Fred Rahat and Mary Rahat v. Akbar Golmirzaie

Fred RAHAT and Mary Rahat v. Akbar GOLMIRZAIE

97-832                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
                Opinion delivered April 16, 1998


1.   Attorney & client -- attorney's fees in partition actions -- award
     mandatory. -- Arkansas Code Annotated section 18-60-419 (1987)
     makes the awarding of attorney's fees in partition actions
     mandatory; in assessing a reasonable fee award, the court is
     to consider only those services performed by the attorney
     requesting the fee that are of common benefit to all parties.

2.   Attorney & client -- attorney's fees in partition actions -- taxed as part
     of costs. -- Arkansas Code Annotated section 18-60-419 mandates
     the taxing of the attorney's fee as part of the costs of the
     cause, to be assessed and taxed proportionately against all
     parties.

3.   Attorney & client -- attorney's fees in partition actions -- trial court's
     discretion -- appellant's burden on appeal. -- There is no fixed
     formula for assessing attorney's fees in partition actions;
     the determination lies within the broad discretion of the
     trial court; to prevail on appeal, the appellant bears the
     burden of demonstrating that the trial court abused its
     discretion in awarding the attorney's fees; the test
     necessarily remains whether the fee awarded is reasonable in
     view of the services rendered.

4.   Attorney & client -- attorney's fees in partition actions -- justification
     for statutory provision. -- Justification for the statutory
     provision for attorney's fees in partition actions has been
     found in the importance of painstaking preparation before
     filing of the suit and the necessity for meticulous compliance
     with procedural requirements thereafter to assure that all
     interested parties are before the court and that there are no
     unnecessary impediments to a proper conclusion of the
     proceeding; these measures obviously inure to the benefit of
     those owning any share of the property; to require the
     cotenant who institutes the action to bear more than his
     proportionate share of this burden is inequitable.

5.   Attorney & client -- attorney's fees in partition actions -- factors for
     determining reasonableness. -- The pertinent considerations for
     determining the reasonableness of an award of attorney's fees,
     both generally and in partition suits, are (1) the attorney's
     judgment, learning, ability, skill, experience, professional
     standing, and advice; (2) the relationship between the
     parties; (3) the amount or importance of the subject matter of
     the case; (4) the nature, extent, and difficulty of services
     in research, collection, and estimation of evidence and
     potential defenses, as well as advice given before any
     pleadings are filed or other visible steps are taken; (5) the
     preparation of pleadings; (6) the proceedings actually taken
     and the nature and extent of the litigation; (7) the time and
     labor devoted to the client's cause; (8) the difficulties
     presented in the course of the litigation; (9) the results
     obtained; and (10) other factors beside the time visibly
     employed; both the trial court's and the appellate court's
     experience and knowledge of the character of such services may
     be used as a guide, with considerable weight being given to
     the ruling of the trial court.

6.   Attorney & client -- attorney's fees in partition actions -- trial court
     did not abuse discretion in awarding appellee's attorney fee of five
     percent of total sales price of partitioned parcels. -- In light of the
     testimony and the reasoning employed by the trial court, the
     supreme court held that the trial court did not abuse its
     discretion in awarding to appellee's attorney a fee of five
     percent of the total sales price of three partitioned parcels;
     both parties to the suit benefitted from the partition of the
     land; it was of no consequence that appellants incurred more
     debt after the sale, as they chose to purchase two of the
     three parcels.

7.   Attorney & client -- attorney's fees in partition actions -- trial court
     considered time expended as factor. -- Where it was clear from the
     trial court's ruling that time expended on a case was a factor
     it considered when awarding attorney's fees, appellants'
     argument that the trial court ignored the allegedly small
     amount of time that appellee's attorney spent on the case was
     clearly a misconstruction of the trial court's ruling.

8.   Attorney & client -- attorney's fees in partition actions -- percentage of
     total sales price not per se unreasonable. -- The supreme court was
     unwilling to hold that any award of attorney's fees pursuant
     to Ark. Code Ann. section 18-60-419 that is based upon a
     percentage of the total sales price of the partitioned
     property is per se unreasonable; the amount of attorney's fees
     awarded will always be capable of being reduced to a
     percentage of the total sales price of the property; the use
     of a percentage fee is simply a matter of convenience to the
     trial court.  

9.   Attorney & client -- attorney's fees in partition actions -- trial court
     considered necessary factors -- award affirmed. -- The supreme court
     declined to overrule prior cases favoring the trial court's
     discretion over a fixed formula when determining the amount of
     attorney's fees in partition suits; it is implicit that, when
     using such discretion, the trial court must consider the
     enumerated factors set forth in case law along with any other
     factors that the court may find pertinent to the award of
     attorney's fees; because that was done by the trial court, the
     supreme court affirmed its decision.

     Appeal from Washington Chancery Court, First Division; Thomas
F. Butt, Chancellor; affirmed.
     Kit Williams, for appellant.
     Pearson and Chadwick, by: C. Thomas Pearson, Jr., and Charles
R. Chadwick, for appellee.

     Donald L. Corbin, Justice.
     Appellants Fred and Mary Rahat appeal the judgment of the
Washington County Chancery Court awarding attorney's fees to
C. Thomas Pearson Jr., Appellee Akbar Golmirzaie's attorney in this
partition suit, pursuant to Ark. Code Ann.  18-60-419 (1987). 
Appellants' sole argument on appeal is that the trial court abused
its discretion in awarding an attorney's fee of five percent (5%)
of the total sales price of the property.  Appellants ask this
court to abolish the practice of allowing the trial court to award
a fee on the basis of a percentage of the sales price and to
overrule any precedent to the contrary.  Our jurisdiction of this
appeal is pursuant to Ark. Sup. Ct. R. 1-2(a)(17), as it raises an
issue of significant public interest.  We find no error and affirm.
     The record in this case reveals the following facts.  Appellee
co-owned three parcels of land with Appellants.  On June 9, 1995,
Appellee petitioned the chancery court for partition of the land,
which he asserted was not divisible in kind, and requested
attorney's fees.  Appellants answered on June 20, 1995, asking for
consideration of a division in kind.  Appellants also indicated
that they would not oppose attorney's fees awarded within the
discretion of the trial court.  The partition action was dismissed
for want of prosecution on December 11, 1995, but reinstated on
December 21, 1995.  On that date, the trial court entered a
partition decree, finding that the properties were not capable of
a division in kind and should be sold, with the proceeds of the
sale to be divided and apportioned among the parties, after payment
of costs and attorney's fees.  
     The properties were sold at auction on January 25, 1996. 
Tracts A and C were subsequently purchased by Appellants for
$51,600 and $24,000, respectively, while Tract B was purchased by
third parties for $80,000.  On March 12, 1996, the trial court
awarded Appellee's attorney a fee in the amount of $7,780, which
was five percent (5%) of the total sales price of $155,600. 
Appellants objected to the amount of the attorney's fees and asked
the trial court to reconsider the award.  They argued that the
amount of the fees failed to reflect the simplicity of the case,
the dearth of pleadings, and the small amount of time needed to
complete the uncontested litigation.  The trial court overruled
Appellants' objection, determining that the award of $7,780 was not
per se unreasonable.  
     On February 12, 1997, per Appellants' request, the trial court
conducted a hearing on the issue of attorney's fees.  Walter
Niblock, a practicing attorney and member of the local bar for
thirty-five years, testified for Appellee.  Niblock stated that he
had experience in bringing foreclosure and partition cases, for
which he had received attorney's fees in the amount of five percent
(5%) to ten percent (10%) of the sales price of the properties.  He
also stated that in assessing attorney's fees in partition cases,
the court should consider the amount of the partition and the
pleadings involved.  
     Appellee's next witness, Lamar Pettus, a local attorney who
had practiced in the area for twenty-two years, also testified that
he had considerable experience with partitions and foreclosures. 
He stated that normally the attorney's fees awarded for both
partitions and foreclosures is a percentage of the sales price of
the property.  He stated that a fee of five percent (5%) of the
sales price was a reasonable fee, and that he had seen awards
ranging from three percent (3%) to ten percent (10%).  He stated
that the factors to consider in this type of case were the amount
of time and labor, the difficulty of the case, and the experience
of the attorney.  He indicated that even in an uncontested
partition action, however, the custom and practice in that area was
that the actual work required had no real bearing on the amount of
attorney's fees awarded; rather, such fees were treated in the same
manner as a real estate commission or an auctioneer's fee.  He
further stated that the amount of attorney's fees awarded should be
based upon a percentage of the total sales price, as opposed to the
net gain to the parties.   
     Appellant presented the testimony of David Morris, a local
attorney, who had practiced in the area for fifteen years.  He
stated that he had reviewed the pleadings in this case, and that it
was his belief that the case was not unusual or difficult and did
not require a high level of legal skill to accomplish.  He stated
that an experienced attorney such as Appellee's attorney should
receive a hourly rate between $90 and $150.  He stated further that
such an experienced attorney should not have had to devote a lot of
labor to finish this partition case and distribute the proceeds. 
He stated that the fee awarded in this case was high.  On cross-
examination, however, he agreed that attorney's fees in partition
and foreclosure cases are not normally awarded upon an hourly rate. 
He indicated that some of his fees in partition cases were based
upon a percentage of the sales price, and that in light of the
factors enunciated by this court, a fee of five percent (5%) of the
sales price is not per se unreasonable.      
     Appellant Fred Rahat testified that he did not believe that he
had benefitted from the partition and sale of all three parcels of
land.  He contended that because he had purchased Tracts A and C
and had thereby increased his debt, he had not actually benefitted
from the partition of those parcels.  Conversely, on rebuttal,
Appellee, who is responsible for his proportionate share of the
attorney's fees pursuant to section 18-60-419, testified that he
thought the amount of attorney's fees was fair.  
     The trial court ruled that in awarding attorney's fees of
$7,780, it had considered the various factors submitted by
Appellants, namely the ability of the practitioner, the results
obtained, and the amount of work required, as well as the total
sales price involved.  The trial court found that Appellee's
attorney was a lawyer of long standing in that court and was at
least a reasonably average, competent attorney.  (The trial court
noted that Appellants did not raise any question of the attorney's
competency.)  The court found that the results obtained in this
case were those specifically envisioned by the statute providing
for fees in partition suits, as all parties to the suit had
benefitted from the partition of the land.  The trial court found
that Appellants had actually received a benefit from the partition
of the entire property, despite the fact that their debt had
increased on the two parcels that they purchased.  The trial court
reasoned that it was their choice to assume the additional debt.
     The trial court found further that the lack of evidence as to
the amount of time Appellee's attorney actually spent on this case
was of little consequence to its decision.  The court reasoned that
although an attorney's time was one factor to consider in awarding
attorney's fees, it was not a decisive factor in this case, weighed
along with the requisite skill, knowledge, and expertise required
to take such a case to a successful conclusion.  The court
explained that because all attorneys do not work at the same rate
of speed to obtain similar results, the particular hourly rate of
an attorney was not a true measure of the work involved.  The trial
court additionally observed that this court's prior decisions
regarding attorney's fees in partition suits have viewed the amount
of the fee in relation to the value of the property in determining
whether such fee was reasonable.  Accordingly, the trial court
ruled that the award of $7,780 in attorney's fees was not
unreasonable on its face, nor was it unreasonable in light of the
factors that this court has established.       
     Appellants argue on appeal that the amount of attorney's fees
awarded by the trial court was not reasonable, given the simplistic
nature of the partition action, which was not contested and did not
result in any litigation except that regarding the award of
attorney's fees.  Appellants further ask this court to abolish the
practice of awarding fees in such partition actions based upon a
percentage of the sales price or fair market value of the property. 
Instead, they urge us to consider only those factors set out in
Rule 1.5 of the Model Rules of Professional Conduct, particularly
the time and labor required by the attorney.  
     Section 18-60-419 provides in pertinent part: 
          (a) In all suits in any of the courts of this state
     for partition of lands when a judgment is rendered for
     partition in kind, or a sale and a partition of the
     proceeds, the court rendering the judgment or decree
     shall allow a reasonable fee to the attorney bringing the
     suit.  The attorney's fee shall be taxed as part of the
     costs in the cause and shall be paid pro rata as the
     other costs are paid according to the respective
     interests of the parties to the suit in the lands so
     partitioned. 

     Section 18-60-419 makes the awarding of attorney's fees in
partition actions mandatory.  Graham v. Inlow, 302 Ark. 414, 790 S.W.2d 428 (1990).  In assessing a reasonable fee award, the court
is to consider only those services performed by the attorney
requesting the fee which are of common benefit to all parties.  Id. 
This provision mandates the taxing of the fee as part of the costs
of the cause, to be assessed and taxed proportionately against all
parties.  McElhaney v. Cox, 257 Ark. 934, 521 S.W.2d 66 (1975). 
There is no fixed formula for assessing attorney's fees in
partition actions; such determination lies within the broad
discretion of the trial court.  Padgett v. Haston, 279 Ark. 367,
651 S.W.2d 460 (1983).  To prevail on appeal, the appellant bears
the burden of demonstrating that the trial court abused its
discretion in awarding the attorney's fees.  Id.; Cole v. Scott,
264 Ark. 800, 575 S.W.2d 149 (1979).  "The test necessarily remains
whether the fee awarded is reasonable in view of the services
rendered."  Id. at 803, 575 S.W.2d  at 151.  
     In Johnston v. Smith, 248 Ark. 929, 454 S.W.2d 649 (1970),
this court discussed the reasoning behind the statutory provision
for attorney's fees:
          Justification for these statutes has been found in
     the importance of painstaking preparation before filing
     of the suit and the necessity for meticulous compliance
     with procedural requirements thereafter in order to
     assure that all parties in interest are before the court
     and that there are no unnecessary impediments to a proper
     conclusion of the proceeding.  These measures obviously
     inure to the benefit of those owning any share of the
     property.  To require the cotenant who institutes the
     action to bear more than his proportionate share of this
     burden is inequitable.  

Id. at 933, 454 S.W.2d  at 652.
     In Robinson v. Champion, 251 Ark. 817, 475 S.W.2d 677 (1972),
this court recited the pertinent considerations for determining the
reasonableness of an award of attorney's fees:  (1) the attorney's
judgment, learning, ability, skill, experience, professional
standing, and advice; (2) the relationship between the parties; (3)
the amount or importance of the subject matter of the case; (4) the
nature, extent, and difficulty of services in research, collection,
and estimation of evidence and potential defenses, as well as
advice given before any pleadings are filed or other visible steps
are taken; (5) the preparation of pleadings; (6) the proceedings
actually taken and the nature and extent of the litigation; (7) the
time and labor devoted to the client's cause; (8) the difficulties
presented in the course of the litigation; (9) the results
obtained; and (10) other factors beside the time visibly employed. 
This court subsequently recognized that these factors were
pertinent in determining the reasonableness of attorney's fees in
partition suits.  Cole, 264 Ark. 800, 575 S.W.2d 149.  Both the
trial court's and this court's experience and knowledge of the
character of such services may be used as a guide, with
considerable weight being given to the ruling of the trial court. 
Robinson, 251 Ark. 817, 475 S.W.2d 677.  
     In light of the foregoing testimony and the reasoning employed
by the trial court, we hold that the trial court did not abuse its
discretion in awarding to Appellee's attorney a fee of five percent
(5%) of the total sales price of the three partitioned parcels.  We
agree that both parties to this suit benefitted from the partition
of the land; it is of no consequence that Appellants incurred more
debt after the sale, as they chose to purchase two of the three
parcels.
     We are not persuaded by Appellants' argument that the trial
court completely ignored the factor of the attorney's time spent
working on the case.  Appellants contend that the trial court
viewed the amount of time spent preparing such a case to be
unimportant.  In their attempt to support this contention,
Appellants' abstract depicts the court's ruling as follows:
     There is nothing in the record to show how much time
     Mr. Pearson worked, but that is unimportant.
This is not, however, a correct or complete recitation of the trial
court's ruling, which is:
     There is no evidence in the record to show how much time
     Mr. Pearson spent.  But this is unimportant as a decisive
     factor.  It is important as being one of the factors that
     may be considered.  But in so doing, this has to be
     counter-balanced or at least weighed along with the skill
     and knowledge and expertise required to carry a case to
     a successful conclusion.  [Emphasis added.]

It is clear from the trial court's ruling that time expended on a
case is a factor it considers when awarding attorney's fees.  Thus,
Appellants' argument that the trial court ignored the allegedly
small amount of time that Appellee's attorney spent on the case
clearly misconstrues the trial court's ruling.  
     Furthermore, we are unwilling to hold that any award of
attorney's fees pursuant to section 18-60-419 that is based upon a
percentage of the total sales price of the partitioned property is
per se unreasonable.  We are persuaded by the trial court's
reasoning that the amount of attorney's fees awarded will always be
capable of being reduced to a percentage of the total sales price
of the property, and that the use of a percentage fee is simply a
matter of convenience to the trial court.  Moreover, we see no
valid reason, nor have Appellants presented us with any such
reason, to overrule our prior cases favoring the trial court's
discretion over a fixed formula when determining the amount of
attorney's fees in partition suits.  It is implicit that when using
such discretion, the trial court must consider those factors stated
in Robinson, 251 Ark. 817, 475 S.W.2d 677, and Cole, 264 Ark. 800,
575 S.W.2d 149, along with any other factors the court may find
pertinent to the award of attorney's fees.  That is precisely what
was done in this case, and we therefore affirm the trial court's
decision.
   Newbern, J., not participating.