Opinion ID: 2575840
Heading Depth: 2
Heading Rank: 1

Heading: DFS' Requested Attorneys' Fees Are Unreasonable

Text: HRS § 607-14 authorizes this court to award attorneys' fees that the court determines to be reasonable[.] The burden is on the prevailing party to prove such fees were reasonably and necessarily incurred. See Smothers v. Renander, 2 Haw.App. 400, 408, 633 P.2d 556, 563 (1981); see also Sharp v. Hui Wahine, Inc., 49 Haw. 241, 247, 413 P.2d 242, 246 (1966). The United States Supreme Court has stated that: The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services.... The ... court also should exclude from this initial fee calculation hours that were not reasonably expended. Cases may be overstaffed, and the skill and experience of lawyers vary widely. Counsel for the prevailing party should make a good-faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary[.] Hensley v. Eckerhart, 461 U.S. 424, 433-34, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983) (citation omitted) (emphases added); see also Chun v. Bd. of Trustees of the Employees' Retirement Sys. of the State of Hawai`i, 92 Hawai`i 432, 434 n. 1 992 P.2d 127, 129 n. 1 (2000) (The `lodestar' equals the number of hours reasonably spent on a case multiplied by a reasonable hourly rate[.] (Citation omitted)). In determining the number of hours reasonably expended on the litigation, the majority simply concludes: [A]fter a thorough examination of the submissions of DFS and Paiea as well as a careful review of the record before us, we conclude that the DFS has demonstrated that it expended 105 reasonable and necessary hours on the underlying appeal. Majority op. at 505. DFS requested a total of 559.9 hours of attorneys' fees incurred on appeal. Thus, based on the 105 hours awarded as reasonable, the majority has exclude[d] from [the] initial fee calculation hours that were `not reasonably expended.' Hensley, 461 U.S. at 434, 103 S.Ct. 1933. The majority, however, neglects to explain its reasoning for excluding the hours it deemed to be unreasonable. Where the issue involves a request for attorneys' fees incurred on appeal, our responsibility is no different than those of trial judges, whom we have previously remind[ed] ... to specify the grounds for awards of attorneys' fees and the amounts awarded with respect to each ground. Price v. AIG Ins. Co., 107 Hawai`i 106, 113, 111 P.3d 1, 8 (2005). It is only fair to the parties and attorneys involved, especially where, as here, the requested fees are substantially reduced, and regardless of whether or not the matter is referred to the ODC for investigation. [1] Moreover, an explanation of the reasons for substantially reducing a fee request that, in turn, prompts a referral to the ODC is beneficial to the members of the bar, in general. See Akinaka v. Disciplinary Bd., 91 Hawai`i 51, 57-58, 979 P.2d 1077, 1083-84 (1999) (citations omitted). In my view, the following examples illustrate the reasoning underlying the exclusion of 454.9 hours. The itemized bills attached to the request indicate that the Stubenberg firm spent 205.7 hours (25.7 eight-hour work days), amounting to $52,086.42 in fees, on the appeal between the time Paiea (the appellant) filed its notice of appeal and its statement of jurisdiction. During that time, however, DFS (the appellee) did not file any documents in this court and Paiea filed only one document: a request for transcripts. Nearly 40 of the 205.7 hours (five eight-hour work days) were expended researching appellate procedure, including: (1) legal research regarding procedure on appeal (up to 3.2 hours); [2] (2) legal research regarding restricting issue on appeal (up to 5.9 hours); (3) legal research regarding extent of appeal jurisdiction (up to 6.5 hours); (4) research [of] law regarding record on appeal (up to 4.5 hours); (5) research [of] law regarding record on appeal; stay of appeal; HRCP & HRAP (up to 6.5 hours); (6) legal research [3] (3.8 hours); (7) legal research regarding appellate procedure (4.8 hours); and (8) outlin[ing] appellate procedure (5.5 hours). The nature of this appeal was not complex and clearly did not warrant forty hours researching the appellate rules and procedure. Thus, absent any explanation by DFS or its attorneys as to the necessity and reasonableness of such research, most of the research on appellate procedure was unnecessary. Additionally, during this time period, the Stubenberg firm charged DFS for reviewing: (1) appeal materials from Paiea (up to 3.2 hours); (2) various materials from McCorriston (2.5 hours); (3) material for record on appeal (3.8 hours); (4) materials regarding appeal (up to 5.9 hours); (5) pleadings from McCorriston (2.5 hours); (6) all documents and correspondence; letter to apposing [sic] counsel (5.5 hours); and (7) letter from McCorriston [and] letter from Kemp (up to 6.5 hours), totaling nearly 29 hours (3.6 eight-hour work days). Inasmuch as the firm represented DFS before the circuit court, much of the time spent re-reviewing all documents and correspondence appears excessive. Further, because Paiea had not yet filed its opening brief and, thus, the Stubenberg firm did not know for certain which issues would be raised on appeal, I question why the firm spent nearly 16 hours (two eight-hour work days) researching operating expenses, contract construction, lease construction, fixed CAM provisions, consequences of payment of excess CAM, and contract/lease issues. The Stubenberg firm billed 4.5 hours for researching the collection of attorney fees even before Paiea filed its jurisdictional memorandum. The fact that the firm could not have anticipated which issues would be raised on appeal or whether DFS would prevail on appeal leads me to conclude that the research regarding attorneys' fees was related to fees incurred before the circuit court. Subsequently, the Stubenberg firm again billed DFS up to 5.2 hours for legal research regarding procedure to recover attorney fees in [c]ircuit [c]ourt.  (Emphasis added.) Such time spent researching the issue of attorneys' fees incurred in the circuit court is clearly not recoverable as attorneys' fees incurred on appeal. It is also noteworthy that, during this appeal, DFS filed only three documents in this court: (1) the motion to dismiss; (2) a one-page letter informing Paiea of its request for extension of time to file its answering brief; and (3) the sixteen-page answering brief. According to the itemized bills, the Stubenberg firm expended a total of 100.4 hours (12.6 eight-hour work days) preparing and drafting the motion to dismiss and 227.2 hours (28.4 eight-hour work days) drafting its answering brief (excluding time claimed as research). In the motion to dismiss, DFS challenged Paiea's attempt to vacate the appraisal report based on Paiea's failure to file a motion to vacate, modify or correct the award[.] In its answering brief, DFS repeated that argument and contended that Paiea failed to prove the appraiser was partial and that all matters of indefiniteness [of the appraisal report] alleged by Paiea . . . are hopelessly intertwined with vacating an award[.] All three of these assertions are not novel issues and were fully briefed and argued before the circuit court in the parties' pleadings and at the November 14, 2002 and January 27, 2003 hearings. Lastly, the Stubenberg firm claims to have spent more than an entire work day (8.8 hours) on its request for an extension of time to file its answering brief. Specifically, the firm alleges that it spent at least 6.5 hours researching the procedure for requesting such an extension, [4] which required only that it review HRAP Rule 29 (2000), clearly labeled Extensions of time for briefs. [5] The firm also claims to have spent 0.80 hours (48 minutes) requesting by telephone an [o]ral extension ... via supreme court clerk. That same day, the Stubenberg firm also expended 1.5 hours (90 minutes) [d]raft[ing]/send[ing] letter notice regarding extension to Paiea. [6] In sum, the Stubenberg firm billed more than one eight-hour work day to obtain a simple, standard extension of time to file DFS' answering brief and to send a three-sentence letter, notifying Paiea of the new filing deadline.