Court Opinion

ID: 8027248
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:44:48.012587+00
Date Added: 2024-06-11T16:36:51.628673
License: Public Domain

MR. JUSTICE SHEA
dissenting:
I join in the opinion on the attachment bond issue but I dissent from the decision approving the attorney fee award.
Here we have a situation where plaintiff’s counsel was virtually certain to obtain a judgment against the Beckstroms, (or at least against Mr. Beckstrom), in the amount of the promissory note. The real question was whether the bank would have available to it assets to satisfy any judgment obtained.
The question is whether the attorney fee, under these circumstances, is excessive. It is. The attorney testified that he spent about fifty hours on the case, and many of the hours were spent on ancilliary matters directed at finding property that could satisfy any potential judgment. The attorney had represented the bank on other occasions, and so they were not strangers to each other. The attorney fee arrangement was that the attorney would receive on a contin*331gency basis, 25 percent of any amount recovered before suit, 33 Vz percent of any amount recovered after suit but before trial, and 50 percent for an amount recovered after an appeal. This contingency should not have been considered for any purpose in determining the reasonableness of a fee, for the Beckstroms were not a party to the contract and should therefore not be bound directly or indirectly by its terms or by it being considered as a factor in setting the fee. Unfortunately, the trial court and this Court both considered the contingency fee as a factor in setting the fee.
The trial court found that the contingency fee contract was not binding on the court, but was simply an indication of the agreement between the parties — that is, the agreement between the bank and its attorney. The fact is, however, that absent this agreement, the only evidence present to justify an award would be the $50 per hour normal billable rate testified to by the attorney — at this rate, the attorney’s fee would be $2,500 rather than $5,000 — twice the normal hourly rate. There is no evidence in the record demonstrating that the normal hourly rates for attorney fees in the community is $100 per hour — yet that is the only basis on which the award could be upheld under the majority rationale.
While the trial court and this Court appear to want to avoid using the contingency fee arrangement as a basis for the amount of the attorney fee award, it is clear that both have at least let the contingency fee contract be used as evidence justifying an award beyond the normal $50 per hour testified by plaintiff’s attorney as his normal hourly rate. Although I do not understand the majority rationale, this part of its opinion is revealing:
“The District Court concluded that contingent fee agreement which is not binding on the Court was nonetheless an indication of the agreement between the parties. Under the contingent fee agreement, the attorneys for the bank appear to be entitled to 40 percent or 50 percent of the $27,569.20 which was recovered. Under those circumstances *332it would be unfair to hold counsel to an approximation of fifty hours of work at $50.00 an hour.” (Emphasis added).
The Beckstroms should either be bound by the contingency fee agreement or they should not — and I am sure neither the trial court not this Court would venture to hold that the contingency fee arrangement, to which the Beckstroms were not a party, should be the basis on which they should pay an attorney fee. I also fail to see how the contingency arrangement can be “an indication” in effect that the Beckstroms should pay more than the normal rate of $50 per hour. To hold otherwise is to hold that the contingency fee agreement is in fact evidence that Beckstroms should be bound in some degree to some standard of assessment of attorney fees without the Beckstroms being a party to that agreement.
Because the Beckstroms were not a party to this agreement, they cannot by held to the contingency fee arrangement as constituting in any way what a reasonable attorney fee would be. The question then becomes what standard should be applied in determining the reasonableness of the fee to be assessed against the Beckstroms. The only reliable evidence in the record is that of the attorney himself that his normal billable rate is $50 per hour. Any other evidence is based entirely on speculation and on the understandable yet regrettable proclivity of attorneys to justify fees on behalf of their brethern of the bar.
This Court relies on the so-called uncontradicted testimony of plaintiff’s counsel and “another attorney who qualified as an expert witness familiar with fees in the area, . . .’’in upholding the trial court’s finding that the $5,000 fee was commensurate with those usually charged. . .in this community.” (Emphasis added) I fail to see, however, where there is evidence in the record justifying this $5,000 fee.
The bank’s attorney demanded that he be paid $5,000 as the fee, and he and another lawyer testified that $5,000 was a reasonable fee. However, the bank’s lawyer testified that *333when he charged an hourly rate it was at the rate of $50 per hour. The so called expert also testified that his rate was $50 per hour. The essence of the testimony of the lawyer receiving the fee is that he should receive a fee higher than the rate of $50 per hour because he had a contingency fee agreement with the Bank which entitled him to a higher fee.
The so-called expert on attorney fees (and all attorneys seem to be experts in support of attorney fees to be awarded to their brethern of the bar), was that the requested fee, $5,000, was reasonable. But, he really gave no basis for his testimony. In fact, he admitted that he had reviewed neither the District Court file nor the file of the lawyer before determining that the requested fee of $5,000 was reasonable.
Contrary to the assertions of the Bank’s counsel, this case was not a complex case. Indeed, judgment against the Beckstroms was virtually assured from the outset — although whether there would be property to satisfy the judgment was another matter. It does not engender public confidence on the bench and bar for a court to rubber-stamp a demand for attorney fees, especially when that demand is double the usual hourly billing rate of the attorney.
To summarize, a fee twice as high as a fee calculated at the normal billable rate of $50 per hour, is, under the circumstances of this case, excessive. The fee should be $2,500, not $5,000.