Mauck v. Columbus Hotel Co., No. 97-CA-00114-SCT

• Citation: 741 So.2d 259
• Decision Date: 26 August 1999
• Docket Number: No. 97-CA-00114-SCT, No. 90-CA-00846-SCT.
• Parties: Edwin C. MAUCK and Kenneth L. Smotherman v. COLUMBUS HOTEL COMPANY, A Delaware Corporation, First Federal Bank For Savings, and The City of Columbus, Mississippi. Columbus Hotel Company, A Delaware Corporation v. Elmer Pierce, Jr., Charles N. White, d/b/a El Ark, Inc., an Arkansas Corporation, Kenneth L. Smotherman, and Edwin C. Mauck, First Federal Bank For Savings, and The City of Columbus, Mississippi.
• Court: United States State Supreme Court of Mississippi

741 So.2d 259

Edwin C. MAUCK and Kenneth L. Smotherman v. COLUMBUS HOTEL COMPANY, A Delaware Corporation, First Federal Bank For Savings, and The City of Columbus, Mississippi.

Columbus Hotel Company, A Delaware Corporation v. Elmer Pierce, Jr., Charles N. White, d/b/a El Ark, Inc., an Arkansas Corporation, Kenneth L. Smotherman, and Edwin C. Mauck, First Federal Bank For Savings, and The City of Columbus, Mississippi.

Nos. 97-CA-00114-SCT, 90-CA-00846-SCT.

Supreme Court of Mississippi.

August 26, 1999.

James Ray Mozingo, Craig D. Smith, Jackson, J. Tyson Graham, Columbus, Attorneys for Appellants.

J. Randolph Lipscomb, Jeffrey J. Turnage, David L. Sanders, R. Gawyn Mitchell, Columbus, Attorneys for Appellees.

EN BANC.

ON MOTION FOR CLARIFICATION¹

BANKS, Justice, for the Court:

¶ 1. The motions for rehearing on behalf of First Federal Bank and the City of Columbus are granted. The motion for rehearing filed on behalf of Columbus Hotel Company is denied. The opinions and order granting attorney fees on appeal previously issued by this Court are withdrawn and this opinion is substituted therefor.

¶ 2. We treat an appeal from a decision awarding attorney's fees and the question of whether the intervening defendants, each having a security interest in the case, should share liability for fees imposed upon the lessee. We conclude that there is no legal basis for imposing attorney's fees on the interveners and that there is no manifest error as to the amount to fees awarded. Accordingly, we affirm the judgment of the chancellor.

I.

¶ 3. This appeal arises from a decision of the Chancery Court of Lowndes County, Mississippi that followed the reversal and remand by this Court of the case Columbus Hotel Co. v. Pierce, 629 So.2d 605 (Miss.1993). There we canceled a long-term lease that Columbus Hotel Company (hereafter CHC) sought to have forfeited and remanded the case to the lower court in order to determine the proper amount of the attorney's fees and expert fees to be awarded to CHC. Id. at 611. Following remand, defendant interveners First Federal Bank For Savings (hereafter First Federal) and the City of Columbus (hereafter City) filed motions to dismiss, or in the alternative for summary judgment as to their liability for attorney's fees. Both First Federal and the City argued that they were not parties to the lease agreement, and consequently are not liable to CHC for fees or expenses incurred in the litigation. Chancellor Woodrow W. Brand, Jr. denied both motions by order entered September 26, 1994.

¶ 4. The chancery court, upon its own motion, granted certification pursuant to Miss.R.App.P. 5(a). With permission from the lower court, First Federal and the City filed a Petition for Interlocutory Appeal with this Court seeking clarification of the issues to be decided by the chancery court on remand. Both petitions were denied by this Court.

¶ 5. After the denial of the interlocutory appeal, another Chancellor, Dorothy W. Colom, assumed the case. CHC filed a motion and supporting brief for award of attorney fees and expenses. In both the City and First Federal's response to CHC's motion for award of attorney fees and expenses, each party once again argued that it was not responsible for CHC's attorney fees and expenses.

¶ 6. After the case was finally submitted for decision on the merits, Chancellor Colom entered her Opinion Awarding Attorney's Fees, which awarded CHC all fees and costs requested on an hourly basis, with a reduction of ten percent for attorney Lipscomb's failure to maintain contemporaneous time records for a total award of $97,696.25. The Chancellor rejected CHC's request for enhancement of the fee award but the opinion further awarded $22,072.26 for expenses relating to the litigation of the action. In addition, the Chancellor found that First Federal and the City were not liable, concluding that "[n]either First Federal nor the City of Columbus qualify as lessees, assignees or sublessess [sic]." A Final Judgment in favor of CHC was entered against El-Ark, Inc., Smotherman and Mauck on September 30, 1996.

II.

¶ 7. This matter originated from a Complaint to Cancel Lease filed on May 13, 1988, by CHC seeking to cancel a lease agreement dated July 19, 1979, between CHC as lessor and El-Ark, Inc. as lessee. The lease concerned property upon which was situated a hotel and the former Continental Trailways Bus Station, now a city parking lot. Randolph Lipscomb, the attorney for CHC, was retained on March 23, 1988 when a contingent fee agreement with CHC was executed. The original defendants were El-Ark, Smotherman and Mauck. Subsequently, alleging a special financial interest in upholding the lease, First Federal was allowed to intervene on December 19, 1988, and the City of Columbus was allowed to intervene on March 24, 1989. First Federal and the City asserted affirmative defenses which were personal to the parties to the lease agreement such as waiver, estoppel, laches and compliance with the lease, and First Federal vigorously defended the claims asserted by CHC, including major participation in the discovery phase as well as at trial. First Federal also retained an accounting firm to perform an audit of the hotel business in an effort to comply with the lease agreement.

¶ 8. A three-day trial on the merits was held with Chancellor William E. Bearden, Jr. presiding. In the written opinion the court held that the defendants had in fact breached the lease agreement but did not grant a forfeiture of the lease on grounds of unconscionability. Thereafter, the chancery court entered its final decree denying CHC all damages, all attorney fees and all expert witness fees.

¶ 9. On the first appeal, we reversed the decision of the chancellor and rendered a judgment of forfeiture of the lease agreement. Columbus Hotel Co. v. Pierce, 629 So.2d 605 (Miss.1993). We remanded the case to the Chancery Court of Lowndes County "for a determination of the proper amount of attorney's fees and expert costs." Columbus Hotel Co., 629 So.2d at 610.

¶ 10. On remand CHC hired attorney William H. Liston to aid Lipscomb in preparing a motion for attorney fees. Lipscomb filed a motion for attorney fees which was accompanied by affidavits by himself and Liston and several other supporting exhibits. The chancery court granted CHC its requested expenses and also accepted that Lipscomb expended 654.25 hours and Liston expended 57.25 hours in litigation of this action at the rate of one hundred fifty (150) dollars per hour finding that this rate is within the range of fees customarily charged. The amount awarded is disputed by both parties. Following the denial of the petitions to reconsider filed by Mauck and CHC, Mauck and Smotherman brought this appeal in which CHC cross appealed and filed notice of appeal against First Federal and the City. Several issues and sub issues are presented for this Court's consideration.

III.

¶ 11. The first issue asserted by Mauck, Smotherman, and by CHC, concerns the liability of First Federal and the City for attorney's fees.

A. Standing

¶ 12. The City of Columbus and First Federal assert that Mauck and Smotherman lack standing to challenge their dismissal on appeal. In support of this contention they cite Miss.Code Ann. § 11-3-37 (1991), which reads as follows:

§ 11-3-37. Appellant not entitled to reversal for error as to another.

In all cases, civil and criminal, a judgment or decree appealed from may be affirmed as to some of the appellants and be reversed as to others; and one of several appellants shall not be entitled to a judgment of reversal because of an error in the judgment or decree against another, not affecting his rights in the case. And when a judgment or decree shall be affirmed as to some of the appellants and be reversed as to others, the case shall thereafter be proceeded with, so far as necessary, as if the separate suits had been begun and prosecuted; and execution of the judgment of affirmance may be had accordingly. Costs may be adjudged in such cases as the supreme court shall deem proper.

Miss.Code Ann. § 11-3-37 (1991) (emphasis supplied). The City argues that no matter what the outcome of this appeal, Mauck and Smotherman will not be relieved of their obligation to pay attorneys' fees and expenses, and consequently their rights remain unaffected by the chancellor's decision to dismiss the City. The City cites Capital Transport Co. v. McDuff, 319 So.2d 658 (Miss.1975), in support of its argument that Mauck and Smotherman do not have standing to appeal. In Capital Transport Co., the jury returned a verdict against the master but failed to return a verdict against the servant when the master's liability depended upon the negligence of the servant. In finding that the master did not have standing to raise the issue and reversal was not required, we stated that, "[o]f what avail should it be to appellant that its co-defendant (servant) was so fortunate as to be let out or even given a windfall? The appellee (plaintiff) is the only one who has posture to raise such a complaint and he has not cross-appealed." Capital Transp. Co., 319 So.2d at 661. See also Meena v. Wilburn, 603 So.2d 866, 872-73 (Miss.1992)

(reiterating the holding of Capital Transport that just because the jury returned a verdict against one defendant and not the other in a negligence action does not require reversal of the verdict); D.W. Boutwell Butane Co. v. Smith, 244 So.2d 11, 12 (Miss.1971) (holding "where the employee is exonerated and the master held liable, the case will not be reversed for that reason alone").

¶ 13. We agree. That does not mean the issue of First Federal and the City's responsibility to pay the attorney fees of CHC is barred from review, however, because CHC assigned this as an issue in its cross-appeal. CHC adopted the arguments of Mauck and Smotherman as their arguments pertain to the responsibility of First Federal and the City to pay for CHC's...