Title: TRACY L. RINGOLSBY, JR., and JANE E. SWANHORST V. DALLAS C. JOHNSON, ARLA JOHNSON, DALMAC CONSTRUCTION, INCORPORATED, DALMAC HOMES, INCORPORATED, AAA LAZY D LAND COMPANY, LLC, and AAA LAZY D ENTERPRISES, INCORPORATED

State: wyoming

Issuer: Wyoming Supreme Court

Document:

TRACY L. RINGOLSBY, JR., and JANE E. SWANHORST V. DALLAS C. JOHNSON, ARLA JOHNSON, DALMAC CONSTRUCTION, INCORPORATED, DALMAC HOMES, INCORPORATED, AAA LAZY D LAND COMPANY, LLC, and AAA LAZY D ENTERPRISES, INCORPORATED2008 WY 127193 P.3d 1167Case Number: S-08-0022Decided: 10/15/2008
OCTOBER 
TERM, A.D. 2008

 
 
TRACY 
L. RINGOLSBY, JR., and JANE E. 
SWANHORST,Appellants(Plaintiffs),v.DALLAS C. 
JOHNSON, ARLA JOHNSON, DALMAC CONSTRUCTION, INCORPORATED, DALMAC HOMES, 
INCORPORATED, AAA LAZY D LAND COMPANY, LLC, and AAA LAZY D ENTERPRISES, 
INCORPORATED,Appellees(Defendants).

 
 
Appeal 
from the DistrictCourtofLaramieCounty

The 
Honorable Keith G. Kautz, Judge

 
 
Representing 
Appellants:

John 
B. "Jack" Speight and Robert T. McCue of Speight, McCue & Associates, 
Cheyenne, Wyoming.  

 
 
Representing 
Appellees:

James 
R. Salisbury and Don W. Riske of Riske, Salisbury & Kelly, P.C., Cheyenne, Wyoming.

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, and KITE, JJ, and CRANFILL, 
DJ.

 
 
CRANFILL, 
District Judge.

 
 
[¶1]      Appellants Tracy 
L. Ringolsby and Jane E. Swanhorst appeal from the district court's order 
denying their claim for attorneys' fees.  
We conclude that Appellants are not entitled to attorneys' fees due to a 
failure of proof.  We 
affirm.

 
 
ISSUES

 
 
[¶2]      Appellants 
presented one issue for review as follows:

 
 
Whether 
the trial court abused its discretion by ruling that Appellants did not meet 
their burden of proving the reasonableness of their attorneys' fees where 
Appellants submitted redacted billing statements along with an offer of in 
camera review to the trial court.

 
 
Appellees' 
brief did not contain a statement of the issue.

 
 
FACTS

 
 
Underlying 
Action

 
 
[¶3]      On June 10, 2005, 
Appellants, as plaintiffs, initiated a civil action in the Laramie County 
District Court captioned Ringolsby v. 
Dalmac Construction, Inc. (the "underlying action").  The underlying action was based upon 
contractual relationships between Appellants, as owners, and defendant Dalmac 
Construction, Inc., as contractor.  
Appellants named Dalmac Construction, Inc. as the sole defendant in the 
underlying action.  However, it is 
important to note Appellee Dallas Johnson acted as President, a director and 
full-time employee of Dalmac Construction, Inc., and Appellee Arla Johnson acted 
as Vice President, Treasurer, a director, and an employee of Dalmac 
Construction, Inc.  Appellees Dallas 
Johnson and Arla Johnson were the sole directors, officers, shareholders, and 
owners of Dalmac Construction, Inc.

 
 
[¶4]      The district 
court conducted a bench trial finding that defendant Dalmac Construction, Inc. 
breached various contracts, breached the implied warranty of habitability, and 
breached oral promises.  The 
district court found defendant Dalmac Construction, Inc. liable for damages and 
awarded a total of $85,208.96, plus costs, expenses and attorneys' fees to 
Appellants in the underlying action on June 6, 2006.

 
 
[¶5]      Dalmac 
Construction, Inc. did not appeal the underlying action, as such an appeal 
required Dalmac Construction, Inc. to post an appeal bond in the amount of the 
judgment.  The Johnsons instead 
decided to file bankruptcy on behalf of Dalmac Construction, Inc., in an effort 
to avoid paying the judgment in the underlying action. 

 
 
[¶6]      Appellants filed 
their Motion for Costs, Expenses and Attorneys Fees pursuant to W.R.C.P. 
54(d)(2)(b) during the time Dalmac Construction, Inc. filed for bankruptcy. 
 In support of their motion, 
Appellants submitted billing statements with the descriptions of the work 
performed redacted, claiming such redaction was prudent and necessary to 
maintain attorney-client privilege since the dispute between Appellants and 
Dalmac Construction, Inc. was not finalized.  Appellants also stated they would submit 
the billing statements without the redactions for a review in camera if so requested by the 
court.  Dalmac Construction, Inc. 
opposed using the redacted billing statements.  Ultimately, the district court awarded 
Appellants attorneys' fees totaling $63,050.88.

 
 
Piercing 
Action

 
 
[¶7]      While their 
Motion for Costs, Expenses and Attorney Fees was being considered by the 
district court, Appellants attempted to collect their judgment against Dalmac 
Construction, Inc., by filing as a creditor in the bankruptcy court and by 
bringing the action that is the subject of this appeal, also known as the 
"piercing action."  Appellants filed 
suit against Dallas Johnson, Arla Johnson, Dalmac Construction, Inc., Dalmac 
Homes, Inc., AAA Lazy D Land Company, LLC, and AAA Lazy D Enterprises, Inc.  The piercing action was assigned to a 
different judge.

 
 
[¶8]      The district 
court found only Dallas Johnson and Arla Johnson had invested any money or 
assets into AAA Lazy D Land Company, LLC or AAA Lazy D Enterprises, Inc.  The district court also found that 
Dallas and Arla Johnson were the sole officers and shareholders of Dalmac Homes, 
Inc., which filed its Articles of Incorporation with the Wyoming Secretary of 
State on June 22, 2006, sixteen days after the district court entered its 
Judgment and Order in the underlying action. 

 
 
[¶9]      In the piercing 
action, the district court concluded, after stating very particularized Findings 
of Fact, that a unity of interest and ownership between Dallas Johnson, Arla 
Johnson, Dalmac Homes, Inc., AAA Lazy D Land Company, LLC, and AAA Lazy D 
Enterprises, Inc. existed.  The 
district court found the corporate entities had been manipulated by their owners 
Dallas and Arla Johnson in an effort to avoid payment of a particular 
creditor.  As such, the court 
awarded Appellants $148,259.84, plus statutory interest from November 8, 2006. 
 Appellants were also awarded their 
costs, expenses and attorneys' fees for presenting their claims to the 
court.

 
 
[¶10]   Appellants filed their Motion for 
Award of Costs, Expenses and Attorneys Fees, using the same redaction method as 
in the underlying action and again stating they would provide the statements 
without the redactions for an in 
camera review if so requested by the district court.  In support of their motion, Appellants 
also submitted the affidavit of Robert T. McCue, attorney for Appellants in the 
piercing action, and the affidavit of Randall B. Reed, a practicing attorney 
from the same location as the attorney for Appellants.  Both affiants stated the costs, expenses 
and attorneys' fees incurred were reasonable and necessary in prosecuting the 
matter.  Appellees opposed the 
motion, arguing, inter alia, that 
Appellants failed to present sufficient credible evidence entitling them to an 
award of costs, expenses and attorneys' fees.

 
 
[¶11]   The district court awarded no 
attorneys' fees to Appellants, finding Appellants failed to meet their burden of 
providing proof of reasonableness of the fees as they did not submit itemized 
billings and that Appellants improperly suggested the in camera review as this would give them 
a second chance to meet the burden of proof.  Some expenses and costs were awarded by 
the district court, totaling $2,904.02.

 
 
STANDARD 
OF REVIEW

 
 
[¶12]   An award of attorneys' fees is 
reviewed under an abuse of discretion standard.  Johnston v. Stephenson, 938 P.2d 861, 
862 (Wyo. 
1997) (citing State Dep't of Family 
Servs., Div of Pub. Assistance & Soc. Servs. v. DDM, 877 P.2d 259, 262 
(Wyo. 
1994)).

 
 
A 
court abuses its discretion only when it acts in a manner which exceeds the 
bounds of reason under the circumstances.  Goff v. Goff, 844 P.2d 1087, 1092 
(Wyo. 
1993).  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.

 
 

Johnston, 
938 P.2d  at 862.

 
 
[¶13]   "Judicial 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."  Martin v. State, 720 P.2d 894, 897 (Wyo. 1986) (citation omitted).  

 
 
DISCUSSION

 
 
Reasonableness 
of Attorneys' Fees

 
 
[¶14]   Wyoming adopted the federal "lodestar" test 
for the determination of reasonableness of attorneys' fees in 1989.  Hinckley v. Hinckley, 812 P.2d 907, 915 
(Wyo. 1991) (citing UNC Teton Exploration Drilling, Inc. v. 
Peyton, 774 P.2d 584 (Wyo. 1989)).  See Stanbury v. Larsen, 803 P.2d 349 
(Wyo. 
1990).  In Hinckley, this Court stated: 

 
 
The 
lodestar test requires that two factors be considered: (1) whether the fee 
charged represents the product of reasonable hours times a reasonable rate; and 
(2) whether other factors of discretionary application should be considered to 
adjust the fee either upward or downward.  
UNC Teton, 774 P.2d  at 
595.  The party who is seeking an 
award of fees has the burden of providing proof of the reasonableness of his 
fee.  See Miles v. CEC Homes, Inc., 753 P.2d 1201 (Wyo. 1988); JonesLand 
& Livestock v. Federal Land Bank, 733 P.2d 258 (Wyo. 1987).  In order to meet that burden of proof, 
the claimant must present not only an itemized billing reflecting the time and 
the rate, but there must be evidence demonstrating that the fee was 
reasonable.  UNC Teton.

 
 

Hinckley, 
812 P.2d  at 915.

 
 
[¶15]   The Wyoming Legislature also 
addressed attorneys' fees by enacting Wyo. Stat. Ann. § 1-14-126(b) 
(LexisNexis 2007), which lists 
factors a trial court may consider when exercising its discretion in awarding 
attorneys' fees.  Such factors 
include:

 
 
(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.

 
 

Id. 

 
 
[¶16]   Appellants argue the trial court 
abused its discretion in denying the attorneys' fees, claiming the redacted 
billing statements satisfy the first prong of the lodestar test and the 
requirement of submission of itemized billing reflecting the time and the rate 
simply because "they were broken down to show the hours spent by each attorney 
and the amount charged per hour by attorney."  Appellants also argue the affidavit of 
Randall B. Reed supports the reasonableness of the fees as his affidavit was 
based on a review of the unredacted billing statements.  Mr. Reed's affidavit merely states the 
attorney hourly charges are reasonable and that the "time spent for the services 
rendered . . . in prosecuting this matter is reasonable for this type of work 
under the circumstance."

 
 

[¶17]   Appellees rely on this Court's 
decision in Jones Land & Livestock 
Co. v. Federal Land Bank of Omaha, 733 P.2d 258 (1987), to argue the 
redacted billing statements do not provide evidence of the reasonableness of the 
attorneys' fees.  In Jones, no billing statements were 
submitted to prove reasonableness of attorneys' fees.  Id. 
at 262.  Rather affidavits, with 
attachments thereto, were submitted.  
Id. at 265.  This Court found the affidavits and 
attachments relating to the attorneys' fees "show[ed] an itemization of 
the 
nature of the service performed, 
the time expended, and the hourly fee customarily charged for such service." 
 Id. 
(emphasis added).  

 
 
[¶18]   Appellants made no such showing of 
the nature of the services performed in the instant case.  In looking at the redacted billing 
statements, the district court had no way of ascertaining the nature of the 
services performed, and thus the reasonableness of such services.  Nor did Mr. Reed's affidavit contain 
enough explanation to provide a sufficient basis to determine the reasonableness 
of the fees. Therefore, Appellants' argument that the first prong of the 
lodestar has been satisfied fails.  
 

 
 
Failure 
to Meet Burden of Proof

 
 
[¶19]   In denying Appellants attorneys' 
fees in the piercing action, the trial court held:

 
 
5.   Plaintiffs improperly suggested 
that "if the Court would like to review the statements without the descriptions 
redacted" they would submit them for in-camera inspection.  This suggestion amounts to a request 
that the Court first determine whether Plaintiffs met their burden of proof, and 
then give the Plaintiffs a second chance to meet the burden of proof. 

 
 
6.   The Wyoming Supreme Court has specifically 
rejected such attempts to prove reasonable attorney fees after once failing to 
do so.  "(I)f a party has had an 
opportunity to present proof of attorney fees to the trial court, and they fail 
to do so, the award will be summarily reversed on appeal with no remand.  A party will not be allowed another 
bite of the apple' in order to prove an element of their claim."  Pekas v. Thompson, [903 P.2d 532, 537 
(Wyo. 1995)]. 

 
 
[¶20]   Appellants argue the trial court 
discounted the circumstances surrounding the manner of submission of the 
attorneys' fees and as such the trial court abused its discretion when it 
determined Appellants were seeking a second chance to meet their burden of 
proof.  In other words, Appellants 
claim equities favor them.  In 
support of this argument, Appellants note that in the underlying action, they 
submitted redacted statements, just as they did in the piercing action, and were 
awarded attorneys' fees.  They also 
argue that the redaction would not have been necessary if Dallas and Arla 
Johnson had not tried to evade paying the original judgment.  This Court disagrees.  

 
 
[¶21]   While a trial court is granted 
broad discretion to determine the amount of an award of attorneys' fees, 
Wyoming case 
law is clear on this point.  Once a 
party is given an opportunity to present sufficient evidence of attorneys' fees 
and fails to do so, the party will not be given another chance. Pekas v. Thompson, 903 P.2d 532, 537 
(Wyo. 1995). 
 Appellants had an opportunity to 
present proof of attorneys' fees to the trial court.  Rather than doing so in a sufficient 
manner, Appellants chose to present deficient support and then placed the burden 
on the trial court to request further proof.  Appellants could have reworded the task 
descriptions on the billing statements in such a manner that attorney-client 
privilege would not be waived rather than submitting redacted 
statements.

 
 

[¶22]   "A remand to allow additional proof 
on attorney fees will be allowed only 
in those instances where a party was denied an opportunity to make proof in the 
proceeding below."  Pekas, 903 P.2d  at 537 (emphasis 
added).  A remand in this situation 
is not allowable as Appellants had their opportunity to present proof and failed 
to do so.

 
 
CONCLUSION

 
 
[¶23]   The district court did not abuse 
its discretion by ruling that Appellants did not meet their burden of proof in 
establishing the reasonableness of their attorneys' fees by submitting redacted 
billing statements along with an offer of in camera review to the trial 
court.  Appellants did not prove 
their attorneys' fees in conformity with the requirements of our precedent.  Affirmed.