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A contingent-fee contract does not impose an automatic ceiling on an award of attorney's fees. Instead, the presence of a pre-existing fee agreement may aid in determining reasonableness.
In August 2005, plaintiff, Courtney McNiff, brought suit to recover damages against defendants, Mazda Motor of America, Inc. (Mazda), and Sam Leman Mazda, for breach of written warranty and breach of implied warranty of merchantability. The parties eventually settled. In March 2007, plaintiff filed a petition for an award of costs and attorney fees. In May 2007, the trial court awarded plaintiff's two attorneys a total of $26,015.50 in fees and costs. Defendant Mazda and plaintiff filed motions to reconsider, both of which the court denied. On appeal, defendant Mazda argued that the trial court erred in awarding attorney fees on an hourly basis when plaintiff entered into a contingency-fee agreement with her attorneys and abused its discretion in compensating the attorneys. In her cross-appeal, plaintiff argued that the trial court erred in refusing to award attorney fees for her response to the motion for reconsideration and by awarding her attorney a lower rate.
The appellate court held that contrary to the automaker's contentions, the presence of the fee agreement did not impose a ceiling on the award of fees under 15 U.S.C.S. § 2310(d)(2). The records provided by counsel were sufficient to allow the trial court to determine whether the fees were reasonably incurred. The trial court found the requested fees to be reasonable and they were properly awarded. However, the court found that the trial court erred in denying the owner attorney fees for work counsel did on a motion to reconsider the fee award. On remand, the plaintiff was to submit a supplemental petition detailing reasonable attorney fees incurred in responding to the automaker's motion to reconsider the fee award. The time was not to exceed 10.75 hours. As the plaintiff admitted the case was not complex, the trial court did not abuse its discretion in awarding fees at counsels' regular rates, not higher rates charged for complex commercial litigation. Finally, under the Magnuson-Moss Act the plaintiff was entitled to appellate attorney fees. According to the court, allowing a plaintiff to petition for appellate attorney fees and costs would further the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act’s goal of providing consumers with legal assistance to enable them to pursue a remedy for injury or loss.