Court Opinion

ID: 9514956
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:52:42.683473+00
Date Added: 2024-06-11T09:06:23.196101
License: Public Domain

AMUNDSON, Justice
(concurring in part and dissenting in part).
[¶ 38.] I concur in issues 1 and 2.
[¶ 39.] I respectfully dissent as to issues 3, 4 and 5.
ISSUE 3: INCIDENTAL AND CONSEQUENTIAL DAMAGES
[¶ 40.] The majority holds that the issue of incidental and consequential damages has been waived. It is true, as the majority states, that SDCL 15-6-50(a) requires that a motion for directed verdict be made at the close of all the evidence in order to preserve that issue for appeal. Pearson v. Adams, 279 N.W.2d 674 ,(S.D.1979). The holding of Pearson, however, does not dispose of this case.
[¶ 41.] In Pearson, we stated that "insufficiency may not be reviewed unless it has been timely presented to the trial court by a proper motion for directed verdict, request for findings, or other apt motion, offer, objection or exception.” 279 N.W.2d at 676 (citations omitted) (emphasis supplied). When a party challenges the sufficiency of the evidence at the close of the plaintiffs case and during settlement of instructions, that party has timely preserved the issue by apt motion or objection. In this case, not only did the defense move for a directed verdict, but also objected to the jury instruction on incidental and consequential damages by arguing that “there is[n’t] sufficient evidence to submit to the Court [ ] the issue of the storage or the rental value,” thus it *615would be improper to have a verdict form that would allow for such damages. Although the trial court disregarded such argument and allowed the plaintiffs version of the verdict form, defense counsel took exception. The objection and exception by defense counsel preserved this issue for appeal. We have stated that “[questions of insufficiency of the evidence [of damages] may be presented on appeal without the necessity of an application for a new trial if the questions by appropriate proceedings have been first presented and decided in the court below.” Schoenrock v. City of Sisseton, 78 S.D. 419, 103 N.W.2d 649, 653 (1960). Based on the above, this issue is properly before the court.
[¶ 42.] SDCL 57A-2-715 permits the trial court to grant incidental and consequential damages. SDCL 57A-2-715 in part provides:
(1) Incidental damages resulting from the seller’s breach include expenses reasonably incurred ... and any reasonable expense incident to the delay or breach.
(2) Consequential damages resulting from the seller’s breach include:
(a) Any loss ... and
(b) Injury to person or property proximately resulting from any breach of warranty.
Therefore, according to statute, the damages must be an expense actually incurred, and they must be the proximate result of the breach. We have also stated that damages “may be recovered if the evidence shows with reasonable certainty both their occurrence and the extent thereof.” Drier v. Perfection Inc., 259 N.W.2d 496, 507 (S.D.1977). Thus, it is paramount for the plaintiff to put forth evidence of actual damages. Kobbeman v. Olesen, 1998 SD 20, ¶ 5, 574 N.W.2d 633, 635 (citations omitted). It is the plaintiffs burden to establish that he or she has, in fact, been damaged by the defendant. Id.
[¶ 43.] At trial, however, Dr. Alvine produced no evidence that he had actually incurred any expense for storage. No estimates, receipts, or records were produced to show such an expense. This is because he, in fact, had the vehicle stored exclusively at his own residential garage. Thus, the $1440 cost for storage was not actually incurred. On cross-examination Dr. Alvine admitted as much:
Q: You have not procured any such storage have you?
A: That’s correct.
This exchange, coupled with the inability to produce any documents establishing such expense, should lead one to the conclusion that Dr. Alvine had incurred no expenses related to storage of the Mercedes. We have often stated that damages must be proven by a reasonable degree of certainty. Damages are not recoverable unless they are “clearly ascertainable in both their nature and origin.” High Plains Genetics Research Inc. v. J K Mill-Iron Ranch, 535 N.W.2d 839, 844 (S.D.1995) (citing SDCL 21-2-1). “It is fundamental that damages, which are uncertain, contingent or speculative cannot be made the basis of recovery.” Kunkel v. United Sec. Ins. Co., 84 S.D. 116, 168 N.W.2d 723, 733 (1969). Without an expense incurred, one is not entitled to damages. Kobbeman, supra.
[¶ 44.] The evidence shows the same for the $12,000 lease award. Again, Dr. Alvine did not incur any expense related to the rental of a car because one was never rented. Dr. Alvine speculated that it would probably cost him around five hundred dollars per month to rent a car similar to that of the Mercedes. Again, no receipts, estimates, or documents of any kind were offered to show that the five hundred-dollar per month figure was more than conjecture and speculation.
[¶ 45.] More importantly, according to Dr. Alvhie’s testimony, he had five other vehicles from which to choose. He admitted that he owned two pickups, a Jaguar, an Oldsmobile, and a Dodge Durango. In a follow up question on cross-examination, Dr. Alvine was asked:
*616Q: So with all those vehicles you’re not hurting for wheels to get around are you?
A: No. I’m using my pick-up and Oldsmobile, yes.
There was no reason for Dr. Alvine to rent a vehicle because he had an array of vehicles from which to choose. Regardless, Dr. Alvine did not, in fact, rent a car. Because he never rented a car, he cannot exactly show how he was damaged.
[¶ 46.] It is clear that damages must be actually incurred before recovery is allowable. SDCL 57A~2-715(1). Damages are not appropriate unless the plaintiff can show that he or she can show a loss or damages actually incurred. Kobbeman, supra. Here, Dr. Alvine has failed to offer such proof. Therefore, an award for incidental and consequential damages was not proper. Courts of law are to dispense justice and fair decisions, and should not allow a litigant to recover an award that amounts to a damage bonus. On the record before us, I do not agree with the trial court’s decision to allow incidental and consequential damages. As such, I also dissent to the outcome reached in issue 4 as it relates to remittitur of incidental and consequential damages.
ISSUE 5: ATTORNEYS’ FEES
[¶ 47.] The Magnuson-Moss Warranty Act allows recovery of attorneys’ fees in an action brought in state court. Champion Ford Sales, Inc. v. Levine, 49 Md.App. 547, 433 A.2d 1218 (1981). Under the Act, attorneys’ fees are recoverable by the prevailing party at the discretion of the trial court.* The question raised on appeal, however, is not the initial granting of attorneys’ fees, but rather the amount of the attorneys’ fees awarded. Mercedes claims that the award of $47,328.50 for attorneys’ fees was not reasonable.
[¶ 48.] By affidavit, Dr. Alvine’s attorney requested a $5,565 increase in the fee award because of the successful result. The $5,565 figure is the equivalent of a $25 per hour enhancement. A fee enhancement is prohibited under the Magnuson Moss Warranty Act. See Volkswagen of America, Inc. v. Smith, 690 So.2d 1328 (Fla.Dist.Ct.App.1997); Maserati Automobiles Inc. v. Caplan, 551 So.2d 501 (Fla.Dist.Ct.App.1989). The prevailing attorney should be held to the terms of the fee contract agreed upon with his client. “In no case should the court-awarded fee exceed the fee agreement reached by the attorney and his client.” Maserati, supra, at 503 (citing Perez-Borroto v. Brea, 544 So.2d 1022, 1023 (Fla.1989)). When an attorney and a client agree upon a fixed hourly rate, it would be unjust to allow that attorney a higher rate because of the mere presence of a fee-shifting statute.
[IT 49.] Nowhere in the Magnuson-Moss Warranty Act does it state that a fee enhancement is required or discretionary. Rather, the Act states that the fees must ■be reasonable. “What we require the trial court to do is exercise its discretion regarding an attorney’s fee award in a reasonable mannerf.]” Samuels v. American Motors Sales Corp., 969 F.2d 573, 579 (7th Cir.1992). The purpose of the Act is not *617to pynish the losing party, rather it is to give what is generally considered persons unable to afford legal representation an avenue of cost savings that would not normally be afforded such a person under our American rule for attorneys’ fees. With this purpose in mind, it is contrary to the purpose of the Act to dispense punishment by awarding a fee enhancement to the detriment of the defending party. Dr. Al-vine’s attorney would have been made whole without such a fee enhancement. This Court should not adopt a rule that gives bonuses to those who prevail and, concomitantly, punishes those who defend such claims and are unsuccessful.
[¶ 50.] This Court should strike the award as to the incidental and consequential damages, and the fee enhancement. We should also remand for a determination of reasonable attorneys’ fees without the inclusion of the fee enhancement.
[¶ 51.] GILBERTSON, Justice, joins this writing as to issue 5 (attorney’s fees).

15 USC § 2310(d)(2). The statute provides:
If a consumer finally prevails ... he may be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of cost and expenses (including attorneys' fees based on actual time expended ) determined by the court to have been reasonably incurred by the plaintiff for or in connection with the commencement and prosecution of such action, unless the court in its discretion shall determine that such award of attorneys’ fees would be appropriate. (emphasis supplied).
The majority's reliance on Hensley is erroneous for two reasons. First, Hensley involved an involuntary commitment proceeding under 42 USC § 1983. Second, under such action, attorneys' fees are awarded under 42 USC § 1988, which does not expressly allow attorneys' fees "based on actual time expended” as expressed in the Magnuson-Moss Warranty Act. Hensley clearly does not support an award of attorneys’ fees based on the Magnu-son-Moss Warranty Act.