Present: Hassell, C.J., Keenan, Koontz, Kinser, Lemons,
and Agee, JJ., and Lacy, S.J.1
WEST SQUARE, L.L.C.
v. Record No. 062303 OPINION BY JUSTICE CYNTHIA D. KINSER
September 14, 2007
COMMUNICATION TECHNOLOGIES, INC.
FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY
Herman A. Whisenant, Jr., Judge
This appeal involves litigation that arose out of a
commercial real estate lease entered into between West
Square, L.L.C. (West Square), as landlord, and
Communication Technologies, Inc. (ComTek), as tenant. As
relevant to the issues before us, the lease in question
contained a “Costs and Attorney’s Fees” clause that
provided:
In any litigation between the parties
arising out of this Lease, and in connection with
any consultations with counsel and other actions
taken or notices delivered, in relation to a
breach of the provisions herein, the non-
prevailing party shall pay to the prevailing
party all expenses and court costs, including
reasonable attorney’s fees incurred by the
prevailing party in preparation for and (if
applicable) at trial, and on appeal, and
reasonable attorney’s fees in identifying and
resolving any breach of this Lease. Such
attorney’s fees and costs shall be payable upon
demand.
1
Justice Lacy participated in the hearing and decision
of this case prior to the effective date of her retirement
on August 16, 2007.
The primary issue before us is whether the circuit
court abused its discretion in determining the amount of
reasonable attorneys’ fees to award to West Square as the
prevailing party in litigation arising from a breach of the
lease. We conclude that the circuit court did not abuse its
discretion as to the award of attorneys’ fees. The circuit
court did, however, abuse its discretion by refusing to award
West Square certain costs and expenses.
I. RELEVANT FACTS AND PROCEEDINGS
Approximately nine months after the parties executed
the subject lease, West Square filed a three-count motion
for judgment against ComTek. In the first count asserting
breach of the lease by ComTek, West Square sought a
judgment awarding it possession of the leased premises and
monetary damages for past-due rent and other payments, as
well as an award of attorneys’ fees and costs. The other
two counts involved a contractor’s alleged claim against
ComTek for services and materials provided to construct
improvements to the interior of the leased premises. The
contractor had assigned its claim to West Square, and West
Square sought monetary damages against ComTek on a breach
of contract theory, or alternatively, on a quantum meruit
theory. In response, ComTek filed an answer, pleas in bar,
a demurrer to the quantum meruit claim, and a counterclaim
2
for West Square’s alleged “unauthorized construction of the
interior of the [leased p]remises” and breach of its
covenant of quiet enjoyment.
The circuit court overruled ComTek’s demurrer, and the
case proceeded to trial. At the beginning of the second
day of trial, West Square non-suited the two construction
claims assigned to it by the contractor. Finding that
ComTek had, in fact, breached the lease, the circuit court
ruled in favor of West Square on its remaining claim for
breach of the lease and also on ComTek’s counterclaim
(collectively, the lease dispute). The court awarded
damages to West Square in the amount of $35,442.78 plus
interest.2
Pursuant to an agreed pretrial order bifurcating the
determination of attorneys’ fees and the trial on the
merits, West Square then filed an application for
attorneys’ fees and expenses. West Square attached to the
application an affidavit from its lead attorney, which,
among other things, summarized the hours of legal services
provided to West Square by seven of the law firm’s
attorneys along with their respective hourly rates. The
hours of legal services rendered and the hourly rates
2
ComTek did not challenge, by cross-error or
otherwise, the circuit court’s award of damages to West
Square.
3
charged ranged from 162.8 hours at the rate of $325 per
hour to 0.6 hours at the rate of $165 per hour. The
affidavit also listed 1.4 hours of paralegal services
billed at the rate of $85 per hour.
West Square also included with its application
summaries of the qualifications of each attorney who
provided legal services to West Square, a synopsis
detailing the legal services represented to have been
rendered to West Square regarding the lease dispute, a list
of costs and expenses incurred by West Square, and copies
of the itemized billing statements sent to West Square
showing all the legal fees West Square incurred in its
disputes and litigation with ComTek. According to West
Square, the itemized billing statements demonstrate that it
excluded from the attorneys’ fee application the legal
services rendered with regard to the non-suited claims.
West Square requested an award of attorneys’ fees in the
amount of $64,578.00 for approximately 223.30 hours of
legal services and an award for costs and expenses in the
amount of $5,074.70.3
3
The costs and expenses included $4,390.60 for
depositions, $150.00 for a court reporter at the trial,
$175.00 for serving witness subpoenas, $93.00 for filing
the motion for judgment, and $266.10 for miscellaneous
expenses.
4
ComTek filed a memorandum opposing West Square’s
application for attorneys’ fees and expenses. ComTek
centered its objection on West Square’s failure to
segregate its requested attorneys’ fees and expenses
associated with the lease dispute from those incurred with
regard to the non-suited claims. Relying on this Court’s
decision in Ulloa v. QSP, Inc., 271 Va. 72, 83, 624 S.E.2d
43, 50 (2006), ComTek asserted that “[w]here multiple
claims exist, only one of which permits the recovery of
attorney’s fees, the party requesting attorney’s fees must
fairly and reasonably separate out its attorney’s fees with
specificity.”
In its opposition papers, ComTek submitted its own
tabulation of West Square’s time and work entries found in
the detailed billing records that were produced as part of
the fee application. ComTek allocated the items according
to its interpretation of the claims to which the activity
was related and argued that only about 32.90 hours of legal
services, representing attorneys’ fees of $8,828.00, were
separately and specifically identified in West Square’s
application as relating solely to the lease dispute. In
contrast, according to ComTek, the bulk of the time entries
contained no delineation between the lease dispute and the
non-suited claims. ComTek further asserted that about 17
5
hours were billed to West Square for multi-lawyer
conferences, which ComTek claimed did not pertain solely to
the lease dispute and/or were a duplication of effort.
In furtherance of its position that the amount of
requested attorneys’ fees was unreasonable, ComTek pointed
out that, prior to trial, the parties had filed only three
pleadings in the case, that only one motion, ComTek’s
demurrer, was heard by the circuit court, and that the
demurrer was not related to the lease dispute. ComTek also
noted that only two of the eleven interrogatories it
propounded and only three of its thirty-seven requests for
production of documents pertained solely to the lease
dispute. The attorneys’ fees application, according to
ComTek, also did not take into account the complexity of
the non-suited claims versus the simplicity of the lease
dispute. ComTek asserted that West Square’s alleged
damages for ComTek’s breach of the lease “involved a
straightforward calculation of $2,000 per month rent,
approximately $300 per month in common area maintenance
charges, a late charge, interest and a leasing commission
of $5,583.48,” and “required one witness’s testimony
. . . , the admission of [the lease], and one or two other
documents related to common area maintenance charges.”
ComTek asked the circuit court to compare the case at bar
6
where, “[a]s evidenced by the pleadings and the total
absence of any contentious pre-trial motions, the lease
dispute did not require complicated or extensive effort,”
with the situation in Chawla v. BurgerBusters, Inc., 255
Va. 616, 499 S.E.2d 829 (1998), “where[, according to
ComTek,] more than 300 pleadings were filed, 15 to 20
depositions were taken, . . . approximately 50 distinct
motions were filed[, and t]hirty separate court hearings
were conducted, including a seven-day trial.”
ComTek challenged the requested costs and expenses for
similar reasons. For example, ComTek claimed that the
depositions dealt with matters pertaining to all the claims
asserted by West Square, not just the lease dispute. It
further asserted that, as with the attorneys’ fees, West
Square failed to specify those costs and expenses incurred
solely in relation to the lease dispute.
In a reply memorandum, West Square appended a
supplemental affidavit from its lead attorney. In that
affidavit, West Square’s attorney stated that, upon further
review of the challenged billing entries, he concluded that
the amount of $7,320.00 should be deducted from the
original total sum of attorneys’ fees requested in the
application because that amount was not clearly related to
the lease dispute. At the same time, however, West Square
7
contended that it was entitled to recover the additional
sum of $8,860.15 for attorneys’ fees incurred subsequent to
filing the original application for attorneys’ fees and
expenses. West Square thus sought attorneys’ fees and
expenses for the amended sum of $71,380.70.4
Following oral argument by counsel, the circuit court
first noted that West Square had been awarded approximately
$35,000 on the merits of the case. The court then stated
that “the total cost, which is over $80,000 in attorneys’
fees, over $5,000 in expenses, is certainly a figure that
is too high for this case. I would be remiss not to go on
the record saying that.” The circuit court found the
amount of attorneys’ fees and costs requested by West
Square “to be exorbitant . . . consider[ing] the amount
sued for.” The court explained: “It’s called ‘reasonable
attorneys’ fees.’ It doesn’t say ‘attorneys’ fees,’ but
‘reasonable.’ ”
In reaching its decision, the circuit court indicated
that it had considered the cases cited by West Square’s
4
West Square also submitted with the reply memorandum
an affidavit from Timothy M. Purnell, who opined as an
expert on the issue of attorneys’ fees in commercial
landlord-tenant litigation. Purnell stated that, in his
opinion, the requested attorneys’ fees and expenses “were
customary, reasonable and necessary to prosecute the breach
of lease case and to defend against the counterclaim of the
tenant.”
8
counsel, along with “the type of case” and “the amount sued
for.” The court concluded that “reasonable attorneys’ fees
for this case, in the time that we could have tried the
case, [was] $10,000.” The circuit court further ruled that
it was not awarding any costs or expenses to West Square.
This appeal ensued.
II. ANALYSIS
On appeal, West Square asserts that the circuit court
erred by awarding it “only a small fraction of the
attorney’s fees and none of the expenses and court costs
incurred by the prevailing party.” On appeal, we will set
aside a trial court’s determination of the amount of
attorneys’ fees to be awarded only if the court abused its
discretion. Schlegel v. Bank of America, 271 Va. 542, 550,
628 S.E.2d 362, 366 (2006); Holmes v. LG Marion Corp., 258
Va. 473, 479, 521 S.E.2d 528, 533 (1999). We will first
discuss the circuit court’s award of attorneys’ fees to
West Square and then turn to its decision to award no
amount for costs and expenses.
A. Attorneys’ Fees
“Under the so-called ‘American rule,’ a prevailing
party generally cannot recover attorneys’ fees from the
losing party.” Ulloa, 271 Va. at 81, 624 S.E.2d at 49
(citing Lee v. Mulford, 269 Va. 562, 565, 611 S.E.2d 349,
9
350 (2005)). This rule, however, does not prevent parties
to a contract from adopting provisions that shift the
responsibility of attorneys’ fees to the losing party in
disputes involving the contract. See id.; Mullins v.
Richlands Nat’l Bank, 241 Va. 447, 449, 403 S.E.2d 334, 335
(1991). Here, the “Costs and Attorneys’ Fees” clause at
issue was such a contractual provision. It provided that,
in the event of litigation arising out of the lease, the
“non-prevailing party” would have to pay all expenses,
costs, and reasonable attorneys’ fees incurred by the
“prevailing party.” Since West Square was the prevailing
party on the lease dispute, see Sheets v. Castle, 263 Va.
407, 413, 559 S.E.2d 616, 620 (2002) (a “prevailing party”
is the “party in whose favor a judgment is rendered,
regardless of the amount of damages”), the circuit court
correctly awarded attorneys’ fees to West Square. The
question before us, however, is whether the court abused
its discretion in determining the amount of reasonable
attorneys’ fees.
A prevailing party who seeks to recover attorneys’
fees pursuant to a contractual provision such as the one
before us has the burden to present a prima facie case that
the requested fees are reasonable and that they were
necessary. Chawla, 255 Va. at 623, 499 S.E.2d at 833; see
10
also Seyfarth, Shaw, Fairweather & Geraldson v. Lake
Fairfax Seven Ltd. P’ship, 253 Va. 93, 96, 480 S.E.2d 471,
473 (1997). We have identified several factors that are
relevant to the determination of reasonableness:
[A] fact finder may consider, inter alia, the
time and effort expended by the attorney, the
nature of the services rendered, the complexity
of the services, the value of the services to the
client, the results obtained, whether the fees
incurred were consistent with those generally
charged for similar services, and whether the
services were necessary and appropriate.
Chawla, 255 Va. at 623, 499 S.E.2d at 833; accord Ulloa,
271 Va. at 82, 524 S.E.2d at 49; Mullins, 241 Va. at 449,
403 S.E.2d at 335. Under a contractual provision like the
one at issue, however, a prevailing party “is not entitled
to recover fees for work performed on unsuccessful claims.”
Ulloa, 271 Va. at 82, 624 S.E.2d at 49 (citing Chawla, 255
Va. at 624, 829 S.E.2d at 833).
West Square asserts that all its attorneys’ fees were
reasonable and necessary and that the circuit court should,
therefore, have awarded it the full amount requested. In
the alternative, West Square argues that the circuit court
should have articulated its findings on the various factors
set forth in Chawla and identified the specific legal
services that were not reasonable and necessary. West
Square claims that the circuit court, instead of performing
11
such an analysis, arbitrarily awarded it an amount of
attorneys’ fees that was less than one-third of the amount
of damages it recovered. In doing so, the court, according
to West Square, considered only the large amount of
attorneys’ fees requested in relation to the type of case
and the amount for which West Square sued. We do not agree
with West Square’s position.
As both parties note, this Court has identified
several factors that a fact-finder “may consider” in
determining the amount of reasonable attorneys’ fees to be
awarded to a prevailing party. Chawla, 255 Va. at 623, 499
S.E.2d at 833. We have not, however, stated that a fact-
finder must consider all these factors in every situation.
See Connors v. Connors, 594 S.W.2d 672, 676 (Tenn. 1980)
(identifying factors to be used as “guides in fixing a
reasonable attorney’s fee”). But see Barber v. Kimbrell’s,
Inc., 577 F.2d 216, 226 (4th Cir. 1978) (“[twelve] factors
must be considered by district courts in [the Fourth
Circuit] in arriving at a determination of reasonable
attorneys’ fees”) (emphasis added). And, we decline to do
so today. In the determination of reasonable attorneys’
fees, particular factors may have added or lessened
significance depending on the circumstances of each case.
12
Nonetheless, the record demonstrates that both
West Square and ComTek, in arguing their respective
positions before the circuit court, presented and
discussed the several factors that may be considered
in determining reasonable attorneys’ fees. When
announcing its decision, the circuit court stated that
it had considered the cases cited by West Square. The
court also had before it West Square’s detailed
application for attorneys’ fees, along with ComTek’s
particularized objections to the reasonableness of the
amount requested, including the assertion that West
Square failed to segregate the legal services rendered
solely with regard to the lease dispute from the
services provided for the non-suited claims. While
the circuit court may not have articulated a finding
with regard to each of the factors we identified in
our prior cases, see Chawla, 255 Va. at 623, 499
S.E.2d at 833; Mullins, 241 Va. at 449, 403 S.E.2d at
335, the court did, however, note the factors it found
relevant in deciding the reasonableness of West
Square’s requested attorneys’ fees. As the fact-
finder, the circuit court had to determine “from the
evidence what [were] reasonable fees under the facts
and circumstances of [this] particular case.”
13
Mullins, 241 Va. at 449, 403 S.E.2d at 335. In light
of the record before the circuit court, we cannot say
that the court abused its discretion in consideration
of appropriate factors and in fixing the amount of
attorneys’ fees it awarded to West Square.
B. Costs and Expenses
West Square also contends that the circuit court erred
in refusing to award it any costs or expenses. We agree.
As we have already stated, West Square was the “prevailing
party” at trial. Therefore, ComTek, as the “non-prevailing
party,” was required under the “Costs and Attorney’s Fees”
clause of the lease to pay West Square “all expenses and
court costs” in connection with “any litigation between the
parties arising out of” the lease.
ComTek, however, contends West Square failed to
segregate its costs and expenses associated with the lease
dispute from those incurred with regard to the non-suited
claims. Our holding in Ulloa regarding the burden to
specify attorneys’ fees associated with a particular claim
for which an award of attorneys’ fees is allowed applies
with equal force to a request for an award of costs and
expenses. Even though claims may be intertwined and have a
common factual basis, West Square, as the party seeking an
award of costs and expenses, had “the burden to establish
14
to a reasonable degree of specificity” those costs and
expenses associated with the lease dispute. Ulloa, 271 Va.
at 83, 624 S.E.2d at 50. It did not do so with respect to
certain requested costs and expenses.
Based on the record before us, we conclude that West
Square is entitled to recover from ComTek the filing fee of
$93.00, the process fees for serving witness subpoenas
totaling $175.00, and the court reporter expense of
$150.00. With regard to the requested expenses for
depositions and miscellaneous items, West Square did not
“establish to a reasonable degree of specificity” what
portion of those expenses were incurred with regard to the
lease dispute, as opposed to the non-suited claims. Id.
West Square “is not entitled to recover [expenses] for
. . . unsuccessful claims.” Id. at 82, 524 S.E.2d at 49
(citing Chawla, 255 Va. at 624, 829 S.E.2d at 833).
Therefore, we hold that the circuit court abused its
discretion by refusing to award costs and expenses for the
filing fee, the service of process fees, and the court
reporter expense. The circuit court did not abuse its
discretion in refusing to award West Square the remainder
of its requested costs and expenses.
III. CONCLUSION
15
For these reasons, we will affirm the judgment of the
circuit court with regard to the amount of its award of
attorneys’ fees to West Square. We will reverse the
judgment of the circuit court only with regard to its
refusal to award West Square its costs and expenses for the
filing fee, the service of process fees, and the court
reporter expense. Because the dollar amounts of those
items are in the record before us and are not disputed, we
will enter final judgment here in favor of West Square in
the amount of $418.00.
We must now address one final matter. West Square
requests an additional award of attorneys’ fees, costs and
expenses under the terms of the “Costs and Attorney’s Fees”
clause allowing an award of “expenses and court costs,
including reasonable attorney’s fees incurred by the
prevailing party . . . on appeal.” We hold that West
Square is not entitled to such an award because it is not
the “prevailing party” on appeal. In Sheets, we stated
that in reaching an interpretation of the term “prevailing
party,” “[w]e need not go farther than Black’s Law
Dictionary for its common meaning: ‘A party in whose favor
a judgment is rendered, regardless of the amount of damages
awarded.’” 263 Va. at 413, 559 S.E.2d at 620. On the
primary issue regarding the amount of the circuit court’s
16
award of attorneys’ fees, West Square is not the recipient
of a judgment in its favor on appeal.
ComTek also requests an award of attorneys’ fees,
costs and expenses incurred in this appeal. Unlike West
Square, ComTek is the prevailing party on the primary issue
before us. Thus, we will remand this case to the circuit
court for a determination of reasonable attorneys’ fees,
costs and expenses incurred by ComTek in this appeal.
Affirmed in part,
reversed in part,
and remanded.
17