Tome Land and Improvement Co., Inc.(NSL) v. Silva

519 P.2d 1024, 86 N.M. 87
New Mexico Supreme Court·Decided December 7, 1973·No. 9628·Published·Cited by 11 cases

Opinions

OPINION

STEPHENSON, Justice.

This case has been here before. Tome Land & Improvement Co. v. Silva, 83 N.M. 549, 494 P.2d 962 (1972). In that appeal, we approved the trial court’s determination of corporate stock values in actions brought under art. 28 of the Business Corporation Act [ § 51-28-1 et seq., N.M.S.A. 1953 (Supp.1971)], but also said:

“ * * * we remand this case to the trial court for the sole purpose of awarding attorneys’ fees to appellants, in accordance with § 51-2&-4(G) * *

The italicized portion is duplicated in our mandate. “Appellants” in both instances referred to the dissenting shareholders (“the dissenters”), appellees here.

Thereafter, an evidentiary hearing was had, the parties submitted requested findings of fact and conclusions of law, the court made its decision and rendered judgment awarding attorneys’ fees to the dissenters. Plaintiff-Appellant (“Tome”) has appealed and the dissenters have cross-appealed.

§ 51-28-4(G), N.M.S.A.1953 (Supp.1971) provides in part:

“ * * * [B]ut if the fair value of the shares as determined materially exceeds the amount which the corporation offered to pay therefor * * * the court in its discretion may award to any shareholder who is a party to the proceedings * * * reasonable fees of legal counsel.” (Emphasis added.)

During the course of the hearing, dissenters introduced into evidence a contingent fee contract between themselves and their attorney. There had originally been seventy-six dissenters, but some of them had settled as the litigation progressed and the offers increased, until in its final stages there were forty left. Some payments had been made to counsel under the contingent fee contract by those who had settled prior to the hearing. Tome, following introduction of the contract, commenced delving into the amounts which counsel had been paid under the contract. This evidence was admitted over the dissenters’ objection.

An expert witness, Mr. George T. Harris, Jr., a practicing attorney in Albuquerque, testified in response to a hypothetical question that a reasonable attorneys’ fee would be in the neighborhood of $200,000.-00.

Following the hearing, the court made findings of fact to the effect that the case was one of first impression and required special preparation and presentation; that at all stages the case was sharply and extensively contested by counsel for all parties whose representation was of the highest professional caliber; that a substantial amount of time was devoted to the case by the dissenters’ attorneys; that the dissenters were people whose economic status did not warrant representation on an hourly basis and so a contingency agreement was made. The trial court finally found that a fair fee would be $122,281.44. This finding is the focal point of this appeal.

The court correctly concluded that the sole issue was to determine the reasonable attorneys’ fees in accordance with the cited statute and that that amount was $122,281.-44. Judgment was entered in favor of the dissenters for that sum.

The court’s finding of fact number nine states:

“9. That from the sum received by the dissenters, Mr. Marchiondo, by the contract in evidence, receives 20% or the sum of $122,281.44. That this is a fair fee provided that it is the total fee paid.” (Emphasis added.)

As nearly as we can make out, in the trial court Tome was contending, in substance and effect, that after a reasonable attorney fee had been determined, the court should proceed to further determine how much has been paid under the agreement between the dissenters and their counsel, and that Tome should only be required to pay the difference. Under this argument, if the dissenters had already paid their attorney $122,281.44, presumably Tome would owe nothing at all. This is exactly what Tome argues here. It claims that since the amount already paid the dissenters’ counsel plus what he has coming under the contingent fee contract as found by the court in its finding number nine, exceeds the fee found by the court to be “fair” in that finding (which it otherwise ardently asserts is deficient for a variety of reasons), Tome owes nothing. From this mind boggling chain of reasoning, it seems that Tome seeks to take credit for amounts paid or to be paid by the dissenters, Tome’s adversaries and the prevailing parties, to their attorney.

In view of Tome’s argument, a definition of the issues seems appropriate. We see nothing wrong with the admission of the contract so long as its effect was limited to being simply an item of evidence having some probative value in resolving the issue of the amount of a reasonable attorney fee to be allowed dissenters; to be weighed and taken into account with all of the other evidence bearing on that question. Such was the purpose of its offer into evidence.

Section 51-28-4(G) provides not only that the amount of the fee is to be reasonable, but that it is to be awarded to the dissenting shareholders, not to their attorney. We observe in passing that the same result has been reached in domestic relations cases under statutes requiring husbands to pay the wife’s attorney fee. We have consistently held that the allowance is not to the attorney, but to the wife. Lloyd v. Lloyd, 60 N.M. 441, 292 P.2d 121 (1956).

On the other hand, the amount to be paid by the dissenters to their attorney is a different matter, and is predicated upon the contract between the dissenters and their lawyer rather than upon the statute. It may be more than, the same as, or less than the amount found by the court to be reasonable under the statute. The trial court was without jurisdiction to fix the amount to be paid by dissenters to their attorney under the contract or pass upon the reasonableness of such amounts, because that was not the issue presented and the attorney was not a party. We do not understand that the court actually attempted to make such a determination.

Thus the concept of what is reasonable under the statute, an issue between the parties to this lawsuit, and what dissenters’ attorney is paid, predicated upon private negotiation and agreement between them, are two very different things. We are concerned with the former, but not with the latter.

Tome’s counsel stated on oral argument that “finding of fact number nine is the cornerstone on which this appeal rests.” It asserted that the matter should be sent back because finding of fact number nine, containing conflicts within itself, together with the fact that a long period of time intervened between the hearing and the finding, discloses an aura of confusion and ambiguity. We are by no means convinced that such ambiguity or confusion exists, but would observe that if it does, it ill becomes Tome to complain of it in view of the fact that it injected the false issue into the proceedings over the dissenters’ persistent, but fruitless, objections.

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Tome Land and Improvement Co., Inc.(NSL) v. Silva, 519 P.2d 1024, 86 N.M. 87 (N.M. 1973).

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Tome Land and Improvement Co., Inc.(NSL) v. Silva
519 P.2d 1024 (New Mexico Supreme Court, 1973)