Love v. U.S. Fidelity & Guaranty Co.

• Citation: 568 S.W.2d 746,263 Ark. 925
• Decision Date: 10 July 1978
• Docket Number: No. 77-166,77-166
• Parties: Monroe LOVE, Appellant, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, Appellee.
• Court: Supreme Court of Arkansas

Page 746

568 S.W.2d 746

263 Ark. 925

Monroe LOVE, Appellant, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, Appellee.

No. 77-166.

Supreme Court of Arkansas, In Banc.

July 10, 1978.

Lee A. Munson, Pros. Atty., Little Rock, by John Wesley Hall, Jr., Deputy Pros. Atty., for appellant.

Bridges, Young, Matthews & Davis, Pine Bluff, for appellee.

LEROY AUTREY, Special Justice:

This is the second time that this matter has come before the Supreme Court of Arkansas. On July 19, 1976, in United States Fidelity and Guaranty Company v. Love, 260 Ark. 374, 538 S.W.2d 558-559 (1976), this Court held that the agreement of Pulaski County Sheriff Monroe Love to indemnify the surety, United States Fidelity and Guaranty Company, against any loss, damage or expense of any kind incurred by reason of the execution of the Sheriff's statutory bond included attorneys' fees expended by the surety in defending a civil rights action against the Sheriff, one of the Sheriff's deputies and the surety in the United States District Court for the Eastern District of Arkansas. In reversing and remanding the case to the trial court, this Court stated:

"To be recoverable by the indemnitee, the attorneys' fees must be reasonable, proper, necessary and incurred in good faith and with due diligence . . . These are factual questions to be determined by the trier of fact, and when properly placed in dispute are not matters to be disposed of on motion for summary judgment. Sheriff Love does, by sworn answers to interrogatories, place in issue the question of reasonableness of the fees paid. Accordingly, this case is reversed and remanded to the trial court for a determination of the reasonableness of the attorneys' fees."

At the hearing before the trial court on remand, Love took the position that under the mandate of this Court, he was entitled to "litigate the question of reasonableness, propriety and necessity, good faith and due diligence in the assessment of costs by USF&G in the conduct of their own defense . . ." USF&G objected to the position taken by Love and the trial court ordered "that the only issue before the court today is the reasonableness of the attorneys' fees". At the conclusion of the hearing on February 11, 1977, the trial court entered judgment for USF&G against Love in the amount of $1,962.50 plus costs and interest at the rate of six percent (6%) per annum from date until paid. The sum of $1,962.50 represented the full amount of the attorneys' fees paid by USF&G and this attorneys' fee was based on 55.30 hours of time expended by the defense attorney billed at the rate of $35.00 per hour, plus the court reporter's costs. There is no indication in the judgment of the trial court or in the record of the proceedings before trial court that any consideration was given to any factors other than the actual hours of time expended by the defense attorneys and the reasonableness of the hourly rate, plus the court reporter's costs, in the trial court's determination of the "reasonableness of the attorneys' fees".

In Robinson v. Champion, 251 Ark. 817, 475 S.W.2d 677, 678 (1972), this Court held:

"Among the pertinent considerations in determining the reasonableness of attorney's fees . . . are: the attorney's judgment, learning, ability, skill, experience, professional standing and advice, . . . the relationship between the parties, . . . the amount or importance of the subject matter of the case, . . . ; the nature, extent and difficulty of services in research, collection, estimation and mental array of evidence and anticipation of defenses and means of meeting them, and considering the case, receiving confidential information and giving confidential advice before any pleadings are filed or other visible step is taken, . . . the preparation of pleadings, . . . ; the proceedings actually taken and the nature and extent of the litigation, . . . ; the time and labor devoted to the client's cause, . . . ; the difficulties presented in the course of the litigation, . . . ; the results obtained, . . . and many other facts beside the time visibly employed, . . ."

The factors to be considered as guides in determining the reasonableness of an attorneys' fee are set forth in the Code of Professional Responsibility of the American Bar Association adopted by per curiam order of Court as the rule in this state after the Code had been promulgated and adopted by the American Bar Association under the chairmanship of the late Edward L. Wright, a leader at the bar of this State for many years, who served as a president of the American Bar Association. These considerations as set forth in Disciplinary Rule 2-106 as follows:

" . . . Factors to be considered as guides in determining the reasonableness of a fee include the following:

"(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly.

"(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.

"(3) The fee customarily charged in the locality for similar legal services.

"(4) The amount involved and the results obtained.

"(5) The time limitations imposed by the client or by the circumstances.

"(6) The nature and length of the professional relationship with the client.

"(7) The experience, reputation, and ability of the lawyer or lawyers performing the services.

"(8) Whether the fee is fixed or contingent."

In the recent case of Waters v. Wisconsin Steel Works, 502 F.2d 1309, 1319 (C.A.7, 1974), the Seventh Circuit U. S. Court of Appeals cited and quoted from the above provisions of Disciplinary Rule 2-106 in reversing the U. S. District Court's award of attorneys' fees to Plaintiff's counsel pursuant to Section 706(k) of Title VII, 42 U.S.C. § 2000e-5(k), with the comment that the trial court's award of attorneys' fees "was so lacking in analysis that it constituted an abuse of discretion." The court then went on to say:

"In fashioning a method of analysis to assist in determining the amount of attorney fees properly to be awarded in a Title VII action, we cannot subscribe to the view that attorney fees are to be determined solely on the basis of a formula applying 'hours spent times billing rate.' We recognize however that such a factor is a consideration in making the ultimate award and indeed it is a convenient starting point from which adjustments can be made for various other elements. Other elements to be considered are set out in the Code of Professional Responsibility as adopted by the American Bar Association: . . . "

While an important element to be considered in determining the reasonable value of an attorney's services is the time spent in the performance of such service, it has frequently been held that time spent in doing professional work is not a controlling factor in assessing the value of such services. Time spent by an attorney is sometimes of minor importance in determining the reasonable value of his services since an experienced or skillful attorney might accomplish in a very short time what another attorney would require a much longer time to accomplish. See Trimble v. Kansas City S&GR Co., 201 Mo. 372, 100 S.W. 7, Am.Jur.2d, Attorney's at Law, § 238, at Page 184.

In Weeks v. Southern Bell Telephone & Telegraph Company, 467 F.2d 95, 97 (C.A.5, 1972), the Fifth Circuit U. S. Court of Appeals affirmed the award of a $15,000.00 attorney's fee by Judge Griffin B. Bell, now United States Attorney General, but then a judge of the U. S. Court of Appeals for the Fifth Circuit, who was assigned to hear the matter on the district court level. In affirming Judge Bell's award of attorney's fees against the claim that Judge Bell had not awarded a fee of a sufficient amount in view of the hours of work claimed by the Plaintiff's attorney, the Fifth Circuit Court said:

"Hours claimed or spent on a case is not the sole basis for determining a fee. Electronics Capital Corp. v. Sheperd, 5 Cir. 1971, 439 F.2d 692, 693. In any event, the time factor, has a 'dubious virtue . . . as a standard for legal services'; 'when hours of time become a criterion, economy of time may cease to be a virtue.' See Hornstein, Legal Therapeutics: The 'Salvage Factor in Counsel Fee Awards, 69 Harv.L.Rev. 658 (1956)."

The Fifth Circuit Court of Appeals then went on to explain that Judge Bell had thoroughly discussed the basis for the award of attorneys' fees, weighing the results obtained, the time expended, the testimony of experienced attorneys involved in litigation of this type, the briefs filed, efforts on remand, and the contingency of the attorney's fee award. The Court concluded by stating:

"The question before this reviewing court is not what fee the members of this panel might have awarded sitting as a district court. The question is whether Judge Bell abused his discretion by awarding an unreasonably low fee. The majority answers firmly that Judge Bell did not abuse his discretion in making his award of $15,000.00 fees to Mrs. Roberts."

When this Court remanded this matter to the trial court for determination of the "reasonableness of the attorneys' fees" in USF&G v. Love, supra, this court's opinion and the applicable law as above set out clearly required that the trial court consider more than the hours of time expended by the defense attorney and the reasonableness of the hourly rate charged. The trial court should have permitted Love to proceed with any evidence he may have had to present on the "question of the reasonableness, propriety and necessity, good faith and due diligence" of the attorneys' fees and should have considered such evidence along with all other evidence in determining the reasonableness of the attorneys' fees to be paid by Love.

While the trial court in the exercise of its reasonable discretion in matters of this kind might well conclude that the reasonable fee which USF&G is entitled...