O'Connell v. Wynn Las Vegas, LLC
O'Connell v. Wynn Las Vegas, LLC
Opinion of the Court
*666Yvonne O'Connell sued Wynn Las Vegas, LLC, for negligence after she was injured when she slipped and fell on the resort's property.
O'Connell subsequently sought an attorney fees award under NRCP 68, which allows a party to seek attorney fees when the final judgment is more favorable than her rejected offer of judgment. She requested $96,000 in attorney fees, which she calculated as 40 percent of the reduced judgment amount based on the 40-percent contingency fee agreement with her attorneys. The district court denied her request. The court did not award O'Connell any attorney fees because, in part, O'Connell did not submit hourly billing records of the work performed by her counsel to show the requested fee was reasonable. The court further found that the other factors set forth in Beattie v. Thomas,
This case asks us to examine if a lawyer, who represents a client on a contingency fee basis, must provide proof of hourly billing records before he or she can be awarded attorney fees that are otherwise allowed by agreement, rule, or statute. We conclude that district courts cannot deny attorney fees because an attorney, who represents a client on a contingency fee basis, does not submit hourly billing records. The district court here relied primarily on the lack of hourly billing records in evaluating the reasonableness of O'Connell's application for attorney fees, without recognizing that attorney fees can be awarded when they are based upon contingency fee agreements. And because we further determine that the district court improperly analyzed certain of the remaining Beattie factors, we conclude the court abused its discretion in denying her request. Consequently, we reverse the district court's denial of O'Connell's request for attorney fees and remand for a full hearing on O'Connell's request.
FACTS AND PROCEDURAL HISTORY
On February 8, 2010, O'Connell slipped and fell on a liquid substance as she was walking through the front atrium of the Wynn resort. Two days later, she went to an urgent care facility seeking treatment for her pain from the fall. She continued to see a series of doctors for pain and injuries related to the incident. Two years after her fall, O'Connell sued Wynn for negligence. Discovery progressed over the following three years, and the case was tried before a jury, over a seven-day period, in November 2015.
Before the jury trial, Wynn and O'Connell attempted to settle the case by exchanging offers of judgment. Wynn's top offer was for $3,000. O'Connell's last offer was for $49,999, which included interest, costs, and attorney fees. Four months before O'Connell's last offer, and before the discovery deadline, she disclosed approximately $33,000 in medical *667damages. She later disclosed an amended amount of nearly $38,000 in damages approximately a month after the discovery deadline, but still before she presented her offer of judgment. The case proceeded to a jury trial, and the jury awarded O'Connell $400,000 for pain and suffering, apportioned as $150,000 for past pain and suffering and $250,000 for future pain and suffering. The jury assigned 60 percent of the fault to Wynn and 40 percent to O'Connell, and the judgment amount of $240,000 reflected the verdict minus 40 percent.
Post-trial, in her initial application for attorney fees, costs, and pre-judgment interest, O'Connell argued that her requested attorney fees were reasonable and justified because the State Bar of Nevada approves of contingency fee arrangements and "the industry standard" is 40 percent, or more, if the case goes to a jury trial. Within her application, O'Connell noted generally "the work done in this case" and argued that her "counsel expended substantial time and incurred costs to try this matter through a full jury trial." O'Connell further argued that, if the court did not award fees, it would undermine the purpose of NRCP 68 and its goal to settle cases. O'Connell contended that to decide "the amount of fees to award, the court may calculate a reasonable amount to be that of the contingency fee," citing to Shuette v. Beazer Homes Holdings Corp.,
In her later-filed amended application for fees, costs, and pre-judgment interest, O'Connell addressed the Brunzell factors and argued that her counsel satisfied all four factors. As to the second factor, the type of work done, O'Connell noted that contingency fees are common in personal injury cases because clients usually have fewer resources to pay legal fees up front or as the fees accrue. She argued that personal injury cases are difficult because the burden of proof rests on the plaintiff and the "[c]ases require considerable skill and effort in written discovery and trial work." Additionally, she explained the risk attorneys take by accepting cases on a contingency fee basis because "attorneys will not be entitled to fees if they lose." Regarding the third factor about the "work actually performed," O'Connell summarily argued that her counsel "spent hundreds of hours preparing and litigating this case."
The district court conducted a brief hearing on the motion for attorney fees, and no additional evidence was presented. The court allowed only limited argument by O'Connell and then denied the request for attorney fees. In its order, the district court rejected O'Connell's request for attorney fees in its entirety. It applied the Beattie factors,
In her appeal from the district court's decision regarding attorney fees, O'Connell does not argue that she provided any billing statements to the court in addressing the determination that the reasonableness of the award could not be determined absent any bills. Rather, she argues that the district *668court is holding contingency fee agreements to "a double standard" by requiring hourly billing records. We agree that declining to assess the reasonableness of a request for attorney fees, based upon a contingency fee agreement, because the motion was not supported by hourly billing statements, is improper when analyzing whether to award fees under Beattie and how much to award under Brunzell.
ANALYSIS
A party may seek attorney fees when allowed by an agreement, rule, or statute. See NRS 18.010 (governing awards of attorney fees); RTTC Communications, LLC v. The Saratoga Flier, Inc.,
The district court must evaluate the Beattie factors when deciding whether to award attorney fees pursuant to NRCP 68. Frazier v. Drake,
The Beattie factors require the district court to evaluate:
(1) whether the plaintiff's claim was brought in good faith; (2) whether the defendants' offer of judgment was reasonable and in good faith in both its timing and amount; (3) whether the plaintiff's decision to reject the offer and proceed to trial was grossly unreasonable or in bad faith; and (4) whether the fees sought by the offeror are reasonable and justified in amount.
Beattie,
When considering the amount of attorney fees to award, the analysis turns on the factors set forth in Brunzell. Of particular significance to this case, Brunzell provides that "[w]hile hourly time schedules are helpful in establishing the value of counsel services, other factors may be equally significant."
(1) the qualities of the advocate: his ability, his training, education, experience, professional standing and skill; (2) the character of the work to be done: its difficulty, its intricacy, its importance, time and skill required, the responsibility imposed and the prominence and character of the parties where they affect the importance of the litigation; (3) the work actually performed by the lawyer: the skill, time and attention given to the work; (4) the result: whether the attorney was successful and what benefits were derived.
*669The offer of judgment was reasonable and in good faith
The district court concluded that the second Beattie factor weighed in Wynn's favor because the court precluded O'Connell from submitting "special medical damages at the time of trial," which made it difficult for Wynn to determine the value of the case. The court also concluded that the offer was unreasonable because O'Connell made it when she did not have a proper damages calculation. O'Connell argues that she had disclosed approximately $38,000 in medical damages at the time of her offer. Wynn contends that O'Connell's damages should have been excluded because of discovery issues, while O'Connell points to the significant amount of discovery her attorneys completed before making the $49,999 offer.
The second Beattie factor requires district courts to evaluate "whether the ... offer of judgment was reasonable and in good faith in both its timing and amount." Beattie,
Here, the district court justified its decision to weigh the second factor in Wynn's favor based on its conclusion that it had excluded evidence of O'Connell's medical damages. This reasoning has two significant flaws. First, as to timing, apart from its decision in its order denying O'Connell's request for attorney fees, it is not apparent from the record that the district court did in fact exclude O'Connell's medical damages. After it heard Wynn's motion in limine seeking to exclude the medical damages before trial, the court denied Wynn's motion without prejudice and deferred its decision until trial, which was almost two months after O'Connell's offer of judgment expired. Furthermore, on the first day of trial, O'Connell chose not to seek medical damages, so it is unclear if an order was ever needed, or entered, as one does not appear in the record. If the district court ever did exclude the evidence, any exclusion occurred after O'Connell's offer of judgment had expired. Therefore, Wynn did not know at the time it rejected the offer of judgment that it would not face potential liability for medical damages.
Second, as to the amount, whether O'Connell's medical damages were excluded did not control her request for general damages, which would include pain and suffering. Wynn had all of the necessary information to evaluate O'Connell's claim as discovery had closed before she made her offer. See Certified,
Based on the foregoing, the district court abused its discretion by mistakenly concluding that, because medical damages were precluded, *670O'Connell did not have a basis for her offer or that Wynn could not properly evaluate her offer.
The district court abused its discretion by limiting its review of the reasonableness of O'Connell's fees to whether hourly billing records were submitted
We now turn to the fourth Beattie factor to determine "whether the fees sought by the offeror are reasonable and justified in amount." Beattie,
We first address whether an attorney, who litigated a matter based on a contingency fee agreement, is required to produce hourly billing records to receive an attorney fees award. We conclude that such records are not required. We then provide guidance as to how trial courts can evaluate a fee request based on a contingency fee agreement that does not include hourly billing statements.
Hourly billing records are not required to support an award of attorney fees based on a contingency fee agreement
Nevada law does not require billing records with every attorney fees request. The law only requires the trial court to calculate "a reasonable fee." Shuette,
In Cooke v. Gove , the Nevada Supreme Court upheld an attorney fees award based on "the reasonable value" of the attorney's services, even though the case was taken on a contingency fee basis with no formal agreement.
*671after the court considered how the plaintiff's "work, thought and skill contributed" to the successful outcome.
Thus, the district court is not confined to authorizing an award of attorney fees exclusively from billing records or hourly statements. See Shuette,
We note that our conclusion is in line with other jurisdictions that squarely address awarding attorney fees based on a contingency fee agreement. For example, in McNeel v. Farm Bureau General Insurance Co ., the Michigan Court of Appeals reversed a trial court's decision to reduce an award of fees to an attorney who represented a client on a contingency fee basis because the "court gave only mild consideration to the complexity of the case" and did not factor in the required attorney preparation.
Courts have recognized an additional reason that supports awarding attorney fees-the risks attorneys take by offering or accepting contingency fee agreements. See King v. Fox ,
Additionally, contingency fees allow those who cannot afford an attorney who bills at an hourly rate to secure legal representation. See King,
*672Black v. Brooks,
Considerations when assessing an attorney fees award based on a contingency fee agreement
Here, the district court determined that it could not award fees without hourly billing records despite citing no legal authority for that proposition. As discussed above, however, district courts may take almost any sensible approach or apply any logical method to calculate "a reasonable fee" to award as long as the court weighs the Brunzell factors. See Shuette,
As to the methods or approaches a district court may use to determine a reasonable amount, there are certainly more considerations than just hourly billing records. See Hsu v. Cty. of Clark,
In comparison here, the district court could consider the length of time counsel represented O'Connell and the length of the trial. We note that the appellate record was large and most of it pertained to the trial. Also, based on the lower court record, there is evidence that O'Connell's attorneys worked on the case in the form of motions they filed and at pretrial hearings held after O'Connell's offer of judgment expired, as well as at trial, which lasted seven days. Further, O'Connell's application indicated that counsel had performed a considerable amount of work-"hundreds of hours" on the case-and she included the contingency fee agreement as part of her request for fees.
Furthermore, although NRS 18.010(3) dictates that a district court may award attorney fees with or without additional evidence, the district court's decision to require hourly billing records as a prerequisite to determine if the fee request was reasonable and justified was itself unreasonable as the court had presided over protracted litigation and witnessed a lengthy trial in which O'Connell overcame numerous challenges to prevail. See Cooke,
Therefore, we conclude that, in this case, there were alternative sources of information for the district court to rely upon to determine whether the requested award was reasonable, even though hourly billing records were not provided. Thus, the district court should not have concluded that no attorney fees were warranted based on the absence of hourly billing records alone and without holding an evidentiary hearing or making a determination based upon all the information before it. Accordingly, the denial of attorney fees must be reversed and the matter remanded to the district court for further proceedings consistent with this opinion.
We note that the cases and methods used within this opinion to determine the amount of an attorney fees award are instructive and not exhaustive. Trial courts should also keep in mind that their awards of attorney fees should be made on a case-by-case basis by applying the considerations described herein to the evidence provided, and that an adequate record will be critical to facilitate appellate review. Cf. Logan v. Abe,
Ultimately a party seeking attorney fees based on a contingency fee agreement must provide or point to substantial evidence of counsel's efforts to satisfy the Beattie and Brunzell factors.
*674On remand, the district court should consider the proposed amount of the attorney fees award based on the judgment and the contingency fee agreement and evaluate the requested award based on the work performed. The evidence does not need to be limited to documents and may include what the trial court readily observed.
CONCLUSION
Attorneys who represent a client on a contingency fee basis are not required to submit hourly billing records to support an award of attorney fees that are allowed by a valid agreement, rule, or statute. Because the district court incorrectly based its decision to deny fees, in part, on the second Beattie factor and on the failure to provide hourly billing records with regard to the fourth Beattie factor, we conclude that the district court abused its discretion in denying O'Connell's request. Accordingly, we reverse the district court's order as to its complete denial of O'Connell's request for attorney fees. We remand this matter for the district court to allow O'Connell a new hearing related to her attorney fees request, and then to address and reweigh the second, third, and fourth Beattie factors in light of this opinion. If the Beattie factors favor O'Connell, we direct the district court to determine a reasonable amount of attorney fees to award.
We concur:
Silver, C.J.
Tao, J.
This appeal was consolidated with the appeal in Docket No. 70583 prior to briefing. We now deconsolidate these appeals for the purposes of disposition. Judgment was affirmed in Docket No. 70583.
The district court partially awarded O'Connell her requested expert witness fees. O'Connell argues on appeal that the district court should have awarded her the entirety of those fees. O'Connell did not raise this argument until her reply brief in her appeal. Therefore, we decline to consider it now. See Weaver v. State , Dep't of Motor Vehicles ,
We address only Beattie factors two and four in this opinion. On appeal, O'Connell does not challenge the district court's ruling on the first Beattie factor, and so we need not consider it. See Powell v. Liberty Mut Fire Ins . Co.,
Wynn argued below that O'Connell's various offers resulted in "gamesmanship" and was one reason why Wynn could not give due weight to her $49,999 offer of judgment. But this argument is unpersuasive as the record suggests that Wynn did not give due weight to any of O'Connell's offers. O'Connell's $49,999 offer was close to her two most recently disclosed medical damages at the time ($33,000 in medical damages followed by a later disclosed $38,000 in medical damages). In comparison, Wynn only made a $3,000 offer of judgment when O'Connell disclosed an estimated $29,000 in medical expenses.
The lodestar method "involves multiplying the number of hours reasonably spent on the case by a reasonable hourly rate." Shuette,
Although O'Connell did not provide a verified application or affidavits to the district court to support her request for attorney fees, the district court is not limited to considering affidavits in determining a reasonable amount of attorney fees. Further, despite the lack of an affidavit and based on O'Connell's representations in her application for fees, the district court could have sworn in counsel at the hearing to accept testimony supporting the fee request or possibly have taken judicial notice of certain facts. See NRS 47.130 ; NRCP 43(c) (indicating that when a motion is based on facts that are not in the record, the district court may decide the motion based on the affidavits presented or oral testimony); Mardirossian,
We note that the better-but not required-practice in a contingency fee case is for an attorney to keep hourly statements or timely billing records to later justify the requested fees. See. e.g., Copper Liquor, Inc. v. Adolph Coors Co.,
On appeal, O'Connell concedes that her award should be limited to her post-offer fees. She estimates her request should accordingly be reduced to $71,111.11. Her contingency fee agreement, however, also provided for a 50-percent fee if she was successful on appeal. Additionally, we note that O'Connell did not retain the same counsel from the beginning of the case until the end, and thus her current counsel is not automatically entitled to fees based on the entire litigation. Cf Van Cleave v. Osborne , Jenkins & Gamboa, Chtd .,
Reference
- Full Case Name
- Yvonne O'CONNELL, an individual v. WYNN LAS VEGAS, LLC, d/b/a Wynn Las Vegas
- Cited By
- 11 cases
- Status
- Published