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2011-UP-449 - Waccamaw Bank v. Myrtle Beach Smokestack

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Waccamaw Bank, Respondent,

v.

Myrtle Beach Smokestack Lightning, LLC, Ramsey Company, Inc., Athalia S. Ramsey, Jasper Ramsey, Bhupendra C. Patel, Wayne Faulk, Michael Bert Anderson, South Carolina Department of Revenue, United States of America acting by and through its agency, The Internal Revenue  Service, 

Of whom Bhupendra C. Patel is the Appellant.


Appeal From Horry County
 Ralph P. Stroman, Special Referee Judge


Unpublished Opinion No. 2011-UP-449
Submitted October 1, 2011 – Filed October 11, 2011   


REVERSED AND REMANDED


William W. DesChamps, Jr., of Myrtle Beach, for Appellant.

Scott B. Umstead, of Myrtle Beach, for Respondent. 

PER CURIAM:  Bhupendra C. Patel appeals the special referee's order awarding Waccamaw Bank (the Bank) $124,018.02 in attorney's fees.  We reverse[1] and remand to the circuit court to make specific factual findings to support its award for reasonable attorney's fees.

Generally, "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).  "When a [contract] provides for attorney['s] fees at a specific rate in the event collection becomes necessary, the amount of attorney['s] fees is governed by the contract."  West v. Gladney, 341 S.C. 127, 135, 533 S.E.2d 334, 338 (Ct. App. 2000).  However, when the contract permits reasonable attorney's fees, "the award of attorney's fees is left to the discretion of the [circuit court] and will not be disturbed" absent an abuse of discretion.  Blumberg, 310 S.C. at 493, 427 S.E.2d at 660. In awarding attorney's fees, the circuit court should consider the following factors: "(1) nature, extent, and difficulty of the legal services rendered; (2) time and labor devoted to the case; (3) professional standing of counsel; (4) contingency of compensation; (5) fee customarily charged in the locality for similar services; and (6) beneficial results obtained."  Hardaway Concrete Co. v. Hall Contracting Corp., 374 S.C. 216, 230, 647 S.E.2d 488, 495 (Ct. App. 2007) (quoting Blumberg, 310 S.C. at 494, 427 S.E.2d at 660). 

"An award of attorney['s] fees will be affirmed on appeal if there is sufficient evidentiary support in the record for each factor."  Menne v. Keowee Key Prop. Owners' Ass'n, Inc., 368 S.C. 557, 569, 629 S.E.2d 690, 697 (Ct. App. 2006).  Therefore, "the [circuit court] must make specific findings of fact on the record for each of the required factors to be considered."  Hardaway Concrete Co., 374 S.C. at 230, 647 S.E.2d at 495.  "[A]bsent sufficient evidentiary support on the record for each factor, the award should be reversed and the issue remanded for the [circuit court] to make specific findings of fact."  Id. (citation and quotation marks omitted) (alteration in original).

We find the special referee's order failed to make any specific factual findings to support its award of reasonable attorney's fees.[2]  Here, the special referee's order is unclear as to how it determined the reasonableness of its award of attorney's fees.  In its order, the special referee invoked the reasonableness standard for awarding attorney's fees, but failed to apply it.  Additionally, the special referee failed to apply the required factors for  determining reasonable attorney's fees.  Moreover, the record contains insufficient evidence to support the special referee's decision.  The Bank's counsel's affidavit and the Senior Vice President's testimony were the only evidence presented to support the award.  However, counsel's affidavit did not set forth his hourly rate or the amount of time devoted to this case, and the Senior Vice President's testimony only indicated the Bank agreed to reasonable attorney's fees.  Thus, we reverse and remand to the circuit court to make specific factual findings supporting its award of reasonable attorney's fees.   See Sunrise Sav. & Loan Ass'n v. Mariner's Cay Dev. Corp.,  295 S.C. 208, 211, 367 S.E.2d 696, 698 (1988) (finding an award of $125,000 for attorney's fees was unsupported by the evidence in the record because counsel's affidavit stating in a conclusory fashion that the fees were reasonable was the only evidence presented to support the award). 

REVERSED AND REMANDED.

HUFF, PIEPER, and LOCKEMY, JJ., concur. 


[1] We decide this case without oral argument pursuant to Rule 215, SCACR.

[2] We find the Bank's argument that the amount of the attorney's fees set forth in the mortgage applies to Patel is without merit.  As a guarantor, Patel is not subject to the terms of the mortgage because the mortgage and guaranty agreement are separate contracts.  Accordingly, Patel was only responsible for paying reasonable attorney's fees as agreed upon in the guaranty agreement.  See First Sav. Bank v. Capital Investors,  318 S.C. 555, 556, 459 S.E.2d 307, 308 (1995) (reversing the circuit court's award for attorney's fees against the guarantor based on the note agreement because the note and guaranty are separate contracts with different terms for the amount of attorney's fees).