Ulibarri v. Gee
| Decision Date | 30 November 1987 |
| Docket Number | No. 17089,17089 |
| Citation | 106 N.M. 637,1987 NMSC 113,748 P.2d 10 |
| Parties | Henry ULIBARRI, Plaintiff-Appellee and Cross-Appellant, v. George GEE and Joan Z. Ball, individually and d/b/a Chama Realty, Defendants-Appellants and Cross-Appellees. |
| Court | New Mexico Supreme Court |
Henry Ulibarri, a building contractor, undertook to construct a building for George Gee and Joan Ball (Chama Realty) and timely filed a lien in connection with work and materials supplied. Upon failure of Chama Realty to pay amounts due under the construction contracts, principally on a cost plus ten percent basis, Ulibarri filed suit for damages and to foreclose his lien. Chama Realty responded by denying any balance due and counterclaimed for damages from overcharges and unworkmanlike construction. The district court tried the case without a jury and entered its decision for Ulibarri. Chama Realty appeals from an award of prejudgment interest, attorney fees and other costs. Ulibarri cross-appeals from a reduction of damages which he claims is without support in the district court's findings of fact or in the evidence adduced at trial. We affirm the trial court's judgment in all but one respect. We reverse the amount of the award of attorney fees as unreasonable and remand to the district court for entry of judgment consistent with this opinion.
The trial court found that (1) Ulibarri substantially performed his contracts with Chama Realty, (2) "A-1" labor and materials were furnished by Ulibarri, (3) all labor and materials utilized were necessary and reasonable and were actually incorporated in the construction, and (4) the prices charged for labor and materials were reasonable. For this construction work Chama Realty was found to owe $42,419.63, adjusted in the conclusions of law to $28,819.63. Additionally, the court awarded prejudgment interest of $4,607.19, and costs of $3,956.09 plus $30,100.71 as an attorney's fee.
Prior to trial, Ulibarri had been granted leave to amend his claim for damages from $27,054.37 to $42,419.63. (The verified claim of lien reflected a balance due of $27,529.37.) In foreclosing the lien, the court adjudged that the lien secured the payment of $28,819.63 for sums awarded to Ulibarri, plus interest, costs, and an attorney's fee. This five percent variance between the statement of lien and the proof at trial did not vitiate the lien. See Weggs v. Kreugel, 28 N.M. 24, 205 P. 730 (1922). Only substantial compliance with the lien statute is required. Id. "In determining whether there has been substantial compliance, the purpose of the statutory requirements must be kept in mind, the primary object being to 'give notice to subsequent purchasers and incumbrancers and inform the owner of the extent and nature of the lienor's claim.' " Garrett Bldg. Centers, Inc. v. Hale, 95 N.M. 450, 453, 623 P.2d 570, 573 (1981) (quoting Weggs, 28 N.M. at 27, 205 P. at 731).
Chama Realty nevertheless argues, for the first time on appeal, that the lien was rendered void by the amendment of the complaint and the proof at trial, increasing by over 50 percent the amount sought in damages. This argument is made in support of the point that, absent a valid lien and subsequent application of NMSA 1978, Section 48-2-14 (Repl.Pamp.1987), there would be no basis for the award of attorney fees. In Chavez v. Sedillo, 59 N.M. 357, 284 P.2d 1026 (1955), a judgment for defendant on the pleadings was affirmed where there was no substantial similarity between the contract as set out in the claim of lien and as asserted in the pleadings to enforce the lien. Plaintiff was limited to a judgment on an account stated, separate and apart from his claim to foreclose the lien. See also Measday v. Sweazea, 78 N.M. 781, 785, 438 P.2d 525, 529 (Ct.App.1968). Here, the amendment affected only the contract claim in Ulibarri's complaint, and he did not assert or prove a lien substantially greater than $27,529.37. The claim of lien was not abandoned by joinder with a contract claim at variance with the claim of lien. Had we been inclined to the contrary, we would not have entertained this argument without its first having been raised in and passed upon by the trial court. See Daughtrey v. Carpenter, 82 N.M. 173, 477 P.2d 807 (1970).
The attorney's fee section of the legislation on mechanics' and materialmen's liens, NMSA 1978, Section 48-2-14 (Repl.Pamp.1987), provides that the court may allow a reasonable attorney's fee in an action to enforce liens. While this Court has recognized that, under this statute, the allowance of attorney fees is discretionary, Montgomery v. Karavas, 45 N.M. 287, 114 P.2d 776 (1941), the exercise of that discretion must be reasonable when measured against objective standards and criteria.
The award of an attorney's fee, like the award of other costs of litigation, is not the same question as the determination of reasonableness of a fee as between the attorney and his client, or the actual expenses to be reimbursed the attorney by his client regardless of whether awarded under the cost bill. Under the rules of professional conduct, an attorney and his client may make any fee agreement that is reasonable considering (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly, (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer, (3) the fee customarily charged in the locality for similar legal services, (4) the amount involved and the results obtained, (5) the time limitations imposed by the client or by the circumstances, (6) the nature and length of the professional relationship with the client, (7) the experience, reputation, and ability of the lawyer performing the services, and (8) whether the fee is fixed or contingent. SCRA 1986, 16-105.
While the criteria under the rules of professional conduct may, in general, determine the reasonableness of a fee, see Thompson Drilling, Inc. v. Romig, 105 N.M. 701, 736 P.2d 979 (1987) (), the court does not set the fee as between the mechanic or materialman and his attorney. Under Section 48-2-14, the court simply allows recovery of a "reasonable attorney's fee" from the owner. Involved is a commercial setting in which the parties should be entitled to reasonable expectations regarding the fees to be assessed if defenses or counterclaims are interposed to enforcement of a lien. The award of fees associated with counterclaims and other questions collateral to enforcement of the lien must be closely scrutinized and are the exception, not the rule. See Hiatt v. Keil, 106 N.M. 3, 738 P.2d 121 (1987); Thompson Drilling, Inc. v. Romig.
Logic suggests that the net cost to plaintiff in enforcing a lien that is questionable in merit be more than where the defense is frivolous. Therefore, we decline to adopt time spent and quality of representation as determinative criteria in the allowance of attorney fees as costs in the successful enforcement of liens. The greater the contingency against recovery and the greater the prospects for a successful counterclaim, the plaintiff might expect to pay his attorney an hourly or percentage fee several times that which the trial court might award as costs. On the other hand, where the contingency against recovery is small, the entire attorney's fee may be awarded as costs. When the plaintiff has sued for a small sum clearly owed, then a higher percentage of the award may be reasonable as an attorney's fee. When the sum is large and the defense is most meritorious, a smaller percentage may be reasonable. The 105% awarded in this case was clearly excessive.
In the case before us, the defense was not without merit. It managed to reduce the contract claim from $42,419.63 to $28,819.63. However, the lien was enforced in full with the court having found that "A-1" labor and materials had been furnished. While the amount recovered was relatively small in relation to the time invested by Ulibarri's attorneys,...
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