JOSEPH ALAN FURMICK,
Plaintiff,
v
.
GREGORY R. MINER,
Defendant.
Blanchard, Jenkins, Miller & Lewis, PA, by Philip R. Miller,
III, for plaintiff-appellee.
Cranfill, Sumner & Hartzog, L.L.P., by Jesse M. Tillman, III,
for defendant-appellant.
THOMAS, Judge.
The issue for consideration in this appeal is whether the
trial court erred in awarding attorney's fees, costs and
prejudgment interest under N.C. Gen. Stat. § 6-21.1.
The jury returned an $812.11 verdict for plaintiff, Joseph
Alan Furmick, upon his claim for personal injuries. Defendant,
Gregory R. Miner, had earlier filed a $3,671.00 Offer of Judgment.
The trial court nevertheless awarded plaintiff $6,500.00 in
attorney's fees, $1,866.90 in costs and $81.20 in prejudgment
interest.
Defendant appeals, arguing the trial court: (1) erred by
failing to make adequate findings of fact; (2) abused its
discretion in awarding fees in light of the amount of defendant'ssettlement offers as compared to the jury verdict; and (3) erred in
awarding prejudgment interest.
We agree with defendant as to the inclusion of prejudgment
interest, but otherwise affirm the trial court. We remand the case
for the limited purpose of allowing the trial court to make a
determination regarding attorney's fees for services performed on
appeal.
On 10 April 1997, plaintiff was driving home from work when
his vehicle was struck from behind by a vehicle operated by
defendant. Plaintiff suffered lower back pain and as a result
incurred medical bills totaling $600.56.
Approximately two weeks after the accident, J.J. Hoyer, a
representative of defendant's liability insurance carrier, went to
plaintiff's home and made a settlement offer. According to Hoyer,
he offered to pay the total of plaintiff's medical expenses up to
that date plus $1,000.00. Plaintiff does not deny an offer was
made but does not remember the amount. In any event, plaintiff,
who was still receiving medical treatment, refused the offer.
On 11 October 2000, after plaintiff instituted suit and
mediation was unsuccessful, defendant filed an Offer of Judgment in
the amount of $3,671.00. Plaintiff again declined to settle.
The case was tried before a jury on 4 and 5 December 2000.
By his first assignment of error, defendant contends the trial
court erred in awarding fees and costs because it failed to make
specific findings of fact. While the trial court made findings of
fact concerning the reasonableness of the fees and costs, defendantargues it did not make required findings regarding whether an award
was appropriate. We disagree.
Generally, the prevailing party is not entitled to recover
attorney's fees as a part of court costs. Washington v. Horton,
132 N.C. App. 347, 349, 513 S.E.2d 331, 333 (1999). However, our
legislature has provided for the recovery of attorney's fees in
certain cases where the damage award is less than $10,000.00:
In any personal injury or property damage
suit, or suit against an insurance company
under a policy issued by the defendant
insurance company and in which the insured or
beneficiary is the plaintiff, upon a finding
by the court that there was an unwarranted
refusal by the defendant insurance company to
pay the claim which constitutes the basis of
such suit, instituted in a court of record,
where the judgment for recovery of damages is
ten thousand dollars ($10,000) or less, the
presiding judge may, in his discretion, allow
a reasonable attorney fee to the duly licensed
attorney representing the litigant obtaining a
judgment for damages in said suit, said
attorney's fee to be taxed as a part of the
court costs.
N.C. Gen. Stat. § 6-21.1 (2001). The allowance of attorney fees
is in the discretion of the presiding judge, and may be reversed
only for abuse of discretion. Washington, 132 N.C. App. at 351,
513 S.E.2d at 334. Accordingly, to overturn the trial court's
decision, it must be shown that it is so arbitrary that it could
not have been the result of a reasoned decision, or is manifestly
unsupported by reason. Davis v. Kelly, 147 N.C. App. 102, 106,
554 S.E.2d 402, 405 (quoting Blackmon v. Bumgardner, 135 N.C. App.
125, 130, 519 S.E.2d 335, 338 (1999)).
This discretion, however, is not unbridled. Washington, 132N.C. App. at 351, 513 S.E.2d at 334. The trial court must consider
the entire record, including: (1) settlement offers made before
suit was filed; (2) offers of judgment made pursuant to Rule 68 of
the North Carolina Rules of Civil Procedure, and whether the
judgment finally obtained was more favorable than such offers; (3)
whether the 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 the
settlement offers; (6) the amounts of settlement offers as compared
to the jury verdict; and (7) the whole record. Id. at 351, 513
S.E.2d at 334-35 (citations omitted). If the trial court
determines that an award of attorney's fees is proper, it must also
make factual findings concerning time and labor expended, the skill
required, the customary fee for similar work, and the experience or
ability of the attorney based on competent evidence. Porterfield
v. Goldkuhle, 137 N.C. App. 376, 378, 528 S.E.2d 71, 73 (2000)
(citations omitted). However, the trial court is not required to
make detailed findings of fact for each factor. Tew v. West, 143
N.C. App. 534, 537, 546 S.E.2d 183, 185 (2001).
Here, the trial court's order states [a]t the hearing for
costs and attorney fees, the Court considered the following
materials:
1. Motion for Costs with exhibits
submitted by Plaintiff;
2. Bill of Costs and Attorney's Fees
submitted by Plaintiff;
3. Affidavit of Philip R. Miller, III,
attorney for Plaintiff;
4. Testimony of Mr. J.J. Hoyer, insurance
adjuster for Liberty Mutual Insurance, the
liability insurance carrier in this case, who
appeared and testified at the hearing pursuant
to a subpoena issued by counsel for Plaintiff;
5. Exhibits tendered during the hearing;
6. Legal arguments and authorities
submitted by Mr. Miller; and
7. Legal arguments and authorities
submitted by Mr. Tillman.
The Court has reviewed all of the above-
referenced materials as well as the relevant
case law setting forth the elements that must
be satisfied before ordering a defendant to
pay costs and attorney's fees pursuant to
North Carolina General Statute § 6-21.1. In
particular, pursuant to Washington v. Horton,
132 N.C. App. 347, 513 S.E.2d 331 (1999), the
Court has considered the following factors:
1. Settlement offers made prior to the
institution of the action;
2. The offer of judgment in the amount of
$3,671.00 made by the Defendant pursuant to
Rule 68 on the 11th day of October, 2000 and
whether the Judgment finally obtained was more
favorable than such offer;
3. Whether the Defendant exercised
superior bargaining power;
4. The timing of settlement offers as
reflected and summarized in Exhibit 4 of
Plaintiff's motion for costs and attorney fees
and as occurred prior to the start of the jury
trial when the undersigned Judge told both
attorneys to confer with their respective
clients in an effort to settle the case;
5. The amounts of the settlement offers
as compared to the jury verdict; and
6. The whole record.
In a footnote following (6) above, the order provided:
In light of the fact that this was a caseagainst an individual defendant and not an
insurance company, the Court did not consider
and therefore does not make any findings on
the issue of whether there was an unwarranted
refusal by the Defendant insurance company to
pay the claim which constitutes the basis of
such suit.
The trial court then made ten additional findings pertaining to the
reasonableness of the award, the time and labor expended, the skill
required, the customary fee for like work, and the experience or
ability of plaintiff's counsel.
Defendant correctly asserts that the trial court's mere
recitation that it has considered all of the Washington factors,
without additional fact finding, is inadequate and does not allow
for meaningful appellate review. Thorpe v. Perry-Riddick, 144 N.C.
App. 567, 572-73, 551 S.E.2d 852, 857 (2001). Here, however, the
trial court incorporated by reference the parties' briefs and other
evidence it had reviewed including exhibits, testimony, and an
affidavit. It then specifically noted defendant's pre-judgment
offer of $3671.00, the timing of the settlement offers as
reflected and summarized in Exhibit 4, and the fact that the
Washington factor regarding an insurance company's unwarranted
refusal to pay a claim did not apply here.
The trial court did not specifically note each offer and the
amount. However, the trial court did make reference to offers in
its findings. Since there were essentially only two amounts
offered, the one by Hoyer and the Offer of Judgment, which was one
dollar more than the mediation offer, we hold the findings are
adequate as to that factor. The trial court also did not expressly find that the judgment
finally obtained--damages plus costs plus attorney's fees--exceeded
the Offer of Judgment. It did, however, state the factor was
considered. The judgment finally obtained here totaled $9,179.01,
which does not include prejudgment interest. Clearly, that
exceeded defendant's top offer of $3,671.00.
Finally, the trial court did not make a finding about whether
the defendant unjustly exercised superior bargaining power. The
lack of such a finding was in no way prejudicial to defendant.
Accordingly, we reject this assignment of error.
By his second assignment of error, defendant contends the
trial court abused its discretion in awarding attorney's fees
where the jury verdict was $812.11. He argues that his initial
offer eighteen days after the accident was nearly twice the jury
verdict, and his mediation offer and offer immediately following
mediation were approximately four and a half times the verdict.
Defendant further emphasizes that plaintiff's settlement demands
never fell below $4,000.
While defendant's prejudgment offers were higher than the
ultimate jury verdict, we can not say these facts render the trial
court's award completely arbitrary or manifestly unsupported by
reason. Davis, 147 N.C. App. at 106, 554 S.E.2d at 405. The
trial court considered both the amount of the verdict and [t]he
timing of settlement offers as reflected and summarized in Exhibit
4 of Plaintiff's motion for costs and attorney fees and as occurredprior to the start of the jury trial when the undersigned Judge
told both attorneys to confer with their respective clients in an
effort to settle the case. Accordingly, the trial court acted
within its authority under section 6-21.1 and we reject defendant's
argument.
By his third assignment of error, defendant contends the trial
court erred in awarding prejudgment interest in the amount of
$81.20. We agree. This Court held in Washington that because
there is no provision in section 6-21.1 for the assessment of
interest, the trial court erred by including interest in its award
of attorney's fees. Washington, 132 N.C. App. at 352, 513 S.E.2d
at 335. Accordingly, we vacate that portion of the award charging
interest.
Plaintiff has also moved, in this Court, for attorney's fees
incurred during the appellate process. The trial court does have
discretion under section 6-21.1 to award such fees. Davis v.
Kelly, 147 N.C. App. 102, 109, 554 S.E.2d 402, 406-07 (2001). We
therefore remand this case to allow the trial court, upon
plaintiff's motion and in its discretion, to make findings of fact
relevant to a determination of reasonable attorney's fees for
services performed on appeal and to enter an award consistent with
those findings.
Accordingly, we vacate that part of the trial court's order
awarding prejudgment interest but otherwise affirm. We remand for
consideration of attorney's fees incurred for the appeal. VACATED IN PART; AFFIRMED IN PART; REMANDED IN PART.
Judges MARTIN and TYSON concur.
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