¶1 In the principal appeal, Defendant/Appellant/Counter-Appellee Doris
Dearmon (Defendant) seeks review of the trial court's order granting attorney's
fees and costs to Plaintiff/Appellee/Counter-Appellant Elizabeth Hall
(Plaintiff) on motion of Plaintiff after Plaintiff accepted Defendant's offer to
confess judgment. In the counter-appeal, Plaintiff asserts the trial court
abused its discretion in awarding less than the amount of the attorney's fees
and costs she sought.
¶2 The automobile owned and driven by Defendant collided with the automobile
owned and driven by Plaintiff. Plaintiff commenced the instant action to recover
damages for injury to her person and automobile. Defendant admitted the claim
for damage to Plaintiff's car but denied Plaintiff's claim for damages for
personal injury.
¶3 Defendant engaged an appraiser who estimated that the accident resulted in
the diminished value of Plaintiff's car of $2,788.00 after repairs. On June 2,
2012, Defendant offered to settle Plaintiff's claim on payment of $2,788.00,
attorney's fees in the sum of $3,001.00 and costs of $309.34. Plaintiff rejected
Defendant's offer.
¶4 On July 30, 2013, Defendant filed an offer to confess judgment in the
amount of $2,788.00, not including attorney's fees. On July 31, 2013, Plaintiff
accepted Defendant's offer to confess judgment.
¶5 On October 23, 2013, Plaintiff filed a motion to assess attorney's fees
and costs. To the motion, Plaintiff attached her attorney's time records
demonstrating the investment of 80.6 hours at the rate of $250.00 per hour for a
total attorney's fee claim of $19,950.00 on the claim for damage to property
alone, as well as costs of $1,052.75. Plaintiff asserted she was entitled to an
award of prevailing party attorney's fees for the prosecution of her claim for
damage to her automobile under 12
O.S. §940, and prevailing party costs under 12 O.S. §942.
¶6 Defendant responded. Defendant argued that Plaintiff claimed no physical
injury to her property, and that §940 did not permit an award of attorney's fees
for the successful recovery of only economic damages for the diminished value of
Plaintiff's car.
¶7 The parties appeared for hearing on February 18, 2014. Plaintiff presented
the testimony of an attorney, who opined that the claim for diminished value
constituted a claim for damage to property covered by §940, and that the number
of hours and hourly rate of compensation claimed by Plaintiff's attorney were
reasonable. Defendant presented the testimony of an attorney and former
associate district judge, who opined §940 did not authorize an award of
attorney's fees related to the successful recovery of economic damages for
diminished value, and that a reasonable attorney's fee would be $6,642.00,
calculated by multiplying a reasonable number of hours (49.2) related solely to
the claim for property damage times a reasonable hourly rate of $135.00 per
hour. The trial court took the matter under advisement.
¶8 By minute order dated March 17, 2014, memorialized by journal entry of
judgment filed April 22, 2014, the trial court granted attorney's fees and costs
to Plaintiff, holding:
After reviewing the motions, the arguments by counsel, and considering
all information and documentation offered in support of and opposition to
this motion, the Court determines that Plaintiff is entitled to fees and
costs pursuant to 12 O.S.
§§940 and 942. The diminution in value of Plaintiff's vehicle caused by
the accident is an element of injury to property, entitling Plaintiff to an
attorney fee award. Because of the marital relationship existing between
Plaintiff and Plaintiff's husband, the nature of some of the itemized
services (those services typically performed by the vehicle owner rather
than the attorney), as well as, the lack of evidence of a fee agreement or
an agreed-to fee between the attorney and client, the Court determines that
those limited legal services were for self-representation, subjecting those
services to the clear and convincing standard and the requirements of
Weaver v. Lamb, [1977 OK
242,] 574 P.2d 609 (Okla.
1977). The Court orders that judgment is hereby awarded to the Plaintiff,
and against the Defendant, for attorney's fess in the amount of $8,850.00,
based on 59 hours of necessary legal services at the reasonable hourly rate
of $150.00, and recoverable court costs in the amount of $1002.75.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that judgment is hereby
entered in favor of the Plaintiff and against the Defendant, Doris Dearmon,
for the total sum of $9,852.75, plus statutory interest to accrue until paid
in full.
¶9 In the principal appeal, Defendant first asserts §940 does not authorize
an award of prevailing party attorney's fees based solely on the recovery of the
purely economic loss for diminished value of Plaintiff's vehicle, and §940
permits an award only based on the successful recovery for actual
physical damage to Plaintiff's car. Defendant secondly argues that the
attorney's fees allowed are wholly unreasonable, excessive and disproportionate
to the actual amount in controversy. Defendant lastly challenges the award of
costs as unauthorized by §942.
¶10 In the counter-appeal, Plaintiff asserts the trial court abused its
discretion and arbitrarily reduced the amount of attorney's fees claimed,
especially considering the testimony of its expert establishing the
reasonableness of the number of hours expended and the hourly rate of
compensation. Plaintiff secondly asserts the trial court erroneously failed to
properly award "enhancement/incentive" attorney's fees allowed by Spencer v.
OG&E, 2007 OK 76, 171 P.3d 890, and Burk v.
Oklahoma City, 1979 OK 115,
598 P.2d 659. Plaintiff lastly
asserts the costs awarded were proper and reasonable under 12 O.S. §942.
¶11 The question of whether an award of attorney's fees is authorized
presents a question of law, subject to de novo review on appeal. Corr
v. Smith, 2008 OK 12, ¶15,
178 P.3d 859, 863; Finnell v.
Seismic, 2003 OK 35, ¶7, 67 P.3d 339, 342. The amount of
"[a] trial court's attorney fees award is reviewed for abuse of discretion."
Spencer, 2007 OK 76, ¶13,
171 P.3d at 895; Tibbetts v. Sight 'n Sound Appliance Centers, Inc., 2003 OK 72, ¶3, 77 P.3d 1042, 1046.
¶12 Section 940(A) of title 12, O.S., provides:
In any civil action to recover damages for the negligent or willful
injury to property and any other incidental costs related to such action,
the prevailing party shall be allowed reasonable attorney's fees, court
costs and interest to be set by the court and to be taxed and collected as
other costs of the action.
Section 942 of title 12, O.S., authorizes an award for certain items as
costs.
¶13 Generally speaking, "attorney fees recoverable under the provisions of .
. . §940 by the prevailing party contemplate only those actions for damages for
the negligent or willful physical injury to property." Woods Petroleum
Corp. v. Delhi Gas Pipeline Corp., 1984 OK 94, ¶13, 700 P.2d 1011, 1013. (Emphasis
original.) So, the prevailing party on a claim for damage to real property from
seismic operations, or damage to a water source as the result of the
construction of a sewage lagoon, or for destruction of growing crops, and
temporary and permanent injury to farmland attributable to the well
operator-defendant's willful or negligent acts, was entitled to an award of
attorney's fees under §940(A) because the claims arose directly from some
physical injury to property. Finnell v. Seismic, 2003 OK 35, 67 P.3d 339 (damage to real
property from seismic operations); Schaeffer v. Shaeffer, 1987 OK 30, 743 P.2d 1038 (damage to water
source); Briscoe v. Harper Oil Co., 1985 OK 43, 702 P.2d 33 (damage to crops and
farmland). See also, BP Pipelines (North America) Inc. v. C.D. Brown Const.,
Inc., 473 Fed.Appx. 818 (10th Cir. (Okl.) 2012).1 On the other hand, the prevailing
party on a claim for slander of title, or conversion, or mis-measurement of gas
taken from a mineral estate, was not entitled to attorney's fees under §940
because the claims did not arise directly from some physical injury to property.
See, Stites v. Duit Const. Co., Inc., 1999 OK CIV APP 113, 992 P.2d 913 (conversion); Turner
Roofing & Sheet Metal, Inc. v. Stapleton, 1994 OK 36, 872 P.2d 926 (slander of title);
Woods Petroleum, 1984 OK
94, ¶¶13-14, 700 P.2d at 1013 (mis-measurement of gas). However, the parties
cite, and we find, no pronouncement of the Oklahoma appellate courts speaking
directly to the issue presented in this case, and that is, whether the
prevailing party on a claim for the diminished value of personal property caused
by the willful or negligent act of another is entitled to an award of attorney's
fees under §940(A).
¶14 Defendant cites cases from other jurisdictions construing the phrase,
"property damage," defined in policies of property insurance as "physical damage
to property," as not including claims for economic damages such as diminished
value. See, Goodstein v. Continental Cas. Co., 509 F.3d 1042 (9th Cir.
(Wash.) 2007); Auto-Owners Ins. Co. v. Carl Brazell Builders, Inc., 588
S.E.2d 112 (S.C. 2003); Hartford Acc. & Indem. Co. v. Pacific Mut. Life
Ins. Co., 861 F.2d 250 (10th Cir. (Okl.) 1988); Federated Mut. Ins. Co.
v. Concrete Units, Inc., 363 N.W.2d 751 (Minn. 1985); Wyoming Sawmills,
Inc. v. Transportation Ins. Co., 578 P.2d 1253 (Or. 1978). However, insofar
as these cases involve the construction of specific contract language of an
insurance policy defining "property damage," we do not find them instructive
here.
¶15 Plaintiff cites a decision of the Oklahoma Supreme Court which we find
supports application of §940(A) in the present case. In Brennen v. Aston,
2003 OK 91, 84 P.3d 99, plaintiff sued
defendant to recover, inter alia, damages for the post-repair diminished value
of his vehicle, obtained judgment, and the trial court awarded plaintiff
attorney's fees. 2003 OK 91, ¶5,
84 P.3d at 101. On appeal, but without discussion of the attorney's fee award,
the Oklahoma Supreme Court held that the proper measure of damages to personal
property included not only the cost of repairs, but also the post-repair
diminution in value of the property, and affirmed judgment for plaintiff.
Brennen, 2003 OK 91, ¶12,
84 P.3d at 102.
¶16 In this respect, Plaintiff argues that the trial court's award of
attorney's fees to plaintiff in Brennen could only be based on §940(A)
and plaintiff's status as prevailing party on his claim to recover the
post-repair diminished value of his personal property. So, says Plaintiff,
Brennen tacitly supports the trial court's award of §940(A) prevailing
party attorney's fees to her in this case on her claim to recover for the
post-repair diminished value of her car.
¶17 Although the Supreme Court did not specifically address the application
of §940(A) in Brennan, we are satisfied the reasoning expressed in
Brennen supports the application of §940(A) in the present case. The
Supreme Court in Brennen specifically held that damages for diminished
value constituted a proper element of damages in a suit to recover for
damage to personal property. The damages for diminished value flow directly from
and are a part of the damage to the personal property. If damages for diminished
value constitute a proper element of recovery in a suit for damage to personal
property, it necessarily follows that the claim for damage to personal property,
including damages for diminished value, constitutes a claim for the negligent or
willful damage to property within the scope of §940(A).
¶18 The gravamen of Plaintiff's recovery in the present case was for damage
to Plaintiff's vehicle. Plaintiff recovered a sum representing the post-repair
diminished value of her car, and was the prevailing party on her claim for
damage to her personal property. As prevailing party, Plaintiff was entitled to
an award of attorney's fees under §940(A), and we hold the trial court did not
err as a matter of law in awarding her such fees.
¶19 In the principal appeal, Defendant also asserts the trial court erred in
awarding wholly excessive and unreasonable fees, disproportionate to the actual
amount in controversy. In the counter-appeal, Plaintiff asserts the trial court
erred in arbitrarily awarding less than the amount of attorney's fees claimed,
supported by competent expert testimony establishing the reasonableness thereof,
and without an award of an "enhanced" fee authorized by Spencer and
Burk.
¶20 "Generally, the correct formula for calculating a reasonable fee is to:
(1) determine the compensation based on an hourly rate; and (2) enhance the fee
through consideration of the factors outlined in Burk v. Oklahoma City,
1979 OK 115, 598 P.2d 659 (Burk factors)."
Spencer, 2007 OK 76, ¶13,
171 P.3d at 895. (Footnotes omitted.) As the Supreme Court in Spencer
explained:
The factors set out in Burk v. Oklahoma City are: time and labor
required; novelty and difficulty of the questions; skill requisite to
perform the legal service; preclusion of other employment; customary fee;
whether the fee is fixed or contingent; time limitations; amount involved
and results obtained; experience, reputation and ability of the attorneys
involved; risk of recovery; nature and length of relationship with the
client; and awards in similar causes. An attorney seeking an award must
submit detailed time records and offer evidence of the reasonable value of
the services performed based on the standards of the legal community in
which the attorney practices. Thereafter, steps are taken to determine a
reasonable fee. First, from the detailed time records, a lodestar fee is
arrived at by multiplying the attorney's hourly rate by the hours expended.
Second, the fee may be enhanced by application of the Burk factors.
Finally, any fee so calculated is subject to the rule that it must be
reasonable and bear some reasonable relationship to the amount in
controversy.
2007 OK 76, ¶14, 171 P.3d at
895. (Footnotes omitted.)
¶21 As we have previously noted, the amount of "[a] trial court's attorney
fees award is reviewed for abuse of discretion." Spencer, 2007 OK 76, ¶13, 171 P.3d at 895.
"An abuse of discretion occurs when a decision is based on an erroneous
conclusion of law or where there is no rational basis in evidence for the
ruling." Id.
¶22 In the present case, Plaintiff claimed Burk "lodestar" attorney's
fees of $19,950.00 by multiplying the 80.6 hours invested by the hourly rate of
$250.00 per hour, costs of $1052.75, and presented expert testimony argued to
establish the reasonableness of the hours spent, the hourly rate and the costs
claimed. Defendant presented expert testimony argued to establish, under the
circumstances of this case, a reasonable attorney's fee of $6,642.00, based on
49.2 hours at an hourly rate of $135.00 per hour.
¶23 The trial court, upon consideration of the evidence and testimony,
awarded attorney's fees in the sum of $8,850.00, "based on 59 hours of necessary
legal services at the reasonable hourly rate of $150.00," and costs of $1002.75.
The amount of the trial court's award was within the range of reasonable fees
established by the expert testimony. The trial court explained its reasons for
awarding less than the amount claimed. The trial court was not persuaded the
case was of such a nature to warrant an incentive fee under the Burk
factors, and neither are we. On review of the record, we hold the amount of the
trial court's award of attorney's fees and costs was authorized by law, was
reasonable and not excessive, and is unaffected by an abuse of discretion.
¶24 The order of the trial court is AFFIRMED.
MITCHELL, P.J., and HETHERINGTON, C.J., concur.