# FILED
June 22, 1998 Cecil W. Crowson Appellate Cou rt Clerk IN THE SUPREME COURT OF TENNESSEE

AT NASHVILLE

DAVID A. ALEXANDER and ) FOR PUBLICATION MACLIN P. DAVIS, JR., ) ) FILED: JUNE 22, 1998 Plaintiffs-Appellees ) ) DAVIDSON COUNTY v. ) ) HON. ROBERT S. BRANDT, JULIA ANN WHITE INMAN ) CHANCELLOR ) Defendant-Appellant ) NO. 01-S-01-9705-CH-00103

For Appellant : For Appellees : HARLAN DODSON, III WARD DEWITT, JR. ANNE C. MARTIN Nashville, TN Nashville, TN

OPINION

REVERSED BIRCH, J.1 Mr. Alexander died after the first trial of this case. 2 We granted permission to appeal under Tenn. R. App. P. 11 to the appellant, Julia Ann White Inman, in order to determine the amount of at torneys’ fees, if any, that the appellees, attorneys David A. Alexander 1 and Maclin P. Davis, Jr. , ar e entitled to
recover from Inman, their former client, pursuant to a written fee agreement.

Under the circumstances presented herein, we conclude that (1) the agreement is not a contingent fee arrangement; (2) the attorneys and Inmanshared the same understanding of the agreement; and (3) the fee charged is reasonable. Consequently, we hold that the attorneys have satisfied their high fiduciary duty of good faithin the formation of the agreement. We conclude also that the attorneys did not violate the terms of the agreement. Accordingly,
we hold that the agreement is enforceable, and the attorneys are entitled to recover the full amount requested. Finally, the attorneys are not entitled to prejudgment interest.

I

After releasing her first attorneys, Inman engaged Davis and Alexander on September 6, 1988, to represent her in a fiercely contested divorce action which had already been set for trial on October 5, 1988. During the September 6 meeting between Alexander and Inman, Alexander req uested a $10,000 retainer but did not disc uss any other billing arrangements. He also recommended associating Davis to ass ist with the representation, and Inman2 Inaddition, Alexander’s partner, attorney Ernest W.

Williams, contributed substantially to the representation. Williams is not a party to this suit. 3 agreed. 2 Because the attorneys were engaged only one month before the trial date, they obtained a continuance, and the trial was reset for November 15, 1988. Once the trial was reset, approximately eight weeks were available to prepare for trial.

The parties entered into the fee agreement in dispute on September 22, 1988. Neither Alexander nor Davis explained the agreement to Inman, although she admitted at trial to having read the agreement before signing it. The agreement provides:
The amount of the final fee to be paid by Client for legal services of Attorneys and lawyers and clerks under their supervision shall be a reasonable amount taking into consideration the time and labor required, the novelty and difficulty of the questions involved, the skill required to perform the services properly, the amount involved and results obtained, and other relevant factors. Said final fee shall not exceed 15% of the total sum (in moneyand property) awarded to Client after commencement of the trial of said action for divorce for alimony in solido , for five years of alimony in futuro , and distribution and division of property, or 10% of such total sum awarded to Client by settlement prior to the commencement of such trial, provided that said f ee s hall in no event be less than (a) $10,000; or (b) the total amount ona time basis for work of Attorneys and other attorneys and clerks under their supervision at their usual hourly charges for work. Said retainer feel [sic] shall be credited toward the total charges to Client. If the charges for work exceed $10,000, Attorneys shall bill4 Client for said excess charges within a reasonable time.

Inthe days before the trial, the attorneys examined the files from Inman’s previous attorneys, subpoenaed bank r ecords, amended the pleadings, and assembled the necessary evidence. They also requested the court to re-open discovery and to order Inman’s spouse to answer several interrogatories propounded by her previous attorneys.

Because Inman suspected that her spouse had not bee n honest about the existence and value of all marital assets, a great deal of time was devoted to identification and re-evaluation of the marital estate. The trial court declined to re-open discovery, so
an extensive search of various docu ments and bank records became necessary. With Inman’s assistance, they located at least one undisclosed asset and proved that the value of the marital estate
was approximately $1,666,000 more than Inman’s spou se had estimated. The attorneys testified that theytoiled many evenings and weekends to pre pare f or trial and that they devoted considerable time to meeting or talking with Inman.

The trial was conducted on November 15, 16, and 17, 1988. In December 1988, the trial court found that the value of the
mar ital estate was approximately $8,000,000 and entered an orde r awarding the divorce to Inman’s spouse on the grounds of cruel and inhumantreatment. Additionally, t he c ourt awarded Inman $2,300,200 of the marital estate. In January 1989, Inman received partial payment of the judgment; with it she paid the attorneys5

$149,000 in fees and approximately $16,000 in expenses. She did not ask for an explanation of how the fee was calculated or what services were included.

T he attorneys continued to represent Inman on the appellate level. On October 18, 1989, the Court of Appeals reversed the trial court’s judgment and held that Inman was entitled to: (1) the divorce, on grounds of a dultery, (2) an additional $1,043,230 of the marital estate, (3) $5,000 in alimony per month, and (4) 50% of her attorneys’ fees accruing at trial and 75% of her attorneys’ fees acc rui ng on appeal. The Court of Appeals also removed $850,000 from her spouse’s separate property and added it to the marital estate, for a total marital estate of $8,850,000.

Inman’s spouse then applied for permission to appeal to this Court, and we granted his application. On April 22, 1991, the Court reversed the Court of Appeal’s awa rd of alimony and attorneys’ fees, affirmed the award of the divorce to Inman and the $1,043,230 increase of her share of the marital prop erty, and remanded the cause to the trial court for further proceedings. On July 1, 1991, the Court denied Inman’s petition to rehear.

Onremand, the attorneys continued to represent Inman, at least at first. They requested the trial court to award interest
a nd income from certain real estate, stocks, bonds, and othe r propertythat had been awarded to Inman yet remained in her spouse’s possession. On August 16, 1991, the trial court dismissed the motion, and the attorneys advised Inman to appeal this ruling.3 This fig ure consists of the original $10,000 retainer fee,

plus the $149,000 paid after the divorce trial was concluded. 6 Meanwhil e, Dav is had written a letter to Inman on July 10, 1991, explaining that the attorneys’ fee wou ld be 15% of her $3,343,430 award, a total of $501,514.50. Because she had already paid $159,000, 3 the attorneys requested the balance of $342,514.50. Although Inman was distressed by the amount requested, she waited until late August 1991 to respond that she was unwilling to pay it. Consequently, the attorney-client relationship was severed, and Inmanretained other counsel to represent her inal l subsequent proceedings.

The attorneys sued Inman for the unpaid fee on December 13, 1991. Inman, alleging that the fee agreement was unenforceable and the fee was clearly excessive, counterclaimed for a portion of the $159,000 she had already paid. On March 3, 1993, following a three-day trial, the jury returned a verdict for the attorneys in the amount of $263,985 , to be paid in addition to the $159,000 already paid.

Inmanappealed the verdict, and on February 8, 1995, the Court of Appeals reversed and remanded for another trial. Alexander v. Inman , 903 S.W.2d 686 (Te nn. Ct. App. 1995). The Court of Appeals opinion provided comprehensive guidance to the trial court on evidentiary issues, jury instructions, and the law relating to contingent fees in domestic relations ca ses . On remand, the parties agreed to a bench trial on the record of the original trial.7 Abench trial ensued, and on January 29, 1996, the trial court ruled that the attorneys had violated the fee agreement by failing to bill Inman within a reasonable time and that $501,514.50 is an unrea son able fee under the circumstances presented. Upon analyzing the factors determining reasonableness, the trial court concluded that $300,000 is a reasonable fee and awarded the attorneys the unpaid portion of this amount--$141,000. The trial court also denied the attorneys’ request for prejudgment interest. Inmanappealed this ruling, and the cause came before the Court of Appeals for the second time.

The Court of Appeals held that the fee agre ement is contingent and unenforceable. However, because the court found that the fee requested was not “clearly excessive,” the attorneys
were allowed to recover in quantum meruit for the reasonable value of their services. The Court of Appeals determined that the
reason able value of their services was $280,757.25. Since Inman had already paid $159,000, the attorneys were awarded $121,757.25 plus interest, to begin accruing February 13, 1996, the date of entryof the trial court’s judgment on remand. Judge Koch dissented from the Court of Appeal s decision, noting that the appropriate fee as determined by the majority, $280,757.25, was merelyan average of the highest and lowest fees suggested by expert witnesses. Koch found the value of the attorney’s services to be $166,252.50, which, after credit fo r the $159,000 already paid, would result in a judgment of $7,252.50.

Be fore this Court, Inman contends that the requested $501,514 .50 fe e is a clearly excessive contingent fee and, under8

White v. McBride , 937 S.W.2d 796 (Tenn. 1996), the attorneys are not entitled to recover any fee at all. Rather, she insists that she is entitled to recover the $159,000 already paid. Alternatively, she urges that a reasonable fee in this case is $60,000 and that she is entitled to recover $99,000 from the attorneys. The attorneys assert tha t the fee agreement is enforceable, that the fee requ ested is reasonable, and that they are entitled to an award of prejudgment interest.

Inour view of the cause, we find the dispositive issues to be: (1) wheth er the fee provided for in the agreement is a contingent fee; (2) whether the attorneys satisfied their fiduciary d utyof g ood faith with respect to the formation of the fee agreement; (3) whether the attorneys violated the terms of the agreem ent; and (4) whether the attorneys are entitled to prejudgment interest. Our review of all findings of law will be de
novo , with no presumption of correctness. Any findings of fact will be afforded a presumption of correctness, unless the preponderance of the evidence is otherwise. Tenn. R. App. P. 13(d); Campbell v. Florida Steel Corp. , 919 S.W.2d 26, 35 (Tenn. 1996).

II

As a general rule, contingent fee agreements are begrudginglypermitted in domestic relations cases. Because public policyfavors marri a ge and discourages attorneys from promoting bitter divorce battles for financial gain, conti ngen t fees are sub jected to enhanced scrutiny and rarely are found to be4 According to the Court of Appeals, the attorney whose fee in

a divorce case is based on a contingency must demonstrate, in addition to the requirements for all attorney fee agreements: (1) that the client is currently or will be unable to pay a reasonable fixed fee, or that the opposing party cannot payreasonable pendente lite attorneys’ fees or an award for attorneys’ fees at the conclusion of the case; (2) that the attorney has explained all relevant considerations to the client, including the availability of other fee or payment arrangements and the client’s right to seek independent legal advice; and (3 ) that the attorney has agreed to credit any court

awarded fees against his or her final fee. See Alexander , 903 S.W.2d at 699. 9 justified. As a matter of fact, so unsavory are contingent fees in domestic relations cases that a higher quantum of proof is necessaryto enforce a contingent fee. Alexander , 903 S.W.2d at 698-99. 4 Thus, our initial task is to determine whether the fee agreement before us describes a contingent fee. The Court of Appeals found the fee to be one based upon a contingency. Upon careful analysis, however, we find otherwise.

In Eckell v. Wilson , 597 A.2d 696 (Pa. Super. Ct. 1991), appeal denied , 607 A.2d 253 (Pa. 1992), a Pennsylvania c our t analyzed whether a fee based upon the “reasonable value” of attorneyservices, with a minimum fee calculated at an hourly rate,
w as conti ngent. The court found that the fee was not truly contingent because the attorneys were guaranteed payment regardless of the outcome of the litigation. In contrast, “[a] contingency fee agreement carries a risk that an attorney will not be paid if the outcome of the li tigation i s unsuccessful. No such risk is found here.” Id. at 700-01. Other courts have similarly defined “contingent fee”:5 But see State ex rel. Oklahoma Bar Assn, v. Fagin , 84 8 P.2d

11 (Okla. 1992) (because state rules prohibit any fee which has some aspect of a contingency involved, any enhancement of a fee based on a favorable result is contingent); Salerno v. Salerno , 575 A.2d 532, 533 (N.J. Super. Ct. Ch. Div. 1990) (an agreement for an hourlyrate p lus a bo nus based on a percentage of the award is a contingent fee). 10 Acontingent fee contract by definitionis one that provides that a fee is to be paid to the attorney for his services onlyin case he wins, that is, a fee whic h is made to depend upon the success or failure to enforce a supposed right , and which fee is generally paid out of the recovery for the client.
Pocius v. Halv ors en , 195 N.E. 137, 139 (Ill. 1964) (emphasis added). “The usual meaning of ‘contingent fee’ is that the attorneywill be paid onlyif the case is won.” V.W. v. J.B. , 629 N.Y.S.2d 971, 973 (N.Y. Sup. Ct. 1995)(emphasis added). 5

The fee agreement in the instant case closely parallels the agreement in Eckell , in that both use the term “reasonable” in describing the fee, and both state a minimum fee to be charged. In additionto these common elements, th e agreement in the instant case states a maximum fee to be charged. This addition, however, does not alter our analysis, for under the terms of the agreement betweenInman and the attorneys, there is no question that they would be paid regardl ess of th e outcome of the case. Payment itself is certain; only the exact amount of payment is uncertain. The percentage of the total award merely marks the upward limit for the fee to be charged, and it is not the sol e basis for the fee. Therefore, we find that this arrangement is not a contingent one, and any enhanced considerations applicable to contingent fees are6 Inaddition, because we find that the fee is not contingent,

the recent case White v. McBride , 937 S.W.2d at 803, is inapplicable to this case. 11 not relevant here. 6 Rather, the criteria generally app licabl e to attorney fee agreements must be employed.

III
We move now to the second issue: whether the attorneys satisfied their duty of good faith when they entered into the agreement in dispute. The relationship of attorney and client is “extremelydelicate and fiduciary”; therefore, attorneys must deal withtheir clients in utmost good faith. This level of good faith is significantly higher than t hat required in other business transactions where the parties are dealing at arm’s length. Cooper & Keys v. Bell , 127 Tenn. 142, 150, 153 S.W. 844, 846 (1913); Alexander , 903 S.W.2d at 693. The client must be able to trust the attorneyto deal fairly at all times, including during the negotiationof the attorney’s terms of employment. Cumming s v . Patterson , 59 Tenn. App. 536, 541, 442 S.W.2d 640, 643 (1968).

Inthis context, this Court has long held that an attorney is entitled to compensation in the amount agreed upon by contract, provided that the contract is fair at its inception and entered into in good faith. Peoples Nat ’l Ba nk of Washington v. King , 697 S.W.2d 344, 346 (Tenn. 1985). In order to prove such good faith and fairness, an attorney seeking to enforce a contract for attorney’s fees must show:12 (1) the client fully understood the contract’s meaning and effect, (2) the attorney and client shared the same understanding of the contract, and (3) the terms of the contract are just and reasonable. Cooper & Keys , 153 S.W. at 846 (citing Planters’ Bank of Tennessee v. Hornberger , 44 Tenn. 531, 573 (1867)).

We will analyze th e first two criteria together. Our analysis be gins with the inescapable and obvious conclusion that the attorneys, as authors of the agreement, understood it to allow them to charge up to fifteen percent of Inman’s total award. The dispositive question, then, is whether Inman had the same
un derstanding of the agreement’s meaning and effect. In he r testimony, Inman admitted that sh e re ad the agreement before signing it. She testified also tha t she was unable to recall whether she understood it at that time. Yet, the language of the agreement plainly stated that the fee could be as much as fifteen percent of the total award.

Addi tio nally, the record reveals that Inman is an experienced realtor, well-acquainted with contracts of varying complexityand their interpretation. Indeed, from the record before us we easily conclude that she is a highly intelligent, self-reliant person who possesses acumen and tenacity in such
measure as to e nable her to succeed in the extraordinarily competitive field of real estate. As an example of her financial sophistication, Inman refused, on at least one occasion, to follow13

her attorneys’ advice that she accept cash equivalents in lieu of property. She was also actively involved in the management of her divorce case, helping the atto rney s to uncover valuable assets belonging to the marital estate. Moreover, the record contains no suggestionof undue influence or fraud. Thus, we discern no plausibl e basi s for concluding that Inman did not understand the words “Said final fee shall not exceed 15% of the total sum (in money and property) awarded to Client” when she read them.

Inmanplaces a great deal of reliance upon the fact that the attorneys did not “walk her through” the fee agreement in detail and explain its terms and conditions to her. This omission, Inmanargues, prevents the attorne ys f rom demonstrating that she understood the agreement. However, this position is not welltaken. If we were to accept her argument, then nothing would be gained by reducing fee agreements to writing. This is true because
a client could make a prima facie case of breach of fiduciary duty bysimply denying that the attorney explained the agreement before the client signed it. See Maksym v. Loesch , 937 F.2d 1237, 1243 (7th Cir. 1991).

In Maksym , a client attempted to defend against her attorney’s claim for fees by alleging fraud in the inducement. Beca use her claim of fraud was not supported by the proof, the client argued that all contracts between lawyers and c lients are presumptivelyfraudulent if the lawyer benefits from the contract. Id. at 1241. While Inman has not resorted to the use of the term “fraud,” her argument is strikingly similar. Because the attorneys did not expla in the fee agreement to her, Inman claims that they14

ca nnot prove she understood it, which under applicable case la w would mean that the attorneys violated their fiduciary duty of good faith towards their client. See Cooper & Keys , 127 Tenn. at 150- 51, 153 S.W. at 846.

Yet, the failure of one party to explain the terms of a writtencontrac t to the other is not alone a violation of the fiduciaryobligation of good faith, even if the contract is between attorneyand client. The argument that a fee agreement is unenforc eab le unless verbally explained to the client would effectivelycreate a presumption that all attorney’s fee contracts
are unenforceable. See Maksym , 937 F.2d at 1241-43. We do not find such a presumption appropriate.

Certainly, an attorney sho u ld reach a clear agreement about fees with the client and should explain the reasons for preferring one arrangement over another. Ethical Consideration 2- 19, Tenn. S. Ct. R. 8. Nothing, however, suggests that a written retainer agreement cannot satisfy this ethical consideration. In fact, reducing the agreement to writing is ideal. Here, the attorneys amply de mons trated that Inman understood the agreement she signed and that the attorneys shared the s ame understanding; Inmanadduced no evidence to suggest otherwise. Therefore, we find that the attorneys have satisfied the first and second criteria of Cooper & Keys for showing good faith in dealings between attorney and client.

Under th e th ird and last criterion for an attorney seeking to enforce a contract for fees, the terms of the contract15

must be just and reasonable. Cooper & Keys , 127 Tenn. at 150, 153 S.W. at 846. On its face, the agreement between Inman and the attorneys requires a reasonable fee, based upon expressed factors. In general, an agreement which utilizes broad terms and does not fixanexact fee is still acceptable. This Court has allowed a law firm to enforce a promissory note created pursuant to a similarly worded fee agreement. See Waller, Lansden, Dortch, & Davis v. Haney , 851 S.W.2d 131, 132 (Tenn. 1992) (the ret ain er agreement provided that the firm be paid a reasonable fee based on the amount involved, the time expended, the novel ty of the transaction, and the deadlines imposed upon counsel). Moreover, the agreement here is just and reasonable because it provides for a minimum and maxi mumfee to be charged. Indeed, the maximum fee provided a protectionto Inman by defining the limit beyond which the fee could not rise.

Of course, the use of the word “reasonable ” and the provisionof a m inim um and maximum fee will not alone make the agreement enforceable. We must also determine whether the fee ultimatelycharged was a reasonable fee, as is required by the terms of the agreement and by case law. We begin by noting that,
as a practical matter, no court can divine f romthe range of reasonable fees the one that is “most reasonable.” Indeed, those who have already opined a reasonable fee in this case have arrived at different figures. There is no need to second-guess the reasonab le f ees proposed because we hold that, under the circumstances, $501,514.50 is within the range of reasonableness. We reach this conclusion upon a careful analysis of the factors determining the reasonableness of an attorney’s fee.7 Withrespect to time and labor , w e disregard the attempted

reconstruction of the attorneys’ time records and the allegations of over-staffing and duplicative services. There is no need to reconstruct the exact hours spent on the case, because the fee was 16 Pursuant to the fee agreem ent, the factors to be considered in determining the reasonableness of a fee are “the time and labor required, the novelty and difficulty of th e questions involved, the skill required to perform the services properly, the amount involved and results obtained, and other relevant factors.” These factors essentially mirror those enumerated by this Court in Connors v. Connors , 594 S.W.2d 672, 676 (Tenn. 1980). Additional factors relevant to reasonableness of a fee include: the time limitations impo se d by the circumstances, the fee customarily charged in the locality for similar legal services, and the experience, reputation, and ability of the lawyer perf ormi ng the legal service. Id.

Inour consideration of what is a “r easona ble fee,” we have relied on the trial court’s f indings of fact. First, with respect to time and labor devoted to Inman’s representation , w e agree with the trial court that considerable amounts of each were expended. While divorce cases are more often disposed of without
a contested trial, Inman’s case required a three-day trial, an appeal to the intermediate court, and an appeal to this Court. The appeal to the intermediate court was based on factual issues, and the preparation of a brief in such a case is a time-consuming task, in that bits and pieces of evidence adduced during the three-day trial had to be organized and restated understandably and persuasively. In sum, this was no ordinary divorce case in terms of the time required of the attorneys. 7not controlled by the attorneys’ hourly rates. Rather, the parties

clearlyintended some leeway beyond the hourly rates. The time devoted to the case is but one of several factors determining the overall reasonableness of the fee charged. Because it is clear that the a tto rneys put innumerable hours into Inman’s case, the time and labor factor suggests that the $501,514.50 fee i s reasonable. Of course, as this case illustrates, it is preferable for an attorn ey to maintain reliable time records, regardless of the kind of fee arrangement the attorney has with the client. 17 As an added consideration, the fact that Inman retained the attorneys a scant month before the initial trial court date imposed a severe burden on them. They were able to obtain a continuance to November 15, 1988, but even so, they had precious little time--two months--to prepare for trial. Because the attorneys came into the case so late, they had to pr epar e more intenselythan they would have, had they been representing her from the beginning.

We move now to a consideration of the novelty and difficultyof the questions involved and the skill required to render effective representation. According to the trial court, there was nothing novel or difficult about the issues raised in this divorce case. The trial court further explained that divorce
cases are not particularly difficu lt compared to other types of cases, because they usually involve factual situations with which the trier of fact is familiar. Yet, the time cons trai nts, the number of issues, and the value of the marital estate significantly increased the difficulty of this case. Based upon a consideration of those factors, it is clear to us that only those attorneys with extraordinaryskill and specialized experience would have been able to properly represent Inman and manage her case.18 Furthermore, considering the criteria of experience, reputation, and ability of the attorneys, we do not hesitate to conclude that these attorneys were exceptionally well-qualified to handle such a difficult case. The quality of their representation is evidenced bytheir unflagging persistence and consummate skill. Expert witnesses testified that each of Inman’s attorneys possessed
an extraordinary degree of expertise and enjoyed an excellent reputationin the area of domestic relations. The trial judge, on remand, agreed that Inman’s attorneys were “veteran trial lawyers withreputations for tenacity and competence.” Furthermore, there is an abundance of proof in the record that the attorneys represented Inman to the best of their skills and abilities. This
was what she expected of them, and, in dee d, this is what she received.

Withrespect to the results obta ined by the attorneys, t he trial court concluded that the results were not partic ularl y good. On this point, we differ. Admittedly, Inman’s objection to the fee charged stems from a dissatisfaction with the results. She ins ists that the results obtained were not favorable because sh e
was awarded much less than fifty percent of the marital estate, the amount to which she considered herself entit led. Yet, the attorneys managed to convince the Court of Appeals to reverse the trial court ruling which awarded the divorce to her spouse--no small feat. E ven more important, the Court of Appeals substa ntiallyincreased the amount awarded to Inman by the trial court. In addition to having been advanced to the position of the prevailing party in this bitter divorce action, Inman was also awarded an additional $1,043,230 of the marital estate, increasing8 Inthe instant case, Inm an’s o wn expert, Rose Palermo, a

lawyer who handles divorce cases involving large estates, testified that in such cases the spouse who was not the primary wage-earner typicallyrec eive s approximately thirty-five to forty percent of the marital estate. 19 her total award to $3,343,430--approximately thirty-eight percent of the marital estate. This increase is particularly impressive in light of the fact that she was not shown by the evidence to be the primarywage-earner. 8 See Inman v. Inman , 811 S.W. 2d 870, 870-71 (Tenn. 1991). Moreover, the dollar amount of marital assets is also a significant factor in the fee- det ermination process. Because the essence of the dispute concerned the distribution of an almost nine million dollar estate, Inman’s attorneys are entitled to a proportionally larger fee.

There is countervailing proof regarding the reasonableness of the fee. Evidence of the smaller fee charged by the attorney for Inman’s spouse and the expert testimony of one witness, taken together, per mit the inference that for similar services other attorneys have charged or may charge less. That inference notwithstanding, just as no two cases are the same, no two lawyers are the same, and unless the legal profession decides to operate under a “uniform fee” system, no two fees will be the
same. Thus, the fact that other lawyers may have performed similar services for less does not undermine the reasonableness of the fee charged by Inman’s attorneys.

While no single factor determines reasonableness, on balance we conclude that the fee of $501,514.50 is reasonable. In sum, because the fee agreement provided bo th a minimum fee and a20

protective cap on the fee, and because the fee ultimately charged
was based on the reasonable value of services rendered, the attorneys have satisfied the third criterion of Cooper & Keys , that the terms of the agree ment be just and reasonable. The fee agreement thus conforms to case law and the code of professional responsibility. To conclude, with all three Cooper & Keys criteria satisfied, the attorneys have shown that they fulfilled their high fiduciary duty of good faith toward Inman in the formation of the fee agreement between them.

IV

We need not dwell at length on the third issue: whether the attorneys violated the terms of the fee agreement. The attorneys waited until the entry of the final judgment of this Court, in July 1991, to send Inman the bill. According to the trial court, this delayviolated the fee agreement, which required “If the charges for the work exceed $10,000, Attorneys shall bill Client for said excess charges within a reasonable time.”

Clearl y, th is agreement does not require periodic or interimbilling, which is the customary method when the fee is calculated solely on a per-hour basis. Further, Inman never inquired about the lack of billing during the three years the appellees represented her. Even wh en the attorneys requested a payment of $149,000 in attorneys’ fees after the trial, she did not request an accounting or explanation of the fees. Because neither the language of the agreement nor the conduct of the parties indicated a need for interim billing, we conclude that no such9 Tennessee Code Annotated § 47-14-123 (1988) provides:
21 re quirement existed. The fee was ultimately based upon Inman’ s total award. This amount could not be ascertained before final judgment. Because the bill was sent promptly upo n entry of the final judgment of this Court, we conclude that such billing was accomplished within a reasonable time. Thus, the attorneys fulfilled their obligations under the agreement.

V

The final issue is whether the attorneys are entitled to prejudgment interest. The attorneys insist that inter est should beginaccruing on the date they first requested payment of their fees, July 10, 1991. The trial court declined to award prejudgment interest in this case, reasoning that

Alexander and Davis seem to have been the major cause for their failure to be timely paid. Their contract is vague and, most importantly, they did not follow it themselves, particularly the part that required them to bill Inman within a reasonable time.

The Court of Appeals did not disturb this ruling, but allowed interest to begin accruing fromthe date the judgment of the trial court was entered on remand, February 13, 1996.

Pursuant to Tenn. Code Ann. § 47-14 -123, prejudgment int erest may be awarded in accordance with the principles of equity. 9 In reaching an equi ta ble decision, a court must keep inPre-judgment interest, i.e., interest as an element of, or in the nature of, damages, as permitted by the statutoryand common laws of the state as of April 1, 1979, may be awarded by courts or jurie s in a ccordance with the principles of equity at any rate not in excess of a maximum effective rate of ten percent (10%) per annum; . . . . 22 mind that the purpose of prejudgment interest is t o f ully compensate a plaintiff for the loss of the use of funds, not to penalize a defendant. Moreover, if a plaintiff’s right to recovery and the amount of such recovery are not disputed on reasonable grounds, an award of prejudgment interest is more likely to be equitable. Myint v. Allstate Insurance Co. , ___ S.W.2d ____ (Tenn. 1998), 1998 W.L. 276184.

The trial court’s decision to award or deny prejudgment interest may be overturned only upon a finding of a “manifest and palpable abuse of discretion.” Under this deferential standard, an appellate court may not substitute its judgment for that of the trial court. Rather, an abuse of discretion occurs only when the evidence does not support the trial court’s decision. Id.

We have concluded, contrary to the trial court’s ruling, that Inman’s refusal to pay the attorneys’ fees is not attributable to the attorneys’ conduct. Nevertheless, the trial court’s denial of prejudgment interest is not a manifest and palpable abuse of discretion. We reachthis conclusion because an additional factor supports the trial court’s decision: both the right to recover the fees and the amount of such fees were quite reasonably disputed. This fact is amply demonstrated by the sound, yet widely differing, conclusions reached by the several jurists who have analyzed this23

case. In light of the extreme uncertainty of the final disposition of this case, we conclude that an award of prejudgment interest would not serve to compensate the attorneys for loss of the use of funds. Rather, such an award would amount to a windfall. Accordingly, the attorneys’ request f or prejudgment interest is denied.

VI

In conclusion, we recognize that the agreement at issue could have been more clearly drafted. Although language of the agreement is not ambiguous, a more carefully crafted document may have spared the parties protracted litigation. Yet, under the facts and circumstances presented, we find that Inman nevertheless fullyundersto od the agreement and had the same understanding as the appellees. Further, the agreement was fair and reasonable, as
was the fee ultimatel y charged. Inman does not allege fraud or undue influence in the formation of the fee agreement, and there is
no evidence of such bad faith conduct. Therefore, the attorneys satisfied their high fiduciary duty of good faith towards Inman in the formation of the fee agreement. Further, the attorneys did not violate the terms of the agreement by postponing the billing until the case was concluded. Finally, the attorneys are not entitled to an award of prejudgment interest.

Accordingly, the judgment of the Cou rt o f Appeals is reversed. The fee agreement is enforceable, and the appellees are entitled to the full amount requested, $501,514.50. Because Inman has already paid $159,000 in attorneys’ fees, judgment for the24

appellees is hereby entered in the amount of $342,514.50, with interest accruing on and after February 13, 1996, pursuant to the opinionof the Court of Appeals. Costs of the appeal are taxed to the appellant, for which execution may issue if necessary.

__________________________________ ADOLPHO A. BIRCH, JR., Justice CONCUR: Anderson, C.J. Drowota, Holder, JJ. Reid, S.J.