Title: CARKEEK v AYERS

State: montana

Issuer: Montana Supreme Court

Document:

N o . 14976 I N T H E SUPREME C O U R T O F T H E STATE O F M O N T A N A 1980 RILEY G. CAREEK, d/b/a SILVERTIP CONSTRUCTION CO., P l a i n t i f f and Respondent, VS . EUGENE AYER, Defendant and Appellant, and SIMKINS-HALLIN, INC. Intervenor. Appeal from: D i s t r i c t Court o f t h e Eighteenth J u d i c i a l D i s t r i c t , Honorable W. W. Lessley, Judge p r e s i d i n g . I n and For t h e County of G a l l a t i n . Counsel o f Record: For Appellant: Berg, Morgan, C o i l & Stokes, Bozeman, Montana For Respondent: Drysdale, McLean, Screnar and Cok, Bozeman, Montana Submitted on b r i e f s : A p r i l 3, 1980 Decided: J u l y 22, 1980 F i l e d : N L ~ ~ 1980 M r . C h i e f J u s t i c e F r a n k I. H a s w e l l d e l i v e r e d t h e O p i n i o n o f t h e C o u r t . T h i s i s a n a p p e a l f r o m a n a w a r d o f a t t o r n e y f e e s by a p r o - p e r t y o w n e r who s u c c e s s f u l l y d e f e n d e d a g a i n s t a n a t t e m p t e d m e c h a n i c ' s l i e n f o r e c l o s u r e . P l a i n t i f f C a r k e e k , t h e l i e n h o l d e r , s u e d d e f e n d a n t A y e r , t h e l i e n e e , t o f o r e c l o s e a l i e n f o r $ 6 , 2 0 0 f o r l a b o r a n d m a t e r i a l s f u r n i s h e d i n c o n s t r u c t i n g two b a r n s on t h e l a t t e r ' s p r o p e r t y . T h e l i e n e e r e s i s t e d t h e a t t e m p t e d f o r e c l o s u r e a n d c o u n t e r c l a i m e d f o r a p p r o x i m a t e l y $ 6 , 0 0 0 d a m a g e s f o r d e f e c t i v e w o r k m a n s h i p , r u i n e d h a y a n d o t h e r e x p e n s e s . F o l l o w i n g a b e n c h t r i a l , t h e D i s t r i c t C o u r t e n t e r e d j u d g m e n t f o r t h e l i e n e e o n t h e a t t e m p t e d f o r e c l o s u r e , a w a r d e d h i m $ 3 , 3 1 1 . 5 0 d a m a g e s o n h i s c o u n t e r c l a i m a n d g r a n t e d h i m a t t o r n e y f e e s a n d c o s t s t o b e d e t e r m i n e d a t a n a p p r o p r i a t e h e a r i n g . F o l l o w i n g t h i s h e a r i n g i n w h i c h t h e l i e n e e s o u g h t a t t o r n e y f e e s o f $ 5 , 7 7 3 . 2 0 , t h e D i s t r i c t J u d g e a w a r d e d h i m $ 3 , 0 0 0 a t t o r n e y f e e s a n d $ 6 0 5 . 9 2 c o s t s . T h e D i s t r i c t J u d g e f i l e d t h i s memorandum a c c o m p a n y i n g h i s o r d e r : ' ' T h i s C o u r t i s c o n v i n c e d t h a t t h e a t t o r n e y , M i c h a e l C . C o i l , i s e n t i t l e d t o F i f t y D o l l a r s ( $ 5 0 . 0 0 ) p e r h o u r f o r a t t o r n e y ' s f e e s ; t h a t h e h a s s p e n t a t o t a l o f One H u n d r e d F o r t y - f o u r a n d t h i r t y - t h r e e ( 1 4 4 . 3 3 ) h o u r s i n t h i s c a u s e , a n d h i s d e d u c t i o n o f T e n D o l l a r s ( $ 1 0 . 0 0 ) p e r h o u r r e s u l t i n g i n a f e e o f F o r t y D o l l a r s ( $ 4 0 . 0 0 ) p e r h o u r i s m o s t f a i r ; t h a t F i v e T h o u s a n d S e v e n H u n d r e d S e v e n t y - t h r e e a n d 2 0 / 1 0 0 D o l l a r s ( $ 5 , 7 7 3 . 2 0 ) i s a r e a s o n a b l e f e e ; h o w e v e r , t h e d e f e n d a n t ( s i c ) i n t h i s c a u s e h a s b e e n a l m o s t h e l p l e s s i n t h i s l i t i g a t i o n t h r o u g h t h e c o n t i n u e d d e l a y s a n d a t l e a s t two a t t o r n e y s . H i s f i r s t a t t o r n e y , M r . Tom S a b o , was n o t p r o m p t o r p r o f e s s i o n a l i n h i s p r e p a r a t i o n o f t h e c a s e n o r i n h i s r e p r e - s e n t a t i o n o f p l a i n t i f f ; t h i s d e l a y a n d c o n - f u s i o n was a l m o s t b e y o n d b e l i e f . T h e p l a i n t i f f i s now f a c e d w i t h l o s s o f h i s l a w s u i t . "To now i n s i s t o n t h e p a y m e n t o f a t t o r n e y ' s f e e s o f F i v e T h o u s a n d S e v e n H u n d r e d S e v e n t y - t h r e e a n d 2 0 / 1 0 0 D o l l a r s ( $ 5 , 7 7 3 . 2 0 ) a n d h i s own a t t o r n e y ' s f e e s w o u l d b e m o s t u n r e a s o n a b l e . " T h e l i e n e e a p p e a l s f r o m t h e a w a r d o f o n l y $ 3 , 0 0 0 a t t o r n e y f e e s , c o n t e n d i n g t h a t h e i s e n t i t l e d t o $ 5 , 7 7 3 . 2 0 , t h e a m o u n t t h e D i s t r i c t C o u r t f o u n d t o b e a r e a s o n a b l e f e e . A p a r t y who s u c c e s s f u l l y d e f e n d s a g a i n s t a f o r e c l o s u r e a c t i o n m u s t b e a l l o w e d a r e a s o n a b l e a t t o r n e y f e e i n b o t h t h e D i s t r i c t C o u r t a n d t h e S u p r e m e C o u r t . S e c t i o n 7 1 - 3 - 1 2 4 , MCA. I n d e t e r m i n i n g w h a t c o n s t i t u t e s a " r e a s o n a b l e f e e " i n a g i v e n c a s e , we h a v e s e t down t h e f o l l o w i n g g u i d e l i n e s : 0 1 . . , T h e c i r c u m s t a n c e s t o b e c o n s i d e r e d i n d e t e r m i n i n g t h e c o m p e n s a t i o n t o b e r e c o v e r e d a r e t h e a m o u n t a n d c h a r a c t e r o f t h e s e r v i c e s r e n d e r e d , t h e l a b o r , t i m e a n d t r o u b l e i n v o l v e d , t h e c h a r a c t e r a n d i m p o r t a n c e o f t h e l i t i g a t i o n i n w h i c h t h e s e r v i c e s w e r e r e n d e r e d , t h e a m o u n t o f money o r t h e v a l u e o f p r o p e r t y t o b e a f f e c t e d , t h e p r o f e s s i o n a l s k i l l a n d e x p e r i e n c e c a l l e d f o r , t h e c h a r a c t e r a n d s t a n d i n g i n t h e i r p r o f e s s i o n o f t h e a t t o r n e y s . . . T h e r e s u l t s e c u r e d b y t h e s e r v i c e s o f t h e a t t o r n e y s may b e c o n s i d e r e d a s a n i m p o r t a n t e l e m e n t i n d e t e r m i n i n g t h e i r v a l u e . " ' F i r s t S e c u r i t y Bank v. T h o l k e s ( 1 9 7 6 ) , 1 6 9 Mont. 4 2 2 , 4 2 9 - 3 0 , 5 4 7 P.2d 1 3 2 8 , 1 3 3 2 . W i t h i n t h e s e g u i d e l i n e s , t h e a m o u n t f i x e d a s a t t o r n e y f e e s i s l a r g e l y d i s c r e t i o n a r y w i t h t h e D i s t r i c t C o u r t . W e w i l l n o t d i s t u r b i t s j u d g m e n t i n t h e a b s e n c e o f a n a b u s e o f t h a t d i s c r e t i o n . W e h a v e p r e v i o u s l y s t a t e d t h e a p p l i c a b l e p r i n c i p l e s i n t h i s l a n g u a g e : " T h i s C o u r t i s w e l l a w a r e o f i t s r o l e when a s k e d t o l o o k i n t o m a t t e r s o f a b u s e o f d i s c r e t i o n o f t h e t r i a l c o u r t a n d we h a v e n o t e d t h e number o f c a s e s a n d o t h e r c i t a t i o n s g i v e n u s b y t h e p a r t i e s . W e f e e l a n a p p r o v e d c o m p o s i t e p o s i t i o n s i m p l y s t a t e d w o u l d b e : a r e v i e w i n g c o u r t i s n e v e r j u s t i f i e d i n s u b s t i t u t i n g i t s d i s c r e t i o n f o r t h a t o f t h e t r i a l c o u r t . I n d e t e r m i n i n g w h e t h e r t h e t r i a l c o u r t a b u s e d i t s d i s c r e t i o n , t h e q u e s t i o n i s n o t w h e t h e r t h e r e v i e w i n g c o u r t a g r e e s w i t h t h e t r i a l c o u r t , b u t r a t h e r , d i d t h e t r i a l c o u r t i n t h e e x e r c i s e o f i t s d i s c r e t i o n a c t a r b i t r a r i l y w i t h o u t t h e e m p l o y m e n t o f c o n s c i e n t i o u s j u d g m e n t o r e x c e e d t h e b o u n d s o f r e a s o n , i n v i e w o f a l l t h e c i r c u m s t a n c e s , i g n o r i n g r e c o g n i z e d p r i n c i p l e s r e s u l t i n g i n s u b s t a n t i a l i n j u s t i c e . " P o r t e r v. P o r t e r ( 1 9 7 0 ) , 1 5 5 Mont. 4 5 1 , 4 5 7 , 453 P.2d 5 3 8 , 5 4 1 . < ' . W e n o t e t h a t a r e a s o n a b l e a t t o r n e y f e e m u s t b e a w a r d e d f o r t h e s u c c e s s f u l d e f e n s e o f t h e f o r e c l o s u r e a c t i o n by v i r t u e o f s e c - t i o n 7 1 - 3 - 1 2 4 , MCA. T h e r e i s no s t a t u t o r y p r o v i s i o n f o r a n a w a r d o f a t t o r n e y f e e s i n s u c c e s s f u l l y p r o s e c u t i n g t h e c o u n t e r c l a i m f o r d a m a g e s . C o s t s a r e r e c o v e r a b l e o n t h e c o u n t e r c l a i m , s e c t i o n s 2 5 - 1 0 - 1 0 1 ( 3 ) , 2 5 - 1 0 - 1 0 2 , a n d 2 5 - 1 0 - 2 0 1 , MCA; b u t a t t o r n e y f e e s a r e n o t r e c o v e r a b l e c o s t s i n t h e a b s e n c e o f s t a t u t e o r c o n t r a c - t u a l a g r e e m e n t o f t h e p a r t i e s . W i n e r v. J o n a l C o r p . ( 1 9 7 6 ) , 1 6 9 Mont. 2 4 7 , 5 4 5 P.2d 1 0 9 4 , a n d c a s e s t h e r e i n c i t e d . A p p l y i n g t h e f o r e g o i n g p r i n c i p l e s t o t h i s c a s e , we c a n n o t s a y t h a t t h e D i s t r i c t C o u r t a b u s e d i t s d i s c r e t i o n i n r e d u c i n g t h e l i e n e e ' s c l a i m f o r a t t o r n e y f e e s f r o m $ 5 , 7 7 3 . 2 0 t o $ 3 , 0 0 0 . A r e a s o n a b l e a t t o r n e y f e e i n a g i v e n c a s e d o e s n o t n e c e s s a r i l y r e s u l t f r o m s i m p l e m u l t i p l i c a t i o n o f t h e h o u r s s p e n t t i m e s a f i x e d h o u r l y r a t e . To a w a r d a n a t t o r n e y s f e e o f $ 5 , 7 7 3 . 2 0 i n d e f e n d i n g a g a i n s t a $ 6 , 2 0 0 c l a i m w o u l d a p p e a r m o s t u n r e a s o n a b l e r e g a r d l e s s o f t h e t i m e s p e n t , t h e s k i l l i n v o l v e d i n t h e w o r k , t h e e x p e r i e n c e o f t h e a t t o r n e y a n d s i m i l a r c o n s i d e r a t i o n s . T h e d e f e n s e s i m p l y i s n o t w o r t h a f e e a p p r o a c h i n g 1 0 0 % o f t h e a m o u n t o f t h e l i e n . W e i n t e r p r e t t h e D i s t r i c t c o u r t ' s memorandum a s s a y i n g t h a t w h i l e a f e e o f $ 5 , 7 7 3 . 2 0 i s f a i r a n d r e a s o n a b l e , i t w o u l d b e u n r e a s o n a b l e t o a s s e s s t h i s e n t i r e a m o u n t a g a i n s t t h e l i e n h o l d e r u n d e r t h e c i r c u m s t a n c e s o f t h i s c a s e . W e a g r e e . W e f i n d no a b u s e o f d i s c r e t i o n b y t h e D i s t r i c t C o u r t . A f f i r m e d . ............................ C h i e f J u s t i c e ' W e c o n c u r : i . ................................... J u s t i c e s M r . J u s t i c e John C. Sheehy dissenting: I n approving t h e a t t o r n e y s f e e s of $3,000 here, t h e majority approves t h e i r pay a t t h e rate of $20.75 p e r hour. That r a t e is unconscionable! I t is unreasonable i n t h e sense t h a t it d e f i e s reason. I t means t h a t t h e s u c c e s s f u l a t t o r n e y , i f h i s c l i e n t does n o t make up t h e d i f f e r e n c e , w i l l have t o s u s t a i n t h e deficiency, o r recover a proper amount from o t h e r c l i e n t s i n h i s o f f i c e by charging them g r e a t e r f e e s t o make up h i s l o s s . Let m e state a lesson i n l a w o f f i c e economics. A lawyer i n p r i v a t e p r a c t i c e , f i v e years o u t of law school, and n o t a parttime retiree, who is not grossing $30,000 a year i n f e e s should seek some o t h e r business. A t a p o i n t where a lawyer's gross f e e s exceed $40,000 p e r year, he begins t o be an economic u n i t . A s a general r u l e of thumb, it can be assumed t h a t from $40,000 t o $100,000 p e r year i n gross f e e s , h i s c o s t s of doing business, including o f f i c e r e n t , l i b r a r y , employees' wages, and general o f f i c e expenses w i l l exhaust 50 percent of t h e gross f e e s t h a t he w i l l earn. I n theory, a lawyer who p r a c t i c e s on a f e e b a s i s of charging f o r h i s t i m e has a p o s s i b l e 2,000 hours p e r y e a r f o r which he could send b i l l s . I n r e a l i t y , however, t h e t i m e a lawyer w i l l spend i n p r o f e s s i o n a l upgrading, community s e r v i c e , and general o f f i c e management w i l l reduce t h e b i l l a b l e t i m e t o c l i e n t s t o about 60 percent, o r 1,200 hours p e r year. The minimum, t h e r e f o r e , t h a t any lawyer worth h i s s a l t should charge f o r h i s time is $50 p e r hour. A t t h a t rate, t h e r e i s no danger t h a t he would accumulate much of an estate. I n t h i s case, t h e a t t o r n e y s possibly o u t of deference t o t h e D i s t r i c t Court, reduced t h e claimed f e e of $50 p e r hour by 20 percent t o $40 p e r hour. I t was t h e l a t t e r f i g u r e t h a t gave rise t o t h e f e e of $5,773.20. Then, a f t e r f i n d i n g t h a t t h e f e e t h e a t t o r n e y s claimed w a s "most f a i r " t h e D i s t r i c t Court s l i c e d t h a t f e e nearly i n h a l f t o a sum t h a t I would consider most u n f a i r . The reasons given by t h e D i s t r i c t Court, and now endorsed by t h i s Court f o r t h i s s l i c i n g are t h a t t h e p l a i n t i f f had a t t o r n e y s who d i d n o t s e r v e him properly o r t h a t t h e a t t o r n e y s w e r e not p r o f e s s i o n a l i n t h e i r work f o r t h e p l a i n t i f f . The a t t o r n e y s w e r e s e l e c t e d by t h e p l a i n t i f f , y e t it is t h e defendant and h i s a t t o r n e y s who a r e required by t h e c o u r t t o pay t h e p r i c e . I t i s no answer t o say t h a t t h e claimed f e e approached 100 percent of t h e l i e n claim a g a i n s t t h e defendant i n t h i s case. The defendant's a l t e r n a t i v e s w e r e t o e i t h e r h i r e an a t t o r n e y and defend a g a i n s t a c l a i m , o r pay t h e $6,200.00. H e had l i t t l e choice. I would reverse by r e i n s t a t i n g t h e f e e t h a t t h e D i s t r i c t Court found reasonable t o be awarded here.