Opinion ID: 2543254
Heading Depth: 1
Heading Rank: 1

Heading: On Return to Second Remand

Text: The Madison County Department of Human Resources (DHR), T.S.'s legal guardian, appealed the trial court's judgment approving an attorney fee in the amount of $262,500, plus litigation expenses, for Doug Fees, the attorney who represented T.S. and F.M., T.S.'s mother, in a personal-injury action. On October 23, 2009, we remanded the case with directions for the trial court to issue an order explaining its approval of the attorney fee in light of this Court's decision in Pharmacia Corp. v. McGowan, 915 So.2d 549 (Ala.2004), and indicating how the trial court had calculated the attorney fee. Madison County Dep't of Human Res. v. T.S. Madison County Dep't of Human Res. v. T.S. [Ms. 1081405, October 23, 2009] 53 So.3d 38 (Ala.2009). The trial court's amended order filed in this Court on December 7, 2009, did not comply with this Court's remand order. We, therefore, remanded this cause to the trial court a second time to comply with this Court's mandate. Madison County Dep't of Human Res. v. T.S. (Ala.2010). The trial court, on return to second remand, has complied with our directions and has submitted an amended order, which states: This cause is before the court on remand from the Alabama Supreme Court. See Pocket No. 1081405 (Oct. 23, 2009; January 29, 2010). This court adopts, as if fully set forth herein, its Final Order entered on March 6, 2009. In accordance with the Supreme Court's mandate, the present supplemental order further explains the basis for this court's award of attorney's fees. These findings are based upon testimony and evidence submitted at this court's December 12, 2008, and February 23, 2009, hearings, and the filings in this matter up to March 6, 2009. Findings of Fact 1. Plaintiff T.S.'s mother first contacted [Fees] 21 months after the incident made the basis of plaintiff's complaint. 2. [Fees] began intense work on the case immediately. 3. The immediacy of the task made it likely that representing T.S. would preclude [Fees] from other employment. 4. When [F.M.] retained [Fees], she had physical custody of her daughter T.S.; while DHR retained legal custody. 5. DHR did not take legal action against the defendants in this case on behalf of T.S. There is no indication that DHR ever intended to take up this case on behalf of T.S. [Fees] was T.S.'s only advocate against Defendants. 6. T.S.'s profound disability left her unable to provide meaningful information concerning the circumstances surrounding her severe burn injury. 7. Defendant Carolyn Hodges, a key witness in the case, was criminally charged and unavailable to give a statement to [Fees]. 8. The criminal charges associated with this incident jeopardized potential recovery in the civil case. 9. The professional relationship between [Fees], [F.M.,] and T.S. was limited only to this matter. 10. This Court is aware that [Fees] has practiced law in Alabama since 1983 and that he and his law firm have a prominent reputation. 11. The contingency fee charged in this area for the services of an attorney of education and professional experience similar to [Fees] is generally 40%. 12. T.S.'s pre-existing disability increased the responsibility borne by [Fees]. 13. Initial investigation by [Fees] identified eleven potential defendants. 14. [Fees] prepared and filed specific, individualized interrogatories, requests for production, requests for admissions, and deposition notices in order to develop theories of liability as to the various defendants. 15. [Fees] was initially denied access to T.S.'s DHR file, including investigative documents produced to DHR by Defendant Ability Plus. 16. [Fees] was nonetheless able to develop evidence sufficient to bring the parties to early mediation. 17. In less than three months, [Fees] gathered and reviewed T.S.'s voluminous medical treatment and billing records; the investigative documents from local and state authorities; and consulted with experts with regard to the various aspects of the case. [Fees] consulted with safety expert John Frost; technical literature expert Harry Philo, Jr.; and reconstructive surgeon Dr. John LoMonaco. [Fees] also arranged preparation of a `Day-In-The-Life' film shown at mediation. 18. [Fees] also issued subpoenas for T.S.'s medical records and photographs taken by her medical providers, as well as records and photographs of the Limestone County District Attorney, Limestone County Sheriff, and the DHR for Limestone, Madison, and Cullman Counties. The subpoena responses included thousands of documents. 19. [Fees] worked on the case every day from the date he was first retained (August 4, 2008) through the second pro ami settlement hearing (February 23, 2009), a period equivalent, in practical terms, to roughly two years at a normal 2-day-per-week pace, but vastly accelerated and intensified, and thereby far more demanding on counsel's time and resources. 20. Because of the speed at which the case had to be prepared, it consumed a large portion of [Fees's] resources, diverting him from other potentially remunerative work until this time-intensive case could be resolved. 21. The $787,500.00 settlement achieved by [Fees] exceeds nine (9) times the amount of special damages. 22. The structured settlement coordinated by [Fees] provides lifetime benefits to T.S. Conclusions of Law 1. In determining the reasonableness of an attorney's fee award, this Court must consider the following factors: (1) the nature and value of the subject matter of the employment; (2) the learning, skill, and labor requisite to its proper discharge; (3) the time consumed; (4) the professional experience and reputation of the attorney; (5) the weight of his responsibilities; (6) the measure of success achieved; (7) the reasonable expenses incurred; (8) whether a fee is fixed or contingent; (9) the nature and length of a professional relationship; (10) the fee customarily charged in the locality for similar legal services; (11) the likelihood that a particular employment may preclude other employment; and (12) the time limitations imposed by the client or by the circumstances. Van Schaack v. AmSouth Bank, N.A., 530 So.2d 740 (Ala. 1988). 2. Although all the foregoing factors must be considered, not necessarily all need be applicable. Van Schaack v. AmSouth Bank, N.A., supra, 530 So.2d at 749. 3. Nor are the foregoing twelve factors exclusive. Other pertinent criteria may also be considered. Pharmacia Corp. v. McGowan, 915 So.2d 549, 553 (Ala.2004). 4. The Nature and Value of the Subject Matter of the Employment. Because of the immediacy of the deadline and the many logistical hurdles (a disabled minor client, unavailable witnesses and documents, an ongoing criminal prosecution), the nature of this case imposed special burdens upon [Fees]. So too did its potential value due to the severity of the burn injuries and T.S.'s handicap. 5. The Required Learning, Skill, and Labor. The nature of this case presented special complications which were aggravated by the urgency of a rapidly expiring statute of limitations and an early mediation date. The circumstances of this case demanded particular learning, great skill, and intense labor. 6. The Time Consumed. Considering the results achieved, the time spent by [Fees] was efficient and reasonable. 7. Plaintiff's Counsel's Professional Experience and Reputation. The importance of this case required the efforts of an attorney with both experience and expertise. [Fees] is amply qualified in both. 8. The Weight of Counsel's Responsibilities. The complications of this case were enormous. [Fees], as the sole advocate for T.S. against the defendants in this case, bore especially heavy responsibilities. 9. The Measure of Success Achieved. Given the difficulties involved, the potential for protracted litigation, and the attendant potential for enormous expenses as a result, [Fees] achieved a commendably swift and fair resolution. 10. The Reasonable Expenses Incurred. The foregoing result was accomplished on a relatively shoestring budget: the sum total of all expenses ($29,315.99) is a mere 3.7% of the recovery ($787,500.00). 11. Whether the Fee was Fixed or Contingent. In light of the many risks and difficulties evident from the outset, [Fees] took a great risk in agreeing to represent T.S. on a contingency fee basis. His willingness to reduce his usual contingency fee from 40% to one-third, moreover, exhibits a laudable sacrifice for T.S.'s benefit. 12. The Nature and Length of the Professional Relationship. T.S.'s disability affected [Fees's] professional relationship with her by increasing his fiduciary responsibilities, and thus the burdens (legal and logistical alike) he had to confront. Furthermore, [Fees] agreed to represent T.S. only in the present matter. Hence, his risk was all the greater because a case such as this does not generate revenue in the form of future patronage; thus [Fees] had no such financial cushion in the case at bar. 13. The Fee Customarily Charged in the Locality for Similar Legal Services. The one-third contingency fee arrangement in which [Fees] undertook to represent T.S. against these defendants is below the contingency fee customarily charged in this locality. 14. The Likelihood that the Employment May Preclude Other Employment. Because of the time constraints faced in this case, it was highly likely that representing T.S. would preclude [Fees] from other gainful employment. Subsequent events, moreover, confirmed this prognosis, for the efforts entailed in producing a successful recovery on T.S.'s behalf diverted [Fees] from other work. 15. The Time Limitations Imposed by the Client or by the Circumstances. The brevity of time remaining before the statute of limitations expired when [Fees] was retained by T.S.'s mother placed extra pressure on counsel, increased the premium for efficiency, disrupted [Fees's] handling of other cases, and made the success achieved all the more reasonable. 16. Other Factors: Special Complications and Challenges. DHR's repeated refusal to become involved in the case early on, and its subsequent obstruction of efforts to prosecute the case against the defendants, presented special complications and challenges which were successfully overcome by [Fees]. 17. Having undertaken unusual risk in this case with no guarantee of recovery, [Fees] had, by the time of mediation, advanced over $17,000.00 in an effort to achieve a successful outcome. 18. When one then factors in the contingency risk, the effort, the sacrifices and the hardships undertaken by [Fees]; his proficiency, prominence, and expertise; the exceptional success achieved, especially given the economy of cost; and all other criteria discussed above, an award of $262,500 in attorney's fees is fair, reasonable and eminently justified under all the circumstances. The foregoing order articulates the decision made by the trial court with regard to the attorney fee awarded, the reasons supporting the decision, and how the trial court calculated the attorney fee; therefore, we can now conduct our review to address DHR's contention that the attorney fee is excessive. We have carefully reviewed the record. In November 2006, T.S., a disabled minor residing in a group home run by Ability Plus, Inc., was placed in a whirlpool tub filled with hot water. T.S. suffered severe burns and required extensive medical treatment. In August 2008, F.M., T.S.'s mother, retained Fees to represent her and T.S. in seeking compensation for their injuries. F.M. entered into a contingency-fee contract with Fees that provided that for representing T.S. and F.M. Fees would receive 33 1/3% of the total recovery, plus litigation expenses. Fees filed a complaint, identifying 11 named defendants and other fictitiously named parties, within three weeks of being retained. Within days of being served with the complaint, counsel for Ability Plus contacted Fees suggesting that the parties engage in mediation to avoid expensive discovery and litigation. In November 2008, Ability Plus, the operator of the group home; George and Ronda Roberts, the owners of the property on which the group home is located; and Cora, Inc., d/b/a/ Mr. Rooter, the company that had installed a heater on the whirlpool tub just before T.S. was injured, engaged in mediation with Fees on behalf of T.S. and F.M. and entered into a proposed settlement of $787,500. The evidence in support of Fees's attorney fee includes an affidavit from Fees, two affidavits from local counsel in the area, and the court file. Fees stated in his affidavit: 1. I reside in Huntsville, Alabama. I graduated from the University of Alabama School of Law in 1983, and was licensed to practice in Alabama in September 1983. For the past 25 years, my practice has focused exclusively in representing victims of serious injury or death due to the wrongful conduct of others. 2. On August 4, 2008, I was retained to represent [F.M. and T.S.]. We agreed upon a 33-1/3[%] contingency fee, plus expenses, with the fee for services to be paid only if there was a recovery. 3. The expenses incurred in bringing about a successful recovery are the usual and customary expenses my firm advances on cases involving serious injury or death. 4. The total recovery in this case was $787,500.00. Pursuant to the Professional Service Agreement executed by myself and [F.M.], my fee constitutes 33-1/3% of that recovery or $262,500.00, plus expenses. Fees also submitted the affidavits of two attorneys in the Huntsville area. Both attorneys provided personal information indicating that they are qualified to provide an opinion as to the reasonableness of an attorney fee and expenses arising out of the prosecution of a personal-injury case in the Huntsville area and that they are thoroughly familiar with the usual and customary charges for legal services rendered by attorneys in personal injury civil litigation. They aver: Based upon a review of selected pleadings, orders, and discovery, [we are] familiar with the legal services rendered by [Fees] in the above-styled case. 5. [We] write this affidavit in support of [Fees's] request for attorney's fees of 33 1/3% of $787,500.00 ($262,500.00), plus expenses. These types of cases are typically taken on a percentage-contingency basis. The customary contingency fee arrangement is 33 1/3 to 40%, plus expenses. Particularly complex personal injury cases are often taken on a 50% contingency fee arrangement, plus expenses. Facts Relied Upon in Reaching Opinions 6. In addition to speaking with [Fees], [we] have reviewed Plaintiffs' motion to add DHR as an indispensable party; DHR's objection to the settlement; and correspondence between [Fees] and counsel for DHR, in order to familiarize [ourselves] with the work performed by [Fees] in this action. 7. Although the injury made the basis of this suit occurred in November, 2006, [Fees] was only contacted by [F.M., T.S.'s] mother, on August 1, 2008. Due to the rapidly approaching statute of limitations, [Fees] began intense work on the case immediately. 8. Because [T.S] was in the legal custody of DHR at the time of her injury, [F.M.] was unable to provide much information regarding the facts and circumstances of [T.S.'s] injury. [Fees] was therefore required to devote time and expense to investigating the incident and identifying the appropriate parties. 9. It is customary for attorneys to retain professional investigators to assist in such tasks as identifying, locating, and interviewing witnesses; gathering documentary evidence, service of process; and a variety of other tasks. This is a reasonable expense. 10. Investigation ultimately identified eleven potential defendants. Further investigation was required in order to determine the legal designation and locations of each of the potential defendants. 11. [Fees's] preliminary investigation revealed evidence to support counts for negligence/wantonness, negligence/wantonness per se, premises liability, products liability, negligent hiring/retention, negligent/wanton supervision, vicarious liability, and breach of implied warranty. 12. In addition to the complaint, [Fees] prepared interrogatories, requests for production, requests for admissions, and deposition notices in order to develop discovery from each of the defendants to support the averments of the complaint. Service copies of each of these documents were prepared for service on defendants by certified mail. 13. After the action was filed, [Fees] was contacted by New Jersey-based defense counsel for Ability Plus. Defense counsel suggested early mediation of the case in an effort to avoid incurring substantial discovery expenses. [Fees] agreed. Mediation was scheduled for November 5, 2008. 14. For mediation to be successful, plaintiffs must develop as much evidence as possible in order to persuade defendants of the value of the case. In a personal injury matter, plaintiff's counsel must gather medical bills, medical records and histories, investigative documents from local and state authorities, and consult with experts in the field. All of this information must be provided to opposing counsel prior to mediation so that they can evaluate the plaintiffs' case, and make a decision regarding its settlement value. With mediation quickly approaching, [Fees] and his staff scrambled to obtain all of the available supporting documentation. This required in-house copying of thousands of documents, which were sent via overnight mail to Ability Plus's defense counsel in New Jersey, delivered by hand to [Cora, Inc., d/b/a/] Mr. Rooter's defense counsel in Huntsville, and mailed to the property owner's defense counsel in Tuscumbia, Alabama. 15. In preparation for mediation, [Fees] consulted with safety expert John C. Frost in order to establish the liability of defendant Mr. Rooter, installer of the water heater. Mr. Frost reviewed the investigative, technical, and safety research files in the case, and personally inspected the water heater, in order to develop expert opinions as to the liability of the water heater's installer and manufacturer, as well as the safety alternatives available to group homes. [1] 16. Harry Philo, Jr., master librarian and expert in the field of researching technical literature, was retained to conduct a search for available literature relating to the liability of the installers of water heaters, hot water heater safety, and plumbing safety. In addition to the researcher's time, obtaining primary source material such as trade journals, code books, professional treatises and guidelines of safety organizations requires such expenses as copying and database access fees associated with library research. All of this research is customary and reasonable in a case involving the liability of an industry or trade, such as the plumbing industry. [2] 17. [Fees] also consulted with Dr. John LoMonaco, a nationally recognized specialist in the field of reconstructive surgery, in order to develop evidence of [T.S.'s] anticipated future medical expenses. [3] 18. [Fees] prepared subpoenas to obtain [T.S.'s] medical records, billing, and photographs taken by her medical providers. Subpoenas were also prepared and issued to the Limestone District Attorney, Limestone County Sheriff, and the Department of Human Resources for Limestone, Madison, and Cullman counties. The subpoena responses resulted in thousands of documents which [Fees] reviewed and culled for pertinent information. 19. Photographs of [T.S.'s] burn injuries were crucial evidence in this case, and [Fees] spent substantial time tracking down and obtaining injury photographs from Athens Limestone Hospital, Limestone County Sheriff and District Attorney's offices, Madison County DHR, Children's Hospital in Birmingham, and various other medical providers. These photographs were subsequently reviewed, reproduced, and provided to defense counsel. 20. The documentary evidence in this case was ultimately so voluminous, that the mediation presentation was packaged in three bound volumes. This three volume package was provided to each of the defense attorneys for Ability Plus, Mr. Rooter, and [George and Ronda Roberts], as well as the mediator. A copy was also prepared for use by [Fees] at mediation. All of the copying and binding was done in-house by [Fees's] staff, rather than a professional copy shop, which represents a substantial savings in copying expense. 21. This case was resolved at mediation with a structured settlement. Because of [T.S.'s] lifetime permanent disability, it was essential to [T.S. and F.M.] that [T.S.'s] settlement funds be protected with a Special Needs Trust. Trust work is a specialized area of law, and professionals and attorneys with expertise in that area are both reasonable and necessary. [Fees] initially estimated this expense to be $7,500.00, but due to the complexity of the settlement arrangements and additional work performed subsequent to DHR's objections to the settlement, that expense has risen to $12,000.00 22. [Fees] undertook the risk in his case with no guarantee of recovery for time and expenses. [Fees's] law firm has thus far advanced over $17,000 in an effort to bring this case to a successful resolution. This is a reasonable figure given the facts of the case, investigation conducted, unusual medical circumstances of the injured [T.S], and the speed at which the case had to be prepared. 23. The speed at which this case had to be prepared meant that it required a great deal of resources of [Fees] to be concentrated on this one case. As a result, [Fees] was unable to take on other potentially remunerative work until this time-intensive case could be resolved. 24. [Fees] has continued to work on this case in an effort to have the settlement approved by the court. 25. Accordingly, given the facts and circumstances of the action, the risks undertaken by [Fees], and the favorable results obtained, an attorney's fee in the amount of one-third of the total value of the recovery, reduced by $50,000.00 [or $212,500.00], plus expenses, is a reasonable and just fee. (Footnotes omitted; emphasis added.) At the close of the hearing at which the attorney fee was addressed, the following occurred: THE COURT: Let me be clear, Mr. Fees. In support of your petition for fee, there's no testimony other than what you've offered as affidavits is what you're saying? FEES: Right. DHR contends that the trial court exceeded the scope of its discretion in awarding Fees an attorney fee in the amount of $262,500, which is 33 1/3% of the total settlement of $787,500. Initially, we note that DHR does not contest that Fees is entitled to 33 1/3% of the $50,000 awarded to F.M. out of the total settlement of $787,500. DHR stated in argument before the trial court and concedes in brief to this Court that the contingency-fee contract between Fees and F.M. is binding as to the award of attorney fees for his representation of F.M. Therefore, this amount is not at issue. Additionally, although DHR implies in its arguments that the litigation expenses of $29,315.99 are excessive, DHR does not develop its objection to the expenses with specificity. Fees attached detailed invoices for the litigation expenses. We note that these expenses included an attorney fee of $12,000 for Cheryl Baswell-Guthrie, the attorney who created the special-needs trust for T.S. We have reviewed the invoices, as well as considered the statements made by Baswell-Guthrie at the hearing explaining the difficulties encountered in establishing the trust for T.S. In light of DHR's failure to develop this issue and because nothing before us indicates that the litigation expenses are excessive, we conclude that the trial court did not exceed the scope of its discretion awarding litigation expenses of $29,315.99. With regard to the attorney fee for that portion of the settlement awarded to T.S., a minor ($737,500), the contingency-fee contract is not binding. Our caselaw clearly establishes that when an attorney represents a minor, the attorney is entitled to the reasonable value of his services from the amount recovered as a result of his representation. Ex parte Peck, 572 So.2d 427, 428 (Ala. 1990) (In Malone v. Malone, 491 So.2d 932 (Ala.1986), this Court reaffirmed `the general rule recognized by a majority of jurisdictions that parents, as next friends, are authorized to contract for payment of a reasonable fee for legal services rendered on behalf of their minor children.' 491 So.2d at 933. (emphasis added)). At the time the contingency-fee contract between F.M. and Fees was executed, DHR was T.S.'s legal custodian. Statements were made during the hearings and in the pleadings indicating that DHR agreed to allow Fees to pursue the claims for T.S. Nothing in the record indicates that DHR agreed to an attorney fee of 33 1/3% of the total settlement for Fees's representation of T.S. Regardless of whether DHR agreed to the contingency-fee contract or the fact that F.M. executed a contingency-fee contract that stated that Fees would receive 1/3% of the total recovery in this case, Fees is entitled to only a reasonable fee for his representation of T.S. The determination of whether an attorney fee is reasonable is within the sound discretion of the trial court and its determination on such an issue will not be disturbed on appeal unless in awarding the fee the trial court exceeded that discretion. State Bd. of Educ. v. Waldrop, 840 So.2d 893, 896 (Ala.2002); City of Birmingham v. Horn, 810 So.2d 667, 681-82 (Ala.2001); Ex parte Edwards, 601 So.2d 82, 85 (Ala.1992), citing Varner v. Century Fin. Co., 738 F.2d 1143 (11th Cir.1984). This Court has set forth 12 criteria a court might consider when determining the reasonableness of an attorney fee: `(1) [T]he nature and value of the subject matter of the employment; (2) the learning, skill, and labor requisite to its proper discharge; (3) the time consumed; (4) the professional experience and reputation of the attorney; (5) the weight of his responsibilities; (6) the measure of success achieved; (7) the reasonable expenses incurred; (8) whether a fee is fixed or contingent; (9) the nature and length of a professional relationship; (10) the fee customarily charged in the locality for similar legal services; (11) the likelihood that a particular employment may preclude other employment; and (12) the time limitations imposed by the client or by the circumstances.'  Van Schaack v. AmSouth Bank, N.A., 530 So.2d 740, 749 (Ala.1988). These criteria are for purposes of evaluating whether an attorney fee is reasonable; they are not an exhaustive list of specific criteria that must all be met. Beal Bank v. Schilleci, 896 So.2d 395, 403 (Ala.2004), citing Graddick v. First Farmers & Merchants Nat'l Bank of Troy, 453 So.2d 1305, 1311 (Ala.1984). Pharmacia Corp. v. McGowan, 915 So.2d 549, 552-53 (Ala.2004). Accordingly, we will now consider whether the trial court exceeded the scope of its discretion in awarding Fees an attorney fee in the amount of 33 1/3% of the total settlement for his representation of T.S.