Meredith v. Smith

¶1T1 Defendant in this small claims action appeals from the trial court's order denying his motion to vacate an order granting attorney fees to Plaintiff.

¶212 Plaintiff, a court reporter, sued Defendant for $458.25. Defendant advised the court he agreed not to contest the action, and thus he did not appear at the hearing. The trial court granted default judgment to Plaintiff for that amount.

¶3T8 After an initial abortive attempt1 by Plaintiff to obtain an order granting her request for attorney fees, the trial court entered an order giving Plaintiff $8,300.00 for attorney fees and $120.00 in costs. Due to scheduling conflicts, Defendant could not appear at the hearing which had been reset without agreement by Defendant. The trial court entered this order on December 17, 1998. Defendant did not appeal or file a motion for new trial.

¶414 On January 12, 1999, Defendant filed a motion to vacate the December 17 award. Although not so denominated by Defendant, his motion was filed within 30 days of the judgment and will be considered as a 12 00.85.1997 Swpp. § 1081.1 (B) motion. The trial court overruled his motion, and he appeals.

¶515 The trial court has discretion to vacate its own judgment, and refusal to vacate is not reversible error unless abuse of discretion is shown. Craig v. Cabelka, 1992 OK CIV APP 98, 838 P.2d 532. Although under this section, the trial court's power is almost unlimited, the application may be granted only for sufficient cause shown. Jones v. Strain, 1979 OK CIV APP 48, 603 P.2d 353.

¶6T6 In his motion to vacate and on appeal, Defendant argues the award of attorney fees should have been limited to 10% of the judgment as set out in 12 0.9.1998 Supp. § 1751 (C). That section provides in cases "which are uncontested, the amount of attorneys fees allowed shall not exceed ten percent (10%) of the judgment." He claims the parties agreed Plaintiff was entitled to $458.25 as judgment in the action. Based on the agreement, Defendant allowed the default judgement to be entered against him hoping to limit attorney fees to the statutory 10%.

¶7T 7 Plaintiff asserts the action could searcely be called uncontested. Defendant appeared on the date the case was initially set and announced ready for trial. However, because all the judges in Cleveland County recused, the hearing was continued. Defendant also filed two motions in an effort to have the case dismissed. Plaintiff points out that simply because Defendant chose not to appear for the reset hearing on the merits, does not mean the matter was uncontested. We agree. The attorney fee cap does not apply under these circumstances. Plaintiff's attorney spent time drafting responses to Defendant's motions and appeared in court several times.

¶818 12 0.S$.1997 Supp. § 1764 provides, in pertinent part, that "any statute providing for an award of attorney fees shall be applicable to the small claims division if the attorney makes an appearance in the case, whether before or after judgment or on *1004hearing for disclosure of assets." Plaintiff filed this action to recover charges for her services in taking and transcribing a deposition for Defendant. 12 0.8.1991 $ 986 authorizes attorney fees for the prevailing party in such an action for labor or services. Plaintiff is clearly entitled to attorney fees.

¶919 Defendant also argues the amount of attorney fees bears no relation to the amount of the judgment and is unreasonable. The determination of the reasonableness of an attorney's fee is particularly within the province of a trial court. We review the district court's award of attorney's fee for abuse of discretion. Marvel v. Miken, 1994 OK CIV APP 150, 889 P.2d 903. An attorney in Oklahoma is clearly prohibited from receiving a fee which is excessive or unreasonable. American National Bank and Trust Co. of Shawnee v. Clarke & Van Wagner Inc., 1984 OK CIV APP 37, 692 P.2d 61. However, an attorney fee award is not unreasonable simply because it exceeds the amount of the judgment. AME, Inc. v. Consolidated Freightways, 1989 OK CIV APP 57, 783 P.2d 499.

¶10110 Because litigants are entitled to a fair day in court, policy encourages actions being tried on the merits, and default judgments are not favored. Nelson v. Nelson, 1998 OK 10, 954 P.2d 1219. In his motion to vacate, Defendant points to several contested issues. He claims he mailed Plaintiff's lawyer a check for $586.62 with a cover letter stating $45.83 was for attorney fees which Plaintiff cashed. Plaintiff admits cashing the check but states she did not see the cover letter and offered to return the $45.88. Defendant, an attorney, also points out that he had two other hearings set at the time the trial court held the hearing on attorney fees. He advised the court of the conflicts, but the judge stated in his order that he had contacted the other court and made arrangements to postpone the proceeding. Defendant claims his client would not agree.

¶11T11 The Supreme Court, in reviewing a trial court's ruling refusing to vacate a default judgment has considered several factors: 1) default judgments are not favored; 2) vacation of a default judgment is different from vacation of a judgment where the parties have had at least one opportunity to be heard on the merits; 3) judicial discretion to vacate a default judgment should always be exercised so as to promote the ends of justice; 4) a much stronger showing of abuse of discretion must be made where a judgment has been set aside than where it has not. The Court also considered whether substantial hardship would result from granting or refusing to grant the motion to vacate. Ferguson Enterprises, Inc. v. H. Webb Enterprises, Inc., 2000 OK 78, 13 P.3d 480. This Court may also consider whether any rights of a stranger would be affected. Also, if the motion could be granted without substantial delay or injustice and its denial might work a serious injustice, a denial would constitute an abuse of discretion and should be reversed on appeal. Latson v. Eaton, 1957 OK 105, 311 P.2d 231.

¶12112 Here, the trial court stated in its order overruling Defendant's motion to vacate that it considered the Burk2 factors. However, there is no record before us supporting this finding. $3,800.00 in attorney fees to prosecute an action for $485.25 appears to be unreasonable, especially in a small claims case. See, Roofing & Sheet Metal Supply Company of Tulsa, Inc. v. Golzar-Nejad Khalil, Inc., 1996 OK 101, 925 P.2d 55, 60.

¶13T 13 Accordingly, the judgment refusing to vacate the default judgment for attorney fees is reversed and the cause remanded with directions to grant Defendant a full hearing on the amount of attorney fees to be awarded Plaintiff.

¶14T 14 REVERSED AND REMANDED

¶17concurring:

¶18{15 While I concur, additional comments are needed. The attorney fee order was entered on December 17, 1998. Appellant's motion to vacate was filed 26 days later, on January 12, 1999. Therefore, this appeal from the order denying the motion to vacate must be considered in the light of 12 0.8. *1005Supp. 197? § 1081.1 (B)3 The trial court has almost unlimited power to vacate its judgment within 80 days after its rendition. Colquitt v. Hill, 1984 OK CIV APP 18, 680 P.2d 994. However, its order, to vacate or not to vacate, is not reversible unless an abuse of discretion is shown. Craig v. Cabelka, 1992 OK CIV APP 98, 838 P.2d 532.

¶19[ 16 When an order is entered by the trial court upon the motion of a party to vacate a judgment under the power and authority granted by § 1081.1, the issue on appeal is whether the trial court's response to the motion constituted an abuse of discretion. Cf. Yery v. Yery, 1981 OK 46, 629 P.2d 3957. Was the attorney fee excessive, unreasonable and contrary to law? Did the court abuse its discretion when it entered the order and, as applicable here, when it refused to vacate the order when requested, within term time? Both questions should be answered in the affirmative.

¶20117 Plaintiff sued Defendant for $485.25. On its face, an attorney fee of $8,300.00 in an action involving $485.25 is excessive and unreasonable. This is especially true in a small claims case, but I would so hold, in the absence of extreme conditions, in any action.

¶21118 One of the purposes of the small claims act is to make available to litigants a simple, swift and inexpensive method to settle minor civil disputes. As our Supreme Court said in Thayer v. Phillips Petroleum Co., 1980 OK 95, 613 P.2d 1041, "We may reasonably assume that people who use it [small claims court] expect the expense to be minimal." As originally enacted, the Act did not allow attorney fees. Now, the statute [see 12 O.S. Supp.1995 § 1751 (C)] allows such fees where otherwise allowed by law, but limits the fee to 10% of the judgment in uncontested cases.

¶2219 In this appeal it is disputed whether the case was contested. However, whether contested or uncontested, small claims procedure restricts the parties in their legal activities. The plaintiff's claim is required to be stated on an affidavit substantially in the form prescribed by statute. The forms are available at the court clerk's office. The clerk is required to assist the claimant by drafting the affidavit if claimant desires. The defendant is not required to file an answer or other pleading to deny or contest a claim. The defendant may file an answer and/or file a counterclaim or setoff. If the defendant decides to file such a response to the plaintiff's claim, it is required to be on an affidavit substantially in the form prescribed by statute. The forms are available at the court clerk's office.

¶23120 The applicable statutes neither contemplate nor authorize extensive activity by lawyers in these actions. Discovery is not permitted. Lawyers are allowed, but are not required. The Judge runs the show. The procedure is informal. Pre-trial procedures, motions and orders are not authorized. The usual evidentiary rules are not required. A motion to transfer the case to another docket and a motion (request) for jury trial are allowed. Otherwise only minor motions or requests are allowed. If the parties want the court to take some action, a simple oral request is sufficient. And, on and on.

¶24121 Apparently, in this case the lawyers conducted themselves substantially as they would in an action on the regular civil docket. The trial court should not have allowed numerous motions and time consuming activity. This was error. As one who has been there many times, I must admit that lawyers can be, and often are most insistent. By the same token, the court can easily control the lawyers' activity and conduct of the hearing and trial, and should do so. |

¶251 22 The legislative intent, as expressed in the Small Claims Act, should be given effect. As above stated, a quick, simple and inexpensive method of administering justice is the goal.

¶261283 I agree that this case must be reversed and remanded for a new hearing on the amount of attorney fees to be awarded to Plaintiff.

¶2741 24 I concur.