Opinion ID: 870353
Heading Depth: 2
Heading Rank: 1

Heading: The Denial of Attorneys' Fees Associated With the Preparation of Billing Records and/or Preparation of Coupe's Fee Petitions

Text: As discussed supra, Coupe's March 20, 2009 Motion requested additional damages that were not included in its initial October 11, 2007 Motion. On May 14, 2009, the court issued an Order granting Coupe's March 20, 2009 Motion but excluded $75,384.00 in attorneys' fees, which were associated with the preparation of billing records for [Coupe's] fee petition and/or preparation of [Coupe's] fee petitions[.] Coupe challenges the court's denial of these attorneys' fees. According to Coupe, the court's determination is contrary to the holding in Coupe I which awarded Coupe damages including attorneys [sic] fees and costs which were incurred in applying for the damage award[.] Also, Coupe challenges the court's reliance on Hawai'i Ventures, arguing that it [wa]s not an eminent domain case, and did not involve [HRS §] 101-27, and thus has nothing to say about whether [it] ... is entitled to recover all the attorneys [sic] fees and costs it incurred[.] In its answering brief, the County maintains that [g]enerally, there shall be no recovery for fees and expenses incurred in litigating the propriety of the fees to be awarded pursuant to [ Hawai'i Ventures ]. In its reply brief, Coupe essentially reiterates the arguments made in its opening brief.
The trial court's grant or denial of attorneys' fees and costs is reviewed under the abuse of discretion standard. Kamaka v. Goodsill Anderson Quinn & Stifel, 117 Hawai'i 92, 105, 176 P.3d 91, 104 (2008) (quoting Kahala Royal Corp. v. Goodsill Anderson Quinn & Stifel, 113 Hawai'i 251, 266, 151 P.3d 732, 747 (2007) (citation omitted)) (brackets omitted). Generally, under the American Rule, each party is responsible for paying his or her own litigation expenses[,] however, attorney's fees are chargeable against the opposing party when so authorized by statute, rule of court, agreement, stipulation, or precedent. Sierra Club v. Dep't of Transp. of State of Hawai'i, 120 Hawai'i 181, 218, 202 P.3d 1226, 1263 (2009) (quoting Fought & Co. v. Steel Eng'g & Erection, Inc., 87 Hawai'i 37, 50-51, 951 P.2d 487, 500-01 (1998)) (internal quotation marks and brackets omitted). In Coupe II, this court was presented with the threshold question of whether `all such damage' under HRS § 101-27 provide[d] adequate authority for [Coupe's] request for attorneys' fees and costs on appeal and, if so, to what extent. 120 Hawai'i at 404, 208 P.3d at 717. This court stated that, [b]y its plain language, HRS § 101-27 appears to provide a sufficient basis for the award of damages in the form of costs and attorney's fees sustained as a result of [Coupe's] appeal of the automatic denial of fees in Condemnation 1. Id. at 404-05, 208 P.3d at 717-18. Further, it was concluded that HRS § 101-27 encompassed damages sustained in seeking fees and costs owed: The statutory language all such damage... sustained ... by reason of the bringing of the proceedings, on its face would appear to encompass what [Coupe] seeks herein.... Had the County not brought the unsuccessful proceedings in Condemnation 1, [Coupe] would never have had cause to move for fees and to subsequently appeal. Therefore, the damage sustained by [Coupe] in seeking the fees and costs owed and in appealing the denial of such fees and costs, was part of the damage resulting from the County having brought the unsuccessful proceedings in Condemnation 1. Consequently, under HRS § 101-27, the County should be held liable for such damage. Id. at 405, 208 P.3d at 718 (emphasis added) (brackets and footnote omitted) (some ellipsis in original and some added). Similar to the reasoning in Coupe II, had the County not brought the unsuccessful proceeding in Condemnation 1, Coupe would not have had cause to move for fees or to litigate the amount of fees on remand. Thus, the expenses Coupe sustained in seeking those fees and costs resulted from the County having brought the unsuccessful proceeding in Condemnation 1. Consequently, the County is liable for these damages under HRS § 101-27. This court's discussion of whether Coupe was entitled to attorneys' fees and costs for its Coupe II Request and Coupe II Response further supports this position. [23] As discussed in Coupe II, Coupe did not request the damages it incurred in filing or preparing the [ Coupe II ] Request and [the Coupe II ] Response in its Coupe II Request but waited until its Coupe II Response to do so. Coupe II, 120 Hawai'i at 414, 208 P.3d at 727 (brackets omitted). While Coupe's request was ultimately denied, it was not because this court concluded that there was no recovery for fees and expenses incurred in litigating the propriety of the attorneys' fees and costs claimed. Rather, this court stated that Coupe did not expressly request attorneys' fees for preparing the [ Coupe II ] Request in its original Request, nor did it provide supporting documentation; upon filing the [ Coupe II ] Response and requesting fees for preparing that Response, [Coupe] again did not provide any supporting documentation as required by HRAP Rule 39(d)(1); [24] and although Coupe later filed the requisite itemized account of attorneys' fees in its Errata, [Coupe] d[id] not provide this court with any rationale as to why it should be permitted to essentially raise new substantive arguments for the first time in an Errata. Id. at 414, 208 P.3d at 727 (citing Taomae v. Lingle, 110 Hawai'i 327, 333, 132 P.3d 1238, 1244 (2006)). As apparent from this court's discussion in Coupe II, that decision left open the possibility that damages sustained in preparing and litigating the propriety of fees could be recovered under HRS § 101-27.
The court, in its May 14, 2009 order granting in part Coupe's March 20, 2009 Motion, and the County in its answering brief, rely on Hawai'i Ventures for the proposition that fees and expenses incurred in litigating the propriety of the fees to be awarded cannot be recovered. In Hawai'i Ventures, a receiver was appointed to manage a hotel pending a foreclosure sale. 116 Hawai'i at 468, 173 P.3d 1125. The circuit court appointed a special master to review the receiver's final report, and entered a deficiency judgment. Id. All parties appealed the circuit court's decision and challenged the actions taken by the receiver. Id. On appeal, this court affirmed the circuit court's final judgment in part but vacated `the awards of fees to the [r]eceiver and her professionals reflected in certain of the circuit court orders' and remanded the fee orders to the circuit court `for clarification and, if necessary, a redetermination of the amount[.]' Id. at 469, 173 P.3d at 1126 (brackets omitted). The receiver then filed a request for reimbursement of fees and costs she incurred on appeal. This court stated, inter alia, that the [r]eceiver and her professionals are not entitled to compensation for work performed in relation to the defense of fees issue. Id. at 476, 173 P.3d at 1133. To support this position, this court quoted United States v. Larchwood Gardens, Inc., 420 F.2d 531, 534 (3d Cir.1970), which stated that, the law imposes on a party the duty to pay [her] own fees and expenses in vindicating [her] personal interests.... It is our understanding that services necessarily involved in preparing [fee] application [sic] to the district court and defending them are not compensable. Id. (brackets and ellipsis in original). While, as indicated in Hawai'i Ventures, receivers in foreclosure proceedings are not entitled to recover fees and expenses associated with litigation involving the propriety of the fees to be awarded to them, 114 Hawai'i at 497-98, 164 P.3d at 755-56, the specific question here is whether Coupe is entitled to fees and costs for litigating the propriety of fees under HRS § 101-27. Hawai'i Ventures was not an eminent domain case, and it did not decide whether HRS § 101-27 may entitle a landowner to attorneys' fees expended because of the government's unsuccessful attempt to condemn property. As discussed supra, Coupe II did not bar Coupe's ability to seek damages sustained by [Coupe] in seeking the fees and costs [it is] owed[.] 120 Hawai'i at 404-05, 208 P.3d at 717-18. Our holding herein is limited to the specific circumstances of HRS § 101-27 involved in litigating disputes as to fees and costs recoverable because of a failed condemnation. Because the court incorrectly determined that there shall be no recovery for fees and expenses incurred in litigating the propriety of fees under HRS § 101-27, the court based its ruling on an erroneous view of the law and, therefore, abused its discretion in failing to consider whether Coupe was entitled to these attorneys' fees. Because the court did not reach the question of the reasonableness of these fees, the case must be remanded to the court to determine the extent to which the $75,384 of attorneys' fees associated with preparing the billing records and Coupe's fee petitions were reasonable and should be awarded.