Butt v. Evans Law Firm, P.A.

Decision Date30 January 2003
Docket NumberNo. 01-1307.,01-1307.
Citation351 Ark. 566,98 S.W.3d 1
PartiesWilliam Jackson BUTT, II; Butt-N-Buck Hardwood Plantation, LC; and Three Thousand Nineteen Taxpayer Class Members v. The EVANS LAW FIRM, P.A.; E. Kent Hirsch, P.A.; and David G. Nixon.
CourtArkansas Supreme Court

Davis, Wright, Clark, Butt & Carithers, PLC, by: William Jackson Butt II; Bassett Law Firm, by: Woody Bassett; Everett Law Firm, by John Everett and Jason Wales; Taylor Law Firm, by: Tim Brooks; Ball & Mourton, Ltd., PLLC, by: Rayburn W. Green; Howard W. Brill; Odom & Elliott, by: Bobby Odom and Don Elliott; Connor & Winters, P.L.L.C., by: John Elrod and Terri Dill Chadick, Fayetteville; Harrington, Miller, Neihouse & Krug, by: Mickie Harrington, Springdale; Estes, Estes & Gramling, by: Peter G. Estes, Jr., Fayetteville; and Quattlebaum Grooms Tull & Burrow, PLLC, by: Leon Holmes, Little Rock, for appellants.

Timothy Davis Fox, PLLC, by: Timothy Davis Fox, Little Rock, for appellees/cross-appellants.

ROBERT L. BROWN, Justice.

This is an appeal brought by the appellants, William Jackson Butt, II, Butt-N-Buck Hardwood Plantation (Butt-N-Buck), and 3,019 taxpayers from an order of the Washington County Circuit Court, which awarded attorneys' fees in a consolidated illegal-exaction suit. The appeal alleges that the circuit court abused its discretion in the amount of fees awarded, which was 25% of the various settlement amounts for a total fee award of approximately $4.6 million. The named appellees, Evans Law Firm, E. Kent Hirsch, and David G. Nixon, were class counsel, who were awarded the fees in question. The appellees cross-appeal on two points: (1) the circuit court incorrectly stated the amount of the refunds made; and (2) the trial court erred in allowing appellant Jack Butt to solicit representation of members of the class. This case stems from illegal exaction suits filed in 1998 in northwest Arkansas against Washington County and various cities and school districts within that county for violation of Amendment 59 of the Arkansas Constitution. On February 12, 1998, the circuit court entered a class certification order which defined the class as "All persons, and entities that have paid real or personal property ad valorem tax for the years 143, 1994, 1995, 1996 and 1997, in any of the following taxing units in Washington County, Arkansas: City of Fayetteville, Arkansas; Fayetteville School District No. 1; City of Springdale, Arkansas; Springdale School District No. 50; West Fork School District No. 141; City of Prairie Grove, Arkansas; Prairie Grove School District No. 23, City of Elkins, Arkansas; Elkins School District No. 10; Greenland School District No. 95; Winslow School District No. 20, Lincoln School District No. 48 and Washington County, Arkansas[.]" The order further ordered that notice of the class action be given by newspaper publication and by individual notice in accordance with Arkansas Rule of Civil Procedure 23.1

On March 5, 1998, Mr. Butt filed a motion to intervene in the suit.2 In his attached complaint in intervention, he stated that among the substantive issues to be resolved was "whether and how much counsel for the class will be paid and from what source." He further asserted his desire to participate in the suit for the purpose of "determining whether, how much, and the source of attorneys' fees paid to class counsel." On April 17, 1998, Mr. Butt's motion to intervene was granted by the circuit court.

On July 3, 2000, stipulations of settlement for each government entity, all of which were subject to court approval, were filed with the Washington County Circuit Court Clerk. In each stipulation, the class and the governmental entity agreed that the "Maxpayers shall have the opportunity to receive a prorata [sic] refund of all illegally exacted ad valorem taxes paid less the award of attorneys' fees ...." With regard to attorneys' fees, several of the proposed settlements read:

2.2 Attorneys' Fees of Plaintiffs Attorneys.

a. Attorneys for the Plaintiff shall request an award of attorneys' fees and costs for representing the Class an [sic] amount of 33-1/3% of the illegally exacted ad valorem property taxes, subject to court approval, which shall be payable directly to The Evans Law Firm, and Hirsch Law Firm, P.A., within 14 days of entry of Order Approving Settlement. Defendant shall not object to the requested attorneys' fee of 33-1/3% of the fund.

Other stipulations of settlement that were filed read:

Attorneys' Fees of Plaintiffs' Attorneys. Attorneys for the Plaintiffs shall make application to the Court to receive attorneys' fees and costs for representing the Plaintiffs in an amount not to exceed thirty-three and one-third percent (33 1/3%) of the Settlement Amount. The District agrees not to object to such application for attorneys' fees and costs up to a total amount of thirty-three and one-third percent (33 1/3%) of the Settlement Amount. The exact amount of the fees and costs to be paid to Attorneys of the Plaintiffs will be determined and awarded by the Court, which amount shall be paid out of the Settlement Amount and thereby reduce the Settlement Amount. Due to the uncertainty in payment sums that will develop should any appeal of any part of this Agreement be taken, the Parties to this agreement stipulate and agree that the damages to the settling parties in the event of appeals shall be the time value of money on any amounts which are due for payment or shall become due for payment under the terms of this stipulation and settlement agreement. The parties further agree and stipulate that any appeal bond should be sufficient to cover the value of any payments due or to become due hereunder. The District further agrees to pay such amount as approved by the Court as follows: onehalf within five (5) days of the entry of the Order Approving Settlement and the other half on or before October 2001, without interest.

In the stipulations of settlement for Washington County, the following was written regarding attorneys' fees:

Attorneys' Fees of Plaintiff's Attorneys.

Attorneys for the Plaintiffs shall seek as an award of attorneys' fees and costs for representing the Plaintiffs the sum of $1.5 million from the Settlement Amount, $375,000 of which shall be payable directly and jointly to The Evans Law Firm, P.A. and The Hirsch Law Firm and $375,000 to The Nixon Law Firm within 5 days of entry of the Order Approving Settlement. The remaining attorneys' fees in the amount of $375,000 jointly to The Evans Law Firm, P.A. and The Hirsch Law Firm and $375,000 to The Nixon Law Firm shall be paid directly to each firm on or before October 10, 2001, without interest. County will not object to such.

In the stipulation of settlement for the Springdale School District, the following was written:

2.4 Attorneys' Fees of Plaintiffs' Attorneys.

Attorneys for the Plaintiffs shall make application to the Court to receive attorneys' fees and costs for representing the Plaintiffs in an amount not to exceed thirty-three and one-third percent (33 1/3%) of the Settlement Amount. The District agrees not to object to such application for attorneys' fees and costs up to a total amount of thirty-three and one-third percent (33 1/3%) of the Settlement Amount. The exact amount of the fees and costs to be paid to Attorneys of the Plaintiffs will be determined and awarded by the Court, which amount shall be paid out of the Settlement Amount and thereby reduce the Settlement Amount. The District further agrees to pay such amount as approved by the Court as follows: one-half within five (5) days of the time in which the Court's order approving such attorney's fees becomes a final order and the other half on or before October 2001, without interest.

On August 14, 2000, class counsel Marshall Dale Evans, E. Kent Hirsch, and Stephanie Brodacz filed individual petitions for award of attorneys' fees as class counsel for the following class members: Washington County ad valorem taxpayers, City of Fayetteville ad valorem taxpayers, City of Elkins ad valorem taxpayers, City of Prairie Grove ad valorem taxpayers City of Springdale ad valorem taxpayers, Fayetteville School District ad valorem taxpayers, Springdale School District ad valorem taxpayers, Elkins School District ad valorem taxpayers, Prairie Grove School District ad valorem taxpayers, Lincoln School District ad valorem taxpayers, Greenland School District ad valorem taxpayers, and Winslow School District ad valorem taxpayers. From August 9 through 21, 2000, notices of the settlement hearings for each group of class members were filed with the circuit clerk. Each notice either stated the amount of attorneys' fees agreed to by the parties, or stated that the court at the hearing would consider "the application of plaintiffs' counsel for an award of fees and reimbursement of expenses[.]" All notices of settlement hearings included the figure of 33 1/3% of the settlement amount in reference to attorneys' fees, with the exception of the Washington County notice which included exact figures.

On August 31, 2000, Mr. Butt and Woody Bassett entered their appearance as counsel on behalf of 3,019 taxpayers, who were members of the class, and gave notice of their objection to the attorneys' fees requested by class counsel. The list of the taxpayers was attached to the notice and entry of appearance.3

On September 5, 2000, Mr. Butt moved for summary judgment regarding attorneys' fees based on the allegation that insufficient notice had been given to the class members about their right to object to those attorneys' fees. On September 6, 2000, Wayne Krug, a member of the class, and Mr. Butt, moved to appoint a guardian ad litem for the class members on the attorneys' fees issue. Mr. Butt filed his response to class counsels' petitions for attorneys' fees on September 26, 2000. On September 29, 2000, the motion for summary judgment was denied. That same day, the motion for...

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10 cases
  • Jewell v. Fletcher
    • United States
    • Arkansas Supreme Court
    • June 3, 2010
    ...in a dissolution proceeding that was rejected by the circuit court. Moreover, the circuit court's reliance on Butt v. Evans Law Firm, P.A., 351 Ark. 566, 98 S.W.3d 1 (2003), for the proposition that Sims was not entitled to relief is misplaced. In that case, an intervenor challenged the cir......
  • Kragnes v. City of Des Moines
    • United States
    • Iowa Court of Appeals
    • January 14, 2015
    ...the court. We conclude the public source of the funds here is a legitimate factor for the court to consider. See Butt v. Evans Law Firm, 351 Ark. 566, 98 S.W.3d 1, 9 (Ark.2003)2 (noting one factor in determining a reasonable attorney fee is “the fact that the suit was against a political en......
  • Covenant Presbytery v. First Baptist Church
    • United States
    • Arkansas Supreme Court
    • March 31, 2016
    ...in interest to First Presbyterian under the trust, we dismiss the cross-appeal because this issue is moot. See Butt v. Evans Law Firm, P.A., 351 Ark. 566, 98 S.W.3d 1 (2003).Reversed on direct appeal; cross-appeal dismissed; court of appeals' opinion vacated.Danielson and Goodson, JJ., diss......
  • City of O'Fallon v. CenturyLink, Inc.
    • United States
    • Missouri Court of Appeals
    • March 29, 2016
    ...Counsel, and not the court's judgment approving the settlement, the instruction of Ring regarding standing still applies. Likewise, in the Butt case, the 3,019 class members who were appealing the award of attorney's fees but had not successfully intervened in the case below were found to l......
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