Dewalt v. Davidson Surface Air & Donald Davidson
| Decision Date | 23 September 2014 |
| Docket Number | No. ED 101245.,ED 101245. |
| Citation | 449 S.W.3d 401 |
| Court | Missouri Court of Appeals |
| Parties | Thomas DEWALT, Appellant, v. DAVIDSON SURFACE AIR and Donald Davidson, Respondents. |
Mark A. Potashnick, Eli Karsh, St. Louis, MO, for appellant.
Jack B. Spooner, St. Louis, MO, for respondent.
Thomas DeWalt appeals from the judgment awarding him attorneys' fees at trial and on appeal. He claims the trial court abused its discretion in awarding only some of the fees he requested. We affirm in part and reverse in part.
DeWalt was a driver for a trucking company owned by Donald Davidson. During his employment, DeWalt was diagnosed with a brain tumor that restricted his ability to drive long distances. When DeWalt was unable to accept long distance delivery assignments, the employer repeatedly refused to give him available local deliveries or other jobs, sending him home without pay and issuing disciplinary write-ups. DeWalt sued the company and Davidson under the Missouri Human Rights Act for having constructively discharged him based on his disability. The jury found in favor of DeWalt on his discrimination claim against Davidson individually, but found the company not liable. DeWalt testified to over $80,000 in compensatory damage, but the jury awarded him only $7,500 and found Davidson not liable for punitive damages. After trial, DeWalt requested $133,198.50 in attorneys' fees as a prevailing plaintiff under Section 213.111.2 of the MHRA. The trial court reduced that amount and awarded him $75,000, without explanation.
The judgment as to liability was affirmed on appeal. See DeWalt v. Davidson Service/Air, Inc., 398 S.W.3d 491, 506–08 (Mo.App.E.D.2013). The amount of attorneys' fees awarded was also at issue in that appeal. DeWalt argued that the trial court failed to recognize the important public purpose in pursuing MHRA claims and instead erroneously based its award solely on the amount of the compensatory damages. Id. at 506–07. At oral argument on that appeal, Davidson asserted that awarding fees in proportion to damages was appropriate and served to encourage settlements without allowing attorneys to recover a windfall in fees on a small verdict.1
In the opinion, we set out the factors to be considered when assessing a fee award under the MHRA, noting that “the most crucial factor is the degree of success obtained.” Id. at 507. We found that there was no explanation for the trial court's award, but it appeared to be ten times the amount of damages. Id. We held, as other courts have, that while the amount of damages is “not irrelevant,” a “rule of proportionality would make it difficult, if not impossible, for individuals with meritorious civil rights claims but relatively small potential damages to obtain redress from the courts.” Id. Therefore, we stated, a court may not reduce fees to maintain a ratio between the fees and the damages. Id. We concluded that because the trial court had failed to enumerate its reasons for reducing the requested fee, this Court could not determine whether it had given proper consideration to the relevant factors or abused its discretion. Id. at 507–08. Therefore, we reversed and remanded the attorneys' fees award for the entry of findings of fact and conclusions of law consistent with our opinion. Id. at 508. We also instructed the trial court to rule on DeWalt's request for attorneys' fees on appeal. Id. at 508 n. 4.
On remand, the trial court entered findings and conclusions relating to the trial attorneys' fee award. It reduced the requested amount first for what it found to be “additional, duplicative, unnecessary or non-productive” work, including all of the time counsel spent preparing the fee application and some of the time counsel spent communicating with the client and co-counsel. After those deductions, the court listed the factors we had set forth in DeWalt. It found that the case did not take very long to try and was not complex, the attorneys advocated conscientiously and the plaintiff proved liability as to one defendant, but the damages awarded were small. The trial court went on to conclude that awarding all of the fees requested where the verdict was small would work against the public policy of encouraging settlement; therefore, it further reduced the requested fee by 30%. After all reductions, the total amount of trial attorneys' fees awarded was $87,200.75. In a separate order, the court awarded only $15,000 of the requested $35,560 in attorneys' fees on appeal, finding again that the case was not complicated and concluding that only 40 hours was needed to complete the brief.
This appeal follows. DeWalt argues in Point I that the trial court abused its discretion in awarding only some of the requested fees on appeal because the award bears no relation to the amount of time it actually took to respond to the breadth of issues raised by Davidson in the first appeal, which he claims opposing counsel conceded, and fails to consider the importance of MHRA claims. He argues in Point II that the award of attorneys' fees at trial is also an abuse of discretion because it is again improperly based on the size of the verdict without consideration of the important nature of the claim and erroneously excluded some of counsel's compensable work. We address these points out of order.
Attorneys' fees are authorized for a prevailing party under the MHRA. Section 213.111.2. The reasons are twofold: “(1) to fully make the plaintiff whole by compensating him or her for the costs of bringing suit and (2) to deflect that discrimination may result in nominal or small monetary damages.” Coyle v. City of St. Louis, 408 S.W.3d 281, 291 (Mo.App.E.D.2013) (internal citations omitted). While the determination of reasonable attorneys' fees under the MHRA is in the sound discretion of the trial court, there are, as we said in the first appeal, a number of factors to be considered: (1) the rates customarily charged by the attorneys involved in the case and by other attorneys in the community for similar services; (2) the number of hours reasonably expended on the litigation; (3) the nature and character of the services rendered; (4) the degree of professional ability required; (5) the nature and importance of the subject matter; (6) the amount involved or the result obtained; and (7) the vigor of the opposition. Id. at 506–07. Again, “the most crucial factor is the degree of success obtained.” DeWalt, 398 S.W.3d at 507. Nevertheless, the court may not reduce fees when the damages are small in order to maintain some proportionality between the damages and the fees awarded. Id.
The trial court listed all of these factors and made findings regarding most of them, focusing mostly on the degree of DeWalt's success:
DeWalt's first argument is that reducing the award by 30% was an abuse of discretion. We agree. The determination of reasonable attorneys' fees is within the trial court's sound discretion. Id. at 506. We will not reverse that determination unless we find that the amount was arbitrarily arrived at or is so unreasonable as to indicate indifference and a lack of proper judicial consideration. Id. Although the trial court carefully considered most of the factors as instructed in the first opinion, it nevertheless inappropriately relied entirely on the policy of encouraging settlement—without any findings regarding the settlement efforts of counsel in this case—and failed to even mention the nature and importance of this MHRA claim. Thus, the 30% percent reduction—while not explicitly a ratio between the verdict and the fee award—nevertheless is unreasonable due to the lack of appropriate findings on all applicable factors.
First, contrary to DeWalt's claim, there is nothing inherently incompatible about the policy of encouraging settlement and the policy of encouraging meritorious MHRA suits. In discussing the application of rules regarding offers of judgment in civil rights cases, courts have consistently held that the purpose of furthering societal interest in eliminating discrimination and the purpose of encouraging settlements “are not in opposition.” Gabriel v. Saint Joseph License, LLC, 425 S.W.3d 133, 140 (Mo.App.W.D.2013) ; see also Marek v. Chesny, 473 U.S. 1, 5, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985) () and its progeny.2 But a court only needs to consider the policy of encouraging settlement when there is evidence before it regarding the particular settlement efforts in that case. See Gabriel, 425 S.W.3d at 140 (); see also Charles v. Daley, 846 F.2d 1057, 1072–73 (7th Cir.1988) (). Only when good faith offers of settlement have been unreasonably rejected in favor of trial on claims with...
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