WATT, J.
1 1 To dispose of the certiorari petition, we must resolve two issues. The first is whether the trial court abused its discretion in reducing the requested attorney fees of $8,775.37 by more than $6,000.00. It is apparent from the transeript of the hearing on the attorney fees issue that: 1) there was no real attempt to determine the amount to be awarded under the standards of Burk v. Oklahoma City, 1979 OK 115, 598 P.2d 659; and 2) no rational relationship exists between the attorney fees awarded and the evidence
presented. Therefore, we hold that the failure to follow the Burk directives and to award attorney fees consistent with the evidence constitutes an abuse of discretion requiring reversal.
1 2 The second issue requiring resolution is the appropriate fee to be awarded for Speneer's representation in the underlying cause. Under the facts and the evidence presented, we hold that $7,104.50 in attorney fees should be awarded as costs against OG & E.
FACTS
a. Underlying cause.
13 The facts of the underlying action are highly disputed. Nevertheless, it is uncontested that Spencer, a disabled mother of three, paid her account with the electric company in full on November 18, 2002. The debt of approximately $484.00 was paid in cash for which the customer received a receipt. Two years later, Spencer applied for housing assistance.
She alleges her application was denied because OG & E refused to extend Spencer service, based on allegations that the November, 2002 bill remained outstanding,
T4 In January of 2005, Spencer filed suit seeking a declaration that she had paid her debt in full to OG & E and requesting damages. OG & E answered in March raising affirmative defenses of insufficient service, unclean hands, limitations, failure to mitigate, Spencer's negligence and federal preemption. In addition, OG & E counterclaimed for breach of contract alleging that, at the customer's request, the cash payment had been refunded and replaced with her personal check which was returned for insufficient funds. The electric company sought payment for the outstanding bill. OG & E's answer and amended answer and counterclaim were followed a month later with a motion to dismiss adding arguments of improper venue and lack of authority to award damages in a declaratory judgment action. Attached to the motion to dismiss is an affidavit of an OG & E employee explaining the activity report of the electric company indicating that Spencer made the cash payment on her account, requested its reversal and substituted a check which was returned dishonored. The record contains a copy of Spencer's cash receiptA.
Notably absent therefrom is a copy of the allegedly dishonored check. The customer contends that the check would be impossible to resurrect as she had no checking account upon which to write a draft when she made the cash payment.
b. Attorney fees issue.
15 On May 19, 2005, the trial court overruled OG & E's motion to dismiss. A year after the customer filed her petition, the electric company offered to confess judgment in the amount of $5,000.00 exclusive of "any costs or attorney fees."
The offer of judgment was made pursuant to 12 O.S. § 940(B).
Subsection A
of the same statute specifically provides that the prevailing party shall
be allowed reasonable attorney fees, court costs and interest. The offer was accepted the day after its filing and in February of 2006, Spencer filed her application for attorney fees and costs in the sum of $8,775.37. Despite having made an offer of judgment under a statute allowing the collection of attorney fees, OG & E responded that none of the requested costs were recoverable and no statutory basis existed for the assessment of attorney fees.
'In the penultimate paragraph of Plaintiff/Appellant's Petition for Writ of Certiorari, Plaintiff's counsel attempts to characterize OG & E as the party unwilling to settle, and instead adopting a 'scorched earth policy' in relation to the Plaintiff. See Petition for Writ of Certio-rari, page 9. These allegations are unfounded, unverified, inaccurate, and untrue. To the contrary, this Court will be happy to learn that OG & E, at the initial stages of the litigation, offered Plaintiff's counsel a full settlement of the litigation, offering everything demanded in the Petition, without reservation. It is Plaintiff counsel's refusal of this offer, and his attempt to exploit the case for a nuisance settlement value, that has led to all subsequent attorneys fees."
T6 In the alternative, OG & E asserted that Spencer's application for attorney fees lacked trustworthiness. The assertion was based on discrepancies existing between the submitted request and a draft billing statement Spencer provided to OG & E on January 26, 2006.
If attorney fees were awarded, OG & E argued that they should be reduced by $3,450.00 reflected by the alleged differences in the draft statement and the statement submitted with Spencer's application. In addition, the electric company insisted that the customer's attorney fees were unreasonable, the hourly rates were insupportable and $840.00 in fees were incurred because of the attorney's mismanagement of the cause, specifically his need to file a motion to vacate after missing a disposition docket. Finally, OG & E sought the award of attorney fees in its favor based on equitable grounds
alleging that Spencer misrep
resented facts relating to Spencer's inability to obtain housing assistance.
T7 The hearing on Spencer's attorney fees and costs application was held on April 21, 2006. The trial court found that Spencer was entitled to attorney fees under 12 0.8. Supp.2002 § 986
as a result of OG & E having counterclaimed for the payment of an outstanding amount on the customer's utility account and pursuant to 12 0.8.2001 § 988
allowing the recovery of attorney fees in civil actions to retrieve overpayments for utility services or to establish the right to such services.
¶ 8 At the hearing, Spencer's attorney testified as to the reasonableness of his hourly rate of $180.00 for out of court time and $250.00 for court appearances. The attorney also explained the differences between the draft statement submitted to OG & E and the statement submitted with his application for attorney fees as having resulted from computer difficulties in his office requiring him to reconstruct the statement from his office records.
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WATT, J.
1 1 To dispose of the certiorari petition, we must resolve two issues. The first is whether the trial court abused its discretion in reducing the requested attorney fees of $8,775.37 by more than $6,000.00. It is apparent from the transeript of the hearing on the attorney fees issue that: 1) there was no real attempt to determine the amount to be awarded under the standards of Burk v. Oklahoma City, 1979 OK 115, 598 P.2d 659; and 2) no rational relationship exists between the attorney fees awarded and the evidence
presented. Therefore, we hold that the failure to follow the Burk directives and to award attorney fees consistent with the evidence constitutes an abuse of discretion requiring reversal.
1 2 The second issue requiring resolution is the appropriate fee to be awarded for Speneer's representation in the underlying cause. Under the facts and the evidence presented, we hold that $7,104.50 in attorney fees should be awarded as costs against OG & E.
FACTS
a. Underlying cause.
13 The facts of the underlying action are highly disputed. Nevertheless, it is uncontested that Spencer, a disabled mother of three, paid her account with the electric company in full on November 18, 2002. The debt of approximately $484.00 was paid in cash for which the customer received a receipt. Two years later, Spencer applied for housing assistance.
She alleges her application was denied because OG & E refused to extend Spencer service, based on allegations that the November, 2002 bill remained outstanding,
T4 In January of 2005, Spencer filed suit seeking a declaration that she had paid her debt in full to OG & E and requesting damages. OG & E answered in March raising affirmative defenses of insufficient service, unclean hands, limitations, failure to mitigate, Spencer's negligence and federal preemption. In addition, OG & E counterclaimed for breach of contract alleging that, at the customer's request, the cash payment had been refunded and replaced with her personal check which was returned for insufficient funds. The electric company sought payment for the outstanding bill. OG & E's answer and amended answer and counterclaim were followed a month later with a motion to dismiss adding arguments of improper venue and lack of authority to award damages in a declaratory judgment action. Attached to the motion to dismiss is an affidavit of an OG & E employee explaining the activity report of the electric company indicating that Spencer made the cash payment on her account, requested its reversal and substituted a check which was returned dishonored. The record contains a copy of Spencer's cash receiptA.
Notably absent therefrom is a copy of the allegedly dishonored check. The customer contends that the check would be impossible to resurrect as she had no checking account upon which to write a draft when she made the cash payment.
b. Attorney fees issue.
15 On May 19, 2005, the trial court overruled OG & E's motion to dismiss. A year after the customer filed her petition, the electric company offered to confess judgment in the amount of $5,000.00 exclusive of "any costs or attorney fees."
The offer of judgment was made pursuant to 12 O.S. § 940(B).
Subsection A
of the same statute specifically provides that the prevailing party shall
be allowed reasonable attorney fees, court costs and interest. The offer was accepted the day after its filing and in February of 2006, Spencer filed her application for attorney fees and costs in the sum of $8,775.37. Despite having made an offer of judgment under a statute allowing the collection of attorney fees, OG & E responded that none of the requested costs were recoverable and no statutory basis existed for the assessment of attorney fees.
'In the penultimate paragraph of Plaintiff/Appellant's Petition for Writ of Certiorari, Plaintiff's counsel attempts to characterize OG & E as the party unwilling to settle, and instead adopting a 'scorched earth policy' in relation to the Plaintiff. See Petition for Writ of Certio-rari, page 9. These allegations are unfounded, unverified, inaccurate, and untrue. To the contrary, this Court will be happy to learn that OG & E, at the initial stages of the litigation, offered Plaintiff's counsel a full settlement of the litigation, offering everything demanded in the Petition, without reservation. It is Plaintiff counsel's refusal of this offer, and his attempt to exploit the case for a nuisance settlement value, that has led to all subsequent attorneys fees."
T6 In the alternative, OG & E asserted that Spencer's application for attorney fees lacked trustworthiness. The assertion was based on discrepancies existing between the submitted request and a draft billing statement Spencer provided to OG & E on January 26, 2006.
If attorney fees were awarded, OG & E argued that they should be reduced by $3,450.00 reflected by the alleged differences in the draft statement and the statement submitted with Spencer's application. In addition, the electric company insisted that the customer's attorney fees were unreasonable, the hourly rates were insupportable and $840.00 in fees were incurred because of the attorney's mismanagement of the cause, specifically his need to file a motion to vacate after missing a disposition docket. Finally, OG & E sought the award of attorney fees in its favor based on equitable grounds
alleging that Spencer misrep
resented facts relating to Spencer's inability to obtain housing assistance.
T7 The hearing on Spencer's attorney fees and costs application was held on April 21, 2006. The trial court found that Spencer was entitled to attorney fees under 12 0.8. Supp.2002 § 986
as a result of OG & E having counterclaimed for the payment of an outstanding amount on the customer's utility account and pursuant to 12 0.8.2001 § 988
allowing the recovery of attorney fees in civil actions to retrieve overpayments for utility services or to establish the right to such services.
¶ 8 At the hearing, Spencer's attorney testified as to the reasonableness of his hourly rate of $180.00 for out of court time and $250.00 for court appearances. The attorney also explained the differences between the draft statement submitted to OG & E and the statement submitted with his application for attorney fees as having resulted from computer difficulties in his office requiring him to reconstruct the statement from his office records. The attorney testified that the reformulated statement was extremely accurate and that he believed the 47.68 hours reflected in the statement were reasonable, especially considering the electric company's statements indicating they had a minimum of 125 hours of attorney time invested in the cause.
"In amy civil action to recover for labor or services rendered, or on an open account, a statement of account, account stated, note, bill, negotiable instrument, or contract relating to the purchase or sale of goods, wares, or merchandise, unless otherwise provided by law or the contract which is the subject of the action, the prevailing party shall be allowed a reasonable attorney fee to be set by the court, to be taxed and collected as costs."
"In any civil action or proceeding to recover for the overpayment of any charge for water, sanitary sewer, garbage, electric or natural gas service from any person, firm or corporation, or to determine the right of any person, firm or corporation to receive any such service, the prevailing party shall be allowed a reasonable attorney fee to be set by the court, to be taxed and collected as costs."
T9 The trial court announced its decision at the conclusion of the hearing, listing the factors to be considered under Burk v. Oklahoma City, 1979 OK 115, 598 P.2d 659 when making an attorney fees award. Nevertheless, the trial court concluded the ruling with the assumption that the suit was never anything more than a $5,000.00 case and awarded Spencer $2,500.00 to be taxed against OG & E along with costs.
T10 Spencer appealed asserting that the trial court abused its discretion in reducing the requested attorney fees over $6,000.00 and arguing that, rather than being reduced, the requested attorney fees should have been increased under Burk v. Oklahoma City, 1979 OK 115, 598 P.2d 659. In an unpublished opinion, the Court of Appeals affirmed. On April 16, 2007, Spencer filed her petition for certiorari. OG & E filed its answer on May 8th. On June 28, 2007, we granted certiorari to settle the attorney fees dispute.
{11 a. The failure to follow the directives of Burk v. Oklahoma City in setting the attorney fees and to make an award consistent with the evidence presented constitutes an abuse of discretion requiring reversal.
{12 Spencer asserts that the trial court abused its discretion in reducing the requested fee of $8,775.37 by more than $6,000.00. OG & E argues that there was no abuse of discretion and that the award should stand. We disagree with the electric company's contention.
1) Burk analysis.
118 A trial court's attorney fees award is reviewed for abuse of discretion.
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.
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).
In all cases, the attorney fees must bear some reasonable relationship to the amount in controversy.
"114 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.
1115 In Burk, we set forth the following directive to trial courts:
A particular word of caution to the trial judges of Oklahoma is here warranted. When a question on appeal presents the issue of reasonableness of attorney's fees awarded by the court, abuse of discretion by the trial judge is the standard of review. Therefore, the trial court should set forth with specificity the facts, and computation to support his award. While the compensatory fee is not all that difficult a problem on review if the trial court has made findings into the record regarding hours spent and reasonable hourly rates, the value placed on additional factors will be different in each case. Obviously, the reasonable value to be given for incentive fees should bear a reasonable relationship to the aggregate hourly compensation.
Here, the trial court listed the Burk factors in making his ruling.
Nevertheless, there is no evidence that guidelines other than the comparison of the fee to the amount recovered played any real role in setting the $2,500.00 attorney fees award. No baseline was arrived at from either Spencer's detailed time records or the draft records offered by the electric company. The awarded fee did not result from the multiplication of an hourly rate, based on evidence presented, times the hours expended. Simply, the trial court awarded the fee based on a determination that the cause was never worth more than $5,000.00 and that it would not support an award of more than $2,500.00 in attorney fees. The award does not comport with the guidelines of Burk v. Oklahoma City, 1979 OK 115, 598 P.2d 659.
2) Evidence relating to the attorney fees issue.
T16 Neither party presented an independent witness to testify on the appropriate hourly rate to be charged for attorney fees. Spencer's attorney testified that he had been practicing law for seventeen years and that his rates of $180.00 per hour for out of court time and $250.00 per hour for court appearances were appropriate, reasonable and consistent with the rates of other attorneys in the Seminole area.
OG & E countered the proposed hourly rate by supplying a copy of an Oklahoma Bar Association Survey indicating that in 2002 metro area attorneys were charging $156.72 per hour while non-metro attorneys were charging $138.55. Interestingly enough, the OG & E attorney testified that he did not know what he billed per hour.
Spencer's attorney also testified that he had put 47.68 hours into prosecuting the cause. The number of hours is reasonable when considered with OG & E's admission that it had in excess of 125 hours of attorney time invested in the cause.
117 Considering Spencer's proposed in court and out of court hourly rates applied to
the reconstructed billing statement, the amount sought as attorney fees is $8,775.37. If only the lower of the two hourly rates presented by Spencer is applied to all time expended, the attorney fee award would be $8,582.40. Applying OG & E's proposed hourly rate, the award would be $6,606.64. When the rates as proposed by Spencer are accepted and applied to the draft statement, which OG & E insists is the more accurate estimation of the time involved in the case, the award would be $5,825.37. Finally, if the $840.00 billed for time expended on a motion to vacate judgment entered when the attorney failed to appear at the disposition docket is subtracted from this total, the proposed attorney fees would be reduced to $4,487.37.
¶ 18 None of the proposed amounts, ranging from almost $9,000.00 to a low of approximately $4,500.00, bears any rational relationship to the trial court's award of $2,500.00. When divided by the hours Spencer had in the case, the amount awarded is less than $53.00 per hour for attorney time, one-third of the hourly rate proposed for a rural attorney in the Tulsa area by OG & E, and a rate considered reasonable by this Court almost thirty years ago.
The award of $2,500.00 for approximately 48 hours of attorney time is not supported by reason or the evidence.
{ 19 b. Under the facts and evidence presented, $7,104.50 in attorney fees should be awarded to the customer.
1) Lodestar fee.
120 We now turn to the issue of the attorney fees to be awarded. As noted Spencer sought $8,775.57 in attorney fees before the trial court. OG & E argued that no attorney fees should be awarded. In the alternative, it asserted that the requested amount be reduced by $38,450.00 for discrepancies between its draft statement and the reconstructed statement necessitated by a computer crash. The electric company also contended that Spencer's attorney should not be allowed to bill for $840.00 resulting from his negligence in the necessity of the filing of a motion to vacate after missing a disposition docket. Had the trial court accepted the figures OG & E proffered, the net amount of attorney fees award would have been $4,487.37.
{21 The time expended by Spencer's attorney, 47.68 hours, is less than half of the 125 hours counsel for OG & E admits were put into the cause. The only evidence presented by Spencer on the hourly rate charged was the testimony of her attorney that he charged hourly rates of $180.00 for out of court time and $250.00 per hour for court appearances. The electric company presented a 2002 Oklahoma Bar Association Survey report urging the trial court to rely on the mean average of $188.55 for non-metro attorneys. However, when the report is examined, it is apparent that 40.48 percent of non-metro attorneys surveyed charge between $126 and $150 per hour.
\ 22 Under the facts presented, it appears that a reasonable calculation for a lodestar fee is 47.68 hours at the rate of $150.00 for a total of $7,152.00. Nevertheless, we also agree that it would be egregious to require cither the attorney's client or OG & E to bear the burden of paying for the attorney's mistake in failing to appear for the disposition docket. Therefore, 4.65 hours times the hourly rate of $150 for a total of $697.50 shall be deducted from the lodestar fee.
Having
so done, we determine that a base fee of $6,454.50 should be awarded to Spencer and assessed as costs against OG & E.
123 The lodestar fee, which exceeds Spencer's award by $1,454.50, is not unreasonable when compared to the $5,000.00 confessed judgment. The attorney fees awarded are thirty percent more than the award. While we are committed to the rule that a fee for legal services must bear some reasonable relationship to the judgment, we have never identified a percentage above which a fee's relationship to the damage award must be deemed unreasonable per se.
1 24 In Southwestern Bell Telephone Co. v. Parker Pest Control, Inc., 1987 OK 16, ¶ 17, 737 P.2d 1186, we approved a $3,000 fee award for a suit in which the plaintiff sought $3,867 and the defendant confessed judgment for $1,500. In Arkoma Gas Co. v. Otis Engineering Corp., 1993 OK 27, ¶ 6, 849 P.2d 392, we affirmed a fee award of $5,500 in a breach of warranty case in which the plaintiff sued for more than $70,000 and ultimately recovered only $100.84.
Clearly, the allowance awarded in the instant case is within the range of fees in relation to damages previously approved by this Court.
2) Incentive fee.
125 Spencer asserts that the awarded fee should be enhanced specifically when considering the following Burk factors: time and labor required; novelty and difficulty of the questions; the fact that billing the client for any fees would have been futile as she was unable to pay the same; the amount at issue and the results received; and the undesirability of the cause. Undoubtedly, OG & E opposes enhancement on grounds that the original award of $2,500.00 was a reasonable fee.
1 26 Although this cause began as a simple declaratory judgment action with the hope of some money damages to be collected, it quickly became much more complicated. OG & E raised affirmative defenses of insufficient service, unclean hands, limitations, failure to mitigate, Spencer's negligence and federal preemption. Ultimately the electric company filed a motion to dismiss adding arguments of improper venue and lack of authority to award damages in a declaratory judgment action. Furthermore, this is a cause that Spencer's attorney took knowing that he would most likely not receive any fee from the disabled mother with three dependents.
Five thousand dollars to an individual in Spencer's situation most certainly was significant. Finally, this was not an attractive case. Although it involved a "David vs. Goliath" battle, there was little chance that the case would create a windfall in favor of Spencer's attorney in the nature of either the attention of the press or an increased client base.
T27 Conversely, Spencer has been awarded fees based on a reasonable hourly rate and the time dedicated to this cause most certainly did not prevent the taking on of additional clients or caseloads. Under all these facts, we determine that the reasonable loadstar fee of $6,454.50 should be increased as an incentive by $650.00, approximately ten percent.
We hold that the total fee to be collected as costs from OG & E in Spencer's favor is $7,104.50.
CONCLUSION
1 28 Discretion is abused, so as to warrant reversal, when a trial judge makes a clearly erroneous conclusion and judgment, against
reason and the evidence.
On this record, we are constrained to hold that the award set was without a basis in reason or evidence and an abuse of discretion occurred. The failure to follow the directives of Burk v. Oklahoma City, 1979 OK 115, 598 P.2d 659 in setting the attorney fees and to make an award consistent with the evidence presented constitutes an abuse of discretion requiring reversal. Under the facts and evidence presented, $7,104.50 in attorney fees should be awarded as costs against OG & E.
129 Spencer requested appeal related attorney fees in a separate section of the brief in chief filed on December 22, 2006. The request complies with Rule 1.14, Supreme Court Rules, 12 0.8.2001, Ch. 15, App. 1. Appeal related attorney fees may be awarded in cases where there is statutory authority to award a fee for legal services rendered in the underlying cause.
The trial court found, and we agree, that the award of attorney fees was appropriate under either 12 O.S. Supp. 2002 § 936
or 12 0.8.2001 § 938.
The application is granted. On remand, the trial court shall conduct an adversarial hearing to determine a reasonable fee for legal services provided to Spencer in the appeal and certio-rari related proceedings.
COURT OF CIVIL APPEALS OPINION VACATED; TRIAL COURT AFFIRMED IN PART AND REVERSED IN PART; REMANDED FOR DETERMINATION OF APPEAL AND CERTIORARI RELATED ATTORNEY FEES.
EDMONDSON, V.C.J., OPALA, KAUGER, WATT, TAYLOR, COLBERT, JJ. concur.
WINCHESTER, C.J., HARGRAVE, J. concur in result.