Kennedy v. Sherwin ( 2022 )

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
No. A-1-CA-39137
THOMAS KENNEDY,
Plaintiff-Appellant,
v.
BOB SHERWIN; KEITH SCHAUDER;
PADRE SPRINGS, LLC; THE CLIFFS
AT PADRE SPRINGS, LLC; and THE
CLIFFS AT PADRE SPRINGS HOME-
OWNERS ASSOCIATION, INC., II,
Defendants-Appellees,
and
BOB SHERWIN; KEITH SCHAUDER;
PADRE SPRINGS, LLC; THE CLIFFS
AT PADRE SPRINGS, LLC; and THE
CLIFFS AT PADRE SPRINGS HOME-
OWNERS ASSOCIATION, INC., II,
Counterclaimants,
v.
THOMAS KENNEDY,
Counterdefendant.
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Bryan Biedscheid, District Judge
Durham, Pittard & Spalding, LLP
Caren I. Friedman
Justin R. Kaufman
Rosalind B. Bienvenu
Santa Fe, NM
Sommer, Udall, Hardwick & Jones, P.A.
Cullen Hallmark
Santa Fe, NM
Bruce S. Garber
Santa Fe, NM
for Appellant
McClaugherty & Silver, P.C.
Joe L. McClaugherty
Santa Fe, NM
Jere Kathryn Smith
Roswell, NM
for Appellees
MEMORANDUM OPINION
DUFFY, Judge.
{1} This appeal arises from a dispute over a subdivision housing development and
the activities of its Homeowners Association (HOA); the ensuing litigation lasted nearly
seven years. Plaintiff Thomas Kennedy sued the owners, developers, and HOA
(collectively, Defendants) on multiple legal theories, none of which prevailed. The
district court declared Defendants the prevailing parties and awarded attorney fees and
costs.1 Kennedy argues that the district court erred (1) in calculating the award of
attorney fees, and (2) by refusing to disqualify defense counsel for concurrent conflicts
of interest. We affirm.
DISCUSSION
I. Attorney Fees
1Defendants also filed a number of counterclaims. While Kennedy asserts that Defendants prevailed on
some, but not all, of their counterclaims, the district court’s amended order stated that “Defendants’
counterclaims are expressly denied.” Notwithstanding this, the district court’s order could be read to grant
some of the relief requested in Defendants’ counterclaims by ruling that the amended declaration is
enforceable and that Defendants were entitled to attorney fees for defending against claims brought by
Kennedy related to the agreement and mutual release. However, in light of our holding, we need not explore
this inconsistency further.
{2} “We review an award of attorney fees for an abuse of discretion.” Paz v. Tijerina,
2007-NMCA-109, ¶ 8, 142 N.M. 391, 165 P.3d 1167. “An abuse of discretion occurs if
the decision is against the logic and effect of the facts and circumstances of the case.”
Garcia v. Jeantette, 2004-NMCA-004, ¶ 15, 134 N.M. 776, 82 P.3d 947 (internal
quotation marks and citation omitted). An abuse of discretion may also occur if the
district court bases a discretionary decision on a misapprehension of law. N.M. Right to
Choose/NARAL v. Johnson, 1999-NMSC-028, ¶ 7, 127 N.M. 654, 986 P.2d 450.
{3} In this case, the district court determined that only Defendant Padre Springs,
LLC, was entitled to attorney fees and that all Defendants were entitled to costs.
Defendants filed a motion seeking $759,475 in attorney fees and $23,197.75 in costs. In
support, they submitted an attorney affidavit and extensive notes regarding the hours
billed. They also identified “$30,259.00 in fees that were outside the claims covered by
the . . . [o]rder and . . . [listed them in the] attached bills as ‘No Charge.’” Defendants
further noted that “at least seventy-five percent (75%) of the total attorney fees
requested are clearly subject to the [c]ourt’s [o]rder and are allowable. The other twenty-
five percent (25%) are so intermingled and intertwined that they could not be definitely
separated and confirmed.”
{4} Kennedy responded with a general claim that the district court should deny the
request outright because “Padre Springs did not separate attorney fees that are
properly awardable from those that were not.” He then went on to make specific
objections to fees that he found vague, excessive, duplicative, nonlitigation related, or
related to work for Defendants other than Padre Springs. Defendants responded by
noting that Kennedy had not objected to $584,529 of the fees requested by Defendants.
Defendants also agreed with Kennedy’s objections as to $10,350 of the fees requested
and reduced their total attorney fee request to $749,124.75. The district court ultimately
awarded $576,599.51 in attorney fees and costs.
{5} Kennedy now argues that the district court erred in calculating attorney fees
because it “[(1)] failed to consider Defendants’ unsuccessful counterclaims, [(2)] failed
to segregate recoverable from non-recoverable fees, and [(3)] failed to ensure the
reasonableness of the amount awarded.”
{6} In support of the first argument, Kennedy notes that defense counsel sought fees
for both defending against Kennedy’s claims and for prosecuting Defendants’
counterclaims. Kennedy asserts that the district court was required to, but did not,
distinguish between time spent on Defendants’ successful defense of Kennedy’s claims
and time spent on prosecuting their unsuccessful counterclaims. See Thompson
Drilling, Inc. v. Romig, 1987-NMSC-039, ¶ 22, 105 N.M. 701, 736 P.2d 979 (“[I]t is
appropriate to distinguish between the amount of the attorney[] fees incurred for
prosecution of the complaint and counsel’s fees for defense of a counterclaim.”). Both
below and on appeal, Kennedy offered no more than a conclusory assertion on this
point, stating simply that “[n]either Defendants nor the district court made any attempt to
segregate fees incurred as a result of prosecuting [Defendants’] largely unsuccessful
counterclaims.” However, Defendants asserted in both their request and their reply that
it was difficult or impossible to segregate the work performed on the different claims
because the work was “inextricably intertwined.” See Puma v. Wal-Mart Stores East,
LP, ___-NMCA-___, ¶ 43, ___ P.3d ___ (A-1-CA-38023, Aug. 9, 2022) (quoting J.R.
Hale Contracting Co. v. Union Pac. R.R., 2008-NMCA-037, ¶ 95, 143 N.M. 574, 179
P.3d 579). Kennedy has made no effort to address or rebut this argument.
{7} Kennedy also asserts the district court should have provided an offset for fees
Kennedy incurred in successfully defending against Defendants’ counterclaims.
Kennedy’s argument on this point begins and ends there. He offers no authority to
support this claim, nor does he direct us to any portion of the record below where he
filed a request for fees that he claims “should” have been offset, thereby invoking the
district court’s consideration and preserving the matter for our review. For these
reasons, we decline to consider this argument. See In re Adoption of Doe, 1984-NMSC-
024, ¶ 2, 100 N.M. 764, 676 P.2d 1329 (“Issues raised in appellate briefs which are
unsupported by cited authority will not be reviewed by us on appeal.”).
{8} Kennedy next asserts that the district court failed to segregate recoverable from
nonrecoverable fees, either as between parties or between claims. In terms of
differentiation between parties, Kennedy baldly asserts that “the district court made [no]
attempt to separate out fees incurred by Padre Springs, as opposed to fees incurred by
all of the other Defendants.” The record indicates otherwise. Defendants’ fee request
demonstrated that they had made an effort to separate “fees that were not related to the
allowed Defendants.” Before the district court, Kennedy specifically objected to certain
of defense counsels’ time entries on the basis that they were for activities related to
other Defendants, including the HOA. Those objections amounted to around 40.5 hours
of work. As for the remainder of Defendants’ fee request, Kennedy did not make a
specific showing or argument in the district court as to why Defendants’ efforts to
segregate fees was insufficient. His argument on appeal is similarly sparse, and he has
made no showing that the district court awarded fees for work performed on behalf of
parties other than Padre Springs. See Perez v. Gallegos, 1974-NMSC-102, ¶ 3, 87 N.M.
161, 530 P.2d 1155 (“The nature of claimed error on the part of the trial court must be
specifically stated and argued.”). And to the extent Kennedy asserts that Padre Springs
is not entitled to fees at all because there was no proof that it paid attorney fees during
litigation, he again fails to alert us to where this issue was raised below, and again
provides no authority to support a claim that a party must pay attorney fees in order to
receive them. We decline to address this argument further. See In re Adoption of Doe,
1984-NMSC-024, ¶ 2.
{9} In terms of differentiation between claims, Kennedy focuses on whether the fees
awarded resulted from “[a] cause of action for which there is authority to award attorney
fees.” See Dean v. Brizuela, 2010-NMCA-076, ¶ 16, 148 N.M. 548, 238 P.3d 917. Both
parties agree that it was Defendants’ burden to segregate recoverable from
nonrecoverable fees, see id. ¶ 14, and that the district court “was required to review
Defendants’ attorney fee request and determine what portion of it was attributable to
claims for which fees were authorized.” See Jaramillo v. Gonzales, 2002-NMCA-072, ¶
39, 132 N.M. 459, 50 P.3d 554. The district court awarded Padre Springs attorney fees
based on a provision in a 2012 settlement agreement between the parties, and under
NMSA 1978, Section 47-6-27.1(D) (1995) (“The court, in its discretion, may award
reasonable attorneys’ fees to the prevailing party.”). Kennedy asserts that the parties
presented common law claims that fell outside the scope of the 2012 agreement and
claims that did not support attorney fees under statute. Kennedy does not tell us which
specific claims he is referring to. Instead, he offers only that “the record shows that the
district court failed to meet its obligation.” Kennedy has not identified any specific
portion of the record in support of his claim of error. Because we have “no duty to
review an argument that is not adequately developed,” Corona v. Corona, 2014-NMCA-
071, ¶ 28, 329 P.3d 701, we decline to consider Kennedy’s contention that the district
court failed to meet its obligation in evaluating Defendants’ fee request. See Doe v. City
of Albuquerque, 1981-NMCA-049, ¶ 8, 96 N.M. 433, 631 P.2d 728 (“Points of error not
properly briefed or argued will not be considered; rather, we will indulge all
presumptions in favor of the correctness of the procedures in the trial court.” (citation
omitted)).
{10} Finally, Kennedy claims that the district court erred by awarding an unreasonable
amount of fees. He alleges that “Defendants merely hazarded a guess that ‘at least’
75% of their claimed fees are recoverable and the other 25% are so ‘intertwined that
they could not be definitely separated and confirmed.’” According to Kennedy, the
district court failed to scrutinize Defendants’ time entries and “merely went along with
the random 75% figure.” Kennedy also claims that the district court failed to consider
several of the lodestar criteria when considering the reasonableness of the fee request,
including “the time and labor required for the representation, and the results obtained.”
See Rio Grande Sun v. Jemez Mountains Pub. Sch. Dist., 2012-NMCA-091, ¶ 13, 287
P.3d 318 (“While an award of attorney fees is discretionary, the exercise of that
discretion must be reasonable when measured against objective standards and criteria.”
(internal quotation marks and citation omitted)). We do not agree.
{11} The district court was presented with detailed time records and an affidavit
explaining how counsel’s hourly fees were customary in the industry. Those records set
forth the extensive work undertaken by counsel over the course of nearly seven years of
litigation. The district court awarded $576,599.51 in attorney fees and costs based on
“the amounts claimed by Defendants, the objections of [Kennedy] that were valid and
noted by Defendants, and a reduction of an additional $7,929.49 for the costs related to
[an expert witness deemed unhelpful to the court].” And, as Defendants point out, the
district court awarded less attorney fees than those that would have been permitted
after all of Kennedy’s specific objections to time entries.
{12} The district court’s actions in this case do not resemble other cases that Kennedy
cited, where the district court “failed to determine the time reasonably necessary to
provide the required services and instead made an arbitrary fee award.” See id. ¶ 13
(reversing an award of attorney fees where the district court expressly refused to
consider the time and labor required and the fee customarily charged for similar
services); Autovest L.L.C. v. Agosto, 2021-NMCA-053, ¶¶ 26-27, 497 P.3d 642(reversing an award of attorney fees to the plaintiffs where the district court arbitrarily
reduced the award by two-thirds); Autovest, L.L.C., 2021-NMCA-053, ¶¶ 30-31
(concluding that the district court erred in ruling that a reduction of the plaintiff’s attorney
fee award constituted an award to the defendants for successfully defending against the
plaintiff’s counterclaim because the defendants had not yet submitted a motion or
evidence as to the amount of fees they incurred).
{13} Ultimately Kennedy has not shown that the district court failed to consider the
unsuccessful counterclaims, nor did he rebut Defendants’ argument that the claims
were inextricably intertwined. Nor has Kennedy persuaded us that the district court
failed to segregate recoverable fees from nonrecoverable fees, whether between the
parties or between claims. Finally, Kennedy has not indicated how the district court’s
award of attorney fees was unreasonable. We conclude that the district court did not
abuse its discretion in calculating the award of attorney fees for Defendants.
II. Disqualification of Defense Counsel
{14} “A ruling on a motion to disqualify is generally reviewed for an abuse of
discretion.” Roy D. Mercer, LLC v. Reynolds, 2013-NMSC-002, ¶ 13, 292 P.3d 466.
Kennedy initially asked the district court to disqualify defense counsel because of an
alleged concurrent conflict of interest in violation of Rule 16-107 NMRA. Notably,
Kennedy never asserted that a conflict existed between himself and Defendants, but
rather that a conflict of interest could arise amongst the individual Defendants. Cf. Roy
D. Mercer, LLC, 2013-NMSC-002, ¶¶ 30-32, 46 (disqualifying counsel for a conflict of
interest that arose after the plaintiff discovered that his former attorney had joined the
firm representing the defendants); Day-Peck v. Little, 2021-NMCA-034, ¶¶ 25-26, 493
P.3d 477 (affirming disqualification of counsel from representing multiple plaintiffs with
adverse interests in life insurance proceeds).
{15} The district court found that no conflict of interest existed between Defendants.
The district court denied the motion to disqualify because “[t]he overlap of interests
between the HOA and the developer does not create a conflict of interest that would
require disqualification under Rule 16-107(B)(3) (the assertion of a claim by one client
against another).” Furthermore, defense counsel indicated that Defendants had signed
written waivers of any conflict of interest in accordance with Rule 16-107(B)(4). While
Kennedy notes those waivers were not made part of the record, this does not constitute
error given the district court’s finding that no conflict existed in the first place.
{16} Kennedy has not persuaded us that the district court abused its discretion in its
rulings. And, as a practical matter, Kennedy has not indicated what relief this Court
could grant even if it were to find an abuse of discretion. See Living Cross Ambulance
Serv., Inc. v. N.M. Pub. Regul. Comm’n, 2014-NMSC-036, ¶¶ 21-22, 338 P.3d 1258(directing trial courts to determine whether conflicts of interest exist before substantive
proceedings occur); see also Rule 12-318(A)(5) NMRA (requiring “a conclusion
containing a precise statement of the relief sought”). We affirm the district court’s finding
that no conflict existed between defense counsel’s clients.
CONCLUSION
{17} For the foregoing reasons, we affirm.
{18} IT IS SO ORDERED.
MEGAN P. DUFFY, Judge
WE CONCUR:
JACQUELINE R. MEDINA, Judge
MICHAEL D. BUSTAMANTE, Judge, retired, sitting by designation