Present: Kinser, C.J., Lemons, Goodwyn, Millette, Mims, and 

Powell, JJ., and Koontz, S.J.

DEWBERRY & DAVIS, INC.

OPINION BY

v. Record No. 111661 SENIOR JUSTICE LAWRENCE L. KOONTZ, JR.

September 14, 2012

C3NS, INC., ET AL.

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY

R. Terrence Ney, Judge

In this appeal, we consider whether the circuit court 

erred in applying an attorneys' fees provision of a contract. 

The court determined that the plaintiff, the prevailing party 

on both its claim for compensation under the contract and the 

defendant's counterclaim for the plaintiff's alleged breach of 

the contract, was entitled to only a nominal award of one 

dollar in attorneys' fees for its defense of the counterclaim

because the defendant had a "good faith" basis for alleging 

the breach. We further consider an assignment of cross-error 

asserting that any award of attorneys' fees on the 

counterclaim was subject to a further provision in the 

contract for calculating fees in an action to collect

compensation owed under the contract.

BACKGROUND

The material facts are not in dispute and may be 

summarized in the following manner. On May 12, 2008, Dewberry 

& Davis, Inc. ("Dewberry"), an engineering firm, entered into 

a contract with C3NS, Inc. to prepare a survey and site plan
2

for the construction of a building on property owned by C3 

Holdings, LLC in an industrial park located in Louisa, 

Virginia. The building would house a tire recycling plant to 

be operated by C3RS, Inc.1

"Attachment B" to the contract included certain "standard 

terms and conditions" including a provision that

[C3] shall furnish [to Dewberry] all plans, 

drawings, surveys, deeds and other documents related 

to the services in your possession and shall inform 

us in writing about all special criteria or 

requirements related to Services . . . . [Dewberry] 

may obtain deeds, plats, maps and any other 

information filed with or published by any 

governmental entity . . . . [C3] agree[s] to give 

prompt notice to [Dewberry] of any development or 

occurrence that affects the scope or timing of 

Services.

Also included in Attachment B was the following provision 

concerning the payment of attorneys' fees and expenses in the 

event of litigation arising from the contract ("attorneys' 

fees provision"):

The losing party shall pay the winning party's 

reasonable attorneys' fees and expenses for the 

prosecution or defense of any cause of action, claim 

or demand arising under this Agreement in any court 

or in arbitration. The attorneys' fees payable to 

us for the collection of compensation you owe us 

shall be twenty-five percent of any judgment or 

award against you and our attorneys' fees, expenses, 

and collection costs.

 1 C3NS, Inc., C3 Holdings, LLC, and C3RS, Inc. are related 

entities. We will refer to them collectively as "C3."
3

Under the terms of an addendum signed by C3 on June 15, 

2008, Dewberry was required to relocate the proposed building 

site from the location originally designated by C3 to "allow[] 

for a closer proximity to the Dominion Virginia Power (DVP) 

service area" within the industrial park so that the building 

would "receive power service from DVP." The addendum 

indicated that C3 was acquiring additional acreage in the 

industrial park in order to facilitate this change.

Prior to the execution of the addendum, Dewberry received

from Rappahannock Electric Cooperative ("Rappahannock 

Electric"), the other electric service provider for the 

industrial park, materials which purported to show the 

division of the service areas of the two providers. Unknown 

to Dewberry, the materials were inaccurate. However, using 

these materials, Dewberry prepared a building site plan that 

did not meet the criteria of the June 15, 2008 addendum.

Also prior to the execution of the addendum, C3 had

received from DVP an aerial photograph which accurately 

reflected the service areas of the two electric service 

providers. This photograph showed that no portion of the 

building site, including the additional acreage acquired by 

C3, was within DVP's service area. C3, which apparently was 

unaware of the photograph's significance, failed to provide it

to Dewberry as required by the contract.
4

When C3 learned that the site plan prepared by Dewberry 

would not place the building within the DVP service area, it 

withheld payment to Dewberry on the balance owed under the 

contract. Dewberry subsequently obtained a mechanic's lien on 

the property to secure this debt.

On May 21, 2009, Dewberry filed in the Circuit Court of 

Fairfax County, C3's principal place of business, a complaint 

against C3 seeking to collect the balance owed on the 

contract. On November 10, 2009, C3 filed in the same circuit 

court a complaint against Dewberry alleging, among other 

things, breach of contract and seeking 1.5 million dollars in 

damages allegedly incurred as a result of the tire recycling 

plant not being located within DVP's service area. Both 

parties sought an award of attorneys' fees and expenses under 

the contract. Ultimately, the suits were consolidated for 

trial with C3's complaint nominated as a counterclaim.

Following an extended period of discovery and pre-trial 

motions, the case was set for a bench trial, limited to the 

issue of liability on the complaint and counterclaim. In this 

regard, the court had entered a consent order reflecting the 

parties' agreement that neither party would be required to 

present evidence concerning attorneys' fees until after a 

judgment had been rendered on the merits of the asserted 

claims. The consent order stated that "[a]ttorney[s'] fees 
5

and expenses may be awarded in accordance with" the attorneys'

fees provision of Attachment B. (Emphasis added.)

The trial commenced on February 28, 2011, and evidence in 

accord with the above recited facts was received by the 

circuit court. At the conclusion of the trial on March 10, 

2011, the court entered an order awarding Dewberry judgment 

for $49,459.85 on its claim. In its summation, the court 

concluded that even if Dewberry had breached the contract by 

failing to discover the inaccuracy in the information obtained 

from Rappahannock Electric and, thus, not providing a site 

plan in accord with the criteria of the June 15, 2008 

addendum, C3 could not recover on its counterclaim. The court 

reasoned that this was so because C3 had been the first to 

breach the contract by failing to provide Dewberry with the 

aerial photograph provided by DVP. The court further stated

that it would consider an award of attorneys' fees, "[b]ut it 

strikes [the court] that this was a legitimate, good-faith 

dispute, a difference of opinion, and without making any 

decision, [the court is] not likely to shift fees absent any 

other evidence presented."

On April 15, 2011, citing the attorneys' fees provision, 

Dewberry filed a motion, supported by numerous billing records 

and other documentation, for an award of attorneys' fees and 

expenses for both the prosecution of its complaint and the 
6

defense of the counterclaim. Dewberry calculated the award 

due for collection of compensation owed under the second 

sentence of the attorneys' fees provision to include 25% of 

the judgment in addition to attorneys' fees and expenses of 

$5,795.50, while it claimed $338,356.60 in attorneys' fees and 

expenses for successfully defending the counterclaim.

In response, C3 contended that although the attorneys'

fees provision required that "[t]he losing party shall pay 

. . . reasonable attorneys' fees and expenses," the use of the 

term "may" in the consent order had modified the contract and

allowed the circuit court the discretion to decline awarding

attorneys' fees to Dewberry. (Emphasis added.) C3 noted that 

the court had observed that the suit involved a "legitimate, 

good-faith dispute," and, thus, it contended that an award of 

attorneys' fees would be a "windfall for Dewberry," while 

penalizing C3 for pursuing a legitimate, though ultimately 

unsuccessful, claim for breach of contract.

C3 further contended that the attorneys' fees provision 

limited any recovery by Dewberry to that available under its

second sentence. C3 maintained that where a contract provides 

for an award of liquidated cost of collection damages that 

includes attorneys' fees, such an award necessarily includes

the cost of the defense of any counterclaim.
7

Lastly, C3 contended that Dewberry's request for 

attorneys' fees included amounts that were "unrecoverable" 

because these fees related to "claims" on which Dewberry had 

not prevailed. These "claims" were "unsuccessful defenses 

[that] were outside the scope of the [attorneys' fees] clause 

or were unreasonable," including a pre-trial motion for 

partial summary judgment and motions to compel discovery.

In response, Dewberry maintained that the consent order 

was not intended as a novation of the contract, but merely 

provided for the manner of conduct of the trial. Dewberry 

further contended that because it had prevailed on all issues 

regarding liability, it was entitled to recover all attorneys'

fees related to both the prosecution of its complaint and the 

defense of the counterclaim and that it would be an abuse of 

discretion for the circuit court not to enforce the attorneys'

fees provision as written.

Thereafter, the circuit court held a hearing on the 

motion for attorneys' fees. On June 14, 2011, the court 

issued an order with an incorporated opinion letter. The 

court first concluded that "the only logical purpose of the 

[c]onsent [o]rder was to bifurcate the attorneys' fees issue 

from the trial on the merits." Nonetheless, the court further 

concluded that "the 'may' versus 'shall' argument is 

ultimately a distinction without a difference [because, while] 
8

the language of the [c]ontract is mandatory, under Virginia 

law, this Court must still be satisfied that fees should be 

awarded."

The circuit court then discussed the nature of the 

counterclaim, concluding that "this was a good faith dispute." 

Thus, although "C3 [did] not dispute" that "Dewberry's fees 

for its defense of C3's [c]ounterclaim standing alone are fair 

and reasonable," the court nonetheless concluded that "given 

the nature of the dispute, shifting [the burden of attorneys' 

fees] to C3 is not warranted." However, recognizing that the 

attorneys' fees provision was "mandatory," the court awarded 

Dewberry attorneys' fees of $18,160.46 for the prosecution of 

its complaint and one dollar for the defense of the 

counterclaim.2

 The circuit court did not address C3's 

arguments that Dewberry could recover only under the second 

sentence of the attorneys' fees provision and that Dewberry

was barred from recovering fees associated with the pre-trial 

motions on which it had not prevailed.

Dewberry filed a motion for reconsideration of the award 

of one dollar as attorneys' fees and expenses for its 

successful defense of the counterclaim. Dewberry maintained 

 2 The record is not clear regarding how the amount of the 

award was calculated with regard to Dewberry's complaint. 

However, that issue is not presented in this appeal.
9

that the court had improperly rewritten the parties' contract 

through its "adoption of [a] 'good faith dispute'" standard. 

Dewberry asserted that it was entitled to an award of 

reasonable attorneys' fees for its successful defense of C3's 

counterclaim, regardless of whether C3 had a good faith basis 

for asserting that claim.

Having previously suspended the order entered June 14, 

2011, the circuit court issued a final order with an 

incorporated opinion letter on July 8, 2011 denying Dewberry's

motion for reconsideration. The court stated that while its 

prior opinion letter had "take[n] into consideration the 

nature of the dispute, it was to explain the circumstances 

that led to the result of the dispute." In the court's view, 

although "Dewberry may have prevailed in the trial . . . it 

still plainly breached its contract . . . because it failed to 

provide C3 access to [DVP's service area] as it had agreed." 

Thus, because both parties had breached the contract and 

Dewberry had prevailed on C3's counterclaim only because C3 

had been the first to breach the contract, the court reasoned 

that "based on the result of the dispute, the . . . decision 

to award Dewberry its attorneys' fees of $1.00 is reasonable."

We awarded Dewberry an appeal on the following assignment 

of error:
10

The trial court erred by abusing its discretion in 

awarding Dewberry only $1.00 in attorneys' fees and 

expenses for its successful defense of [C3's]

Counterclaim in contravention of clear contract 

language directing recovery by a prevailing party of 

reasonable attorneys' fees and expenses for the 

prosecution or defense of any claim.

We also awarded an appeal to C3 on its assignment of 

cross-error:3

The trial court incorrectly construed the contract 

when it failed to find that the second sentence of 

section twenty two of the standard terms of the 

Contract, which states "The attorneys' fees payable 

to us [Dewberry] for the collection of compensation 

you [C3] owe shall be twenty-five percent of any 

judgment or award against you and our attorney's 

fees, expenses, and collection costs," did not cover 

all of Dewberry's Attorneys' fees, including defense 

of counterclaims filed in response to Dewberry's 

action.

DISCUSSION

At no time have the parties contended that the attorneys' 

fees provision is ambiguous, nor is there any dispute that 

Dewberry was the "winning party," as that term is used in the 

contract on both its complaint and C3's counterclaim. Under 

these circumstances, this Court applies a de novo standard of 

review to interpret an unambiguous provision of a contract. 

PMA Capital Ins. Co. v. US Airways, Inc., 271 Va. 352, 357-58, 

626 S.E.2d 369, 372 (2006). Moreover, the contract is to be 

 3 C3 also filed a cross-appeal addressing the merits of 

the underlying case. We refused C3's petition for appeal by 

order. C3NS, Inc. v. Dewberry & Davis, Inc., Record No. 

111778 (December 19, 2011).
11

"construed as written, without adding terms that were not 

included by the parties." Id. at 358, 626 S.E.2d at 372.

"Under the so-called 'American rule,' a prevailing party 

generally cannot recover attorneys' fees from the losing 

party." Ulloa v. QSP, Inc., 271 Va. 72, 81, 624 S.E.2d 43, 49 

(2006). 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. Id.

A prevailing party who seeks to recover attorneys' fees 

pursuant to a contractual provision such as the one at issue 

here has the burden to present a prima facie case that the 

requested fees are reasonable and necessary. Chawla v. 

BurgerBusters, Inc., 255 Va. 616, 623, 499 S.E.2d 829, 833

(1998); see 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 this issue:

[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.
12

Chawla, 255 Va. at 623, 499 S.E.2d at 833; accord Ulloa, 271 

Va. at 82, 624 S.E.2d at 49.

Dewberry asserts that the circuit court misapplied the 

guidance given in Chawla by inferring that the "whether the 

services were necessary and appropriate" language permitted 

the court to consider the "nature of the dispute" and apply a 

"good faith" requirement to limit the prevailing party's 

recovery. Dewberry contends that a trial court's 

consideration of the reasonableness of the attorneys' fees 

requested should be limited to the substance and relationship 

of the fees to the prosecution or defense of a claim, without 

consideration of whether the opposing party had a good faith

basis for taking an adverse position at trial. Thus, because 

the court determined that the fees and expenses Dewberry 

submitted for the defense of C3's counterclaim were otherwise

"fair and reasonable," Dewberry asserts that the court abused 

its discretion in limiting Dewberry's recovery of attorneys' 

fees for the defense of the counterclaim because it found that 

the counterclaim arose from a "legitimate dispute." We agree.

In its June 14, 2011 opinion letter, the circuit court 

expressly stated that it was limiting Dewberry's recovery 

because "given the nature of the dispute, shifting [the burden 

of attorneys' fees] to C3 is not warranted." Although the 

court subsequently clarified that it had "take[n] into 
13

consideration the nature of the dispute . . . to explain the 

circumstances that led to the result of the dispute," the 

result of the dispute is relevant only to determining under 

the contract which party is the "winning party" and therefore 

entitled to seek an award of attorneys' fees. Moreover, the 

court reasoned that not shifting the burden of the attorneys' 

fees to C3 was "warranted" because Dewberry had prevailed on 

the counterclaim only by virtue of the affirmative defense 

that C3 had first breached the contract. This reasoning is 

plainly wrong. It is not in accord with the contract 

provision providing that the "losing party shall pay the 

winning party's reasonable attorneys' fees and expenses for 

the . . . defense of any . . . claim . . . under this 

Agreement."

A trial court may, when determining the reasonableness of 

the fees and expenses claimed by a prevailing party, deduct 

from the award any fees and expenses associated with claims 

and defenses the court views to be frivolous, spurious, or 

unnecessary. Chawla, 255 Va. at 624, 829 S.E. 2d at 833; 

Ulloa, 271 Va. at 83, 624 S.E.2d at 50. However, "[c]ourts 

will not rewrite contracts; parties to a contract will be held 

to the terms upon which they agreed." The Bank of Southside 

Virginia v. Candelario, 238 Va. 635, 640, 385 S.E.2d 601, 603 

(1989). Here, the award of one dollar as reasonable 
14

attorneys' fees essentially required the circuit court to 

rewrite the parties' contract. It takes no analytical leap to 

conclude that an award of one dollar was not contemplated by 

the parties' contract. Accordingly, we hold that the circuit 

court abused its discretion in limiting Dewberry's recovery of 

attorneys' fees and expenses for its successful defense of 

C3's counterclaim to one dollar.

We turn now to consider C3's assignment of cross-error. 

The thrust of C3's various assertions is that Dewberry was 

limited to one award of attorneys' fees rather than two and 

the amount of that award was limited by the provisions of the 

second sentence in the attorneys' fee provision of the 

parties' contract.

C3 maintains that Dewberry's complaint was "for the 

collection of compensation" as contemplated by the second 

sentence of the attorneys' fees provision and would have 

included the costs of the necessary efforts to dispute C3's 

claim that Dewberry had breached the contract and, thus, 

excused or mitigated C3's lack of payment of compensation 

otherwise due to Dewberry. C3 contends that the costs of 

these efforts would have been incurred by Dewberry even if C3 

had not also sought an "affirmative recovery" through its 

counterclaim. C3 thus maintains that because there was only 

one action for the collection of compensation, Dewberry was 
15

limited to one award of attorneys' fees and the award was 

limited to "twenty-five percent of any judgment . . . against 

[C3] and [Dewberry's] attorneys' fees, expenses, and 

collection costs."

C3's assertions are flawed on multiple grounds. First, 

C3's assertion that Dewberry would have been required to 

respond to the claim that it had breached the contract even if 

C3 had not asserted its counterclaim and sought an 

"affirmative recovery" belies the fact that C3 actually sought

to recover damages for Dewberry's alleged breach that were 

well in excess of those claimed in Dewberry's complaint. The 

counterclaim did not seek merely to mitigate or alleviate C3's 

liability, but to impose a significant liability on Dewberry 

as well. By increasing the magnitude of the amount in 

controversy, C3 necessarily increased the costs to defend a 

claim that otherwise would have been presented only as an 

affirmative defense to a much smaller amount in controversy.

Second, the nature of the counterclaim expanded the scope 

of the litigation far beyond a collection of compensation 

dispute. An examination of the record shows that the greater 

portion of the lengthy discovery process and the nine-day 

trial was devoted to the prosecution and defense of the 

counterclaim. In this context, there was never any real 

dispute that Dewberry was owed compensation under the 
16

contract, only whether it had breached the contract in a 

manner that would bar it from collecting the balance due. 

Indeed, while a claim of $338,356.60 in attorneys' fees for 

contesting an affirmative defense to the claim for 

compensation of less than one-sixth that amount would be

excessive and unreasonable, a different calculus would apply 

where the same amount is expended in defending against a claim 

for $1,500,000 in damages.

Accordingly, we do not agree with C3 that because the 

facts asserted to support its counterclaim might also have 

served as a defense to the complaint, the entire matter was 

"for the collection of compensation" and, thus, all fees to be 

awarded would be subject to the second sentence of the 

attorneys' fees provision. We hold that the defense of the 

counterclaim was not part of the collection action and the 

circuit court did not err in failing to find that an award of 

attorney's fees and expenses to Dewberry on the counterclaim 

would be controlled by the second sentence of the attorneys'

fees provision.4

Having determined that the circuit court erred in 

limiting the award of attorneys' fees and expenses for 

 4 In light of this holding, we need not address C3's 

further assertion concerning the method for calculating an 

award under the second sentence of the attorneys' fees 

provision.
17

Dewberry's successful defense of C3's counterclaim to one 

dollar and that the calculation of the award is not subject to 

the "for the collection of compensation" clause of the 

attorneys' fees provision, we must now consider what result 

should obtain in this Court. Dewberry contends that because 

the court determined that the claim for $338,356.60 in 

attorneys' fees and expenses was "fair and reasonable," we 

should remand with instruction to award that amount. Dewberry 

further requests that upon remand it be permitted to seek an 

award of attorneys' fees and expenses for the prosecution of

this appeal and defense of the assignment of cross-error. 

C3 responds that we should remand the case to the circuit 

court with "instruction regarding [the] attorneys' fees that 

can be awarded against" C3, but without specifically directing 

the court to award the amount claimed by Dewberry. C3 

conceded at trial that it was not challenging the 

reasonableness of the hourly billing rate nor the number of 

hours billed by Dewberry's counsel for defense of the 

counterclaim. However, C3 maintains that it did not concede

the necessity of all the charges at trial and that the court 

made no express ruling on this issue. The record supports 

this contention. During oral argument of this appeal, counsel 

explained that "there had been no reason" to contest the 

necessity of individual elements of the fees in light of the 
18

court's ultimate award of only one dollar. Accordingly, 

counsel expressly requested at the conclusion of oral argument

that the issue be remanded with instruction for the circuit 

court to receive evidence as to whether all the fees claimed

were necessary to the defense of the counterclaim.

In its opposition to Dewberry's motion for attorneys' 

fees, at trial C3 clearly contested the necessity of some of 

the fees claimed, specifically asserting that Dewberry should 

not recover for unsuccessful motions related to discovery and 

an unsuccessful motion for partial summary judgment on the 

counterclaim. While we have held that a party entitled to 

recover attorneys' fees may do so only for those issues on 

which it prevailed and which relate to the contract, Ulloa, 

271 Va. at 83, 624 S.E.2d at 50, heretofore we have not 

required the party to show that it was successful in every 

aspect of its prosecution or defense related to those issues 

on which it prevailed, and we decline to adopt such a rule 

now.

Rather, the question is whether, given the factors set 

forth and explained in Chawla, Ulloa, and their progeny, the 

fees were reasonable, necessary and appropriate to the 

particular circumstances of the litigation. Chawla, 255 Va. 

at 623, 499 S.E.2d at 833; Ulloa, 271 Va. at 82, 624 S.E.2d at 

49. Merely because a party loses a pre-trial motion related 
19

to an issue on which the party ultimately prevails does not 

mean that the pre-trial motion was not appropriate at the time 

it was filed and under the circumstances of the case. It is 

the province of the trial court to determine whether fees for 

these services were necessary.

We are of opinion that the circuit court's finding that 

"[attorneys'] fees for [Dewberry's] defense of [C3's] 

counterclaim standing alone are fair and reasonable" did not 

resolve the issue whether all of those fees were necessary. 

"Fair" and "reasonable," the terms used by the court in its 

opinion letter, are synonymous in meaning. Here, no evidence 

was received concerning the necessity of those fees and no 

express ruling on that issue was made by the court. 

Undoubtedly this was because of the court's erroneous ruling 

limiting the recovery of attorneys' fees on the counterclaim 

to one dollar. Moreover, we are further of opinion that the 

trial court should be afforded the opportunity to exercise its 

discretion to resolve this issue in the first instance rather 

than for this Court to resolve the issue in this appeal. 

Accordingly, we hold that while the reasonableness of the 

hourly rate of Dewberry's claim for attorneys' fees and 

expenses will not be subject to challenge upon remand, the 

court may receive evidence on the issue whether all the fees 

charged with respect to the defense of the counterclaim were 
20

necessary applying the guidance found in Chawla and Ulloa as 

discussed herein.

CONCLUSION

For these reasons, we will reverse the judgment of the 

circuit court awarding one dollar in attorneys' fees and 

expenses to Dewberry for its successful defense of C3's 

counterclaim. We will remand the case to the circuit court 

for further proceedings to determine a proper award to 

Dewberry for attorneys' fees and expenses for its successful 

defense of C3's counterclaim. Additionally, upon remand, 

Dewberry may submit to the circuit court a claim for 

additional attorneys' fees and expenses, and the court shall 

award such fees and expenses that it determines to be 

reasonable and necessary for the successful prosecution of 

this appeal and defense of C3's assignment of cross-error 

thereto.

Reversed and remanded.