Appeal by defendant from order entered 5 September 2006 by
Judge Abraham Penn Jones in Superior Court, Wake County. Heard in
the Court of Appeals 11 September 2007.
E. Gregory Stott, for plaintiff-appellee.
McAngus, Goudelock & Courie, PLLC, by Mary M. Webb, for
defendant-appellant.
Larcade, Heiskell & Askew, PLLC, by Christopher N. Heiskell
and Roger A. Askew, for North Carolina Association of Defense
Attorneys, amicus curiae.
WYNN, Judge.
In North Carolina, when a plaintiff recovers ten thousand
dollars or less in a personal injury suit, the trial court may
allow a reasonable fee to the plaintiff's attorney “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.”
(See footnote 1)
Here, the defendant argues that the trial courtabused its discretion by ordering $25,000 in attorney fees
following the jury's award of $7,000 to the plaintiff. Because the
trial court's order is supported by the requisite findings of fact
and conclusions of law, we find no abuse of discretion.
On 3 August 2002, Plaintiff Gurpreet Kaur Wright and Defendant
James Clarence Murray were involved in a motor vehicle accident on
Ridge Road in Raleigh, North Carolina. Through her attorney, E.
Gregory Stott, Ms. Wright filed a complaint in Wake County District
Court on 19 November 2004 against Mr. Murray, alleging that his
negligence caused the accident. Mr. Murray's insurance carrier
defended him against Ms. Wright's lawsuit and through its attorneys
filed an answer to the complaint on 31 January 2005, denying
liability and also alleging contributory negligence by Ms. Wright
in causing the accident. Mr. Murray's attorneys filed a Request
for Statement of Monetary Relief Sought by Plaintiff on 7 February
2005. Due to the amount of damages requested by Ms. Wright in her
original complaint, the lawsuit was transferred to Wake County
Superior Court by the consent of both parties on 18 February 2005.
The parties then began discovery, including production of
documents and interrogatories, and Mr. Stott filed Partial
Responses to Defendant's First Request for Production of Documents
for Ms. Wright on 31 May 2005, attaching some of the medical
records for treatment she received for injuries sustained in the
August 2002 car accident. On 6 July 2005, Mr. Stott filed aSupplemental Response to Request for Production of Documents, which
again included copies of medical bills for Ms. Wright.
The parties attended a mediation session on 14 September 2005,
which culminated in an offer by Mr. Murray's attorneys to settle
Ms. Wright's claim for $8,000. Ms. Wright declined that offer, as
well as a formal Offer of Judgment for the total sum of $8,001, to
include costs, interest, and attorney's fees, made by Mr. Murray's
attorneys on 16 September 2005, approximately one month before the
trial was scheduled to take place.
At the 17 October 2005 session of Wake County Superior Court,
a jury heard Ms. Wright's claim against Mr. Murray and returned a
verdict finding Mr. Murray negligent and Ms. Wright not
contributorily negligent, and awarding Ms. Wright $7,000 for her
personal injuries. The trial court entered a judgment against Mr.
Murray based on the jury verdict on 7 December 2005.
Following the judgment, Ms. Wright's attorney, Mr. Stott,
filed a request for an assessment of court costs and of attorney
fees as court costs. In an order filed 5 September 2006, the trial
court found that the “judgment finally obtained” by Ms. Wright “was
more favorable than [Mr. Murray's] Offer of Judgment.” The trial
court further found as fact that Mr. Stott had “recorded more than
139.5 hours of time in rendering [his] services to [Ms. Wright] and
he charges $220.00 per hour, which is a customary charge of
attorneys in this area.” Those services included “telephone and
personal consultations, drafting and filing court papers, preparing
for hearing, numerous appearances in court, legal research,drafting court orders and other miscellaneous activities.” The
trial court concluded that Mr. Murray should be taxed with the
costs of Ms. Wright's action against him, including fees for
filing, subpoenas, expert witnesses, and depositions, in the amount
of $3,188.25. Additionally, the trial court ordered Mr. Murray to
pay Mr. Stott $25,000 in reasonable attorney fees and $160.50 in
photocopying expenses.
Mr. Murray now appeals the order of attorney fees, arguing
that (I) the trial court's findings of fact are not supported by
competent evidence to sustain the award and amount of attorney
fees; and (II) the trial court abused its discretion in the award
and amount of attorney fees under North Carolina General Statute §
6-21.1. Because the arguments on these issues overlap, we
consolidate them for discussion.
Our General Assembly set forth the law governing the outcome
of this appeal in Section 6-21.1 of our General Statutes, which
provides that:
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 thecourt costs.
N.C. Gen. Stat. § 6-21.1 (2005) (emphasis added). Because this
section empowers our trial judges with the discretion to allow
attorney fees, we review challenges to a trial judge's award of
attorney fees pursuant to Section 6-21.1 under the abuse of
discretion standard.
An abuse of the discretion to award attorney fees occurs when
“[a] decision [is] manifestly unsupported by reason or so arbitrary
that it could not have been the result of a reasoned decision.”
Briley v. Farabow, 348 N.C. 537, 547, 501 S.E.2d 649, 656 (1998)
(internal quotations omitted). Our Supreme Court has further
noted:
The obvious purpose of this statute is to
provide relief for a person who has sustained
injury or property damage in an amount so
small that, if he must pay his attorney out of
his recovery, he may well conclude that it is
not economically feasible to bring suit on his
claim. In such a situation the Legislature
apparently concluded that the defendant,
though at fault, would have an unjustly
superior bargaining power in settlement
negotiations. . . . This statute, being
remedial, should be construed liberally to
accomplish the purpose of the Legislature and
to bring within it all cases fairly falling
within its intended scope.
Hicks v. Albertson, 284 N.C. 236, 239, 200 S.E.2d 40, 42 (1973)
(citation omitted).
Nevertheless, we have noted that “[t]he discretion accorded
the trial court in awarding attorney fees pursuant to N.C. Gen.
Stat. § 6-21.1 is not unbridled.”
Washington v. Horton, 132 N.C.
App. 347, 351, 513 S.E.2d 331, 334 (1999). In exercising suchdiscretion, a trial court must consider the entire record,
including but not limited to factors such as: (1) the settlement
offers made prior to the institution of the action; (2) offers of
judgment made pursuant to Rule 68 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 settlement
offers; and (6) the amounts of the settlement offers compared to
the jury verdict.
Id., 513 S.E.2d at 334-35 (citations omitted).
Moreover, when examining a trial court's decision to award
attorney fees, this Court
require[s] more than “[m]ere recitation by the
trial court that it has considered all
Washington factors.”
Thorpe v. Perry-Riddick,
144 N.C. App. 567, 572, 551 S.E.2d 852, 857
(2001). However, the trial court is not
required to make detailed findings of fact as
to each factor.
Tew v. West, 143 N.C. App.
534, 537, 546 S.E.2d 183, 185 (2001).
Instead, the trial court is required only to
make the additional findings necessary to
preserve its ruling on appeal.
Thorpe, 144
N.C. App. at 573, 551 S.E.2d at 857.
House v. Stone, 163 N.C. App. 520, 523, 594 S.E.2d 130, 133 (2004).
In the instant case, the trial court's order contains explicit
findings regarding the lack of settlement offers prior to the
filing of Ms. Wright's claim, offer of judgment made pursuant to
Rule 68, timing of the settlement offers, and amounts of the
settlement offers relative to the jury's verdict. The order
further finds that the “judgment finally obtained” by Ms. Wrightwas more favorable than Mr. Murray's final offer of judgment.
(See footnote 2)
As
such, the order had specific findings as to the majority of the
Washington factors.
Additionally, the trial judge stated that the order was based
on “a review of the entire record herein, the court's first hand
acquaintance with the evidence presented, the observance of the
parties, the witnesses, the attorneys involved, various other
attendant circumstances, the affidavits of the plaintiff's attorney
and the arguments of the attorneys for both parties[.]” Finally,
the trial judge included findings as to the services performed by
Mr. Stott during his representation of Ms. Wright and to the number
of hours he spent on her claim, as well as his per-hour charge and
that the charge is customary for the area.
Mr. Murray contends that these findings as to the
Washington
factors and as to the amount of the attorney fees awarded to Ms.
Wright were not supported by competent evidence, and that the trial
judge abused his discretion in awarding and determining the amountof the attorney fees. We are not persuaded.
The record before us reflects an ongoing dispute between
counsel for plaintiff and counsel for defendant as to how Ms.
Wright's claim against Mr. Murray proceeded from the time of the
accident up until the time of the jury trial, including what
occurred at the mediation session. Mr. Murray's attorneys contend
that Ms. Wright did not provide them with any medical records
documenting her injuries and treatment, so that they were unable to
prepare a settlement offer prior to mediation; Ms. Wright's
attorney, by contrast, asserts - and submits supporting
documentation attached to a discovery response - that Ms. Wright's
medical records were available to Mr. Wright's attorneys as early
as May 2005, six months before the trial.
When a trial judge sits as “both judge and juror,” as in a
hearing on court costs and attorney's fees, “it is that judge's
duty to weigh and consider all competent evidence, and pass upon
the credibility of the witnesses, the weight to be given their
testimony and the reasonable inferences to be drawn therefrom.”
In
re Whisnant, 71 N.C. App. 439, 441, 322 S.E.2d 434, 435 (1984)
(citation omitted). Here, the trial court directly observed the
attorneys throughout the course of this matter, including their
demeanor and characteristics during the hearing on costs and fees.
The record contains evidence that supports the versions of events
offered by both Ms. Wright's and Mr. Murray's counsel. In such an
instance, we cannot substitute our assessment of the credibility of
the evidence for that of the trial judge. Instead, our law compelsus to decline to find an abuse of discretion where the trial court,
in its discretion, finds one version more credible than the other.
See In re Gleisner, 141 N.C. App. 475, 480, 539 S.E.2d 362, 365-66
(2000) (“If different inferences may be drawn from the evidence,
the trial judge must determine which inferences shall be drawn and
which shall be rejected.”). Accordingly, we overrule these
assignments of error.
Affirmed.
Judges ELMORE and JACKSON concur.
Footnote: 1