Richardson v. Murray

• Citation: 469 P.3d 104 (Table)
• Decision Date: 14 August 2020
• Docket Number: No. 120,680,120,680
• Parties: Douglas K. RICHARDSON and Mary K. Richardson, Appellants, v. Marilyn K. MURRAY and Paul E. Murray, Appellees.
• Court: Court of Appeals of Kansas

469 P.3d 104 (Table)

Douglas K. RICHARDSON and Mary K. Richardson, Appellants,

v.Marilyn K. MURRAY and Paul E. Murray, Appellees.

No. 120,680

Court of Appeals of Kansas.

Opinion filed August 14, 2020.

MEMORANDUM OPINION

Buser, J.:

This is an appeal of the district court's ruling awarding attorney fees to Mary K. and Douglas K. Richardson who obtained a judgment against Marilyn K. and Paul E. Murray in a lawsuit involving the sale of the Murrays' residence. The Richardsons appeal the district court's decision to deny attorney fees for the Kansas Consumer Protection Act (KCPA) claim. They also appeal the district court's calculation and amount of its award of attorney fees for the breach of contract claim. Upon our review, we find no abuse of discretion by the district court and, therefore, affirm its ruling.

FACTUAL AND PROCEDURAL BACKGROUND

In 2013, the Richardsons purchased a home in Overland Park, Kansas, from the Murrays. After the sale, the Richardsons had water intrusion in their basement. On July 28, 2014, the Richardsons filed an eight-count petition seeking damages against the Murrays primarily based on numerous inaccuracies in the real estate disclosure statement. These claims included breach of contract, fraudulent misrepresentation, violation of the KCPA, gross and wanton negligence, negligence, negligent misrepresentation, fraud by omission, and breach of implied duty of good faith and fair dealing.

On October 9, 2015, the Murrays submitted an offer of judgment in the amount of $30,000 which the Richardsons accepted on October 15, 2015. The district court entered judgment for the Richardsons for $30,000 on October 20, 2015.

The Richardsons filed an application for attorney fees and expenses in prosecuting the lawsuit. The district court granted the Richardsons $3,598.80 in court costs but denied their request for attorney fees and expenses. The Richardsons appealed to the Court of Appeals contending the district court erred in its denial of attorney fees and expenses.

On appeal, our court reversed the district court's ruling and remanded with directions for the district court to revisit the attorney fees issue. We directed the district court:

"(1) to determine in its discretion whether the Richardsons should receive an award of attorney fees for pursuing the merits of their KCPA claim and, if the court determines that they should receive an award, to award a reasonable amount and (2) to award a reasonable amount of attorney fees incurred by the Richardsons as a result of pursuing the merits of their breach of contract claim. In making any determination regarding reasonableness, the district court shall consider all of the relevant factors set forth in [the Kansas Rules of Professional Conduct] KRPC 1.5 (a)." Richardson v. Murray , 54 Kan. App. 2d 571, 589-90, 402 P.3d 588 (2017), rev. denied 307 Kan. 988 (2018).

On remand, the Richardsons offered itemized billing statements memorializing the law firm's time, billing rate, and descriptions of the legal services rendered during the litigation. The Richardsons' attorneys also provided a copy of the employment agreement with their clients for the district court's in camera review. Initially, the Richardsons sought $141,972.50 in attorney fees and expenses related to the 599.4 hours spent working on the case.

The Murrays responded that attorney fees should not be awarded for the KCPA claim because it constituted only a minor claim in the litigation as reflected in the billing statement. Moreover, the Murrays argued that the requested fees in general were excessive and duplicative, especially given the fact that the litigation settled for $30,000.

The Richardsons acknowledged that 4.5 hours out of the entire billing statement was duplicative and agreed it should be stricken from the request. They also agreed that one task which required 43.6 hours was excessive and the fee should be reduced by half. Ultimately, the Richardsons modified their request to $107,682.50.

The district court granted the motion for attorney fees in part and denied it in part. The district court found that no attorney fees should be awarded regarding the KCPA claim but ordered the Murrays to pay $8,712.40 in attorney fees to the Richardsons for their legal work on the breach of contract claim.

The Richardsons filed a timely notice of appeal.

DENIAL OF ATTORNEY FEES FOR PROSECUTING THE KCPA CLAIM

On appeal, the Richardsons contend the district court "erred by concluding that the Plaintiffs were not entitled to an attorney fee award under the KCPA." In particular, the Richardsons allege that the district court's reason for not awarding attorney fees under the KCPA was contrary to the law and the facts. In response, the Murrays contend the district court's decision to deny attorney fees was reasonable given that the KCPA does not mandate an attorney fee award, and the Richardsons did not actively pursue the KCPA claim.

Our standard of review provides: "On appeal, we review both a district court's determination of the reasonableness of requested attorney fees and the actual award of attorney fees under an abuse of discretion standard." Ross-Williams v. Bennett , 55 Kan. App. 2d 524, 558, 419 P.3d 608 (2018), rev. denied 308 Kan. 1595 (2018). A judicial action constitutes an abuse of discretion if (1) no reasonable person would take the view adopted by the district court; (2) it is based on an error of law; or (3) it is based on an error of fact. Consolver v. Hotze , 306 Kan. 561, 568-69, 395 P.3d 405 (2017).

In the prior appeal regarding attorney fees, our court held that the KCPA "provides the court with discretion to award reasonable attorney fees to a prevailing party when a supplier has violated the KCPA and the action has been terminated by judgment." Richardson , 54 Kan. App. 2d 571, Syl. ¶ 3. Accordingly, our court remanded the KCPA attorney fees request to the district court with directions "to determine in its discretion whether the Richardsons should receive an award of attorney fees for pursuing the merits of their KCPA claim and, if the court determines that they should receive an award, to award a reasonable amount." 54 Kan. App. 2d at 589-90.

On remand, in denying the Richardsons' request for KCPA attorney fees, the district judge ruled:

"In considering the pleadings, affidavits, calculation of time, the Kansas Rules of Professional Conduct, arguments by counsel, the Court looked at the KCPA claim and I looked at the billing and it was not separated out by claim, and like defense had pointed out, the Court could only see where there were approximately 5.4 hours in regards to this KCPA claim.

"While the plaintiffs were perceived as the prevailing party in this matter, the Court does not see where this KCPA claim was a significant part of the case considering that there was only 5.4 hours billed for it and so in the Court's discretion the Court is not going to grant attorneys' fees in regards to the KCPA claim."

At the outset, we disagree with the Richardsons' premise that the district court found the plaintiffs "were not entitled to an attorney fee award under the KCPA." (Emphasis added.) Based on our review of the district court's ruling on remand, it is apparent that—consistent with our prior opinion and remand—the district court understood that Kansas law permits a court to award attorney fees in appropriate KCPA cases. Thus, the Richardsons were entitled to attorney fees provided, in the district court's discretion, the fees claimed were appropriate and reasonable. The district court did not abuse its discretion by basing its ruling on an error of law. See Consolver , 306 Kan. at 568-69.

Under the KCPA, "the idea that one violation may constitute grounds for a fee award does not equate to the idea that such fees must be awarded." Louisburg Building. & Development Co. v. Albright , 45 Kan. App. 2d 618, 652-53, 252 P.3d 597 (2011). The KCPA provides that an award of attorney fees should be "limited to the work reasonably performed." K.S.A. 50-634(e).

The district court's discretionary ruling to not award attorney fees for prosecution of the KCPA claim is supported by the factual record. The Richardsons' billing statement had only two entries that referenced the KCPA claim. The first entry, dated September 21, 2015, occurred almost 14 months after the inception of the litigation, and about one month prior to the Richardsons' acceptance of the Murrays' offer of judgment. This entry for 3.3 hours was for an associate attorney to conduct an "[a]nalysis of Kansas case law regarding claims of fraud and claims under the Kansas Consumer Protection Act in preparation of drafting response to defendant's motion for summary judgment."

The second entry, dated October 13, 2015, occurred four days after the Murrays made the offer of judgment and two days before the Richardsons accepted it—effectively ending the litigation. This entry was for 1.5 hours for "[a]nalysis of Kansas case law regarding an award of attorney's fees under the KCPA." (Emphasis added.)

The KCPA claim was predicated on a stand-alone statutory basis that has, over the years, engendered a large, discrete body of caselaw. Inexplicably, nowhere in the billing statement was there any reference to the KCPA, its statutory provisions, or caselaw unique to this act, until at or very near the conclusion of the litigation. The district court appropriately noted this lack of significance to the prosecution of the Richardsons' lawsuit as shown in the limited number of hours recorded. It is also noteworthy that one of the two billing entries related to recovery of attorney fees at the time the litigation was concluding.

Moreover, as the Murrays argue, the Richardsons did not pursue written or deposition discovery on issues unique to a KCPA claim. And on appeal, the Richardsons do not refute the Murrays' assertion that the KCPA claim was an insignificant part of their cause of action. In summary, the totality of facts, including the limited...