Edwards v. Cascade County, DA 08-0071.

Decision Date07 July 2009
Docket NumberNo. DA 08-0071.,DA 08-0071.
Citation2009 MT 229,212 P.3d 289
CourtMontana Supreme Court
PartiesRobert EDWARDS, Plaintiff and Appellant, v. CASCADE COUNTY, Cascade County Sheriff Department, Undersheriff Clyde "Blue" Corneliusen and Cascade County Sheriff David Castle, Defendants and Appellees.

For Appellant: Elizabeth A. Best, Best Law Offices, P.C., Great Falls, Montana.

For Appellees: Robert J. Vermillion, Smith, Walsh, Clarke & Gregoire, PLLP, Great Falls, Montana.

Justice JOHN WARNER delivered the Opinion of the Court.

¶ 1 Robert Edwards and four other plaintiffs brought actions under the Montana Human Rights Act against Cascade County, the Cascade County Sheriff and deputy sheriffs (hereinafter collectively called the County). Attorney Elizabeth Best represented Edwards as well as the other claimants. Only Edwards was successful in his claim before the Human Rights Bureau (HRB). The Human Rights Act provides that successful claimants may recover attorney fees. Edwards, through Best, petitioned the District Court of the Eighth Judicial District for an award of his reasonable attorney fees and submitted calculations and affidavits justifying the amount claimed. The District Court awarded fees. However, the District Court awarded less than the amount claimed. Edwards appeals. We reverse in part and affirm in part.

¶ 2 This appeal presents the following issues:

¶ 3 Issue 1: Did the District Court abuse its discretion by deducting from the amount of fees claimed payment for 74 hours of attorney time?

¶ 4 Issue 2: Did the District Court err in applying an "offset" of $28,062.95 to Edwards' fee claim?

¶ 5 Issue 3: Did the District Court err by not awarding interest?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 6 Edwards and four other former employees of the Cascade County Sheriff's Department brought Human Rights Act claims against the County, alleging that their termination from the Sheriff's Department was in retaliation for supporting an unsuccessful candidate for sheriff. An HRB investigator concluded that only Edwards' claim constituted a violation of the Human Rights Act. The remaining four men, as well as another terminated deputy sheriff, filed complaints in District Court alleging statutory, common law and constitutional violations by the County. Edwards and the other claimants were all represented by Best before both the HRB and in District Court.

¶ 7 Pursuant to the provisions of the Human Rights Act, Edwards, through his attorney Best, filed a petition in District Court for enforcement of the favorable decision of the HRB and for an award of attorney fees. Best claimed compensation for the time she had expended in representing not only Edwards, but her other clients who had similar claims based on the same basic facts. In support of the claim for attorney fees, Best filed affidavits from two experienced civil rights attorneys. These lawyers both opined that the total number of hours expended by Best, and the hourly rate she charged, were reasonable and necessary to adequately represent Edwards. The County filed a response which did not object to Best being awarded her reasonable fees for representation of Edwards. However, the County objected to the amount of fees claimed on the basis that all of the time Best expended was not on behalf of Edwards. The County filed no affidavits or sought to introduce other evidence concerning the reasonable amount of Best's fees. Best filed two additional affidavits in support of her fee claim on December 15, 2006, and October 26, 2007.

¶ 8 In June of 2007, the County requested leave to amend its response. The County asserted it had mistakenly paid Edwards $28,062.95, and this amount must be offset against attorney fees. The District Court granted the County's motion to amend its response.

¶ 9 In August of 2007, the District Court ordered Best to construct a more complete presentation of her fee request by segregating the time she expended on Edwards' claim from the time she expended representing the other five plaintiffs. Best responded that she could not do so and requested a hearing on the matter. The District Court again ordered Best to submit a more complete accounting of the time spent on Edwards' case.

¶ 10 The District Court scheduled a hearing on the petition for attorney fees at the beginning of December, 2007. The day before the hearing Best filed a brief in which she again asserted that it was impossible to segregate hours expended on Edwards' case from those spent working on the other cases.

¶ 11 At the hearing two attorneys testified that the number of hours expended by Best and the rate she charged were reasonable and necessary. They also testified that segregation of hours spent on Edwards' case from those spent on the other matters was not possible or appropriate.

¶ 12 The record indicates that the County sent six checks to Best on behalf of Edwards. One of these checks was dated August 23, 2006, written by Cascade County and made payable to Edwards for the amount of $28,062.95. After receiving this check, Best wrote the County's attorney and inquired if it represented a partial payment of fees and costs. Best asserts that he did not respond so she wrote another letter. The County's attorney then responded that the check was meant to respond to the HRB order, which did not relate to fees. While these communications were going on, Best left the money in her trust account. On January 31, 2007, the County sent Edwards an IRS form 1099 reflecting the payment of the $28,062.95. Best then paid the money to Edwards, as he received the form 1099 evidencing a tax liability for the payment. On March 28, 2007, the County's lawyer sent a letter to Edwards demanding refund of the $28,062.95.

¶ 13 In January 2008, the District Court issued its Order awarding attorney fees. It reduced Edwards' fee claim, refusing payment for a net of 74 hours of Best's attorney time, which it concluded she had expended working for her other clients. The order also granted the County's motion to deduct from the fee award the $28,062.95, and did not order payment of interest.

STANDARD OF REVIEW

¶ 14 We review a district court's grant or denial of attorney's fees for abuse of discretion. Kuhr v. City of Billings, 2007 MT 201, ¶ 14, 338 Mont. 402, 168 P.3d 615. A district court abuses its discretion when it acts arbitrarily, without employment of conscientious judgment, or in excess of the bounds of reason resulting in substantial injustice. Kuhr, ¶ 14.

DISCUSSION

¶ 15 Issue 1: Did the District Court abuse its discretion by deducting from the amount of fees claimed payment for 74 hours of attorney time?

¶ 16 At the hearing on attorney fees, Best called two lawyers who testified that the hours she had billed to Edwards were reasonable and that it was impossible to segregate the time spent on his case from that spent on the other cases. Best also testified in a similar fashion. The County presented no evidence. It simply objected to the number of hours claimed by Best.

¶ 17 On behalf of Edwards, Best asserts it is impossible to separate the work done for her four clients, who were not entitled to fees, from the work done for Edwards. Best claims that all her work was related to a single, core set of facts, and the legal theories are the same, making any separation of the hours spent for the different clients purely arbitrary and inappropriate. In the District Court she backed up this claim with affidavits, expert testimony and her own testimony. The County presented no contrary evidence. The District Court concluded that it had no choice other than to reduce the amount of the claimed attorney fees because Best represented five clients, and only one was entitled to fees. Therefore, after a sua sponte examination of Best's fee statement, the District Court attributed a net 74 hours of time to work performed for Best's clients other than Edwards and declined payment for these hours.

¶ 18 The District Court utilized the lodestar approach to determine a reasonable attorney fee. This approach has been approved by this Court. See Laudert v. Richland County Sheriff's Dept., 2001 MT 287, 307 Mont. 403, 38 P.3d 790. The lodestar fee amount is calculated by taking the number of hours reasonably expended and multiplying it by a reasonable hourly rate. Laudert, ¶ 14.

¶ 19 A prevailing party in a human rights action may bring an action in district court for attorney fees. Section 49-2-505(8), MCA. Edwards was the prevailing party in his human rights action. The other four plaintiffs Best represented in front of the HRB are not entitled to attorney fees as they were not successful in that forum. However, as noted above, Edwards argues that the "core common facts" of the claims of all five plaintiffs were necessarily developed so that he could be successful in his HRB case.

¶ 20 In Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), cited with approval by this Court in Audit Services v. Frontier-West, 252 Mont. 142, 827 P.2d 1242 (1992), the Court recognized that where claims involve a core set of facts or are based on related legal theories, much of a lawyer's time is devoted generally to the litigation as a whole, making it difficult to divide the hours on a claim by claim basis. Hensley, 461 U.S. at 435, 103 S.Ct. at 1940; Audit Services, 252 Mont. at 154, 827 P.2d at 1250. The County does not contest that the several claims brought by Best for her several clients were interrelated to the extent that they all involved alleged discrimination by the same people in the Sheriff's Department, for the same reason. The several claims, therefore, do involve a core set of facts and are based on the same legal theory. We conclude that, at least initially, the lodestar approach is an appropriate method to determine Best's reasonable fee.

¶ 21 In considering a claim for attorney fees, a district court must determine whether the...

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