Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-92-06318/USCOURTS-ca10-92-06318-0/pdf.json

Parties Involved:
Billy M. Carter
Appellee
Charles R. Chasteen
Appellee
Billy M. Holmes
Appellee
Lendell D. Roberts
Appellee
The Cadle Company, II, Inc.
Appellant

Document Text:

FILL D 

United States Court of Appeali Tenth Circuit 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

MAR 2 9 1993 

ROBERT L. HOECKER 

THE CADLE COMPANY, II, Inc. 

Plaintiff-Appellant, 

v . 

CHARLES R. CHASTEEN; BILLY M. 

CARTER; BILLY M. HOLMES; and 

LENDELL D. ROBERTS, 

Defendants-Appellees. 

Clerk . 

No. 92-6318 

(D. C. No. CIV-90-1270-R) 

(W.D. Okla.) 

ORDER AND JUDGMENT* 

Before LOGAN, MOORE and BRORBY, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. 

submitted without oral argument. 

The cause is therefore ordered 

This case is founded upon diversity jurisdiction and presents 

for appeal the issue of whether prevailing counsel should be 

* This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res j udicata, or collateral estoppel . 10th Cir. R. 36.3. 

Appellate Case: 92-6318 Document: 010110199063 Date Filed: 03/29/1993 Page: 1 
awarded attorney fees based upon a reasonable hourly rate or the 

agreed upon rate. The district court applied the reasonable 

hourly rate and we affirm. 

The significant matters are not disputed. Appellee prevailed 

in federal district court. As this was a diversity suit, the 

trial court applied the law of the forum (Oklahoma) and awarded 

Appellee reasonable attorney fees . 

The problem arises in that during the litigation Appellee's 

counsel retroactively reduced his fees from $125 per hour to 

$62.50 per hour, due to his client's poor financial condition. 

Appellant does not challenge whether $125 per hour is a reasonable 

hourly rate for Appellee's attorney, but instead asserts that 

Appellee's attorney should have been awarded $62.50 per hour, the 

amount he actually charged the client . The facts leading up to 

the reduced billing and the district court's rationale were 

succinctly stated as follows: 

There is no question that the hourly rate Mr. Tobin 

eventually agreed to with his clients was not a 

reasonable hourly r ate for his services, nor was it the 

market rate . Because he had some sympathy with his 

clients' financial position and reduced his hourly rates 

does not in my opinion entitle the Plaintiff, as the 

nonprevailing party, to the benefit of that bargain . . .. 

The key factor is the prevailing market rate for the 

services of an attorney of comparable experience and 

qualifications. I see no reason why the same 

determination should not apply when an attorney, because 

of financial concern f or his/her client, has charged the 

client a rate below a "reasonable" hourly rate . 

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Appellate Case: 92-6318 Document: 010110199063 Date Filed: 03/29/1993 Page: 2 
The trial court concluded the key factor to be the prevailing 

market rate for the services of the attorney rather than the 

agreed reduced rate that resulted from the attorney's financial 

concern for his client. 

Appellant asserts, as its only issue, that the trial court 

erred by awarding the reasonable rate rather than the agreed upon 

rate. Appellant accepts all factual findings of the trial court . 

The parties agree we review the trial court's award of 

attorney fees to determine if the trial court abused its 

discretion. Iqbal v. Golf Course Superintendents Ass'n of 

America, 900 F.2d 227, 228 (10th Cir. 1990). The establishment of 

hourly rates in awarding attorney fees is within the discretion of 

the trial judge. Gurule v. Wilson, 635 F.2d 782, 794 (10th Cir. 

1980), overruled on other grounds sub nom. Cox v. Flood, 683 F.2d 

330, 331 (10th Cir. 1982). "Under the abuse of discretion 

standard, a trial court's decision will not be disturbed unless 

the appellate court has a definite and firm conviction that the 

lower court made a clear error of judgment or exceeded the bounds 

of permissible choice in the circumstances." McEwen v. City of 

Norman, 926 F.2d 1539, 1553-54 (10th Cir. 1991) . 

As we are applying the law of the forum, we first look to 

Oklahoma law. Okla. Stat. Ann. tit. 12, § 936 (West 1988) 

provides: "[T]he prevailing party shall be allowed a reasonable 

attorney fee to be set by the court." Oklahoma cases hold that a 

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Appellate Case: 92-6318 Document: 010110199063 Date Filed: 03/29/1993 Page: 3 
court, in fixing the value of a reasonable attorney fee, should 

consider every fact or circumstance "bearing on fair compensation 

for the professional services rendered." Walls v. Russell, 519 

P.2d 936, 938 (Okla. Ct. App. 1974), overruled on other grounds 

sub nom. Russel v. Flanagan, 544 P.2d 510, 512 (Okla. 1975). A 

reading of the Oklahoma cases, however, reveals no cases directly 

on point. When there is no law directly on point, our task is to 

attempt to predict how the Oklahoma courts would decide the issue. 

If there is a common thread running through attorney fee 

cases, it is that of reasonable compensation in light of all the 

circumstances. The fee agreement existing between an attorney and 

client is but one of the circumstances to be considered. If the 

fee agreement fails to provide for reasonable compensation, then 

the fee agreement alone should not be determinative in an action 

against a nonparty to the agreement for a "reasonable attorney's 

fee." This principle was enunciated in Blanchard v. Bergeron, 489 

U.S. 87 (1989), when considering whether a litigant could recover 

an attorney fee in excess of the fee agreement . There the Supreme 

Court stated: 

As we understand [42 U.S.C.] § 1988's provision for 

allowing a "reasonable attorney's fee," it contemplates 

reasonable compensation, in light of all of the 

circumstances, for the time and effort expended by the 

attorney for the prevailing plaintiff, no more and no 

less. Should a fee agreement provide less than a 

reasonable fee calculated in this manner, the defendant 

should nevertheless be required to pay the higher 

amount . 

Id. at 93. 

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In the case before us, Oklahoma law mandates "a reasonable 

attorney fee"; it does not mandate the agreed upon fee 

arrangement. 

Appellant argues this result would unjustly enrich the 

prevailing party's counsel and result in a windfall. Appellant 

cites Florida Rock Indus., Inc . v. United States, 9 Cl. Ct . 285 

(1985), as supporting its position that the attorney fee should be 

limited to the amount fixed by the attorney-client contract. In 

Florida Rock, the Claims Court held that "where there is a bona 

fide contractual arrangement whereby the client has committed to 

pay the amount billed by the attorneys, . .. the court should not 

second-guess the workings of the market in determining the 

reasonableness or appropriateness of the fees." Id. at 288. 

However, market value, as indicated by a fee arrangement, does not 

reflect what is a "reasonable attorney fee" if the attorney 

reduces the fee rate because of a client's poor financial 

condition. Instead, market value is but one of the factors to be 

considered in determining reasonableness. 

Nor are we persuaded by Appellant's "windfall" argument. 

Attorneys who reduce their hourly rates for poor clients should 

not be penalized for so doing. Save our Cumberland Mountains, 

Inc. v. Hodel, 857 F.2d 1516 (D.C. Cir. 1988) (en bane). 

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Based upon the facts of this case, we cannot hold the trial 

court abused its discretion in awarding reasonable attorney fees 

in lieu of the agreed rate. 

The judgment is AFFIRMED. 

Entered for the Court: 

WADE BRORBY 

Circuit Judge 

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