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Selleck v. Keith M. Evans Insurance, Inc.

Court of Appeals of Missouri, Eastern District, First Division

December 12, 2017

CLAY SELLECK, Appellant,

         Appeal from the Circuit Court of St. Charles County Honorable Jon A. Cunningham



         Clay Selleck ("Selleck") appeals from the judgment of the trial court, entered after a jury awarded him $10, 000 on his claim against Keith M. Evans Insurance, Inc. ("Evans Insurance") for violating the Missouri Merchandising Practices Act ("MMPA"). As authorized by the MMPA, the trial court then granted Selleck his reasonable attorneys' fees. In calculating Selleck's reasonable attorneys' fees, the trial court expressly considered the contingent-fee agreement executed by Selleck and his attorneys before awarding Selleck $3, 333.33. In his sole point on appeal, Selleck asserts that the trial court erred in relying on the contingent-fee arrangement to determine his reasonable attorneys' fees. While the presence of a pre-existing contingent-fee agreement may aid a trial court in determining the reasonableness of a statutory award of attorneys' fees, a contingent-fee contract does not impose an automatic ceiling on an award of attorneys' fees.

         The judgment of the trial court appears to treat the contingent-fee agreement as a mandatory cap on the amount of attorneys' fees that may be awarded under the MMPA instead of utilizing the contingent fee-agreement as one factor to determine the reasonableness of an attorneys' fee award. Accordingly, we reverse the judgment of the trial court and remand with instructions to determine Selleck's reasonable attorneys' fees for his claim under the MMPA.

         Factual arid Procedural History

         After the termination of his employment, Selleck sued his former employer, Evans Insurance. In four separate counts, Selleck alleged claims for (1) wrongful discharge, (2) unpaid commissions under Section 407.913[1] of the MMPA, (3) unjust enrichment, and (4) breach of an oral contract. In Count I, Selleck averred that Evans Insurance wrongfully discharged him because he reported unlawful activity to his supervisors. Selleck further contended that Evans Insurance's purported reason for his termination-Selleck's negligent job performance-was "a pretext to mask [Evans Insurance's] retaliatory conduct." Claiming extensive damages, Selleck sought recovery under his wrongful-discharge claim for unpaid rent, unpaid child support, fees incurred in a modification suit with his former wife, emotional distress, lost wages, and punitive damages. In Count II, Selleck maintained that Evans Insurance failed to pay Selleck his earned commissions, estimated then at around $3, 000, in violation of the MMPA. In Counts III and IV, Selleck alleged unjust enrichment and breach of an oral contract, demanding damages for unpaid wages, vacation pay, unpaid commissions, and punitive damages.

         From the onset, the ensuing litigation was contentious and combative. The parties' attorneys immediately and intensely disputed both the scope and the procedure of discovery. Unable to amicably conduct discovery, the parties' attorneys required the trial court to intervene in numerous discovery disputes. Selleck's attorney unsuccessfully and repeatedly sought sanctions against opposing counsel for purported discovery violations. Both parties' attorneys levied allegations that the opposing counsel engaged in professional misconduct and committed ethical violations. The antagonistic litigation resulted in an unsuccessful attempt by Evans Insurance to remove Selleck's attorney from the proceedings.

         The bitterly contested suit proceeded to a jury trial. At trial, Selleck testified regarding his past work history, his job performance with Evans Insurance, his post-termination employment, and the commission-payment system implemented by Evans Insurance. Selleck testified that he suffered extensive damages as a result of the wrongful discharge and asked for an award of over $160, 000. Selleck explained at length his financial struggles following his termination. Selleck also requested the jury to award him $11, 709 in unpaid commissions, statutory penalties, and accrued interest. Regarding his attorneys' fees, Selleck testified that he had hired his attorneys on a contingent-fee arrangement. After presenting evidence, Selleck voluntarily withdrew his claims for unjust enrichment and breach of an oral contract and submitted his claims for wrongful discharge and for unpaid commissions to the jury. The jury found against Selleck on his wrongful-discharge claim and found in favor of Selleck on his unpaid-commissions claim, awarding Selleck $10, 000.

         Pursuant to Section 407.913, Selleck filed a post-trial motion for his reasonable attorneys' fees. Selleck requested a total fee award of $221, 292. Selleck represented that this amount reflected the 788 hours billed on the case by attorneys who charged $280 and $450 an -hour, respectively. Evans Insurance objected to many of the entries on the legal bill, stating that many of the charges did not relate to Selleck's modest MMPA claim; instead, the charges pertained to his unsuccessful claims for wrongful discharge, unjust enrichment, and breach of an oral contract.

         The trial court ruled that Selleck was entitled to his reasonable attorneys' fees. According to the trial court, the amount of attorneys' fees sought by Selleck, however, was "neither reasonable nor [was] it supported by the evidence based upon extremely excessive hours requested for the type of case involved[.]" The trial court continued: "[T]he fees requested by [Selleck] were extremely excessive for work on a case that was brought over the alleged non-payment of $4, 200.00 in commissions. ... [B]y far, most of the fees in the case arose because of discovery and trial preparation for [Selleck's] unsuccessful claim" for wrongful discharge.

         The trial court found that Selleck presented credible evidence that he had entered into a contingent-fee arrangement with his attorneys. The trial court determined that Selleck "had paid no attorney's fees in this case" and that Selleck had not "incurred" any attorneys' fees until the $10, 000 jury award in his favor. Considering contingency agreements, the trial court ruled that 33 1/3% was a reasonable and standard contingent-fee percentage in the local legal community. Regarding the merits of the suit, the trial court explained that this was "a simple commissions case for a rather moderate amount" and that the amount Selleck requested was "extremely excessive" for an unpaid-commissions case. The trial court acknowledged that a high-degree of skill was required to conduct a jury trial, that unpaid commissions were an important subject matter, and that the case was vigorously litigated. However, the trial court also found that Selleck's attorneys experienced limited success, prevailing on only one of Selleck's four claims. The trial court emphasized the dissimilarity of Selleck's claims, which required the trial court to separate the MMPA claim from the unsuccessful wrongful-discharge claim. Recognizing that the jury awarded Seileck $10, 000 on his MMPA claim, the trial court granted Selleck $3, 333.33 in attorneys' fees and $2, 789.45 in costs.

         Alternatively, the trial court then computed the reasonable amount of attorneys' fees had Selleck not entered into a contingent-fee agreement and had employed his attorneys at an hourly rate. Specifically, the trial court stated that, had the attorneys' fees been calculated based on an hourly rate, "the Court would have found a fee based upon 25 hours for pleading preparation, discovery, and arguments on motions, 20 hours for final trial preparation, and 40 hours for the actual jury trial would be reasonable." The trial court noted that 85 hours at the hourly rate of $280 would amount to $23, 800, but repeated its decision not to award attorneys' fees based upon an hourly basis.

         Selleck moved for reconsideration of his attorneys' fees award. In his motion, Selleck asserted that Missouri law did not support reducing an attorneys' fee award based upon a contingent-fee agreement. Further, Selleck argued that the trial court erred in its alternative finding that, of the 788 ...

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