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Hodge v Sorba (10/05/2001) sp-5485
Hodge v Sorba (10/05/2001) sp-5485
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
DUANE DONALD HODGE, )
) Supreme Court No. S-9587
Appellant, )
) Superior Court No.
v. ) 3PA-98-310 CI
)
GEORGANNA CARLA SORBA, ) O P I N I O N
)
Appellee. ) [No. 5485 - October 5, 2001]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Palmer,
Eric Smith, Judge.
Appearances: David R. Edgren, Edgren &
Associates, P.C., Anchorage, for Appellant. Joseph R.D. Loescher,
Hughes Thorsness Powell Huddleston & Bauman LLC, Anchorage, for
Appellee.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
Duane Hodge appeals the superior court's award of
$22,594.50 in attorney's fees and $1,003.21 in costs to his ex-
wife, Georganna Sorba, following their divorce proceeding.
Because, contrary to Duane's argument, Georganna did not have a
contingent fee agreement with her attorneys, and because the award
was permissible under AS 25.24.140(a), we affirm the award.
II. FACTS AND PROCEEDINGS
Georganna Sorba filed a complaint for divorce from Duane
Hodge on March 31, 1998. Georganna's original attorney, Mark
Christensen, asked the superior court to award her interim
attorney's fees of $2,500. The court granted Georganna a one-time
interim spousal support award of $500. On October 29 the superior
court granted Duane's motion to bifurcate the divorce proceeding
from the proceedings regarding child custody, visitation, support,
and property division.
Attorneys from the law firm of Hughes, Thorsness, Powell,
Huddleston & Bauman, LLC (Hughes, Thorsness) entered an appearance
for Georganna on December 8, 1998. Georganna had no income when
she retained the Hughes, Thorsness firm. It agreed to represent
her in exchange for whatever attorney's fees the court awarded in
the case, and agreed not to collect any more than the award. The
superior court entered the divorce decree on January 27, 1999.
Hughes, Thorsness attorneys worked 5.9 hours on her case before the
divorce decree was entered. After the divorce decree was entered,
the firm represented Georganna in the various proceedings
adjudicating child custody, support, and property division, and
worked 152.4 hours. After resolving the remaining issues, the
superior court awarded Georganna "reasonable attorney's fees" and
requested briefing on the appropriate amount. Georganna moved for
an award of $22,594.50 in attorney's fees and $1,003.21 in costs.
The superior court granted Georganna's motion and ordered that she
be paid the amount requested. The final decree of divorce was
issued March 16, 2000.
Duane appeals the award of attorney's fees and costs.
III. DISCUSSION
A. Standard of Review
It is a question of law whether the superior court had
authority under AS 25.24.140(a) to award attorney's fees, where the
client agreed to pay her lawyers whatever fees the court might
award her. We review that question de novo. [Fn. 1] We will adopt
the rule that best reflects precedent, reason, and policy. [Fn. 2]
If the superior court had authority to award attorney's fees under
AS 25.24.140, it had broad discretion in deciding how to exercise
that authority. [Fn. 3] If the award was authorized, it should
"'not be disturbed on appeal unless it is arbitrary, capricious,
manifestly unreasonable, or stems from an improper motive.'" [Fn.
4]
B. Did the Superior Court Have Authority to Award
Attorney's Fees to Georganna Given Her Underlying Fee Arrangement?
Alaska Statute 25.24.140(a) provides:
During the pendency of the [divorce] action, a
spouse may, upon application and in appropriate circumstances, be
awarded expenses, including (1) attorney fees and costs that
reasonably approximate the actual fees and costs required to
prosecute or defend the action; in applying this paragraph, the
court shall take appropriate steps to ensure that the award of
attorney fees does not contribute to an unnecessary escalation in
the litigation . . . .
Alaska Bar Rule 35(d) provides:
An attorney will not enter into an agreement
for, charge, or collect: (1) any fee in a domestic relations
matter, the payment or amount of which is contingent upon the
securing of a divorce or upon the amount of alimony or support, or
property settlement in lieu thereof, except an action to collect
past-due alimony or support payments . . . .[ [Fn. 5]]
Duane argues that the underlying fee arrangement was a
contingency fee arrangement and that the superior court
consequently abused its discretion by awarding attorney's fees to
Georganna. Duane implicitly argues that the nature of the fee
agreement deprived the superior court of the authority to award
attorney's fees, not merely that this award was an abuse of
discretion. Duane argues that Bar Rule 35(d)(1) and Professional
Conduct Rule 1.5(d) embody a state policy against contingency fee
arrangements in domestic proceedings, and reflect a state interest
in preserving the institution of marriage. Likewise, he argues
that either the rules themselves or the policies they embody denied
the superior court the authority to enter this attorney's fee
award.
We assume for discussion's sake that Duane is correct
that these policies and rules would prohibit an award of attorney's
fees under AS 25.24.140(d)(1) if the underlying fee arrangement is
"contingent," as that term is used in Bar Rule 35(d) and Rule of
Professional Conduct 1.5(d)(1). But Georganna's arrangement with
her attorneys was not "contingent" under those rules or the
policies underlying those rules. The superior court concluded that
"[t]his is not a contingency fee, as that term is defined in Alaska
Bar Rule 35(d)(1), as payment was not contingent on securing a
divorce or on the amount of alimony, support or a property
settlement." The superior court reasoned that the fee agreement
is a form of a pro bono arrangement, by which
counsel agreed to represent plaintiff in the hope that the court
would award attorneys fees at the end of the case. . . . Evidently
recognizing that plaintiff could not pay much in the way of fees,
and that he was unlikely to obtain more than what the court
awarded, counsel for plaintiff instead made an agreement that both
reflected the reality that he perceived and provided a pro bono
service to a client. To deny fees because the arrangement provided
up front for what evidently would have happened anyway would be
effectively to penalize counsel for plaintiff for taking the
realistic and pro bono approach that he did.
We agree with the superior court's characterization of
the fee arrangement. Georganna's payment of fees for services the
firm rendered was not contingent on successful prosecution of any
given issue. [Fn. 6] Rather, it turned on the financial resources
of the parties. It therefore did not violate the prohibitions of
the bar rules or rules of professional conduct.
Duane, in arguing that Georganna's fee agreement was
contingent, relies on Municipality of Anchorage v. Gentile. [Fn. 7]
He argues that our characterization of the fee agreement in that
case as a contingent fee arrangement also applies here. But the
Gentile fee arrangement differed from Georganna's because the
Gentile attorneys had agreed to accept whatever was awarded by the
court under Alaska Civil Rule 82 or perhaps Alaska Civil Rule 23.
[Fn. 8] Those rules provide for fee awards to prevailing parties
and consequently tie compensation to the litigation result in the
sense contemplated under common notions of contingent fee
agreements. In comparison, Georganna sought an award under AS
25.24.140(a). That statute conditions awards not on the litigation
outcome, but on the relative economic positions of the parties.
[Fn. 9]
Duane also argues that the arrangement is, in essence, a
contingency arrangement because Georganna's attorneys would not be
paid unless the court awarded fees, and because the court could not
award fees under AS 25.24.140(a) unless there was a divorce. Thus,
he reasons that the payment to the lawyers was contingent on
granting the divorce Georganna sought. But Duane cites no
authority to support his premises. Our decision in Coleman v.
Coleman suggests that an attorney's fee award in domestic
proceedings will not turn on whether the underlying proceeding is
formally a proceeding to obtain a divorce. [Fn. 10] We assumed for
the sake of argument that the ex-spouses in that case had been
fully divorced before their custody and support disputes were
litigated. [Fn. 11] Nevertheless, we held that the ex-wife could
recover attorney's fees incurred during the post-divorce
proceedings under the rule that "[a]n award of attorney's fees in
a 'case between unmarried individuals . . . limited to issues of
child custody and support' is 'based on [their] relative economic
situations and earning powers.'" [Fn. 12]
Under Coleman, Georganna's relative economic disadvantage
made her eligible for a fee award regardless of whether the
proceedings for which she sought compensation secured her divorce,
or dealt with custody and support. Duane cites no authority to
support his argument that Georganna's fee arrangement was
contingent because, he theorizes, fees could not be recovered or
paid unless divorce was granted. As we have seen, Duane's
underlying assumption is incorrect. In any event, we are
unpersuaded by his unsupported argument. We conclude that no
prohibition against contingent attorney's fees agreements in
domestic matters precluded the superior court from exercising its
discretion.
Duane also argues that Georganna's fee arrangement was
undesirable because it gave her attorneys financial incentive to
litigate. We are not persuaded that any such incentives resulted
in excessive attorney's fees in this case. In fact, the superior
court noted that "counsel made active efforts to settle the case,
in contrast to the very legitimate concern that contingency fee
arrangements in divorce cases operate to prolong and exacerbate
litigation, not to resolve it." Further, Duane does not claim on
appeal that the award was excessive or that Georganna's counsel
spent too many hours litigating in the superior court. Any
potential for overzealous representation was not realized here. To
the extent such agreements could encourage excessive legal efforts,
the remedy lies in adjusting the amount of the award, not in
adopting a rule that would require complete denial on grounds of
public policy.
IV. CONCLUSION
We therefore AFFIRM the superior court's award of
attorney's fees and costs to Georganna.
FOOTNOTES
Footnote 1:
See Coleman v. Coleman, 968 P.2d 570, 572-73 (Alaska 1998)
(reviewing de novo superior court's decision to award ex-spouse
attorney's fees under AS 25.24.140(a) in custody proceeding that
was undertaken after divorce proceeding had been resolved).
Footnote 2:
See Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).
Footnote 3:
See Coleman, 968 P.2d at 572; Jones v. Jones, 835 P.2d 1173,
1179 (Alaska 1992).
Footnote 4:
Notkin v. Notkin, 921 P.2d 1109, 1114 (Alaska 1996) (quoting
Zimin v. Zimin, 837 P.2d 118, 124 (Alaska 1992)).
Footnote 5:
Alaska Rule of Professional Conduct 1.5(d)(1) contains
identical language.
Footnote 6:
The record demonstrates that payment to Georganna's attorneys
was not contingent upon her obtaining a divorce. Duane and
Georganna were divorced by superior court order on January 27,
1999. At that time, Georganna's attorneys had worked only 5.9
hours on her case. Following the divorce order, they worked an
additional 152.4 hours. Therefore most of her attorneys' efforts
involved advocating her interests in child custody and property
matters, not securing her divorce.
Footnote 7:
922 P.2d 248, 262-67 (Alaska 1996) (holding that in
determining compensable value of services attorneys rendered to
class of plaintiffs, for purposes of determining award of attorney
fees under Rule 82 -- providing for award to prevailing party in
civil class action in which class representatives agreed to pay
attorneys whatever fees court awarded -- trial court may consider
risk enhancement and apply common fund analysis).
Footnote 8:
See id. at 262.
Footnote 9:
See Jones, 835 P.2d at 1179-80 ("The 'prevailing party'
standard of Rule 82 does not apply in divorce actions. Instead,
the court must base an award of fees on the parties' relative
economic situations and earning power." (citations omitted)).
Footnote 10:
See Coleman, 968 P.2d at 573-74.
Footnote 11:
See id. at 573.
Footnote 12:
Id. (citations omitted).
