Viens v. Delphia, No. 627-11-03 Wncv (Katz, J., Aug. 23, 2005)


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STATE OF VERMONT                                          SUPERIOR COURT
Washington County, ss.:                           Docket No. 627-11-03 WnCiv


VIENS

v.

DELPHIA


                                    ENTRY
                             (Attorney Fee Request)


       Subcontractor Viens recovered $5,536 against general contractor
Delphia after a bench trial. He now seeks an award of $8,365 as attorneys
fees. As the findings of fact should make clear, this was a good faith
dispute between reputable members of the construction trade. Plaintiff
asserted a claim for $8,500. Defendant always admitted owing Plaintiff
something, but disputed the amount claimed. The decision after trial
somewhat justifies Defendant’s unwillingness to pay the amount claimed.

       The parties’ legal memos regarding an award of fees focus on the
contract provision in the document under which they worked. It provides:
       Collection Proceedings: In the event of litigation, in addition
       to any other relief awarded, the court shall award
       costs/expenses including attorney’s fees to the party it
       determines is entitled to such relief.

This language derives from plaintiff plumber’s form proposal, which was
accepted by defendant general contractor. We consider the language to be
ambiguous. As Plaintiff notes, its operative verb is “shall award,” implying
an imperative. On the other hand, what the court awards in that regard is
costs, expenses, and fees “to the party it determines is entitled to such
relief.” Quite clearly, the court must make a determination that the party is
entitled to the relief. Hence, unlike the situation of Vermont’s Prompt Pay
Act, the contractual language does not seem to hinge on which party is the
prevailing party, but rather on the court’s determination to award attorney’s
fees. This concluding language suggests discretion on the part of the
court—either the party is determined to be entitled to such an award, or it is
not. But it is the court’s determination. The language is not cast in terms
of what the law requires, but rather what the court determines.

       In construing a contract, our duty is to ascertain the parties’
expressed intent. In doing so, we must use all the language, assuming it
was included advisedly. Although the language is somewhat ambiguous,
pointing as it does in opposite directions, in a situation such as here obtains,
where no parol evidence was offered, it remains a question of law to
determine the proper interpretation. We therefore conclude that the
language calls for a discretionary exercise on the part of the court. This is
what must be enforced. See Fletcher Hill, Inc. v. Crosbie, 2005 VT 1, ¶ 5
(declining to revise the parties’ agreement on attorneys’ fees).

      However, in addition to arguing its contention regarding the quoted
language, Plaintiff’s memo also notes its contention that it is entitled to an
award under the Prompt Pay Act. Other than asserting that point, the memo
says nothing. Reviewing the Act, we find at 9 V.S.A. § 4007(c):
“Notwithstanding any contrary agreement, the substantially prevailing party
in any proceeding to recover any payment within the scope of this chapter
shall be awarded reasonable attorneys’ fees in an amount to be determined
by the court or arbitrator, together with expenses.” This dispute is within
the scope of the Act. Section 4003(a) states that performance by a
subcontractor entitles it to payment from the party with which it contracts.
Hence, it would appear that the Act preempts the contractual language.
       Although sharply divided, the majority in Fletcher Hill held that the
court may exercise some measure of discretion on the issue of whether to
award such fees at all. Because § 4007(c) awards such fees to the
substantially prevailing party, the Fletcher Hill majority holds that a net
award does not necessarily entitle the bearer to a fee award. 2005 VT 1, ¶¶
13-15. However, both majority and dissent would seem to accord trial
courts with discretion over the amount of any fee award. Id., ¶ 33. We
therefore conclude that Plaintiff should be awarded fees, although we
should exercise discretion regarding their amount.

       “Trial courts have wide discretion” over the determination of
reasonable attorneys’ fees. Parker, Lamb & Ankuda, P.C. v. Krupinsky,
146 Vt. 304, 307 (1985). The Vermont Supreme Court has approved of the
“lodestar approach” to determining reasonable fees. Human Rights
Commission v. Labrie, Inc., 164 Vt. 237, 251 (1995). The lodestar is the
reasonable number of hours of attorney-time multiplied by the reasonable
rate. Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 478
U.S. 546, 563 (1986). The determination of reasonableness impliedly
incorporates factors taken from the American Bar Association’s Model
Code of Professional Responsibility Disciplinary Rule 2-106, which
included, among others:

      (1) the time and labor required;
       (2) the novelty and difficulty of the question;
       (3) the skill requisite to perform the legal service properly . .
       .;
       (5) the customary fee . . .;
       (8) the amount involved and the results obtained;
       (9) the experience, reputation, and ability of the attorney;
       (10) the “undesirability” of the case;
       (11) the nature and length of the professional relationship
       with the client; and
       (12) awards in similar cases.

Delaware Valley, 478 U.S. at 562 fn.7 (emphasis added); see also Platt v.
Shields, 96 Vt. 257, 269 (1923) (setting out factors similar to the Model
Code factors); Vermont Code of Professional Responsibility Disciplinary
Rule 2-106(B), quoted in Krupinsky, 146 Vt. at 307 (same); Vermont Rules
for Professional Conduct 1.5(a) (same).

         Plaintiff seeks an award of $8,365 in fees and expenses (including
nearly $200 of “interest” on an overdue balance owed by Plaintiff). This
against a recovery of $5,536. This is not a case in which Defendant fled the
jurisdiction or concealed assets. Defendant’s final words at the job site
were “send me your final bill.” In the end, however, Defendant disputed
that bill. Our finding implicitly finds that dispute to have been substantially
justified. In reaching this conclusion, we do not take into account any
compromise offers or demands which may have been communicated prior
to trial or the court’s decision. Counsel’s rate is reasonable, and counsel
certainly was skilled and prepared. But in a purely economic case like this
(with only the simplest of legal and factual issues), we are reluctant to make
a fee award which substantially exceeds the recovery on the merits.
Counsel has some responsibility to moderate time spent on a case so the fee
does not become completely disproportionate to the anticipated damages.
This is not a civil rights case, with important rights at stake but no
significant damages recoverable. This is a perfectly run-of-the-mill
construction contract dispute featuring easily calculable economic interests.

        A fee award so disproportionately high in relation to the value of the
case would tend to render settlement of future cases difficult, and tend to
skew consideration of settlement away from the merits of the claim, and
toward the amount of the bill. We have in mind that the looming presence
of attorneys’ fees could have the effect of promoting settlements earlier in
the course of the dispute, but such reasoning tends to be one-sided, in that
the claimant has the advantage. As the claimant typically will get at least
some award, in the event of no settlement, that person has significantly less
incentive than does the obligor to compromise. We are not persuaded that
the Legislature intended to so skew any negotiations merely by allowing
the recovery of attorneys’ fees in this type of case. While the effects of
such a plaintiff-oriented interpretation may be ameliorated to some extent
by use of a Rule 68 Offer of Judgment, counsel are often reluctant to
engage in serious negotiation without first engaging in some discovery.
Once the “meter” starts to tick, the plaintiff’s advantage tends to harden.
We conclude that the reasonable number of hours to devote to a case
featuring only such simple legal and factual issues, the value of which
ought to have been easy to assess before suit was filed, usually ought to be
substantially less than the value of the case. No circumstances are present
in this case that would suggest otherwise. We conclude that Plaintiff’s fee
request is unreasonably disproportionate to the value of the case. The
nearly 55 hours claimed is excessive.

       Additionally, the court was struck by counsel’s manner at trial:
cross-examining adverse witnesses by minute deviations from the wordings
used during answers to deposition questions. This is a common technique,
frequently over-used, in situations of inconsequential deviations. But the
technique inherently requires a good deal of trial preparation, to learn the
precise language of the deposition responses, so as to be able to distinguish
them from the language used at trial. Here, counsel indicates fourteen
hours of trial preparation the day prior to trial. While trial preparation
renders counsel effective, and counsel here was effective, this was a single-
day bench trial, with needless impeachment on the basis of inconsequential
variations in language.

       After reviewing the billing records closely, and on the basis of the
considerations above, we find that the reasonable number of attorney-hours
is 15. At $150/hour, reasonable fees are $2,250. Claimed expenses totaling
$252.20 also are reasonable. The total award is $2,502.20.


       Counsel for Plaintiff to draft judgment accordingly.


       Dated at Montpelier, Vermont, _______________________, 20__.




                                            __________________________
                                                                 Judge
