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 1        IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO


 2 CAROL WOOTTON,

 3          Plaintiff-Appellant,

 4 v.                                                                                    NO. 32,290

 5 SCOTT VINSON,

 6          Defendant-Appellee.


 7 APPEAL FROM THE DISTRICT COURT OF LUNA COUNTY
 8 Daniel Viramontes, District Judge

 9 Frederick H. Sherman
10 Deming, NM

11 for Appellant


12 Robert F. Turner
13 Deming, NM

14 for Appellee


15                                 MEMORANDUM OPINION

16 GARCIA, Judge.
 1   {1}   The parties do not dispute that Defendant, Scott Vinson, agreed to pay the

 2 reasonable attorney fees incurred by Plaintiff, Carol Wootton, in pursuing legal action

 3 to collect on a promissory note. The question presented is whether the fees charged

 4 by Plaintiff’s first attorney were reasonable and, in the tortured procedural history of

 5 this case, whether the district court erred in first ordering Defendant to pay those fees,

 6 then reversing its order, and then ordering Plaintiff to reimburse Defendant for

 7 overpaying the fees of Plaintiff’s second attorney. Though we recognize that our

 8 decision will result in the accrual of even more attorney fees, we conclude that the

 9 district court erred. We reverse and remand for further proceedings regarding the

10 proper calculation of attorney fees.

11 BACKGROUND

12   {2}   In 2008, Plaintiff retained attorney R. Nathan Gonzales to represent her in an

13 action to pursue collection on a promissory note and mortgage. Plaintiff paid $4,000

14 to Gonzales as a retainer. Plaintiff filed a complaint for breach of contract against

15 Defendant, seeking to recover the amount due on the note and attorney fees and costs

16 pursuant to the terms of the note.1 After the requisite period of time had elapsed



          1
18          As pled in the complaint, the note provides that Defendant agreed to pay 10
19 percent attorney fees on the amount due ($35,000) “if placed in the hands of an
20 attorney for collection.”

                                               2
 1 without an answer from Defendant, Plaintiff filed a motion for default judgment

 2 requesting, among other things, that she be awarded her attorney fees. Plaintiff

 3 attached an invoice from Gonzales reflecting that she had incurred attorney fees in the

 4 amount of $1,852.27.

 5   {3}   The district court granted Plaintiff’s motion for default judgment and, among

 6 other things, awarded Plaintiff “her attorney[] fees and court costs as submitted by her

 7 legal counsel.” Defendant filed a motion to set aside the default judgment, and

 8 Plaintiff filed a response. Before the district court ruled on Defendant’s motion,

 9 Plaintiff retained a new attorney, Frederick H. Sherman, who filed a motion on behalf

10 of Plaintiff to amend the judgment as to specific damages and attorney fees.

11   {4}   On August 13, 2010, the district court entered a stipulated order resolving

12 Defendant’s motion to set aside the default judgment and Plaintiff’s motion to amend

13 the judgment. The stipulated order states, in pertinent part, that Defendant agrees to

14 pay the note along with interest and attorney fees and that “[a]ny issues as to

15 [a]ttorney[ f]ees that [cannot] be resolved will be submitted to the court subsequent

16 to the entry of the order and [p]rior to [s]atisfaction.”

17   {5}   The parties could not resolve the issue of attorney fees and, on October 29,

18 2010, Defendant filed a motion to determine reasonable attorney fees. The parties

19 agreed that the amount that Gonzales had billed Plaintiff (over $4,000) was excessive.


                                               3
 1 A copy of the motion was sent to Gonzales via facsimile. On November 4, 2010,

 2 Gonzales filed a motion to withdraw as counsel for Plaintiff, stating that Plaintiff had

 3 retained other counsel. The district court entered an order on November 4, 2010,

 4 permitting Gonzales to withdraw. The order reflects that neither Plaintiff’s new

 5 attorney, Sherman, nor Defendant’s attorney responded to or approved the order.

 6   {6}   The district court held a hearing regarding attorney fees on November 8, 2010,

 7 and entered an order on November 18, 2010. The district court noted that Gonzales

 8 failed to attend the hearing and failed to provide an itemized bill for his services. The

 9 district court found that Gonzales’s bill of over $4,000 was unreasonable and ordered

10 Gonzales to refund this entire amount to Plaintiff. The district court ordered Defendant

11 to pay Plaintiff’s new attorney, Sherman, $2,100 in attorney fees.

12   {7}   On February 18, 2011, Gonzales filed a motion to reconsider. Gonzales attached

13 a copy of his invoices to Plaintiff, reflecting that he had billed Plaintiff $4,093.79 for

14 his work. Gonzales stated that he did not attend the hearing on November 8, 2010,

15 because he did not represent Plaintiff at that time, and he was not aware that his fees

16 were going to be considered. He argued that the district court lacked authority to

17 reduce his fees because they were the subject of a contractual agreement between

18 himself and his client, Plaintiff.

19   {8}   The district court scheduled a hearing on Gonzales’s motion to reconsider for


                                               4
 1 March 31, 2011, and Plaintiff’s new attorney, Sherman, filed a motion for a

 2 continuance, stating that he had a conflict on that date. The district court did not grant

 3 the continuance, and held a hearing on March 31, 2011, though neither Plaintiff’s new

 4 attorney nor Defendant’s attorney were present. At the hearing, Gonzales informed

 5 the district court that Plaintiff had filed a disciplinary complaint against him, which

 6 had been resolved in his favor. The district court went off the record to review

 7 documentation pertaining to the disciplinary complaint.

 8   {9}    On May 26, 2011, the district court entered an order granting Gonzales’s

 9 motion to reconsider. The district court concluded that it lacked authority to consider

10 the contractual fee agreement between Plaintiff and Gonzales and thus vacated the

11 portion of its earlier order that ordered Gonzales to reimburse Plaintiff in the amount

12 of $4,000.

13   {10}   On October 6, 2011, Plaintiff filed a motion for additional attorney fees and to

14 reconsider the denial of attorney fees that Plaintiff had previously paid to Gonzales.

15 The district court held a hearing on April 16, 2012, and entered a final order on June

16 6, 2012, implicitly overruling Plaintiff’s objection to the proposed form of order that

17 had been circulated. The district court found that based on the exhibits presented at

18 the hearing, which are not part of the record, Defendant had made two payments to

19 attorney Sherman for $2,100. The district court ordered Plaintiff to reimburse


                                                5
 1 Defendant in the amount of $2,100. The district court explained at the hearing that

 2 Plaintiff could pursue a civil action against Gonzales to recover the money she had

 3 paid to Gonzales. Plaintiff appeals from this order.

 4 DISCUSSION

 5   {11}   Plaintiff contends the district court erred in refusing to order Defendant to pay

 6 all of her attorney fees because Defendant was obligated to pay these fees pursuant to

 7 the terms of the note. Plaintiff argues that she “should not be out $4,000 [the amount

 8 paid to attorney Gonzales] as a result of using legal action to collect and enforce a

 9 sales agreement.” Plaintiff also contends that the district court erred in ordering her

10 to reimburse $2,100 to Defendant because no evidence was introduced to establish an

11 overpayment.

12   {12}   We review an award of attorney fees for an abuse of discretion. See In re N.M.

13 Indirect Purchasers Microsoft Corp., 2007-NMCA-007, ¶ 6, 140 N.M. 879, 149 P.3d

14 976. “A discretionary decision based on a misapprehension of the law is an abuse of

15 discretion that must be reviewed de novo.” Id.

16   {13}   As a preliminary matter, Defendant asserts that Plaintiff’s arguments are

17 precluded by the doctrines of judicial estoppel, finality, and mootness. Defendant first

18 argues that Plaintiff should be judicially estopped from arguing that Gonzales’s

19 attorney fees are now reasonable because she took a contrary position in the district


                                                6
 1 court. We disagree.

 2   {14}   In order for judicial estoppel to apply, three elements must be present. See Keith

 3 v. ManorCare, Inc., 2009-NMCA-119, ¶ 37, 147 N.M. 209, 218 P.3d 1257.

 4                First, the party against whom the doctrine is to be used
 5                must have successfully assumed a position during the
 6                course of litigation. Second, that first position must be
 7                necessarily inconsistent with the position the party takes
 8                later in the proceedings. Finally, while not an absolute
 9                requirement, judicial estoppel will be especially applicable
10                when the party’s change of position prejudices a party who
11                had acquiesced in the former position.

12 Id. (internal quotation marks and citations omitted). None of these elements are

13 present here. First, Plaintiff did not ultimately convince the district court that

14 Gonzales’s fees were unreasonable. Second, Plaintiff’s position on appeal is not

15 inconsistent with the position she took in the district court to recover her legitimate

16 attorney fees pursuant to the note. She has consistently argued that she is entitled to

17 recover all of her attorney fees from Defendant. And finally, Plaintiff’s change in

18 position, to the extent it can be characterized as such, has not prejudiced Defendant

19 in any way.

20   {15}   Defendant next argues that any issue regarding Gonzales’s fees is not properly

21 before this Court because Plaintiff did not appeal from the May 25, 2011, order

22 granting Gonzales’s motion to reconsider. Again, we disagree. In appealing from the

23 final judgment in this case, Plaintiff can challenge any and all of the non-final orders

                                                7
 1 leading up to the judgment, including the May 25, 2011, order. This is consistent with

 2 the “strong policy in New Mexico of disfavoring piecemeal appeals, and of avoiding

 3 fragmentation in the adjudication of related legal or factual issues[.]” Principal Mut.

 4 Life Ins. Co. v. Straus, 1993-NMSC-058, ¶ 12, 116 N.M. 412, 863 P.2d 447 (citation

 5 omitted).

 6   {16}   Defendant lastly argues that any issue regarding the fees charged by Gonzales

 7 is moot because there is no actual controversy involving these fees. We reject this

 8 argument because it is clear that there is an actual controversy regarding the fees paid

 9 to Gonzales, and the district court must determine the appropriate amount of attorney

10 fees due to Plaintiff under the note. See Gunaji v. Macias, 2001-NMSC-028, ¶ 9, 130

11 N.M. 734, 31 P.3d 1008 (explaining that “[a] case is moot when no actual controversy

12 exists, and the court cannot grant actual relief” (internal quotation marks and citations

13 omitted)).

14   {17}   Having disposed of these preliminary matters, we proceed to consider the

15 merits. As a general rule, “[a] contract providing for attorney fees is enforceable.” In

16 re N.M. Indirect Purchasers Microsoft Corp., 2007-NMCA-007, ¶ 19. As generally

17 relevant here, our Supreme Court has recognized that “the purpose of a provision for

18 attorney fees in a note is to enable the noteholder to recover the full amount of the

19 debt without deduction for legal expenses.” Cabot v. First Nat’l Bank of Santa Fe,


                                               8
 1 1970-NMSC-118, ¶ 4, 81 N.M. 795, 474 P.2d 478.

 2   {18}   The district court’s November 18, 2010, order had the effect of allowing

 3 Plaintiff to recover the full amount of the debt from Defendant without deduction for

 4 legal expenses that were incurred through that date. In that order, the district court

 5 ordered that: (1) attorney Gonzales refund $4,000 to Plaintiff, which was the amount

 6 Plaintiff paid to Gonzales as a retainer; and (2) Defendant pay Plaintiff’s new attorney

 7 $2,100 in attorney fees, the full amount claimed to be due. However, when the district

 8 court granted Gonzales’s subsequent motion to reconsider, it concluded it lacked

 9 authority to interfere with the contractual fee agreement between Plaintiff and

10 Gonzales. As a result, Plaintiff had paid $6,100 in attorneys fees and only $2,100 have

11 been awarded against Defendant. The district court explained at a later hearing that

12 Plaintiff could pursue a civil action against Gonzales to recover the additional money

13 she had paid to Gonzales.

14   {19}   The district court erred. In determining the reasonableness of attorney fees due

15 under the note, the district court should have considered two factors: (1) the specific

16 provisions of the note regarding attorney fees; and (2) the reasonable amount charged

17 by Plaintiff’s attorneys that may be assessed as attorney fees against Defendant. Given

18 the limited record provided for review, it appears that the district court did not discuss

19 or apply the specific attorney fees provision contained in the note. In determining the


                                                9
 1 reasonableness of the amount of Gonzales’s attorney fees that should be assessed

 2 under the note, the court must evaluate:

 3          (1) the time and labor required—the novelty and difficulty of the
 4          questions involved and skill required; (2) the fee customarily charged in
 5          the locality for similar services; (3) the amount involved and the results
 6          obtained; (4) the time limitations imposed by the client or by the
 7          circumstances; and (5) the experience, reputation and ability of the
 8          lawyer or lawyers performing the services.

 9 Thompson Drilling, Inc. v. Romig, 1987-NMSC-039, ¶ 20, 105 N.M. 701, 736 P.2d

10 979. The district court had the discretion to adjust the amount of attorney fees due

11 from Defendant under the note if it determined that a portion of Gonzales’s fees were

12 excessive or unreasonable. See id. ¶ 23 (“The allowance of a particular fee may be

13 reduced if it is determined to be unreasonable or excessive.”). However, the district

14 court did not utilize this method to calculate the amount of attorney fees due from

15 Defendant under the note. First, the court concluded that Gonzales was entitled to

16 recover nothing for his work and then reconsidered and ruled that it lacked authority

17 to consider the reasonableness of Gonzales’s attorney fees paid by Plaintiff. Instead

18 of recalculating the correct amount of attorney fees due from Defendant under the

19 note, the court stated that Plaintiff would be required to sue Gonzales in a separate

20 civil action to recover the amount in attorney fees that she had paid to him.

21   {20}   With respect to attorney Sherman’s fees, we perceive no abuse of discretion in

22 the district court’s conclusion that, if Defendant overpaid those fees, he should be

                                               10
 1 entitled to a reimbursement. Because a recalculation of attorney fees is necessary and

 2 because the record is unclear regarding whether Defendant in fact overpaid Sherman’s

 3 fees, this issue can also be resolved on remand.

 4 CONCLUSION

 5   {21}   For the reasons stated above, we reverse the district court’s order dated June 6,

 6 2012, and remand for further proceedings. The district court must determine the

 7 amount of attorney fees that were reasonable for Plaintiff to incur in pursuing this

 8 action. The court must then reconcile this amount with the specific attorney fee

 9 provision in the note. Defendant should then be ordered to pay the proper amount of

10 attorney fees pursuant to the terms of the note, after being given credit for any

11 payments he has already made. The determination of attorney fees to be paid by

12 Defendant in this case is not dependent upon whether Plaintiff pursues a separate legal

13 proceeding against Gonzales to recover any overpayment of attorney fees previously

14 paid to him. The district court should enter findings of fact and conclusions of law for

15 the benefit of the parties and to enable further appellate review if necessary.

16   {22}   IT IS SO ORDERED.



17                                           ________________________________
18                                           TIMOTHY L. GARCIA, Judge



                                               11
1 WE CONCUR:



2 __________________________________
3 JONATHAN B. SUTIN, Judge


4 __________________________________
5 CYNTHIA A. FRY, Judge




                                  12
