Sims v. Nissan N. Am., Inc.

[Cite as Sims v. Nissan N. Am., Inc., 2015-Ohio-5367.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
William R. Sims et al., :
:
Appellants-Appellants,
: No. 15AP-19
v. (C.P.C. No. 14CVF-09-9324)
:
Nissan North America, Inc., (REGULAR CALENDAR)
:
Appellee-Appellee.
:
D E C I S I O N
Rendered on December 22, 2015
Morganstern, MacAdams & DeVito Co., L.P.A., and
Christopher M. DeVito, for appellants.
Taft, Stettinius & Hollister LLP, Joseph C. Pickens and
Stephen C. Fitch; Dorsey & Whitney LLP, Steven J. Wells and
Erik D. Ruda, pro hac vice, for appellee.
APPEAL from the Franklin County Court of Common Pleas
DORRIAN, J.
{¶ 1} This appeal arises from an administrative protest filed with the Ohio Motor
Vehicle Dealers Board ("Board") by William R. Sims and Sims Buick-GMC Truck, Inc.,
dba Sims Buick-GMC-Nissan (collectively "Sims") against Nissan North America, Inc.
("Nissan") because Nissan sought to terminate Sims's new car dealership. Although the
merits of the protest have been settled in favor of Sims, the matter continues with respect
to Sims's request for attorney fees, expert fees, and costs pursuant to the successful
protest. The present appeal is taken from a judgment of the Franklin County Court of
Common Pleas affirming the Board's adoption of a hearing examiner's decision awarding
Sims a reduced amount of attorney fees, expert fees, and costs for the period from June 1,
2011, through January 31, 2014. For the reasons that follow, we affirm.
No. 15AP-19 2
I. Procedural History
{¶ 2} The facts and procedural history of the underlying protest are more fully set
forth in this court's prior decision, Sims v. Nissan North America, Inc., 10th Dist. No.
12AP-833, 2013-Ohio-2662. As relevant here, the Board sustained Sims's protest and
granted in part his request for attorney fees and costs for the period prior to June 1, 2011,
but did not award expert witness fees. Sims at ¶ 5. Sims and Nissan both appealed to the
common pleas court, which affirmed the Board's order sustaining the protest. The
common pleas court also affirmed the order not to award expert witness fees, affirmed the
award of costs, and remanded the matter for an evidentiary hearing to support and justify
appellants' attorney fees. Id. at ¶ 2. Both parties then appealed to this court. We overruled
the challenges to the underlying decision granting Sims's protest. Id. at ¶ 21. We also
sustained in part and overruled in part the challenges to the Board's decision on fees and
costs and remanded the matter to the Board for a determination of the reasonableness of
expert fees and other costs denied by the Board. Id. at ¶ 40. We further ordered the Board
to reinstate the uncontroverted amount of attorney fees requested, minus any fees not
associated with the protest. Id. at ¶ 52.
{¶ 3} On remand from this court's order, a Board hearing examiner conducted a
telephone status conference with the parties regarding resolution of the outstanding fee
and cost issues. Pursuant to the telephone conference, the hearing examiner issued an
order requiring Sims to submit an affidavit of legal counsel detailing the hours and
services provided from June 1, 2011 forward and any other expenses and costs. The
hearing examiner further ordered Nissan to file any objections in the form of a brief or
affidavit. Sims filed an affidavit from his lead counsel, Christopher M. DeVito ("DeVito
affidavit"), detailing the attorney fees, expert fees, and costs incurred in the case, with
copies of billing statements attached in support of the affidavit. Nissan submitted an
affidavit from one of its attorneys ("Weisenberger affidavit"), presenting exhibits
purporting to demonstrate that certain entries on DeVito's billing statements were
associated with frivolous or premature motions. Nissan also submitted an affidavit from
James B. Niehaus ("Niehaus affidavit") attesting to his experience in the field of motor
vehicle dealer representation in Ohio and his knowledge of attorney fee rates charged for
No. 15AP-19 3
that type of work. Sims then filed a supplemental affidavit from DeVito supporting the
claims for attorney fees, expert fees, and costs ("supplemental DeVito affidavit").
{¶ 4} In his affidavits, DeVito asserted that, for the period through May 31, 2011,
which was before the hearing examiner as a result of this court's remand order in Sims,
Sims was entitled to attorney fees of $205,811.66, expert witness fees of $57,700.03, and
costs and expenses of $13,982.94. DeVito further asserted that, for the period from
June 1, 2011, through January 31, 2014, Sims was entitled to actual attorney fees of
$411,864.80 and a 50-percent lodestar multiplier, for total attorney fees of $617,797.20.
He also claimed that Sims incurred expert witness costs of $15,000 during 2012 and 2013.
Finally, DeVito asserted that Sims was entitled to reimbursement of travel expenses of
$6,429.83 incurred during July and October 2010, and litigation and appeal expenses of
$8,448.20 for the period from June 1, 2011, through January 31, 2014.
{¶ 5} After the affidavits were submitted, the hearing examiner issued a decision
addressing the issues on remand from this court's Sims decision and determining the
reasonable attorney fees, expert fees, and costs from June 1, 2011, through January 31,
2014. In the decision, the hearing examiner indicated that the parties had agreed to her
evaluation of attorney fees, expert fees, and costs on affidavits. With respect to the period
through May 31, 2011, the hearing examiner found that $3,333.33 of Sims's attorney fees
were not associated with the protest. Accordingly, pursuant to this court's remand order,
the hearing examiner awarded Sims attorney fees of $202,478.33, expert witness fees of
$57,700.03, and costs of $13,982.94 for the period through May 31, 2011. For the period
from June 1, 2011, through January 31, 2014, the hearing examiner concluded that Sims
was entitled to attorney fees of $94,785, and that the additional 50-percent upward
lodestar modification requested by Sims was not warranted. The hearing examiner
further held that Sims was entitled to expert fees of $8,660. She denied Sims's request for
$6,429.83 in travel expenses incurred in July and October 2010 and held that Sims was
entitled to costs of $7,808.36 for the period from June 1, 2011, through January 31, 2014.
{¶ 6} Sims filed objections to the hearing examiner's decision with the Board; the
Board declined to take further action within 30 days and, by operation of law under R.C.
4517.58, the hearing examiner's decision was considered to be approved by the Board.
Sims then filed an appeal under R.C. 119.12 with the Franklin County Court of Common
No. 15AP-19 4
Pleas, arguing that the Board erred as a matter of law and violated his right to due process
by failing to award the requested amount of attorney fees, expert fees, and costs, by failing
to conduct a hearing on the issue of fees and costs or allow discovery of Nissan's attorney
fees, and by awarding a reduced amount of attorney fees, expert fees, and costs. The
common pleas court affirmed the Board's adoption of the hearing examiner's decision,
concluding that the hearing examiner did not err as a matter of law or violate Sims's right
to due process by awarding less than requested and not conducting a hearing or allowing
discovery of Nissan's attorney fees. The court concluded that the hearing examiner's
award was supported by reliable, probative, and substantial evidence.
{¶ 7} Sims appeals from the lower court's decision, assigning three errors for this
court's review:
I. The Board erred for a second time, as a matter of law and
violating Sims' constitutional due process rights, by ignoring
controlling Ohio precedent and the law of the case
establishing that the Ohio Dealer Act standard for a fees and
costs petition, pursuant to R.C. 4517.65(C), is an attorney's
recapitulation of time and expenses through an affidavit,
which establishes prima facie evidence of the amount to be
awarded.
II. The Board erred for a second time, as a matter of law and
violating Sims' constitutional due process rights, by (1)
refusing to allow discovery of Nissan's hourly attorney rates
and itemized attorney time records and (2) denying a hearing
on the merits regarding the disputed reasonable hourly rates,
total amount of attorney time, expert witness fees, and costs
for 2.5 years of administrative appeals.
III. The Board erred for a second time, as a matter of law and
violating Sims' constitutional due process rights, by
reducing—in a vacuum—the prima facie evidence establishing
Sims' attorney fees and costs petition, which was supported by
an affidavit with itemized attorney time, itemized expenses,
and uncontroverted by any relevant or material evidence by
Nissan.
(Emphasis sic.)
II. Standard of Review
{¶ 8} In an appeal under R.C. 119.12, the common pleas court must affirm an
order from an agency or board if, based on a consideration of the entire record, the order
No. 15AP-19 5
"is supported by reliable, probative, and substantial evidence, and is in accordance with
law." Pons v. Ohio State Med. Bd., 66 Ohio St. 3d 619, 621 (1993). The common pleas
court's "review of the administrative record is neither a trial de novo nor an appeal on
questions of law only, but a hybrid review in which the court 'must appraise all the
evidence as to the credibility of the witnesses, the probative character of the evidence, and
the weight thereof.' " Lies v. Ohio Veterinary Med. Bd., 2 Ohio App. 3d 204, 207 (1st
Dist.1981), quoting Andrews v. Bd. of Liquor Control, 164 Ohio St. 275, 280 (1955).
{¶ 9} The standard of review for a court of appeals in an administrative appeal is
more limited; the court of appeals must determine whether the court of common pleas
abused its discretion. Pons at 621. An abuse of discretion occurs when a decision is
unreasonable, arbitrary, or unconscionable. Blakemore v. Blakemore, 5 Ohio St. 3d 217,
219 (1983). However, on questions of whether the agency or board's decision was in
accordance with law, we exercise plenary review. Gralewski v. Ohio Bur. of Workers'
Comp., 167 Ohio App. 3d 468, 2006-Ohio-1529, ¶ 17.
III. Second Assignment of Error – Hearing and Discovery
{¶ 10} We begin with Sims's second assignment of error, in which he argues that
the hearing examiner erred by denying a hearing on the issue of attorney fees and costs
and by denying the request for discovery of Nissan's attorney fees. We will consider each
of these issues separately.
{¶ 11} Sims argues that the hearing examiner erred by denying a hearing on the
issue of attorney fees and costs before awarding less than the amount requested. The
statute authorizing attorney fees for successful protesting motor vehicle dealers, R.C.
4517.65, is silent as to whether a hearing is required before the Board may award attorney
fees and costs. There also does not appear to be any case law holding that the Board must
conduct a hearing prior to awarding attorney fees and costs under R.C. 4517.65(C).
{¶ 12} A similar statute under the Ohio Administrative Procedure Act providing for
recovery of attorney fees by prevailing parties in administrative hearings is also silent as
to whether a hearing must be conducted before fees may be awarded. See R.C. 119.092.
Although noting that it may be good practice to conduct an evidentiary hearing on a
motion for attorney fees under that statute, the Supreme Court of Ohio has held that a
hearing is not required because the statute merely requires that the referee or examiner
No. 15AP-19 6
who conducted the hearing must review the fee request. State ex rel. Auglaize Mercer
Community Action Comm., Inc. v. Ohio Civ. Rights Comm., 73 Ohio St. 3d 723, 726
(1995). By contrast, R.C. 2323.51, which permits a court to award attorney fees as a
sanction for frivolous conduct, expressly provides that the court must conduct a hearing
before making such an award. R.C. 2323.51(B)(2)(c). See also Donaldson v. Todd, 174
Ohio App. 3d 117, 2007-Ohio-6504, ¶ 9 (10th Dist.) (noting that a trial court may deny a
motion for attorney fees as a sanction without conducting a hearing if it concludes that
there is no basis for the motion but that it must conduct a hearing on motions that
demonstrate arguable merit).
{¶ 13} Sims does not appear to argue that a hearing must always be conducted
when attorney fees and costs are sought under R.C. 4517.65(C). Rather, Sims asserts that
if the hearing examiner was going to award less than he requested, she was required to
conduct an evidentiary hearing. Sims claims that the failure to conduct a hearing violated
his constitutional right to due process. The court below concluded that Sims waived the
opportunity for a hearing because he did not unconditionally request one. After reviewing
the record, we conclude that the lower court did not err in reaching this conclusion.
{¶ 14} "The fundamental requirement of procedural due process is notice and
hearing, that is, an opportunity to be heard." Korn v. Ohio State Med. Bd., 61 Ohio App. 3d
677, 684 (10th Dist.1988), citing Luff v. State, 117 Ohio St. 2d 102 (1927). " 'An elementary
and fundamental requirement of due process in any proceeding which is to be accorded
finality is notice reasonably calculated, under all the circumstances, to apprise interested
parties of the pendency of the action and afford them an opportunity to present their
objections.' " Althof v. Ohio State Bd. of Psychology, 10th Dist. No. 05AP-1169, 2007-
Ohio-1010, ¶ 19, quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314
(1950).
{¶ 15} In this case, the hearing examiner conducted a telephone status conference
on February 4, 2014. The hearing examiner's final order indicates that, during the
telephone conference, the parties agreed to evaluation of the issue of attorney fees and
costs through submission of affidavits. Pursuant to an order issued by the hearing
examiner following the telephone conference, Sims submitted an affidavit from his
attorney in support of the request for fees and costs. The caption of that filing included the
No. 15AP-19 7
phrase "Hearing Requested if Objection by Nissan or Reduction to Fees and Costs by
Board." (Feb. 20, 2014 Notice of Filing Affidavit.) Within the notice of filing the affidavit,
Sims asserted that, if Nissan objected to the amount of attorney fees and costs, or if the
hearing examiner contemplated a reduction in the award, a hearing was required. After
Nissan filed a brief in opposition to the request for attorney fees and costs, Sims filed a
reply in support of the request. Once again, this filing contained a caption indicating
"Discovery and Hearing Requested if Total Fees and Costs Not Awarded by Board" and
asserted that Sims should be given the opportunity to present further evidence at a
hearing if the hearing examiner recommended a reduction in the amount of attorney fees
and costs. (Mar. 24, 2014 Reply in Support.) Notably, the hearing examiner's decision
indicates that, during a telephone status conference on March 21, 2014, she presented the
parties with an opportunity to submit an unconditional request for a hearing and that
none of the parties did so.
{¶ 16} The record indicates that Sims was not denied an opportunity to be heard.
At best, Sims only made a conditional request for a hearing, arguing that, if an
unfavorable outcome was forthcoming, he should be provided with the opportunity to
present additional evidence and testimony in support of the request for attorney fees,
expert fees, and costs. In effect, this would require the hearing examiner to reach a
preliminary conclusion and, if it was unfavorable to Sims, afford him another opportunity
to persuade her. Sims fails to cite any precedent holding that due process requires such a
contingency. If Sims believed a hearing was necessary, he should have made an
unconditional request. Thus, the lower court did not err by holding that Sims waived the
right to request a hearing. See State ex rel. Scioto Cty. Child Support Enforcement
Agency v. Gardner, 113 Ohio App. 3d 46, 52 (4th Dist.1996) (holding that party waived the
right to a hearing by making a conditional request indicating that another hearing should
be conducted if particular issues were not clear to the court).
{¶ 17} Sims further argues that the hearing examiner erred by denying the request
for discovery of Nissan's attorney fee rates and itemized time records. Sims argues that
Nissan's attorney fees were relevant to the determination of the reasonableness of Sims's
request for attorney fees. The court below determined that Sims waived this issue because
the discovery requests were contingent on the hearing examiner conducting a hearing.
No. 15AP-19 8
{¶ 18} Under R.C. 4517.57(B), parties may engage in discovery prior to a hearing
before the Board in accordance with the civil rules. Rulings on discovery are within the
discretion of the administrative tribunal. Little Forest Med. Ctr. of Akron v. Ohio Civ.
Rights Comm., 61 Ohio St. 3d 607, 617 (1991).
{¶ 19} In this case, the hearing examiner's order of February 4, 2014, indicated
that Sims's request for discovery of Nissan's attorney fees was overruled but that it could
be reconsidered at a subsequent status conference when the hearing examiner would
determine any remaining discovery issues. In his subsequent filings, Sims asserted that
discovery of Nissan's attorney fees was required if the hearing examiner was going to
award less than the requested amount of attorney fees and costs. Thus, similar to the
hearing request discussed above, it appears that Sims only made a conditional discovery
request. In addition, the lower court concluded that Sims failed to establish the relevance
of the requested discovery. As discussed more fully herein, the hearing examiner's
reductions to the amount of attorney fees, expert fees, and costs awarded were based in
part on specific deficiencies in the evidence presented. Sims argues that discovery of
Nissan's attorney time and hourly rates would be relevant to the determination of the
reasonableness of Sims's attorney fees and costs; however, Sims has failed to demonstrate
how it would be relevant to the specific deficiencies cited by the hearing examiner. Under
these circumstances, the lower court did not err by determining that Sims waived this
issue by making a conditional request for discovery and failed to demonstrate the
relevance of the discovery sought.
{¶ 20} Accordingly we overrule Sims's second assignment of error.
IV. First Assignment of Error – Award of "Uncontroverted" Attorney Fees
{¶ 21} In his first assignment of error, Sims argues that the Board erred by
ignoring controlling case law providing that an attorney's recapitulation of time and
expenses through an affidavit is prima facie evidence of the amount to be awarded. Sims
asserts that Nissan failed to provide any substantive or material evidence in opposition to
the DeVito affidavit. Based on this assertion, Sims appears to argue that the hearing
examiner was required to award the full amount of attorney costs and fees requested. The
lower court rejected this argument, holding that even an uncontroverted claim for fees
and costs must still be reviewed by the tribunal issuing the award.
No. 15AP-19 9
{¶ 22} As this court noted in Sims, when an attorney's recapitulation of fees is
accepted as evidence and is uncontradicted by opposing counsel, it is sufficient to
maintain a motion for attorney fees. Sims at ¶ 48, citing Earl Evans Chevrolet, Inc. v.
Gen. Motors Corp., 74 Ohio App. 3d 266, 286 (11th Dist.1991). However, the fact that an
affidavit providing a recapitulation of fees is sufficient to support the motion does not
mean that the tribunal is restricted to simply awarding the amount set forth in the
affidavit. The Sims decision explained that, in determining a fee award, the tribunal must
compute the "lodestar" figure—i.e., the number of hours expended by a reasonable hourly
rate. Id. at ¶ 46, citing Bittner v. Tri-County Toyota, Inc., 58 Ohio St. 3d 143, 145 (1991).
Further, once the tribunal has calculated the lodestar figure, it may modify the calculation
in accordance with the factors set forth in Prof.Cond.R. 1.5(a). Id. Accordingly, the lower
court did not abuse its discretion by rejecting this argument from Sims.
{¶ 23} Accordingly, we overrule Sims's first assignment of error.
V. Third Assignment of Error – Determination of Reasonable Attorney Fees,
Expert Fees, and Costs
{¶ 24} In the third assignment of error, Sims asserts that the Board erred by
awarding less in attorney fees, expert fees, and costs than requested. Sims reiterates many
of the arguments raised in the first assignment of error, again asserting that the evidence
in support of the motion for fees and costs was uncontroverted and that the Board was
therefore required to award the amount requested by appellants. Sims raised this
argument in the common pleas court, and the court concluded that there was reliable,
probative, and substantial evidence to support the Board's award of attorney fees, expert
fees, and costs.
{¶ 25} As explained in our prior decision, when a tribunal is empowered by statute
to award attorney fees, the amount of fees is within the sound discretion of the tribunal.
Sims at ¶ 46, citing Brooks v. Hurst Buick-Pontiac-Olds-GMC, Inc., 23 Ohio App. 3d 85,
91 (12th Dist.1985). That discretion is not unfettered, however. "The tribunal must base
its determination of reasonable attorney fees upon the actual services performed, and
there must be some evidence that supports the tribunal's determination." Id. at ¶ 47. An
application for attorney fees must contain sufficient documentation of the hours worked
and the work performed to allow a determination regarding the merits of the application.
No. 15AP-19 10
Id. The party seeking attorney fees bears the burden of proving that the time was fairly
and properly used and the reasonableness of the time expended. Id. The Board also has
authority to award expert fees and litigation costs. Id. at ¶ 39. The Board's discretion to
reimburse a protestant for every expense involved in a case is also not unlimited; items
proposed as costs must be given "careful scrutiny," and the Board must consider the
reasonableness of expert fees and costs. Id. at ¶ 40.
{¶ 26} In an appeal from a Board order ruling on a request for attorney fees, expert
fees, and costs, the common pleas court, acting as an appellate court, must determine
whether the order is supported by reliable, probative, and substantial evidence. Id. at
¶ 49, citing R.C. 119.12. The lower court in this case concluded that there was reliable,
probative, and substantial evidence supporting the award of costs and fees and that the
Board did not abuse its discretionary authority in making the award. The court noted that
Nissan presented affidavits and arguments refuting the necessity and reasonableness of
some of the amounts included in Sims's evidence and the reasonableness of the hourly fee
charged by DeVito and that certain entries from the bills submitted by DeVito supported
the reductions made by the hearing examiner. Our review, however, is limited to
determining whether the common pleas court abused its discretion in determining
whether the award was supported by reliable, probative, and substantial evidence. Id. at
¶ 8.
A. Determination of Reasonable Hourly Rate for Attorney Fees
{¶ 27} The hearing examiner analyzed Sims's request for attorney fees by
considering the reasonableness of the hourly rates charged and the number of hours
expended, as well as whether any adjustment was appropriate under the Prof.Cond.R.
1.5(a) factors. With respect to hourly rates, DeVito asserted that he charged between $550
and $600 per hour in 2011, between $600 and $650 per hour in 2012, between $650 and
$700 per hour in 2013, and between $700 and $900 per hour in 2014. He also asserted
that work by associates in his law firm was billed at rates between $300 and $400 per
hour during 2011 and 2012.
{¶ 28} The hearing examiner noted that the Niehaus affidavit submitted by Nissan
asserted that prevailing rates during that period for attorneys representing Ohio
automotive dealers in disputes with manufacturers were in the range of $250 to $500 per
No. 15AP-19 11
hour. The hearing examiner also noted that, in a prior affidavit made in 2011, Sims's
counsel attested that standard billing rates for attorneys in his law firm ranged between
$200 and $500 per hour and that Nissan had not objected to those hourly rates. Based on
that evidence, the hearing examiner concluded that rates in excess of $500 per hour were
unreasonable and that $500 per hour was a reasonable rate for work performed by
DeVito. The hearing examiner further concluded that the DeVito affidavit failed to provide
sufficient information regarding the qualifications of the associate attorneys who worked
on the case and that she was unable to determine a reasonable hourly rate for their work.
Thus, it appears that the hearing examiner relied on the Niehaus affidavit and the DeVito
affidavit in assessing a reasonable hourly rate for the work performed. The common pleas
court did not abuse its discretion in determining that this portion of the award was
supported by reliable, probative, and substantial evidence.
B. Determination of Reasonable Number of Attorney Hours
{¶ 29} With respect to the number of hours expended, the DeVito affidavit
included itemized annual billing records detailing the hours worked on the case each day
and descriptions of the tasks performed during that time. In response, Nissan presented
an affidavit from one of its attorneys asserting that certain entries on the billing records
from DeVito were associated with frivolous or premature motions.
{¶ 30} In her decision, the hearing examiner asserted that she undertook an
independent review of the itemized time set forth in the records attached to the DeVito
affidavit. She noted that many of the entries on the bills involved "block billing," with
multiple tasks described in a single paragraph followed by the total amount of time spent
on all tasks, and concluded that these entries did not reflect how much time was spent on
each task. The hearing examiner concluded that this made it difficult to assess the
reasonableness and necessity of the amount of time spent on each task. The hearing
examiner specifically cited items indicating that DeVito personally performed work such
as conversion of digital file formats, correction of document formatting, and correction of
grammatical errors at a rate of $500 per hour. She also noted certain entries that included
duplicated or redacted charges. Based on her review of the itemized billing statements,
the hearing examiner concluded that Sims's attorney fee request included excessive billing
surpassing what would be necessary under typical circumstances. As a result of this
No. 15AP-19 12
conclusion, the hearing examiner reduced the number of hours for which Sims would
receive attorney fees.
{¶ 31} For the year 2011, the DeVito affidavit and invoices attached to the affidavit
indicated that DeVito and attorneys with his firm performed 94.93 hours of work on the
termination protest and associated appeals.1 The hearing examiner concluded that 30
hours of attorney time would have been reasonable for that year, effectively reducing
Sims's request by 68 percent. The hearing examiner identified a total of 64.93 hours that
she was deducting from the 2011 invoices. The decision included an itemized list of
deductions amounting to 17.06 hours of attorney time. The itemized deductions included
time billed for the associate attorneys whose qualifications were insufficiently set forth in
the DeVito affidavit, time spent on non-compensable claims, and time entries that were
redacted or duplicative. The hearing examiner further deducted an additional 47.87 hours
"for excessive billing far surpassing what is necessary under typical circumstances and
pursuant to the downward adjustments warranted by [the hearing examiner's
Prof.Cond.R. 1.5 analysis]." (Decision on Remand, 13.)
{¶ 32} Similarly, for the year 2012, the DeVito affidavit and attached invoices
indicated that DeVito and attorneys with his law firm performed 392.77 hours of work on
the termination protest and associated appeals. The hearing examiner concluded that 100
hours of attorney time would have been reasonable, or 74 percent less than indicated in
the DeVito affidavit. Of the 292.77 hours deducted, the hearing examiner identified 26.25
hours of itemized deductions, including time labeled "no charge," time billed for an
associate attorney whose qualifications were insufficiently set forth in the DeVito affidavit,
time spent on non-compensable claims, and time entries that were redacted or
duplicative. The hearing examiner also deducted an additional 266.52 hours "for
excessive billing far surpassing what is necessary under typical circumstances and
pursuant to the downward adjustments warranted by [the hearing examiner's
Prof.Cond.R. 1.5 analysis]." (Decision on Remand, 15.)
1 We note that there appears to be a discrepancy between the text of the DeVito affidavit and the attached
invoices. In the affidavit, DeVito asserts that his firm performed 94.63 hours of work on the matter in 2011.
(DeVito Affidavit, ¶ 7.) The 2011 invoice attached to the affidavit indicates that attorneys associated with
DeVito's law firm performed 94.93 hours of work on the matter in 2011. Because the hearing examiner
appears to have used the latter number, we will do the same.
No. 15AP-19 13
{¶ 33} For the year 2013, the DeVito affidavit and attached invoices indicated that
DeVito and attorneys with his law firm performed 148.29 hours of work on the
termination protest and associated appeals. The hearing examiner concluded that 50
hours of attorney time would have been reasonable, or 66 percent less than indicated in
the DeVito affidavit. The hearing examiner deducted a total of 98.26 hours from the
attorney time requested for 2013. The deductions included 14.50 hours of itemized
deductions, including time entries that were redacted or duplicative, time entries for
general business representation, and time entries for correcting formatting and syntax in
the briefs. The hearing examiner also deducted an additional 83.76 hours "for excessive
billing far surpassing what is necessary under typical circumstances and pursuant to the
downward adjustments warranted by [the hearing examiner's Prof.Cond.R. 1.5 analysis]."
(Decision on Remand, 17.)
{¶ 34} The Board's award of attorney fees must be based on the actual services
performed, and there must be some evidence that supports its determination of the
amount of attorney fees awarded. Sims at ¶ 47. With respect to the itemized deductions
from the DeVito invoices, the hearing examiner clearly identified the evidence supporting
her determination by citing specific time entries or specific types of time for which she
would not award attorney fees. These portions of the hearing examiner's decision were
clearly supported by reliable, probative, and substantial evidence, and the common pleas
court did not abuse its discretion by concluding that the record supported them.
{¶ 35} The majority of the hours deducted by the hearing examiner, by contrast,
were classified within the broad description of "excessive billing surpassing what is
necessary under typical circumstances" and pursuant to the hearing examiner's
Prof.Cond.R. 1.5 analysis. It is appropriate for the Board to exclude unreasonably
expended hours from an attorney fee award. See, e.g., Pack v. Hilock Auto Sales, 10th
Dist. No. 12AP-48, 2012-Ohio-4076, ¶ 18 (in a case addressing attorney fees under the
Consumer Sales Practices Act, holding that the trial court should exclude unreasonably
expended hours and defining unreasonably expended hours as "those that are excessive in
relation to the work done, are duplicative or redundant, or simply unnecessary").
Nevertheless, in order to determine whether the trial court abused its discretion in
affirming these deductions, we must consider whether the hearing examiner's explanation
No. 15AP-19 14
of these deductions for excessive billing was sufficient to allow the trial court to determine
whether the deductions were based on reliable, probative, and substantial evidence.
{¶ 36} The parties did not present case law addressing the issue of what constitutes
sufficient explanation or justification for award or reduction of attorney fees pursuant to
R.C. 4517.65(C) when the amount is contested, and our research has not revealed any case
law directly on point. Therefore, we have looked to other statutes providing for the award
of attorney fees. In other contexts, courts have noted the need for a sufficient explanation
of the basis for a fee award. Thus, the Supreme Court of Ohio has held that, when making
a fee award under the Consumer Sales Practices Act, "the trial court must state the basis
for the fee determination." Bittner v. Tri-County Toyota, Inc., 58 Ohio St. 3d 143, 146
(1991). "Absent such a statement, it is not possible for an appellate court to conduct a
meaningful review." Id. Similarly, this court has stated that, "[a]though [a] trial court
enjoys broad discretion in setting the amount of attorney fees, it must state the basis for
the fee determination. Without such a statement, an appellate court cannot conduct a
meaningful review." Pack v. Hilock Auto Sales, 10th Dist. No. 12AP-48, 2012-Ohio-4076,
¶ 16, citing Bittner at 146. Similarly, under the statute providing for an award of
reasonable attorney fees when a landlord fails to comply with the statutory requirements
governing the deduction or return of tenant security deposits, this court has noted that an
explanation is necessary to determine the appropriateness of the attorney fee award.
Ridenour v. Dunn, 10th Dist. No. 03AP-611, 2004-Ohio-3375, ¶ 10-12. See also
Whitestone Co. v. Stittsworth, 10th Dist. No. 06AP-371, 2007-Ohio-233, ¶ 62 ("As in
Ridenour, we cannot find the attorney fee award, on its face, to be an abuse of the trial
court's discretion; however, it is sufficiently disproportionate to the damages obtained to
raise a question as to reasonableness under R.C. 5321.16(C). Indeed, we are unable to
determine which of the DR 2-106(B) factors, if any, the trial court applied.").
{¶ 37} However, the absence of a detailed explanation will not necessarily require
reversal of an attorney fee award where there is no showing of material prejudice. See
Action Group, Inc. v. NanoStatics Corp., 10th Dist. No. 13AP-72, 2013-Ohio-5542, ¶ 73
("We impose this requirement [of an explanation for why an attorney fee award was
reasonable] to ensure our ability to meaningfully review the trial court's attorney-fee
calculation. We nevertheless conclude that the absence of an explanation does not
No. 15AP-19 15
warrant reversal in this case. A reviewing court will not disturb a judgment unless the
error contained within is materially prejudicial to the complaining party.").
{¶ 38} In her decision, prior to discussing the specific requests for a lodestar
multiplier, reasonableness of rates charged, reasonableness of hours expended, and
expert fees and costs, the hearing examiner observed that Prof.Cond.R. 1.5 addresses legal
fees and that, although it is a disciplinary rule, it provides guidance in determining the
reasonableness of attorney fees. The hearing examiner quoted Prof.Cond.R. 1.5, including
factors (1) through (8) and the instruction that " '[a] fee is clearly excessive when, after a
review of the facts, a lawyer of ordinary prudence would be left with a definite and firm
conviction that the fee is in excess of a reasonable fee.' " (Emphasis added.) (Decision on
Remand, 4.) The hearing examiner then proceeded to conduct a Prof.Cond.R. 1.5 factor-
by-factor examination of Sims's request for a lodestar multiplier. (Decision on Remand,
7-10.) The hearing examiner's analysis of the reasonableness of rates and hours expended
and expert fees and costs, however, was more general and did not include a similar factor-
by-factor examination of Prof.Cond.R. 1.5. (Decision on Remand, 1-19.) Therefore, the
significant deductions attributed to "excessive billing far surpassing what is necessary
under typical circumstances and pursuant to the downward adjustments warranted by
[the hearing examiner's Prof.Cond.R. 1.5 analysis]" must be considered to determine
whether the general discussion was sufficient to allow the trial court to determine whether
the deductions were based on reliable, probative, and substantial evidence. (Decision on
Remand, 13.)
{¶ 39} As noted previously, the hearing examiner appears to have undertaken a
thorough review of the evidence before her, including the affidavits from Sims's counsel
and the affidavits submitted by Nissan. Futhermore, although the hearing examiner did
not conduct a factor-by-factor analysis of Prof.Cond.R. 1.5, her general analysis points to
several specific factors. For instance, regarding the deduction for 2011, the hearing
examiner generally appears to discuss Prof.Cond.R. 1.5(1): the time and labor required,
the novelty and difficulty of the questions involved, and the skill requisite to perform the
legal service properly. The hearing examiner stated as follows:
During [the seven months itemized on Exhibit 1], there were
no hearings or oral arguments to prepare for or attend, no
appellate briefs to draft, and no travel time; instead Protestant
No. 15AP-19 16
drafted and filed objections to an order, prepared an affidavit
and reply in support of attorneys fees, and filed a motion to
compel and reply in support. The remaining time is, for the
most part, listed as communications with the protestant, the
Board and opposing counsel. It is not reasonable in any sense
of the word to charge $46,614.95 for the drafting and filing of
5-6 documents including research, and engaging in
communications with the parties over a seven month period.
(Decision on Remand, 12-13.)
{¶ 40} Regarding the deduction for 2012, the hearing examiner generally appears
to discuss Prof.Cond.R. 1.5(4): the amount involved and the results obtained. The hearing
examiner stated:
For the 2012 time, Respondent specifically argues for the
reduction of the fees charged against them pertaining to
Protestant's unsuccessful Motion to Dismiss and Motion for
Summary Judgment in the appeal before the Franklin County
Court of Common Pleas. This argument has merit because it
is not appropriate to award fees to a party who purposefully or
unsuccessfully runs up the fee. On the other hand, there is no
rule of law limiting a prevailing party to receive only fees
associated with victories.
(Decision on Remand, 14.) The hearing examiner generally appears to discuss
Prof.Cond.R. 1.5(1): the time and labor required, the novelty and difficulty of the
questions involved, and the skill requisite to perform the legal service properly, as well as
Prof.Cond.R. 1.5(7): the experience, reputation, and ability of the lawyer performing the
services. The hearing examiner stated: "What is more troubling is the fact that more than
392 attorney hours were expended during the briefing portion of the appeals. This is an
extremely high number of hours by an attorney who claims to be well-versed in new
motor vehicle dealer-manufacturer litigation." (Decision on Remand, 14.) In addition, the
hearing examiner cited the standard from Prof.Cond.R. 1.5 when she concluded that she is
left "with a definite and firm conviction that the fees charged by the Protestant's counsel
for the 2012 calendar year were in excess of a reasonable fee." (Decision on Remand, 14.)
{¶ 41} Regarding the deduction for 2013, once again, the hearing examiner
generally appears to discuss Prof.Cond.R. 1.5(1): the time and labor required, the novelty
and difficulty of the questions involved, and the skill requisite to perform the legal service
properly. The hearing examiner stated: "According to Exhibits 3 and 5, counsel spent
No. 15AP-19 17
more than 45 hours preparing for and attending the oral argument of the appeal before
the Tenth District Court of Appeals. More than a week of full-time work to prepare for
and participate in, a routine oral argument was unwarranted and unnecessary." (Decision
on Remand, 16.)
{¶ 42} After reviewing the hearing examiner's decision, and taking into
consideration the general discussion of factors when considering the reasonableness of
fees, together with the specific discussion of Prof.Cond.R. 1.5 factors at the beginning of
her decision, we cannot conclude that the lower court abused its discretion by finding that
this portion of the hearing examiner's decision was supported by reliable, probative, and
substantial evidence. Furthermore, as previously discussed, although an attorney's
explanation of his fees may constitute sufficient evidence to support a request for fees, the
board was not required to award the amount requested by Sims. Under these
circumstances, we cannot find that it was unreasonable, arbitrary, or unconscionable for
the lower court to affirm this portion of the Board's order.
C. Determination of Lodestar Multiplier
{¶ 43} The hearing examiner also rejected Sims's request for a 50-percent upward
lodestar multiplier based on the factors set forth in Prof.Cond.R. 1.5(a). The examiner
considered each of the eight factors set forth under the rule in light of the evidence
presented by Sims, concluding that five factors were neutral, three warranted a downward
adjustment, and one was not applicable under the circumstances. The hearing examiner
reached these conclusions by reviewing this court's prior decision, the DeVito affidavit
and attached invoices, and the Niehaus affidavit. Thus, this portion of the decision was
supported by reliable, probative, and substantial evidence.
D. Determination of Reasonable Expert Fees and Litigation Costs
{¶ 44} The hearing examiner awarded a reduced amount of expert fees and other
costs. With respect to expert fees, the hearing examiner noted Nissan's argument that
there were no invoices from expert witnesses, evidence of payments to experts, or
evidence of expert testimony or expert reports produced during the relevant time period.
However, the hearing examiner concluded that there were time entries on DeVito's billing
statements reflecting communications with experts. In the absence of statements or other
evidence reflecting actual payments to experts, the hearing examiner calculated the
No. 15AP-19 18
amount of time spent by DeVito communicating or meeting with experts; the hearing
examiner then multiplied that time by a rate of $500 per hour, which she concluded was a
reasonable rate because it was the same hourly rate applied for DeVito. The hearing
examiner concluded that the DeVito affidavit provided insufficient evidence to support
the claim for travel expenses in July and October 2010. Finally, the hearing examiner
made minor reductions to the costs requested by Sims for the period from June 1, 2011,
through January 31, 2014, because of redactions and duplications she identified in the
billing statements. The common pleas court did not abuse its discretion by concluding
that this portion of the award was supported by reliable, probative, and substantial
evidence.
{¶ 45} After reviewing the hearing examiner's decision, we find that the trial court
did not abuse its discretion in finding that reliable, probative, and substantial evidence
supported the award of attorney fees, expert fees, and costs, including the itemized
deductions and the general deductions based on "excessive billing far surpassing what is
necessary under typical circumstances and pursuant to the downward adjustments
warranted by [the hearing examiner's Prof.Cond.R. 1.5 analysis]."
{¶ 46} Accordingly, we overrule Sims's third assignment of error.
VI. Conclusion
{¶ 47} For the foregoing reasons, we overrule all three of Sims's assignments of
error and affirm the judgment of the Franklin County Court of Common Pleas.
Judgment affirmed.
SADLER and BRUNNER, JJ., concur.
__________________