Chawla v. BurgerBusters, Inc.

PRESENT: Carrico, C.J., Compton, Lacy, Keenan, Koontz, and
Kinser, JJ., and Stephenson, Senior Justice

INDER CHAWLA, ET AL.
OPINION BY
v. Record No. 970941 SENIOR JUSTICE ROSCOE B. STEPHENSON, JR.
April 17, 1998
BURGERBUSTERS, INC.

FROM THE CIRCUIT COURT OF FAUQUIER COUNTY
William Shore Robertson, Judge

In this appeal, we consider, inter alia, whether the trial

court erred in (1) interpreting and applying a provision in a

lease providing for the payment of attorneys’ fees and (2)

placing upon the defendants the burden of proving that the

attorneys’ fees claimed by the plaintiff were unreasonable.

I

The attorneys’ fees in question were incurred by

BurgerBusters, Inc. (BurgerBusters), a tenant in a shopping

center, in a chancery suit it brought against Inder and Vera V.

Chawla (the Chawlas), the owners of the shopping center and

BurgerBusters’ landlord. In the suit, BurgerBusters claimed

that the Chawlas breached the lease agreement by leasing space

in the shopping center to a bank and by constructing a bank

building which was not a structure or use “substantially shown”

on the site plan attached to the lease. BurgerBusters contended

that the bank was not a “retail” establishment, that the bank

occupied less than the 4,500 square feet of space shown on the

site plan, and that the bank deprived BurgerBusters of four
parking spaces. BurgerBusters sought an injunction requiring

the demolition of the bank building, restoration of the four

parking spaces, damages, and attorneys’ fees and costs.

In their answer, the Chawlas denied that they had breached

the lease. By their amended cross-bill, the Chawlas alleged

that BurgerBusters had unreasonably refused to consent to the

construction of the bank building. Among other relief, they

sought to have the lease reformed; however, the trial court

denied all relief.

The trial court also denied BurgerBusters’ claim for

monetary damages. The court was unable to conclude that the

lease term “retail” did not encompass a bank. However, the

court did conclude that the bank building and its drive-thru

lanes did not substantially conform in size, shape, or structure

to the site plan attached to the lease. The court ordered that

the structure be enlarged to approximately 4,500 square feet or,

in the alternative, be demolished.

Thereafter, both BurgerBusters and the Chawlas sought

recovery of attorneys’ fees expended in the chancery suit based

upon the following provision in the lease:

Tenant shall pay to Landlord and Landlord shall
pay to Tenant all costs and expenses, including
attorney fees, incurred . . . in exercising any of
their rights or remedies hereunder or in enforcing any
of the terms, conditions or provisions hereof.

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The trial court concluded that BurgerBusters was, and the

Chawlas were not, entitled to recover attorneys’ fees.

The trial court then ordered an issue out of chancery, and,

after a two-day hearing, the jury rendered an advisory verdict,

awarding BurgerBusters $446,389.56, the precise amount of

attorneys’ fees it had claimed. The court denied the Chawlas’

motion to set aside the verdict and entered a final judgment in

accordance with the verdict. The Chawlas appeal.

II

The evidence established that BurgerBusters’ attorneys

expended approximately 3,150 hours on the chancery suit. More

than 300 pleadings were filed, 15 to 20 depositions were taken,

and approximately 50 distinct motions were filed. Thirty

separate court hearings were conducted, including a seven-day

trial.

Each party called an attorney as an expert witness. The

Chawlas’ expert opined that BurgerBusters’ fee application was

unreasonable. He described the case as “straightforward

. . . not a complex matter” and as one that could have been

handled by a single lawyer assisted by an associate or a

paralegal. Instead, he noted, BurgerBusters had been

represented by 11 lawyers, three paralegals, and a summer

associate. He also observed that, “when you have all of these

lawyers working on things, you’ve got a duplication of effort.”

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He believed that a reasonable fee in the case would have been

“in the range of $30,000.00 to $40,000.00.”

BurgerBusters’ expert opined that, given the magnitude of

the case and the issues involved, the attorneys’ fees were

reasonable. He noted that the hourly rates charged were on the

lower end of the scale of charges for legal services in the

Northern Virginia area.

III

The Chawlas first contend that the trial court erred in

denying their recovery of attorneys’ fees for their successful

defense of some of BurgerBusters’ claims. They rely upon the

provision in the lease which provides that each party shall pay

to the other attorneys’ fees incurred by them “in exercising any

of their rights or remedies [under the lease] or in enforcing

any of the terms, conditions or provisions [of the lease].”

Although the trial court correctly found that “[the

Chawlas] prevailed on a number of the substantive issues in the

case,” the court, nonetheless, denied the Chawlas’ request

because “their prevailing was in the defensive nature and not in

the exercising of rights or remedies or enforcing terms.” We

think the trial court erred.

In interpreting a provision in a lease, as with any

contract, a court looks to the plain meaning of the language

employed and gives the language its intended effect. Amos v.

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Coffey, 228 Va. 88, 92-93, 320 S.E.2d 335, 337 (1984). Thus,

courts must interpret a lease as written and not make a new and

different contract for the parties. Great Falls Hardware v.

South Lakes Village Ctr., 238 Va. 123, 125-26, 380 S.E.2d 642,

643-44 (1989); Berry v. Klinger, 225 Va. 201, 208, 300 S.E.2d

792, 796 (1983).

In the present case, we do not read the lease provision to

limit recovery of attorneys’ fees solely to the plaintiff;

rather, we think both the plaintiff and the defendants may

exercise rights and remedies under the lease and enforce its

terms, conditions, or provisions. Here, BurgerBusters, in

exercising its rights and remedies under the lease, claimed that

a bank was not a “retail” establishment, and the Chawlas claimed

that it was. On that issue, the trial court was in equipoise

and ruled that the bank could remain in the shopping center as a

“retail” concern. Therefore, the Chawlas prevailed on that

issue. They also prevailed when the trial court denied

BurgerBusters’ claim for monetary damages. To the extent,

therefore, that the Chawlas were successful in the litigation,

they were entitled under the lease to recover their reasonable

attorneys’ fees.

IV

The Chawlas further contend that the trial court erred in

placing on them the burden of establishing that the attorneys’

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fees sought by BurgerBusters were unreasonable and in so

instructing the jury. BurgerBusters claims that the Chawlas

failed to preserve these issues for appeal and that, even if the

issues were preserved, the trial court ruled correctly.

We first consider whether these issues were preserved for

appeal. Several months before trial of the attorneys’-fee

issue, BurgerBusters filed a “motion for a determination of

which party shall bear the burden of proof on the amount of fees

and costs to be awarded [BurgerBusters] under the parties’

lease.” The court heard argument on the motion on May 20, 1996.

The Chawlas presented the court with a memorandum of law and

oral argument in support of their contention that the burden of

proof was upon BurgerBusters. By an order entered July 1, 1996,

the court ruled that “the [Chawlas] shall bear the burden of

proof on the issue of whether [BurgerBusters’] costs and

expenses are excessive or unreasonable.” Counsel for the

Chawlas endorsed the order as “seen and objected to for the

reasons stated on the record on May 20, 1996 and also for the

reasons set forth in [the Chawlas’] exceptions attached hereto.”

The attachment contained a clear statement of the Chawlas’

position on the burden-of-proof issue.

On December 1, 1996, the trial court entered a “pretrial

order” in which it restated its previous ruling on the burden of

proof and also listed the various factors the jury would

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consider in reaching “the ultimate decision.” Counsel for the

Chawlas endorsed the December 1, 1996 order as “SEEN AND

AGREED.” Then, when the trial court instructed the jury that

the Chawlas had the burden of proof on the issue of the

reasonableness of BurgerBusters’ attorneys’ fees, the Chawlas

failed to object on the ground the burden was misplaced.

However, when the decree appealed from was entered on

February 7, 1997, counsel for the Chawlas endorsed the decree as

“SEEN AND OBJECTED TO: -- See . . . pleading entitled Exceptions

to Decree . . . filed on Feb. 7, 1997.” The exceptions included

a lengthy reiteration of the Chawlas’ position on the burden-of-

proof issue.

BurgerBusters contends that the Chawlas waived or abandoned

their earlier objection to the court’s ruling on the burden of

proof when their counsel endorsed the pretrial order as “seen

and agreed” and when their counsel failed to object to the jury

instruction. We do not agree.

Rule 5:25 provides, in part, that “[e]rror will not be

sustained to any ruling of the trial court . . . unless the

objection was stated with reasonable certainty at the time of

the ruling.” The purpose of requiring timely specific

objections is to afford a trial court the opportunity to rule

intelligently on the issues presented, thereby avoiding

unnecessary appeals and reversals. Wright v. Norfolk and

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Western Railway Co., 245 Va. 160, 167-68, 427 S.E.2d 724, 728

(1993). In 1992, Code § 8.01-384(A) was amended to provide, in

pertinent part, as follows:

No party, after having made an objection . . . known
to the court, shall be required to make such objection
. . . again in order to preserve his right to appeal
. . . a ruling, order, or action of the court. No
party shall be deemed to have agreed to, or acquiesced
in, any written order of a trial court so as to
forfeit his right to contest such order on appeal
except by express written agreement in his endorsement
of the order.

Waiver is the voluntary and intentional abandonment of a

known legal right, advantage, or privilege. Weidman v. Babcock,

241 Va. 40, 45, 400 S.E.2d 164, 167 (1991); Fox v. Deese, 234

Va. 412, 425, 362 S.E.2d 699, 707 (1987). The essential

elements of waiver are knowledge of the facts basic to the

exercise of the right and intent to relinquish that right.

Weidman, 241 Va. at 45, 400 S.E.2d at 167; Fox, 234 Va. at 425,

362 S.E.2d at 707. Waiver of a legal right will be implied only

upon clear and unmistakable proof of the intention to waive such

right for the essence of waiver is voluntary choice. Weidman,

241 Va. at 45, 400 S.E.2d at 167; May v. Martin, 205 Va. 397,

404, 137 S.E.2d 860, 865 (1964).

In the present case, the Chawlas’ counsel made clear to the

trial court his objection to the ruling respecting the burden of

proof issue and never abandoned or evidenced an intent to

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abandon the objection. Thus, the Chawlas preserved the issue

for appeal.

We now consider the substantive issue; i.e., whether the

trial court erred in placing upon the Chawlas the burden of

proving that the attorneys’ fees claimed by BurgerBusters were

unreasonable. The trial court instructed the jury, in pertinent

part, as follows:

[T]he burden is on [the Chawlas] to show that the
attorneys’ fees . . . claimed by BurgerBusters are
excessive or unreasonable . . . .

You may award BurgerBusters each item of fees
. . . shown in its fee application unless the Chawlas
prove by the greater weight of the evidence that such
item is excessive or unreasonable.

Recently, in Seyfarth, Shaw v. Lake Fairfax Seven Ltd.

Prtnrshp., 253 Va. 93, 96, 480 S.E.2d 471, 473 (1997), decided

after the trial court’s decision in the present case, we held

that “[a]n attorney who seeks to recover legal fees . . . must

establish, as an element of the attorney’s prima facie case,

that the fees charged . . . are reasonable.” In determining

whether a party has established a prima facie case 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

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similar services, and whether the services were necessary and

appropriate. Id. at 97, 480 S.E.2d at 473.

We think Seyfarth, Shaw is dispositive of the issue in the

present case. The party claiming the legal fees has the burden

of proving prima facie that the fees are reasonable and were

necessary.

We hold, therefore, that the trial court erred in placing

upon the Chawlas the burden of proving that the attorneys’ fees

claimed by BurgerBusters were unreasonable.

V

For the reasons stated, we will reverse the trial court’s

judgment and remand the case for a new trial. Upon remand, each

party will have the burden of establishing, as an element of its

prima facie case, that the attorneys’ fees it seeks are

reasonable in relation to the results obtained and were

necessary. Neither party shall be entitled to recover fees for

duplicative work or for work that was performed on unsuccessful

claims.

Reversed and remanded.

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