Opinion ID: 2773045
Heading Depth: 2
Heading Rank: 5

Heading: the district court erred when it

Text: DENIED ALL OF PLAINTIFFS‘ REQUESTS FOR ATTORNEY FEES ¶ 58 Finally, plaintiffs argue that the district court erred when it denied attorney fees in the trial of Mr. Campbell. Plaintiffs were entitled to pursue attorney fees under Utah Code section 61-1-22(1)(b), which allows a purchaser of a security to seek ―reasonable attorney fees‖ if the seller of the security violates securities laws. Plaintiffs signed a contingency fee agreement with their legal counsel, and, after they succeeded at the district court against Mr. Campbell, sought an award of attorney fees based on this agreement. Plaintiffs‘ counsel submitted an affidavit of attorney fees that included forty-six dated and itemized entries of attorney time with detailed descriptions of work performed. The district court reviewed the affidavit and request for fees and expressed concern that the affidavit did not separate out fees based on successful and unsuccessful claims, which caused the district court concern.54 The district court, 53 See id. at 344 (―[T]he benefit of the bargain is whatever the parties are willing to exchange.‖). 54 The court noted, ―[O]ne of my concerns as I‘ve gone through this, there has been a briefing of general attorney‘s fees, and I‘m going to say general because we have entries literally dealing with hundreds of hours associated with various items. They‘re not the typical attorney‘s fee affidavit that the Court is used to seeing where there‘s a specific amount of time kept on a daily basis showing exactly how much time is used for various items. And that causes the Court to have concerns in two respects. First, as I looked at those entries, it appeared that a very substantial portion of that work was directed toward the claims against HTK, which up to this juncture have been disallowed. So why should Mr. Campbell be required to pay the attorney‘s fee associated with all of the work against HTK?‖ 30 Cite as: 2015 UT 8 Opinion of the Court relying primarily on Kealamakia, Inc. v. Kealamakia,55 determined that it was impossible to separate the time spent on the distinct claims, and therefore impossible to determine whether the contingent fee request was reasonable. ¶ 59 Plaintiffs argue that the court erred when it attempted to distinguish between successful and unsuccessful claims because this was a contingency case, and that distinction is appropriate only for examination of attorney fees in a case billed by hourly rates. Plaintiffs also argue that it was an abuse of discretion to deny attorney fees related to the claim against Mr. Campbell after HTK had been dismissed on summary judgment, because at that point Mr. Campbell was the only remaining defendant and plaintiffs were successful in their claim against him at trial. We recognize that the ―[c]alculation of reasonable attorney fees is in the sound discretion of the trial court, and will not be overturned in the absence of a showing of a clear abuse of discretion.‖56 We also recognize that the district court ―may, in its discretion, deny fees altogether for failure to allocate, . . . [and] may not award wholesale all attorney fees requested if they have not been allocated as to separate claims and/or parties.‖57 The method for determining reasonable attorney fees has been well-established in our case law, and ―as a practical matter the trial court should find answers to four questions‖:

reasonably necessary to adequately prosecute the matter? 55 2009 UT App 148, ¶ 11, 213 P.3d 13 (concluding that a contingency fee agreement ―is not determinative when calculating the appropriate amount of an attorney fee award‖). 56 Dixie State Bank v. Bracken, 764 P.2d 985, 988 (Utah 1988) (citation omitted). 57 Valcarce v. Fitzgerald, 961 P.2d 305, 318 (Utah 1998). 31 BURDICK v. HORNOR TOWNSEND Opinion of the Court 3. Is the attorney‘s billing rate consistent with the rates customarily charged in the locality for similar services? 4. Are there circumstances which require consideration of additional factors, including those listed in the Code of Professional Responsibility? 58 ¶ 60 The district court made no findings as to the four questions above. The district court determined only that it was impossible to separate the time spent on the separate Campbell and HTK claims, and therefore impossible to determine reasonable attorney fees. Thus, the district court denied the attorney fee request in its entirety. After reviewing the affidavit submitted by counsel, we hold that the district court abused its discretion when it denied attorney fees entirely and failed to make any findings relevant to the four questions above. There was no dispute as to the hourly rate presented by plaintiffs‘ counsel, and the affidavit clearly identifies 282 hours attributable only to the prosecution of the Campbell claim, amounting to $84,600. Despite the broad authority granted the district court in the determination of attorney fees, this broad authority is not an invitation to forego a reasoned analysis or attempt to parse out an appropriate award of attorney fees. ¶ 61 We therefore reverse the rejection of plaintiff counsel‘s affidavit and resulting denial of attorney fees and remand for a determination of appropriate attorney fees. Plaintiffs are entitled to a reasonable attorney fee for the time spent pursuing the claim against Mr. Campbell for which they were successful at trial and which was adequately identified by their affidavit in sections 6(oo)–6(tt). With regards to the remaining time, the district court must conduct a reasonableness analysis and attempt to discern what fees may be divided between the Campbell claims and the HTK claims. 58 Dixie State Bank, 764 P.2d at 990 (footnotes omitted); see also Softsolutions, Inc. v. Brigham Young Univ., 2000 UT 46, ¶¶ 48–50, 1 P.3d 1095. 32 Cite as: 2015 UT 8 Opinion of the Court