Opinion ID: 6105184
Heading Depth: 2
Heading Rank: 2

Heading: Common Core of Facts

Text: 1. Application of the “Common Core of Facts” Rule to Claims Under the Prompt Payment Statute [¶16] GBT contends the court erred as a matter of law when it applied the “common core of facts” rule to the award of fees and expenses under the prompt payment statute. We review de novo the applicability of the “common core of facts” rule to an award of attorney fees and expenses under the prompt payment statute. See Kilroy, 2007 ME 119, ¶ 6, 930 A.2d 1060. [¶17] The “common core of facts” rule originated in Hensley v. Eckerhart, where the Supreme Court of the United States reviewed an attorney fee award in a federal civil rights action involving multiple claims, only some of which were successful. 461 U.S. 424, 426-28 (1983). In analyzing the eighth Johnson factor—the amount involved and the results obtained—the Supreme Court stated that when a party’s claims for relief “involve a common core of facts” or are “based on related legal theories,” counsel’s time is often “devoted generally to the litigation as a whole, making it difficult to divide the hours expended on a claim-by-claim basis.” Id. at 435. Such lawsuits “cannot be viewed as a series 12 of discrete claims,” and thus the court awarding fees “should focus on the significance of the overall relief obtained . . . in relation to the hours reasonably expended,” and not reduce a fee award simply because a party failed to win on every issue. Id. [¶18] We have applied the guidelines set out in Hensley to, for example, an appeal of a denial of an attorney fee award in the context of a civil rights case. See Wyman v. Town of Skowhegan, 464 A.2d 181, 181, 185-86 (Me. 1983). We have also recognized that the “common core of facts” rule is applicable in cases where, as here, “non-fee claims are joined with fee-claims in a single action.” Poussard v. Com. Credit Plan, Inc. of Lewiston, 479 A.2d 881, 883, 885 (Me. 1984); see, e.g., Advanced Constr. Corp. v. Pilecki, 2006 ME 84, ¶¶ 9, 30-33, 901 A.2d 189. [¶19] In Pilecki, we analyzed how courts should determine awards in cases with both fee and non-fee claims. 2006 ME 84, ¶¶ 1, 25-26, 32, 901 A.2d 189. There, the allegations all stemmed from a house construction project and included a claim under the Unfair Trade Practices Act (UTPA), which provides a statutory entitlement to attorney fees, and other claims that did not provide for attorney fees. Id. The contractor and its sole shareholder argued that attorney fees were not awardable “for time spent on the nonstatutory claims 13 and that the court abused its discretion in failing to apportion the fees between the fee and non-fee claims.” Id. ¶¶ 3, 28. [¶20] While we recognized that parties requesting attorney fees have the burden to “separate the costs of pursuing the fee claims from the costs of pursuing the non-fee claims,” we explained that “when the fee and non-fee claims are related and arise from common facts, they may be so entwined as to make separation impossible.” Id. ¶ 32. Additionally, if the claims all arose from facts relating to a party’s UTPA violation, “the fact that damages can be attributed to a related non-fee claim does not mean that the work done jointly on the fee and non-fee claims should be disregarded in determining the amount of the fees,” and the court awarding fees should instead “focus on the overall relief awarded to the prevailing party.” Id. [¶21] We applied the “common core of facts” analysis in Pilecki to the UTPA, a Maine consumer protection statute. Id. ¶¶ 29-30. The same analysis informs a court’s award, and our review of a fee award, under the prompt payment statute, which applies to both consumer and commercial litigation.13 13We note that the Vermont Supreme Court has applied the “common core of facts” rule to a claim under Vermont’s prompt payment act. See Elec. Man, Inc. v. Charos, 895 A.2d 193, 196-98 (Vt. 2006) (explaining “that allowing full attorneys’-fees recovery where there is a common core of facts is consistent with the language of the statute,” which does not “limit[] attorneys’-fees recovery to representation associated with a payment-withholding claim[] to the exclusion of recovery for representation for other claims, such as breach of contract, arising out of the same controversy”). 14 In Poussard, we recognized that civil rights litigation cases, such as Wyman, are not controlling but are instructive where “various provisions for attorney’s fees are designed to aid in the effective enforcement of the acts in question.” 479 A.2d at 883. This reasoning attendant to a determination of attorney fees in UTPA actions applies just as forcefully to claims that include violations of the prompt payment statute. With respect to a prompt payment claim, we have explained that a substantially prevailing party “must be awarded reasonable attorney’s fees” pursuant to 10 M.R.S. § 1118(4) (emphasis added), to “provide motivation, in the form of penalties for noncompliance, for an owner, contractor, or subcontractor to make timely payments,” Jenkins, Inc. v. Walsh Bros., 2001 ME 98, ¶ 31, 776 A.2d 1229. Therefore, the court did not err in applying the “common core of facts” rule to review F&W’s requested attorney fees under the prompt payment statute. 2. F&W’s Contract Claims and GBT’s Counterclaims and Affirmative Defenses [¶22] We now turn to the court’s analysis of the other claims that did not directly assert a violation of the prompt payment statute. We review the court’s overall determination of attorney fees for an abuse of discretion,14 but we Our review for abuse of discretion involves “three questions: (1) are factual findings, if any, 14 supported by the record according to the clear error standard; (2) did the court understand the law applicable to its exercise of discretion; and (3) given all the facts and applying the appropriate law, 15 review any underlying factual findings for clear error. See Lee, 2003 ME 78, ¶ 18, 828 A.2d 210; Sweet, 2019 ME 18, ¶ 23, 201 A.3d 1215. [¶23] GBT contends that the court erred in awarding F&W attorney fees for work “seeking remedies for contractual claims, defending against GBT’s counterclaims[,] and addressing GBT’s affirmative defenses” because that work was not in pursuit of prosecuting F&W’s prompt payment claims. The court found that for F&W to succeed on its prompt payment claims, F&W had to “defeat claims that it or another party was responsible for any ‘unsatisfactory job progress, defective construction or materials, disputed work or 3rd-party claims,’” under 10 M.R.S. § 1118(1), and thus that F&W had to successfully defend against any counterclaims GBT asserted. The court also determined that “[t]he facts generated and arguments asserted by both parties about the requirements of the contract were inextricably interwoven” with the allegations relating to the prompt payment claims, and fees incurred relating to the contract claims were awardable as part of the “common core of facts” rule. [¶24] To succeed on its prompt payment claims, F&W had to establish that GBT did not pay F&W “strictly in accordance with the terms of the construction contract.” 10 M.R.S. § 1113(1); see Cellar Dwellers, Inc. v. D’Alessio, was the court’s weighing of the applicable facts and choices within the bounds of reasonableness.” McLeod v. Macul, 2016 ME 76, ¶ 6, 139 A.3d 920 (quotation marks omitted). 16 2010 ME 32, ¶ 18, 993 A.2d 1. In other words, F&W was required to prove that GBT breached the parties’ contracts. Additionally, F&W had to establish that it performed in accordance with the contracts, and that GBT did not have valid claims against F&W “arising from unsatisfactory job progress, defective construction or materials, disputed work or 3rd-party claims.” 10 M.R.S. § 1118(1). Therefore, to prevail on its prompt payment claims overall, F&W had to both prove GBT’s breach of contract and successfully defend against GBT’s counterclaims. The court did not err by concluding that F&W is entitled to attorney fees incurred both directly and indirectly in support of its prompt payment claims, because F&W was “the substantially prevailing party in [this] proceeding to recover . . . payment within the scope” of the prompt payment statute. 10 M.R.S. § 1118(4). [¶25] To the extent that any of F&W’s work fell outside of what was necessary to prove its prompt payment claims, F&W’s claims against GBT and GBT’s offset claims against F&W were also all based on the same facts— whether GBT breached the contracts with F&W when it refused to pay F&W pursuant to F&W’s payment applications, and whether any of GBT’s claimed offsets were legitimate and reduced that amount. The court thus did not abuse its discretion in determining that the contract claims and counterclaims 17 between F&W and GBT were based on a “common core of facts,” so interwoven that separation of fee and non-fee work was not possible. See Lee, 2003 ME 78, ¶ 20, 828 A.2d 210 (affirming award where court determined that the issues in the complaint and counterclaim were “inextricably intertwined”); Sweet, 2019 ME 18, ¶¶ 23, 25, 201 A.3d 1215.15 3. NHD’s Fees for its Work as F&W’s Insurance Counsel [¶26] GBT also contends that F&W is not entitled to an award of NHD’s fees because NHD was hired to defend against GBT’s counterclaims and not to pursue F&W’s prompt payment claims. For the same reasons that the court properly found that the fees related to F&W’s defense against GBT’s counterclaims and affirmative defenses are recoverable, the court did not err by concluding that NHD’s fees are also awardable. There is nothing in the prompt payment statute that would exclude such fees simply because NHD was hired by an insurance company. Rather, as the court explained, categorically excluding the award of NHD’s fees would violate the purpose of the prompt payment statute “to deter contractors and owners from failing to timely pay for 15 In Sweet, we affirmed the court’s decision to decline an award of attorney fees relating to counterclaims, for which fees were not recoverable, because the owners relied on “bare assertions” that the claims were linked and had only a “limited degree of success,” failing to prevail on many counterclaims. 2019 ME 18, ¶¶ 3, 11, 25, 201 A.3d 1215. Here, F&W provided much more than bare assertions to show the common core of facts, and the court found not only that the claims and counterclaims were “inextricably interwoven” but also that F&W had a great degree of success. These determinations by the court were, on this record, not error. 18 work completed under a contract they freely entered.” The court did not abuse its discretion in awarding NHD’s requested fees. 4. Subcontractor Lawsuits [¶27] GBT next argues that the court erred in “awarding fees billed defending against claims brought by subcontractors in 18 separately-captioned lawsuits which were eventually consolidated into this matter.” The court made no finding regarding whether the subcontractor claims were part of the common core of facts or inextricably interwoven with the prompt payment claims. Rather, in finding that F&W was not categorically ineligible to recover fees for time spent resolving those claims, the court stated only that “delays and scheduling problems were avoided by the settlement of the subcontractor claims,” that it was “helpful . . . for the [c]ourt, and both parties, to remove the multiple subcontractors from the case,” and that removal of those claims reduced GBT’s exposure to additional attorney fees and interest. [¶28] Although we have no reason to doubt that the resolution of the subcontractor claims indeed saved the court and the parties time, the court abused its discretion when it explicitly awarded fees based on efficiency when it did not also articulate a basis for an award of fees that would be proper under 19 the prompt payment statute and our interpretive case law.16 We vacate this portion of the judgment and remand for the court to determine the extent to which the fees may be properly awardable as part of the litigation of F&W’s prompt payment claims against GBT or as otherwise inseparable from it—a determination on which we express no opinion here.