Opinion ID: 1590736
Heading Depth: 1
Heading Rank: 2

Heading: History of the Payment of Office-Overhead Expenses

Text: Originally, the statute in question, § 15-12-21(d), Ala.Code 1975, set out hourly rates and limits on total fees for attorneys representing indigent defendants and also established that [c]ounsel shall also be entitled to be reimbursed for any expenses, reasonably incurred in such defense to be approved in advance by the trial court. In 1993, the Alabama Court of Criminal Appeals in May v. State, 672 So.2d 1307, 1308 (Ala.Crim.App.1993), held that office overhead expenses are by law encompassed in the term `expenses reasonably incurred' as that term is used in § 15-12-21(d). This Court quashed as improvidently granted the petition for a writ of certiorari filed in May v. State, 672 So.2d 1310 (Ala.1995). The Court of Criminal Appeals in Ex parte Barksdale, 680 So.2d 1029, 1030 (Ala.Crim.App.1996), cited the Court of Criminal Appeals' holding in May for the proposition that office overhead fell into the category of expenses reasonably incurred in the defense of a defendant. On April 19, 1996, the then attorney general issued identical opinions in responses to inquiries from the comptroller and the finance director, who asked whether the trial court was required to approve office-overhead expenses in advance of the actual occurrence of those expenses. The attorney general concluded that office-overhead expenses claimed under § 15-12-21(d) must be approved by the trial court in advance of being incurred before the comptroller may reimburse such expenses. In other words, the comptroller may not reimburse appointed counsel for office-overhead expenses incurred before the date the trial court approved the expenses. (Op. Att'y Gen., No. 1996-491, and No. 1996-192.) This Court, in Ex parte Smith, 698 So.2d 219, 224-25 (Ala.1997), discussed the Court of Criminal Appeals' decisions in May and Barksdale. Explicitly adopting the holding of May, this Court stated, [w]e agree with the Court of Criminal Appeals' holding in May that § 15-12-21 authorizes payment to a court-appointed attorney for overhead expenses reasonably incurred in defense of an indigent defendant. 698 So.2d at 224. In 1999, the legislature enacted Act No. 99-427, which amended § 15-12-21(d). In that amendment, the legislature increased the hourly rates for attorneys appointed to represent indigent defendants. In addition, the legislature changed the sentence that provided that counsel be reimbursed for expenses reasonably incurred in such defense to read that counsel would be reimbursed for expenses reasonably incurred in the defense of his or her client. (Emphasis added.) The attorney general issued an opinion in 2001, addressing the issue of office-overhead expenses. Op. Att'y Gen., No. 2002-022 (Oct. 15, 2001). He stated that based on May, Barksdale, and the language of § 15-12-21 (even after the 1999 amendment), an attorney who represents indigent defendants could be reimbursed for office-overhead expenses, even if the attorney worked out of his or her home. On March 15, 2002, this Court issued an opinion on application for rehearing in Lyons v. Norris, 829 So.2d 748 (Ala.2002). [4] In Lyons, the finance director and the comptroller denied reimbursement for office-overhead expenses of several attorneys who had represented indigent criminal defendants. Those attorneys filed a declaratory-judgment action and a petition for a writ of mandamus in Montgomery County. One attorney also sued the comptroller, alleging negligence and wantonness, while another attorney sought certification of a class action. The trial court consolidated these related cases. Following a hearing, the trial court denied class certification. The trial court issued a writ of mandamus instructing the State officials to approve all attorney-fee declarations that include orders approving office-overhead expenses filed prior to or contemporaneously with the attorney-fee declarations. The State officials appealed. The dispute in Lyons turned on the meaning attributed to the phrase approved in advance by the trial court in § 15-12-21(d). In a footnote, the main opinion addressed office-overhead expenses: In June 1999, the Alabama Legislature passed the `Investment in Justice Act of 1999.' Act No. 99-427, 1999 Ala. Acts. In pertinent part, Act No. 99-427 substantively amended § 15-12-21 to increase attorney fees for appointed work at the trial level. Under the Act, the rate of compensation for attorneys representing indigent criminal defendants was increased to $40 per hour for out-of-court time and $60 per hour for in-court time. The fee limits, which have been increased substantially, are now based on the severity of the crime, and there is no limit on the total fee that can be paid to an attorney representing a defendant charged with a capital offense or with an offense that carries a possible sentence of life imprisonment without parole. Section 15-12-21, as amended, also specifies that the court for good cause shown may approve an attorney's fee in excess of the maximum amount allowed.' Section 15-12-21 now provides that to be reimbursable, any expenses incurred must be incurred, specifically, `in the defense of his or her client.' Here, the attorneys seek reimbursement for office-over-head expenses, including but not limited to: professional license fees; malpractice, casualty, health, general-liability, and workers' compensation insurance; office salaries; ad valorem taxes; office supplies; postage and express-delivery charges; depreciation for office equipment and furniture; local and long-distance telephone charges; `CLE expenses, including travel and lodging for out-of-town seminars (incurred one or more times per year)'; utilities; various bank fees and interest on business loans; and other professional fees. Although whether these fees are actually incurred `in the defense of [an attorney's] client' is highly questionable, that issue is not presently before this Court. Neither does this Court have before it the question of the applicability of Act No, 99-427 to office-overhead expenses. However, the change in language in Act No. 99-427 from `any expenses reasonably incurred in such defense' to `any expenses reasonably incurred in the defense of his or her client,' prohibits reimbursement of office-overhead expenses based on calculations of the pro rata cost of an attorney's criminal practice compared to his overall practice. At the same time, it precludes advance calculations of office-overhead expenses for a specific criminal defendant. The increase in fees, together with the ability of the courts to approve fees in excess of the mandated maximum `for good cause shown,' further indicates the Legislature's intent to eliminate reimbursement for `office-overhead expenses' under Act No. 99-427. 829 So.2d at 751 n. 1. Justices Brown and Stuart concurred in the main opinion, which was authored by Chief Justice Moore. Justice Harwood concurred specially, writing that the office-overhead-expenses discussion in footnote 1 of the main opinion was not necessary and that the issue of office-overhead expenses was not properly before the Court. He was joined in that opinion by Justices Houston, Lyons, and Woodall. Justice Johnstone concurred in part and dissented in part, dissenting as to that part of the main opinion regarding the preapproval of expenses, and concurring in overruling the application for rehearing because the applicant was not properly before the Court. Justice See joined the concurring portion of Justice Johnstone's special writing. As the trial court states in its order in this case, the decision in Lyons triggered two reactions. The first was Christensen v. Childree, CV-2002-50, an action in Covington County against the comptroller. At oral argument, Wright's counsel stated that the comptroller briefly stopped paying office-overhead expenses in 2002 pursuant to an executive order and that that was the basis for the Covington County action. The Covington Circuit Court held that office-overhead expenses were to continue under § 15-12-21, even though the statute had been amended. The comptroller did not appeal that decision, and he continues to pay office-overhead expenses in Covington County, even though he ceased paying office-overhead expenses in the rest of the state for a second time on February 1, 2005. The second reaction of the decision in Lyons was Act No. 2002-129, Ala. Acts 2002, a joint resolution by the legislature. This joint resolution provided: That it was and continues to be the intent of this . Legislature pursuant to the enactment of Act 99-427, H. 53 of the 1999 Regular Session, the Investment In Justice Act of 1999, that overhead expenses shall be paid in addition to in-court and out-of court fees to attorneys appointed to represent indigent persons. In 2005, the comptroller requested an opinion from the attorney general asking whether an attorney representing an indigent defendant may claim both office-over-head expenses at a rate approved in advance by the trial court and expenses under the Uniform Guidelines for Attorney Fee Declarations. On February 1, 2005, the attorney general issued an opinion concluding, Act 99-427 amended section 15-12-21(d) of the Code of Alabama to eliminate overhead as an expense for which an appointed attorney can be reimbursed. An attorney can only be reimbursed for out-of-pocket expenses that are approved by the trial court in advance of being incurred. Op. Att'y Gen., No.2005-063 (February 1, 2005), The attorney general based his opinion on the language in the main opinion in Lyons and argued that Act No. 2002-129, the legislative joint resolution, was not controlling. The attorney general's opinion did not mention the earlier attorney general's opinions from 1996 or 2001, nor did it mention Christensen v. Childree. Based on the 2005 attorney general opinion, the comptroller ceased payments of office-overhead expenses to lawyers appointed to represent indigent defendants under Ala.Code 1975, § 15-12-21.