Summary 2008 WY 46

Summary of Decision issued April 16, 2008

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

Case Name: Stewart Title Guaranty Co. v. Tilden

Citation: 2008 WY 46

Docket Number: S-07-0208

Appeal from the District Court of Park County, the Honorable Gary P. Hartman, Judge

Representing Appellant (Defendant): Andrea L. Richard and Erika M. Nash of the Richard Law Firm, PC, Jackson, Wyoming.

Representing Appellee (Plaintiff): Jessica Rutzick of Jessica Rutzick Attorney at Law, PC, Jackson, Wyoming and John R. Vincent of Vincent Law Office, Riverton, Wyoming.

Facts/Discussion: Stewart Title appealed the district court’s award of statutory attorney’s fees and interest to Tilden. This is the third trip to the Court for the instant case.
Whether the filing deadline of W.R.C.P. 54(d)(2) applied: The unambiguous language of W.R.C.P. 54(d)(2) does not place a 14-day filing deadline upon application for fees in a case where the cause of action is for attorney’s fees. There was no reason to require the filing of a motion for attorney’s fees because the only reason any additional filing was required was that a partial summary judgment had been granted resolving the fact that statutory attorney’s fees were due but not establishing the amount.
Whether doctrine of res judicata bars award: The district court found that the arbitrator denied the attorney’s fee claim on the grounds that he had no authority to decide it. The language and intent of the Interim Order was clear. The arbitrator did not address and decide Tilden’s claim for statutory attorneys’ fees therefore, the issue was not barred by the doctrine of res judicata.
Whether contingent fees can be included: In its brief, Stewart Title did not mention the existence or effect of contingent fees. The Court noted that attorney’s fees must be proven to be reasonable. Whether or not attorney’s fees are fixed or contingent is one factor a district court is to consider in determining the reasonableness under the federal “lodestar” test adopted by the Court. The district court listed and considered the required lodestar factors.
Whether amounts billed in violation of Wyo. R. Prof. Conduct 8.4(g) can be included: Stewart Title contended that one of Tilden’s lawyers violated the rule by hiring and charging Tilden for the services of a certain paralegal. The Court summarily affirmed the district court’s rejection of Stewart Title’s objection to inclusion in the attorney’s fees award of amounts paid to the paralegal.
Whether prejudgment interest can be included: Wyo. Stat. Ann. § 26-15-124(c) does not clearly indicate whether prejudgment interest is available only upon the underlying claim or loss that the insurer refused to pay or also upon the attorney’s fees incurred both in vindicating that claim and in pursuing the attorney’s fees claim under the statute. The Court noted again that the arbitrator declined to decide the attorney’s fees issue because he concluded that he lacked the jurisdiction to make such a determination under applicable arbitration rules and that there was no prevailing party statute for him to apply. Attorney’s fees owed at any given time could have been readily computed and if Stewart Title had asked for the amount, they could have cut off the accrual of fees and interest. An insured, wronged by the dilatory tactics of an insurer cannot be made whole if he or she loses more in attorney’s fees and interest that he or she obtains in an underlying damage award.

Holding: The filing deadline of W.R.C.P. 54(d)(2) did not apply to an application for fees under Wyoming Statutes. The present action was not barred by the doctrine of res judicata because it was not raised, and could not be raised, in the arbitration. The district court did not err by including in the final judgment attorney’s fees that might have been contingent or attorney’s fees paid to a certain paralegal or prejudgment interest on the fees awarded in the judgment.

Affirmed.

C.J. Voigt delivered the decision.

Link: http://tinyurl.com/6mzkeg .

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. Please note when you look at the opinion that all of the paragraphs are numbered. When you pinpoint cite to a quote, you should cite to this paragraph number rather than to any page number. If you need assistance in putting together a citation using the Universal Citation form, please contact the Wyoming State Law Library.]

Summary 2007 WY 120

Summary of Decision issued August 1, 2007

[SPECIAL NOTE: This opinion uses "Universal Citation" and was given an "official" citation when issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. You will note that all of the paragraphs are numbered. When you need to provide a pinpoint citation, the universal portion of the citation will use that paragraph number. The pinpoint citation in the P.3d portion should include the reporter page number. If you need assistance, please contact the Wyoming State Law Library.]

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

Case Name: Horn and Horn, PC. v. Wooster and Duddy

Citation: 2007 WY 120

Docket Number: 06-195

Certified Questions from the United States District Court, District of Wyoming, the Honorable Clarence A. Brimmer, Judge

Representing Appellants (Defendants): Weston W. Reeves and Anna R. Olson of Park Street Law Office, Casper, Wyoming. Argument by Mr. Reeves.

Representing Appellees (Plaintiffs): C.M. Aron of Aron & Henning, LLP, Laramie, Wyoming.

Questions: Should Client’s malpractice award be reduced by the contingent fee Attorney would have received absent his malpractice in the personal injury case? Can the Associated Attorney recover the agreed portion of the contingent fee, either as an offset against the contingent fee or as a separate claim against the Principal Attorney?

Facts/Discussion: The federal district court for the District of Wyoming certified two questions to this Court concerning how a negligent attorney’s contingent fee in the underlying personal injury action should be accounted for in a subsequent malpractice award to his former client.
Question One: The Court has never had occasion to address how a negligent attorney’s contingent fee should be treated in a subsequent malpractice action brought by the client. Historically, a negligent attorney had been entitled to deduct from a subsequent malpractice award the amount he would have been entitled to as a contingent fee in the underlying action. In the latter part of the twentieth century, some courts began to rule a negligent attorney was not entitled to such a deduction. Other courts simply stated that a negligent attorney should not benefit from shoddy or negligent work. In Jackson State Bank v. King, the Court stated that even though legal malpractice may be attributable to negligence on the part of the attorney, the right to recompense is based upon the breach of the contract with the client. Wyoming precedence established that in the absence of willful conduct, the damages recoverable for legal malpractice are those typically available for breach of contract and the award was designed to put the plaintiff in the same position as if the contract had been performed less the proper deductions. The Court noted that in the First Circuit case of Moores, the court stated that in a negligence action, the plaintiff is entitled to recover only those damages which were a foreseeable consequence of the defendant’s negligence. Concentrating on the question of what the client lost as a result of the attorney’s negligence requires the deduction of all expenses which the client would have incurred in order to successfully prosecute his claim, including the attorney’s fee expense. The well-accepted principles for calculation of damages in both contract and tort cases should be applied and the plaintiff should receive an award that would place him in the same position he would have enjoyed had the negligence not occurred.
The Court stated they have clear authority regarding a prevailing party’s right to collect attorney’s fees from his opponent. In Wyoming the American rule is applied. The Court saw no reason for creating an exception to the American rule when legal malpractice was involved.
Some courts have ruled that a negligence attorney is not entitled to a deduction of his contingent fee from a malpractice award against him but, utilizing a quantum meruit theory, may be entitled to a deduction for the value of his services which benefited the client. The Court stated that using the above approach to calculate damages would be difficult because the facts would present nearly unlimited opportunities for the client to second-guess the first attorney’s tactics and work product.
Question Two: The Court stated that plaintiffs did not cite any authority to support their position that an attorney should be allowed to maintain an action against his co-counsel for negligence in prosecuting the underlying personal injury action. To adopt a cause of action between co-counsel simply because the attorney proposed to give the client the benefit of any judgment in his favor would not square with the Court’s other precedent and could result in a case where the client’s best interests are compromised by the self interests of feuding attorneys.

Holding: The Court concluded that consistent with their damages jurisprudence in other areas of the law, a malpractice plaintiff is entitled to an award in the net amount he would have received under the contingent fee agreement had the underlying action been successful. The Court declined to recognize a cause of action by an attorney against his negligent co-counsel.

The first certified question was answered in the affirmative and the second in the negative.

J. Kite delivered the decision.

J. Burke, dissenting: The Justice dissented because he did not believe it was appropriate to adopt a rigid rule allowing deduction of the attorney’s contingent fee percentage in all legal malpractice cases. The deductibility of those fees should be tied to the benefit that the client received from the attorney’s efforts. Where the client has received no benefit, no deduction should be allowed. The Justice stated he believed that Moores supported a more flexible rule than the majority stated.
In the final analysis, it does not appear to the Justice that any court currently applies the rule adopted by the majority. The modern view regarding deductibility is appropriate and the reasoning supporting that view persuasive. He stated he felt the Court should adopt the general rule that the contingent fee should not be deducted. In those cases where it would be inequitable to disallow the deduction, as in Moores, a quantum meruit approach would be more appropriate. In the instant case, the certified question does not include any facts indicating any benefit. Accordingly, the Justice would have answered “No” to the first certified question.

Link: http://tinyurl.com/2jbk99 .