Leibowitz v. Moore

HOFFMAN, Presiding Judge,

dissenting.

I respectfully dissent.

An evidentiary hearing on the issue of attorney fees is not mandated. The Indiana Supreme Court has ruled that a trial court is empowered to make an award of attorney fees without hearing any evidence by merely relying upon its own knowledge of what a reasonable attorney fee should be. In re Lockyear (1974), 261 Ind. 448, 305 N.E.2d 440; McDaniel v. McDaniel (1964), 245 Ind. 551, 201 N.E.2d 215; In re Davis (1932), 204 Ind. 227,183 N.E. 547. This rule has been followed by the Indiana Court of Appeals in numerous cases. See, e.g., McBride v. McBride (1981), Ind.App., 427 N.E.2d 1148; In re Marriage of Gray (1981), Ind.App., 422 N.E.2d 696; First Valley Bank v. First S & L Ass’n (1980), Ind.App., 412 N.E.2d 1237; Farthing v. Farthing (1978), Ind.App., 382 N.E.2d 941; Fox v. Galvin (1978), Ind.App., 381 N.E.2d 103; Kizer v. Davis (1977), Ind.App., 369 N.E.2d 439; Geberin v. Geberin (1977), 172 Ind.App. 255, 360 N.E.2d 41; Wireman v. Wireman (1976), 168 Ind.App. 295, 343 N.E.2d 292; Roe v. Doe (1972), 154 Ind.App. 203, 289 N.E.2d 528; Hardiman v. Hardiman (1972), 152 Ind.App. 675, 284 N.E.2d 820; Marshall et al. v. Russell R. Ewin, Inc. (1972), 152 Ind.App. 171, 282 N.E.2d 841. Judge Staton concisely stated the rule in In re Marriage of Gray, supra, as follows:

“. . . The trial court may take judicial notice of what a reasonable attorney’s fee would be, even absent any evidence in the record, because the trial court is familiar with the action and the amount of work which would be required. Geberin v. Geberin (1977), 172 Ind.App. 255, 360 N.E.2d 41, 47.” 422 N.E.2d at 703.1

The underlying rationale for this rule was explained in Fox v. Galvin, supra:

“First, in dealing with attorneys fees, the trial court judge is what the Louisiana Court of Appeals termed ‘an expert in his own right.’ Indiana courts, as well as those in other jurisdictions, have recognized the obvious — that judges have an expertise in the legal field. This stems from their status as lawyers, McDaniel v. McDaniel, supra, [(1964), 245 Ind. 551, 201 N.E.2d 215] and their knowledge and professional experience obtained as both lawyer and judge. Kizer v. Davis, supra, [(1977), Ind.App., 369 N.E.2d 439. See Melnyk v. Robledo (1976), 64 Cal.App.3d 618, 134 Cal.Rptr. 602; La Salle National Bank v. Brodsky (1964), 51 Ill.App.2d 260, 201 N.E.2d 208; Boydstun v. Cook and Co. (1960), 238 Miss. 324, 118 So.2d 354. “Second, the trial court judge has before him the entire proceedings of the case. The awarding of attorneys fees is done, not in a void, but in light of all that is involved in the litigation. See Geberin v. Geberin, supra, [ (1977), 172 Ind.App. 255, 360 N.E.2d 41]; Wireman v. Wireman (1976), [168] Ind.App. [295], 343 N.E.2d 292. See also Melnyk v. Robledo, supra; Pitcher v. Baltz (1967), 242 Ark. 625, 414 S.W.2d 859.
*906“As the California Court of Appeals stated in Melnyk v. Robledo (1976), 134 Cal.Rptr. at 605:
‘The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.’
“It is true in general that judgments should be based on evidence directly submitted by the parties to the tribunal, but it is also true that what transpires from beginning to end of a lawsuit is indirect evidence of what constitutes reasonable attorneys fees. Combined with the judge’s knowledge and experience in the legal profession, he ‘may take judicial notice’ of what constitutes a reasonable attorneys fee .. . and it is expeditious that he do so.” (Footnotes omitted.) 381 N.E.2d at 107-108.

U. S. Aircraft Financing, Inc. v. Jankovich (1980), Ind.App., 407 N.E.2d 287 did not disregard the general rule but merely noted a limited exception. There the Court stated:

“In examining the cases it would appear that in certain types of actions, particularly divorce or dissolution, it is generally held evidence is not required to support an award of attorney’s fees. This is apparently true when the amount of the fees is relatively modest or appears to be the norm for the type of litigation under consideration. However, where the nature of the action is unique, such as Sears, Roebuck & Co. v. State, supra, [(1967), 248 Ind. 169, 225 N.E.2d 175] involving a mandamus proceeding to compel the collection of property taxes, the Supreme Court held where there ‘is no evidence at all in the record on the subject of .. . attorney fees (t)he lack of evidence is fatal.... A finding by the court as to the value of an attorney’s services should be supported by testimony.’ 225 N.E.2d at 183.” 407 N.E.2d at 295-296.

The present case can in no way be characterized as “unique.” The case involves nothing more than a breach of an installment promissory note. The Moores were awarded a default judgment on their complaint. Surely this case comes within the expertise of the trial judge with regard to the amount of reasonable attorney fees.

The majority cites Lystarczyk v. Smits, 435 N.E.2d 1011 (1982) in support of its position. Lystarczyk is inapplicable however, because in that case a jury was acting as the finder of fact. Inasmuch as members of a jury generally have no expertise with regard to the reasonableness of attorney fees, there must be sufficient evidence in the record to support the jury’s award. Where, however, the trial court acts as the fact-finder, it is appropriate for it to utilize its experience in the legal profession and take judicial notice of the amount of a reasonable fee.

Having determined that the trial court has the capacity to make an award of attorney fees based solely upon its experience and knowledge, the only remaining issue is whether the fee in this case was reasonable. It is well established that a trial court’s award of attorney fees will be disturbed only upon a showing of an abuse of discretion. Brames v. Crates (1980), Ind.App., 399 N.E.2d 437; Arnold v. Dirrim (1979), Ind.App., 398 N.E.2d 426; Lovko v. Lovko (1978), Ind.App., 384 N.E.2d 166; Fox v. Galvin, supra; Streets v. M.G.I.C. Mortg. Corp. (1978), Ind.App., 378 N.E.2d 915.

In the present case, Leibowitz filed a motion to correct errors attacking the award of attorney fees. The trial court denied the motion with an opinion explaining the award as follows:

“In determining the fee, although the Court did not conduct a hearing, counsel for the plaintiff informed the Court that at the time he took the case he advised his client that he could take the case on a time and charge basis or that he could take the case on a contingent fee basis. After explaining the procedure, the client informed the plaintiff’s counsel that he did not desire time and charges basis as he thought the case might become too expensive and agreed to a contingent fee *907arrangement. At a prior hearing, at which the defendant was present, plaintiffs counsel had indicated that the fee arrangement between himself and his client was a one-third (⅛) contingent fee. “However, when plaintiff requested the default, he informed the Court that he could not remember whether the fee arrangement was one-third (⅛) or one-fourth (¼). He further explained that the reason for the contingent fee basis was based in large part upon what he and the client perceived to be the difficulty in enforcing the collection of the judgment. The Court opted out for the lower of the two fees and entered a fee order of $10,-000.00, which would have been slightly less than the one-fourth (V4) agreement.”

Whether a fee is fixed or contingent is a factor which must be looked at in determining whether a legal fee is excessive. Code of Professional Responsibility, DR. 2-106(B). In Streets v. M. G. I. C. Mortg. Corp., supra, this Court expressly approved a contingency fee equal to one-third of the final judgment as a reasonable attorney fee. The Indiana Supreme Court denied transfer of Streets on January 10, 1979, all justices concurring. This is ample precedent for finding that a contingent attorney fee based on one-fourth the final judgment is reasonable.

For the above stated reasons, I would affirm the judgment of the trial court.

. Although usually a trial court may not take judicial notice without disclosure at trial and an opportunity to object, In re Marriage of Gray (1981), Ind.App., 422 N.E.2d 696, it must be remembered that in the present case the trial court entered a default judgment in favor of the Moores. There was no trial. Leibowitz refused to defend in this action.