Heldreth v. Rahimian

• Decision Date: 21 February 2006
• Docket Number: No. 32779.,32779.
• Citation: 637 S.E.2d 359
• Court: West Virginia Supreme Court
• Parties: Holly D. HELDRETH, Plaintiff Below, Appellant v. Dr. Ali A. RAHIMIAN and Regional Women's Health Care, Inc., Defendants Below, Appellees.

637 S.E.2d 359

Holly D. HELDRETH, Plaintiff Below, Appellant v. Dr. Ali A. RAHIMIAN and Regional Women's Health Care, Inc., Defendants Below, Appellees.

No. 32779.

Supreme Court of Appeals of West Virginia.

Submitted January 11, 2006.

Decided February 21, 2006.

Concurring Opinion of Justice Davis February 22, 2006.

Concurring and Dissenting Opinion of Justice Maynard June 22, 2006.

Concurring Opinion of Justice Benjamin July 27, 2006.

COPYRIGHT MATERIAL OMITTED

Syllabus by the Court

1. "[T]he trial [court] . . . is vested with a wide discretion in determining the amount of . . . court costs and counsel fees; and the trial [court's] . . . determination of such matters will not be disturbed upon appeal to this Court unless it clearly appears that [it] has abused [its] discretion." Syl. Pt. 3, in part, Bond v. Bond, 144 W.Va. 478, 109 S.E.2d 16 (1959).

2. Inherent in any statutory fee award made pursuant to West Virginia Code § 5-11-13(c) (1998) (Repl.Vol.2002) is a recognition that the economic incentive provided by such a fee-shifting mechanism is necessary to attract competent counsel for the purpose of enforcing civil rights laws that serve to protect the interests of this state's citizenry.

3. Although a circuit court has discretion in setting an award of reasonable attorney's fees and expenses that are authorized in connection with the successful pursuit of a claim under the West Virginia Human Rights Act, West Virginia Code §§ 5-11-1 to -21 (Rep.Vol.2002), the trial court is not permitted to apply a percentage reduction based on the ratio of claims pursued to claims prevailed upon when making such an award.

4. "When the relief sought in a human rights action is primarily equitable, `reasonable attorneys' fees" should be determined by (1) multiplying the number of hours reasonably expended on the litigation times a reasonable hourly rate — the lodestar calculation — and (2) allowing, if appropriate, a contingency enhancement. The general factors outlined in Syllabus Point 4[of] Aetna Cas. & Sur. Co. v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986) should be considered to determine: (1) "the reasonableness of both time expended and hourly rate charged; and, (2) the allowance and amount of a contingency enhancement." Syl. Pt. 3, Bishop Coal v. Salyers, 181 W.Va. 71, 380 S.E.2d 238 (1989).

5. "Where attorney's fees are sought against a third party, the test of what should be considered a reasonable fee is determined not solely by the fee arrangement between the attorney and his client. The reasonableness of attorney's fees is generally based on broader factors such as: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases." Syl. Pt. 4, Aetna Cas. & Sur. Co. v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986).

6. While fee structures that involve a contingent-fee arrangement are clearly enforceable despite the existence of a fee-shifting statute, attorneys are not entitled to receive both the statutory fee award and the full amount of the contingent fee.

Drew M. Capuder, Law Office of Drew M. Capuder, Fairmont, for the Appellant.

Jerald E. Jones, Perry B. Jones, West & Jones, Clarksburg, for the Appellee.

ALBRIGHT, Justice:

Appellant Holly D. Heldreth appeals from the November 16, 2004, order of the Circuit Court of Harrison County through which the trial court made a reduced award of attorney's fees that are statutorily authorized¹ in connection with a successful result in a sexual harassment action. Upon its review and hearing of Appellant's counsel's motion for cumulative attorney's fees in the amount of $43,085, the trial court awarded twenty percent of the fees requested for the amount of $8,617.² In justification of this fee reduction, the trial court explained that the fees submitted were not capable of being readily divided based on the differing theories originally advanced by Ms. Heldreth and accordingly required an across-the-board eighty percent deduction because Appellant succeeded on only one of her five original theories of recovery.³ Upon our review of this issue, we conclude that the trial court committed error by arriving at the award of attorney's fees through application of a straight percentage formula of reduction. Accordingly, we reverse and remand to permit the trial court to make an award of reasonable attorney's fees by applying factors appropriate for calculation of a reasonable fee award. In addition, on remand the lower court should consider the additional guidance offered by this Court with regard to making a statutory fee award where the complainant and her counsel have previously entered into a contingency fee agreement.

I. Factual and Procedural Background

Appellant was a receptionist in the Clarksburg, West Virginia, medical office of Appellee Dr. Ali A. Rahimian from August 2000 until she left his employ on December 5, 2001. Dr. Rahimian was also Appellant's gynecologist. In the complaint, Ms. Heldreth alleged that she was forced to quit as a result of sexual harassment and a sexual assault. The alleged assault occurred in connection with the administration by Dr. Rahimian of a Depo-Provera injection.

Appellant asserted five separate causes of action against Dr. Rahimian through a lawsuit filed in state court. She alleged sexual harassment under the West Virginia Human Rights Act based on a hostile work environment;⁴ quid pro quo sexual harassment;⁵ intentional infliction of emotional distress; assault and battery; and wrongful discharge in violation of public policy.⁶ At trial, Appellant's counsel made a strategy determination to proceed to the jury on only two of the five original causes of action. Consequently, the jury was asked to make determinations only as to Appellant's two sexual harassment claims, one of which involved an alleged hostile work environment while the other claim centered on allegations of quid pro quo sexual harassment.

The jury found for Appellant on the sexual harassment claim predicated on hostile work environment, but against her on the quid pro quo claim of sexual harassment.⁷ The jury returned damages in the amount of $5,000 for emotional distress; $6,300 for lost wages; and $1,000 in punitive damages for a total award of $12,300.

When Appellant's attorney submitted his request for attorney's fees and expenses,⁸ he submitted a bill for 246.09 hours of work at a rate of $175 an hour for a total amount of $43,085. After holding a hearing on the issue of a statutory fee award, the trial court decided to apply a percentage basis and awarded Appellant's counsel 20% of his requested fees for a total amount of $8,617. In its order authorizing the award, the trial court noted that this award of statutory fees was in addition to the 40% contingency fee counsel would receive from his client pursuant to their contractual fee arrangement.

Through this appeal, Appellant seeks a reversal of the trial court's use of a straight percentage basis in making the fee award and additional reimbursement for the fees reasonably required to prosecute this appeal.

II. Standard of Review

Our review of the issue of a trial court's award of attorney's fees is to determine whether the lower court committed error in making the award. In Bond v. Bond, 144 W.Va. 478, 109 S.E.2d 16(1959), we explained: "[T]he trial [court] . . . is vested with a wide discretion in determining the amount of . . . court costs and counsel fees; and the trial [court's] . . . determination of such matters will not be disturbed upon appeal to this Court unless it clearly appears that [it] has abused [its] discretion." Id. at 478-79, 109 S.E.2d at 17, syl. pt. 3, in part. Accordingly, we proceed to determine whether the award of attorney's fees made by the trial court in this case constitutes an abuse of its discretion.

III. DISCUSSION

Appellant argues that the methodology the trial court employed to arrive at the award of attorney's fees granted in this case was an abuse of its discretion. In making its award, the trial court opined as follows:

The hourly rate of $175 is an appropriate rate based on prevailing market rates of other similar attorneys in this area. However, the total number of hours expended (246.90 hours) should not be used, as the Plaintiff only prevailed as to one count which provided for the recovery of attorney fees. It is impossible to discern from the detailed invoice which Plaintiff's counsel has submitted how many hours were devoted to each distinct cause. Therefore, the Court will use a percentage basis. Since only one of the causes of action allowed for the recovery of attorneys' fees and the Plaintiff prevailed on that one cause of action, then 20 percent of the total attorneys' fees or the sum of $8,617.00 should be awarded to Plaintiff's counsel, in addition to the forty (40) percent of the total verdict he will receive from the Plaintiff under their contingency fee arrangement.

The underlying basis for an award of fees pursuant to the fee shifting statute at issue was articulated in Bishop Coal Company v. Salyers, 181 W.Va. 71, 380 S.E.2d 238 (1989):

The goal of the West Virginia human rights law is to protect the most basic, cherished rights and liberties of the citizens of West Virginia. Effective enforcement of the human rights law depends upon the action of private citizens who, from our observations of these matters, usually lack the resources to retain the legal counsel necessary to...