Attorney’s fee award vacated for lack of comparables

A divided North Carolina Court of Appeals panel has vacated an attorney’s fee award because the attorney’s affidavit offered no evidence about comparable fee rates in his field of practice, saying that the trial judge who ordered the award should not have relied on his personal knowledge of customary fee rates when calculating the award.

The attorney, Eric Snider, then of Smith Moore Leatherwood in Raleigh, represented a landlord in a commercial lease dispute in Wake County in which his client prevailed. The landlord sought attorneys’ fees pursuant to a provision in the lease providing for the recovery of fees resulting from litigation.

Superior Court Judge Allen Baddour awarded the landlord $44,736 in attorneys’ fees and costs, the full amount it had requested. In his affidavit in support of the request, Snider stated that he billed the client at a rate of $260 per hour in 2015 and 2016 and $285 per hour in 2017—slightly less than his typical billing rates in the latter two years. (Other attorneys also worked on the case, and their billing rates were included as well.)

Under state law, a fee award must contain “findings of fact as to the time and labor expended, the skill required, the customary fee for like work, and the experience or ability of the attorney.” In his order, Baddour noted that he was “aware of the range of hourly rates charged by law firms in Wake County as well as in North Carolina for litigation of business contracts like this,” and found that the rates listed in the affidavit were fair and reasonable, and consistent with what attorneys with comparable experience in similar matters typically charge in Wake County.

The tenant appealed the award. Among other things, it argued that Baddour had applied the wrong provision of Chapter 6 of the North Carolina General Statutes, which governs liability for court costs. In a June 5 opinion, the appeals court agreed that the landlord was entitled to attorneys’ fees, but vacated and remanded the fee award, citing the absence of any evidence in the record regarding the prevailing rates.

“The affidavit offers no statement with respect to comparable rates in this field of practice,” Judge Ann Marie Calabria wrote for the majority. “Nor did counsel offer comparable rates at the hearing on attorneys’ fees. It is therefore clear that there was insufficient evidence before the trial court of “the customary fee for like work” for the trial court to make a finding on that point, and to award attorneys’ fees accordingly.”

Judge Mark Davis dissented from that portion of the court’s ruling, saying that the Court of Appeals has previously upheld an award of attorneys’ fees where the trial court took judicial notice of customary hourly rates. Although that opinion involved the award of fees in connection with a child custody modification issue, Davis said he was “unable to discern any valid reason why a trial court should not be permitted to similarly invoke the judicial notice doctrine in connection with an award of attorneys’ fees” under Chapter 6.

Snider, who is now general counsel for the North Carolina State Board of Education, and Beth Scherer, who is also of Smith Moore Leatherwood in Raleigh, represented the landlord on appeal. Scherer could not be reached for comment about the decision.

Nelson Harris of Harris & Hilton in Raleigh represented the tenant. Harris called the court’s decision “logical,” and said he had hoped that the court might go even further than it did in clarifying the scope of information that attorneys need to provide in their fee affidavits.

“I wish that they had spent more time looking at the fact that he simply gave an hourly rate and a number of hours and didn’t disaggregate [those hours], and in the federal system in particular, that would be unacceptable,” Harris said.

The 18-page decision is WFC Lynnwood I LLC v. Lee of Raleigh, Inc. (Lawyers Weekly No. 011-199-18). The full text of the opinion is available online at nclawyersweekly.com.

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