Rice v. Mike Ferrell Ford, Inc.

• Decision Date: 01 April 1991
• Docket Number: No. 19561,19561
• Court: West Virginia Supreme Court
• Parties: , 1991-1 Trade Cases P 69,426 Aaron E. RICE, Jr. and Donna Rice, Plaintiffs Below, Appellants, v. MIKE FERRELL FORD, INC., a corporation; and Robert Bridges, Individually, Defendants Below, Appellees.

Page 774

403 S.E.2d 774

184 W.Va. 757, 1991-1 Trade Cases P 69,426

Aaron E. RICE, Jr. and Donna Rice, Plaintiffs Below, Appellants, v. MIKE FERRELL FORD, INC., a corporation; and Robert Bridges, Individually, Defendants Below, Appellees.

No. 19561.

Supreme Court of Appeals of

West Virginia.

Submitted Jan. 9, 1991.

Decided April 1, 1991.

Syllabus by the Court

"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 requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases." Syl. pt. 4, Aetna Casualty & Surety Co. v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986).

Bradley J. Pyles, Marcelle St. Germain, Crandall & Pyles, Logan, for appellants.

W. Bernard Smith, Logan, for appellees.

PER CURIAM:

This case is before this Court upon the appeal of Aaron and Donna Rice from an order of the Circuit Court of Logan County entered on May 8, 1989, which limited their award of attorneys' fees to $1,666.66, and denied reimbursement of litigation expenses. The appellants contend that the trial court abused its discretion by failing to award reasonable attorneys' fees in their successful action against the appellees, Mike Ferrell Ford, Inc. and Robert Bridges. ¹ We agree that the appellants are entitled to reasonable attorneys' fees, and we reverse and remand this case to the circuit court to determine a reasonable value of the attorneys' services.

The appellants initiated an action against the appellees for breach of contract on January 7, 1986. The appellants alleged in their complaint that the appellees had violated the Motor Vehicle Information and Cost Savings Act (Odometer Act), 15 U.S.C. §§ 1981-1991 (1988) the Magnuson-Moss Warranty--Federal Trade Commission Improvement Act (Magnuson-Moss Act), 15 U.S.C. §§ 2301-2312 (1988), and the West Virginia Consumer Credit and Protection Act, W.Va.Code, §§ 46A-1-101 to 6-109 (Supp.1990) by fraudulently misrepresenting to the appellants the actual mileage of a 1984 Ford SVO Mustang purchased by the appellants from the appellees. One of the appellees, Mike Ferrell Ford, Inc., filed a separate action against the appellants seeking to recover an alleged deficiency of $8,149.20, plus interest.

Following extensive discovery and four continuances of the trial over the objection of the appellants, the trial began on November 3, 1988. After a three-day trial, the jury returned a verdict in favor of the appellants in the amount of $5,000. The jury also denied Mike Ferrell Ford, Inc. any recovery on its claim against the appellants.

The appellants then filed a motion for attorneys' fees and costs in the amount of $34,810. Although the circuit court did not question any of the time certified by the appellants' counsel to have been spent on this case, the circuit court, by order entered on May 8, 1989, ruled that the appellants' counsel was entitled to attorneys' fees in the amount of $1,666.66, and denied the amounts claimed by the appellants as expenses for depositions and transcripts. This matter is now before this Court upon the appeal of that order.

The principal issue in this appeal is whether the trial court abused its discretion in limiting the appellants' recovery of attorneys' fees to one third of the appellants' recovery, in failing to award attorneys' fees at a reasonable hourly rate, and in denying reimbursement for litigation expenses. The appellants contend that under the Magnuson-Moss Act, 15 U.S.C. § 2310(d)(2) (1988), the Odometer Act, 15 U.S.C. § 1989(a)(2) (1988), and the West Virginia Consumer Credit and Protection Act, 46A-6-101 [1974], the appellants are allowed to recover reasonable attorneys' fees. The appellees assert, among many cross assignments of error, that the trial court erred in allowing any attorneys' fees without ascertaining whether the basis of the jury's award was upon a statute authorizing fees. ²

W.Va.Code, 46A-6-101(1) [1974] provides some guidance to the legislature's intent in enacting the West Virginia Consumer Credit and Protection Act:

(1) The legislature hereby declares that the purpose of this article is to complement the body of federal law governing unfair competition and unfair, deceptive and fraudulent acts or practices in order to protect the public and foster fair and honest competition. It is the intent of the legislature that, in construing this article, the courts be guided by the interpretation given by the federal courts to the various federal statutes dealing with the same or similar matters. To this end, this article shall be liberally construed so that its beneficial purposes may be served.

The legislature specifically declares in W.Va.Code, 46A-6-101(1) [1974], that the interpretations given by the federal courts to the federal statutes dealing with unfair, deceptive and fraudulent acts or practices, such as the Magnuson-Moss Act and the Odometer Act, should be used as guidelines by the courts in construing the West Virginia Consumer Credit and Protection Act. In the case before us, we are concerned with the federal courts' interpretation of those provisions of the Magnuson-Moss Act and the Odometer Act which authorize the recovery of attorneys' fees in successful actions brought under those statutes.

Under the Magnuson-Moss Act, 15 U.S.C. § 2310(d)(2) (1988), and the Odometer Act, 15 U.S.C. § 1989(a) (1988), attorneys' fees may be recovered by an individual who finally prevails in his or her action brought under those provisions. The Magnuson-Moss Act, 15 U.S.C. § 2310(d)(2) (1988), provides:

If a consumer finally prevails in any action brought under paragraph (1) of this subsection, he may be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of cost and expenses (including attorneys' fees based on actual time expended) determined by the court to have been reasonably incurred by the plaintiff for or in connection with the commencement and prosecution of such action, unless the court in its discretion shall determine that such an award of attorneys' fees would be inappropriate.

Under the Odometer Act, 15 U.S.C. § 1989(a) (1988):

[a]ny person who, with intent to defraud, violates any requirement imposed under this subchapter shall be liable in an amount equal to the sum of--

(1) three times the amount of actual damages sustained or $1,500, whichever is the greater; and

(2) in the case of any successful action to enforce the foregoing liability, the costs of the action together with reasonable attorney fees as determined by the court.

We observed in Muzelak v. King Chevrolet, Inc., 179 W.Va. 340, 347, 368 S.E.2d 710, 717 (1988) that the Magnuson-Moss Act, 15 U.S.C. § 2310(d)(2) specifically provides the recovery of attorneys' fees in successful actions for the actual time expended on the warranty claims. See also City National Bank of Charleston v. Wells, 181 W.Va. 763, 777, 384 S.E.2d 374, 388 (1989). Although we have not had occasion to address the recovery of attorneys' fees in successful actions under the Odometer Act, other jurisdictions, both state and federal, have recognized that an award of reasonable attorneys' fees is mandatory under the Odometer Act. Duval v. Midwest Auto City, Inc., 578 F.2d 721, 726 (8th Cir.1978) (award of attorneys' fees may exceed amount of damages); Fleet Investment Company, Inc., v. Rogers, 620 F.2d 792, 793 (10th Cir.1980) (fees not limited by fee arrangement between counsel and prevailing party); Force v. McGeachy, 186 Ga.App. 781, 368 S.E.2d 777 (1988); Hall v. Riverside Lincoln Mercury-Sales, 148 Ill.App.3d 715, 722, 101 Ill.Dec. 789, 499 N.E.2d 156, 161 (1986) (award of attorneys' fees exceeded damages); Chapotel v. Bailey Lincoln-Mercury, Inc., 363 So.2d 451, 454 (La.1978); Kostel Funeral Home, Inc. v. Duke Tufty Company, 393 N.W.2d 449, 452 (S.D.1986).

Since it is clear that the recovery of attorneys' fees is specifically authorized by the Magnuson-Moss Act and the Odometer Act, the only question before this Court concerns the method by which these attorneys' fees should be determined.

The United States Supreme Court first addressed the question of the appropriate manner in which to determine a reasonable attorney's fee in Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). In Hensley, the Supreme Court stated that

[t]he most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services.

Id. at 433, 103 S.Ct. at 1939, 76 L.Ed.2d at 50. This sum is referred to as the "lodestar." The Supreme Court then went on to note that the lodestar may be adjusted upward or downward to reflect the twelve factors enumerated in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.1974), ³ 461 U.S. at 434 n. 9, 103 S.Ct. at 1940 n. 9, 76 L.Ed.2d at 51 n. 9. The Supreme Court stated that the standards set forth in Hensley, "are generally applicable in all cases in which Congress has authorized an award of fees to a 'prevailing party.' " Id. at 433 n. 7, 103 S.Ct. at 1939 n. 7, 76 L.Ed.2d at 51 n....