06 November 2007

How Not To Handle Costs and Attorneys Fees

In an opinion not sufficiently of interest to the general public for Colorado Confidential coverage, the Colorado Court of Appeals on November 1, illustrated how not to handle attorneys' fees and costs in a case.

The Plaintiff was awarded attorneys' fees, but the Plaintiff's lawyers failed to provide time entries to support their general affidavits of attorneys' fees (requesting $24,310), despite stating that such back up was attached in the affidavits.

Here, plaintiff’s motion and affidavit indicated the total amount of fees requested and counsel’s hourly rate, but contained no other information explaining how the total amount was calculated. Although the affidavit referenced an attachment containing “detailed billing references,” no such attachment was actually included.

Plaintiff also submitted a supplement to the bill of costs which provided some documentation concerning additional requested cost items. However, these materials failed to include documentation supporting the overall attorney fee request. Finally, in its reply to defendant’s objection to the fee request, plaintiff, yet again, failed to provide documentation supporting the total amount of fees sought.

Result, no fee award.

Approximately two months after defendant paid plaintiff the full amount of the judgment, including costs and interest, he filed a motion indicating that plaintiff was refusing to release a mechanic’s lien and notice of lis pendens filed against the property. . . . determined that plaintiff and its counsel had acted “without substantial justification” and awarded defendant attorney fees and costs totaling $1526.69 . . . .

[T]he trial court’s ruling was based upon plaintiff’s failure to clearly or timely communicate its position to defendant.

The trial court emphasized that, although plaintiff was technically correct in arguing that defendant had failed to pay the small cost of obtaining release of the lien, plaintiff’s letter to defendant was entirely unclear concerning what costs it allegedly had not received. Adding to this lack of clarity was plaintiff’s erroneous argument that it had no obligation to release the lien until defendant paid an amount that included the contract-based attorney fees plaintiff had requested.

As the trial court noted, it was not until plaintiff’s response to defendant’s motion to compel that plaintiff finally clarified what “cost” defendant had failed to pay. This resulted in a three-month delay in filing the release.

The sanction of $1526.59 was affirmed.

Thus, this firm came out $25,836.59 worse than it should have, after winning a case, simply as a result of failing to handle the post-judgment matters appropriately. A firm with any character would pay the sanction without reimbursement from the client and refund its fees in that situation.

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