Shafer v. Kings Tire Service, Inc., No. 31574.

• Court: Supreme Court of West Virginia
• Writing for the Court: DAVIS, Justice.
• Citation: 597 S.E.2d 302,215 W.Va. 169
• Parties: Scott SHAFER, Appellant, Plaintiff below, v. KINGS TIRE SERVICE, INC., Matthew King, and Sam King, Appellees, Defendants below.
• Docket Number: No. 31574.
• Decision Date: 06 May 2004

597 S.E.2d 302
215 W.Va. 169

Scott SHAFER, Appellant, Plaintiff below,
v.
KINGS TIRE SERVICE, INC., Matthew King, and Sam King, Appellees, Defendants below

No. 31574.

Supreme Court of Appeals of West Virginia.

Submitted April 27, 2004.

Decided May 6, 2004.

597 S.E.2d 304

Debra Kilgore, Esq., Burton & Kilgore, Princeton, for the Appellant

Colleen C. McCulloch, Esq., Brown & Levicoff, P.L.L.C., Beckley, for the Appellee.

DAVIS, Justice.

Scott Shafer (hereinafter "Mr. Shafer")¹ appeals from an award of attorney's fees granted to him by the Circuit Court of Mercer County against Kings Tire Service, Matthew King and Sam King (hereinafter "the Kings"). The circuit court's attorney's fees award was granted after Mr. Shafer accepted the Kings' offer of judgment made pursuant to West Virginia Rule of Civil Procedure 68(a). Mr. Shafer requested a total award of $67,684.40 which included $17,227.30 in expenses and $50,457.50 for attorney's fees. He was awarded $25,000. Having reviewed the parties' briefs, heard oral argument, and reviewed the record, we reverse and remand with directions to the circuit court to make findings of fact and conclusions of law on the issue of attorney's fees.

I.

FACTUAL AND PROCEDURAL HISTORY

On April 9, 2001, Mr. Shafer sued the Kings for disability discrimination in violation of the Human Rights Act, W. Va.Code § 5-11-9(1) (1998) (Repl.Vol.2002), and for discrimination based upon the receipt of workers' compensation benefits in violation of W.

597 S.E.2d 305

Va.Code § 23-5A-1 (1978) (Repl.Vol.2002). Approximately eighteen months after filing the suit, the Kings' counsel verbally proposed three alternative settlement proposals: (1) a binding arbitration with a low and high cap award; (2) a jury verdict cap with a guaranteed payment to Mr. Shafer even if the jury returned a defense verdict; or (3) an immediate payment of $125,000.00. After Mr. Shafer refused all three offers, the Kings made an offer of judgment under Rule 68(a) of the West Virginia Rules of Civil Procedure on October 18, 2002. This offer of judgment allowed a judgment to be taken against the Kings for "One Hundred Twenty-five Thousand ($125,000.00), which shall include costs then accrued." Mr. Shafer accepted the offer of judgment on October 28, 2002

On November 6, 2002, Mr. Shafer filed a motion for attorney's fees pursuant to the Human Rights Act's cost-shifting section. W. Va.Code § 5-11-13(c). The motion requested $17,227.30 in expenses and $50,457.50 in attorney's fees billed at $175.00 per hour for 286.75 hours of work. This amount also included a total of $276.25 resulting from 4.25 hours of work at $65.00 an hour billed by an associate who worked at the law firm representing Mr. Shafer. The motion was accompanied by time sheets documenting the services rendered and the time these services consumed. The motion also included affidavits from three lawyers practicing in the employment discrimination field in West Virginia indicating the fees they charged for employment discrimination cases were at least $175.00 an hour.

Below, the Kings objected to the payment of any fees. They contended that the Human Rights Act authorizes attorney's fees only if a court finds that the defendant engaged in discriminatory practices as prohibited by the Act. The Kings further argued that the offer of settlement was not such a finding of discriminatory practices.

At a hearing on the attorney's fees motion held on January 24, 2003, the circuit court found that the offer of settlement did not preclude the award of attorney's fees. The court concluded that even though there was no finding of discrimination, an award of attorney's fees was appropriate because Mr. Shafer had prevailed in the case. Noting that the Human Rights Act was one of the "few areas where attorneys fees can be awarded" and that there was no finding of discrimination, the circuit court found that awarding a portion of the requested fees would be appropriate. The circuit court then awarded fees and costs in the amount of $25,000.00. The circuit court failed to disclose any reasoning that supported the fee amount. Mr. Shafer now appeals this ruling.

II.

STANDARD OF REVIEW

This case requires us to examine both a statute, the West Virginia Human Rights Act's attorney's fees provision, and a rule of civil procedure, Rule 68(a) of the West Virginia Rules of Civil Procedure. We have previously held that "`[w]here the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review.' Syllabus point 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995)." Syl. pt. 1, State v. Paynter, 206 W.Va. 521, 526 S.E.2d 43 (1999). We have likewise held that "[a]n interpretation of the West Virginia Rules of Civil Procedure presents a question of law subject to a de novo review." Syl. pt. 4, Keesecker v. Bird, 200 W.Va. 667, 490 S.E.2d 754 (1997). See also Franklin D. Cleckley, Robin J. Davis & Louis J. Palmer, Jr., Litigation Handbook on West Virginia Rules of Civil Procedure § 68[2][c] at 1045 (2002) ("Appellate review of Rule 68 issues is generally de novo, except that factual determinations by the trial court are reviewed for clear error." (footnote omitted)).

Additionally, this case also requires us to determine a question relating to the awarding of attorney's fees. Our review of this issue is limited for as we have recently reiterated:

"`[T]he trial [court] ... is vested with a wide discretion in determining the amount of ... court costs and counsel fees, [sic] 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.'

597 S.E.2d 306

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. 3, Daily Gazette Co., Inc. v. West Virginia Dev. Office, 206 W.Va. 51, 521 S.E.2d 543 (1999).

Syl. pt. 1, Hollen v. Hathaway Elec., Inc., 213 W.Va. 667, 584 S.E.2d 523 (2003) (per curiam). Keeping these standards in mind, we now turn to the contentions the parties raise.

III.

DISCUSSION

We think this case presents two issues for consideration: (1) did the circuit court have authority to enter any award of costs in this case given the relationship between Rule 68(a) and the cost-shifting provision of the West Virginia Human Right Act and (2) did the circuit court abuse its discretion in awarding Mr. Shafer only partial costs? We examine each of these questions in turn.

1. W. Va. R. Civ. Pro. 68(a) and W. Va.Code § 5-11-13(c)

West Virginia Rule of Civil Procedure 68(a) provides:

Offer of Judgment. At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against the defending party for the money or property or to the effect specified in the defending party's offer, with costs then accrued. If within 10 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof and thereupon the court shall direct entry of the judgment by the clerk.

By its terms, an offer of judgment must include not only an offer of judgment on the claim raised by the plaintiff, but such an offer must also include "costs then accrued." See Franklin D. Cleckley, Robin Jean Davis & Louis J. Palmer, Litigation Handbook on West Virginia Rules of Civil Procedure, § 68(a), p. 1046 (2002) ("An offer under Rule 68(a) does not have to separately recite the amount the defendant is offering in settlement of the substantive claim and the amount being offered to cover accrued costs. The critical issue concerning the contents of the offer, is that the offer be one that allows judgment to be taken against the defendant for both the damages caused by the challenged conduct and the costs then accrued."). While the term "costs" usually does not include attorney's fees, Nelson v. West Virginia Public Employees Insurance Board, 171 W.Va. 445, 451, 300 S.E.2d 86, 92 (1982), if an applicable statute defines costs to include attorney's fees, then attorney's fees may be recovered as costs. See generally 20 Am.Jur.2d Costs § 57 (1995). The Human Rights Act's cost-shifting section defines "costs" as "including reasonable attorney fees[.]" W. Va.Code § 5-11-13(c).² In Marek v. Chesny, the seminal United States Supreme Court case interpreting Federal Rule of Civil Procedure 68, the Court held:

[T]he most reasonable inference is that the term "costs" in Rule 68 was intended to refer to all costs properly awardable under the relevant substantive statute or other authority. In other words, all costs properly awardable in an action are to be considered within the scope of Rule 68 "costs." Thus, absent congressional expressions to the contrary, where the underlying statute defines "costs" to include attorney's fees, we are satisfied such fees are to be included as costs for purposes of Rule 68.

597 S.E.2d 307

473 U.S. 1, 9, 105 S.Ct. 3012, 3016, 87 L.Ed.2d 1, 9 (1985). The Supreme Court went on to hold that the accrued cost provision of Rule 68 extended to an award of attorney's fees under 42 U.S.C. § 1988, the general federal fee shifting statute for civil rights litigation, as "[t]his `plain meaning' interpretation of the interplay between Rule 68 and § 1988 is the only construction that gives meaning to each word in both Rule 68 and § 1988." Marek, 473 U.S. at 9, 105 S.Ct. at 3017, 87 L.Ed.2d at 9-10. Although "[a] federal case interpreting a federal counterpart to a West Virginia rule of civil procedure may be persuasive, ... it is not binding or controlling [,]"...