A Law Corp.. v. Laroya

• Decision Date: 02 September 2010
• Docket Number: No. 28754.,28754.
• Citation: Hall v. Laroya, 124 Hawai'i 187, 238 P.3d 714 (Haw. App. 2010)
• Parties: David W. HALL, Attorney at Law, A Law Corporation, Plaintiff-Appellant v. James H. LAROYA, Defendant-Appellee.
• Court: Hawaii Court of Appeals

124 Hawai'i 187

238 P.3d 714

David W. HALL, Attorney at Law, A Law Corporation, Plaintiff-Appellant

v.James H. LAROYA, Defendant-Appellee.

No. 28754.

Intermediate Court of Appeals of Hawai‘i.

Sept. 2, 2010.

David W. Hall, Honolulu, on the briefs, for Plaintiff-Appellant.

NAKAMURA, C.J., REIFURTH and GINOZA, JJ.

Opinion of the Court by GINOZA, J.

Plaintiff-AppellantDavid W. Hall, Attorney at Law, a Law Corporation(Hall law firm) initiated this action (collection action) to collect $8,601.92 in attorney fees, costs, and taxes for legal services provided to DefendantJames H. Laroya(Laroya) in a prior case.After Laroya defaulted in this collection action, the District Court of the First Circuit, Honolulu Division(district court), entered judgment on August 22, 2007, awarding the Hall law firm the principal amount of $8,601.92, plus interest, filing fees, and other costs.The district court did not, however, award the attorney fees requested by the Hall law firm pursuant to Hawaii Revised Statutes (HRS) § 607-14(Supp.2006) for the litigation of the instant collection action.The Hall law firm now appeals, contending that it is entitled to an award of attorney fees pursuant to HRS § 607-14 for litigating this case.

This case presents the question of whether a law firm that prevails in a court action to collect fees from a client may also be awarded attorney fees under HRS § 607-14 for the work of an attorney employed with the law firm who represents the firm in the collection action.Given the language and history of the statute and Hawai‘i case law, we answer this question in the affirmative.

I.STATEMENT OF FACTS

The named plaintiff in this action is the Hall law firm, a law corporation.Based on the declaration of David W. Hall(attorney Hall), as an employee of the Hall law firm, he represented Laroya in a criminal matter beginning on September 1, 2003 and, although Laroya agreed to pay for the legal services, Laroya later failed to make any payments.

On February 24, 2006, the Hall law firm filed a complaint in district court against Laroya, seeking $8,601.92 in attorney fees, costs, and gross excise tax for services rendered to Laroya from September 1, 2003 through April 7, 2005.

On February 23, 2007, the district court denied a proposed default judgment submitted by the Hall law firm which had requested a total of $14,611.55, including a request for $2,632.50 for attorney fees in litigating the instant case.¹The district court denied the requested judgment because the complaint was not verified, and the court also added the following notation: “cannot recover Attorney's Fees as you are essentially representing yourself.”

On March 1, 2007, the Hall law firm submitted an Ex Parte Motion for Reconsideration of Denial of Judgment and Attorney's Fees (Motion for Reconsideration).In support of the Motion for Reconsideration, attorney Hall submitted a declaration that stated, in pertinent part:

1.I am the attorney for the Plaintiff in the above-entitled matter.

2.The attached motion to reconsider is filed ex parte because Defendant was served by publication and cannot be found.

3.As an employee of Plaintiff, I represented the Defendant in State of Hawaii v. James Laroya, Criminal CaseNo. 1P103-09420, Citation/ReportNo. 03349488, in which he was charged with impersonating a police officer in the second degree, extortion in the third degree and sexual assault in the fourth degree.I spent 77.9 hours from September 1, 2003 through May 10, 2004 in resolving the case with a deferred acceptance of a no contest plea to impersonating a police officer in the second degree which was ultimately dismissed after another year.I performed all work in the case under Plaintiff's name and bills were submitted to Defendant in Plaintiff's name.

4.Although Defendant had consistently said that he would pay for the services rendered, he did not pay anything.

....

6.I filed a verified complaint in this action to recover the money owed Plaintiff on February 24, 2006.

7.After many failed attempts to locate Defendant, he was served by publication.

8.Defendant failed to appear on February 20, 2007.I appeared on behalf of Plaintiff and requested that a default be entered and that Plaintiff be permitted to submit a Judgment and request for attorney's fees and costs and the Court so ordered.

9.On February 22, 2006, I submitted a Judgment and Declaration Regarding Attorneys' Fees and Costs on behalf of Plaintiff with detailed time sheets as Exhibit 1 and costs as Exhibit 2....

10.On February 26, 2007, I received the Judgment and the Declaration Regarding Attorneys' Fees and Costs and Exhibits 1 and 2 back stamped “Denied” with the explanation that “per court minutes on 2-20-07, complaint not verified” and “cannot recover attorney's fees as you are essentially representing yourself.”

....

....

13.I have practiced as an shareholder, director, officer and employee of Plaintiff and its predecessor corporations since 1980 and prior to 1980, I had practiced under various other corporate entities and partnerships since 1971.

....

On March 8, 2007, the district court denied the Motion for Reconsideration.²

On July 26, 2007, default judgment was entered and on August 22, 2007, judgment was entered, awarding a total of $12,438.73, ³ but not awarding attorney fees for the work in this collection action.

II.DISCUSSION A. Standards of Review

On appeal, a trial court's grant or denial of attorneys' fees is reviewed under the abuse of discretion standard.Kamaka v. Goodsill Anderson Quinn & Stifel,117 Hawai‘i 92, 105, 176 P.3d 91, 104(2008);TSA Int'l, Ltd. v. Shimizu Corp.,92 Hawai‘i 243, 253, 990 P.2d 713, 723(1999).

The trial court abuses its discretion if it bases its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence.Stated differently, an abuse of discretion occurs where the trial court has clearly exceeded the bounds of reason or disregarded rules or principles of law or practice to the substantial detriment of a party litigant.

TSA Int'l, Ltd.,92 Hawai‘i at 253, 990 P.2d at 723(citations, internal quotation marks, and brackets omitted).

In this case, the statutory interpretation of HRS § 607-14 is central to the issue on appeal.For purposes of interpreting a statute,

our foremost obligation is to ascertain and give effect to the intention of the legislature, which is to be obtained primarily from the language contained in the statute itself.And we must read statutory language in the context of the entire statute and construe it in a manner consistent with its purpose.

When there is doubt, doubleness of meaning, or indistinctiveness or uncertainty of an expression used in a statute, an ambiguity exists....

In construing an ambiguous statute, the meaning of the ambiguous words may be sought by examining the context, with which the ambiguous words, phrases, and sentences may be compared, in order to ascertain their true meaning.HRS § 1-15(1)(1993).Moreover, the courts may resort to extrinsic aids in determining legislative intent.One avenue is the use of legislative history as an interpretive tool.

Fought & Co. v. Steel Eng'g and Erection, Inc.,87 Hawai‘i 37, 45, 951 P.2d 487, 495(1998)(citations, internal quotation marks, and brackets omitted).

B.Attorneys' Fees UnderHRS § 607-14

The Hawai‘i Supreme Court has often stated with regard to the award of attorneys' fees that:

Generally, under the “American Rule,” each party is responsible for paying for his or her own litigation expenses.A notable exception to the “American Rule,” however, is the rule that attorneys' fees may be awarded to the prevailing party where such an award is provided for by statute, stipulation, or agreement.

TSA Int'l, Ltd.,92 Hawai‘i at 263, 990 P.2d at 733(citations omitted);see alsoDFS Group L.P. v. Paiea Properties,110 Hawai‘i 217, 219, 131 P.3d 500, 502(2006);Ranger Ins. Co. v. Hinshaw,103 Hawai‘i 26, 31, 79 P.3d 119, 124(2003).

HRS§ 607-14 is a statutory exception to the American Rule.It provides, in pertinent part:

§ 607-14 Attorneys' fees in actions in the nature of assumpsit, etc.In all the courts, in all actions in the nature of assumpsit ... there shall be taxed as attorneys' fees, to be paid by the losing party and to be included in the sum for which execution may issue, a fee that the court determines to be reasonable; provided that the attorney representing the prevailing party shall submit to the court an affidavit stating the amount of time the attorney spent on the action and the amount of time the attorney is likely to spend to obtain a final written judgment, or, if the fee is not based on an hourly rate, the amount of the agreed upon fee.The court shall then tax attorneys' fees, which the court determines to be reasonable, to be paid by the losing party; provided that this amount shall not exceed twenty-five per cent of the judgment.

....

The above fees provided for by this section shall be assessed on the amount of the judgment exclusive of costs and all attorneys' fees obtained by the plaintiff, and upon the amount sued for if the defendant obtains judgment.

Here, where Laroya promised to pay for legal services, this action to collect the fees he owes is “in the nature of assumpsit.”SeeChuck Jones & MacLaren v. Williams,101 Hawai‘i 486, 502, 71 P.3d 437, 453(App.2003)(implicitly recognizing that HRS § 607-14applied to a fee collection action for legal services);Kamaka,117 Hawai‘i at 121-22, 176 P.3d at 120-21 (“Assumpsit is a common law form of action which allows for the recovery of damages for non-performance of a contract, either express or implied, written or verbal, as well as quasi contractual obligations (quotingBlair v. Ing,96 Hawai‘i 327, 332, 31 P.3d 184, 189(2001))(internal quotation marks and brackets omitted).

The express terms of HRS § 607-14 are broad, stating that “[i]n all the courts, in all actions in the...