Spencer v. Oklahoma Gas & Elec. Co.
| Citation | 2007 OK 76,171 P.3d 890 |
| Decision Date | 09 October 2007 |
| Docket Number | No. 103,404.,103,404. |
| Parties | Theresa SPENCER, Plaintiff/Appellant, v. OKLAHOMA GAS & ELECTRIC COMPANY, Defendant/Appellee. |
| Court | Oklahoma Supreme Court |
CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION 1
¶ 0 A disabled mother of three, the plaintiff/appellant, Theresa Spencer (Spencer/customer), filed an application for housing assistance. Because the defendant/appellee, Oklahoma Gas and Electric Company (OG & E/electric company), refused to open an account in Spencer's name, the application was denied. The electric company asserted that the customer had an outstanding balance on a 2002 account of $483.32. Spencer filed suit seeking a declaration that, having paid the account in full, she did not owe the electric company any further monies joined with a plea for damages. After a year of litigation, OG & E offered to confess judgment in the amount of $5,000.00, exclusive of costs and attorney fees. After accepting the offer, Spencer sought $8,775.37 in attorney fees and costs. OG & E opposed the award and countered for an award of attorney fees and costs in its favor. The trial court awarded Spencer $2,500.00 in attorney fees and the Court of Civil Appeals affirmed. We determine that: 1) the failure to follow the directives of Burk v. Oklahoma City, 1979 OK 115, 598 P.2d 659 in setting the attorney fees and to make an award consistent with the evidence presented constitutes an abuse of discretion requiring reversal; and 2) under the facts and evidence presented, $7,104.50 in attorney fees should be taxed and collected as costs against OG & E.
COURT OF CIVIL APPEALS OPINION VACATED; TRIAL COURT AFFIRMED IN PART AND REVERSED IN PART; REMANDED FOR DETERMINATION OF APPEAL AND CERTIORARI RELATED ATTORNEY FEES.
Jerry L. Colclazier, Colclazier & Associates, Seminole, OK, for plaintiff/appellant.
William P. Tunell, Rainey, Ross, Rice & Binns, P.L.L.C., Oklahoma City, OK, for defendant/appellee.
¶ 1 To dispose of the certiorari petition, we must resolve two issues. The first is whether the trial court abused its discretion in reducing the requested attorney fees of $8,775.37 by more than $6,000.00. It is apparent from the transcript of the hearing on the attorney fees issue that: 1) there was no real attempt to determine the amount to be awarded under the standards of Burk v. Oklahoma City, 1979 OK 115, 598 P.2d 659; and 2) no rational relationship exists between the attorney fees awarded and the evidence presented. Therefore, we hold that the failure to follow the Burk directives and to award attorney fees consistent with the evidence constitutes an abuse of discretion requiring reversal.
¶ 2 The second issue requiring resolution is the appropriate fee to be awarded for Spencer's representation in the underlying cause. Under the facts and the evidence presented, we hold that $7,104.50 in attorney fees should be awarded as costs against OG & E.
¶ 3 The facts of the underlying action are highly disputed. Nevertheless, it is uncontested that Spencer, a disabled mother of three, paid her account with the electric company in full on November 13, 2002. The debt of approximately $484.00 was paid in cash for which the customer received a receipt. Two years later, Spencer applied for housing assistance.2 She alleges her application was denied because OG & E refused to extend Spencer service, based on allegations that the November, 2002 bill remained outstanding,3
¶ 4 In January of 2005, Spencer filed suit seeking a declaration that she had paid her debt in full to OG & E and requesting damages. OG & E answered in March raising affirmative defenses of insufficient service, unclean hands, limitations, failure to mitigate, Spencer's negligence and federal preemption. In addition, OG & E counter-claimed for breach of contract alleging that, at the customer's request, the cash payment had been refunded and replaced with her personal check which was returned for insufficient funds. The electric company sought payment for the outstanding bill. OG & E's answer and amended answer and counterclaim were followed a month later with a motion to dismiss adding arguments of improper venue and lack of authority to award damages in a declaratory judgment action. Attached to the motion to dismiss is an affidavit of an OG & E employee explaining the activity report of the electric company indicating that Spencer made the cash payment on her account, requested its reversal and substituted a check which was returned dishonored. The record contains a copy of Spencer's cash receipt.4 Notably absent therefrom is a copy of the allegedly dishonored check. The customer contends that the check would be impossible to resurrect as she had no checking account upon which to write a draft when she made the cash payment.
¶ 5 On May 19, 2005, the trial court overruled OG & E's motion to dismiss. A year after the customer filed her petition, the electric company offered to confess judgment in the amount of $5,000.00 exclusive of "any costs or attorney fees."5 The offer of judgment was made pursuant to 12 O.S. § 940(B).6 Subsection A7 of the same statute specifically provides that the prevailing party shall8 be allowed reasonable attorney fees, court costs and interest. The offer was accepted the day after its filing and in February of 2006, Spencer filed her application for attorney fees and costs in the sum of $8,775.37. Despite having made an offer of judgment under a statute allowing the collection of attorney fees, OG & E responded that none of the requested costs were recoverable and no statutory basis existed for the assessment of attorney fees.
¶ 6 In the alternative, OG & E asserted that Spencer's application for attorney fees lacked trustworthiness. The assertion was based on discrepancies existing between the submitted request and a draft billing statement Spencer provided to OG & E on January 26, 2006.9 If attorney fees were awarded, OG & E argued that they should be reduced by $3,450.00 reflected by the alleged differences in the draft statement and the statement submitted with Spencer's application. In addition, the electric company insisted that the customer's attorney fees were unreasonable, the hourly rates were insupportable and $840.00 in fees were incurred because of the attorney's mismanagement of the cause, specifically his need to file a motion to vacate after missing a disposition docket. Finally, OG & E sought the award of attorney fees in its favor based on equitable grounds10 alleging that Spencer misrepresented facts relating to Spencer's inability to obtain housing assistance.
¶ 7 The hearing on Spencer's attorney fees and costs application was held on April 21, 2006. The trial court found that Spencer was entitled to attorney fees under 12 O.S. Supp.2002 § 93611 as a result of OG & E having counterclaimed for the payment of an outstanding amount on the customer's utility account and pursuant to 12 O.S.2001 § 93812 allowing the recovery of attorney fees in civil actions to retrieve overpayments for utility services or to establish the right to such services.
¶ 8 At the hearing, Spencer's attorney testified as to the reasonableness of his hourly rate of $180.00 for out of court time and $250.00 for court appearances. The attorney also explained the differences between the draft statement submitted to OG & E and the statement submitted with his application for attorney fees as having resulted from computer difficulties in his office requiring him to reconstruct the statement from his office records. The attorney testified that the reformulated statement was extremely accurate and that he believed the 47.68 hours reflected in the statement were reasonable, especially considering the electric company's statements indicating they had a minimum of 125 hours of attorney time invested in the cause.13
¶ 9 The trial court announced its decision at the conclusion of the hearing, listing the factors to be considered under Burk v. Oklahoma City, 1979 OK 115, 598 P.2d 659 when making an attorney fees award. Nevertheless, the trial court concluded the ruling with the assumption that the suit was never anything more than a $5,000.00 case and awarded Spencer $2,500.00 to be taxed against OG & E along with costs.14
¶ 10 Spencer appealed asserting that the trial court abused its discretion in reducing the requested attorney fees over $6,000.00 and arguing that, rather than being reduced, the requested attorney fees should have been increased under Burk v. Oklahoma City, 1979 OK 115, 598 P.2d 659. In an unpublished opinion, the Court of Appeals affirmed. On April 16, 2007, Spencer filed her petition for certiorari. OG & E filed its answer on May 8th. On June 28, 2007, we granted certiorari to settle the attorney fees dispute.
¶ 11 a. The failure to follow the directives of Burk v. Oklahoma City in setting the attorney fees and to make an award consistent with the evidence presented constitutes an abuse of discretion requiring reversal.
¶ 12 Spencer asserts that the trial court abused its discretion in reducing the requested fee of $8,775.37 by more than $6,000.00. OG & E argues that there was no abuse of discretion and that the award should stand. We disagree with the electric company's contention.
¶ 13 A trial court's attorney fees award is reviewed for abuse of discretion.15 An abuse of discretion occurs when a decision is based on an erroneous conclusion of law or where there is no rational basis in evidence for the ruling.16 Generally, the correct formula for calculating a reasonable fee is to: 1) determine the compensation based on an hourly rate; and 2) enhance the fee through consideration of the factors outlined in Burk v. Oklahoma City, 1979 OK 115, 598 P.2d 659 (Burk factors).17 In all cases, the attorney fees must bear some reasonable relationship to the amount in controversy.18
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