McNiff v. Mazda Motor of America, Inc. ( 2008 )

Filed 7/18/08 NO. 4-07-0817
IN THE APPELLATE COURT
OF ILLINOIS
FOURTH DISTRICT
COURTNEY McNIFF, ) Appeal from
Plaintiff-Appellee and ) Circuit Court of
Cross-Appellant, ) McLean County
v. ) No. 05L135
MAZDA MOTOR OF AMERICA, INC., )
Defendant-Appellant and )
Cross-Appellee. )
and ) Honorable
SAM LEMAN MAZDA, ) Charles G. Reynard,
Defendant. ) Judge Presiding.
______________________________________________________________
JUSTICE TURNER delivered the opinion of the court:
In August 2005, plaintiff, Courtney McNiff, brought
suit to recover damages against defendants, Mazda Motor of
America, Inc. (Mazda), and Sam Leman Mazda, for breach of written
warranty and breach of implied warranty of merchantability. The
parties eventually settled. In March 2007, plaintiff filed a
petition for an award of costs and attorney fees. In May 2007,
the trial court awarded plaintiff's two attorneys a total of
$26,015.50 in fees and costs. Defendant Mazda and plaintiff
filed motions to reconsider, both of which the court denied.
On appeal, defendant Mazda argues the trial court (1)
erred in awarding attorney fees on an hourly basis when plaintiff
entered into a contingency-fee agreement with her attorneys and
(2) abused its discretion in compensating the attorneys. In her
cross-appeal, plaintiff argues the trial court erred (1) in
refusing to award attorney fees for her response to the motion
for reconsideration and (2) by awarding her attorney a lower
rate. We affirm in part, reverse in part, and remand with
directions.
I. BACKGROUND
In May 2004, plaintiff's grandfather purchased a new
2004 Mazda RX-8 from Sam Leman Mazda for the list price of
$30,854 and immediately gifted the car to plaintiff. The car
developed mechanical difficulties rendering it unreliable.
Plaintiff asked for a refund but received a second engine in-
stead. Thereafter, the vehicle continued to have difficulties.
In August 2005, plaintiff filed a two-count complaint
against defendants, alleging breach of written warranty and
breach of implied warranty of merchantability under the Magnuson-
Moss Warranty--Federal Trade Commission Improvement Act
(Magnuson-Moss Act) (15 U.S.C. §§2301 through 2312 (2000)).
Plaintiff retained Attorneys Daniel Deneen and William Hutul to
represent her in the lawsuit against defendants. In October
2005, defendants filed their answer to the complaint. Ulti-
mately, the parties agreed to a settlement, and defendant Mazda
repurchased the vehicle for $30,000. The settlement did not
include attorney fees.
In March 2007, plaintiff filed a petition for an award
of costs and attorney fees pursuant to the Magnuson-Moss Act.
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Deneen attached an invoice for services showing a total of
$13,650 due for 56.25 hours of work. Deneen indicated he charged
a premium rate of $225 per hour for fiduciary-fraud and consumer-
fraud litigation through mid-May 2006 and $250 per hour thereaf-
ter. His standard rate was $175 per hour until May 2006 when it
increased to $200 per hour. The petition also stated Hutul's
time records showed 45.4 hours of work from August 11, 2005,
through February 6, 2007. At Hutul's rate of $325 per hour, the
fees amounted to $14,755. In April 2007, Deneen filed a supple-
mental petition asking for, inter alia, $1,875 in fees for
preparing and filing the fee petition.
Defendants filed a response in opposition to plain-
tiff's fee petition. Defendants argued plaintiff and her attor-
neys entered into a contingency-fee agreement, whereby counsel
agreed attorney fees would be equal to one-third of all amounts
collected or recovered in the case. As the parties settled for
$30,000, defendants argued plaintiff's request for fees should be
capped at $10,000. Defendants also contended counsels' time
sheets failed to provide sufficient evidence of the reasonable-
ness of the hourly rate and hours expended.
In May 2007, the trial court filed its order on the
petition for fees. The court found Deneen's reasonable rate of
compensation to be $200 per hour. Based on 65.25 hours of work,
the court ordered defendant Mazda to pay Deneen $13,530.50 for
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his fees, which included $480.50 in costs. The court also found
Hutul's reasonable rate of compensation to be $275 per hour.
Based on 45.4 hours of work, the court ordered defendant to pay
Hutul $12,485 for his fees.
In June 2007, defendant Mazda filed a motion to recon-
sider. Defendant argued the relationship between plaintiff and
her counsel was controlled by the contingency-fee agreement and
the trial court could not award attorney fees in excess of
$10,000. Defendant also argued the time sheets submitted by
plaintiff's counsel lacked specific detail, consisted of block
billing, did not correlate with one another, and contained
duplicate time entries. In July 2007, plaintiff filed a response
and a motion to reconsider, asking, inter alia, the court to
award attorney fees for prosecuting the fee petition, including
the motion to reconsider.
In August 2007, the trial court entered an order
denying the motions to reconsider. As to defendant, the court
found a contingency-fee agreement did not impose a cap on a fee
award. As to plaintiff, the court found it "considered the
reasonableness of the time expended in preparing and prosecuting
the fee petition and did not exclude that time from its order of
fees." Defendant Mazda filed an appeal, and plaintiff filed a
cross-appeal.
II. ANALYSIS
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A. Defendant's Appeal
1. Standard of Review
"Illinois follows the 'American Rule,' which provides
that absent statutory authority or a contractual agreement, each
party must bear its own attorney fees and costs." Negro Nest,
L.L.C. v. Mid-Northern Management, Inc., 362 Ill. App. 3d 640,
641-42, 839 N.E.2d 1083, 1085 (2005). If a statute or contrac-
tual agreement expressly authorizes an award of attorney fees,
the court may award fees "so long as they are reasonable."
Career Concepts, Inc. v. Synergy, Inc., 372 Ill. App. 3d 395,
405, 865 N.E.2d 385, 394 (2007). "A trial court's decision
whether to award attorney fees is a matter within its discretion
and will not be disturbed absent an abuse of that discretion."
Central Illinois Electrical Services, L.L.C. v. Slepian, 358 Ill.
App. 3d 545, 550, 831 N.E.2d 1169, 1173 (2005).
2. Magnuson-Moss Act
Consumers often require the assistance of counsel to
enforce their rights under the Magnuson-Moss Act. Melton v.
Frigidaire, 346 Ill. App. 3d 331, 339, 805 N.E.2d 322, 327
(2004). Section 2310(d)(2) of the Magnuson-Moss Act provides for
the recovery of costs and attorney fees to a prevailing consumer
as follows:
"If a consumer finally prevails in any
action brought under paragraph (1) of this
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subsection, he may be allowed by the court to
recover as part of the judgment a sum equal
to the aggregate amount of cost and expenses
(including attorneys' fees based on actual
time expended) determined by the court to
have been reasonably incurred by the plain-
tiff for or in connection with the commence-
ment and prosecution of such action, unless
the court in its discretion shall determine
that such an award of attorneys' fees would
be inappropriate." 15 U.S.C. §2310(d)(2)
(2000).
This fee-shifting provision was enacted "to vindicate the rights
of a consumer who was injured by a party such as defendant and
[was] intended to encourage consumers to pursue their legal
remedies by providing them with access to legal assistance."
State Farm Fire & Casualty Co. v. Miller Electric Co., 231 Ill.
App. 3d 355, 359, 596 N.E.2d 169, 171 (1992). "The plain lan-
guage of section 2310(d)(2) of the Magnuson-Moss Act provides
that an award of attorney fees to a prevailing plaintiff is
within the sound discretion of the trial court and will not be
disturbed on review absent an abuse of discretion." Cannon v.
William Chevrolet/Geo, Inc., 341 Ill. App. 3d 674, 685, 794
N.E.2d 843, 852 (2003).
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In the case sub judice, defendant concedes plaintiff
was a prevailing party under the Magnuson-Moss Act. However,
defendant claims plaintiff could not be awarded attorney fees in
excess of the amount agreed on by plaintiff and her attorneys in
the contingency-fee agreement. The fee agreement stated, in
part, as follows:
"Client agrees that the attorneys shall
receive a contingent fee equal to one[-]third,
or thirty-three and one-third percent (33.33%)
of all amounts collected or otherwise recov-
ered, whether by suit, trial, or out[-]of[-]
court settlement. ***
Client understands that this litigation
may involve laws and/or statutes which pro-
vide for an award of attorneys' fees to the
attorneys, as against the [d]efendants, based
on the actual time spent on this case by the
attorneys. Client understands and agrees
that any such fee award by the [c]ourt
against [d]efendants shall go to Daniel
Deneen and William Hutul. The amount of any
such award that is collected by the attorneys
shall be credited against the contingent fee,
and the contingent fee shall be reduced by
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the amount of court[-]awarded fees collected
by the attorneys."
Because of the $30,000 settlement, defendant argues plaintiff's
award of attorney fees should have been limited to $10,000, and
the trial court's award over and above that amount was an abuse
of discretion.
The Magnuson-Moss Act gives the trial court the discre-
tion to award attorney fees that were reasonably incurred in the
prosecution of the action. "[A] contingency[-]fee agreement can
be a relevant factor in determining reasonableness." Rath v.
Carbondale Nursing & Rehabilitation Center, Inc., 374 Ill. App.
3d 536, 544, 871 N.E.2d 122, 130 (2007). In Blanchard v.
Bergeron, 489 U.S. 87, 103 L. Ed. 2d 67, 109 S. Ct. 939 (1989),
the United States Supreme Court was confronted with a district
court's discretionary award of reasonable attorney fees to a
prevailing party in a federal civil-rights action. The Supreme
Court found "a contingent-fee contract does not impose an auto-
matic ceiling on an award of attorney's fees." Blanchard, 489
U.S. at 93, 103 L. Ed. 2d at 75, 109 S. Ct. at 944. Instead,
"[t]he presence of a pre-existing fee agreement may aid in
determining reasonableness." Blanchard, 489 U.S. at 93, 103 L.
Ed. 2d at 75, 109 S. Ct. at 944; see also Rath, 374 Ill. App. 3d
at 544, 871 N.E.2d at 130.
Here, defendant Mazda agreed to pay plaintiff $30,000,
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not including her attorney fees. The contingency-fee agreement
indicated plaintiff's required payment for attorney fees would be
reduced by any credits for court-awarded attorney fees. The
presence of a fee agreement does not impose a ceiling on the
award of fees. See Keller v. State Farm Insurance Co., 180 Ill.
App. 3d 539, 557, 536 N.E.2d 194, 206 (1989) (finding the trial
court erred in concluding it was constrained by the contingency-
fee agreement in awarding attorney fees when the insurance
statute provided for the payment of "reasonable" attorney fees).
Further, nothing in the Magnuson-Moss Act requires that any
contingency-fee agreements control over a trial court's award of
fees. Thus, the fees awarded must be reasonable, and the trial
court found the requested fees to be reasonable in this case.
We note the cases cited by defendant are distinguish-
able. The facts in Career Concepts, 372 Ill. App. 3d at 406, 865
N.E.2d at 394-95, did not involve a fee-shifting provision. In
Majcher v. Laurel Motors, Inc., 287 Ill. App. 3d 719, 732, 680
N.E.2d 416, 425 (1997), the plaintiff and her counsel entered
into a contingency-fee agreement whereby the client would pay
one-third of all amounts recovered and attorney fees awarded by
the court would be in addition to the fees payable by the client.
The Second District did not allow counsel to collect a contingent
fee, as well as an hourly fee, as it would amount to double
payment and violate the Rules of Professional Conduct. Majcher,
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287 Ill. App. 3d at 732, 680 N.E.2d at 425. Here, however, the
fee agreement did not provide for double payment as counsel will
not collect the contingent fee. Instead, the amount plaintiff
would have been required to pay was reduced by the trial court's
award of attorney fees. Accordingly, defendant is not entitled
to a reduction in the award of attorney fees based on plaintiff's
contingency-fee agreement.
3. Amount of Compensation
In the alternative, defendant argues the trial court
abused its discretion in awarding Deneen 65.25 hours of compen-
sation and Hutul 45.4 hours of compensation. Defendant claims
(1) Deneen's time records were "glaringly void of any detail" and
(2) Hutul's time records were undated, vague and ambiguous,
redundant, and excessive.
To help the trial court in assessing whether an attor-
ney's fees are reasonable, "the petitioner must provide suffi-
cient information, including detailed time records that were kept
throughout the proceeding." Richardson v. Haddon, 375 Ill. App.
3d 312, 314, 873 N.E.2d 570, 573 (2007).
"When assessing the reasonableness of
fees, a trial court may consider a variety of
factors, including the nature of the case,
the case's novelty and difficulty level, the
skill and standing of the attorney, the de-
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gree of responsibility required, the usual
and customary charges for similar work, and
the connection between the litigation and the
fees charged." Richardson, 375 Ill. App. 3d
at 314-15, 873 N.E.2d at 573.
In this case, we find no abuse of discretion. Deneen's
time records are of the type this court routinely sees on appeal
in cases concerning the proper amount of attorney fees. The
records show the date the services were rendered, a description
of the services, the hours, the fee rate, and the total dollar
amount. While defendant argues the description of services
should have been more detailed, the records provide an adequate
list to allow the trial court to determine whether the fees were
reasonably incurred in this case.
Hutul's records also provide sufficient information for
the trial court to determine the reasonable amount of fees.
Hutul's entries are handwritten, and at times are difficult to
read, but they describe the services rendered and the time
expended. Although evidence suggested a range of rates for
Hutul's services, the trial court found $275 per hour to be a
reasonable rate of compensation "in this specific matter." We
find no abuse of discretion.
B. Plaintiff's Cross-Appeal
Plaintiff raises three issues in her cross-appeal.
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Plaintiff claims the trial court erred in refusing to award
attorney fees for 10.75 hours expended by Deneen in response to
defendant's motion for reconsideration. Plaintiff contends the
court erred in awarding Deneen his standard hourly rate of $200,
instead of his higher rate of $225 to $250 for consumer-law work.
Plaintiff also argues this court should remand for further
hearing on an award of attorney fees for the time spent on
appeal.
1. Time Spent on Motion for Reconsideration
In the trial court, Deneen provided billing statements
requesting 7.5 hours for prosecuting the petition for fees and
10.75 hours for time spent on the motion for reconsideration. In
denying plaintiff's motion to reconsider, the court indicated "it
considered the reasonableness of the time expended in preparing
and prosecuting the fee petition and did not exclude that time
from its order of fees." Plaintiff argues Deneen is entitled to
the additional 10.75 hours for time spent responding to defen-
dant's motion for reconsideration.
We find the trial court should have awarded additional
fees for time spent on the motion for reconsideration. See
Berlak v. Villa Scalabrini Home for the Aged, Inc., 284 Ill. App.
3d 231, 243-44, 671 N.E.2d 768, 776 (1996) (finding the trial
court erred in refusing to consider the plaintiff's supplemental
petition for attorney fees covering the period of posttrial
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representation). On remand, plaintiff shall submit a supplemen-
tal petition detailing reasonable attorney fees incurred in
responding to defendant's motion for reconsideration. Because
the amount is unclear in the briefs, plaintiff shall set forth
the time expended in response to defendant's motion for reconsid-
eration, but that amount shall not exceed 10.75 hours.
2. Hourly Rate
Plaintiff argues the trial court should have awarded
Deneen a higher consumer-law rate between $225 to $250 per hour,
instead of his standard $200-per-hour rate. Deneen indicated he
charged a premium rate of $225 to $250 per hour for fiduciary-
fraud and consumer-fraud litigation. His standard rate was
between $175 and $200 per hour.
Here, plaintiff indicated this was "not a complex legal
case" but a "simple" breach-of-warranty claim. The trial court's
decision to award Deneen his standard rate was not an abuse of
discretion.
3. Remand
Plaintiff asks this court to award attorney fees for
the appeal or to grant leave to file a supplemental fee petition.
"Allowing a plaintiff to petition for appellate attorney fees and
costs furthers the [Magnuson-Moss] Act's goal of providing
consumers with legal assistance to enable them to pursue a remedy
for injury or loss." Melton, 346 Ill. App. 3d at 341, 805 N.E.2d
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at 329. Accordingly, we grant plaintiff's request to file a
supplemental petition in the trial court for attorney fees and
costs incurred in responding to defendant's direct appeal. See
Berlak, 284 Ill. App. 3d at 244, 671 N.E.2d at 776. The trial
court may award any and all fees and costs reasonably incurred in
defending this "simple" case on appeal.
III. CONCLUSION
For the reasons stated, we reverse the trial court's
judgment insofar as it denied plaintiff's request for attorney
fees incurred in responding to defendant's motion to reconsider;
we otherwise affirm, and we remand the case to the trial court
for consideration of attorney fees and costs incurred on appeal
and the motion to reconsider.
Affirmed in part, reversed in part, and remanded with
directions.
KNECHT and STEIGMANN, JJ., concur.
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