Murphy v. Grisham, 12190
| Decision Date | 24 November 1981 |
| Docket Number | No. 12190,12190 |
| Citation | 625 S.W.2d 215 |
| Parties | James F. MURPHY and Mike Murphy, Plaintiffs-Respondents, v. Lawrence E. GRISHAM and Frances M. Grisham, his Wife, Defendants-Appellants. |
| Court | Missouri Court of Appeals |
Peter H. Rea, Branson, for plaintiffs-respondents.
Ivella McWhorter Elsey, Robert M. Sweere, Springfield, for defendants-appellants.
Plaintiffs sought a deficiency judgment following the foreclosure of a deed of trust on real estate which secured the payment of a promissory note they held. Defendants counterclaimed, seeking to set aside the foreclosure sale. The trial judge entered judgment in plaintiffs' favor on their petition and denied defendants' counterclaim.
Defendants here contend that the trial court erred: 1) in awarding plaintiffs an amount equal to 25% of the unpaid balance of the note as attorney's fees "BECAUSE SUCH AN ATTORNEY FEE IS UNREASONABLE AND UNCONSCIONABLE IN THAT THE FEE IS CLEARLY EXCESSIVE IN VIEW OF THE TIME AND LABOR INVOLVED, THE DIFFICULTY OF THE QUESTIONS PRESENTED, THE CUSTOMARY CHARGES AND THE AMOUNT INVOLVED", and 2) "IN LIMITING DEFENDANTS' EVIDENCE REGARDING COMPARABLE LAND SALES TO THE PERIOD OF MID-JULY TO MID-AUGUST OF 1980 WHEN THE LAND AT ISSUE WAS FORECLOSED ON AUGUST 4, 1980 ... IN THAT EVIDENCE OF SALES OF PROPERTY SIMILARLY LOCATED TO THAT INVOLVED REASONABLY NEAR THE TIME OF TAKING IS ADMISSIBLE TO SHOW THE INSUFFICIENCY OF THE CONSIDERATION PAID BY PLAINTIFFS FOR THE FORECLOSED REAL ESTATE."
We first consider defendants' point one. The original amount of the note was $120,000. It provided that defendants agreed "to pay all costs of collections, including a reasonable attorney's fee if payments are not paid at maturity. and agree that such a fee would be 25%". The note was on a printed form and the quoted portion after "maturity." was added by typewriter. No principal payments were made on the note. Plaintiffs purchased the property for $60,000 at the foreclosure sale. After expenses, the sale netted $59,462.90, which was applied toward payment of the note. The trial court determined that the principal and interest due on the note at the time of judgment was $72,383.16 and added to the judgment 25% of this, $18,095.79, for attorney fees.
Provisions in a note providing for attorneys fees based on a specified percentage of the note are valid. American Savings Bank v. Sutton, 204 S.W. 572 (Mo.App. 1918); Annot., Validity of provision in promissory note or other evidence of indebtedness for payment, as attorneys' fees, expenses, and costs of collection, of specified percentage of note, 17 A.L.R.2d 288, 290 (1951). A party contending that an attorney fee provision in a note is unreasonable must plead and prove it. American Savings Bank v. Sutton, supra, 204 S.W. at 573. See also Annot., supra, 17 A.L.R.2d at 303; Annot., Necessity of Introducing Evidence to Show Reasonableness of Attorneys' Fees Where Promissory Note Provides for Such Fees, 18 A.L.R.3d 733, 745-746 (1968). Defendants pled that 25% of the note's balance would not be a reasonable attorney's fee but offered no proof contesting it. In their brief here they contend that because this matter involved a "standard foreclosure", the filing of a petition in this case, filing a reply and "assorted suggestions" and a trial of less than one day, the fee is "excessive, unreasonable and unconscionable as a matter of law."
In determining the reasonable value of legal services, the time taken is one element to consider but it may be of minor importance; other considerations are the nature, character and amount of the services rendered, the nature and importance of the litigation or business in which the services are rendered, the degree of responsibility imposed on or incurred by the...
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