Espinosa v. Settlement Funding, L.L.C.
| Decision Date | 16 August 2012 |
| Docket Number | NO. 30,576,30,576 |
| Parties | TANYA ESPINOSA, TINA ESPINOSA, and, RONNIE ESPINOSA, JR., Plaintiffs/Appellants/Cross-Appellees v. SETTLEMENT FUNDING, L.L.C., d/b/a PEACHTREE SETTLEMENT FUNDING, Intervenors/Defendants/Appellees/Cross-Appellants. Consolidated With IN THE MATTER OF THE ESTATE OF RONNIE GILBERT ESPINOSA, SR., Deceased. |
| Court | Court of Appeals of New Mexico |
This memorandum opinion was not selected for publication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please also note that this electronic memorandum opinion may contain computer-generated errors or other deviations from the official paper version filed by the Court of Appeals and does not include the filing date.
APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Gallagher, Casados & Mann, P.C.
R. Thomas Dawe
Albuquerque, NM
for Appellees/Cross-Appellants
Gilman Law Firm
James K. Gilman
Albuquerque, NM
L. Helen Bennett, P.C.
L. Helen Bennett
Albuquerque, NMfor Appellants/Cross-Appellees
In this appeal, we are asked to review the district court's award of attorney fees, pre- and post-judgment interest, and costs and expenses to Plaintiffs, who are the three children of Ronnie Espinosa, Sr., and were the prevailing parties in the final judgment entered by the district court. We affirm the district court's award with respect to attorney fees and pre- and post-judgment interest. However, we reverse the award of costs and expenses and remand with instructions that the district court reevaluate this portion of the award consistent with this opinion.
This case concerns a particularly litigious dispute between Plaintiffs and Defendant Settlement Funding, L.L.C. (Settlement) that has spanned several years and has been the subject of two prior appeals to our Court. See Espinosa v. United of Omaha Life Ins. Co., 2006-NMCA-075, 139 N.M. 691, 137 P.3d 631 (Espinosa I); Espinosa v. United of Omaha Life Ins. Co., No. 27,407, 2009 WL 6690307 (N.M. Ct. App. Mar. 26, 2009) (mem.) (Espinosa II). In this third appeal, we address the propriety of the district court's rulings regarding attorney fees, costs, and interest. Because the parties are familiar with the underlying facts and proceedings and becausethis is a memorandum opinion, we do not provide a detailed summary here and instead refer to our prior two decisions in this case for the factual background of the parties' dispute. We include additional information as necessary in connection with the issues raised in our discussion below.
Plaintiffs raise four issues on appeal concerning the district court's ruling on attorney fees, pre- and post-judgment interest, and costs and expenses. Settlement has filed a cross-appeal in which it has raised three issues regarding the district court's ruling. We have consolidated the issues in our discussion and address arguments raised in the main and cross-appeal together.
"New Mexico adheres to the . . . American rule that, absent statutory or other authority, litigants are responsible for their own attorney[] fees." See N.M. Right to Choose NARAL v. Johnson, 1999-NMSC-028, ¶ 9, 127 N.M. 654, 986 P.2d 450. Montoya v. Villa Linda Mall, Ltd., 110 N.M. 128, 129, 793 P.2d 258, 259 (1990)(citation omitted); see NARAL, 1999-NMSC-028, ¶ 9 ().
The district court awarded Plaintiffs attorney fees in the amount of $109,360 plus gross receipts tax on the basis of a contractual provision in the loan agreement entered into between WebBank—Settlement's predecessor in interest—and Plaintiffs' deceased father. This provision, which we refer to as the fees provision, provided:
In the event of any dispute between the parties concerning this [a]greement or the transactions contemplated hereby, the prevailing party shall be entitled to recover its costs and expenses, including reasonable attorney[] fees, incurred in connection with such dispute.
We review the award of attorney fees for an abuse of discretion. Id. ¶ 6. However, we review the application of the law to the facts de novo. Id. ¶ 7. "Accordingly, we may characterize as an abuse of discretion a discretionary decision that is premised on a misapprehension of the law." Id. (alteration, internal quotation marks, and citation omitted).
In the proceedings below, Settlement argued that the fees provision provided no basis for the recovery of attorney fees because there was no privity of contract between Plaintiffs and Settlement. Unpersuaded by this argument, the district court determined that attorney fees were recoverable based on the fees provision. However, the court concluded that the amount of fees requested by Plaintiffs was unreasonable.Accordingly, the district court reduced the award of attorney fees from Plaintiff's initial request of $268,875.50 plus tax to $109,360 plus tax.
Plaintiffs contend that the district court erred in reducing the amount of attorney fees awarded. "Historically, New Mexico courts have . . . used the factors now found in Rule 16-105 [NMRA] of the Rules of Professional Conduct to examine the reasonableness of attorney fees." In re N.M. Indirect Purchasers Microsoft Corp., 2007-NMCA-007, ¶ 76, 140 N.M. 879, 149 P.3d 976. These factors include:
Rule 16-105(A). "The factors are not of equal weight, and all of the factors need not be considered." Microsoft, 2007-NMCA-007, ¶ 78.
In this case, Plaintiffs' counsel sought fees at a rate of $350 per hour for 768.25 hours, which resulted in a requested total of $268,875.50.1 In support of his requested hourly rate, Plaintiffs' counsel submitted an affidavit from another attorney who stated that the $350 requested hourly rate was a "reasonable and customary fee" in the locality for similar legal services. This attorney also reviewed Plaintiffs' counsel's time records and concluded that only 670.55 hours of the total hours listed in counsel's time records were actually attributable to work performed in this case. Plaintiffs' counsel also submitted an affidavit from his accountant. In response to Plaintiffs' submissions to the district court, Settlement's counsel submitted an affidavit summarizing its attorney fees charges as well as an affidavit from another local attorney who stated that, in his experience, the $350 requested hourly rate was unreasonable and higher than the customary rates charged for similar work.
After reviewing the foregoing and the record, the district court reduced the number of hours Plaintiffs' counsel claimed to 546.80, determining that "there were numerous excessive charges for items." The district court then determined that $350 was an excessive hourly rate and that a "reasonable hourly rate for the servicesperformed is $200.00 per hour." This ultimately resulted in an award for attorney fees of $109,360.00 plus applicable gross receipts taxes.
On appeal, Plaintiffs do not challenge the district court's reduction in hours. However, they contend that the district court erred in reducing the hourly requested rate from $350 to $200. We are not persuaded that the district court improperly exercised its discretionary authority to reduce the hourly rate. It was not improper for the district court to rely on the affidavits submitted by the parties and its own experience to determine what it considered to be a reasonable hourly rate. See Microsoft, 2007-NMCA-007, ¶ 65 (). We reject Plaintiffs' argument that the district court abused its discretion solely because the $200 hourly rate it applied was the same hourly rate charged by Settlement's attorney during the litigation. We cannot conclude under the facts of this case that the district court abused its discretion in its award of attorney fees.
In its cross-appeal, Settlement contends that the district court improperly awarded attorney fees on the basis of the fees provision in the loan agreement entered into between Settlement and Plaintiffs' deceased father. Settlement argues that since Plaintiffs were not parties to the loan agreement, there was no privity of contractbetween them and Settlement and, therefore, there was no contractual basis to support the awarding of attorney fees. The district court was not persuaded by Settlement's argument and reasoned that Plaintiffs stood in the shoes of their deceased father and that the loan agreement was the entire source of the dispute between the parties as to which party held the right to proceeds from the deceased father's annuity policies.
We reject Settlement's argument. The procedural history of this case dictates the ruling reached by the district court. We note that this case arose originally as a declaratory judgment action brought by Plaintiffs...
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