State v. Shure

                                ENTRY ORDER

                      SUPREME COURT DOCKET NO. 89-159

                            FEBRUARY TERM, 1991


State of Vermont, By and Through  }          APPEALED FROM:
Vermont Industrial Development    }
Authority                         }
                                  }
     v.                           }          Orange Superior Court
                                  }
                                  }
Elaine Shure and                  }
Bradford National Bank, Trustee   }          DOCKET NO. S109-88 OeC


             In the above entitled cause the Clerk will enter:

     Appellant Shure challenges the reasonableness of the trial court's
award of legal fees and costs to VIDA's outside counsel, Palmer & Dodge, for
their participation in a Florida adversary proceeding related to the
bankruptcy of appellant's corporation.

     The determination of reasonableness of attorney's fees is a fact
question.  Parker, Lamb & Ankuda, P.C. v. Krupinsky, 146 Vt. 304, 306, 503 A.2d 531, 532 (1985).  "Trial courts have wide discretion in fixing the
reasonable value of legal services, and the fee allowed by a trial court
will ordinarily not be disturbed unless there is 'strong evidence of
excessiveness or inadequacy of the determined attorney's fees.'"  Id. at
307, 503 A.2d  at 533 (quoting Young v. Northern Terminals, Inc., 132 Vt.
125, 130, 315 A.2d 469, 472 (1974)).  We will not set aside an award "if a
reasonable basis for the trial court's discretionary action is shown to be
present."  Id.

     Appellant asks us to apply a standard of "heightened scrutiny" in
determining the reasonableness of the fees that she must pay to VIDA's
attorneys because she was not their client and did not have an opportunity
to monitor their actions.  There is, however, no reason to deviate from the
Krupinsky standard in this case.  Payment of attorney's fees was not
statutorily mandated.  Rather, appellant's obligation to pay VIDA's
attorney's fees arose from a contract that she willingly signed and was
triggered by her own actions in bringing suit against VIDA.

     In the Florida proceeding, appellant argued that a $750,000 industrial
development revenue bond issued by VIDA on her behalf was invalid under
Vermont's Licensed Lender Act, 8 V.S.A. {{ 2201-38.  In light of testimony
that the success of recent legislative attempts to clarify VIDA's status as
a lender remained questionable and that an adverse ruling by the Florida
court would set a damaging precedent ÄÄ not only for appellant's bonded
indebtedness, but also for over $100 million in similar VIDA-bonded loans ÄÄ
the trial court's conclusion that VIDA interests were at risk in the
Florida litigation was not clearly erroneous.

     Appellant contends that certain work done by VIDA's outside counsel was
either unnecessary or duplicative.  The trial court's findings that, in the
Florida proceedings, VIDA's interests did not coincide with those of the
codefendant banks and that therefore VIDA could not rely on the banks'
attorneys to present its case were supported by substantial evidence and not
clearly erroneous.  Likewise, issues about whether it was appropriate for
VIDA to hire outside counsel or to send attorney Olsen to Florida were fully
aired at trial, and the court's findings were not clearly erroneous.

     At oral argument, appellant claimed that attorney Olsen participated in
the Florida proceeding, not as an attorney, but as a fact witness, and
therefore should not be compensated.  This issue was not raised in the trial
court and was waived.

     Counsel's time sheets, supplemented with testimony verifying their
accuracy, adequacy, and reasonableness, provided a reasonable basis for the
court's award, which will, therefore, not be set aside.  Krupinsky, 146 Vt.
at 307, 503 A.2d  at 533.

     Appellant asserts that Palmer & Dodge had a conflict of interest
representing VIDA in the Florida bankruptcy proceeding because it had
previously rendered an opinion on the validity of the VIDA bonds that were
at issue in that litigation.  She contends that if VIDA lost on this issue,
bondholders could seek to recover from Palmer & Dodge.  The trial court
could reasonably conclude that this did not establish a conflict.  The
interests of Palmer & Dodge and VIDA were consistent: both were concerned
with establishing the validity of the VIDA bonds.  The Attorney General's
office hired Palmer & Dodge; it, not Palmer & Dodge, was in control of the
litigation.  Moreover, the trial court heard substantial expert testimony
that Palmer & Dodge would not be exposed to potential lawsuits, that its
financial interests were not at stake.  Even assuming this conflict claim
had merit, it would be a matter of professional misconduct or legal
malpractice, not a ground for reversal of the trial court's judgment on the
reasonableness of attorney's fees.

     Finally, appellant claims that the judgment is void because two
assistant judges, who heard only the first day of two days of evidence,
signed the findings and conclusions.  This issue was not raised below and is
waived.  Soucy v. Soucy Motors, Inc., 143 Vt. 615, 617, 471 A.2d 224, 225
(1983)(issue not raised below will not be considered on appeal unless an
objection to jurisdiction).  This is not a case of jurisdictional error.
The assistant judges were unavailable on the second day, and the court put
the reason for their absence on the record and continued the trial without
their participation.  4 V.S.A. { 112(a), (c), (e).  Thus, the court was at
all times properly constituted.  The assistant judges' signatures on the
findings and conclusions were mere surplusage: the presiding judge's
signature alone would have been sufficient.  There is no evidence that their
signing was anything other than an oversight.  See State v. Willis, 145 Vt.
459, 484, 494 A.2d 108, 122 (1985)(assistant judges' improper participation
not a jurisdictional error).

Affirmed.



                                   BY THE COURT:


                                   Frederic W. Allen, Chief Justice


                                   Ernest W. Gibson III, Associate Justice


[ ]  Publish                       John A. Dooley, Associate Justice

[ ]  Do Not Publish
                                   James L. Morse, Associate Justice


                                   Denise R. Johnson, Associate Justice