Court Opinion

ID: 2735917
Source: CourtListenerOpinion
Date Created: 2014-09-23 14:04:00.781281+00
Date Added: 2024-06-11T10:03:34.353967
License: Public Domain

In the Missouri Court of Appeals
                            Eastern District
                                       DIVISION THREE

THOMAS DEWALT,                               )      No. ED101245
                                             )
       Appellant,                            )      Appeal from the Circuit Court
                                             )      of St. Louis County
vs.                                          )
                                             )      Hon. Colleen Dolan
DAVIDSON SURFACE AIR and                     )
DONALD DAVIDSON,                             )
                                             )      Filed:
       Respondents.                          )      September 23, 2014

       Thomas DeWalt appeals from the judgment awarding him attorneys’ fees at trial and on

appeal. He claims the trial court abused its discretion in awarding only some of the fees he

requested. We affirm in part and reverse in part.

       DeWalt was a driver for a trucking company owned by Donald Davidson. During his

employment, DeWalt was diagnosed with a brain tumor that restricted his ability to drive long

distances. When DeWalt was unable to accept long distance delivery assignments, the employer

repeatedly refused to give him available local deliveries or other jobs, sending him home without

pay and issuing disciplinary write-ups. DeWalt sued the company and Davidson under the

Missouri Human Rights Act for having constructively discharged him based on his disability.

The jury found in favor of DeWalt on his discrimination claim against Davidson individually,

but found the company not liable. DeWalt testified to over $80,000 in compensatory damage,

but the jury awarded him only $7,500 and found Davidson not liable for punitive damages. After

trial, DeWalt requested $133,198.50 in attorneys’ fees as a prevailing plaintiff under Section
213.111.2 of the MHRA. The trial court reduced that amount and awarded him $75,000, without

explanation.

         The judgment as to liability was affirmed on appeal. See DeWalt v. Davison Service/Air,

Inc., 398 S.W.3d 491, 506-08 (Mo. App. E.D. 2013). The amount of attorneys’ fees awarded

was also at issue in that appeal. DeWalt argued that the trial court failed to recognize the

important public purpose in pursuing MHRA claims and instead erroneously based its award

solely on the amount of the compensatory damages. Id. at 506-07. At oral argument on that

appeal, Davidson asserted that awarding fees in proportion to damages was appropriate and

served to encourage settlements without allowing attorneys to recover a windfall in fees on a

small verdict.1

         In the opinion, we set out the factors to be considered when assessing a fee award under

the MHRA, noting that “the most crucial factor is the degree of success obtained.” Id. at 507.

We found that there was no explanation for the trial court’s award, but it appeared to be ten times

the amount of damages. Id. We held, as other courts have, that while the amount of damages is

“not irrelevant,” a “rule of proportionality would make it difficult, if not impossible, for

individuals with meritorious civil rights claims but relatively small potential damages to obtain

redress from the courts.” Id. Therefore, we stated, a court may not reduce fees to maintain a

ratio between the fees and the damages. Id. We concluded that because the trial court had failed

to enumerate its reasons for reducing the requested fee, this Court could not determine whether it

had given proper consideration to the relevant factors or abused its discretion. Id. at 507-08.

Therefore, we reversed and remanded the attorneys’ fees award for the entry of findings of fact

1
  The record from the first appeal and a partial transcript of the oral argument in that case have been made part of the
record on appeal in this case.
                                                             2
and conclusions of law consistent with our opinion. Id. at 508. We also instructed the trial court

to rule on DeWalt’s request for attorneys’ fees on appeal. Id. at 508 n.4.

       On remand, the trial court entered findings and conclusions relating to the trial attorneys’

fee award. It reduced the requested amount first for what it found to be “additional, duplicative,

unnecessary or non-productive” work, including all of the time counsel spent preparing the fee

application and some of the time counsel spent communicating with the client and co-counsel.

After those deductions, the court listed the factors we had set forth in DeWalt. It found that the

case did not take very long to try and was not complex, the attorneys advocated conscientiously

and the plaintiff proved liability as to one defendant, but the damages awarded were small. The

trial court went on to conclude that awarding all of the fees requested where the verdict was

small would work against the public policy of encouraging settlement; therefore, it further

reduced the requested fee by 30%. After all reductions, the total amount of trial attorneys’ fees

awarded was $87,200.75. In a separate order, the court awarded only $15,000 of the requested

$35,560 in attorneys’ fees on appeal, finding again that the case was not complicated and

concluding that only 40 hours was needed to complete the brief.

       This appeal follows. DeWalt argues in Point I that the trial court abused its discretion in

awarding only some of the requested fees on appeal because the award bears no relation to the

amount of time it actually took to respond to the breadth of issues raised by Davidson in the first

appeal, which he claims opposing counsel conceded, and fails to consider the importance of

MHRA claims. He argues in Point II that the award of attorneys’ fees at trial is also an abuse of

discretion because it is again improperly based on the size of the verdict without consideration of

the important nature of the claim and erroneously excluded some of counsel’s compensable

work. We address these points out of order.

                                                 3
       Attorneys’ Fees at Trial

       Attorneys’ fees are authorized for a prevailing party under the MHRA.                 Section

213.111.2. The reasons are twofold: “(1) to fully make the plaintiff whole by compensating him

or her for the costs of bringing suit and (2) to deflect that discrimination may result in nominal or

small monetary damages.” Coyle v. City of St. Louis, 408 S.W.3d 281, 291 (Mo. App. E.D.

2013) (internal citations omitted). While the determination of reasonable attorneys’ fees under

the MHRA is in the sound discretion of the trial court, there are, as we said in the first appeal, a

number of factors to be considered: (1) the rates customarily charged by the attorneys involved

in the case and by other attorneys in the community for similar services; (2) the number of hours

reasonably expended on the litigation; (3) the nature and character of the services rendered; (4)

the degree of professional ability required; (5) the nature and importance of the subject matter;

(6) the amount involved or the result obtained; and (7) the vigor of the opposition. Id. at 506-07.

Again, “the most crucial factor is the degree of success obtained.” DeWalt, 398 S.W.3d at 507.

Nevertheless, the court may not reduce fees when the damages are small in order to maintain

some proportionality between the damages and the fees awarded. Id.

       The trial court listed all of these factors and made findings regarding most of them,

focusing mostly on the degree of DeWalt’s success:

       The jury returned its verdict against one of the two defendants in the amount of
       $7,500. And although it is likely that the same work expended to secure a verdict
       against one defendant would be needed to secure a verdict against the other . . .
       the amount of damages the jury awarded to plaintiff was small.
                Settlements are encouraged under the law. [citations omitted]. There is
       little incentive for a plaintiff to settle a case which may not have much value in
       terms of plaintiff’s damages, if plaintiff can recover all or most of his attorney’s
       fees by taking the chance of going to trial and recovering even a small verdict.
       Plaintiff’s risk in such a scenario is very low. To award a plaintiff all of the
       attorneys fees he has submitted where his degree of success is not great would
       work against the public policy of encouraging settlement. Accordingly, the Court
       finds it appropriate to reduce the fee request by 30%.
                                                 4
        DeWalt’s first argument is that reducing the award by 30% was an abuse of discretion.

We agree. The determination of reasonable attorneys’ fees is within the trial court’s sound

discretion. Id. at 506. We will not reverse that determination unless we find that the amount was

arbitrarily arrived at or is so unreasonable as to indicate indifference and a lack of proper judicial

consideration. Id. Although the trial court carefully considered most of the factors as instructed

in the first opinion, it nevertheless inappropriately relied entirely on the policy of encouraging

settlement—without any findings regarding the settlement efforts of counsel in this case—and

failed to even mention the nature and importance of this MHRA claim. Thus, the 30% percent

reduction—while not explicitly a ratio between the verdict and the fee award—nevertheless is

unreasonable due to the lack of appropriate findings on all applicable factors.

        First, contrary to DeWalt’s claim, there is nothing inherently incompatible about the

policy of encouraging settlement and the policy of encouraging meritorious MHRA suits. In

discussing the application of rules regarding offers of judgment in civil rights cases, courts have

consistently held that the purpose of furthering societal interest in eliminating discrimination and

the purpose of encouraging settlements “are not in opposition.” Gabriel v. Saint Joseph License,

LLC, 425 S.W.3d 133, 140 (Mo. App. W.D. 2013); see also Marek v. Chesny, 473 U.S. 1, 5

(1985) (“nothing incompatible about these two objectives”) and its progeny.2 But a court only

needs to consider the policy of encouraging settlement when there is evidence before it regarding

the particular settlement efforts in that case. See Gabriel, 425 S.W.3d at 140 (rule regarding

offers of judgment implicated only when offer of judgment made); see also Charles v. Daley,

2
 We rely in part on federal case law throughout this discussion as it is not inconsistent with Missouri law on these
matters. See Daugherty v. City of Maryland Heights, 231 S.W.3d 814, 818 (Mo. banc 2007) (federal employment
discrimination case law may be applied in MHRA cases when consistent with Missouri law).

                                                         5
846 F.2d 1057, 1072-73 (7th Cir. 1988) (where purported settlement not at issue, court is

“unconstrained” by policy considerations regarding settlements). Only when good faith offers of

settlement have been unreasonably rejected in favor of trial on claims with limited value is there

a need to consider reducing attorneys’ fees so as to avoid “windfall.” Where, as here, there are

no findings regarding settlement negotiations, reliance on the policy of encouraging settlement as

a reason to reduce fees is misplaced.3

         Second, despite its other detailed findings and its earnest attempt to follow the dictates in

our first opinion, the trial court’s focus on what it concluded to be a small degree of success in

terms of damages failed to take into account the nature and importance of DeWalt’s total success

in proving discrimination on the part of one defendant.4 We find Gilliland v. Missouri Athletic

Club, on which we relied in the first appeal, instructive. 273 S.W.3d 516 (Mo. banc. 2009). In

that case, the trial court awarded only $22,000 of the requested $170,149.50 in attorneys’ fees

under the MHRA. Id. at 523. The trial court stated that its reduction was based on the fact that

actual damages awarded on the plaintiff’s constructive discharge claim were “only $60,000” and

because the case was relatively straightforward. Id. The Supreme Court on appeal set out the

factors we cited above, which courts are to consider when calculating attorneys’ fees, and further

provided the following guidance:

                  In human rights cases, the amount of the verdict or judgment may have
         little bearing on the amount of attorneys’ fees. The act recognizes the public

3
  We note, as does DeWalt, that this Court did not address this policy—despite Davidson’s suggestion that it
justified a reduction of fees in this case—in the first appeal, which may suggest that this Court has already rejected
the idea that this is a necessary policy consideration in this case. If we had considered it necessary, it seems likely
we would have included that somewhere in our detailed guidance as to the relevant factors for the trial court to
consider on remand.

4
  Having found that the same effort was required to prove the claims against both defendants, the trial court already
recognized that there would be no basis for discounting those efforts solely because DeWalt did not prevail against
the company defendant. See DeWalt, 398 S.W.3d at 507.
                                                         6
          purpose served by litigation that vindicates the rights of those who are
          discriminated against. The Missouri legislature, in enacting the human rights act,
          followed the lead of Congress in the choice of authorizing fees to private
          attorneys for enforcement of human rights claims, rather than relying principally
          upon government agencies for such enforcement. In human rights cases,
          therefore, courts should consider the factor identified as number 5, above, the
          nature and importance of the subject matter.

Id. at 523-24 (emphasis added and citations omitted). The Court concluded that the claim

prevailed on was not actually an MHRA claim for which attorneys’ fees were even available;

nevertheless, the Court pointed out that had it been an MHRA claim, the appeal “might have

been well taken” in light of the trial court’s stated reasons for the award. Id. at 524. This

suggests that the Supreme Court saw potential error in the reduction of fees based primarily on

the size of the award and without consideration of the nature and importance of the subject

matter.

          We find such an error here, where the court failed to consider the nature and importance

of the subject matter and instead relied principally on the size of the verdict in measuring

DeWalt’s degree of success. This is not to say that the size of the verdict in an MHRA case is

irrelevant. As we and other courts have stated, the degree of success is crucial. That success is

partially measured by how much of the plaintiff’s requested relief he actually recovered. But

courts must keep in mind that even small verdicts in MHRA cases may still reflect a high degree

of success when properly considered in light of the nature and importance of the subject matter

in the particular case. We note that not all civil rights claims are of the same nature or of equal

importance. Therefore, the consideration of this factor, and the others, as well as the ultimate

determination of fees requires a case-specific analysis. Nothing we say herein detracts from the

trial court’s discretion and expertise in fashioning the appropriate award in a particular case, as

long as proper consideration is given to all of the relevant factors.

                                                  7
       DeWalt also alleges the trial court erred by excluding from the award counsel’s time

spent preparing the request for fees.       We agree.      Reasonable time spent preparing fee

applications is generally compensable in federal civil rights cases, otherwise petitioning for the

fee would automatically diminish the fee eventually received. See El-Tabech v. Clarke, 616 F.3d
834, 843 (8th Cir. 2010); see also Anderson v. Office of Workers Compensation Programs, 91
F.3d 1322, 1325 (9th Cir. 1996). We find no reason not to extend that logic to MHRA cases. If

the time spent preparing the fee request is excessive, a reduction would be within the court’s

discretion. See El-Tabech, 616 F.3d at 843-44; see also Anderson, 91 F.3d at 1325. But here,

the trial court did not find that counsel spent an unreasonable amount of time preparing the fee

request; rather, it reduced the fee by the entire amount of time spent on that request thereby

providing no compensation for any of counsel’s time spent on the fee request.

       The trial court relied on Williams v. Trans States Airlines as authority for excluding time

spent preparing the fee request. 281 S.W.3d 854 (Mo. App. E.D. 2009). In that case, counsel

submitted his time for work on the fee application, and the opposing party argued that the

number of hours spent on that task was unreasonable and submitted its own calculation of total

attorneys’ fees (excluding the time spent on the fee request, among other proposed reductions).

Id. at 879. The trial court then significantly reduced the requested fees beyond the reductions

suggested by the opponent without explanation. Id. at 879-80. This Court found that such a

significant departure from the parties’ submissions without explanation was an abuse of

discretion. Id. Williams does little more than reaffirm the trial court’s general discretion in these

matters, with the limitation that a court’s reasoning needs to be explained. Nothing in that case

authorizes a trial court to completely eliminate compensation for counsel’s time preparing a fee

                                                 8
request; nor is Missouri law otherwise inconsistent with the federal case law cited above stating

that reasonable time spent on fee requests is compensable.

       Finally, DeWalt claims that the trial court refused to compensate for time speaking to the

client, which he argues conflicts with a lawyer’s ethical responsibility to communicate regularly

with the client. DeWalt mischaracterizes the trial court’s findings. The court did not “refuse” to

compensate counsel for communicating with his client; it reduced the time spent speaking to the

client and to co-counsel by $1,800. This was about half of the combined request of $3,590 for

speaking to the client, the mediator and co-counsel ($1,700 was charged for speaking to the

client and the mediator and $1,890 was charged for speaking to co-counsel). This reduction was

within the trial court’s discretion, and DeWalt has failed to show it to be an abuse thereof.

       Point II is granted in part and denied in part.

       Attorneys’ Fees on Appeal

       Fully compensating a prevailing plaintiff for prosecuting his MHRA claim to final

judgment “obviously” includes the “reasonable hours” counsel spent in connection with an

appeal. See Pollock v. Wetterau Food Distribution Group, 11 S.W.3d 754, 775 (Mo. App. E.D.

1999). Therefore, the same factors should be considered when calculating fees on appeal as are

considered when calculating fees at trial. Here, the trial court found that the case was not

complicated and did not involve novel or complex issues, that counsel’s hourly rate was

reasonable and that the number of hours submitted (over 100 hours) was not reasonable. Despite

DeWalt’s insistence that the issues on appeal were broader and more complicated than the trial

court found, we generally defer to the trial court’s opinion on this issue given its familiarity with

the history of this litigation and therefore its better understanding of how much effort, beyond

what had already been expended during the trial and post-trial proceeding, was needed to

                                                  9
complete DeWalt’s responsive brief. As DeWalt points out, however, it is unclear that the trial

court considered the “vigor” with which Davidson pursued this appeal, which would be relevant

to the amount of effort DeWalt had to put in to defending his verdict. Moreover and more

importantly, the trial court failed to take into account the fact that DeWalt was completely

successful on appeal or, again, the nature and importance of this MHRA case. These are the two

factors that our courts have highlighted as crucial to the determination of fees in human rights

cases. See Gilliland, 273 S.W.3d at 523-24; see also DeWalt, 398 S.W.3d at 507. These factors

may weigh against reducing a fee in even a straightforward appeal requiring minimal effort and

time or may, depending on the circumstances, justify a reduction. Without findings on these

factors, it is difficult for us to determine whether reducing the requested attorneys’ fees on appeal

by over 60 hours in this case was an abuse of discretion.

       Point I is granted.

       The following portions of the award of attorneys’ fees at trial are reversed and remanded:

(1) the 30% reduction and (2) the complete exclusion of fees for time spent preparing the fee

request. In all other respects, the award of attorneys’ fees at trial is affirmed. On remand, the

trial court is directed to reconsider the above portions of the award, make any additional

necessary findings and conclusions consistent with this opinion and recalculate the award if

necessary.

                                                 10
        The award of attorneys’ fees on appeal is reversed and remanded. On remand, the trial

court is directed to reconsider the award, make findings and conclusions consistent with this

opinion and recalculate the award if necessary.5

                                                              ROBERT G. DOWD, JR., Judge

Kurt S. Odenwald, P.J. and
Gary M. Gaertner, Jr., J., concur.

5
  On remand, the trial court need not consider counsel’s statement in oral argument during the first appeal to be a
“judicial admission” as DeWalt suggests we should do here. “A judicial admission is an act done in the course of
judicial proceedings that concedes for the purpose of litigation that a certain proposition is true.” Moore
Automotive Group, Inc. v. Goffstein, 301 S.W.3d 49, 54 (Mo. banc 2009). The admission must be a clear and
unqualified concession of a fact, dispensing of the need to prove that fact with evidence. See Goudeaux v. Board of
Police Commissioners of Kansas City, 409 S.W.3d 508, 519 (Mo. App. W.D. 2013); see also Self v. Brunson, 213
S.W.3d 149, 154 (Mo. App. E.D. 2006). Here, Davidson’s counsel’s statements acknowledging that counsel’s “fees
are his fees” and that “if he’s entitled to fees, he’s entitled to fees,” plus his statement “I’m not denying that he
didn’t do the work or that he charged too much” are not clear, unequivocal concessions as the amount of attorneys’
fees that should be awarded. Moreover, even if they were an admission of anything, they would constitute ordinary
admissions against interest in this proceeding because they were made in a prior proceeding. “While judicial
admissions are conclusive in the proceeding where made, when the admission is introduced in a subsequent
proceeding, the admission is not conclusive or binding and may be explained or contradicted.” Moore Automotive
Group, 301 S.W.3d at 54 (admission in prior garnishment proceeding admissible as ordinary admission against
interest in subsequent civil action). Trials and hearings held after an appeal are not the same proceeding as the
appeal. See Kansas City v. Keene Corporation, 855 S.W.2d 360, 373 (Mo. banc 1993) (statements of fact in brief on
appeal are ordinary admissions against interest in subsequent trials or hearings).

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