Southern Personnel Management, Inc. v. Wagnon Shale Pit & Excavating, Inc.

ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

JUDGE JOSEPHINE LINKER HART

DIVISION II

SOUTHERN PERSONNEL MANAGEMENT, INC.

APPELLANT

V.

WAGNON SHALE PIT & EXCAVATING, INC.

APPELLEE

CA02-879

May 7, 2003

APPEAL FROM THE CRAWFORD COUNTY CIRCUIT COURT

[NO. CIV 98-224]

HONORABLE FLOYD G. ROGERS,

CIRCUIT JUDGE

AFFIRMED

Appellant, Southern Personnel Management, Inc., was awarded a jury verdict against appellee, Wagnon Shale Pit & Excavating, Inc., in the amount of $1,000. Appellant, however, appeals from the circuit court's order awarding appellant only $350 in attorney fees with no award of costs. Appellant argues that the circuit court abused its discretion and should have instead awarded $15,649.50 in attorney fees and $1,032.80 in costs. We affirm.

We note that appellant brought up a record on appeal that consists of appellant's complaint with exhibits, its motion for an attorney fee and costs with exhibits and the brief in support of the motion, appellee's response to the motion with its brief in support, and the trial court's judgment. Accordingly, our discussion of the relevant facts of this case is limited to these documents.

In appellant's complaint, appellant asserted that it was a professional employer

organization that provided client companies with workers' compensation insurance coverage for their employees. In 1997, appellant and appellee entered into an agreement by which appellant would provide these services to appellee. Appellant alleged that in the course of their discussions leading to the agreement, appellee informed appellant that its employees were involved in the excavation, sale, and delivery of dirt and shale. However, when an employee of appellee was injured on the job, appellant learned that the employee was injured while engaged in demolition work and that all but one of appellee's employees performed demolition work. Appellant alleged that because of appellee's misrepresentations and fraud, appellant's insurance provider lost approximately $500,000, which resulted in rate increases that would affect appellant's premium rates for employees. Appellant contended that because of these misrepresentations, which were made with the intent to defraud, appellant incurred damages exceeding $168,000. Appellant further sought punitive damages exceeding that same amount. Also, appellant alleged that because appellee's misrepresentations resulted in a breach of contract, appellant incurred damages in the amount of $41,171.

Following a jury trial, appellant filed a petition seeking an attorney fee and costs. Appellant asserted that the action arose out of a breach of contract and that appellant had initiated the action to recover damages based upon appellee's misrepresentation or fraud. Appellant further asserted that it was the prevailing party because the jury returned a verdict for appellant in the amount of $1,000. Appellant attached to the petition an affidavit fromits counsel averring that counsel, at a rate of $150 an hour, had provided 104.33 hours in professional services for a total cost of $15,649.50. In the affidavit, counsel stated that this was a reasonable hourly rate for firms practicing in that area. Counsel also outlined his education, bar memberships, and teaching experience. Further, counsel averred that he had expended costs in the amount of $1,032.80. This total included a filing fee of $100, service of process in the amount of $25, two subpoenas totaling of $67, with the rest of the costs associated with depositions, copies, faxes, telephone calls, and postage.

In the judgment, the court noted that a jury trial was held and that the jury awarded $1,000 in damages to appellant. While the remainder of the judgment contained typed language awarding appellant an attorney fee in the amount of $15,649.50 and costs in the amount of $1,032.80, this portion of the judgment had been struck out by pen, and following the typed language awarding an attorney fee was written the amount of $350. On appeal, appellant argues that the court abused its discretion by limiting its award to an attorney fee of $350 and by not awarding costs.

The decision to award an attorney fee in a contract case is governed by Ark. Code Ann. § 16-22-308 (Repl. 1999), which provides in pertinent part:

In any civil action to recover on ... breach of contract, unless otherwise provided by law or the contract which is the subject matter of the action, the prevailing party may be allowed a reasonable attorney fee to be assessed by the court and collected as costs.

In applying this statute, the Arkansas Supreme Court has stated as follows:

This court has often observed that there is no fixed formula in determining reasonable attorney's fees. However, a court should be guided in that determinationby the following long-recognized factors: (1) the experience and ability of the attorney; (2) the time and labor required to perform the service properly; (3) the amount in controversy and the result obtained in the case; (4) the novelty and difficulty of the issues involved; (5) the fee customarily charged for similar services in the local area; (6) whether the fee is fixed or contingent; (7) the time limitations imposed upon the client in the circumstances; and (8) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the attorney. Due to the trial judge's intimate acquaintance with the record and the quality of service rendered, we recognize the superior perspective of the trial judge in assessing the applicable factors. Accordingly, the amount of the award will be reversed only if the appellant can demonstrate that the trial court abused its discretion.

Phi Kappa Tau Housing Corp. v. Wengert, 350 Ark. 335, 341, 86 S.W.3d 856, 860 (2002) (citations omitted). Further, we note that where both contract and tort claims are advanced, an award of an attorney fee to the prevailing party is proper only when the action is based primarily in contract. Reed v. Smith Steel, Inc., 77 Ark. App. 110, 121, 78 S.W.3d 118, 126 (2002). The procedure for making claims for seeking an attorney fee and related nontaxable expenses is provided for in Rule 54(e) of the Arkansas Rules of Civil Procedure.

With respect to an award of costs, Rule 54(d), provides as follows:

(1) Costs shall be allowed to the prevailing party if the court so directs, unless a statute or rule makes an award mandatory.

(2) Costs taxable under this rule are limited to the following: filing fees and other fees charged by the clerk; fees for service of process and subpoenas; fees for the publication of warning orders and other notices; fees for interpreters appointed under Rule 43; witness fees and mileage allowances as provided in Rule 45; fees of a master appointed pursuant to Rule 53; fees of experts appointed by the court pursuant to Rule 706 of the Arkansas Rules of Evidence; and expenses, excluding attorney's fees, specifically authorized by statute to be taxed as costs.

In construing this rule, the Arkansas Supreme Court has held that Rule 54(d) gives the trial judge discretion in awarding authorized costs. Zhan v. Sherman, 323 Ark. 172, 177, 913 S.W.2d 776, 779 (1996).

We affirm the circuit court's award. As previously stated, an award of an attorney fee and costs is discretionary. Appellant provided an affidavit regarding the hours of service provided by appellant's counsel and his hourly rate, which counsel stated was reasonable, along with a synopsis of his education, his admission to the bar, and his teaching experience. The circuit court, however, was familiar with the trial proceedings and with the performance and quality of service rendered by appellant's counsel. Given the limited record on appeal, we lack even a passing familiarity with these matters. We note, however, that appellant's client was awarded only $1,000 while seeking sums greater than that in both an attorney fee and costs. Further, appellant's lawsuit sounded in both contract and tort, and it is not at all clear that appellant's $1,000 award was based primarily in contract, thus permitting an award of an attorney fee. We conclude that appellant has not established that the court abused its discretion in refusing to award the requested amounts. Accordingly, we affirm.

Affirmed.

Griffen and Baker, JJ., agree.