Title: West Square, L.L.C. v. Communication Technologies

State: virginia

Issuer: Virginia Supreme Court

Document:

Present:  Hassell, C.J., Keenan, Koontz, Kinser, Lemons, 
and Agee, JJ., and Lacy, S.J.1 
 
WEST SQUARE, L.L.C. 
 
v.  Record No. 062303  OPINION BY JUSTICE CYNTHIA D. KINSER 
 
 
 
 
 
 
 
  September 14, 2007 
COMMUNICATION TECHNOLOGIES, INC. 
 
FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY 
Herman A. Whisenant, Jr., Judge 
 
 
This appeal involves litigation that arose out of a 
commercial real estate lease entered into between West 
Square, L.L.C. (West Square), as landlord, and 
Communication Technologies, Inc. (ComTek), as tenant.  As 
relevant to the issues before us, the lease in question 
contained a “Costs and Attorney’s Fees” clause that 
provided: 
In any litigation between the parties 
arising out of this Lease, and in connection with 
any consultations with counsel and other actions 
taken or notices delivered, in relation to a 
breach of the provisions herein, the non-
prevailing party shall pay to the prevailing 
party all expenses and court costs, including 
reasonable attorney’s fees incurred by the 
prevailing party in preparation for and (if 
applicable) at trial, and on appeal, and 
reasonable attorney’s fees in identifying and 
resolving any breach of this Lease.  Such 
attorney’s fees and costs shall be payable upon 
demand. 
 
                     
1 Justice Lacy participated in the hearing and decision 
of this case prior to the effective date of her retirement 
on August 16, 2007. 
 
2
The primary issue before us is whether the circuit 
court abused its discretion in determining the amount of 
reasonable attorneys’ fees to award to West Square as the 
prevailing party in litigation arising from a breach of the 
lease.  We conclude that the circuit court did not abuse its 
discretion as to the award of attorneys’ fees.   The circuit 
court did, however, abuse its discretion by refusing to award 
West Square certain costs and expenses. 
I. RELEVANT FACTS AND PROCEEDINGS 
 
Approximately nine months after the parties executed 
the subject lease, West Square filed a three-count motion 
for judgment against ComTek.  In the first count asserting 
breach of the lease by ComTek, West Square sought a 
judgment awarding it possession of the leased premises and 
monetary damages for past-due rent and other payments, as 
well as an award of attorneys’ fees and costs.  The other 
two counts involved a contractor’s alleged claim against 
ComTek for services and materials provided to construct 
improvements to the interior of the leased premises.  The 
contractor had assigned its claim to West Square, and West 
Square sought monetary damages against ComTek on a breach 
of contract theory, or alternatively, on a quantum meruit 
theory.  In response, ComTek filed an answer, pleas in bar, 
a demurrer to the quantum meruit claim, and a counterclaim 
 
3
for West Square’s alleged “unauthorized construction of the 
interior of the [leased p]remises” and breach of its 
covenant of quiet enjoyment. 
The circuit court overruled ComTek’s demurrer, and the 
case proceeded to trial.  At the beginning of the second 
day of trial, West Square non-suited the two construction 
claims assigned to it by the contractor.  Finding that 
ComTek had, in fact, breached the lease, the circuit court 
ruled in favor of West Square on its remaining claim for 
breach of the lease and also on ComTek’s counterclaim 
(collectively, the lease dispute).  The court awarded 
damages to West Square in the amount of $35,442.78 plus 
interest.2 
Pursuant to an agreed pretrial order bifurcating the 
determination of attorneys’ fees and the trial on the 
merits, West Square then filed an application for 
attorneys’ fees and expenses.  West Square attached to the 
application an affidavit from its lead attorney, which, 
among other things, summarized the hours of legal services 
provided to West Square by seven of the law firm’s 
attorneys along with their respective hourly rates.  The 
hours of legal services rendered and the hourly rates 
                     
2 ComTek did not challenge, by cross-error or 
otherwise, the circuit court’s award of damages to West 
Square. 
 
4
charged ranged from 162.8 hours at the rate of $325 per 
hour to 0.6 hours at the rate of $165 per hour.  The 
affidavit also listed 1.4 hours of paralegal services 
billed at the rate of $85 per hour. 
West Square also included with its application 
summaries of the qualifications of each attorney who 
provided legal services to West Square, a synopsis 
detailing the legal services represented to have been 
rendered to West Square regarding the lease dispute, a list 
of costs and expenses incurred by West Square, and copies 
of the itemized billing statements sent to West Square 
showing all the legal fees West Square incurred in its 
disputes and litigation with ComTek.  According to West 
Square, the itemized billing statements demonstrate that it 
excluded from the attorneys’ fee application the legal 
services rendered with regard to the non-suited claims.  
West Square requested an award of attorneys’ fees in the 
amount of $64,578.00 for approximately 223.30 hours of 
legal services and an award for costs and expenses in the 
amount of $5,074.70.3 
                     
3 The costs and expenses included $4,390.60 for 
depositions, $150.00 for a court reporter at the trial, 
$175.00 for serving witness subpoenas, $93.00 for filing 
the motion for judgment, and $266.10 for miscellaneous 
expenses. 
 
5
ComTek filed a memorandum opposing West Square’s 
application for attorneys’ fees and expenses.  ComTek 
centered its objection on West Square’s failure to 
segregate its requested attorneys’ fees and expenses 
associated with the lease dispute from those incurred with 
regard to the non-suited claims.  Relying on this Court’s 
decision in Ulloa v. QSP, Inc., 271 Va. 72, 83, 624 S.E.2d 
43, 50 (2006), ComTek asserted that “[w]here multiple 
claims exist, only one of which permits the recovery of 
attorney’s fees, the party requesting attorney’s fees must 
fairly and reasonably separate out its attorney’s fees with 
specificity.” 
In its opposition papers, ComTek submitted its own 
tabulation of West Square’s time and work entries found in 
the detailed billing records that were produced as part of 
the fee application.  ComTek allocated the items according 
to its interpretation of the claims to which the activity 
was related and argued that only about 32.90 hours of legal 
services, representing attorneys’ fees of $8,828.00, were 
separately and specifically identified in West Square’s 
application as relating solely to the lease dispute.  In 
contrast, according to ComTek, the bulk of the time entries 
contained no delineation between the lease dispute and the 
non-suited claims.  ComTek further asserted that about 17 
 
6
hours were billed to West Square for multi-lawyer 
conferences, which ComTek claimed did not pertain solely to 
the lease dispute and/or were a duplication of effort. 
In furtherance of its position that the amount of 
requested attorneys’ fees was unreasonable, ComTek pointed 
out that, prior to trial, the parties had filed only three 
pleadings in the case, that only one motion, ComTek’s 
demurrer, was heard by the circuit court, and that the 
demurrer was not related to the lease dispute.  ComTek also 
noted that only two of the eleven interrogatories it 
propounded and only three of its thirty-seven requests for 
production of documents pertained solely to the lease 
dispute.  The attorneys’ fees application, according to 
ComTek, also did not take into account the complexity of 
the non-suited claims versus the simplicity of the lease 
dispute.  ComTek asserted that West Square’s alleged 
damages for ComTek’s breach of the lease “involved a 
straightforward calculation of $2,000 per month rent, 
approximately $300 per month in common area maintenance 
charges, a late charge, interest and a leasing commission 
of $5,583.48,” and “required one witness’s testimony 
. . . , the admission of [the lease], and one or two other 
documents related to common area maintenance charges.”  
ComTek asked the circuit court to compare the case at bar 
 
7
where, “[a]s evidenced by the pleadings and the total 
absence of any contentious pre-trial motions, the lease 
dispute did not require complicated or extensive effort,” 
with the situation in Chawla v. BurgerBusters, Inc., 255 
Va. 616, 499 S.E.2d 829 (1998), “where[, according to 
ComTek,] more than 300 pleadings were filed, 15 to 20 
depositions were taken, . . . approximately 50 distinct 
motions were filed[, and t]hirty separate court hearings 
were conducted, including a seven-day trial.” 
ComTek challenged the requested costs and expenses for 
similar reasons.  For example, ComTek claimed that the 
depositions dealt with matters pertaining to all the claims 
asserted by West Square, not just the lease dispute.  It 
further asserted that, as with the attorneys’ fees, West 
Square failed to specify those costs and expenses incurred 
solely in relation to the lease dispute. 
In a reply memorandum, West Square appended a 
supplemental affidavit from its lead attorney.  In that 
affidavit, West Square’s attorney stated that, upon further 
review of the challenged billing entries, he concluded that 
the amount of $7,320.00 should be deducted from the 
original total sum of attorneys’ fees requested in the 
application because that amount was not clearly related to 
the lease dispute.  At the same time, however, West Square 
 
8
contended that it was entitled to recover the additional 
sum of $8,860.15 for attorneys’ fees incurred subsequent to 
filing the original application for attorneys’ fees and 
expenses.  West Square thus sought attorneys’ fees and 
expenses for the amended sum of $71,380.70.4 
Following oral argument by counsel, the circuit court 
first noted that West Square had been awarded approximately 
$35,000 on the merits of the case.  The court then stated 
that “the total cost, which is over $80,000 in attorneys’ 
fees, over $5,000 in expenses, is certainly a figure that 
is too high for this case.  I would be remiss not to go on 
the record saying that.”  The circuit court found the 
amount of attorneys’ fees and costs requested by West 
Square “to be exorbitant . . . consider[ing] the amount 
sued for.”  The court explained: “It’s called ‘reasonable 
attorneys’ fees.’  It doesn’t say ‘attorneys’ fees,’ but 
‘reasonable.’ ” 
In reaching its decision, the circuit court indicated 
that it had considered the cases cited by West Square’s 
                     
 
4 West Square also submitted with the reply memorandum 
an affidavit from Timothy M. Purnell, who opined as an 
expert on the issue of attorneys’ fees in commercial 
landlord-tenant litigation.  Purnell stated that, in his 
opinion, the requested attorneys’ fees and expenses “were 
customary, reasonable and necessary to prosecute the breach 
of lease case and to defend against the counterclaim of the 
tenant.” 
 
9
counsel, along with “the type of case” and “the amount sued 
for.”  The court concluded that “reasonable attorneys’ fees 
for this case, in the time that we could have tried the 
case, [was] $10,000.”  The circuit court further ruled that 
it was not awarding any costs or expenses to West Square.  
This appeal ensued. 
II. ANALYSIS 
On appeal, West Square asserts that the circuit court 
erred by awarding it “only a small fraction of the 
attorney’s fees and none of the expenses and court costs 
incurred by the prevailing party.”  On appeal, we will set 
aside a trial court’s determination of the amount of 
attorneys’ fees to be awarded only if the court abused its 
discretion.  Schlegel v. Bank of America, 271 Va. 542, 550, 
628 S.E.2d 362, 366 (2006); Holmes v. LG Marion Corp., 258 
Va. 473, 479, 521 S.E.2d 528, 533 (1999).  We will first 
discuss the circuit court’s award of attorneys’ fees to 
West Square and then turn to its decision to award no 
amount for costs and expenses. 
A. Attorneys’ Fees 
“Under the so-called ‘American rule,’ a prevailing 
party generally cannot recover attorneys’ fees from the 
losing party.”  Ulloa, 271 Va. at 81, 624 S.E.2d at 49 
(citing Lee v. Mulford, 269 Va. 562, 565, 611 S.E.2d 349, 
 
10
350 (2005)).  This rule, however, does not prevent parties 
to a contract from adopting provisions that shift the 
responsibility of attorneys’ fees to the losing party in 
disputes involving the contract.  See id.; Mullins v. 
Richlands Nat’l Bank, 241 Va. 447, 449, 403 S.E.2d 334, 335 
(1991).  Here, the “Costs and Attorneys’ Fees” clause at 
issue was such a contractual provision.  It provided that, 
in the event of litigation arising out of the lease, the 
“non-prevailing party” would have to pay all expenses, 
costs, and reasonable attorneys’ fees incurred by the 
“prevailing party.”  Since West Square was the prevailing 
party on the lease dispute, see Sheets v. Castle, 263 Va. 
407, 413, 559 S.E.2d 616, 620 (2002) (a “prevailing party” 
is the “party in whose favor a judgment is rendered, 
regardless of the amount of damages”), the circuit court 
correctly awarded attorneys’ fees to West Square.  The 
question before us, however, is whether the court abused 
its discretion in determining the amount of reasonable 
attorneys’ fees. 
A prevailing party who seeks to recover attorneys’ 
fees pursuant to a contractual provision such as the one 
before us has the burden to present a prima facie case that 
the requested fees are reasonable and that they were 
necessary.  Chawla, 255 Va. at 623, 499 S.E.2d at 833; see 
 
11
also Seyfarth, Shaw, Fairweather & Geraldson v. Lake 
Fairfax Seven Ltd. P’ship, 253 Va. 93, 96, 480 S.E.2d 471, 
473 (1997).  We have identified several factors that are 
relevant to the determination of reasonableness: 
[A] fact finder may consider, inter alia, the 
time and effort expended by the attorney, the 
nature of the services rendered, the complexity 
of the services, the value of the services to the 
client, the results obtained, whether the fees 
incurred were consistent with those generally 
charged for similar services, and whether the 
services were necessary and appropriate. 
 
Chawla, 255 Va. at 623, 499 S.E.2d at 833; accord Ulloa, 
271 Va. at 82, 524 S.E.2d at 49; Mullins, 241 Va. at 449, 
403 S.E.2d at 335.  Under a contractual provision like the 
one at issue, however, a prevailing party “is not entitled 
to recover fees for work performed on unsuccessful claims.”  
Ulloa, 271 Va. at 82, 624 S.E.2d at 49 (citing Chawla, 255 
Va. at 624, 829 S.E.2d at 833). 
West Square asserts that all its attorneys’ fees were 
reasonable and necessary and that the circuit court should, 
therefore, have awarded it the full amount requested.  In 
the alternative, West Square argues that the circuit court 
should have articulated its findings on the various factors 
set forth in Chawla and identified the specific legal 
services that were not reasonable and necessary.  West 
Square claims that the circuit court, instead of performing 
 
12
such an analysis, arbitrarily awarded it an amount of 
attorneys’ fees that was less than one-third of the amount 
of damages it recovered.  In doing so, the court, according 
to West Square, considered only the large amount of 
attorneys’ fees requested in relation to the type of case 
and the amount for which West Square sued.  We do not agree 
with West Square’s position. 
As both parties note, this Court has identified 
several factors that a fact-finder “may consider” in 
determining the amount of reasonable attorneys’ fees to be 
awarded to a prevailing party.  Chawla, 255 Va. at 623, 499 
S.E.2d at 833.  We have not, however, stated that a fact-
finder must consider all these factors in every situation.  
See Connors v. Connors, 594 S.W.2d 672, 676 (Tenn. 1980) 
(identifying factors to be used as “guides in fixing a 
reasonable attorney’s fee”).  But see Barber v. Kimbrell’s, 
Inc., 577 F.2d 216, 226 (4th Cir. 1978) (“[twelve] factors 
must be considered by district courts in [the Fourth 
Circuit] in arriving at a determination of reasonable 
attorneys’ fees”) (emphasis added).  And, we decline to do 
so today.  In the determination of reasonable attorneys’ 
fees, particular factors may have added or lessened 
significance depending on the circumstances of each case. 
 
13
Nonetheless, the record demonstrates that both 
West Square and ComTek, in arguing their respective 
positions before the circuit court, presented and 
discussed the several factors that may be considered 
in determining reasonable attorneys’ fees.  When 
announcing its decision, the circuit court stated that 
it had considered the cases cited by West Square.  The 
court also had before it West Square’s detailed 
application for attorneys’ fees, along with ComTek’s 
particularized objections to the reasonableness of the 
amount requested, including the assertion that West 
Square failed to segregate the legal services rendered 
solely with regard to the lease dispute from the 
services provided for the non-suited claims.  While 
the circuit court may not have articulated a finding 
with regard to each of the factors we identified in 
our prior cases, see Chawla, 255 Va. at 623, 499 
S.E.2d at 833; Mullins, 241 Va. at 449, 403 S.E.2d at 
335, the court did, however, note the factors it found 
relevant in deciding the reasonableness of West 
Square’s requested attorneys’ fees.  As the fact-
finder, the circuit court had to determine “from the 
evidence what [were] reasonable fees under the facts 
and circumstances of [this] particular case.”  
 
14
Mullins, 241 Va. at 449, 403 S.E.2d at 335.  In light 
of the record before the circuit court, we cannot say 
that the court abused its discretion in consideration 
of appropriate factors and in fixing the amount of 
attorneys’ fees it awarded to West Square. 
B. Costs and Expenses 
West Square also contends that the circuit court erred 
in refusing to award it any costs or expenses.  We agree.  
As we have already stated, West Square was the “prevailing 
party” at trial.  Therefore, ComTek, as the “non-prevailing 
party,” was required under the “Costs and Attorney’s Fees” 
clause of the lease to pay West Square “all expenses and 
court costs” in connection with “any litigation between the 
parties arising out of” the lease. 
ComTek, however, contends West Square failed to 
segregate its costs and expenses associated with the lease 
dispute from those incurred with regard to the non-suited 
claims.  Our holding in Ulloa regarding the burden to 
specify attorneys’ fees associated with a particular claim 
for which an award of attorneys’ fees is allowed applies 
with equal force to a request for an award of costs and 
expenses.  Even though claims may be intertwined and have a 
common factual basis, West Square, as the party seeking an 
award of costs and expenses, had “the burden to establish 
 
15
to a reasonable degree of specificity” those costs and 
expenses associated with the lease dispute.  Ulloa, 271 Va. 
at 83, 624 S.E.2d at 50.  It did not do so with respect to 
certain requested costs and expenses. 
Based on the record before us, we conclude that West 
Square is entitled to recover from ComTek the filing fee of 
$93.00, the process fees for serving witness subpoenas 
totaling $175.00, and the court reporter expense of 
$150.00.  With regard to the requested expenses for 
depositions and miscellaneous items, West Square did not 
“establish to a reasonable degree of specificity” what 
portion of those expenses were incurred with regard to the 
lease dispute, as opposed to the non-suited claims.  Id.  
West Square “is not entitled to recover [expenses] for 
. . . unsuccessful claims.”  Id. at 82, 524 S.E.2d at 49 
(citing Chawla, 255 Va. at 624, 829 S.E.2d at 833).  
Therefore, we hold that the circuit court abused its 
discretion by refusing to award costs and expenses for the 
filing fee, the service of process fees, and the court 
reporter expense.  The circuit court did not abuse its 
discretion in refusing to award West Square the remainder 
of its requested costs and expenses. 
III. CONCLUSION 
 
16
For these reasons, we will affirm the judgment of the 
circuit court with regard to the amount of its award of 
attorneys’ fees to West Square.  We will reverse the 
judgment of the circuit court only with regard to its 
refusal to award West Square its costs and expenses for the 
filing fee, the service of process fees, and the court 
reporter expense.  Because the dollar amounts of those 
items are in the record before us and are not disputed, we 
will enter final judgment here in favor of West Square in 
the amount of $418.00. 
We must now address one final matter.  West Square 
requests an additional award of attorneys’ fees, costs and 
expenses under the terms of the “Costs and Attorney’s Fees” 
clause allowing an award of “expenses and court costs, 
including reasonable attorney’s fees incurred by the 
prevailing party . . . on appeal.”  We hold that West 
Square is not entitled to such an award because it is not 
the “prevailing party” on appeal.  In Sheets, we stated 
that in reaching an interpretation of the term “prevailing 
party,” “[w]e need not go farther than Black’s Law 
Dictionary for its common meaning: ‘A party in whose favor 
a judgment is rendered, regardless of the amount of damages 
awarded.’”  263 Va. at 413, 559 S.E.2d at 620.  On the 
primary issue regarding the amount of the circuit court’s 
 
17
award of attorneys’ fees, West Square is not the recipient 
of a judgment in its favor on appeal. 
ComTek also requests an award of attorneys’ fees, 
costs and expenses incurred in this appeal.  Unlike West 
Square, ComTek is the prevailing party on the primary issue 
before us.  Thus, we will remand this case to the circuit 
court for a determination of reasonable attorneys’ fees, 
costs and expenses incurred by ComTek in this appeal. 
Affirmed in part, 
reversed in part, 
 
 
 
 
 
 
 
   and remanded.