The Tennessee Court of Appeals issued an opinion yesterday in a collection case, which has some really useful analysis on the reasonableness of attorney’s fees. This is an issue near and dear to my heart.
A full copy of the opinion, Tennessee Farmers Cooperative v. Ted Rains, M201801097COAR3CV, 2019 WL 3229686 (Tenn. App. July 18, 2019), can be found here.
To cut to the chase, “[A] determination of attorney’s fees is within the discretion of the trial court and will be upheld unless the trial court abuses its discretion.” Kline v. Eyrich, 69 S.W.3d 197, 203 (Tenn. 2002); Shamblin v. Sylvester, 304 S.W.3d 320, 331 (Tenn. Ct. App. 2009). The appellate court will “presume that the trial court’s discretionary decision is correct, and we consider the evidence in the light most favorable to the decision.” Henderson v. SAIA, Inc., 318 S.W.3d 328, 335 (Tenn. 2010).
Generally, the trial court will apply the standards set out in Rule 8, Rules of the Supreme Court, Rules of Professional Conduct, Rule 1.5 “Fees” in determining whether the fee is reasonable and necessary.
One interesting note in this case is that the Court of Appeals, in reviewing the attorneys fees, subtracted a portion of the fees for a failed motion for summary judgment, reducing the award by about $20,000. This suggests that a trial court should analyze each and every effort made by the prevailing party, even those smaller moves that aren’t successful.
This seems to be a step too far, since there was an ultimate finding of liability, default, and unpaid debt (with no defenses). In that situation, I’d think the creditor’s fees should be fully compensable.