Holmes v. LG Marion Corp.

Present: All the Justices

TERONNIE HOLMES

v. Record No. 982638 OPINION BY JUSTICE ELIZABETH B. LACY
November 5, 1999
LG MARION CORPORATION

FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY
Frank A. Hoss, Jr., Judge

In this appeal, Teronnie Holmes challenges the amount of

the damage and attorneys' fee awards entered in his favor

against LG Marion Corporation (LG Marion) for a willful

violation of the Virginia Consumer Protection Act (VCPA), Code

§§ 59.1-196 through –207. Holmes also asserts that the trial

court erred in striking Holmes' claim for a violation of the

Magnuson-Moss Warranty Act (the Warranty Act), 15 U.S.C.

§ 2301, et seq. (1996). We will affirm the judgment of the

trial court because we conclude that the trial court did not

abuse its discretion in determining the amount of the

attorneys' fee award or in refusing to enhance the amount of

actual damages pursuant to Code § 59.1-204. Although the

trial court erred in striking Holmes' claim for a violation of

the Warranty Act, such error was harmless.

On March 21, 1996, Holmes purchased a 1989 Isuzu Impulse

Turbo automobile from LG Marion. The Isuzu had previously

been owned by Rian Kirkman. In 1993, when Kirkman purchased

the vehicle for $5,790, the odometer showed 27,941 miles.

According to Kirkman, the vehicle leaked oil "like a sieve,"
emitted white smoke from the tailpipe, the transmission made

noises, and he had performed little maintenance on the

vehicle. In 1996, Kirkman sold the vehicle to Tyson's Ford

for a trade-in cash value of $1,600. LG Marion purchased the

vehicle from Tyson's Ford for $2,100.

Prior to his purchase, Holmes visited the dealership and

test drove the vehicle with Marion Cloud, the owner and

principal salesman of LG Marion. Holmes asked Cloud about a

"whining noise" coming from the vehicle. Cloud told Holmes

the noise was the sound of the turbo-charged engine. Holmes

again asked about the "whining noise" when he returned to

purchase the vehicle, and was again told that it was the sound

of the engine.

Holmes paid $5,695 for the vehicle and $795 for the

"Wynn's Product Warranty Program." This program was described

as a "limited warranty agreement" between Holmes and Wynn Oil

Company. It provided for reimbursement to Holmes by Wynn of

up to $3,000 for certain costs incurred to repair or replace

parts for two years following the purchase of the vehicle.

Holmes also received a "Buyers Guide" indicating that the

vehicle was being sold without a service contract and "as is;"

however, Holmes was not asked to and did not sign an

acknowledgement in the "Buyer's Guide" stating that the

vehicle was sold "as is." At the time Holmes purchased the

vehicle, the odometer showed 83,945 miles.

2
 Within a few days of the purchase, while changing the oil

in the vehicle, Holmes discovered that the oil had turned

black. Following a trip to Kentucky in early April, the

vehicle began to emit smoke, make noises, shake, and use large

quantities of oil. According to Holmes, the vehicle ran "like

a lawnmower." LG Marion refused Holmes' request to repair the

vehicle. At this point, the odometer showed over 89,700

miles. In May, Holmes took the vehicle to an Isuzu dealership

and was told that the whining noise came from the

transmission, and that the engine, transmission, and exhaust

systems required overhaul or replacement. The dealership

estimated the cost of these repairs to be at least $5,000.

Holmes did not seek repair under the Wynn's Product Warranty

Program. The vehicle subsequently stopped running.

Holmes filed a motion for judgment against LG Marion

alleging a violation of the Warranty Act, common law fraud,

constructive fraud, violations of the VCPA, and breach of

contract. At a bench trial, following presentation of Holmes'

liability evidence, the trial court granted LG Marion's motion

to strike Holmes' claim under the Warranty Act. At the close

of all evidence, the trial court awarded Holmes $4,000 in

actual damages, and found that LG Marion had willfully

violated the VCPA by misrepresenting the condition of the

vehicle to Holmes prior to the sale. The trial court denied

Holmes' motion seeking reconsideration of its ruling striking

3
his Warranty Act claim and refusing to increase the damage

award under Code § 59.1-204(A) of the VCPA.

Following this ruling, the parties presented further

evidence and argument to the trial court on Holmes' request

for $18,532 in attorneys' fees, $1,389.81 in costs, pursuant

to Code §§ 59.1-204(B), 14.1-178, and -198, and $2,757.30 in

attorneys' fees and costs as sanctions under Rule 4:12(c). 1

The trial court awarded Holmes $4,000 in attorneys' fees

pursuant to Code § 59.1-204(B), and $1,500 in costs pursuant

to Code §§ 14.1-178 and -198, and Rule 4:12(c).

On appeal Holmes assigns error to the actions of the

trial court in failing to increase the damage award under Code

§ 59.1-204(A) to reflect LG Marion's willful violation of the

VCPA, in "limiting Mr. Holmes' attorneys' fees under Code

§ 59.1-204(B) to his awarded damages," and in striking his

claim under the Warranty Act.

I. Enhanced Damages

Holmes does not challenge the amount of actual damages

awarded by the trial court. He asserts, however, that the

trial court should have trebled the $4,000 actual damage award

because it found that LG Marion engaged in a "willful"

violation of the VCPA. Holmes bases his request on Code

1
Code §§ 14.1-178 and -198 were repealed in 1998. Code
§§ 17.1-601 and -626, effective October 1, 1998, are the
successor statutes, respectively, and contain no substantive

4
§ 59.1-204(A), which states that "[i]f the trier of fact finds

that the violation [of the VCPA] was willful, it may increase

the damages to an amount not exceeding three times the actual

damages sustained, or $1,000, whichever is greater." Code

§ 59.1-204(A). This section, Holmes asserts, represents the

General Assembly's intent that willful violators of the VCPA

suffer a punitive sanction in the form of enhanced damages.

The purpose of Code § 59.1-204(A) is to provide a penalty

for intentional violations of the VCPA in addition to

restitution for damages incurred. The General Assembly,

nevertheless, did not mandate the imposition of such penalty,

but left that decision to the discretion of the trier of fact.

Therefore, on appellate review, we will not disturb the trial

court's decision unless we find that the decision was an abuse

of discretion.

LG Marion's violation of the VCPA was willful, according

to the trial court, because LG Marion knew there were problems

with the vehicle. When Holmes asked about its condition, LG

Marion either intentionally misrepresented the condition of

the vehicle or purposely failed to ascertain its true

condition. In determining the damages, however, the trial

court expressed concern over its ability to ascertain the

damage which flowed from this misrepresentation. Holmes drove

changes. For purposes of this opinion we will refer to the
provisions by their former statutory designations.
5
the vehicle over 6,000 miles after he noticed the problems

with it and before he had the vehicle independently evaluated

in order to determine its true condition. Holmes' actions in

this regard not only had an adverse effect on determining the

actual damages Holmes incurred, but also on the extent

punitive sanctions should flow from the willful

misrepresentation.

While the VCPA is remedial legislation and should be

liberally applied, the statutory authorization to impose

enhanced actual damages is not a requirement to do so. Under

the facts of this case, we cannot say that the trial court

applied erroneous principles of law or otherwise abused its

discretion in declining to impose enhanced damages under Code

§ 59.1-204(A).

II. Attorneys' Fees

Holmes' next assignment of error is that the trial court

erred "by limiting Mr. Holmes' attorney's fees under Section

59.1-204(B) to his awarded damages." We reject this

assignment of error on two grounds. First, although Holmes

asserts that the trial court "limited" his attorneys' fee

award to the amount of his actual damages, nothing in the

record, other than the fact that the amounts are identical,

supports this conclusion.

Holmes argues that he introduced sufficient evidence to

support his claim that the requested fees of over $18,000 were

6
reasonable. LG Marion, Holmes asserts, presented no evidence

rebutting the reasonableness of these fees and thus, in

awarding only $4,000 in attorneys' fees, the trial court

ignored Holmes' evidence and improperly limited the amount of

the attorneys' fees award to the amount of his damage

recovery. We disagree.

In discussing Holmes' request for attorneys' fees, the

trial court did not make any statement reflecting either a

belief or a requirement that the amount of the attorneys' fees

should be limited to the amount of actual damages. Rather,

the trial court evaluated the nature of the litigation and the

work performed by counsel. The trial court concluded that the

fee amount Holmes requested was "unreasonable" for a "case of

this nature." This record simply does not support the

assertion by Holmes that the trial court limited its award of

attorneys' fees to the amount of the damage award.

We also reject this assignment of error to the extent it

includes an argument that the attorneys' fees award was

inadequate. When, as here, recovery of attorneys' fees is

authorized by statute, the fact finder must determine "from

the evidence the amount of the reasonable fees under the facts

and circumstances of each particular case." Tazewell Oil Co.

v. United Virginia Bank, 243 Va. 94, 111, 413 S.E.2d 611, 621

(1992). The trier of fact must "'weigh the testimony of

attorneys as to the value of the services, by reference to

7
their nature, the time occupied in their performance, and

other attending circumstances, and by applying to it their own

experience and knowledge of the character of such services.'"

Beale v. King, Administratrix, 204 Va. 443, 446, 132 S.E.2d

476, 478-79 (1963) (citation omitted). On appeal the trial

court's determination of the amount of the attorneys' fees to

be awarded will be set aside only upon a finding of abuse of

discretion. See Coady v. Strategic Resources, Inc., 258 Va.

12, 18, 515 S.E.2d 273, 276 (1999); RF&P Corporation v.

Little, 247 Va. 309, 323, 440 S.E.2d 908, 917 (1994); Rappold

v. Indiana Lumbermens Mutual Ins., 246 Va. 10, 15-16, 431

S.E.2d 302, 306 (1993).

Holmes produced numerous records and the affidavit of an

expert witness to support the reasonableness of his fee

request. LG Marion did not contest the hourly fee rate of

Holmes' counsel, but it did object to the inclusion of a

number of items which it asserted were "excessive, redundant

or otherwise unnecessary." The items challenged by LG Marion

included time spent in seeking to disqualify LG Marion's

counsel, time LG Marion alleged was spent as a result of lack

of preparation by Holmes' counsel, and time spent on claims

upon which Holmes did not prevail. Furthermore, although

Holmes submitted expert opinion evidence regarding the

reasonableness of the fees, the trial court was not bound by

that testimony. Beale, 204 Va. at 446, 132 S.E.2d at 478.

8
 As recited above, the trial court considered the evidence

before it, the circumstances of the litigation, and its "own

experience and knowledge of the character of such services" in

reaching its decision. It determined that the amount

requested was unreasonable and that an award of $4,000 in

attorneys' fees was reasonable. Based on this record we

cannot say that the trial court abused its discretion in

determining the amount of the award of attorneys' fees. 2

III. Warranty Act Claim

Count I of Holmes' motion for judgment alleged that LG

Marion breached the Wynn's Product Warranty Program and

breached the implied warranty of merchantability in violation

of the Warranty Act. The trial court dismissed Count I,

holding that Holmes failed to prove that LG Marion violated

the warranty contained in the Wynn's Product Warranty Program.

Dismissal of the entire count was error because the claim for

2
Holmes also argues here, as he did before the trial
court, that the amount of attorneys' fees should be calculated
by the so-called "lodestar" award method. That method
requires identification of the hours reasonably incurred in
the litigation multiplied by a reasonable hourly rate and then
adjustment of the award by consideration of a number of
specific factors. Hensley v. Eckerhart, 461 U.S. 424 (1983).
Because we conclude that the attorneys' fee award is
reasonable in this case, we do not address this argument.
Nevertheless, as LG Marion points out, many of the factors
cited within the "lodestar" approach are included in the
elements considered by the trial court here, including the
novelty and difficulty of the questions raised, the skill
required, and the "overall relief obtained by the plaintiff in
relation to the hours expended on the litigation." Id. at
435.
9
breach of the implied warranty of merchantability in violation

of the Warranty Act was a separate claim unconnected to the

alleged breach of the Wynn's Product Warranty Program. For

the reasons that follow, however, we conclude that the trial

court's error was harmless because it did not deny Holmes the

ability to recover any sums in addition to those awarded by

the trial court.

As Holmes conceded, the actual damages he would be

entitled to recover resulting from a violation of the VCPA and

of the Warranty Act are the same. 3 Holmes has not challenged

the amount of actual damages awarded by the trial court and a

litigant is not entitled to double recovery of actual damages.

See Tazewell Oil Co., 243 Va. at 113, 413 S.E.2d at 621-22.

Therefore, striking the allegations of a violation of the

Warranty Act was harmless as to the amount of actual damages

which Holmes could recover in this action.

3
The VCPA states in relevant part:
Any person who suffers loss as the result of a
violation of this chapter shall be entitled to
initiate an action to recover actual damages. . . .

Code § 59.1-204(A).

The provision of the Warranty Act relating to damages
states:
[A] consumer who is damaged by the failure of a
supplier, warrantor, or service contractor to comply
with any obligation under this chapter, or under a
written warranty, implied warranty, or service
contract, may bring suit for damages and other legal
or equitable relief.

10
 The VCPA and the Warranty Act allow recovery of

attorneys' fees. 4 Both statutes require that the award of

attorneys' fees be reasonable as determined by the trial

court. As discussed above, the trial court in this case

determined that Holmes' requested attorneys' fees were

unreasonable and awarded an amount it considered reasonable

for this case. There is no indication that the determination

of reasonable attorneys' fees would be different if made

pursuant to the Warranty Act.

The only possible difference between recovery under the

VCPA and the Warranty Act is the potential recovery of costs

and expenses of litigation. The VCPA provides recovery for

"court costs" and the Warranty Act allows recovery of "cost

and expenses . . . determined by the court to have been

reasonably incurred by the plaintiff for or in connection with

15 U.S.C. § 2310(d)(1).
4
The provisions relating to attorneys' fees state:

[I]n addition to any damages awarded, such
person also may be awarded reasonable attorney's
fees and court costs.

Code § 59.1-204(B).

If a consumer prevails . . . , he may be
allowed by the court to recover . . . 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 . . . ."

15 U.S.C. § 2310(d)(2).
11
the commencement and prosecution of such action . . . ." 15

U.S.C. § 2310(d)(2). Costs and expenses recoverable under the

Warranty Act could include recovery for trial–related expenses

such as expert witness fees, which are not recoverable under

the rubric of "court costs" allowed by Code § 59.1-204(B).

However, in addition to the court costs authorized by the

VCPA, Holmes sought recovery of litigation expenses pursuant

to Code §§ 14.1-178 and -198, and Rule 4:12(c). Holmes'

request pursuant to Code §§ 14.1-178 and -198 included not

only filing fees, service fees, and subpoena fees, but also

reasonable costs for depositions taken out-of-state and the

"fees and/or costs to secure" the services of two of Holmes'

witnesses. The total requested for these items was $1,389.81. 5

Holmes also sought $2,757.30 as sanctions under Rule

4:12(c) for attorneys' fees, costs, and expenses incurred for

the services of his automotive expert Godfrey and to conduct

the deposition of Kirkman. Approximately $1,600 of this

amount was designated as attorneys' fees, and the remaining

amount was for the same witness' expenses listed in Holmes'

request for costs under Code §§ 14.1-178 and -198.

The trial court considered all these requests and awarded

Holmes $1,500 pursuant to Code §§ 14.1-178 and –198, and Rule

5
We note that although this amount is less than the sum
of the amounts assigned to each element of expense sought, it
is the total amount Holmes requested under these statutory

12
4:12(c). This award for litigation expenses was not limited

to the court costs allowed under the VCPA. The only

limitation on the award imposed by these sections and this

rule is that the amount of the award be reasonable, in the

opinion of the trial court. This same limitation –

reasonableness – is imposed on litigation expenses recoverable

under the Warranty Act.

Under these circumstances, we conclude that the expenses

requested and recovered by Holmes encompassed the same type of

expenses he could have recovered under the Warranty Act.

There is nothing in this record to indicate that any expense,

and certainly no significant expense, related to the

litigation was omitted from Holmes' request for recovery of

costs and expenses presented to the trial court. The

rationale of reasonableness was applied by the trial court to

Holmes' requests. There is no indication that a different

result would have been reached had the trial court applied the

standard of reasonableness under the Warranty Act.

In summary, because there would have been no difference

in the amount of actual damages, reasonable attorneys' fees,

court costs, and reasonable litigation expenses had Holmes

pursued and prevailed in his claim for a breach of the implied

warranty of merchantability in violation of the Warranty Act,

provisions in both his pleadings and argument before the trial
court.
13
the trial court's error in striking Holmes' claim under the

Warranty Act was harmless.

For the above reasons, we will affirm the judgment of the

trial court.

Affirmed.

JUSTICE KINSER, with whom JUSTICE HASSELL joins, concurring in
part and dissenting in part.

I respectfully dissent from the majority’s decision with

regard to the issue of attorneys’ fees. While I recognize

that this Court should reverse an award of attorneys’ fees

only when the trial court has abused its discretion, see Coady

v. Strategic Resources, Inc., 258 Va. 12, 18, 515 S.E.2d 273,

276 (1999), I am convinced that such an abuse occurred in this

case.

Teronnie Holmes presented detailed records in support of

his request for attorneys’ fees in the amount of $18,532.

Holmes also submitted an affidavit from an attorney

experienced in the area of consumer rights litigation, who

opined that the amount of time expended on this case and the

hourly fees charged were reasonable, necessary, and fair. LG

Marion Corporation presented no countervailing evidence, but

only argued that some of the hours billed were unnecessary.

LG Marion characterized the requested amount of attorneys’

fees as “perhaps the biggest travesty of this case, that it is

three times the cost of the car.”

14
 Based on this evidence, the circuit court concluded that

the amount requested was “unreasonable.” However, the court

did not make any factual findings but merely stated, “I feel

like the money store. . . . I think it is . . . shameful to

have to spend $20,000 on a case of this nature.” While I do

not necessarily disagree with the circuit court’s comments, I

do not consider the statements to be a proper evaluation of

the attorneys’ fees requested by Holmes. In Mullins v.

Richlands Nat’l Bank, 241 Va. 447, 403 S.E.2d 334 (1991), we

said that “[i]n determining a reasonable fee, the fact finder

should consider such circumstances as the time consumed, the

effort expended, the nature of the services rendered, and

other attending circumstances.” Id. at 449, 403 S.E.2d at

335. See also Tazewell Oil Co., Inc. v. United Virginia

Bank/Crestar Bank, 243 Va. 94, 112, 413 S.E.2d 611, 621

(1992). I cannot determine from the record whether the

circuit court considered any of these factors.

Nevertheless, the majority concludes that the circuit

court did not limit the amount of attorneys’ fees awarded to

an amount equal to the amount of Holmes’ actual damages.

Absent evidence of a reasoned analysis by the circuit court of

the amount of the requested fees, the only inference that I

can draw from the record is that the circuit court did limit

the amount of attorneys’ fees to the amount of damages awarded

to the Holmes. An award of attorneys’ fees calculated in that

15
manner is improper. See Riverside v. Rivera, 477 U.S. 561,

575-79 (1986) (rejecting contention in civil rights action

that attorneys’ fees should be proportional to damages awarded

because attorneys should be encouraged to represent persons

with legitimate civil rights complaints); Cieri v. Leticia

Query Realty, Inc., 905 P.2d 29, 48 (Haw. 1995) (in action

under state consumer protection act, “the amount of fees need

not be restricted to the amount of actual damages”); Bittner

v. Tri-County Toyota, Inc., 569 N.E.2d 464, 465 (Ohio 1991)

(“reject[ing] the contention that the amount of attorney fees

awarded . . . must bear a direct relationship to the dollar

amount of” damages in action under state consumer protection

act).

For these reasons, I conclude that the circuit court

abused its discretion and therefore respectfully dissent.

However, I join the majority opinion with regard to the other

issues presented in this appeal.

16