Court Opinion

ID: 892340
Source: CourtListenerOpinion
Date Created: 2013-06-05 18:38:01.412041+00
Date Added: 2024-06-11T15:25:23.093966
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number: 2010-NMCA-076

Filling Date: June 29, 2010

Docket No. 29,247

CYNDI C. DEAN,

       Plaintiff-Appellee,

v.

MARCO BRIZUELA,

       Defendant-Appellant.

APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Richard J. Knowles, District Judge

Sanchez, Mowrer & Desiderio, P.C.
Frederick M. Mowrer
Albuquerque, NM

for Appellee

John V. Nilan, LLC
John V. Nilan
Albuquerque, NM

for Appellant

                                       OPINION

VIGIL, Judge.

{1}     This case involves attorney fees under the Unfair Trade Practices Act (UPA), NMSA
1978, Sections 57-12-1 to -22 (1967, as amended through 2009). Plaintiff was successful
on certain claims brought against Defendant, but not the UPA claim. The metropolitan court
(trial court) judge ruled that Defendant was only entitled to attorney fees incurred in
defending the UPA claim. Since Defendant did not identify what portion of his fee was
attributable to defending the UPA claim, the trial court judge ruled that Defendant was not
entitled to any attorney fees. We affirm.

                                            1
FACTS

{2}    Plaintiff sold Defendant a motorcycle. In a complaint filed in the trial court, Plaintiff
sued for rescission of the contract and for damages, alleging disputes concerning repairs
Defendant made to the motorcycle, damage to the motorcycle, and a return of the motorcycle
without all its parts. Defendant denied the material allegations of the complaint and filed a
counterclaim, alleging in part that Plaintiff was unjustly enriched by repairs he made to the
motorcycle and that Plaintiff committed extortion by reporting the dispute to Defendant’s
probation officer. Plaintiff denied Defendant was entitled to relief under his counterclaims.
Defendant then filed a motion for summary judgment, and after Plaintiff responded, the trial
court denied the motion.

{3}    The trial court then granted Plaintiff leave to file an amended complaint to add a
claim for intentional infliction of emotional distress and attorney fees. The amended civil
complaint, filed on August 30, 2007, repeated the essential allegations of the original
complaint, added a claim for intentional infliction of emotional distress, and a claim for
attorney fees pursuant to the UPA. The claim for attorney fees alleged:

       Defendant represented himself [as] a mechanic familiar with and capable [of]
       making repairs on the motorcycle; defendant threatened to double the charges
       for the costs of repairs allegedly made; he threatened and verbally abused the
       plaintiff in an effort to collect the fees for the work he allegedly performed;
       defendant submitted false and fabricated bills; in doing the acts alleged
       herein the defendant engaged in unfair or unconscionable trade practices in
       violation of the [UPA]. Said violations entitle the plaintiff to an award of
       treble damages and attorney fees.

Defendant denied the material allegations of the amended complaint, alleged six affirmative
defenses, and three counterclaims, one of which was that Defendant was entitled to attorney
fees and costs pursuant to the UPA, because, asserted Defendant, Plaintiff’s claim under the
UPA “is baseless.”

{4}     Following trial, the trial court announced its decision, granting rescission of the
contract and awarding Plaintiff damages. As to Plaintiff’s UPA claim, the trial
court stated that Plaintiff was required to prove that Defendant was acting in the regular
course of his business, there was no proof that he was in the business of motorcycle repairs,
and he was clearly not acting in such a capacity. On this basis, the trial court ruled that the
UPA claim was “baseless” and under the UPA, Defendant was entitled to attorney fees and
costs. However, the trial court also ruled that Defendant was entitled to attorney fees for
only the work expended in defense of the UPA claim, which was not much. The trial court
directed Defendant’s attorney to prepare a bill reflecting only his time in defending the UPA
claim.

                                               2
{5}      Following trial, Plaintiff conceded she “did not prove that Defendant was engaged
in the regular course of his trade or commerce” as required by the UPA to warrant an award
of attorney fees. Consistent with the trial court’s ruling, Plaintiff asked the trial court to
conclude as a matter of law, “Defendant is awarded attorneys fees only for the time
associated with the defense of Plaintiff’s Unfair Practices Claim. Defendant will submit an
affidavit of attorneys fees setting forth the time spent in the defense of the Unfair Practices
Claim.”

{6}      Defendant asked the trial court to “grant” Defendant’s counterclaim for attorney fees
and costs pursuant to Section 57-12-10(C) because Plaintiff’s “claim for violation of the
[UPA] was groundless.” However, counsel made no attempt to comply with the directive
of the trial court concerning attorney fees. Instead, counsel submitted an attorney affidavit
for attorney fees seeking payment of his total bill from the beginning of the case, plus tax,
in the amount of $7,137.15. Counsel asserted:

       Defendant’s attorneys fees and expenses are reasonable because of the
       nature of the multiple claims, the multiple claims of the Plaintiff, the
       nature of the claims of the Plaintiff and the counterclaims of the
       Defendant and the attempt to resolve the matter at the earliest stages of
       the case through motion to dismiss and affirmative defenses. In relation
       to the experience of the Defendant’s counsel and the time spent, the time
       expended by the Defendant’s counsel has been reasonable and necessary.
       All the issues raised by the Plaintiff were contested by the Defendant.
       The Plaintiff raised groundless claims to assert claims for punitive
       damages and attorney fees and costs where none were cognizable [by]
       law.

Plaintiff objected to Defendant’s attorney fee affidavit in part because:

       Defense Counsel completely ignores the ruling of [the c]ourt by filing the
       Affidavit seeking an award of all attorney’s fees and costs associated
       with this case. This is [in] direct disregard of the [court’s] ruling, which
       only awarded Defendant attorneys fees for time counsel spent in defense
       of Plaintiff’s claim under the [UPA].

Moreover, Plaintiff stated,

       [Nowhere] in the eleven pages of bills submitted by Defense Counsel is
       there a reference to research, pleadings or any work related to defending
       the Unfair Practice Claim raised by Plaintiff. Therefore, Defense
       Counsel has failed to support an award of any fees as related to the
       defense of the [UPA] as ordered by the [c]ourt.

                                              3
{7}      The trial court held a hearing on Plaintiff’s objection to Defendant’s attorney fee
affidavit. Defendant’s counsel argued that because the statute is mandatory in requiring
attorney fees to be awarded when it is operative, because the UPA was commingled with all
the other claims and the “real” claim litigated was the UPA claim, it was unfair to require
him to parse out his time in defending the UPA claim. While now conceding that the UPA
claim was not made until the amended complaint was filed on August 30, 2007, Defendant
continued to assert that the entire fee charged from that date forward should be awarded.
Thus, the fee requested was reduced from $7,137.15 to $5,566.08. The trial court stated that
if counsel’s position was that he was entitled to the entire amount or nothing at all, he was
not entitled to any attorney fees because the single issue under the UPA was whether
Defendant was acting in the capacity of his business. Counsel objected, stating that the
statute is mandatory in stating that attorney fees “shall” be awarded when it is triggered, and
it is “disingenuous” for counsel to submit a bill to the client, and a different one, parsed, to
the court.

{8}      The findings of fact and conclusions of law and judgment of the trial court reflect that
the trial court granted attorney fees under the UPA because Plaintiff’s UPA claim had no
basis in that Defendant was not acting in the regular course of his trade or commerce when
he worked on the motorcycle he purchased. The trial court specifically found, “[t]he claim
under the [UPA] had no basis upon which to base a claim.” The trial court was also well
aware of the mandatory provision of Section 57-12-10(C). The trial court quoted the statute
in its decision: “The court shall award attorneys’ fees and costs to the party charged with
an unfair or deceptive trade practice or an unconscionable trade practice if it finds that the
party complaining of such trade practice brought an action which was groundless.” The
court also summarized Defendant’s argument: “Defendant believes that the language in
[Section 57-12-10(C)] means all attorney fees shall be paid by the party asserting a claim
under the [UPA] if the defending party is successful in defending the claim under [the UPA]
even if they were not successful in defending other claims asserted in the complaint.” The
trial court further found that it would award attorney fees only for time spent in defending
the UPA claim, that the amount of time spent in defending the UPA claim would be minimal,
that Defendant’s counsel did not provide a bill separating time spent defending the UPA
claim from the rest of the claims, and that Defendant’s counsel believed the amount could
not be separated out. Thus, the trial court concluded as a matter of law:

        Defendant was awarded, in theory, attorney fees for the minimal time his
        attorney would have expended on defending the [UPA] claim but no amount
        was in fact awarded because the attorney did not separate out the time spent
        on defending the [UPA] claim from the other claims.

{9}     Defendant appealed to the district court, and the district court affirmed. The district
court reasoned that while Section 57-12-10(C) of the UPA is mandatory upon a successful
defense of a UPA claim and a finding that bringing the UPA claim was groundless, the
statute does not require payment of attorney fees for the unsuccessful defense of other non-
UPA claims brought by a plaintiff. Stated another way, “[t]he [UPA] is a consumer

                                               4
protection act; the [c]ourt does not discern a legislative intent in the attorney fees provision
to punish a plaintiff with a losing [UPA] claim by making her pay attorney fees for other
claims that were successful.” Further, the district court noted, counsel failed to submit a
reasonable amount for the work performed in defending the UPA claim, and the trial court
was not required to calculate an attorney fee on its own. Therefore, concluded the district
court, the trial court did not abuse its discretion by refusing to award all attorney fees or by
refusing to make its own calculation of the work spent by defense counsel in defending the
UPA claim.

{10}   Defendant again appeals, and we also affirm.

DISCUSSION

{11} On appeal, our review is limited to determining whether the trial court abused its
discretion. See Jaramillo v. Gonzales, 2002-NMCA-072, ¶ 38, 132 N.M. 459, 50 P.3d 554.
Defendant argues that upon a finding that a UPA claim is “groundless,” Section 57-12-10(C)
requires an award of attorney fees and costs in favor of the defending party. Therefore,
asserts Defendant, it was an abuse of discretion to award no attorney fees.

{12} Defendant makes two separate arguments on how the fees should have been
calculated. First, Defendant asserts that because the trial court heard the case on the merits,
and was intimately aware of the nature of the claims and defenses, the trial court was able
to review the claim for attorney fees and determine the amount of recoverable attorney fees.
Secondly, Defendant argues he was entitled to an award of all the attorney fees generated
from the time the amended complaint was filed and the UPA claim was first asserted, to the
conclusion of the trial.

{13} Plaintiff argues that whether attorney fees are mandatory is not the issue; but rather,
the issue is whether the trial court abused its discretion when Defendant failed to support his
claim for attorney fees by specifying in any manner what fees were incurred in defending
against Plaintiff’s UPA claim. We agree with Plaintiff’s statement of the issue before us.

{14} We conclude that the burden was upon Defendant to segregate the fees charged in
defending the UPA claim or to demonstrate that it was difficult or impossible to segregate
the work in defending the UPA claim from Plaintiff’s other claims and Defendant’s own
counterclaims. Since Defendant did not do either, we conclude the trial court did not abuse
its discretion and affirm.

{15} It is well settled that in the absence of statutory authority, or a rule of court, attorney
fees are not recoverable as an element of damages. Hiatt v. Keil, 106 N.M. 3, 4, 738 P.2d
121, 122 (1987). An additional exception is when a contract provides for an award of
attorney fees. See In re N.M. Indirect Purchasers Microsoft Corp., 2007-NMCA-007, ¶ 19,
140 N.M. 879, 149 P.3d 976 (“A contract providing for attorney fees is enforceable.”).

                                               5
{16} Thus, it has long been the rule in New Mexico that a party is only entitled to those
fees resulting from the cause of action for which there is authority to award attorney fees.
See Hiatt, 106 N.M. at 4, 738 P.2d at 122 (adopting the rule that a party is entitled “‘only to
those fees resulting from its principal cause of action for which there is a contractual (or
statutory) obligation for attorney’s fees’”) (quoting Utah Farm Prod. Credit Ass’n v. Cox,
627 P.2d 62, 66 (Utah 1981)). Where a party has asserted a claim for which attorney fees
are authorized and has also been required to defend a counterclaim for which no attorney
fees are authorized, our courts have not adhered to a rigid rule that attorney fees may never
be awarded for defending the counterclaim, but “we do caution that it should be the
exception and not the rule to do so.” Hiatt, 106 N.M. at 4-5, 738 P.2d at 122-23.

{17} Our Supreme Court has continued to direct that recoverable fees be segregated from
non-recoverable fees to ensure that only those fees for which there is authority to award
attorney fees are in fact awarded. In Hinkle, Cox, Eaton, Coffield & Hensley v. Cadle Co.,
115 N.M. 152, 157-58, 848 P.2d 1079, 1084-85 (1993), the trial court awarded attorney fees
to the plaintiff for work related both to the prosecution of its action on an open account, for
which attorney fees are authorized, and to its defense on the defendant’s counterclaim for
an account stated, for which an award of attorney fees is not authorized. The Supreme Court
reversed the summary judgment in the plaintiff’s open account claim. Id. at 158, 848 P.2d
at 1085. This in turn also required a reversal of the attorney fees awarded because the statute
authorizing attorney fees in an action on open account did not also authorize an award of
attorney fees in an action for an account stated. Id. The Court added:

       Some of the work may be inextricably intertwined, making it difficult or
       impossible to segregate some of the time worked on the complaint from work
       related to the counterclaims. Nevertheless, the trial court should attempt to
       distinguish between the two types of work to the extent possible.
       Accordingly, we vacate the entire award of attorney’s fees. If, on remand,
       [the plaintiff] prevails on its complaint and the trial court awards a reasonable
       attorney’s fee, the award should be limited, to the extent feasible, to work
       related to prosecution of the complaint.

Id.

{18} We have also adhered to these requirements. For example, in Jaramillo, the trial
court determined that only a portion of the attorney fees requested by the plaintiffs were
related to the UPA claim which they succeeded in prosecuting and, accordingly, made a
reduction to the amount claimed. 2002-NMCA-072, ¶ 38. On appeal, we said that the trial
court was required to review the request for attorney fees “and determine what portion of the
work done was attributable to the UPA claim.” Id. ¶ 39. However, the plaintiffs asserted
that there was no evidence that the UPA claims were separate or could be separated from the
other claims, that the entire case was based on the defendant’s conduct which supported the
UPA claim, and that the burden was on the defendant to show that the time was separable.
We disagreed:

                                              6
       Once Plaintiffs made their claim for the attorney fees, it was left to the
       discretion of the trial court to make the award based upon Plaintiffs’ proof of
       the reasonableness of the fees. The [defendant] did not have to object to the
       time or show that it was separate. It was for the trial court to review the
       claim made by Plaintiffs and in its discretion determine what fees to award.
       We cannot say that the trial court abused its discretion by reducing the
       request for attorney fees to that amount relating solely to the UPA claim.

Id. ¶ 41. In J. R. Hale Contracting Co. v. Union Pacific Railroad, 2008-NMCA-037, ¶¶ 92,
95, 143 N.M. 574, 179 P.3d 579, we agreed that an award of attorney fees under a statutory
claim which allows an award for attorney fees, which is joined with non-statutory claims
must be limited to the work done on the statutory claim. We acknowledged that in certain
cases it could be difficult or impossible to segregate the work performed on different claims
because such work was “inextricably intertwined.” Id. ¶ 95 (internal quotation marks and
citation omitted). The burden of showing this to be the case at the trial court level and on
appeal is with the attorney who seeks the attorney fee award. Id.

{19} Defendant made no showing of any kind to the trial court what portion of the attorney
fees charged was attributable to defending the UPA claim or why it was difficult or
impossible to segregate the work in defending the UPA claim from Plaintiff’s other claims
and Defendant’s own counterclaims. Under these circumstances we conclude the trial court
did not commit an abuse of discretion in refusing to award Defendant attorney fees for
successfully defending the UPA claim.

CONCLUSION

{20}   The order of the district court which affirms the order of the trial court is affirmed.

{21}   IT IS SO ORDERED.
                                              _____________________________________
                                              MICHAEL E. VIGIL, Judge

WE CONCUR:

_____________________________________
MICHAEL D. BUSTAMANTE, Judge

_____________________________________
RODERICK T. KENNEDY, Judge

Topic Index for Dean v. Brizuela, Docket No. 29,247

CM                     COMMERCIAL LAW
CM-AF                  Attorney Fees

                                             7
CM-UP   Unfair Practices Act

MS      MISCELLANEOUS STATUTES
MS-UP   Unfair Practices Act

                               8