Proving Attorney’s Fees Requires Some Proof

December 4, 2013 § 3 Comments

Shain (husband) and Dana (wife) Speights submitted an irreconcilable differences divorce by consent. After a hearing, the chancellor awarded Dana custody, ordered Shain to pay child support, and awarded Dana $2,500 in attorney’s fees, among other relief.

Shain appealed, and one of his grounds was the award of attorney’s fees.

Judge James, for the COA majority, in an opinion rendered November 5, 2013, set out the standard:

¶15. Next, Shain argues that the chancellor erred in awarding $2,500 in attorney’s fees to Dana. “The award of attorney[’s] fees in divorce cases is left to the discretion of the chancellor, assuming he follows the appropriate standards.” Creekmore v. Creekmore, 651 So. 2d 513, 520 (Miss. 1995) (citing Adams v. Adams, 591 So. 2d 431, 435 (Miss. 1991)). “Attorney[’s] fees are not generally awarded unless the party requesting such fees has established the inability to pay.” Id. (citing Dunn v. Dunn, 609 So. 2d 1277, 1287 (Miss. 1992)) …

We’ve talked here before about the standard that the trial court is required to apply in order to justify an award of attorney’s fees. We’ve also addressed the steps you need to take to prove attorney’s fees. It’s not complicated. It just requires a little preparation and documentation.

In Speights, though, the record was bereft of even the most elemental proof to support the award. As Judge James put it:

¶16. Although Dana offered testimony regarding her lack of income, she did not offer any evidence of the amount of attorney’s fees she incurred. The record shows that Dana’s attorney briefly mentioned her intention to offer evidence of attorney’s fees at the conclusion of trial, but she never did so. At no time during trial did Dana or her attorney provide the chancellor with evidence of attorney’s fees. Thus, it is unclear to this Court how the chancellor arrived at a figure of $2,500. Further, there is no financial statement from Dana in the record to substantiate her inability to pay.

¶17. “An award of attorney’s fees should be ‘fair and should only compensate for services actually rendered after it has been determined that the legal work charged for was reasonably required and necessary.’” Jordan, 105 So. 3d at 1135 (¶20) (quoting Dunn, 609 So. 2d at 1286)). It has long been the practice of trial courts to apply the factors in McKee v. Mckee, 418 So. 2d 764, 767 (Miss. 1982), in awarding attorney’s fees. Although it is not necessarily reversible error for the chancellor not to make an on-the-record analysis of the McKee factors [footnote omitted], without any evidence of fees in the record, we have absolutely no way of determining whether the chancellor’s award was reasonable.

A point raised in Judge Carlton’s dissent on the attorney’s fee issue is that the trial judge is empowered by MCA 9-1-41 to take judicial notice of a reasonable attorney’s fee, so that the chancellor’s decision should not be reversed. That is a code section that I called to your attention in a prior post.

The majority, however, rejected that approach. The majority opinion said, beginning in ¶18:

 … The dissenting opinion also relies on Mississippi Code Annotated section 9-1-41 (Rev. 2002), which states:

In any action in which a court is authorized to award reasonable attorneys’ fees, the court shall not require the parties seeking such fees to put on proof as to the reasonableness of the amount sought, but shall make the award based on the information already before it and the court’s own opinion based on experience and observation; provided however, a party may, in its discretion, place before the court other evidence as to the reasonableness of the amount of the award, and the court may consider such evidence in making the award.

¶19. In the present case, the chancellor made insufficient findings and there is insufficient proof in the record for this court to determine whether the chancellor’s findings were fair and reasonable. Although the statute gives the court broad discretion, the award of attorney’s fees cannot be upheld by this court unless the record supports the award. An award of attorney’s fees may be sufficient in a simple matter before the court, where the award is based on the court’s experience and observation. However, in a case of this nature, where there are many billable hours that the court is unable to observe or lacks knowledge of, it is incumbent upon the party requesting fees to place before the court evidence as to the reasonabless of the amount of the award, so that the record as a whole can support the award of attorney’s fees. Because the chancellor’s award of $2,500 is not supported by the evidence, we reverse and remand this portion of the judgment for a proper assessment of attorney’s fees.

So here are a few points to walk away with:

  • Notice that the statute only dispenses with proof of reasonableness, not with all proof whatsoever. In other words, once you have put proof into the record that you have expended 21 hours, and that your rate is $200 an hour, then the court may impose its own opinion as to whether it is reasonable. So proof of what you have done is essential to get you to the reasonableness issue.
  • Why not take a few extra minutes and put on proof of the McKee factors? It’s not that hard. You can do it yourself, and you can even carry a script with you to the witness stand if you need it.   
  • Remember: in a divorce case, you must prove your client’s inability to pay before the chancellor can even get near the issue of reasonableness. That would seem to require, at a scant minimum, a Rule 8.05 financial statement. Your client’s naked assertion that she can’t afford her attorney’s fees is most likely not going to cut it on appeal, and maybe not at trial.

This is yet another case where the chancellor did the best he could with the proof he had. A little more preparation and attention to detail, and this award of attorney’s fees would have been bulletproof on appeal.

ATTORNEY’S FEES AND ABILITY TO PAY POST-DIVORCE

May 16, 2013 § 1 Comment

It’s a well-settled principle of Mississippi law that a prerequisite to an award of attorney’s fees in almost all non-contempt cases is proof that the claiming party does not have the ability to pay his or her own attorney’s fees. It’s something we’ve posted about here before.

What about where the spouse claiming an award of attorney’s fees has a present or pre-existing inability to pay, but the equitable distribution award makes adequate provision, leaving no discrepancy?

The COA addressed that very question in Jones v. Jones, rendered April 30, 2013. In reversing the chancellor’s award of attorney’s fees and expert-witness expenses, the COA, per Judge Maxwell, stated:

¶37. We also reverse the award of $18,250 for attorney’s fees and expert-witness expenses. “The question of attorney’s fees in a divorce action is a matter largely entrusted to the sound discretion of the trial court.” Watson v. Watson, 724 So. 2d 350, 356-57 (¶29) (Miss. 1998) (quoting Ferguson, 639 So. 2d at 937). But when “a party is financially able to pay her attorney, an award of attorney’s fees is not appropriate.” Id.

¶38. In Watson, though “reluctant to disturb a chancellor’s discretionary determination whether or not to award attorney[’s] fees,” the supreme court reversed and rendered an award of attorney’s fees because, “with respect to the financial position of the parties after the divorce decree, it [was] evident that [the wife was] financially able to pay for her own attorney’s fees.” Id. at 357 (¶30) (emphasis added); see also Pacheco v. Pacheco, 770 So. 2d 1007, 1012-13 (¶¶26-28) (Miss. Ct. App. 2000) (affirming denial of attorney’s fees because wife’s property award enabled her to pay her attorney’s fees). Here, in finding Jane unable to pay, the chancellor did not consider Jane’s financial position in light of the divorce decree and property division. Jane was awarded almost two hundred thousand dollars in cash, secured by a lien on John’s real property and businesses, a home in Oxford free and clear of any liens, and dividend-paying bank stock, as well as multiple retirement accounts. As in Watson, under the circumstances, we find the award of attorney’s fees and expert-witness expenses to be an abuse of discretion. We reverse and render this portion of the judgment.

As I have said here before, one would think that attorneys would be super-zealous in making an airtight record on attorneys fees, but in my experience the proof is quite often slap-dash and incomplete.

If you want to make your award of attorneys fees bullet-proof, make sure that there is proof in the record to support a finding by the chancellor that, even with the equitable distribution, your client has an inability to pay. Is the equitable division readily liquidable, or is the bulk of it tied up in equity? Will liquidation to pay attorney fees have adverse tax consequences, as with an IRA? Will payment of attorney fees use up most, or all, of your client’s cash? Will it take months or even years to collect all of the equitable distribution?  All of these are factors that the judge will consider if you make sure to put supporting proof in the record. With that kind of proof in this case, Jane might have had at least a partial, viable claim for attorney fees that would have survived on appeal.

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