Charging Lien: Discharged attorneys may obtain a charging lien,
which “is an equitable right to have the fees and costs due for services
secured out of the judgment or recovery in a particular suit.” George v Sandor M Gelman, PC, 201
Mich App 474 (1993).
The Michigan Court of Appeals
(MCOA) affirmed the lower court’s decision reducing the amount of an attorney’s
charging lien in RivertownDevelopment Group v West Congress Street Partners, No. 330728.
Facts:
Petitioner Lawrence Walker was
retained in May 2014 as counsel for West Congress Street Partners in a
litigious landlord-tenant dispute. The relationship broke down, a new lawyer
was hired and Walker was allowed to resign as counsel by court order dated
March 11, 2015. A two-day hearing was held to determine the accuracy of
Walker’s $35,094 charging lien on the settlement in April 2015. Following the hearing,
the court determined the amount owed to be $18,889.62 calculated as follows:
167 hours @
$300 = $50,100.00
Expenses
2,833.62
Payments (34,044.00)
Balance
due $18,889.62
Walker, on his appeal, claimed the
court abused its discretion by (1) making a math error when it found that West
Congress made prior payments of $34,044 when the actual amount was $30,155, 2)
reducing the billable hours from 217 to 167.
Analysis: The MCOA affirmed the lower court
on both counts.
Math error: While it may be true that the math was in error and the
correct amount of payments was $30,155, the error was not raised during the
two-day hearing and the parties accepted the $34,000 figures as accurate. “It
is not the trial court’s burden to check petitioner’s math when the
petitioner’s own documentation clearly stated that payments on the account
totaled $34,044.14.”
Hour Reduction: Courts calculate attorney fees by first determining
the reasonable hourly rate customarily charged in the locality for similar
services, then multiply by the reasonable number of hours expended. The MCOA
supported the reduction in hours stating: “…the trial court explicitly stated
that its decision was based on the parties’ testimony, petitioner’s billing
statement, and the court’s knowledge of billing in general.” After the 2-day hearing,
MCOA stated that “the trial court was in the best position to determine the
reasonable hours expended by petitioner, which it did.”
The court “did not abuse its
discretion by not crediting petitioner with all of the hours listed in the
billing statement” and the Michigan Supreme Court said that in determining the
number of reasonable hours, trial courts should “exclude excessive, redundant
or otherwise unnecessary hours regardless of the attorneys’ skill, reputation
or experience.”
Thus, the MCOA concluded that the
trial court’s determination Walker reasonably expended 167 hours rather than
the 217 billed on defendant’s case fell within “the range of principled
outcomes.”
Lessons to be learned: Check your math more than once and be
prepared to defend your hours when requesting enforcement of a charging lien or
payment of your bill in court.
Labels: attorney fees, Civil Appeal, math error
