No. 14976
I N THE SUPREME COURT O THE STATE OF M N A A
F OTN
1980
RILEY G. CAREEK, d/b/a
SILVERTIP CONSTRUCTION C O . ,
P l a i n t i f f and Respondent,
VS .
EUGENE AYER,
Defendant and A p p e l l a n t ,
and
SIMKINS-HALLIN, INC.
Intervenor.
Appeal from: D i s t r i c t Court o f t h e Eighteenth J u d i c i a l D i s t r i c t ,
H o n o r a b l e W. W. L e s s l e y , J u d g e p r e s i d i n g .
I n and F o r t h e County o f G a l l a t i n .
C o u n s e l o f Record:
For Appellant:
B e r g , Morgan, C o i l & S t o k e s , Bozeman, Montana
F o r Respondent:
D r y s d a l e , McLean, S c r e n a r a n d Cok, Bozeman, Montana
S u b m i t t e d o n b r i e f s : A p r i l 3 , 1980
D e c i d e d : J u l y 2 2 , 1980
Filed: N L 1980 ~
~
M r . Chief J u s t i c e Frank I. Haswell d e l i v e r e d t h e Opinion of the
Court.
T h i s i s an a p p e a l from an award of a t t o r n e y f e e s by a p r o -
p e r t y o w n e r who s u c c e s s f u l l y d e f e n d e d a g a i n s t a n a t t e m p t e d
mechanic's lien foreclosure.
P l a i n t i f f Carkeek, the lienholder, sued defendant Ayer,
the lienee, t o f o r e c l o s e a l i e n f o r $6,200 f o r l a b o r and m a t e r i a l s
f u r n i s h e d i n c o n s t r u c t i n g two b a r n s on t h e l a t t e r ' s property.
The l i e n e e r e s i s t e d t h e a t t e m p t e d f o r e c l o s u r e and c o u n t e r c l a i m e d
f o r a p p r o x i m a t e l y $6,000 damages f o r d e f e c t i v e workmanship,
r u i n e d hay and o t h e r expenses.
Following a bench trial, t h e D i s t r i c t Court entered
judgment f o r t h e l i e n e e on t h e a t t e m p t e d f o r e c l o s u r e , awarded him
$3,311.50 damages on h i s c o u n t e r c l a i m and g r a n t e d him a t t o r n e y
f e e s and c o s t s t o be determined a t a n a p p r o p r i a t e h e a r i n g .
Following t h i s h e a r i n g i n which t h e l i e n e e sought a t t o r n e y f e e s
of $5,773.20, t h e D i s t r i c t Judge awarded him $3,000 a t t o r n e y f e e s
and $605.92 costs. The D i s t r i c t J u d g e f i l e d t h i s memorandum
accompanying h i s o r d e r :
''This Court is convinced t h a t t h e a t t o r n e y ,
M i c h a e l C. C o i l , i s e n t i t l e d t o F i f t y
D o l l a r s ($50.00) p e r hour f o r a t t o r n e y ' s
f e e s ; t h a t h e h a s s p e n t a t o t a l o f One
Hundred F o r t y - f o u r and t h i r t y - t h r e e
(144.33) h o u r s i n t h i s c a u s e , and h i s
d e d u c t i o n of Ten D o l l a r s ($10.00) p e r hour
r e s u l t i n g i n a f e e of F o r t y D o l l a r s
($40.00) p e r hour is most f a i r ; t h a t F i v e
Thousand Seven Hundred Seventy-three and
20/100 D o l l a r s ($5,773.20) i s a reasonable
f e e ; however, t h e defendant ( s i c ) i n t h i s
cause has been almost helpless i n t h i s
l i t i g a t i o n t h r o u g h t h e c o n t i n u e d d e l a y s and
a t l e a s t two a t t o r n e y s . H i s f i r s t attorney,
M r . Tom S a b o , w a s n o t p r o m p t o r p r o f e s s i o n a l i n
h i s p r e p a r a t i o n of t h e c a s e nor i n h i s repre-
s e n t a t i o n of p l a i n t i f f ; t h i s d e l a y and con-
f u s i o n was a l m o s t b e y o n d b e l i e f . The p l a i n t i f f
i s now f a c e d w i t h l o s s o f h i s l a w s u i t .
" T o now i n s i s t o n t h e p a y m e n t o f a t t o r n e y ' s f e e s
o f F i v e Thousand Seven Hundred Seventy-three
a n d 2 0 / 1 0 0 D o l l a r s ( $ 5 , 7 7 3 . 2 0 ) a n d h i s own
a t t o r n e y ' s f e e s would be most u n r e a s o n a b l e . "
The l i e n e e a p p e a l s from t h e award of only $3,000 attorney
fees, contending t h a t he is e n t i t l e d t o $5,773.20, t h e amount the
D i s t r i c t Court found t o be a r e a s o n a b l e fee.
A p a r t y who s u c c e s s f u l l y d e f e n d s a g a i n s t a f o r e c l o s u r e
a c t i o n must be allowed a r e a s o n a b l e a t t o r n e y f e e i n both the
District Court and t h e Supreme Court. S e c t i o n 71-3-124, MCA. In
d e t e r m i n i n g what constitutes a "reasonable fee" in a given
case, we h a v e s e t d o w n t h e f o l l o w i n g g u i d e l i n e s :
0 1
.. , The c i r c u m s t a n c e s t o be c o n s i d e r e d i n
d e t e r m i n i n g t h e c o m p e n s a t i o n t o be r e c o v e r e d a r e
t h e amount and c h a r a c t e r of t h e s e r v i c e s
r e n d e r e d , t h e l a b o r , time and t r o u b l e i n v o l v e d ,
t h e c h a r a c t e r and importance of t h e l i t i g a t i o n i n
which t h e s e r v i c e s were r e n d e r e d , t h e amount of
money o r t h e v a l u e o f p r o p e r t y t o be a f f e c t e d ,
t h e p r o f e s s i o n a l s k i l l and e x p e r i e n c e c a l l e d f o r ,
t h e c h a r a c t e r and s t a n d i n g i n t h e i r p r o f e s s i o n of
the attorneys. .. The r e s u l t s e c u r e d by t h e
s e r v i c e s o f t h e a t t o r n e y s may b e c o n s i d e r e d a s a n
i m p o r t a n t element i n d e t e r m i n i n g t h e i r value."'
F i r s t S e c u r i t y Bank v. T h o l k e s ( 1 9 7 6 ) , 1 6 9 Mont.
4 2 2 , 4 2 9 - 3 0 , 547 P.2d 1 3 2 8 , 1 3 3 2 .
Within these guidelines, t h e amount fixed as attorney
fees is l a r g e l y d i s c r e t i o n a r y with the D i s t r i c t Court. W will
e
n o t d i s t u r b i t s judgment i n t h e absence of an abuse of that
discretion. W have previously
e stated the applicable principles
in this language:
" T h i s C o u r t i s w e l l a w a r e o f i t s r o l e when a s k e d
t o look i n t o m a t t e r s of abuse of d i s c r e t i o n of t h e
t r i a l c o u r t a n d we h a v e n o t e d t h e n u m b e r o f c a s e s
and o t h e r c i t a t i o n s given us by t h e p a r t i e s . W e
f e e l an approved composite p o s i t i o n simply s t a t e d
would be: a reviewing court is never j u s t i f i e d
i n s u b s t i t u t i n g i t s d i s c r e t i o n f o r t h a t of t h e
t r i a l court. I n determining whether the t r i a l
c o u r t abused i t s d i s c r e t i o n , t h e question is not
whether the reviewing court agrees with the t r i a l
court, but rather, did the t r i a l court in the
e x e r c i s e of i t s d i s c r e t i o n a c t a r b i t r a r i l y
w i t h o u t t h e employment of c o n s c i e n t i o u s judgment
o r exceed t h e bounds of r e a s o n , i n view of a l l
the circumstances, ignoring recognized principles
resulting in substantial injustice." P o r t e r v.
P o r t e r ( 1 9 7 0 ) , 1 5 5 Mont. 4 5 1 , 4 5 7 , 453 P.2d 5 3 8 , 5 4 1 .
< ' .
W n o t e t h a t a r e a s o n a b l e a t t o r n e y f e e must be awarded
e for
t h e s u c c e s s f u l d e f e n s e of t h e f o r e c l o s u r e a c t i o n by v i r t u e of sec-
t i o n 71-3-124, MCA. T h e r e i s no s t a t u t o r y p r o v i s i o n f o r an award
of attorney fees i n successfully prosecuting the counterclaim for
damages. C o s t s a r e r e c o v e r a b l e on t h e c o u n t e r c l a i m , sections
25-10-101(3), 25-10-102, and 25-10-201, MCA; but attorney fees
a r e not r e c o v e r a b l e c o s t s i n t h e absence of statute or contrac-
t u a l agreement of the parties. W i n e r v. J o n a l Corp. (1976), 169
Mont. 247, 545 P.2d 1094, and c a s e s t h e r e i n c i t e d .
Applying the foregoing principles t o t h i s c a s e , we c a n n o t
say t h a t t h e D i s t r i c t Court abused i t s d i s c r e t i o n i n reducing the
lienee's c l a i m f o r a t t o r n e y f e e s from $5,773.20 t o $3,000. A
reasonable attorney fee i n a given case does not necessarily
r e s u l t from simple m u l t i p l i c a t i o n of the hours spent times a
fixed hourly rate. To a w a r d a n a t t o r n e y s f e e o f $ 5 , 7 7 3 . 2 0 in
d e f e n d i n g a g a i n s t a $6,200 c l a i m would a p p e a r most u n r e a s o n a b l e
regardless of the time spent, t h e s k i l l i n v o l v e d i n t h e work, the
experience of t h e a t t o r n e y and s i m i l a r c o n s i d e r a t i o n s . The
d e f e n s e simply is not worth a f e e approaching 100% of t h e amount
of the lien.
W i n t e r p r e t t h e D i s t r i c t c o u r t ' s memorandum a s s a y i n g
e
t h a t w h i l e a f e e of $5,773.20 i s f a i r and r e a s o n a b l e , i t would be
u n r e a s o n a b l e t o a s s e s s t h i s e n t i r e amount a g a i n s t the lienholder
under t h e c i r c u m s t a n c e s of this case. W agree.
e W f i n d no
e
a b u s e of d i s c r e t i o n by t h e D i s t r i c t Court.
Affirmed.
............................
Chief J u s t i c e '
W e concur:
i.
...................................
Justices
Mr. J u s t i c e John C. Sheehy d i s s e n t i n g :
I n a p p r o v i n g t h e a t t o r n e y s f e e s of $3,000 h e r e , t h e
m a j o r i t y a p p r o v e s t h e i r pay a t t h e r a t e o f $20.75 p e r hour.
T h a t r a t e i s unconscionable! I t i s unreasonable i n t h e
s e n s e t h a t it d e f i e s reason. I t means t h a t t h e s u c c e s s f u l
a t t o r n e y , i f h i s c l i e n t d o e s n o t make up t h e d i f f e r e n c e ,
w i l l have t o s u s t a i n t h e d e f i c i e n c y , o r r e c o v e r a p r o p e r
amount from o t h e r c l i e n t s i n h i s o f f i c e by c h a r g i n g them
g r e a t e r f e e s t o make up h i s l o s s .
L e t m e s t a t e a l e s s o n i n l a w o f f i c e economics. A
lawyer i n p r i v a t e p r a c t i c e , f i v e y e a r s o u t o f law s c h o o l ,
and n o t a p a r t t i m e r e t i r e e , who i s n o t g r o s s i n g $30,000 a
y e a r i n f e e s s h o u l d s e e k some o t h e r b u s i n e s s . A t a point
where a l a w y e r ' s g r o s s f e e s exceed $40,000 p e r y e a r , h e
b e g i n s t o b e an economic u n i t . A s a g e n e r a l r u l e o f thumb,
i t c a n b e assumed t h a t from $40,000 t o $100,000 p e r y e a r i n
g r o s s f e e s , h i s c o s t s of doing business, i n c l u d i n g o f f i c e
r e n t , l i b r a r y , employees' wages, and g e n e r a l o f f i c e e x p e n s e s
w i l l e x h a u s t 50 p e r c e n t o f t h e g r o s s f e e s t h a t he w i l l e a r n .
I n t h e o r y , a lawyer who p r a c t i c e s on a f e e b a s i s of
c h a r g i n g f o r h i s t i m e h a s a p o s s i b l e 2,000 h o u r s p e r y e a r
f o r which h e c o u l d s e n d b i l l s . I n r e a l i t y , however, t h e
t i m e a lawyer w i l l spend i n p r o f e s s i o n a l u p g r a d i n g , community
s e r v i c e , and g e n e r a l o f f i c e management w i l l r e d u c e t h e
b i l l a b l e t i m e t o c l i e n t s t o a b o u t 60 p e r c e n t , o r 1,200 h o u r s
per year. The minimum, t h e r e f o r e , t h a t any lawyer w o r t h h i s
s a l t s h o u l d c h a r g e f o r h i s t i m e i s $50 p e r hour. A t that
r a t e , t h e r e i s no d a n g e r t h a t h e would accumulate much of a n
estate.
I n t h i s c a s e , t h e a t t o r n e y s p o s s i b l y o u t of d e f e r e n c e
t o t h e D i s t r i c t C o u r t , reduced t h e c l a i m e d f e e o f $50 p e r
hour by 20 p e r c e n t t o $40 p e r hour. I t was t h e l a t t e r
f i g u r e t h a t gave r i s e t o t h e f e e of $5,773.20. Then, a f t e r
f i n d i n g t h a t t h e f e e t h e a t t o r n e y s c l a i m e d w a s "most f a i r "
t h e D i s t r i c t C o u r t s l i c e d t h a t f e e n e a r l y i n h a l f t o a sum
t h a t I would c o n s i d e r most u n f a i r . The r e a s o n s g i v e n by t h e
D i s t r i c t C o u r t , and now e n d o r s e d by t h i s C o u r t f o r t h i s
s l i c i n g are t h a t t h e p l a i n t i f f had a t t o r n e y s who d i d n o t
s e r v e him p r o p e r l y o r t h a t t h e a t t o r n e y s w e r e n o t p r o f e s s i o n a l
i n t h e i r work f o r t h e p l a i n t i f f . The a t t o r n e y s w e r e s e l e c t e d
by t h e p l a i n t i f f , y e t it i s t h e d e f e n d a n t and h i s a t t o r n e y s
who a r e r e q u i r e d by t h e c o u r t t o pay t h e p r i c e .
I t i s no answer t o s a y t h a t t h e c l a i m e d f e e approached
100 p e r c e n t o f t h e l i e n c l a i m a g a i n s t t h e d e f e n d a n t i n t h i s
case. The d e f e n d a n t ' s a l t e r n a t i v e s w e r e t o e i t h e r h i r e an
a t t o r n e y and d e f e n d a g a i n s t a c l a i m , o r pay t h e $6,200.00.
H e had l i t t l e c h o i c e .
I would r e v e r s e by r e i n s t a t i n g t h e f e e t h a t t h e D i s t r i c t
C o u r t found r e a s o n a b l e t o b e awarded h e r e .