Court Opinion

ID: 9847623
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:03:25.020207+00
Date Added: 2024-06-11T09:17:23.732380
License: Public Domain

TYSON, Judge,
concurring in part, dissenting in part.
I concur in the result reached by the majority in sections I through III of their opinion. The award to plaintiff for $17,000.00 in attorneys’ fees pursuant to N.C. Gen. Stat. § 44A-35 is error. No competent or substantial evidence supports any finding that defendant Alvis unreasonably refused to settle and without this finding, the trial court’s unsupported conclusion to award attorneys’ fees is an error of *20law. The trial court also failed to make required findings of fact regarding the reasonableness of the attorneys’ fees it awarded. I vote to reverse in part and respectfully dissent.
I. Background
Following a bench trial, the trial court awarded plaintiff $7,921.00 in compensatory damages from defendant Alvis. The trial also awarded plaintiff $17,000.00 in attorneys’ fees pursuant to N.C. Gen. Stat. § 44A-35.
The statute states, in relevant part:
In any suit brought or defended under the provisions of Article 2 or Article 3 of this Chapter, the presiding judge may allow a reasonable attorneys’ fee to the attorney representing the prevailing party. This attorneys’ fee is to be taxed as part of the court costs and be payable by the losing party upon a finding that there was an unreasonable refusal by the losing party to fully resolve the matter which constituted the basis of the suit or the basis of the defense.
N.C. Gen. Stat. § 44A-35 (emphasis supplied).
To support its award of attorneys’ fees, the trial court found as fact:
15. Plaintiff has attempted to obtain payment funds secured by the Notice of Lien and the Lien from Defendants Crown and Alvis. Defendant Alvis unreasonably refused to fully resolve the matter after receiving the report from his consulting architect on November 2, 2004. The consulting architect reported his conclusion that only about $7,000.00 in recommended remedial work was needed under the Prime Contract and of that amount, only $200.00 could be attributed to Plaintiff’s performance under the contract. Defendant Alvis presented no evidence that the recommended remedial work was ever contracted and paid for by him.
16. Defendant Alvis did not tender an Offer of Judgment in this lawsuit.
17. Plaintiff is the prevailing party.
18. As a result of Defendant Alvis’ unreasonable refusal to fully resolve the matter that is the basis of this dispute, Plaintiff has incurred reasonable attorney fees in the amount of $17,000.00. This amount represents fees incurred after November 2, 2004 and *21includes what the Court finds as a reasonable fee for preparing the Motion for Attorney Fees.
The trial court concluded as a matter of law:
12. In the Court’s discretion, Plaintiffs reasonable attorneys’ fees in the amount of $ 17,000.00 should be taxed against Defendant Alvis as court costs pursuant to N.C.G.S. § 44A-35.
II. Standard of Review
Upon an appeal from a judgment entered in a non-jury trial, our Supreme Court imposed “three requirements on the court sitting as finder of fact: it must (1) find the facts on all issues joined in the pleadings; (2) declare the conclusions of law arising from the facts found; and (3) enter judgment accordingly.” Stachlowski v. Stach, 328 N.C. 276, 285, 401 S.E.2d 638, 644 (1991). Our standard of review is whether competent evidence exists to support the trial court’s findings of fact and whether the findings support the conclusions of law. Sessler v. Marsh, 144 N.C. App. 623, 628, 551 S.E.2d 160, 163, disc. rev. denied, 354 N.C. 365, 556 S.E.2d 577 (2001). The trial court’s conclusions of law drawn from the findings of fact are reviewable de novo. Humphries v. City of Jacksonville, 300 N.C. 186, 187, 265 S.E.2d 189, 190 (1980).
In addition, when awarding attorneys’ fees, thé trial court must make specific findings of fact concerning the attorney’s skill, the attorney’s hourly rate, and the nature and scope of the legal services rendered. In re Baby Boy Scearce, 81 N.C. App. 662, 663-64, 345 S.E.2d 411, 413, disc. rev. denied, 318 N.C. 415, 349 S.E.2d 590 (1986). Whether these requirements are met is a question of law, reviewable on appeal. Taylor v. Taylor, 343 N.C. 50, 54, 468 S.E.2d 33, 35 (1996).
The decision to award attorneys’ fees pursuant to N.C. Gen. Stat. § 44A-35 is within the trial court’s discretion. N.C. Gen. Stat. § 44A-35 “does not mandate that the trial court award attorneys’ fees, but instead places the award within the trial court’s discretion.” Barrett Kays & Assocs., P.A. v. Colonial Bldg. Co., 129 N.C. App. 525, 530, 500 S.E.2d 108, 112 (1998).
III. Unreasonably Refused to Settle
Defendant Alvis argues the evidence does not support the trial court’s finding that he unreasonably refused to settle. Defendant Alvis contends he attempted to resolve the matter in good faith by offering *22plaintiff successive settlements of $1,500.00 and $2,000.00 and he asserted valid defenses against plaintiffs claims. I agree.
N.C. Gen. Stat. § 44A-35 provides the trial court “may” award a prevailing party a reasonable attorneys’ fee upon a finding there was an “unreasonable refusal ... to fully resolve the matter which constituted the basis of the suit or the basis of the defense.” An award of attorneys’ fees under this statute is not mandatory and the trial court may only award attorneys’ fees in cases after findings of fact based upon substantial evidence of the losing party’s unreasonable refusal to settle or the failure to assert valid defenses. N.C. Gen. Stat. § 44A-35; see Barrett Kays & Assocs., P.A., 129 N.C. App. at 530, 500 S.E.2d at 112 (The statute “does not mandate that the trial court award attorneys’ fees, but instead places the award within the trial court’s discretion.”)
Plaintiff’s allegations against defendant Alvis showed he was only secondarily liable to plaintiff after defendant Crown, the general contractor. Defendant Alvis never dealt directly with plaintiff prior to hearing from plaintiff’s attorney about a possible lawsuit. When confronted with a lawsuit from plaintiff, defendant Alvis was reasonable to rely on the general contractor, in which defendant Crown stated it had “been paid in full for all services rendered” as of 14 January 2003 for work on defendant Alvis’s job. Defendant Alvis’s defenses for offsets and credits were allowed by the trial court to reduce any gross deficiency due plaintiff.
The majority’s opinion relies in part on two letters dated 26 June 2003 and 4 August 2003 from defendant Alvis’s counsel to plaintiff’s counsel after suit was filed. In these letters, defendant Alvis’s counsel states he “will make no voluntary payment to any party” and that the only settlement he will consider is a payment from plaintiff to defendant Alvis. At that time, defendant Alvis had asserted claims against defendant Crown and defendant Alvis’s architect had supported offsets against both plaintiff and defendant Crown for deficiencies. These letters fail to show defendant Alvis unreasonably refused to resolve the matter. Both letters were dated prior to the two settlement offers made by defendant Alvis to plaintiff. These letters became irrelevant after substantial settlement offers were made to and rejected by plaintiff and cannot support a finding that defendant Alvis unreasonably refused to settle.
On 16 May 2004, defendant Alvis made a settlement offer of $1,500.00 to plaintiff. Plaintiff rejected this offer. Defendant Alvis *23made a second settlement offer to plaintiff on 16 November 2004 for $2,000.00 prior to the initial trial date in this matter. Plaintiff rejected this offer and counter offered $7,921.00, no compromise from the original amount of its claim in the complaint. In its findings of fact concerning the award of attorneys’ fees to plaintiff, the trial court failed to consider or make findings of fact regarding the two settlement offers defendant Alvis made to plaintiff after the letters, but prior to trial.
Without adequate findings of fact, the trial court’s conclusion to award plaintiff attorneys’ fees pursuant to N.C. Gen. Stat. § 44A-35 is error. Defendant Alvis made two separate substantial settlement offers to plaintiff and asserted reasonable defenses against plaintiff’s claims. The trial court’s conclusion to award plaintiff attorneys’ fees pursuant to N.C. Gen. Stat. § 44A-35 is not supported by its findings of fact. I respectfully dissent.
IV. Reasonableness of the Attorneys’ Fees Awarded
The trial court also failed to make required findings of fact as to the reasonableness of the attorneys’ fees awarded.
The majority’s opinion asserts defendant Alvis failed to assign error or argue the amount of attorneys’ fees awarded. Defendant Alvis assigned error to:
20. Paragraph 3 of the Trial Court’s Final Decree in the Rule 52(A) Judgment, on the grounds that the evidence was insuffi- • cient to support a finding that Plaintiff-Appellee should recover attorneys’ fees from Defendant-Appellant, and an award of the same is contrary to law.
Defendant Alvis argues in his brief, “[T]he trial court abused its discretion in awarding [plaintiff’s] more than 2 times the amount of the contract in attorney fees. The decision of the trial court awarding Terry’s $17,000.00 in attorneys fees constitutes an abuse of discretion and should be reversed.” Defendant Alvis also “requested] that this Court reverse and vacate the trial court’s Rule 52(A) Judgment awarding ... attorney’s fees.” Defendant Alvis assigned error to, and argued, the amount of the attorneys’ fee awarded was unreasonable.
This Court has stated:
A trial court, in making an award of attorneys’ fees, must explain why the particular award is appropriate and how the court arrived at the particular amount. Specifically, an award of attor*24ney’s fees usually requires that the trial court enter findings of fact as to the time and labor expended, skill required, customary fee for like work, and experience or ability of the attorney based on competent evidence.
Dunn v. Canoy, 180 N.C. App. 30, 49, 636 S.E.2d 243, 255 (2006) (emphasis supplied) (internal quotation and citations omitted), disc. rev. denied, 361 N.C. 351, -S.E.2d -(2007); see Thorpe v. Perry-Riddick, 144 N.C. App. 567, 572, 551 S.E.2d 852, 856 (2001) (“If the trial court elects to award attorney fees, it must also enter findings of fact as to the time and labor expended, skill required, customary fee for like work, and experience or ability of the attorney based on competent evidence.”); see also Brookwood Unit Ownership Assn. v. Delon, 124 N.C. App. 446, 449-50, 477 S.E.2d 225, 227 (1996) (“To determine if an award of counsel fees is reasonable, ‘the record must contain findings of fact as to the time and labor expended, the skill required, the customary fee for like work, and the experience or ability of the attorney’ based on competent evidence.” (quoting West v. Tilley, 120 N.C. App. 145, 151, 461 S.E.2d 1, 4 (1995); United Laboratories, Inc. v. Kuykendall, 102 N.C. App. 484, 494, 403 S.E.2d 104, 111 (1991), aff’d, 335 N.C. 183, 437 S.E.2d 374 (1993)).
The trial court failed to make these required findings of fact and erred by awarding to plaintiff $17,000.00 in attorneys’ fees pursuant to N.C. Gen. Stat. § 44A-35. The statute states, “the presiding judge may allow a reasonable attorneys’ fee to the attorney representing the prevailing party.” N.C. Gen. Stat. § 44A-35 (emphasis supplied).
The trial court “must. . . make sufficient findings of fact and conclusions of law to allow the reviewing court to determine whether a judgment, and the legal conclusions that underlie it, represent a correct application of the law.” Spicer v. Spicer, 168 N.C. App. 283, 287, 607 S.E.2d 678, 682 (2005).
The trial court’s findings of fact concerning the imposition of attorneys’ fees are set out above. The trial court failed to make any finding of fact “as to the time and labor expended, skill required, customary fee for like work, and experience or ability of the attorney based on competent evidence.” Dunn, 180 N.C. App. at 49, 636 S.E.2d at 255. Without these findings, this Court cannot “determine whether [the] judgment, and the legal conclusions that underlie it, represent a correct application of the law.” Spicer, 168 N.C. App. at 287, 607 S.E.2d at 682. Here, the trial court’s award of $17,000.00 in attorneys’ *25fees to plaintiff must be vacated and remanded for further findings and conclusions regarding the reasonableness of the award. Dunn, 180 N.C. App. at 50, 636 S.E.2d at 256.
V. Conclusion
Defendant Alvis did not unreasonably refuse to settle this matter with plaintiff. Defendant Alvis never dealt directly prior to plaintiffs demands, made two separate and substantial settlement offers to plaintiff, asserted reasonable defenses against plaintiffs claims, and was awarded offsets and credits set forth in his answer by the trial court. No evidence shows defendant Alvis “unreasonably refused” to settle with plaintiff. I vote to reverse the trial court’s order on this issue.
Alternatively, the trial court failed to make any finding of fact “as to the time and labor expended, skill required, customary fee for like work, and experience or ability of the attorney based on competent evidence.” Dunn, 180 N.C. App. at 49, 636 S.E.2d at 255. Without these findings, this Court cannot review and determine whether the trial court’s award of attorneys’ fees was “reasonable.” N.C. Gen. Stat. § 44A-35. The trial court’s award of $17,000.00 in attorneys’ fees to plaintiff should be vacated and remanded for further findings regarding the reasonableness of the award using the factors in the numerous cases cited above. I respectfully dissent.