not the first time these parties have been before this Court in this litigation. 
In Mueller v. Zimmer, 2005 WY 156, 
124 P.3d 340 (Wyo. 2005), we affirmed the district court's grant of summary 
judgment on a variety of claims in favor of Appellees.  We also remanded the case to the district 
court for an award of attorney fees to Appellees as a sanction against 
Appellants for their pursuit of a frivolous claim.  This appeal arises from the district 
court's order awarding those fees.

[¶4]         
The 
initial litigation involved numerous parties and assorted claims made by 
Appellants.  In resolving the issues 
presented in this appeal, it is not necessary to restate much of the factual 
background in the underlying litigation.  We discuss here only those facts relevant 
to this appeal.

[¶5]         
Appellants instituted a shareholder 
derivative suit against the Star Valley Ranch Association, a charitable 
corporation.  They also made claims 
against the Board of Directors, various Board members, and former 
employees.  The Defendants included 
Appellees, who were former employees of the Association.  Appellants alleged, among other claims, 
that the Board of Directors hired Appellees as managers in violation of the 
Association's bylaws and claimed that their employment was ultra vires.  Appellants sought to recover the 
salaries the Association paid Appellees.  
The district court granted summary judgment to the Defendants.  Appellants appealed to this Court, and 
we affirmed.  Additionally, we 
imposed sanctions against Appellants, in the form of an award of attorney fees 
and costs to Appellees, because the ultra vires claim was frivolous and brought 
in bad faith.

[¶6]         
Our prior 
discussion on the substantive ultra vires issue noted that "[a] simple review of 
our statutes shows that Appellants' claim is utterly devoid of merit."  Mueller, ¶ 23, 124 P.3d  at 353.  We stated:

Appellants did not cite or discuss 
Wyo. Stat. Ann. § 17-19-304 [relating to ultra vires claims] in their argument 
on this issue. The egregiousness of this failure is compounded by the fact that 
Appellants were obviously aware of the statute because they cite it in support 
of an argument on another issue. Appellants' argument is not only not cogent, it 
is frivolous, and we can only conclude that the claim was pursued in bad faith. 
The summary judgment is affirmed.

Id., ¶ 24, 124 P.3d  at 
354.

[¶7]         
Later in 
the opinion, we explained our decision to award attorney fees and 
costs:

Appellants' argument has been 
characterized by the failure to provide evidence in support of their allegations 
and by the repeated presentation of contentions that are not cogent or supported 
by citation to any relevant legal authority. We specifically have found that 
Appellants' claim that the employments of Zimmer and Crittenden were ultra vires 
was frivolous and brought in bad faith considering their failure to cite the 
relevant statutory provision. Accordingly, we will require Appellants to pay all 
of the defendants' reasonable expenses, including counsel fees incurred in 
defending that particular claim. 
While tempted to award fees and costs for the other derivative claims brought by 
Appellants, we decline to do so after careful consideration of the matter. We 
remand this matter to the district court for a determination of those fees and 
costs.

Id., ¶ 44, 
124 P.3d  at 362 (footnote omitted).

[¶8]         
On 
remand, Appellees initially sought to recover their total costs and attorney 
fees.  They contended that our order 
applied to their defense of all derivative claims, not just the ultra vires 
claim.  Appellants, on the other 
hand, asserted that our order applied only to attorney fees and costs associated 
with the ultra vires claim.  The 
district court certified the question, but we declined to address it, 
stating:

The 
scope of our remand was sufficiently set forth in Mueller.  We specifically found that the ultra 
vires derivative claim was frivolous and pursued in bad faith.  We declined to award fees and costs for 
any of the other derivative claims.  We remanded only for a determination of 
the fees and costs associated with the defense against the ultra vires 
derivative claim and award of such to "all of the defendants" to the extent 
incurred, if any.

[¶9]         
Appellees 
subsequently revised their claim to include only the costs and fees attributable 
to their defense of the ultra vires claim, and moved for an award of 
$4,583.66.  The motion was supported 
by a ledger of costs and an affidavit from defense counsel.  The affidavit explained that the 
Defendants' counsel did not contemporaneously track the costs associated with 
the ultra vires claim.  Instead, 
counsel arrived at the figure by reviewing depositions, motions, work product, 
and billing records, and determined that 13.5% of the work was specific to the 
ultra vires claim.  Counsel then 
applied that amount to the total costs, $33,953.03, for a total request of 
$4,583.66.  Defense counsel's hourly 
billing rate was $150.00 per hour.  
After accounting for $193.50 that Appellants had previously paid and 
other downward cost adjustments, Appellees revised their total requested amount 
to $4,241.99.

[¶10]    
At the 
conclusion of the hearing, the district court awarded Appellees the requested 
attorney fees and costs, reasoning as follows:

THE 
COURT: . . . Well, this is a most unusual case.  Normally, as has been pointed out, this 
issue comes to us by way of the Supreme Court's mandate that we go through 
this.  I guess at the outset, I do 
remember spending [a] considerable amount of time researching the ultra vires 
issue during the motion for summary judgment, so I know it was an issue.  There was a lot of other, I think, more 
substantive issues with regard to this.  
But I guess given where we areand I can understand.  I understand what the Supreme Court is 
saying.  I believe it's more from a 
matter of having precision in terms of having ledgers and accounts on each 
claim, but, quite frankly, in our modern pleading, you know, we have in many 
cases such as this multiple counts.  
Sometimes, it's two different ways of saying the same thing.  When it gets down to saying, "Now, you 
sort out what you spent on one claim as opposed to another," I believe that's a 
practical impossibility because sometimes, for example, in a contract claim, you 
have a breach of contract.  You 
don't have a lawsuit any more on contract without the tort theory of breach of 
covenant of good faith and fair dealing.  
In both of those, you're plowing a lot of same ground as to what the 
breach was, for example.  So how do 
you allocate the two?

So in 
terms of where we are, basically, the choice I've got is nothing or 
$4,241.99.

I take 
in terms of what has been described here in the affidavits, what [Appellees' 
counsel] has submitted, it's obvious to the Court that he's done his best.  It really falls in the nature of expert 
testimony, if you want to call it that.  
He's trying to describe his methodology in allocating them out.  As we have in most things where you have 
opinion type of testimony, the other side is saying, "Well, it's 
speculation."

Given 
the choice between the two, in terms of where I'm at, I do find that [Appellees' 
counsel] has met his burden of proof and burden of persuasion.  I'm going to award the $4,241.99 
attorney's fees. 

Appellants 
now appeal the district court's decision.

[¶11]    
We review 
an award of attorney fees for an abuse of discretion. Cline v. Rocky Mountain, Inc., 998 P.2d 946, 951 (Wyo. 2000).

"A court abuses its discretion only 
when it acts in a manner which exceeds the bounds of reason under the 
circumstances. The burden is placed upon the party who is attacking the trial 
court's ruling to establish an abuse of discretion, and the ultimate issue is 
whether the court could reasonably conclude as it did."  

Id. (quoting Johnston v. Stephenson, 938 P.2d 861, 
862 (Wyo. 
1997)).

We have said that "[j]udicial 
discretion is a composite of many things, among which 
are conclusions drawn from objective criteria; it means a sound judgment 
exercised with regard to what is right under the circumstances and without doing so arbitrarily or 
capriciously."  Ekberg v. 
Sharp, 2003 WY 123, ¶ 9, 76 P.3d 1250, 1253 (Wyo. 2003). If the record includes sufficient evidence to 
support the district court's exercise of discretion, we uphold its 
decision.  In re KJD, 2002 WY 26, ¶ 21, 41 P.3d 522, 527 
(Wyo. 2002). 

Hayzlett v. Hayzlett, 2007 WY 147, ¶ 7, 167 P.3d 639, 
641-42 (Wyo. 2007).

DISCUSSION

[¶12]    
We note 
initially that Appellants do not contest the reasonableness of the $150 hourly 
rate charged by Appellees' attorney.   
The essence of Appellants' position in this appeal is that, because 
Appellees failed to provide an itemized statement reflecting only fees and costs 
incurred in defense of the ultra vires claim, there is insufficient evidence in 
the record to support the award.  
Appellants claim that the failure to provide a separate itemization is 
fatal to Appellees' claim.  Appellants rely upon our decisions in Miles v. CEC Homes, Inc., 753 P.2d 1021 
(Wyo. 1988) 
and Jensen v. Fremont Motors Cody, 
Inc., 2002 WY 173, ¶ 33, 58 P.3d 322, 330 (Wyo. 2002), in support of their 
assertion that "[s]egregation between multiple claims is required."  Their reliance is misplaced because both 
cases are factually distinguishable from the instant case.

[¶13]    
In Miles, the attorney represented two 
clients, only one of whom was legally entitled to an award of attorney fees 
pursuant to a contract.  753 P.2d  at 
1027.  The fee application set forth 
the total attorney fees incurred by both clients.  The district court entered an order 
awarding attorney fees for one half of the total amount.   We reversed because we found no 
evidence in the record supporting the district court's decision.  We explained:

In addressing the subject of 
attorney fees, we have said that an award of attorney fees "necessarily carries 
with it a considerable amount of discretion in the trial court" and that this 
discretion "is based upon the court's experience and knowledge in that 
professional field in which it is deemed to have peculiar competence." Lebsack v. Town of 
Torrington, 
Wyo., 698 P.2d 1141, 1148 (1985). There must, however, be 
some proof or evidentiary basis for determining a reasonable fee. 
Anderson v. Meier, Wyo., 
641 P.2d 187 (1982). We cannot discern from the record an evidentiary basis for 
the trial court's determination that CEC should receive one-half of the 
total amount of attorney fees. As far as we can tell, the only evidence to 
support this division of fees is the fact that there were two plaintiffs. This 
alone does not provide a sufficient evidentiary basis for the 
award.

The burden of proving the amount of 
an attorney fee award rests on the party seeking the award. See Downing v. Stiles, Wyo., 635 P.2d 808 
(1981). Because CEC failed to carry this burden, we must reverse the attorney 
fee award.

Id.

[¶14]    
In 
contrast to the situation presented in Miles, the record here contains a 
factual basis for the district court's decision.  Defense counsel's ledgers and affidavit 
provided information allowing the district court to make an informed decision 
regarding a proper attorney fee award.  
Counsel's affidavit explained the calculation method in detail.  Counsel in this case also clearly 
explained why he was unable to separate the claims simply based on the firm's 
ledgers.  Furthermore, the district 
court was intimately familiar with the parties, the issues, and the overall 
litigation.  It was in an excellent 
position to evaluate whether the Defendants' documentation and calculations 
fairly attributed reasonable costs to the particular claim at 
issue.

[¶15]    
In Jensen, we found no abuse of discretion 
in the district court's decision denying Mr. Jensen's request for attorney fees 
pursuant to Wyo. Stat. Ann. § 27-4-104(b) (LexisNexis 2001).1  We held that denial of the attorney fee 
claim was warranted because Mr. Jensen had failed to establish that he had 
prevailed on his claim for past due wages.  
We also stated the following, on which Appellants 
rely:

Implicit in this directive is the 
requirement that a party must show segregation is impossible before he may 
recover for claims for which there is no authorization of fee shifting.  Jensen made no attempt to show that 
segregation of the fees for each claim was impossible.  As the district court recognized, wages 
justly due and the amount spent on each claim were never established.  Under these circumstances, it was not an 
abuse of the district court's discretion to deny recovery of statutory attorney 
fees.

Id., ¶ 33, 58 P.3d  at 330-31 (footnote 
omitted).  Appellants' case, 
however, is distinguishable from Mr. Jensen's.  It is undisputed that Appellees are 
entitled to attorney fees for their defense of the ultra vires claim brought by 
Appellants.  Additionally, and 
significantly, in this case counsel provided an explanation for his failure to 
segregate the fees for each of the claims, and the district court found that the 
segregation of fees by specific claim was a "practical impossibility."  In short, there was a sufficient 
evidentiary basis for the district court's award of attorney fees and 
costs.  We find no abuse of 
discretion in the district court's award of attorney fees. 

[¶16]    
Affirmed.

FOOTNOTES

1Wyo. Stat. Ann. § 27-4-104(b) states 
that:

Whenever an employee who has quit or 
has been discharged from service has cause to bring suit for wages earned and 
due, and shall establish in court the amount which is justly due, the court 
shall allow to the plaintiff interest on the past due wages at the rate of 
eighteen percent (18%) per annum from the date of discharge or termination, 
together with a reasonable attorney fee and all costs of suit.  Prosecution of a civil action to recover 
unpaid wages does not preclude prosecution under W.S. 
27-4-105.