A decision without a published opinion is authority only in the case in which such decision is rendered and should not be cited in any other case in any court for any other purpose, nor should any court consider any such decision for any purpose except in the case in which such decision is rendered. See Rule of Appellate Procedure 30 (e)(3).

NO. COA01-276


Filed: 5 February 2002



v .                             Mecklenburg County
                                No. 98-CVD-311


    Appeal by defendants from judgment entered 1 February 2000 and order entered 21 November 2000 by Judge Fritz Y. Mercer, Jr., in District Court, Mecklenburg County. Heard in the Court of Appeals 9 January 2002.

    Price, Smith, Hargett, Petho & Anderson, by Douglas A. Petho, for the plaintiff-appellee.

    Stiles Byrum & Horne, L.L.P., by Lane Matthews, for defendant- appellant Kinnari M. Patel.

    Templeton & Raynor, P.A., by Erik A. Schwanz, for defendant- appellant David W. Burlingham.

    WYNN, Judge.

    Kinnari M. Patel and David W. Burlingham argue on appeal that the trial court erred in awarding attorney fees to plaintiff under N.C. Gen. Stat. § 6-21.1. We agree, and remand to the trial court for reconsideration.
    In January 1998, plaintiff brought an automobile-related personal injury action against defendants under a complaint signed by his attorneys, William Benjamin Smith and Douglas A. Petho. Defendants Patel and Burlingham each filed an answer as well as cross-claims against one another seeking contribution. On 12 August 1998, plaintiff filed a notice of substitution of counsel removing Petho as counsel of record and substituting Scott A. Beckey of the Law Offices of Stefan R. Latorre, P.A. On 18 September 1998, plaintiff filed a notice of substitution of counsel removing Beckey as counsel of record and substituting Stefan R. Latorre.
    On 17 November 1998, the parties appeared for court-ordered non-binding arbitration and plaintiff was awarded $552.00. Plaintiff appealed, and the case proceeded to jury trial, whereupon the jury awarded plaintiff $2,200.00 for his personal injuries. Following trial, plaintiff moved for attorneys' fees under N.C. Gen. Stat. § 6-21.1 (1999). In support of this motion, Petho submitted an affidavit indicating his hourly rate of $175.00 and listing the time expended by him as well as by Latorre's law firm in prosecuting the action. Petho's affidavit indicated a total time of thirty-one hours spent on plaintiff's matter by himself and Latorre's law firm, but did not apportion the thirty-one hours between the attorneys or their law firms. In its judgment, the trial court stated:
        [t]hat following the trial of this action, the Plaintiff made a motion pursuant to N.C. General Statute 6-21.1 for attorneys fees, and that the Defendant be taxed with the costs of this action, . . . and the Court having reviewed the file, the Motion and Affidavit of Plaintiff's attorneys, and having heard arguments of counsel, in its discretion makes the following findings of fact and conclusions of law:
        . . . 

            2. That the Court having reviewed the Affidavits of Plaintiff's attorneys find they have rendered valuable services to the Plaintiff;

            3. That the Defendant shall pay Plaintiff's attorneys pursuant to N.C. General Statute 6-21.1, attorneys fees in the sum of $5,425.00 which the Court finds to be fair and reasonable based upon the time expended by Plaintiff's attorneys and the results obtained at the trial of this action.

    Defendant Burlingham filed a timely motion to reconsider the award of attorneys' fees and/or make additional findings of fact to support the award. In support of his motion, Burlingham submitted affidavits from his insurer's claims adjuster (Vera Lewis) and his attorney (Erik A. Schwanz). The trial court denied defendant's motion to reconsider. From this order and the trial court's 1 February 2000 judgment, defendants appeal.
    Defendants argue that the award of attorney's fees was not supported by adequate findings of fact and conclusions of law. We agree.
    In her affidavit filed in support of defendants' motion to reconsider the award of attorneys' fees, Vera Lewis affied as follows:
        7. On 11/25/97 I spoke with Plaintiff's attorney, Stefan Latorre inquiring [] about the claim, settlement, and the medical bills. I stated to him that I was in the process of reviewing the file[s] and that I needed to speak with the co-Defendant's insurer regarding a possible [50%] contribution from them on . . . claims made by the Plaintiff.

        8. In this conversation, Latorre informed methat he had received an offer of $1,250.00 from Patel's insurer, and that he was therefore going to file suit against them. He also advised that I could call him once I was ready to make an offer.

        . . . 

        10. On 1/5/98 I called Latorre to offer $2,000.00 to settle our part of the claim, but he was unavailable in a conference, according to his secretary; I left a message with the secretary.

        11. I called two more times throughout that day, and left at least one more message with Latorre's secretary, but never received a call back. I then diaried my computer file to contact Latorre later in the month if I did not hear from him.

        12. On 1/27/98 I called Latorre again in an effort to make a settlement offer and to get the case resolved. Again, Latorre was out; I spoke with another attorney in his firm and made the offer of $2,000.00. That attorney advised that he [would] relay the offer to Latorre and that someone would get back to me regarding the same.

        13. On 2/16/98 I called Latorre's office again to discuss settlement. I spoke with Monica of his firm and offered the $2,000.00; she stated she would relay the message to him.

        14. On 3/5/98 I called Latorre's office again and left a message with his secretary to call me regarding settlement.

        15. On 3/17/98 I received a call from Scott in Latorre's office, who advised that he would be representing [plaintiff] in this matter and he further stated that he had filed suit and wanted to know if anyone had let me know that information. I advised that I had no information regarding the suit, and Scott agreed to fax me a copy of it.

        . . . 

        17. Prior to the filing of the suit, I was willing to negotiate further on the settlementof [plaintiff's] bodily injury claim, but no one with authority to settle the claim would respond to my offer of $2,000.00.

In his affidavit filed in support of defendants' motion to reconsider the award of attorneys' fees, Erik Schwanz affied as follows:
        3. The arbitration in this matter was held on November 17, 1998, which resulted in an award to the Plaintiff for the sum of $552.00; Plaintiff appealed the award on or about December 7, 1998.

        4. In reliance on the arbitration award and the version of events Plaintiff Mejia gave during that hearing, I agreed to a joint offer of judgment in the amount of $1,500.00 with Mr. Lane Matthews (“Matthews” hereinafter), attorney for Defendant Patel.

        5. The Offer of Judgment [made by defendants pursuant to N.C. Gen. Stat. § 1A-1, Rule 68] allowed for $1,500.00 and was mailed to the Plaintiff's counsel on or about June 1, 1999.

        6. At the pre-trial conference of this matter, which occurred just prior to calling the case, the two Defendants made a joint offer (through [Schwanz] and Matthews) to settle for $2,500.00.

        7. Prior to that offer, the lowest counter- offer Defendants had received was $7,500.00.

        8. In response to the offer of $2,500.00, Plaintiff indicated that the minimum he would accept was $6,000.00, otherwise the case would go to trial; the case therefore went to trial.

    G.S. § 6-21.1 provides that the trial judge may, in his discretion, allow a reasonable attorney fee to the attorney representing a litigant obtaining a judgment for damages in a personal injury action “where the judgment for recovery of damages is ten thousand dollars ($10,000) or less[.]”    While the allowance of attorneys' fees under G.S. § 6-21.1 is within the trial court's discretion, such discretion is not unbridled. See Washington v. Horton, 132 N.C. App. 347, 513 S.E.2d 331 (1999). When awarding fees, the trial court must consider and make findings of fact regarding 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 (internal citations omitted).
    Here, the trial court's 1 February 2000 judgment awarding plaintiff attorneys' fees pursuant to G.S. § 6-21.1 found merely that plaintiff's attorneys had “rendered valuable services” to plaintiff, and thereby awarded plaintiff $5,425.00 in attorneys' fees. Upon defendants' motion for reconsideration and/or motion to make additional findings of fact, the trial court made the following additional findings of fact in its 21 November 2000 order denying defendants' motion to reconsider:
        1. That Plaintiff's counsel, Douglas A. Petho, was not the original attorney that was retained in this matter.

        2. That Mr. Petho was involved in this case after suit had been filed.

        3. That pre-suit offers were originally sent to Mr. Latorre's associate, who never acted upon the same.
        4. That counsel for the Defendants made offers prior to trial while meeting with the Court in this matter.

        5. That on the day of trial, the Plaintiff was not inclined to accept the [defendants' settlement] offer as he had traveled to court to have this matter heard by a jury.

        . . . 

        8. That the Court is of the opinion that if Mr. Petho had been handling this case from the outset that the trial of this matter could have been avoided and a settlement would have ensued but based upon substitution of counsel, that did not occur.

Based on these scant findings, the trial court denied defendants' motion to reconsider.
    None of the findings made by the trial court support the award of attorneys' fees to plaintiff under G.S. § 6-21.1. If anything, the trial court's findings support a denial of attorneys' fees to plaintiff. No findings were made concerning the precise timing and amounts of plaintiff's pretrial settlement demands or defendants' pretrial settlement offers; nor were findings made concerning the amounts of the settlement offers as compared to the ultimate jury verdict. Indeed, defendants' uncontested affidavits indicate that defendants made multiple settlement offers prior to trial, ultimately offering $2,500.00 immediately prior to trial, which exceeded the jury award of $2,200.00. Even before suit was filed, defendant Patel's insurer offered $1,250.00 to settle Patel's part of the claim, and defendant Burlingham's insurer offered $2,000.00 to settle his part of the claim; the total of $3,250.00 offered by defendants prior to the case being filed far exceeded the jury'sultimate award. The jury's award ($2,200.00) was well below plaintiff's initial demand ($10,000.00) and final pre-trial settlement demand ($6,000.00), but only slightly exceeded defendants' Rule 68 offer of judgment ($1,500.00) made months before trial. Furthermore, there is nothing in the record, and no finding by the trial court, indicating that defendants unjustly exercised superior bargaining power. See Washington; see also Williams v. Manus, 142 N.C. App. 384, 542 S.E.2d 680 (2001).
    Additionally, even if the trial court made adequate findings to support some award of fees to plaintiff, the trial court did not make adequate findings (including a finding concerning the fee arrangements between plaintiff and his multiple attorneys, see Washington, 132 N.C. App. at 351, 513 S.E.2d at 334) such that the amount of fees awarded was supported. See Porterfield v. Goldkuhle, 137 N.C. App. 376, 528 S.E.2d 71 (2000); Epps v. Ewers, 90 N.C. App. 597, 369 S.E.2d 104 (1988). Rather, the trial court awarded fees based solely upon Petho's hourly rate, despite the recognition that plaintiff employed multiple attorneys and law firms, and that Petho's affidavit regarding time spent on this matter included hours expended by Petho and Latorre's law firms. For instance, plaintiff may have had a fee arrangement to compensate Petho at a reduced hourly rate of $150.00, or an arrangement to compensate Latorre's firm at an hourly rate of $125.00. More likely, plaintiff had a fee arrangement to compensate his attorneys on a contingency fee basis rather than at an hourly rate. In any event, we conclude that the amount of thefees award, as well as the award of fees in and of itself, is unsupported by the trial court's findings of fact.
    Furthermore, we note that the trial court's findings of fact 1 and 2 conflict with the evidence in the record. While the trial court found that Petho was not the original attorney of record in this matter and became involved only after the suit was filed, we note that Petho signed plaintiff's complaint, and was later removed as counsel of record by notice filed by plaintiff on 12 August 1998. There is no indication in the record of when Petho was re- instated as counsel of record. Additionally, the trial court's findings indicate that Latorre's law firm never responded to pre- suit offers. The trial court indicates the opinion that if Petho had handled the matter from the outset, a settlement would have ensued and trial could have been avoided. As noted above, however, Petho signed plaintiff's complaint, and clearly was involved as early as 9 January 1998; furthermore, there is no justification for attributing to defendants the failure to settle, when it appears that settlement would have occurred but for plaintiff's decision to substitute counsel.
    The trial court abused its discretion in awarding plaintiff attorneys' fees without properly considering the factors outlined in Washington and making the required findings. Accordingly, we reverse the award of fees and remand for further review and fact- finding in accordance with the Washington factors. In the event the trial court is unable to make adequate findings to support an award of attorneys' fees under the Washington analysis, the trialcourt should deny plaintiff's motion for fees.
    Defendants do not challenge the amount of the underlying jury award or the expert witness fee awarded to plaintiff. Our decision therefore leaves those portions of the judgment intact. The trial court's 21 November 2000 order denying defendants' motion to reconsider is reversed and remanded, and the 1 February 2000 judgment is,
    Affirmed in part, reversed in part, and remanded.
    Judges HUDSON and THOMAS concur.
    Report per Rule 30(e).

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