Opinion ID: 2613237
Heading Depth: 1
Heading Rank: 1

Heading: fees for the jurisdictional motion

Text: [1] Generally, in order to reverse a fee award, it must be shown that the trial court manifestly abused its discretion. Boeing Co. v. Sierracin Corp., 108 Wn.2d 38, 65, 738 P.2d 665 (1987). This narrow standard of review has been applied even when the fee award involved carrying out the mandate of this court. Fisher Properties, Inc. v. Arden-May-fair, Inc., 115 Wn.2d 364, 375, 798 P.2d 799 (1990). However, the deference given to the trial court's award of fees under the long-arm statute has been curtailed by the Fetzer I decision. In Fetzer I, we pointed out that our former touchstone for awarding fees  fair play and substantial justice  gave little guidance to either the trial or appellate courts: Fair play and substantial justice is unsuitable not only as an expression of the legislative intent underlying the fees award statute, but also as a standard for determining or reviewing awards in particular cases.... ... [A]wards of attorney fees under RCW 4.28.185(5) have become all-or-nothing propositions, with trial court decisions accorded unquestioned deference so long as lip service has been paid to the notions of fair play and substantial justice. Fetzer I, at 118. Hence, this court abandoned the fair play and substantial justice standard for such fees in part because it insulated rulings on fees requests from meaningful review. Fetzer I, at 119. Although our review is still based on an abuse of discretion standard, the discretion of the trial court is now adjudged against the reasonable fees standard of RCW 4.28.185(5). Fetzer's argument as to the reasonableness of the fees award is based upon the date it believes the motion to dismiss was finished. Fetzer argues that, because the motion as to lack of jurisdiction and its supporting brief and affidavit were all completely prepared by September 8, 1986, this should be the latest date for which attorneys fees should be granted. Fetzer believes that the trial court erred in choosing to award attorneys fees for work done until the answer was filed (October 15, 1986) rather than using this earlier date. We agree with Fetzer that the award of fees for prevailing on the jurisdictional motion is excessive. However, we do not limit the award solely to services performed prior to the date on which the motion was prepared. As pointed out in the original Fetzer decision, a CR 12(b)(2) motion raising the jurisdictional defense may be brought even before an answer is filed. Fetzer I, at 122. The trial court here was mistaken in relying upon the date the answer was filed as being the cutoff date for awarding fees. Nonetheless, even a mechanistic summation of the hours billed up to an earlier date would not automatically fulfill the reasonableness requirement of the long-arm statute. [2] RCW 4.28.185(5) authorizes an award of a reasonable amount to be fixed by the court as attorneys' fees. In Fetzer I, we set forth the two fundamental principles by which the reasonableness of an award of fees under the long-arm statute is governed: First, a prevailing defendant should not recover more than an amount necessary to compensate him for the added litigative burdens resulting from the plaintiff's use of the long-arm statute. Second, where the defendant prevails by obtaining a ruling that jurisdiction under the long-arm statute does not properly lie, his award should not exceed the amount in attorney fees he would have incurred had he presented his jurisdictional defense as soon as the grounds for the defense became available to him. Fetzer I, at 120. Unlike many fee shifting statutes which attempt only to punish frivolous litigation or encourage meritorious litigation, RCW 4.28.185(5) balances the dual purposes of recompensing an out-of-state defendant for its reasonable efforts while also encouraging the full exercise of state jurisdiction. The principles outlined in Fetzer I serve to ensure that otherwise valid claims are not abandoned merely out of fear of the possibility of fee shifting. To not so limit such fees would thwart the legislative intent to allow full exercise of state jurisdiction to the extent allowed by due process. Fetzer I, at 125 (Brachtenbach, J., concurring). [3] Because of this desire to limit fees to only those necessary to prevail on the jurisdictional motion, we adopted the lodestar approach to fee calculation under RCW 4.28.185(5). Fetzer I, at 124. The lodestar approach was first adopted in this jurisdiction for use under the Consumer Protection Act. Bowers v. Transamerica Title Ins. Co., 100 Wn.2d 581, 597-99, 675 P.2d 193 (1983). A lodestar award is arrived at by multiplying a reasonable hourly rate by the number of hours reasonably expended on the matter. Fetzer I, at 124. In principle, it is grounded specifically in the market value of the property in question  the lawyer's services. Dan B. Dobbs, Awarding Attorney Fees Against Adversaries: Introducing the Problem, 1986 Duke L.J. 435, 467 (1986). Although the foundation of the award is built upon objective criteria, adjustments to the award are permitted to account for a number of subjective factors, Fetzer I, at 124. See also Bowers, at 597-99. Traditionally, these factors include: the time expended, the difficulty of the questions involved, the skill required, customary charges of other attorneys, the amount involved, the benefit resulting to the client, the contingency or certainty in collecting the fee and the character of the employment. Fetzer I, at 124 (quoting Dailey v. Testone, 72 Wn.2d 662, 664, 435 P.2d 24 (1967)). However, many of these factors, such as the time expended or the customary fees, are included in, and cannot be considered separately from, the initial lodestar determination. See, e.g., Blum v. Stenson, 465 U.S. 886, 898-900, 79 L.Ed.2d 891, 104 S.Ct. 1541 (1984) (novelty and complexity of issues, skill of attorney, and results obtained subsumed in determination of reasonable fee under lodestar method). [4] What is particularly obvious in this case is the gross disparity between the amount requested, and even the amount actually awarded by the trial court, when compared to the amount in controversy. While some of the factors listed above tend to imply an upward adjustment of the fee award, a lodestar figure which grossly exceeds the amount involved should suggest a downward adjustment. As Justice Dimmick has previously pointed out, [t]he lodestar method, having no relation to the amount involved, may lead to an attorney's fee which is equal to or exceeds the judgment recovered.... Bowers, at 607 (Dimmick, J., concurring in part, dissenting in part). While the amount in dispute does not create an absolute limit on fees, that figure's relationship to the fees requested or awarded is a vital consideration when assessing their reasonableness. [5-9] Bowers outlined generally how a court should determine reasonable hours: The trial court must determine the number of hours reasonably expended in the litigation. To this end, the attorneys must provide reasonable documentation of the work performed. This documentation need not be exhaustive or in minute detail, but must inform the court, in addition to the number of hours worked, of the type of work performed and the category of attorney who performed the work ( i.e., senior partner, associate, etc.). The court must limit the lodestar to hours reasonably expended, and should therefore discount hours spent on unsuccessful claims, duplicated effort, or otherwise unproductive time. Bowers, at 597. In adjudging reasonable hours under the long-arm statute, courts should attempt to determine the amount of time that it would take a competent practitioner to recognize the jurisdictional issue, research the relevant law, discover the pertinent facts, and then prepare, file and prevail upon a CR 12(b)(2) motion. [6] The burden of proving the reasonableness of the fees requested is upon the fee applicant. Blum, 465 U.S. at 897. Dwight's' attorneys have provided extensive documentation of their efforts in this case. While this documentation forms the starting point under the lodestar method, it is not dispositive on the issue of the reasonableness of the hours. Nordstrom, Inc. v. Tampourlos, 107 Wn.2d 735, 744, 733 P.2d 208 (1987). [T]he trial court, instead of merely relying on the billing records of the plaintiff's attorney, should make an independent decision as to what represents a reasonable amount for attorney fees. Tampourlos, at 744. Along with the considerations outlined above, the trial court may also examine reasonableness of the hours claimed in light of the testimony of other attorneys called as experts. Here, the trial court relied on such expert testimony in other instances, but failed to take such testimony into account as to the reasonableness of the hours claimed for bringing the CR 12(b)(2) motion. The court was aware that the jurisdictional motion was available and ready in September, and that much of the activity on the part of Dwight's' attorneys related to the parallel federal court case in Texas. The trial court stated: Mr. McDonald prepared his Motion as to Lack of Jurisdiction, as well as his Brief in Support thereof in September, 1986, although they were not signed until February 9 and February 2, 1987, respectively, a month prior to the hearing on said motion. There appears to have been much activity in both of the cases, that is the Texas case and the Washington case, and trial strategy was undertaken by counsel for each party. However, no Answer was filed by Dwight's until October 13, 1986. CP, at 856. Yet despite these frank observations, the trial court awarded hours up to the date the answer was filed. The sum of its explanation for this decision is as follows: Although plaintiff suggests that Dwight's had completed the amount of lawyering that reasonably should have been necessary to prevail on the jurisdictional defense in September, 1986, it is this court's determination that this issue was properly raised after the Answer was filed on October 15, 1986. The defendant, Dwight's, is entitled to reasonable attorney fees with respect to their work as to the jurisdictional issue through October 15, 1986, and from February 7, 1987 ... until the matter was heard and determined by the trial court. CP, at 862. Hence, a total of 481.89 hours  the equivalent of almost 3 months of uninterrupted legal work by one attorney  was awarded, with no examination of the actual reasonableness of these hours. [7] [10] We find this sum to be patently unreasonable in this case. Because of the State's strong interest in allowing its citizens the broadest constitutionally permissible access to our courts, we must zealously circumscribe the scope of advocate activity which will be reimbursed under the long-arm statute. Dwight's' attorney was aware of the jurisdictional issue from the time the suit was filed. The brief and affidavit which ultimately prevailed were prepared sometime in September. As the trial court noted, much of the activity for which Dwight's is attempting to recover was useful for its Texas case, as well as the Washington case. Our review of the billing records for that month show that Dwight's' lead attorney McDonald spent a possible total of 34 hours [8] between September 6 to 8 to research and prepare this motion, brief, and affidavit. Taking this as the essential core of the work to be done, we find that the high figure of 70 hours proposed by Curtis Shoemaker is a reasonable amount of time to be awarded for prevailing on this motion. Utilizing a pro rata distribution based on the hours accepted by the trial court, we award hours as follows: McDonald, 60.75 hours; Van Camp, 2.75 hours; Taylor, 3.81 hours; Deissner, 2.69 hours.