Opinion
No. COA11-50
Filed 16 August 2011 This case not for publication
Appeal by Defendant from judgment and order entered 16 July 2010 by Judge Calvin E. Murphy in Superior Court, Anson County. Heard in the Court of Appeals 24 May 2010.
Poisson, Poisson Bower, PLLC, by E. Stewart Poisson and Fred D. Poisson, Jr., for Plaintiff-Appellee. McAngus, Goudelock Courie, PLLC, by Colin E. Scott and Jennifer M. Arno, for Defendant-Appellant.
Anson County No. 08 CVS 174.
Annette J. Downer (Plaintiff) filed a complaint on 1 April 2008 against Mitchell Wayne Wolfe (Defendant), seeking to recover an amount in excess of $10,000.00 for damages arising from a motor vehicle collision. Defendant filed an answer dated 6 June 2008 denying liability. Defendant also filed an offer of judgment dated 6 June 2008, in which Defendant offered to allow judgment to be taken against him for a total sum of $9,000.00. Plaintiff rejected Defendant's offer. Defendant filed another offer of judgment dated 29 December 2008, in which Defendant offered to allow judgment to be taken against him for a total sum of $11,000.00. Plaintiff also rejected this offer by Defendant.
The matter went to trial and a jury found Defendant liable for Plaintiff's damages in the amount of $5,000.00 on 30 April 2010. Defendant filed a motion dated 14 May 2010 for costs in the amount of $945.53 on the grounds that "the judgment finally obtained was less than the amount of the [o]ffer[s] of judgments filed in this matter." Plaintiff filed a motion for costs and attorney's fees on 18 May 2010, arguing that: (1) as the prevailing party, she was entitled to costs; and (2) because the amount of damages recovered was less than $10,000.00, she was entitled to an award of attorney's fees. In a judgment and order entered 16 July 2010, the trial court granted Plaintiff's motion for costs and attorney's fees and denied Defendant's motion for costs. The trial court determined that Plaintiff's total recovery from Defendant was $15,946.10. Defendant appeals.
Standard of Review
"`The allowance of counsel fees under G.S. 6-21.1 is, by the express language of the statute, in the discretion of the presiding judge. The case law in North Carolina is clear that to overturn the trial judge's determination, the defendant must show an abuse of discretion.'" Blackmon v. Bumgardner, 135 N.C. App. 125, 130, 519 S.E.2d 335, 338 (1999) (citation omitted). "An abuse of discretion occurs when the trial court's ruling is `"manifestly unsupported by reason or is so arbitrary that it could not have been the result of a reasoned decision."'" Bryson v. Cort, 193 N.C. App. 532, 536, 668 S.E.2d 84, 87 (2008) (citations omitted).
Plaintiff's Motion for Attorney's Fees and Costs I. Attorney's Fees Incurred After 29 December 2008
Defendant first argues the trial court erred in granting Plaintiff's motion for attorney's fees and costs in that, as a general rule, attorney's fees are not recoverable as a part of court costs by the successful party at trial. However, N.C. Gen. Stat. § 6-21.1 provides that if the recovery of damages is less than $10,000.00, the presiding judge may, in the judge's discretion, allow reasonable attorney's fees to the prevailing party. See N.C. Gen. Stat. § 6-21.1 (2009). Defendant contends the trial court abused its discretion in awarding attorney's fees as costs pursuant to N.C.G.S. § 6-21.1 in light of Defendant's offer of judgment in the amount of $11,000.00, which Plaintiff rejected. Specifically, Defendant contends that, once he made an offer of judgment in excess of $10,000.00 on 29 December 2008, the provisions of N.C.G.S. § 6-21.1 became inapplicable. However, Plaintiff contends that Defendant did not raise this argument before the trial court and, therefore, did not preserve his argument for appellate review. We agree.
Reviewing the transcript of the hearing on Plaintiff's motion for attorney's fees and costs, it is clear that Defendant's argument against Plaintiff's motion focused on the abuse of discretion standard and the prescribed factors for a trial court to consider pursuant to Washington v. Horton, 132 N.C. App. 347, 513 S.E.2d 331 (1999), which we address below. There was no argument or request by Defendant at the hearing on Plaintiff's motion concerning the inapplicability of N.C.G.S. § 6-21.1 because of Defendant's offers of judgment. We therefore dismiss Defendant's argument as to that issue. N.C.R. App. P. 10 ("In order to preserve an issue for appellate review, a party must have presented to the trial court a timely request, objection, or motion, stating the specific grounds for the ruling the party desired the court to make if the specific grounds were not apparent from the context.").
II. Attorney's Fees Incurred Before 29 December 2008
Defendant next argues that the trial court abused its discretion in awarding attorney's fees as costs for even those fees Plaintiff incurred prior to Defendant's offers of judgment. Defendant concedes that, prior to 29 December 2008, the trial court had authority to award up to 5.5 hours of attorney's fees as costs. However, Defendant contends that the trial court's decision to do so was an abuse of discretion because the trial court failed to consider certain factors set forth by our Court in Washington. We disagree.
In Washington, our Court stated the following factors to be considered by a trial court in determining whether to award fees:
On remand, the trial court is to consider the entire record in properly exercising its discretion, including but not limited to the following factors: (1) settlement offers made prior to the institution of the action. . . .; (2) offers of judgment pursuant to Rule 68, and whether the "judgment finally obtained" was more favorable than such offers . . .; (3) whether defendant unjustly exercised "superior bargaining power". . .; (4) in the case of an unwarranted refusal by an insurance company, the "context in which the dispute arose.". . .; (5) the timing of settlement offers; (6) the amounts of the settlement offers as compared to the jury verdict . . .; and the whole record.
Washington, 132 N.C. App. at 351, 513 S.E.2d at 334-35 (citations omitted).
In the present case, Defendant contends the trial court failed to consider the third, fourth and sixth factors, though he concedes the fourth factor is inapplicable to the present case. Defendant also contends the trial court "ma[de] an improper finding of fact with regard to the second Washington factor[.]" Defendant also contends that the trial court "add[ed] a factor to the analysis which conflicts with the Washington factors."
Defendant is correct in his assertion that the trial court's order does not contain a specific finding addressed to the third Washington factor. However, our Court has stated that "`the absence of such a finding does not require reversal when the trial court made adequate findings on the whole record to support an award of attorney's fees.'" Davis v. Kelly, 147 N.C. App. 102, 108, 554 S.E.2d 402, 406 (2001) (quoting Olson v. McMillian, 144 N.C. App. 615, 619, 548 S.E.2d 571, 573-74 (2001)). See also McDaniel v. McBrayer, 164 N.C. App. 379, 382, 595 S.E.2d 784, 787 (2004) ("The trial court's failure to make a finding as to [d]efendant's exercise of unfair bargaining power is not grounds for reversal."). Therefore, the trial court's failure to make a finding addressing the third Washington factor was not reversible error.
Defendant also contends the trial court erred by not specifically addressing the sixth factor. The sixth Washington factor requires the trial court to consider "the amounts of the settlement offers as compared to the jury verdict[.]" Washington, 132 N.C. App. at 351, 513 S.E.2d at 335. Defendant is correct that the trial court's order does not contain a finding which specifically articulates a comparison of the amounts of Defendant's settlement offers with the amount of the verdict. However, the trial court's order does contain findings reciting each of Defendant's offers and a finding reciting the amount of the jury verdict. The trial court's order also contains a statement articulating the Washington factors, as well as a statement that the trial court considered the Washington factors and the entire record before it. We hold that these findings indicate the trial court did consider the sixth Washington factor. Therefore, Defendant's argument is without merit.
Defendant also argues that the trial court's order contained improper findings of fact in that the trial court made findings concerning the reasons for Plaintiff's rejection of Defendant's settlement offers. Defendant argues that the "relevant factor [for the trial court] to consider, according to Washington, [wa]s the amount of the jury verdict." However, Defendant does not cite any authority in support of his argument that the trial court should not have considered additional factors. Further, we note that Washington provides that "the trial court is to consider the entire record in properly exercising its discretion, including but not limited to the following factors[.]" Washington, 132 N.C. App. at 351, 513 S.E.2d at 334 (emphasis added). Having reviewed the trial court's order, as well as the record on appeal, we hold Defendant has failed to establish that the trial court abused its discretion in awarding Plaintiff attorney's fees pursuant to N.C.G.S. § 6-21.1.
Defendant's Motion for Costs
Defendant next argues that the trial court abused its discretion in denying Defendant's motion for costs because it "improperly calculated the judgment finally obtained by Plaintiff[.]" N.C. Gen. Stat. § 1A-1, Rule 68 (2009) provides in pertinent part: "If the judgment finally obtained by the offeree is not more favorable than the offer [of judgment], the offeree must pay the costs incurred after the making of the offer." Defendant argues that, because "attorney's fees were improperly awarded [to Plaintiff] pursuant to N.C. Gen. Stat. § 6-21.1[,]" the award of attorney's fees should not have been included in determining whether the final judgment was greater than the offers of judgment. As we have held that attorney's fees were properly awarded to Plaintiff, Defendant's argument is without merit.
However, Defendant also argues that the trial court erred by denying his motion for attorney's fees because the trial court should not have ordered Defendant to pay costs accrued after Defendant made his original offer of judgment. Reviewing the case law on which Defendant relies, as well as more recent precedent established by our Supreme Court, we find Defendant's argument to be without merit. Defendant cites Marryshow v. Flynn, 986 F.2d 689 (4th Cir. 1993); Purdy v. Brown, 307 N.C. 93, 296 S.E.2d 459 (1982); and Scallon v. Caldwell, 58 N.C. App. 551, 293 S.E.2d 843 (1982) in support of this reasoning.
However, Defendant's reliance on Purdy, Scallon, and Marryshow is misplaced. Purdy and Scallon were both decided in 1982, and our Supreme Court has since revisited this issue in Roberts v. Swain, 353 N.C. 246, 538 S.E.2d 566 (2000). We find Roberts instructive as to Defendant's reliance on Marryshow and conclusive as to the broader question raised by Defendant's appeal.
In Roberts, our Supreme Court reviewed a decision of our Court reversing a trial court's award of attorney's fees. Our Supreme Court granted discretionary review of our Court's decision, and noted that the issue before the Supreme Court was "whether costs incurred after the offer of judgment but prior to the entry of judgment should be included in calculating the `judgment finally obtained.'" Roberts, 353 N.C. at 247, 538 S.E.2d at 567. Our Supreme Court concluded: "We hold that they should and therefore reverse the Court of Appeals." Id. Our Supreme Court noted that: "In support of its holding, the Court of Appeals cited Marryshow v. Flynn, 986 F.2d 689 (4th Cir. 1993)." Id. at 250, 538 S.E.2d at 569. However, the Court also stated that: "In light of the precedent of Poole [ v. Miller, 342 N.C. 349, 464 S.E.2d 409 (1995)] it was unnecessary for the Court of Appeals to look to federal case law for guidance." Id. The Supreme Court ultimately held "that costs incurred after the offer of judgment but prior to the entry of judgment should be included in calculating the `judgment finally obtained[.]'" Id. at 250-251, 538 S.E.2d at 569.
We note that this reasoning has been followed by our Court several times. See Phillips v. Warren, 152 N.C. App. 619, 628, 568 S.E.2d 230, 236 (2002) ("`[T]he North Carolina Supreme Court stated that "costs incurred after the offer of judgment but prior to the entry of judgment should be included in calculating the `judgment finally obtained[.]'"' Robinson v. Shue, 145 N.C. App. 60, 67, 550 S.E.2d 830, 834-35 (2001) (quoting Roberts, 353 N.C. at 250-51, 538 S.E.2d at 569). It was error for the trial court not to include the full amount of plaintiff's costs in the judgment finally obtained."). In light of the clear precedent holding that post-offer costs are to be included in the calculation of a judgment finally obtained, and considering Defendant's reliance on case law deemed unnecessary by our Supreme Court, we find Defendant's argument is without merit. We therefore affirm the trial court's order denying Defendant's motion for costs pursuant to N.C.G.S. § 1A-1, Rule 68.
Affirmed.
Judges ERVIN and McCULLOUGH concur.
Report per Rule 30(e).