Bowers v. Winquist

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
29-JUL-2021
07:51 AM
Dkt. 55 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
GREG BOWERS, Plaintiff-Appellee, v.
JAMES M. WINQUIST, TRANCITA K. WINQUIST,
Defendants-Appellees,
and
DOE DEFENDANTS 1-10, Defendants
and
TIMOTHY I. MAC MASTER,
Real Party in Interest-Appellant
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CIVIL NO. 14-1-1677; 1CC141001677)
SUMMARY DISPOSITION ORDER
(By: Ginoza, C.J., and Leonard and Wadsworth, JJ.)
Real Party in Interest-Appellant Timothy I. Mac Master
(Mac Master) appeals from the November 7, 2017 "Order Granting in
Part and Denying in Part . . . Mac Master's Motion to Enforce
Attorney's Lien Filed September 8, 2017" (Order), entered in the
Circuit Court of the First Circuit (Circuit Court).1/
Mac Master and Plaintiff-Appellee Greg Bowers (Bowers)
had an attorney-client relationship under the terms of a
contingent fee agreement. Mac Master withdrew as Bowers's
counsel after Bowers decided to reject a Court Annexed
Arbitration Program (CAAP) award of $21,200 and to request a
trial de novo on his claim against Defendants-Appellees James M.
Winquist and Trancita M. Winquist. Mac Master ended his
1/
The Honorable Keith K. Hiraoka presided.
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representation of Bowers based on a purported right under the
contingent fee agreement to terminate the attorney-client
relationship at any time for any reason. Bowers then hired new
counsel who did further work on his case and ultimately helped
Bowers settle his claim for $24,000.
Following the settlement, Mac Master filed a motion to
enforce an attorney's lien in the amount of $7,800 (Motion).
After a hearing on the Motion, the Circuit Court ordered that the
attorney's lien be enforced in the amounts of $4,000 in
attorney's fees and $515 in case costs, and denied the Motion as
to all other claimed fees and case costs.
On appeal, Mac Master contends that the Circuit Court
erred in: (1) denying Mac Master's request for an evidentiary
hearing governed by the Hawaii Rules of Evidence (HRE); (2)
adjudicating the Motion without first conducting an evidentiary
hearing governed by the HRE; (3) disregarding the requirements of
Hawaii Revised Statutes (HRS) § 507-81(b)(1) (quoted infra); and
(4) denying Mac Master's request for findings of facts and
conclusions of law supporting the Order.
Upon careful review of the record and the briefs
submitted by the parties and having given due consideration to
the arguments advanced and the issues raised by the parties, we
resolve Mac Master's points of error as follows and affirm.
(1) Mac Master's first two points of error rely on his
assertion that HRE Rule 101 and the due process clause of article
1, section 5 of the Hawai#i Constitution "required [that] the
Circuit Court conduct an evidentiary hearing governed by the
[HRE] before deciding the Motion." This argument is without
merit.
HRE Rule 101 provides that the Hawaii Rules of Evidence
"govern proceedings in the courts of the State of Hawaii, to the
extent and with the exceptions stated in rule 1101." HRE Rule
1101, in turn, states in relevant part that "[t]hese rules apply
to all courts of the State of Hawaii except as otherwise provided
by statute[,]" and "[t]hese rules apply generally to civil and
criminal proceedings." Nothing in HRE Rules 101 or 1101 requires
a trial court to conduct an evidentiary hearing before deciding a
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motion to enforce an attorney's lien or other motion governed by
the HRE. Further, Mac Master cites no Hawai#i case law or other
authority construing the HRE to require an evidentiary hearing in
these circumstances. There is none.
Rather, Hawai#i Rules of Civil Procedure (HRCP) Rule
43(e) provides:
Evidence of motions. When a motion is based on facts
not appearing of record the court may hear the matter on
affidavits presented by the respective parties, but the
court may direct that the matter be heard wholly or partly
on oral testimony or depositions.
See also Rules of the Circuit Courts of the State of Hawai#i
(RCCH) Rule 7(g) ("In lieu of an affidavit, an unsworn
declaration may be made by a person, in writing, subscribed as
true under penalty of law, and dated, in substantially the
[prescribed] form[.]") Here, again, nothing in HRCP Rule 43(e)
requires a trial court to conduct an evidentiary hearing before
deciding a motion to enforce an attorney's lien, and contrary to
Mac Master's assertion, there is no conflict between HRCP Rule
43(e) and HRE Rule 1101. Trial courts in Hawai#i routinely
decide motions on the basis of affidavits or declarations,
subject to the HRE as applicable, without taking oral testimony
or having documentary evidence introduced through live witnesses.
See, e.g., HRCP Rule 56(e).
In a similar vein, Mac Master cites no Hawai#i case
law or other authority construing the Hawaii Constitution's due
process clause to require an evidentiary hearing in analogous
circumstances. There is none. "[D]ue process is not a fixed
concept requiring a specific procedural course in every
situation." In re Guardianship of Carlsmith, 113 Hawai#i 236,
241, 151 P.3d 717, 722 (2007) (quoting State v. Guidry, 105
Hawai#i 222, 234, 96 P.3d 242, 254 (2004)). Rather, due process
requires "notice and an opportunity to be heard at a meaningful
time and in a meaningful manner before governmental deprivation
of a significant liberty interest." Id. (quoting State v. Bani,
97 Hawai#i 285, 293, 36 P.3d at 1255, 1263 (2001)).
Here, on September 8, 2017, Mac Master filed the
Motion, along with a supporting declaration, several attached
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exhibits, and a memorandum of law, pursuant to HRCP Rules 7(b)
and 17, and consistent with HRCP Rule 43(e) and RCCH Rule 7(g).
On October 12, 2017, the Circuit Court heard the Motion. Before
hearing oral argument, the court stated its "inclination . . . to
enforce the attorney's lien, but not in the amount requested by
Mr. Mac Master." The court explained:
And the Court's reasoning is, that all contracts for legal
services are subject to the Hawaii Rules of Professional
Conduct. And, in fact, paragraph 13 of Mr. Mac Master's fee
agreement acknowledges this.
The Court reviewed the fee agreement, and several of
the provisions appear to be potentially contrary to the
requirements of the Hawaii Rules of Professional Conduct.
And also, paragraph 7 appears to be contrary to Formal
Opinion 28 of the Office of Disciplinary Counsel, as well as
to Rules 1.6 and 1.16 of the Hawaii Rules of Professional
Conduct.
Now, in addition, the Court notes that paragraph 11 of
the fee agreement appears to be contrary to Professional
Conduct Rule 1.2(a).
Paragraph 9 of the fee agreement, which is the
provision at issue, violates Professional Conduct Rule 1.16
to the extent it gives the lawyer the unilateral right to
terminate representation of the client, quote, for any
reason, end quote.
The Court notes that if Mr. Mac Master had moved to
withdraw, based upon the record presented on this motion,
the Court would likely have denied the withdrawal based on
Professional Conduct Rule 1.2(a), which states, A lawyer
shall abide by a client's decision whether to settle a
matter; and also based on Professional Conduct Rule 1.16(b)
regarding when a lawyer may withdraw from representing a
client.
So Mr. Mac Master's reply memo correctly states that
the issue for the Court to determine on this motion is
whether $7,800 is a reasonable fee for the services that Mr.
Mac Master provided to Mr. Bowers. And the Court notes that
that's not totally correct, because the fee being claimed is
$7,000, and $800 represents the costs, as the Court
understands the argument.
So in making the determination of the reasonableness
of the fee, the Court is guided by the factors set forth by
the court of appeals in Riley, . . . against Osako, . . .
and by Professional Conduct Rule 1.5. Rule 1.5 states that
a lawyer shall not collect an unreasonable fee.
The non-exhaustive list of factors to consider under
Rule 1.5 includes, quote, the fee customarily charged in the
locality for similar legal services; the amount involved and
the results obtained; the experience and ability of the
lawyer performing the services; and in contingency fee
cases, the conscionability of the fee in light of the net
recovery to the client.
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In addition to the rule, the court of appeals
instructs the Court to look at, among other things, the
skill requisite to properly conduct the cause and the amount
involved in the controversy and the benefits resulting to
the client from the services.
So the Court expects that lawyers should manage their
client's expectations by explaining the law as applied to
the facts known at the time, including, when applicable, the
principle and effect of modified comparative negligence in
this jurisdiction.
The Court notes, that, based upon a review of the
documentation provided by Mr. Bowers, as the Court
understands the facts of the case, the potentially
recoverable special damages at the time the Complaint w[as]
filed were only $16,175.91. . . .
. . . .
. . . [E]ven if the lawsuit had been filed on the eve
of the statute of limitations, . . . the specials would only
have been $22,923.86. However, what this indicates is that
there may have been a failure to manage Mr. Bowers'
reasonable expectations at the beginning of the lawsuit, and
that may have affected the relationship between attorney and
client after the CAAP award came out.
Now, the Court also notes that Arbitration Rule 19
allows the arbitrator to award costs. . . . So the Court
finds that the failure to request costs as part of a CAAP
proceeding calls into question the experience and the
ability of the lawyer.
So the primary factor the Court is looking at -- or
the primary factors the Court is looking at is, because this
is a contingency case, the Rule 1.5 factor of
conscionability of the fee in light of the net recovery to
the client; and also under the Riley case, the amount
involved in the controversy -- or the Court should state,
the amount reasonably involved in the controversy and the
benefits resulting to the client from the services.
So it's the Court's inclination to, as I said, enforce
the lien, but at a reduced amount.
Mr. Mac Master, I'll hear argument from you first.
The Circuit Court then heard extensive oral argument
from Mac Master, as well as argument from the parties, before
ruling on the Motion. It was not until after Mac Master
completed his oral argument that he stated: "Just for the
record, we . . . are requesting an evidentiary hearing, Your
Honor." Mac Master did not identify any additional evidence that
he sought to make part of the record via an evidentiary hearing
or otherwise indicate why an evidentiary hearing was necessary.
The Circuit Court denied Mac Master's request for an evidentiary
hearing.
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We conclude that under these circumstances, Mac Master
was afforded an opportunity to be heard at a meaningful time and
in a meaningful manner with respect to the Motion, and that due
process did not require an evidentiary hearing. See In re
Guardianship of Carlsmith, 113 Hawai#i at 241, 151 P.3d at 722;
see also Gold v. Harrison, 88 Hawai#i 94, 106-07, 962 P.2d 353,
365-66 (1998) (the circuit court did not deny a sanctioned
attorney due process by failing to hold an evidentiary hearing on
the sanctions, where the attorney received notice and a hearing
on the sanctions motion and "did not explain what evidence he
planned to introduce or otherwise indicate why an evidentiary
hearing was necessary"). Accordingly, the Circuit Court did not
abuse its discretion in denying Mac Master's request for an
evidentiary hearing or in deciding the Motion without an
evidentiary hearing.
(2) In his third point of error, Mac Master contends
that the Circuit Court erred "when it disregarded the
requirements of HRS § 507-81(b)(1), which entitles Mr. Mac Master
to an attorney's lien in the amount of '[t]he fees and
compensation specifically agreed upon with the client.'"
(Formatting and capitalization altered.) This argument is also
without merit.
HRS § 507-81 (2018) states, in relevant part:
Attorney's lien upon actions and judgments. (a) An
attorney has a lien upon:
(1) Actions, suits, and proceedings after
commencement of the action or arbitration
proceeding;
(2) Judgments, decrees, orders, settlements, and
awards entered by the court or an arbitrator in
favor of the client; and
(3) Any proceeds paid in satisfaction of the
judgment, decree, order, settlement, or award.
(b) The lien shall be for:
(1) The fees and compensation specifically agreed
upon with the client;
(2) The reasonable value of the services of the
attorney, if there is no fee agreement;
(3) Any costs advanced by the attorney; and
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(4) Any fees or commissions taxed or allowed by the
court.
In Riley v. Osaka, No. CAAP-XX-XXXXXXX, 2016 WL 3615610(Haw. App. June 30, 2016) (SDO), this court summarized the
prevailing case law regarding the enforcement of an attorney's
lien under HRS § 507-81(b)(1) as follows:
Before granting a contractually-based award of
attorney's fees, the circuit court is required to consider
the reasonableness of the fees. See Booker v. Midpac Lumber
Co., 65 Haw. 166, 172, 649 P.2d 376, 381 (1982) (holding,
where an attorney was discharged without cause prior to the
conclusion of a personal injury case, that "a contingent fee
agreement, without more, is not good reason for boosting an
attorney's compensation or denying him a fee that adequately
compensates him for actual services performed"). In
general, an appellate court must "examine the circumstances
under which the circuit court approved the [attorney's] fee
to determine whether its exercise of discretion was
consistent with the tenets enunciated in Sharp [v. Hui
Wahine, Inc., 49 Haw. 241, 413 P.2d 242 (1966)]." Booker,
65 Haw. at 170–71, 649 P.2d at 379. In Sharp, the Hawai #i
Supreme Court put forth the following guidelines for
determining the reasonableness of attorney's fees when the
fees are provided for by contract:
Comprehensive discussions of the numerous factors to
be considered in determining a reasonable attorney's
fee are to be found in Annotations in 143 A.L.R. 672and 56 A.L.R.2d 13. Canon 12 of the Canons of
Professional Ethics adopted by the American Bar
Association has set up the following guidelines to be
considered in determining the real value of the
services performed by an attorney so as to be able to
fix the reasonable compensation for such services:
"In determining the amount of the fee, it is
proper to consider: (1) the time and labor
required, the novelty and difficulty of the
questions involved and the skill requisite
properly to conduct the cause; (2) whether the
acceptance of employment in the particular case
will preclude the lawyer's appearance for others
in cases likely to arise out of the transaction,
and in which there is a reasonable expectation
that otherwise he would be employed, or will
involve the loss of other employment while
employed in the particular case or antagonisms
with other clients; (3) the customary charges of
the Bar for similar services; (4) the amount
involved in the controversy and the benefits
resulting to the client from the services; (5)
the contingency or the certainty of the
compensation; and (6) the character of the
employment, whether casual or for an established
and constant client. No one of these
considerations in itself is controlling. They
are mere guides in ascertaining the real value
of the service."
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It closes with the admonition that:
"In fixing fees it should never be forgotten
that the profession is a branch of the
administration of justice and not a mere
money-getting trade."
The Canons have been adopted as governing the conduct
of the members of the Hawaii Bar by Rule 16(a) of this
court.
Booker, 65 Haw. at 170 n.2, 649 P.2d at 379 n.2 (quoting
Sharp, 49 Haw. at 244–45, 413 P.2d at 245–46). The
considerations delineated in Sharp are to be considered
"mere guides in ascertaining the real value of the service
[rendered]." Booker, 65 Haw. at 172, 649 P.2d at 381.
In sum, the Hawai#i Supreme Court has held:
Where the efforts of an attorney who was
employed under a contingent fee contract would have a
tendency to advance the client's claim or to enhance
the possibility of a favorable result, we would also
conclude the contract and the reasonably estimated
value of the case should be considered in fixing a
reasonable attorney's fee.
Booker, 65 Haw. at 172, 649 P.2d at 381. "'[T]he real value
of the service' encompasses 'the benefits resulting to the
client.'" Id. (quoting Sharp, 49 Haw. at 244–45, 413 P.2d
at 245).
Id. at *1-2.
Here, the Circuit Court expressly considered the
principles set forth in Riley, as well as Hawai#i Rules of
Professional Conduct (HRPC) Rule 1.5,2/ to determine the
2/
HRPC Rule 1.5 states, in relevant part:
Rule 1.5. FEES.
(a) Reasonableness of Fee. A lawyer shall not make an
agreement for, charge, or collect an unreasonable fee or an
unreasonable amount for expenses. The factors to be
considered in determining the reasonableness
of a fee include the following:
(1) the time and labor required, the novelty and
difficulty of the questions involved, and the skill
requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that
the acceptance of the particular employment will
preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for
similar legal services;
(4) the amount involved and the results obtained;
(continued...)
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reasonableness of the contractually-based fee award requested in
the Motion. After stating its inclination and hearing oral
argument, the Circuit Court ruled as follows:
[I]n a case like this where a contingency fee agreement is
involved, the amount of time spent is not the sole or even
the primary determining factor of the reasonableness of a
fee. Rather, as mandated by Rule 1.5, and as reinforced by
the Riley case, a lawyer's fee must be reasonable. And in
determining reasonableness of a fee, in contingency fee
cases the net recovery to the client is a primary factor,
and also the benefit resulting to the client from the
services.
And another factor is the fee customarily charged in
the locality for similar legal services. And the Court
takes judicial notice that in enumerable cases that the
Court has been involved in both in private practice and as a
settlement judge, counsel have adjusted their fees, when
appropriate under the circumstances, to effectuate a
settlement.
So I'm going to rule on . . . two matters separately.
On the lien for fees, the lien shall be enforced. The Court
finds that a reasonable fee for Mr. Mac Master, under the
circumstances as shown by the record in this case, is
$4,000.
On the claim for costs, other than the amount of the
filing fee, which is going to be shown in the court file --
the documentation in the court file, the costs are denied
because there has not been any evidentiary foundation or
documentation supplied.
Thus, based on the relevant facts and circumstances,
including that Bowers ultimately recovered a $24,000 settlement
after Mac Master withdrew as his counsel, the Circuit Court
applied HRPC Rule 1.5 and the principles set forth in Riley to
determine that a reasonable fee for Mac Master's services was
$4,000. The court also awarded $515 in case costs to Mac Master
based on the documentation in the court file.
(continued...)
(5) the time limitations imposed by the client or by
the circumstances;
(6) the nature and length of the professional
relationship with the client;
(7) the experience, reputation, and ability of the
lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent, and in
contingency fee cases the risk of no recovery and the
conscionability of the fee in light of the net
recovery to the client.
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Mac Master argues that he and Bowers "made an oral
agreement that the amount of Mr. Mac Master's attorney's lien
would be reduced to, and fixed at, $7,800." (Formatting and
capitalization altered.) However, the fees requested pursuant to
this alleged oral agreement, which was itself a product of the
written contingent fee agreement,3/ were subject to the Circuit
Court's determination of their reasonableness. Riley, 2016 WL
3615610, at *1. On this record, we conclude that the Circuit
Court did not abuse its discretion in determining that a
reasonable fee for Mac Master's services was $4,000. We further
conclude that the Circuit Court did not abuse its discretion in
enforcing Mac Master's lien in the amounts of $4,000 in
attorney's fees and $515 in case costs, and in denying the Motion
as to all other claimed fees and case costs.
(3) In his fourth point of error, Mac Master contends
that "[t]he failure of the Circuit Court to issue an Order that
contains adequate findings of fact and conclusions of law
violates . . . Mac Master's [a]rticle 1, [s]ection 5 rights to
due process and prevents proper appellate review of the Circuit
Court's actions[.]" This argument also lacks merit.
Mac Master cites no Hawai#i case law or other authority
construing the Hawai#i Constitution's due process clause to
require a trial court to issue written findings of facts and
conclusions of law in analogous circumstances. Cf. HRCP Rule
52(a) ("Findings of fact and conclusions of law are unnecessary
on decisions of motions under Rules 12 or 56 or any other motion
except as provided in subdivisions (b) and (c) of this rule.").
Further, we reject Mac Master's assertion that the absence of
written findings of fact and conclusions of law in these
circumstances "impedes effective judicial review." During the
hearing on the Motion, the Circuit Court provided a thorough
3/
Mac Master terminated his representation of Bowers pursuant to the
written contingent fee agreement. Moreover, Mac Master stated in his
declaration supporting the Motion that "[t]he agreement to reduce the
attorney's lien amount" was made in part because "$7,000 represents about one
third (i.e. 33.3%) of the CAAP award that Mr. Mac Master helped Mr. Bowers
obtain[,]" i.e., the same percentage of the client's ultimate recovery that
Mac Master was to receive under the written contingent fee agreement.
(Capitalization altered.)
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explanation of the factors and reasoning supporting its decision.
The Circuit Court's oral explanation of its ruling, in
conjunction with the record, is sufficient to enable meaningful
appellate review of the issues raised by Mac Master.
Accordingly, the Circuit Court did not abuse its discretion in
denying Mac Master's request for findings of facts and
conclusions of law supporting the Order.
Therefore, IT IS HEREBY ORDERED that the November 7,
2017 "Order Granting In Part And Denying In Part . . . Mac
Master's Motion to Enforce Attorney's Lien Filed September 8,
2017," entered in the Circuit Court of the First Circuit, is
affirmed.
DATED: Honolulu, Hawai#i, July 29, 2021.
On the briefs:
/s/ Lisa M. Ginoza
Timothy I. Mac Master, Chief Judge
Real Party in Interest-
Appellant.
/s/ Katherine G. Leonard
James J. Bickerton and Associate Judge
Nathan P. Roehrig
(Bickerton Dang, LLLP)
for Plaintiff-Appellee. /s/ Clyde J. Wadsworth
Associate Judge
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