WANDA CHILDERS DON A. PISACANO v. KEN-RAY MOTORS
Annotate this Case
Download PDF
RENDERED: July 10, 1998; 2:00 p.m.
TO BE PUBLISHED
NO. 97-CA-1496-MR
WANDA CHILDERS
and
DON A. PISACANO
APPELLANTS
APPEAL FROM MADISON CIRCUIT COURT
HONORABLE JULIA H. ADAMS, JUDGE
ACTION NO. 94-CI-000826
v.
KEN-RAY MOTORS
APPELLEE
OPINION
REVERSING AND REMANDING
* * *
BEFORE:
ABRAMSON, GUIDUGLI, AND KNOX, JUDGES.
KNOX, JUDGE:
This is an appeal from the Madison Circuit Court's
judgment denying appellants' motion for pre-judgment attorney
fees following a jury trial alleging fraud in violation of the
Kentucky Consumer Protection Act.
After reviewing the record,
and in light of the absence of legal precedent providing guidance
for the trial court, we reverse and remand the matter for further
consideration in conformity with this opinion.
BACKGROUND
In May 1994, Wanda Childers (Childers) purchased a used
vehicle from appellee, Ken-Ray Motors (Ken-Ray).
Within the
first hour following purchase, Childers commenced having what
turned out to be a plethora of problems with the vehicle.
Ultimately, in November 1994, Childers filed a complaint
alleging, inter alia, fraudulent misrepresentation and violation
of the Kentucky Consumer Protection Act (KCPA), KRS 367.010 et
seq.
A jury trial was held respecting these two issues on
January 27, 1997.
That trial resulted in a unanimous jury
verdict awarding Childers $6,748.89 in compensatory damages1 and
$25,000.00 in punitive damages.
The damages award was the result
of the jury's finding that Ken-Ray had committed fraud upon
Childers, had violated the KCPA, and had acted towards Childers
with fraud, malice or oppression.
Following entry of this judgment, Ken-Ray moved the
court: (1) for a new trial; (2) to set aside the judgment; (3) to
stay the proceedings; and, (4) to refer matters to the Madison
County grand jury.2
Childers filed a motion for attorney fees as
permitted under KRS 367.220(3) and, subsequently, filed further
motions for additional attorney fees as would be generated from
the post-judgment proceedings.
1
This figure represents 100% of the actual damages claimed by
Childers.
2
The facts relating to appellee's motion to refer matters to
the grand jury, which was ultimately denied by the trial court,
have no relevance to this appeal.
2
After having taken all of Ken-Ray's motions under
advisement and thoroughly considering each allegation, the trial
court denied the motions for a new trial, to set aside the
judgment, and to refer matters to the grand jury.
The court
further set aside its previous order staying the proceedings, and
authorized Childers to execute the judgment.
On May 5, 1997, Childers filed her renewed motion for
attorney fees and motion for additional attorney fees.
Attached
thereto was counsel's affidavit reflecting the sum of postjudgment fees and costs.
That affidavit indicated that
$1,765.003 in attorney fees had accumulated, as well as $218.18
in costs.
Those figures supplemented counsel's previous motion
and supporting affidavit reflecting a total of $23,996.00 in fees
and $969.23 in costs incurred in preparation for and during
trial, or between August 31, 19954 and January 28, 1997.
The trial court entered its order May 22, 1997,
directing that Childers be awarded: (1) the costs necessary to
prepare and bring her cause of action to trial; (2) $128.60 in
post-judgment costs; (3) nothing for attorney fees generated in
preparation for trial, nor during the trial process itself; and,
3
Counsel's total fee amount was predicated on a regular
hourly rate for himself of $120.00, and that of other associates
and support staff, the hourly rates of whom ranged between $60.00
and $120.00.
4
Childers' present attorney, and co-appellant, did not file
an entry of appearance in this matter until September 1995. By
agreed order in October 1995, current counsel was substituted and
Childers' former representative was permitted to withdraw.
3
(4) $600.00 in post-judgment attorney fees.5
The trial court
further ordered that Childers not be awarded "any other
(additional) costs or attorney fees, as movant has failed to
persuade the Court that the additional fees and expenses claimed
were necessary."
It is from this order that Childers appeals.
CLAIMS
Childers argues that the trial court's ruling runs
afoul of the legislature's intent to permit consumers to pursue
judicial redress of unconscionable or dishonest business
practices.
Absent an attorney fee staututory provision, the KCPA
would have no teeth in that members of the public, whom it is
designed to protect, would be monetarily bootstrapped from hiring
an attorney to represent their causes of action. Considering the
excellent results generated from the litigation, Childers claims
that an award of attorney fees is amply substantiated.
On one hand, it appears Childers appeals from the
portions of this judgment denying any award of attorney fees
incurred either pre-trial or during the course of trial.
On the
other hand, Childers argues that an abuse of discretion occurred
when the trial judge failed to award the "full" amount of
attorney fees.
Regardless of the specific claim, the process
under which judicial discretion may be exercised pursuant to the
KCPA requires some analysis and application of guidelines.
5
The trial court made no findings as to: 1) how it calculated
an award of $128.60 in post-judgment costs; 2) how it ascertained
that no attorney fees were warranted either in preparation for, or
the actual trial process itself; nor, 3) how it calculated an award
of $600.00 in post-judgment attorney fees.
4
Ken-Ray makes two arguments.
First raised is that the
determination of an award of attorney fees is a matter left
totally within the discretion of the trial court.
This
determination will not be disturbed on appeal absent a clear
abuse of such discretion.
Although we agree with the premise of
this argument, we believe the absence of any legal precedent
regarding the calculation of attorney fees under KCPA operated to
hinder the trial judge's application of such discretion,
requiring reversal.
Second, it is maintained that Childers is precluded
from asserting any claim for attorney fees for failure to: (1)
submit the issue at trial and before the jury; (2) present the
issue of reasonableness of such fees before the jury; (3) provide
a jury instruction on the award of reasonable attorney fees; and,
(4) submit evidence in the record as to the financial arrangement
between Childers and her attorney.
On these points we disagree.
KRS 367.220(3) affords that "[i]n any action brought
by a person under this section, the court may award, to the
prevailing party, in addition to the relief provided in this
section, reasonable attorney's fees and costs." (Emphasis added).
The strict statutory language directs the trial court to exercise
its discretion post-facto, in that an award may be made to the
"prevailing party."
It remains simple logic that if one party
has prevailed, the trial has concluded.
The matter is then left
to the sole discretion of the trial judge, not the jury. KRS
367.220(3). See Browning v. Browning, Ky. App., 551 S.W.2d 823,
5
825 (1977).
Of course, had counsel desired to submit the issue
of attorney fees to the jury he was so entitled, but by no means
was this a mandatory method of recovery. Rather,
[i]t should never be overlooked that any
award of an attorney fee is subject to a
determination of reasonableness by the trial
court. . . . The trial judge is generally in
the best position to consider all relevant
factors and require proof of reasonableness
from parties moving for allowance of attorney
fees. In exercising its discretion, a trial
court should require parties seeking attorney
fees to demonstrate that the amount sought is
not excessive and accurately reflects the
reasonable value of bona fide legal expenses
incurred.
Capitol Cadillac Olds, Inc. v. Roberts, Ky., 813 S.W.2d 287, 293
(1991).
With respect to appellee's argument that appellant is
precluded from asserting any claim for attorney fees for failure
to submit evidence in the record regarding the financial
arrangement between Childers and her attorney, we note the case
Meyers v. Chapman Printing Co., Ky., 840 S.W.2d 814 (1992).
In
Meyers, the Court observed that, earlier, the trial court had
addressed a claim from plaintiff's attorney for a "fee
enhancement" because the client was represented on a contingent
fee basis.
Affirming the circuit court's decision, in that a
"contingency enhancement" is inappropriate in such cases, and
quoting Judge Barker's trial court opinion, the Kentucky Supreme
Court said:6
6
Our Supreme Court commented that Judge Barker had rendered
his decision prior to the United States Supreme Court reaching the
identical conclusion in City of Burlington v. Dague, 505 U.S. 557,
112 S.Ct. 2638, 120 L.Ed.2d 449 (1992).
6
[A]n enhancement for that reason constitutes
an unfair penalty upon the defendant and
would have a tendency to encourage meritless
litigation. Most lawyers are familiar with
non-compensated hours and the market rate
takes this into account.
Meyers, 840 S.W.2d at 826 (1992) (alteration in original).
In
light of the language in Meyers, we are of the opinion that
contingent fee arrangements are not to be considered by the court
in arriving at a reasonable attorney fee.
On the other hand, an
arrangement based on an hourly rate may be relevant in
determining a reasonable hourly rate in setting a "lodestar"
figure, as explained hereinafter.
In any event, we find nothing
in Kentucky law which mandates production of evidence regarding
any such hourly arrangement as a predicate for recovering her
attorney fees.
The parties are correct in that there exists no
Kentucky precedent providing guidelines for the exercise of
judicial discretion in the awarding of attorney fees under the
Kentucky Consumer Protection Act.
We perceive the KCPA is
analogous to other statutory provisions which permit the trial
court to discern whether an award of attorney fees is merited.
Likewise, we deem it advisable to look to other corners of
Kentucky law for direction on what type of additional factors
should be employed by the trial court in making such a
determination.
THE KENTUCKY CONSUMER PROTECTION ACT
As a general rule, statutory authority is required in
order to allocate attorney fees and costs. Shelter Mut. Ins. Co.
7
v. McCarthy, Ky. App., 896 S.W.2d 17, 19 (1995).
Enacted in 1972
the KCPA was intended to promote the Kentucky General Assembly's
findings:
that the public health, welfare and interest
require a strong and effective consumer
protection program to protect the public
interest and the well-being of both the
consumer public and the ethical sellers of
goods and services; toward this end,
[agencies] are hereby created for the purpose
of aiding in the development of preventive
and remedial consumer protection programs and
enforcing consumer protection statutes.
KRS 367.120 (1).
As plainly stated in the above-quoted statute,
the legislative scheme/purpose of the KCPA was development of
programs protecting the public from unethical sellers by way of
preventative programs and designated remedies.
One such remedy
is found in KRS 367.220 (3) which authorizes the court to award
the prevailing party reasonable attorney fees and costs incurred
as a result of the wrongdoer's conduct.
We believe the intent of this remedial provision is
analogous to KRS 344.4507 which provides for the allowance of
attorney fees and costs arising from a successful prosecution for
a violation of the Kentucky Civil Rights Act, KRS 344.010 et seq.
In this regard, Meyers v. Chapman Printing Co., Inc., Ky., 840
7
KRS 344.450 provides:
Any person injured by any act in
violation of the provisions of this chapter
shall have a civil cause of action in Circuit
Court to enjoin further violations, and to
recover the actual damages sustained, together
with the costs of the law suit. The court's
order or judgment shall include a reasonable
fee for the plaintiff's attorney of record and
any other remedies contained in this chapter.
8
S.W.2d 814 (1992) remains the seminal case regarding the
calculation of reasonable attorney fees as permitted by KRS
344.450.
In Meyers the plaintiff alleged two separate causes of
action, one for sexual harassment and a second for gender based
discrimination.
Plaintiff prevailed on the first cause and
failed on the second.
Following a hotly contested debate over
the award of attorney fees, the trial court granted plaintiff
$150,662.85 for same, an amount substantially greater than
plaintiff's total recovery of $101,316.24.
However, as the trial
judge, George E. Barker, explained, and the Kentucky Supreme
Court affirmed, the purpose of a fee award statute is:
to insure "effective access to the judicial
process" for persons with civil rights
grievances who would not otherwise have the
funds to employ an attorney, and if
restricted by the size of the claim (albeit
that is a factor to consider) there would be
no incentive to pursue many worthwhile cases.
Meyers, 840 S.W.2d at 825 (quoting Judge Barker's opinion).
Our
Supreme Court further quoted the trial court in stating that "the
court should not undertake to adopt some arbitrary proportionate
relationship between the amount of attorney fees awarded and the
amount of damages awarded." Meyers, 840 S.W.2d at 825-26.
We
believe identical reasoning is applicable under the KCPA.
With respect to civil rights grievances, the accepted
method of calculating attorney fees is that set forth in Hensley
v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983),
as adopted by the Meyers Court.
The Hensley/Meyers analysis
9
provides that attorney fees should be ascertained by multiplying
counsel's reasonable hours by a reasonable hourly rate to produce
a "lodestar" figure.
This lodestar figure may then be adjusted
to account for any special factors particular to the individual
litigation. Meyers, 840 S.W.2d at 826.
Special factors the court will want to consider in
making any adjustment to the lodestar figure include: (1) amount
and character of services rendered; (2) labor, time and trouble
involved; (3) nature and importance of the litigation in which
the services were rendered; (4) responsibility imposed; (5) the
amount of money or value of the property affected by the
controversy, or involved in the employment; (6) skill and
professional character and standing of the attorneys; and, (8)
the results secured. Boden v. Boden, Ky., 268 S.W.2d 632, 633
(1954) (citing Axton v. Vance, 207 Ky. 580, 269 S.W. 534 (1925)).
These factors have long been regarded as applicable through the
decisional law of Kentucky. Commonwealth v. Lavit, Ky., 882
S.W.2d 678, 680 (1994) (calculation of fees for private attorney
who acted as public defender); Daniels v. May, Ky., 467 S.W.2d
372, 374 (1971) (attorney fees allowed for services rendered in
civil litigation extending over four years); Itschner v.
Itschner, Ky., 455 S.W.2d 54, 56 (1970) (award of attorney fees
in dissolution action); Stubblefield v. Stubblefield, Ky., 327
S.W.2d 24, 26 (1959) (same); Brown v. Fulton, Hubbard & Hubbard,
Ky. App., 817 S.W.2d 899, 901 (1991) (attorney fee charged for
defending client against criminal charges); Citizens Fidelity
10
Bank & Trust Co. v. Harvin, Ky. App., 550 S.W.2d 569, 570 (1977)
(award of attorney fee for sale of real estate that was subject
of action for specific performance).
Authorizing a prevailing party to recover compensatory
and punitive damages is consistent with and promotes the
underlying remedial purpose of the Kentucky Consumer Protection
Act.
See KRS 367.120 (1). Permitting an additional recovery of
attorney fees and litigation costs is intended to compensate a
prevailing party for the expense of bringing an action under the
statute.
A further aim is to provide attorneys with incentive
for representing litigants who assert claims which serve an
ultimate public purpose (i.e. a deterrent to conduct resulting in
unfair trade practices which perpetrate fraud and deception upon
the public).
In many, if not most, consumer protection cases, the
monetary value is typically low.
Should the court focus strictly
on the dollar value of the ultimate award when considering
attorney fees and costs, the intended remedial goal of the
statute would be thwarted, if not entirely defeated.
Simply put,
if, in these cases, attorney fees and costs awards do not provide
a reasonable return, it will be economically impossible for
attorneys to represent likely litigants.
Thus, practically
speaking, the door to the courthouse will be closed to all
potential parties excepting those with either a strong
probability of substantial damages, or those with sufficient
economic resources to personally afford financing the expense of
11
litigation.
Such a situation would indeed be ironic, since it is
precisely those with ordinary consumer complaints, who cannot
afford to pay attorney fees, for whom these remedial acts are
designed.
It is our opinion that, considering all the proper
factors, the services rendered by appellant attorney warrant, and
the results realized from said services, require reconsideration
of the trial court's total award of attorney fees. Viewed from
the perspective of both the United States and Kentucky Supreme
Courts, the trial court's judgment in failing to allow any fee
for time spent actually litigating the case and all hourly
services leading up thereto is inconsistent with the finding
that:
[t]he jury's award of both compensatory and
punitive damages is supported by the
evidence, and is not the result of the jury's
prejudice or passion. Furthermore, the
amount of compensatory damages are [sic] not
excessive and are [sic] within the confines
of the instructions; said amounts do not
exceed the amounts requested by plaintiff and
which were sufficiently supported by her
proffered evidence. Nor is the amount of
punitive damages excessive.
Trial court's April 29, 1997 order overruling motion for new
trial, motion to set aside judgment, and order setting aside stay
of proceedings, at 5.
Moreover, we believe, given the lack of legal
precedent, the trial court was uncertain as to the applicable
standard to be employed in deciding whether to award attorney
fees under KRS 367.220 (3).
In her May 22, 1997 order regarding
costs and legal fees, the trial judge held, "[t]hat Petitioner
12
shall not be awarded any other (additional) costs or attorney's
fees, as movant has failed to persuade the Court that the
additional fees and expenses claimed were necessary."
The direct
statutory language, however, provides that the court may exercise
discretion in awarding the prevailing party, in addition to the
other applicable statutory relief, "reasonable attorney's fees
and costs."
KRS 367.220 (3) (emphasis added).
Hence, the
operable standard in ascertaining an award of attorney fees and
costs under KRS 367.220 (3) is a test of "reasonableness" not
"necessity."
As previously stated, the jury determined that Childers
was entitled to 100% of her actual damages sustained ($6,748.89),
in addition to sanctioning defendant $25,000.00 in punitive
damages for its wrongful conduct through the course of the
transaction.
As such, this case clearly constitutes an "unfair"
trade practice, unlawful under the KCPA, KRS 367.170, and the
prevailing party is entitled to the court's consideration of a
"reasonable" attorney fee award. KRS 367.220 (3).
By this
holding, we do not mean to suggest that, in a consumer protection
case, the court must award the full amount of plaintiff's
request.
Rather, we hold that after considering all the usual
factors in computing a lodestar figure, the court must further
weigh the special circumstances presented in the particular
action in ascertaining the fee award.8
8
It is worth noting that under the trial court's order,
Childers would be required to pay $25,250.58, out of pocket, in
attorney fees and costs, not inclusive of any further expense
13
We readily recognize that the fixing of fees in matters
of this type is a difficult and delicate task for the court.
Although it is nearly impossible to set such fees with any
mathematical certainty, the undertaking "should be done with a
view to common sense realism, that is to say, it should pose an
amount that public standards will approve for the work done, time
consumed and the skill required."
Citizens Fidelity Bank & Trust
Co. v. Harvin, Ky. App., 550 S.W.2d 569, 570 (1977).
Our review of the record indicates that the trial judge
lacked sufficient legal guidance on the standard and method to be
employed in the exercise of her discretionary authority granted
in KRS 367.220 (3).
We have determined that the case should be
remanded to the trial judge to allow her to make a discretionary
decision concerning attorney fees and litigation costs consistent
with the standard and method set forth in this opinion.
The judgment of the trial court is reversed and the
case remanded for determination concerning attorney fees and
litigation costs as discussed above.
ALL CONCUR.
generated in pursuing this appeal. As such, not only will Childers
be effectively stripped of all the punitive damages award but will
be required to pay a 1% fee for the privilege of pursuing this
litigation for more than three years.
14
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Don A. Pisacano
Lexington, Kentucky
Jimmy Dale Williams
Richmond, Kentucky
15
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
