Recycling Works, LLC v. Bradmor, LLC

• Decision Date: 20 May 2021
• Docket Number: No. 19-1080,19-1080
• Court: Supreme Court of West Virginia
• Parties: Recycling Works, LLC, Plaintiff Below, Petitioner v. Bradmor, LLC, Defendant Below, Respondent

Recycling Works, LLC, Plaintiff Below, Petitioner v. Bradmor, LLC, Defendant Below, Respondent

No. 19-1080

STATE OF WEST VIRGINIA SUPREME COURT OF APPEALS

May 20, 2021

(Morgan County 2018-C-43)

MEMORANDUM DECISION

Petitioner Recycling Works, LLC ("Recycling Works"), by counsel Dawn White, appeals the order of the Circuit Court of Morgan County, entered on October 28, 2019, awarding liability damages in the amount of $5,908.46, and attorney's fees in the amount of $8,995.00. Respondent Bradmor, LLC ("Bradmor") appears by counsel Michael D. Dunham.

This Court has considered the parties' briefs and the record on appeal. The facts and legal arguments are adequately presented, and the decisional process would not be significantly aided by oral argument. Upon consideration of the standard of review, the briefs, and the record presented, the Court finds no substantial question of law and no prejudicial error. For these reasons, a memorandum decision affirming the order of the circuit court is appropriate under Rule 21 of the Rules of Appellate Procedure.

Recycling Works leased commercial space from Bradmor in Berkeley Springs for its business, a secondhand bookstore. In December of 2017, a pipe in a unit above the leased space failed and damaged Recycling Works' inventory. The business was closed for several days. The incident repeated the following month, resulting in additional damage. Bradmor hired a remediation contractor, and Recycling Works claims that the contractor caused additional damage.

Bradmor alerted its insurance carrier about the damage its tenant incurred. Nearly six months after the first pipe burst, Recycling Works informed Bradmor by letter, "We have again been approached by your insurance company asking us to submit details of our claims. It is not our intention to have any direct dealings with [your insurance company]." Recycling Works informed Bradmor that it had suffered damages "of around $6,300, to which must be added attorney's fees to date of about $3,000." Thereafter, Bradmor's insurer sent at least five letters to Recycling Works between June of 2018 and October of 2018, each requesting a detailed estimate of damages and proof of loss.

There is no evidence in the appendix record on appeal that Recycling Works responded to these requests. By letter dated November 13, 2018, Recycling Works, by counsel, made a demand of $12,000, "most of which is to cover . . . legal fees." In response, Bradmor's insurer sent Recycling Works' attorney a letter stating, "As you are aware, [Bradmor's insurer] is in the midst of negotiations with [Recycling Works' insurer] regarding its [p]roperty [d]amage claim which was paid by its carrier." Nevertheless, Recycling Works filed a complaint in the Circuit Court of Morgan County in December of 2018.

In early February of 2019, Recycling Works' counsel provided an informal "breakdown" of the damage claim to Bradmor's counsel: $5,908.46. Recycling Works' counsel acknowledged that Bradmor's counsel had "expressed frustration with [Recycling Works' counsel's] inability to [previously provide Recycling Works'] exact damage claim" but Recycling Works' counsel informed Bradmor's counsel that her legal fees at that point amounted to $12,400.00. Recycling Works made a "non-negotiable" demand for $18,308.46. Counsel for the parties met, and Recycling Works' counsel showed Bradmor's counsel notes of handwritten time records but did not give counsel copies of the records or other documentation. The client had not been invoiced. At the suggestion of Bradmor's counsel, the parties resolved the damages claim for $5,908.46, but left the question of attorney's fees for the circuit court.¹

Recycling Works petitioned the circuit court for attorney's fees in the amount of $23,126.89, and the circuit court conducted a hearing. The circuit court entered its order awarding attorney's fees in the total amount of $8,995.00 ($175.00 per hour) on October 28, 2019. In doing so, the circuit court found that the parties' lease provided for "reasonable" attorney's fees. However, Recycling Works had no written fee arrangement with its attorney, and it offered no testimony to the court to establish its attorney's typical hourly rate. The court noted that Recycling Works did not provide documentation supporting its claim for attorney's fees to Bradmor until directed to do so by the court. The circuit court questioned the reasonableness of the requested attorney's fees in light of Bradmor's agreement to pay damages immediately upon receipt of the accounting it had requested, and found that it was unreasonable for Recycling Works to request attorney's fees for discovery occurring after Bradmor agreed to settle. The court denied a $2,500.00 "initial fee agreement" cost that Recycling Works sought on the ground that Recycling Works presented no documentation to support the work its counsel allegedly performed for that fee. However, the award of attorney's fees included fees for four hours that Recycling Works' counsel spent preparing for the hearing on attorney's fees.

Recycling Works appeals the order awarding attorney's fees and assigns error on six grounds. It argues that the circuit court: 1) abused its discretion by making an "erroneous assessment of the evidence of the applicable law;" 2) erroneously excluded evidence of prevailing legal fees; 3) erroneously excluded the "initial fee agreement" from the award; 4) arbitrarily denied attorney's fees for time that counsel spent seeking reassignment of the case; 5) made a punitive award; and 6) failed to make adequate findings of fact and conclusions of law. In reviewing these assignments of error, we are mindful that

"'"[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." Syllabus point 3, [in part,] Bond v. Bond, 144 W.Va. 478, 109 S.E.2d 16 (1959). Syl. Pt. 2, [in part,] Cummings v. Cummings, 170 W.Va. 712, 296 S.E.2d 542 (1982) [(per curiam)]. Syllabus point 4, in part, Ball v. Wills, 190 W.Va. 517, 438 S.E.2d 860 (1993). Syl. pt. [2], Daily Gazette Co., Inc. v. West Virginia Dev. Office, 206 W.Va. 51, 521 S.E.2d 543 (1999). Syllabus point 1, Hollen v. Hathaway Electric, Inc., 213 W.Va. 667, 584 S.E.2d 523 (2003) (per curiam).' Syl. Pt. 3, Shafer v. Kings Tire Serv., Inc., 215 W.Va. 169, 597 S.E.2d 302 (2004)." Syl. Pt. 3, Carper v. Watson, 226 W.Va. 50, 697 S.E.2d 86 (2010).

Syl. Pt. 1, W. Virginia Dep't of Transp., Div. of Highways v. Newton, 238 W. Va. 615, 797 S.E.2d 592 (2017).

The circuit court was required to consider the request for attorney's fees according to our prior directives:

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

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