Silver Creek Invs., Inc. v. Whitten Construction Management, Inc.

• Citation: 307 P.3d 360
• Decision Date: 15 March 2013
• Docket Number: Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 1.,No. 109,168.,109,168.
• Parties: SILVER CREEK INVESTMENTS, INC., Plaintiff/Appellee, v. WHITTEN CONSTRUCTION MANAGEMENT, INC., Defendant/Third–Party Plaintiff/Appellant, v. Aqua–Flo Guttering and Insulation, Inc., Jack Hall and Gloria Hall, d/b/a Hall and Sons Glass and Paint, Branham and Son Construction, Harris Plastering and Construction Co., Inc., and Gypsum Enterprises, Third–Party Defendants.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

307 P.3d 360

SILVER CREEK INVESTMENTS, INC., Plaintiff/Appellee,

v.WHITTEN CONSTRUCTION MANAGEMENT, INC., Defendant/Third–Party Plaintiff/Appellant,

v.Aqua–Flo Guttering and Insulation, Inc., Jack Hall and Gloria Hall, d/b/a Hall and Sons Glass and Paint, Branham and Son Construction, Harris Plastering and Construction Co., Inc., and Gypsum Enterprises, Third–Party Defendants.

No. 109,168.Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 1.

Court of Civil Appeals of Oklahoma,

Division No. 2.

March 15, 2013.

Appeal from the District Court of LeFlore County, Oklahoma; Honorable Danita G. Williams, Trial Judge.

AFFIRMED AS MODIFIED.

Belva Brooks Barber, Barber & Barber, Poteau, Oklahoma and Lawrence A.G. Johnson, Bixby, Oklahoma, for Plaintiff/Appellee.

J. Heath Lofton, Pierce, Couch, Hendrickson, Baysinger & Green, L.L.P., Tulsa, Oklahoma, and J. Chris Condren, Pierce, Couch, Hendrickson, Baysinger & Green, L.L.P., Oklahoma City, Oklahoma, for Defendant/Third–Party Plaintiff/Appellant.

JOHN F. FISCHER, Presiding Judge.

¶ 1 Defendant and third-party plaintiff Whitten Construction Management, Inc. appeals the district court's post-judgment order awarding prevailing party attorney fees to Plaintiff Silver Creek Investments, Inc. That order was entered on remand from this Court following our reversal of a prior attorney fee award to Silver Creek. See Silver Creek Investments, Inc. v. Whitten, No. 103,823 (March 11, 2009) ( Silver Creek I ). We find that enhancement of the amount obtained by multiplying a reasonable hourly rate by the hours reasonably incurred was not warranted and after further reductions for block billing and calculation errors we affirm the attorney fee award as modified.

BACKGROUND

I. Silver Creek I

¶ 2 The previous appeal involved what this Court characterized as an action for “damages arising from alleged defective construction of a hotel.” Whitten had entered into a written contract to serve as general contractor for Silver Creek's project to build a three-story hotel in Poteau, Oklahoma. Pursuant to the terms of the contract, Whitten agreed, among other things, to indemnify Silver Creek against any loss or liability occasioned by its negligence or that of its employees or agents. Pursuant to an express warranty, Whitten guaranteed, for a period of one year, all work performed pursuant to the parties' agreement. Slip op. at 3–4. Within one year of substantial completion of the hotel, Silver Creek demanded that Whitten remedy various defects in the construction project, including, but not limited to, replacement of approximately 90 guest room windows that leaked, causing damage to the hotel's interior. It was later discovered that all of the windows had been installed backwards, requiring their removal, which could not be done without extensive damage to the hotel's synthetic stucco exterior. Slip op. at 4.

¶ 3 Silver Creek originally filed this action in September 2002, naming Whitten and the window manufacturer as defendants. Silver Creek alleged that Whitten (1) was negligent in its capacity as general contractor and breached the construction contract; (2) failed to perform in a good and workmanlike manner according to the generally accepted standard of the construction industry and in accordance with the architect's plans and specifications; (3) failed to properly oversee the subcontractors; and (4) failed to remedy defects pursuant to the terms of the express warranty and committed breach of warranty. Whitten generally denied the allegations of the petition and asserted that if Silver Creek had been damaged, it was due to the negligence of third parties over which it had no control. In a cross-claim against the window manufacturer, Whitten asserted that it was entitled to indemnity and/or contribution. Whitten also filed a third-party petition asserting claims against five other subcontractors.¹

¶ 4 Jury trial began on January 17, 2006. The pre-trial order, which had not been finally settled until that day, reflected that Silver Creek would proceed to trial on alternate theories of recovery: breach of contract, breach of express and implied warranty, negligence and negligence per se. Silver Creek did not assert any claims directly against any of the third-party defendants. Some of the third-party defendants settled with Silver Creek, and one was granted summary judgment against Whitten.

¶ 5 Silver Creek's claims against Whitten were tried in the first stage of a bifurcated trial. The jury returned a general verdict in favor of Silver Creek and against Whitten in the amount of $184,000. Silver Creek did not participate in the second stage of the jury trial, which involved Whitten's third-party claim for indemnity against a concrete subcontractor. A special interrogatory, requested by Whitten in the trial's second stage, asked the jury to determine what amount of its $184,000 damage award it attributed to each of ten enumerated categories of damages.The jury attributed the entire award to “removal and replacement of windows.” ²

¶ 6 Silver Creek filed an application seeking an award of attorney fees and costs as prevailing party in its action against Whitten. The district court awarded attorney fees to Silver Creek in the amount of $84,420 and costs in the amount of $2,934.84, just as requested in Silver Creek's application. The district found that Silver Creek was also entitled to an additional amount, $21,105, as an “enhancement” of the base attorney fee for a total attorney fee award of $105,525.

¶ 7 Whitten appealed the judgment entered on the jury verdict and the attorney fee award. This Court found one proposition of error, out of twenty-one asserted, to require reversal. We reversed the judgment for attorney fees because the district court had “simply awarded the total number of hours that [Silver Creek] presented, without an assessment of the extent to which [it] prevailed and with no evidence before it from which to set a fee representative of the breach of express warranty portion of the overall litigation.” Slip op. at 28–29. Our decision was based on the rule that, in a multi-theory case involving judgment in which only some of the theories authorize attorney fees, the district court must distinguish, on the record, between attorney time that is compensable and that which is non-compensable. See Green Bay Packaging, 1996 OK 121, ¶ 38, 932 P.2d 1091, 1098. Although we made no specific determination of the issue, and could not do so from the record then before us, we noted a reduction in the number of hours was warranted, and the enhancement, if any, must also be reconsidered. We remanded the case to the district court for determination of the portion of Silver Creek's attorney fees “attributable to pursuit of its breach of warranty claim as it pertains to the windows.” Slip op. at 35–36.

II. Proceedings on Remand

¶ 8 Mandate was issued on June 4, 2009. On remand, the district court held an evidentiary hearing. Both parties presented expert testimony. Silver Creek presented the testimony of a local attorney, who testified as an expert on trial preparation for construction proceedings. This witness testified as to the reasonableness and necessity of the various charges submitted by Silver Creek for reimbursement by the district court. Silver Creek's witness explained that the warranty claim involved a core set of facts shared with the other claims and practically all of the attorneys' time. Whitten presented its own witness who testified that Silver Creek should recover only 20% of the attorney hours billed (total hours divided by five) because only one of five of its “causes of action” was fee-bearing.³ At the close of the evidence, the district court requested that the parties submit proposed findings of fact and conclusions of law. Both parties complied. On January 6, 2011, the district court filed its journal entry regarding attorney fees. In its order, the district court set forth detailed findings of fact and conclusions of law. After examining the terms and scope of Whitten's express warranty contained in the parties' construction contract, the district court determined that 7.5 hours requested by Silver Creek represented time attributable to issues other than breach of warranty, deducted those hours from the total hours requested and multiplied the remaining 474.9 hours by $175 per hour and awarded Silver Creek $83,107.50 in trial-related attorney fees. The district court also determined that an enhancement of this amount in the amount of $21,105 was still appropriate, and included that amount in its award. Finally, the districtcourt awarded Silver Creek appeal-related attorney fees for the first appeal in the amount of $14,037.50.

¶ 9 On appeal, Whitten argues that the district court's award of trial-related and appeal-related attorney fees must be reversed because the awards are unreasonable, excessive and in violation to the law of the case as set forth in Silver Creek I to apportion the attorney time between the fee bearing and non-fee bearing theories of recovery.

STANDARD OF REVIEW

¶ 10 The standard of review for determining the reasonableness of attorney fees is abuse of discretion. In re Adoption of Baby Boy A, 2010 OK 39, ¶ 19, 236 P.3d 116, 122. “[A]buse occurs when the ruling being reviewed is based on an erroneous legal conclusion or there is no rational basis in the evidence for the decision.” Tibbetts v. Sight'n Sound Appliance Ctrs., Inc., 2003 OK 72, ¶ 3, 77 P.3d 1042, 1046 (citations omitted). “As a general matter, an abuse of discretion review standard includes appellate examination of both fact and law issues.” Id. “What constitutes a reasonable attorney fee is a matter addressed to the sound discretion of the trial court to be decided based on various factors.” Id. An award of attorney fees will not be disturbed unless the appellate court finds that the district court made a clearly erroneous...