1. Costs_attorney fees_taxed entirely to one party
The trial court did not abuse its discretion by taxing fees
and costs entirely against the defendant in an automobile
accident case where defendant contended that the matter proceeded
to trial after her offer of judgment only because the third-party
defendant ( plaintiff's husband and the driver of the car in
which she was injured) made no offer to settle. The trial court
properly considered the required factors and made appropriate
findings.
2. Contribution_amount subject to_fees and costs taxed to one
party
The trial court did not abuse its discretion in its award of
fees and costs in a negligence action where defendant contended
that the amount subject to contribution must be the jury verdict
plus costs and fees. Since the fees and costs were taxed
explicitly to defendant, the portion of the verdict subject to
contribution is the jury verdict for damages.
Law Offices of Michael A. DeMayo, L.L.P., by Frank F. Voler,
for the plaintiff-appellee.
Morris York Williams Surles & Barringer, L.L.P., by R. Gregory
Lewis, for the defendant-appellant.
Steven J. Colombo, P.A., by R. Michael Chandler, for the third
party defendant-appellee.
EAGLES, Chief Judge.
After a jury trial, the trial court entered judgment awarding
Lisa E. Gaffney Stilwell (“plaintiff”) damages in the amount of$5,401.00 and attorneys' fees and costs in the amount of $10,853.75
in her civil negligence action against Amanda Danley Gust
(“defendant”). The trial court ordered that defendant recover
$2,700.50 in contribution from Timothy G. Stilwell, plaintiff's
husband (“third-party defendant”). Defendant appeals. After
careful consideration, we affirm.
On 9 February 1997, plaintiff was a passenger in an automobile
operated by her husband, third-party defendant. Third-party
defendant's vehicle collided with a vehicle operated by defendant.
Plaintiff and her husband brought suit against defendant alleging
negligence. Defendant counterclaimed and alleged that third-party
defendant was negligent in the operation of his vehicle. Prior to
trial, defendant settled with third-party defendant for his bodily
injury claim and third-party defendant dismissed his claims against
defendant. Due to defendant's claim for contribution, third-party
defendant remained in this action. Defendant made an offer of
judgment of $4,500.00 which plaintiff refused. The matter went to
trial on 22 May 2000 in Gaston County Superior Court. The jury
found both defendant and third-party defendant negligent and
returned a verdict assessing damages in the amount of $5,401.00 for
plaintiff.
After the trial, plaintiff moved to tax costs and attorneys'
fees against defendant. The trial court ordered payment of $853.75
in costs and $10,000.00 in attorneys' fees to plaintiff. As to the
contribution claim, the trial court ordered that defendant recover
$2,700.50 (one-half of the damages awarded) from third-party
defendant. Defendant appeals. Defendant raises two issues on appeal: Whether the trial
court erred in (1) taxing costs and attorneys' fees to defendant
and (2) failing to enter judgment in favor of defendant for pro-
rata contribution of the costs and attorneys' fees. After careful
review, we affirm.
[1]Defendant contends that the trial court erred in awarding
attorneys' fees and costs to plaintiff and taxing them entirely to
defendant. Defendant argues that the trial court should have
taxed one-half of plaintiff's costs and fees to defendant incurred
before the offer of judgment and all the post-offer of judgment
costs and fees to the third-party defendant. Defendant contends
that her offer of $4,500.00 was more than her pro-rata share of the
amount for which plaintiff would have settled. The third-party
defendant made no offer to settle with plaintiff before trial.
Defendant argues that this refusal by the third-party defendant to
make a settlement offer resulted in the matter proceeding to trial.
Defendant contends that the costs and fees of trial were incurred
as a result of the conduct of the third-party defendant, not
defendant, and that it was inequitable to tax all the costs and
fees to defendant. We are not persuaded.
Attorneys' fees generally are not recoverable by the
successful party at trial as a part of court costs. Washington v.
Horton, 132 N.C. App. 347, 349, 513 S.E.2d 331, 333 (1999).
However, in personal injury or property damage actions where the
judgment for recovery of damages is $10,000.00 or less, by
statutory exception the presiding judge in his or her discretion
may award attorneys' fees as part of costs. G.S. § 6-21.1 (1999);Thorpe v. Perry-Riddick, 144 N.C. App. 567, 571, 551 S.E.2d 8
52,
856 (2001).
The award of attorneys' fees under G.S. § 6-21.1 is within the
discretion of the presiding judge. Washington, 132 N.C. App. at
351, 513 S.E.2d at 334.
North Carolina case law is clear that to
overturn the trial judge's determination, the
defendant must show an abuse of discretion.
Abuse of discretion results where the court's
ruling is manifestly unsupported by reason or
so arbitrary that it could not have been the
result of a reasoned decision.
Thorpe, 144 N.C. App. at 570, 551 S.E.2d at 855 (2001) (citations
and quotations omitted). In awarding fees, the trial court's
discretion is not unrestrained. Washington, 132 N.C. App. at 351,
513 S.E.2d at 334. In Washington, we noted that the trial court,
in exercising its discretion, should consider the following
factors:
(1) settlement offers made prior to the
institution of the action . . . ; (2) offers
of judgment pursuant to Rule 68, and whether
the “judgment finally obtained” was more
favorable than such offers; (3) whether
defendant unjustly exercised “superior
bargaining power”; (4) in the case of an
unwarranted refusal by an insurance company,
the “context in which the dispute arose”; (5)
the timing of settlement offers; (6) the
amounts of the settlement offers as compared
to the jury verdict; and the whole record.
Id. at 351, 513 S.E.2d at 334-35 (citations omitted). Even so, the
trial court does not need to make detailed findings for each
factor. Tew v. West, 143 N.C. App. 534, 537, 546 S.E.2d 183, 185
(2001). If the court awards attorneys' fees, it must make findingsof fact to support the award. Porterfield v. Goldkuhle, 137 N.C.
App. 376, 378, 528 S.E.2d 71, 73 (2000). These findings must
include the “time and labor expended, the skill required, the
customary fee for like work, and the experience or ability of the
attorney.” Cotton v. Stanley, 94 N.C. App. 367, 369, 380 S.E.2d
419, 421 (1989).
The trial court properly considered the appropriate factors
enumerated in Washington. As for the first factor, the trial court
found that defendant made offers to plaintiff as early as October
1999 and at the settlement conference two weeks prior to trial.
The record shows that the complaint was filed on 2 September 1999
and the summons issued the same day. There is no evidence that
defendant made any settlement offers prior to the commencement of
this action.
In considering the second factor, the trial court found that
the “jury award is more than any amount offered prior to trial” by
defendant. “Judgment finally obtained” means the amount entered as
final judgment modified by any adjustments. Poole v. Miller, 342
N.C. 349, 353, 464 S.E.2d 409, 411 (1995), reh'gs denied, 342 N.C.
666, 467 S.E.2d 722 (1996). “[C]osts incurred after the offer of
judgment but prior to the entry of judgment” should also be
included with the jury verdict to determine the “judgment finally
obtained.” Roberts v. Swain, 353 N.C. 246, 250-51, 538 S.E.2d 566,
569 (2000). The trial court awarded $10,000.00 in attorneys' fees,
to be included as costs, and $853.75 as costs to plaintiff. These
figures added to the jury award of $5,401.00 clearly exceeddefendant's Offer of Judgment of $4,500.00. Even excluding costs
and fees, the jury award exceeded the Offer of Judgment.
As to the third factor, the court found that defendant and her
insurance company “unjustly exercised its superior bargaining power
by refusing to budge through and including trial from its initial
and full valuation of Plaintiff's claims.”
Factor four is not pertinent here since “[o]ur appellate
courts have uniformly held that a finding of unwarranted refusal to
pay a claim is required only in suits brought by an insured or a
beneficiary against an insurance company defendant.” Washington,
132 N.C. App. at 350, 513 S.E.2d at 334. Here, the insurance
company is not the defendant.
As to factor five, the trial court found that defendant and
defendant's insurer filed a formal Offer of Judgment on or about 15
October 1999 for $4,500.00 and “at the May 4, 2000 settlement
conference held two weeks before the trial of this matter,
[defendant and defendant's insurer] refused to offer more than the
amount of $4,500.00 to settle [this matter].”
Considering factor six, the trial court found that the highest
settlement offer by defendant was $4,500.00 and the jury returned
a verdict of $5,401.00. The trial court stated “[t]hat the jury
award is more than any amount offered prior to trial by Defendant
Gust and/or Allstate.” The trial court reviewed the entire record
including the affidavits, memorandum, cases and arguments of
counsel.
The trial court also made the following finding as required by
Porterfield: 15. That given the nature and complexity of
this case, the time expended by counsel
is reasonable . . . and is consistent
with that which may have been expected by
an attorney of similar experience and
expertise in this geographic area, . . .
compared with the services which might be
expected from other law firms in this
geographic area, the amount of $150.00
per hour for attorneys' time is
reasonable.
The record contains a copy of the motion which includes as
attachments the attorney's time sheets reflecting time spent on
this matter and an affidavit from plaintiff's attorney that he
devoted 68.5 billable hours to the case.
The trial court applied the factors set forth in Washington
and made the appropriate findings as required by Porterfield.
There is no evidence that the $10,000.00 in attorneys' fees is
unreasonable. Nor is there any showing of abuse of discretion by
the trial court in the award of fees.
Second, the trial court awarded plaintiff $853.75 in costs.
This figure represents $375.00 for an expert witness fee, $400.00
for deposition costs, and $78.75 for filing and service fees.
“[C]osts which are not allowed as a matter of course under
G.S. § 6-18 or § 6-19 . . . may be allowed in the discretion of the
court under G.S. § 6-20 . . . .” Estate of Smith v. Underwood, 127
N.C. App. 1, 12, 487 S.E.2d 807, 815, disc. review denied, 347 N.C.
398, 494 S.E.2d 410 (1997). “The trial court's discretion to tax
costs pursuant to [G.S. § 6-20] is not reviewable on appeal absent
an abuse of discretion.” Lewis v. Setty, 140 N.C. App. 536, 538,
537 S.E.2d 505, 507 (2000). “While case law has found thatdeposition costs are allowable under section 6-20, it has in no way
precluded the trial court from taxing other costs that may be
'reasonable and necessary.'” Minton v. Lowe's Food Stores, 121
N.C. App. 675, 680, 468 S.E.2d 513, 516, disc. review denied, 344
N.C. 438, 476 S.E.2d 119 (1996).
In assessing fees, the trial court properly considered
Washington and Porterfield. In determining costs, the trial court
considered the motions, affidavits, and arguments of counsel.
Plaintiff sued defendant only. Moreover, when making the
settlement offers, defendant never asserted that the $4,500.00 was
to cover only its pro-rata share of the liability. At the hearing
on the motion to allow attorneys' fees as costs, plaintiff
indicated “she would [have] consider[ed] settling” for a sum around
$6,000.00. Defendant never increased the amount of her offer. The
original offer was $4,500.00 and it remained the top offer through
the settlement conference two weeks before the trial. The awards
taxing costs and fees to defendant are within the trial court's
discretion and defendant has not shown an abuse of that discretion.
[2]In its second assignment of error, defendant contends that
the trial court erred in failing to enter judgment in favor of
defendant for pro-rata contribution. Defendant argues that the
amount subject to contribution must be the jury verdict plus costs
and fees. We are not persuaded.
Defendant relies on Great West Casualty Co. v. Fletcher, 56
N.C. App. 247, 287 S.E.2d 429 (1982) and Roberts v. Swain, 353 N.C.
246, 538 S.E.2d 566 (2000). In Great West Casualty Co., this Courtstated that “the pro rata share of each defendant is determi
ned by
dividing the amount of the judgment by the number of persons
against whom it has been obtained.” Great West Casualty Co., 56
N.C. App. at 249, 287 S.E.2d at 431. Roberts provided that a
“judgment finally obtained” is the final amount entered by the
court as a judgment, including the jury verdict plus any applicable
adjustments. Roberts, 353 N.C. at 249, 538 S.E.2d at 568 (quoting
Poole v. Miller, 342 N.C. 349, 353, 464 S.E.2d 409, 411 (1995)).
Attorneys' fees and court costs are included in determining
“judgment finally obtained.” Id. at 249, 538 S.E.2d at 568.
Defendant's reliance on these cases is misplaced. In Great
West Casualty Co., this Court was interpreting a Tennessee
contribution statute, not G.S. §§ 1B-1 to -6, the North Carolina
contribution statute. The Roberts court was applying “judgment
finally obtained” as used in Rule 68 of the North Carolina Rules of
Civil Procedure. “Judgment finally obtained” was defined in Poole,
which stated:
Thus, we construe the legislature's choice of
the phrase “judgment finally obtained” as
indicative of the legislature's intent that it
is the amount ultimately and finally obtained
by the plaintiff from the court which serves
as the measuring stick for purposes of Rule
68. For these reasons, we conclude that,
within the confines of Rule 68, “judgment
finally obtained” means the amount ultimately
entered as representing the final judgment,
i.e., the jury's verdict as modified by any
applicable adjustments, by the respective
court in the particular controversy, not
simply the amount of the jury's verdict.
Id. at 353, 464 S.E.2d at 411 (emphasis added). The Courtexplicitly limited the application of its definition of “judgment
finally obtained” to Rule 68.
In its judgment, the trial court ordered “that Defendant and
Third Party Plaintiff Amanda Danley Gust shall pay [plaintiff] the
amount of $853.75 as part of Court costs” and “that the [plaintiff]
shall have and recover from Defendant and Third Party Plaintiff
Gust reasonable attorney fees in the amount of $10,000.00, as part
of costs . . . .” We discern no abuse of discretion in the trial
court's award to plaintiff of fees and costs. Since the fees and
costs were taxed explicitly to defendant, the remaining portion of
the judgment subject to contribution is the jury verdict for
damages. In calculating the pro-rata shares, the trial court
properly applied G.S. §§ 1B-1 to -6 to this figure to determine
defendant's and third-party defendant's pro-rata share of
$2,700.50.
Affirmed.
Judges HUDSON and CAMPBELL concur.
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