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4135 - Williamson v. Middleton
Williamson v. Middleton

THE STATE OF SOUTH CAROLINA
In The Court of Appeals


Dan F. Williamson and Dan F. Williamson and Company, Appellants,

v.

Middleton, Alfred C., Respondent.


Appeal From Greenville County
 C. Victor Pyle, Jr., Circuit Court Judge


Opinion No. 4135
Heard June 15, 2006 – Filed July 10, 2006


REVERSED


Desa A. Ballard, of W. Columbia, for Appellants.

James C. Parham, Jr. and Patricia S. Ravenhorst, both of Greenville, for Respondent.

ANDERSON, J.:  Dan F. Williamson and Dan F. Williamson and Company (collectively, “Williamson”) appeal from the trial court’s award of attorney’s fees to Alfred C. Middleton.  Williamson argues that Middleton is not entitled to attorney’s fees, or in the alternative, that the criteria for awarding attorney’s fees were not met in this case.  We reverse.

FACTUAL/PROCEDURAL BACKGROUND

For several years, Middleton worked for Williamson as a commissioned salesman.  When Middleton quit working for Williamson, he was due a commission for having sold yarn pallets to one of Williamson’s customers.  Middleton and Williamson disagreed as to the amount of commission due, and Williamson never paid Middleton any commission, even though it acknowledged owing him $906.62. 

After leaving his employment with Williamson, Middleton began working for Peninsula Plastics, Inc., one of Williamson’s pallet suppliers.  Middleton continued to seek the commission Williamson owed him, and sought assistance from his present attorney.  Middleton and his counsel are personal friends, and counsel previously had represented Middleton in less-complicated matters without charge.  Middleton’s attorney agreed to help with the claim for commission, and the two were to discuss a fee at the end of the case.

Williamson initially was represented by Jordan & Clardy, LLC.  Middleton’s attorneys informed Williamson that they had a complaint drafted and were ready to sue in order to recover the unpaid commission.  Williamson’s attorney requested that Middleton refrain from acting on the drafted complaint until he could speak with his client.  Middleton agreed, and two days later, Williamson filed a complaint against Middleton, alleging causes of action for fraud, constructive fraud, breach of fiduciary duty, and violation of the South Carolina Unfair Trade Practices Act.  Middleton filed an answer, denying the allegations and counterclaiming for commissions owed and sanctions under the South Carolina Frivolous Proceedings Act.  Approximately one month prior to trial, Williamson hired its current counsel.

Of Williamson’s claims against Middleton, only the cause of action for breach of fiduciary duty went to the jury.  The jury returned a verdict in favor of Middleton on that cause of action and found in favor of Middleton on his counterclaim for unpaid commission, awarding him $906.62 in actual damages. 

The trial judge, Judge Pyle, ruled Middleton was entitled to attorney’s fees, but asked the parties to attempt to determine the amount of attorney’s fees themselves.  In the event they could not agree to an amount, Judge Pyle explained he would set the amount for them.  The parties could not come to a consensus on the amount of attorney’s fees, and Middleton petitioned the court for assistance.  Judge Miller awarded Middleton $35,000 in attorney’s fees.  In an unpublished opinion, Williamson v. Middleton, 2005-UP-011 (S.C. Ct. App. filed January 11, 2005), this Court found that Judge Pyle had retained exclusive jurisdiction over the matter.  We therefore reversed Judge Miller’s award and remanded the issue of attorney’s fees for Judge Pyle’s consideration.

At the hearing before Judge Pyle, Williamson argued Middleton was not entitled to attorney’s fees because (1) he was not the prevailing party; (2) the bill Middleton’s counsel presented documenting over $100,000 worth of work listed hours spent on claims other than the unpaid commission claim for which attorney’s fees are allowed; and (3) the amount of fees Middleton’s counsel requested, $35,000, far exceeded the $906.62 verdict.  Williamson further maintained Middleton did not incur any fees because when Middleton’s counsel was deposed, he admitted there was no fee agreement between him and Middleton. 

Judge Pyle acknowledged that Middleton and his attorney had not entered into a formal, written fee agreement, but relied instead “on their long-standing personal relationship and mutual agreement to determine an appropriate fee for services at the conclusion of this matter.”  The judge found such an agreement did not preclude attorney’s fees.  Accordingly, Judge Pyle awarded Middleton $35,000 in attorney’s fees.  Williamson filed a Rule 59(e), SCRCP, motion, which was denied. 

STANDARD OF REVIEW

There must be sufficient evidence in the record to support each of the six factors analyzed for an award of attorney’s fees.  See Taylor v. Medenica, 331 S.C. 575, 580, 503 S.E.2d 458, 461 (1998).  “On appeal, absent sufficient evidentiary support on the record for each factor, the award should be reversed and the issue remanded for the trial court to make specific findings of fact.”  Blumberg v. Nealco, 310 S.C. 492, 494, 427 S.E.2d 659, 661 (1993). 

The interpretation of a statute is not a finding of fact.  Thompson v. Ford Motor Co., 200 S.C. 393, 21 S.E.2d 34 (1942).  “The issue of interpretation of a statute is a question of law for the court.”  Jeter v. S.C. Dep’t of Transp., Op. No. 26168 (S.C. Sup. Ct. filed June 19, 2006) (Shearouse Adv. Sh. No. 23 at 43) (citing Charleston County Parks & Recreation Comm’n v. Somers, 319 S.C. 65, 459 S.E.2d (1991); see also Liberty Mut. Ins. Co. v. S.C. Second Injury Fund, 363 S.C. 612, 621, 611 S.E.2d 297, 301 (Ct. App. 2005) (“The determination of legislative intent is a matter of law.”) (citations omitted); Eldridge v. City of Greenwood, 331 S.C. 398, 417, 503 S.E.2d 191, 200 (Ct. App. 1998) (“[T]he interpretation of a statute is a matter of law.”).  See, e.g., Carolina Power & Light Co. v. Town of Pageland, 321 S.C. 538, 471 S.E.2d 137 (1996); Byrd v. Irmo High School, 321 S.C. 426, 468 S.E.2d 861 (1996); Rowe v. Hyatt, 321 S.C. 366, 468 S.E.2d 649 (1996).

LAW/ANALYSIS

Williamson first argues Middleton is not entitled to attorney’s fees because he does not meet the requirements of section 39-65-30 of the South Carolina Code.  Specifically, Williamson points out that this statute only applies to sales representatives who seek to recover commissions on “wholesale” sales, and the commission awarded to Middleton was from a sale made to the ultimate consumer.  We find this issue is not preserved for our review.

Initially, we note that the arguments Williamson made to Judge Pyle on this issue are not reflected in the record on appeal.  Williamson did not advance this argument at the hearing before Judge Pyle, and although Williamson’s counsel refers to a memorandum she filed in opposition to Middleton’s request for attorney’s fees, that memorandum was not included in the record on appeal.  See Taylor v. Taylor, 294 S.C. 296, 299, 363 S.E.2d 909, 911 (Ct. App. 1987) (“The burden is on the appellant to furnish a sufficient record on appeal from which this court can make an intelligent review.”).  We acknowledge, however, that Judge Pyle addressed the argument in his order awarding attorney’s fees, suggesting the argument was set forth in Williamson’s memorandum.  In the order, Judge Pyle found Williamson’s argument that Middleton was not entitled to attorney’s fees and costs pursuant to section 39-65-30 came too late because during trial, Williamson never objected to the jury instructions referencing section 39-65-30, nor did Williamson challenge Judge Pyle’s initial ruling that Middleton was entitled to attorney’s fees. 

In its brief to our court, Williamson argues that “[e]ven though the jury returned a verdict . . . that awarded Middleton $906.62 for unpaid commissions, this recovery was sought on alternate grounds, both pursuant to § 39-65-30 and § 41-10-10.”  In so arguing, Williamson implies the jury’s award was based on a statute other than section 39-65-30.  Williamson further contends that its argument on this issue is timely because “the request for attorney fees is predicated on entirely different factors than was the request for commissions.”  From the record before us, there is no indication this specific argument was ever made to the trial court, either prior to the order awarding attorney’s fees or in Williamson’s motion for reconsideration.  Thus, the issue is not preserved for review.  See Staubes v. City of Folly Beach, 339 S.C. 406, 412, 529 S.E.2d 543, 546 (2000) (“It is well-settled that an issue cannot be raised for the first time on appeal, but must have been raised to and ruled upon by the trial court to be preserved for appellate review.”); see also Floyd v. Floyd, 365 S.C. 56, 73, 615 S.E.2d 465, 474 (Ct. App. 2005) (“‘Imposing this preservation requirement on the appellant is meant to enable the lower court to rule properly after it has considered all relevant facts, law, and arguments.’”) (quoting I’On, L.L.C v. Town of Mt. Pleasant, 338 S.C. 406, 422, 526 S.E.2d 716, 724 (2000)); Ellie, Inc. v. Miccichi, 358 S.C. 78, 103, 594 S.E.2d 485, 498 (Ct. App. 2004) (“Without an initial ruling by the trial court, a reviewing court simply would not be able to evaluate whether the trial court committed error.”).

Next, Williamson argues Middleton failed to prove the elements necessary to recover fees.  We agree.

The general rule is that attorney’s fees are not recoverable unless authorized by contract or statute.  Blumberg v. Nealco, Inc.,  310 S.C. 492, 493, 427 S.E.2d 659, 660 (1993) (citing Baron Data Sys., Inc. v. Loter, 297 S.C. 382, 377 S.E.2d 296 (1989); Hegler v. Gulf Ins. Co., 270 S.C. 548, 243 S.E.2d 443 (1978); Collins v. Collins, 239 S.C. 170, 122 S.E.2d 1 (1961)); accord Seabrook Island Property Owners’ Ass’n v. Berger, 365 S.C. 234, 238, 616 S.E.2d 431, 434 (Ct. App. 2005).  “In South Carolina, the authority to award attorney’s fees can come only from a statute or be provided for in the language of a contract.  There is no common law right to recover attorney’s fees.”  Harris-Jenkins v. Nissan Car Mart, Inc., 348 S.C. 171, 176, 557 S.E.2d 708, 710 (Ct. App. 2001) (citing Jackson v. Speed, 326 S.C. 289, 486 S.E.2d 750 (1997); American Fed. Bank, FSB v. Number One Main Joint Venture, 321 S.C. 169, 467 S.E.2d 439 (1996); Blumberg, 310 S.C. 492, 427 S.E.2d 659; Baron Data, 297 S.C. 382, 377 S.E.2d 296; Dowaliby v. Chambless, 344 S.C. 558, 544 S.E.2d 646 (Ct. App. 2001); Harvey v. South Carolina Dep’t of Corrections, 338 S.C. 500, 527 S.E.2d 765 (Ct. App. 2000); Global Protection Corp. v. Halbersberg, 332 S.C. 149, 503 S.E.2d 483 (Ct. App. 1998); Prevatte v. Asbury Arms, 302 S.C. 413, 396 S.E.2d 642 (Ct. App. 1990)).

Section 39-65-30 provides:

A principal who fails to comply with the provisions of Section 39-65-20 is liable to the sales representative in a civil action for:

(1)  all amounts due the sales representative plus punitive damages in an amount not to exceed three times the amount of commissions due the sales representative; and

(2)  attorney’s fees actually and reasonably incurred by the sales representative in the action and court costs.

S.C. Code Ann. § 39-65-30 (Supp. 2005).  The jury awarded Middleton the unpaid commission pursuant to section 39-65-20.  Therefore, we are dealing with a statutory attorney’s fee provision. 

When awarding attorney’s fees, the trial court must consider the following six factors: (1) the nature, extent, and difficulty of the legal services rendered; (2) the time and labor necessarily devoted to the case; (3) the professional standing of counsel; (4) the contingency of compensation; (5) the fee customarily charged in the locality for similar legal services; and (6) the beneficial results obtained.  Baron Data, 297 S.C. at 384-85, 377 S.E.2d at 297.  When awarding attorney’s fees, “there is no requirement that [the fees] be less than or comparable to a party’s monetary judgment.”  Taylor v. Medenica, 331 S.C. 575, 580, 503 S.E.2d 458, 461 (1998).

Here, Middleton incurred no attorney’s fees because no fee agreement existed between Middleton and his attorney.  In his deposition, Middleton’s lead counsel stated:

[W]e don’t have a fee agreement with Mr. Middleton.  We talked about this with Mr. Middleton to begin with and we decided that we would try to help him collect the monies due him and at the end of the case, we would talk about a fee.  So we don’t have a fee agreement with him.  But some day, he might pay us a fee.  Right now, he has no obligation at this point if there is no agreement.  He might feel a moral obligation.  And when we talk at the end of the case, he will have the final say.

(Emphasis added.) 

Counsel’s testimony admits there was no fee agreement with Middleton.  Consequently, there is no obligation to pay, and no fees have been incurred.

Hopkins v. Hopkins, 343 S.C. 301, 540 S.E.2d 454 (2000), involved Father’s action to recover overpayment of child support and attorney’s fees.  The court found Father was entitled to reimbursement of child support overpayments, but held he could not recover attorney’s fees because his current wife represented him and they did not have a fee agreement.  The court began its analysis by noting that Calhoun v. Calhoun, 339 S.C. 96, 529 S.E.2d 14 (2000), held a pro se litigant could not recover attorney’s fees because “a pro se litigant, whether an attorney or layperson, does not become ‘liable for or subject to fees charged by an attorney.’”  343 S.C. at 306, 540 S.E.2d at 457.  The Hopkins court declared:

[H]ere, we find no evidence Father actually became “liable for or subject to” attorneys’ fees for his attorney/wife’s service.  There is no contract or fee agreement in the record, nor is there any indication or testimony that Father’s wife/attorney has attempted or intends to collect the fees from Father.  Accordingly, Father did not prove that he became liable for the fees, such that the family court properly denied Father’s request.

343 S.C. at 307, 540 S.E.2d at 457. 

The rationale of Hopkins is equally applicable in the instant case.  Both Calhoun and Hopkins focused on the litigants’ lack of liability for attorney’s fees.  Here, Middleton’s counsel admits Middleton “has no obligation at this point if there is no agreement.”  There is no agreement; therefore, Middleton owes no obligation to pay, and no fees were incurred.  Under these facts the trial judge erred in awarding attorney’s fees. 

Because we reverse the award of attorney’s fees on this ground, we need not address Williamson’s arguments that Middleton was not the prevailing party and that the fees awarded were unreasonable.

CONCLUSION

We hold that in South Carolina there must be an agreement between counsel and client in order for a court to award attorney’s fees.  In the case sub judice, there is unequivocally no agreement to pay attorney’s fees.  Accordingly, the award of fees is

REVERSED.

CURETON, A.J., concurs.

HEARN, C.J., dissents in a separate opinion.

HEARN, C.J.: Because I believe a party can recover attorney’s fees absent a formal agreement, I respectfully disagree with the majority’s reversal of the $35,000 award of fees to Middleton.  It is well-settled that “[w]here an attorney’s services and their value are determined by the trier of fact, an appeal will not prevail if the findings of fact are supported by any competent evidence.”  Baron Data Sys. v. Loter, 297 S.C. 382, 384, 377 S.E.2d 296, 296 (1989) (emphasis added).  Here, there is evidence supporting the trial court’s determination that Middleton and his attorneys had an informal agreement to “determine an appropriate fee for services at the conclusion of this matter.”  Therefore, I vote to affirm. 

As the majority points out, Middleton’s lead counsel stated in his deposition:

[W]e don’t have a fee agreement with Mr. Middleton.  We talked about this with Mr. Middleton to begin with and we decided that we would try to help him collect the monies due him and at the end of the case, we would talk about a fee.  So we don’t have a fee agreement with him. But some day, he might pay us a fee.  Right now, he has no obligation at this point if there is no agreement.  He might feel a moral obligation.  And when we talk at the end of the case, he will have the final say.

(Emphasis added.)  While this testimony could be interpreted to mean Middleton would never be required to pay a fee, it also indicates that Middleton and his attorneys would discuss a fee at the end of the case.   The trial judge adopted this latter interpretation, and based on our standard of review, I do not believe we can second-guess his conclusion.[1] 

Because there was testimony evidencing counsel’s intent to discuss a fee with Middleton, I believe this case is easily distinguished from Hopkins v. Hopkins, 343 S.C. 301, 540 S.E.2d 454 (2000).  In Hopkins, the supreme court upheld the family court’s determination that Husband was not entitled to attorney’s fees when he was represented at trial by his attorney/wife.  In so doing, the supreme court did not merely rely on a lack of a fee agreement, but also stressed there was no “indication or testimony that [appellant’s] wife/attorney intends to collect the fees from [appellant].”  Id. at 307, 540 S.E.2d at 457.  Here, there was evidence Middleton and his attorney would discuss fees at the conclusion of the case. 

The majority finds Middleton did not incur any attorney’s fees because he and his attorneys did not have a fee agreement.  However, the lack of a formal fee agreement does not preclude an attorney from collecting fees.  See Singleton v. Collins, 251 S.C. 208, 210-11, 161 S.E.2d 246, 247 (1968) (“An attorney has a right to be paid for professional services rendered, and where there is no express contract, the law will imply one.”).  Although the Singleton case is procedurally different from the case at hand, its determination regarding attorney’s fees is instructive.  In Singleton, an attorney filed an action to collect fees after rendering services to a client in a domestic relations action.  Despite the lack of a formal contract, the trial court implied a contract and determined the amount of attorney’s fees owed.  Our supreme court upheld the trial court’s decision, noting: “Whether the services were rendered, and their value, are matters of fact to be decided . . . by the court below, and no appeal lies therefrom if the findings of fact are supported by any competent evidence.”  Id. at 211, 161 S.E.2d at 247.

Although Singleton involves the collection of attorney’s fees from a client rather than an opposing party, it illustrates that the lack of a formal agreement is not fatal to an attorney’s claim for fees.  Here, the trial judge was not precluded from awarding attorney’s fees simply because Middleton and his attorneys lacked a written agreement.  Rather, so long as there was evidence Middleton’s attorneys intended to collect a fee, the trial judge had discretion to award the fee.  Not only did Judge Pyle find there was such evidence, but Judge Miller, whose ruling was reversed for lack of subject matter jurisdiction, found an informal agreement existed as well.  Because there is evidence in the record to support the findings of these two outstanding trial judges, I vote to affirm their determination that a fee had been incurred.

In addition to its argument that Middleton did not incur attorney’s fees, Williamson also argues Middleton failed to prove the other elements necessary to recover fees, or in the alternative, that the fees awarded were unreasonably high.  I disagree.

When awarding attorney’s fees, the trial court must consider the following six factors: (1) the nature, extent and difficulty of the legal services rendered; (2) the time and labor necessarily devoted to the case; (3) the professional standing of counsel; (4) the contingency of compensation; (5) the fee customarily charged in the locality for similar legal services; and (6) the beneficial results obtained.  Baron Data Sys, Inc., v. Loter, 297 S.C. at 384-85, 377 S.E.2d at 297.  “Where an attorney’s services and their value are determined by the trier of fact, an appeal will not prevail if the findings of fact are supported by any competent evidence.”  Id. at 384, 377 S.E.2d at 296 (emphasis added).  Here, Judge Pyle made specific findings on each of the six elements, and there is evidence in the record supporting those findings. 

Williamson also argues that even if we find Middleton was entitled to attorney’s fees, the amount of attorney’s fees awarded was unreasonable in light of the beneficial results Middleton received.  However, “there is no requirement that attorney’s fees be less than or comparable to a party’s monetary judgment.”  Taylor v. Medenica, 331 S.C. 575, 580, 503 S.E.2d 458, 461 (1998).  Furthermore, although a $35,000 attorney’s fee may initially seem high for a cause of action for unpaid commissions, especially when the action resulted in a $906.62 verdict, under the peculiar circumstances of this case, there was evidence in the record supporting the trial judge’s finding that $35,000 was a reasonable amount to award.  First and foremost, it is important to note that Middleton’s attorney did not institute this lawsuit.  Rather, in the best tradition of the profession, he attempted to settle this matter with Williamson, and at the specific request of opposing counsel, Middleton delayed bringing suit.  However, within a matter of days, Williamson filed suit against Middleton.  In order to litigate his cause of action for unpaid commissions, Middleton had to defend himself against Williamson’s claim against him for breach of fiduciary duty, which is an affirmative defense for unpaid commissions.  Additionally, Middleton submitted affidavits demonstrating how Williamson employed dilatory tactics prior to the trial of this case, such as persuading Middleton to withhold from filing its complaint so that it could be the first file a complaint, cancelling depositions on the afternoon before or the morning of their scheduled time, and submitting incomplete responses to Middleton’s requests for discovery.[2] Based on the detailed bills submitted by Middleton’s attorneys and the difficulties they faced in trying their case, I find competent evidence supports the trial judge’s award of $35,000 in attorney’s fees.  Accordingly, I vote to affirm the trial court’s order.


[1] If the trial judge had refused to award Middleton fees in the present case, I would vote to affirm that determination also, as there is evidence in the record to support it. 

[2] Williamson’s current counsel was not yet involved in this case when the complaint was filed, nor was she involved when these pre-trial delays occurred.