Opinion
CV156027405S
04-19-2016
A Better Way Wholesale Autos, Inc. v. American Credit Acceptance, LLC et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE RESPONDENT'S MOTION FOR SUPPLEMENTAL ATTORNEYS FEES
MARK H. TAYLOR, J.
I
BACKGROUND
By way of background, A Better Way Wholesale Autos, Inc.'s (A Better Way), application to vacate an arbitration award has been denied by the court, and the respondents have prevailed on their cross applications to confirm the award pursuant to General Statutes § 52-418. The respondent, Kiara Rodriguez (Rodriguez), now seeks statutory attorneys fees after prevailing in this action.
See Memorandum of Decision dated January 11, 2016.
The underlying arbitration between the parties arose from A Better Way's sale of a used 2006 Toyota Scion to the respondent and cross applicant, Rodriguez. In this dispute, Rodriguez originally included American Credit Acceptance, LLC (American Credit) as a defendant in its role as the assignee of the financing agreement in her retail installment sales contract with A Better Way. During the pendency of the arbitration process, Rodriguez settled with American Credit. American Credit then brought a cross claim against A Better Way, based upon alleged violations of their Dealer Agreement. In the arbitration process, Rodriguez asserted violations of the Truth in Lending Act (TILA) and the Connecticut Unfair Trade Practices Act (CUTPA). After a hearing was held by Attorney John R. Downey, an arbitrator selected by the parties, an Award of Arbitrator was entered in favor of Rodriguez and American Credit on May 12, 2015. See Exhibit A to Application, filed on June 3, 2015. The award specifically provided for the following payments to Rodriguez: 1) TILA statutory damages of $1,000; 2) CUTPA damages of $1,000; 3) punitive damages of $2,000; and 4) attorneys fees of $12,500, " as allowed by statute ." (Emphasis added.) Id. In his written arbitration decision, Attorney Downey specifically found that A Better Way's conduct was " deceptive and unethical and violates CUTPA and that the service contract was a condition of financing which should have been disclosed as a finance charge and then included as part of the amount financed. The failure to do so violated TILA." Id.
The respondents have prevailed in their cross applications to confirm this award after a hearing held by the court on December 4, 2015. In its memorandum of decision dated January 11, 2016, this court awarded attorneys fees to the respondent, American Credit, pursuant to its contractual agreement with A Better Way. Rodriguez now seeks supplemental attorneys fees of $6,500 pursuant to TILA and CUTPA, based upon legal work done in opposition to A Better Way's motion to vacate the award and in support of her action to confirm the arbitration award in the Superior Court.
Granting statutory attorneys fees for the enforcement of arbitration awards appears to be a matter of first impression. No legal authority to the contrary has been provided by A Better Way.
The denial of attorneys fees for the enforcement of an arbitration award was held not to be an abuse of discretion in MedValUSA Health Programs, Inc. v. MemberWorks, Inc., 109 Conn.App. 308, 316, 951 A.2d 26 (2008).
II
DISCUSSION
A
TILA
Under 15 U.S.C. § 1640(a), " TILA requires that a [creditor] pay costs and reasonable attorneys fees to any person who brings a 'successful action' to enforce liability under the TILA against that defendant . . . The language is imperative: costs and reasonable fees must be awarded to a [person] who brings a successful action. The only variable in the calculation is the amount of attorneys fees, the determination of which is left to the discretion of the district court with the stipulation that the fees be reasonable." (Citation omitted; footnote omitted.) Nigh v. Koons Buick Pontiac GMC, Inc., 478 F.3d 183, 185 (4th Cir. 2007). " [F]ees may be denied a successful plaintiff only in the most unusual of circumstances." de Jesus v. Banco Popular de Puerto Rico, 918 F.2d 232, 234 (1st Cir. 1990).
15 U.S.C. § 1640(a) provides, in relevant part: " Except as otherwise provided in this section, any creditor who fails to comply with any requirement imposed under this part, including any requirement under section 1635 of this title, subsection (f) or (g) of section 1641 of this title, or part D or E of this subchapter with respect to any person is liable to such person in an amount equal to the sum of . . . (3) in the case of any successful action to enforce the foregoing liability or in any action in which a person is determined to have a right of rescission under section 1635 or 1638(e)(7) of this title, the costs of the action, together with a reasonable attorneys fee as determined by the court . . ."
1
Attorneys Fees under TILA for Arbitration Award Enforcement
The court in Nigh, supra, 478 F.3d 185-86, wrote regarding what constitutes an " action" under TILA's attorneys fees provision: " As it is used in § 1640 (a)(3). action encompasses each stage of . . . litigation . . . The TILA does not define action, but its context makes its meaning plain: an action is a lawsuit. When dealing with similar language in Title VII of the Civil Rights Act of 1964, we acknowledged that, in its usual sense, action is synonymous with a suit brought in a court . . . An action constitutes more than an individual appearance before one particular tribunal. In ordinary usage, an action--a civil action, at least--begins with the filing of a complaint and ends when no party may any longer obtain review of the final disposition of the case, encompassing all steps necessary in between." (Citations omitted; emphasis in original; internal quotation marks omitted.)
Although research has not revealed any cases specifically addressing an award of attorneys fees for work expended in litigation to enforce an arbitration award under TILA, several federal cases have indicated that " the district court may also award additional attorneys fees for a meritorious appeal in Truth-in-Lending litigation . . ." Sosa v. Fite, 498 F.2d 114, 122 (5th Cir. 1974). TILA " allows fees in 'any successful action, ' and an action cannot be said to be 'successful' when an appeal is taken unless the victory below is defended on appeal." (Emphasis in original.) Thomas v. Myers-Dickson Furniture Co., 479 F.2d 740, 748 (5th Cir. 1973), superseded by statute on other grounds as recognized in Turner v. Firestone Tire & Rubber Co., 537 F.2d 1296, 1299 (5th Cir. 1976) (allowing separate attorneys fees for work done on appeal).
In construing a federal statute, Connecticut courts may utilize the plain meaning rule. " With respect to the construction and application of federal statutes, principles of comity and consistency require us to follow the plain meaning rule for the interpretation of federal statutes because that is the rule of construction utilized by the United States Court of Appeals for the Second Circuit." (Internal quotation marks omitted.) Cambodian Buddhist Society of Connecticut, Inc. v. Planning & Zoning Commission, 285 Conn. 381, 400-01, 941 A.2d 868 (2008).
In determining whether an application to confirm or to vacate an arbitration award pursuant to General Statute § 52-418 is an " action, " as contemplated by TILA, the court sees no reason to construe the term narrowly against Rodriguez. " The principles that govern statutory construction are well established. When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature . . . In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply . . . In seeking to determine that meaning, General Statutes § 1-2z directs us first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extra textual evidence of the meaning of the statute shall not be considered." (Internal quotation marks omitted.) Fairchild Heights, Inc. v. Dickal, 305 Conn. 488, 497, 45 A.3d 627 (2012).
In considering the plain meaning of the term " action, " the court concludes that it is not inconsistent with an application brought to the Superior Court to confirm or vacate an arbitration award. Additionally, in considering § 52-418s relationship to other statutes, it is notably codified in Title 52 of the General Statutes, entitled Civil Actions. Furthermore, TILA's attorneys fee provision is in derogation of the common-law " American rule" and, as such, is " remedial in nature and [is] to be liberally construed to implement [its] remedial purpose." Negro v. Metas, 110 Conn.App. 485, 498, 955 A.2d 599, cert. denied, 289 Conn. 949, 960 A.2d 1037 (2008).
Indeed, at least one federal court has liberally construed TILA to award attorneys fees for work done on appeal even though the plaintiff was not successful in their appellate arguments but nevertheless had brought a successful action. In Nigh, supra, 478 F.3d 185, the plaintiff lost an appeal to the United States Supreme Court that the defendant had brought regarding the amount of damages awarded. The defendant argued that the plaintiff should not be entitled to attorneys fees for the appeal because " it is patently unreasonable to award Nigh fees for losing an argument before the Supreme Court and unsuccessfully opposing Koons's petition for rehearing on the issue of fees." Id., 188. The court disagreed, holding that in these circumstances " awarding fees is not intrinsically unreasonable." Id., 189. The Nigh court reasoned that " § 1640(a)(3) does not differentiate between appeals taken to contest liability and appeals taken to contest damage awards (or other matters that do not affect the underlying liability) . . . [and that the] Koons knew or should have known that by appealing only the question of damages to the Supreme Court it risked losing more in fees and costs than it stood to gain in refunded damages. When Koons chose to appeal our initial ruling, it accepted responsibility for the reasonable attorneys fees Nigh would incur defending his judgment before the Supreme Court and in subsequent proceedings." Id.
Militating in favor of awarding attorneys fees to Rodriguez in this action, the court gives weight to the mandatory nature of an award of attorneys fees under § 1640(a)(3), the defendant's successful enforcement of the award before the trial court, the plain meaning of the term " action" under § 1640 and the fact that Rodriguez was compelled to defend her award in the trial court, initiated by the defendant's motion to vacate. Although this action before the Superior Court is not technically an appeal, it is reasonable to consider it another stage in the same lawsuit.
2
Calculating Reasonable Attorneys Fees under TILA
" To determine reasonable attorneys fees, the Second Circuit has historically implemented the lodestar method of examining the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate . . . However, in 2008, the Second Circuit determined that '[t]he meaning of the term " lodestar has shifted over time, and its value as a metaphor has deteriorated to the point of unhelpfulness." Arbor Hill Concerned Citizens Neighborhood Assn. v. County of Albany, 522 F.3d 182, 190 (2d Cir. 2008). In place of the lodestar method, the court used the 'presumptively reasonable fee' standard . . ."
" The presumptively reasonable fee standard is predicated on the same basic analysis as the lodestar method: the multiplication of the hours reasonably expended by a reasonable hourly rate . . . Using the presumptively reasonable fee standard, the district court must engage in a four-step process: (1) determine the reasonable hourly rate; (2) determine the numbers of hours reasonably expended; (3) multiply the two to calculate the presumptively reasonable fee; and (4) make any appropriate adjustments to arrive at the final fee award . . . As part of the reasonableness analysis, the district court should consider the factors enumerated in Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.1974) . . . and may adjust the presumptively reasonable fee based on the degree of success of the prevailing party." (Citations omitted; footnote omitted; internal quotation marks omitted.) Negron v. Mallon Chevrolet, Inc., United States District Court, Docket No. 3:08CV182 (TPS) (D.Conn. September 24, 2012).
" The twelve Johnson factors are: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the attorney's customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or the circumstances; (8) the amount involved in the case and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the 'undesirability' of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases." Negron v. Mallon Chevrolet, Inc., United States District Court, Docket No. 3:08CV182 (TPS) (D.Conn. September 24, 2012).
B
CUTPA
" Section 42-110g(d) provides in relevant part that 'the court may award . . . costs and reasonable attorneys fees based on the work reasonably performed by an attorney and not on the amount of recovery . . .' This statute clearly states that it is within the trial court's discretion in deciding whether to award attorneys fees and that the award is not to be based on the amount of the actual recovery to the party but rather on the work the attorney performed." Jacques All Trades Corp. v. Brown, 57 Conn.App. 189, 197, 752 A.2d 1098 (2000)." Unlike with TILA, under CUTPA " [a]n award of attorneys fees is not a matter of right. Whether any award is to be made and the amount thereof lie within the discretion of the trial court, which is in the best position to evaluate the particular circumstances of a case." (Internal quotation marks omitted.) Heller v. D.W. Fish Realty Co., 93 Conn.App. 727, 734-35, 890 A.2d 113 (2006).
1
Calculating Reasonable Attorneys Fees Under CUTPA
" The guidelines set forth in Johnson for calculating reasonable attorneys fees are appropriate in CUTPA litigation because, similar to Title VII, CUTPA seeks to create a climate in which private litigants help to enforce the ban on unfair or deceptive trade practices or acts . . . [R]eview of whether the trial court correctly applied the guidelines and set a reasonable award of attorneys fees is limited to a consideration of whether the court abused its discretion." (Citation omitted; internal quotation marks omitted.) Steiger v. J.S. Builders, Inc., 39 Conn.App. 32, 39, 663 A.2d 432 (1995) (reversing trial court's award of attorneys fees because " trial court focused on only one of [ Johnson's ] twelve enunciated guidelines--the reasonableness of the relationship between the award of attorneys fees and the award of damages"). " In Johnson . . . [t]he Circuit Court of Appeals set out twelve guidelines for the District Court to consider on remand in setting reasonable attorneys fees: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee for similar work in the community; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation and ability of the attorneys; (10) the 'undesirability' of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases." (Citation omitted; footnote omitted.) Id., 38.
2
Attorneys Fees under CUTPA for Arbitration Award Enforcement
" [T]he twelve [ Johnson ] factors set forth in Steiger do not govern [the court's discretionary decision to award fees] Those factors govern the standard for setting the amount of attorneys fees once a trial court has exercised its decision to award such fees." MedValUSA Health Programs, Inc. v. MemberWorks, Inc., 109 Conn.App. 308, 316, 951 A.2d 26 (2008). In MedValUSA Health Programs, Inc., the arbitration panel had awarded the plaintiff $5 million in punitive damages, $387,794 in attorneys fees, and $70,950 in arbitration costs. Id., 311-12. " The plaintiff timely applied to the trial court to confirm the arbitration award. Soon thereafter, the defendant moved to vacate the award . . . The court denied the defendant's motion to vacate and granted the plaintiff's application to confirm the arbitration award. Subsequently, in a separate ruling, the court denied the plaintiff's motion for prejudgment and postjudgment interest." Id., 312. " Both parties appealed from the judgment of the Superior Court.
Our Supreme Court affirmed the decision of the trial court" and " the United States Supreme Court denied the defendant's petition for a writ of certiorari." Id., 312. " Subsequently, the plaintiff filed a motion for attorneys fees in the trial court . . . On September 20, 2006, the court denied the plaintiff's motion." Id., 313.
In affirming the denial of the plaintiff's motion for attorneys fees, the Appellate Court first articulated the standard for its inquiry into the trial court's decision not to grant attorneys fees. The court stated that " [a]warding . . . attorneys fees under CUTPA is discretionary . . . and the exercise of such discretion will not ordinarily be interfered with on appeal unless the abuse is manifest or injustice appears to have been done . . . The salient inquiry is whether the court could have reasonably concluded as it did." (Citations omitted; internal quotation marks omitted.) Id., 315. The Appellate Court then " conclude[d] that the [trial] court reasonably could have determined that awarding the plaintiff for attorneys fees it incurred on appeal would not further the interest of justice, given that the plaintiff had been awarded punitive damages, costs and fees at arbitration and that the defendant had satisfied the judgment . . . CUTPA . . . allow[s] attorneys fees only subject to the sound discretion of the court . . . and this court will not upset the trial court's judgment without a showing of manifest abuse of discretion or injustice." (Citation omitted; internal quotation marks omitted.) Id., 315-16.
Under MedValUSA Health Programs, Inc., therefore, the decision whether to award the defendant attorneys fees for work is discretionary and will not be reversed unless there is a manifest abuse of that discretion or an injustice is apparent. Id. MedValUSA Health Programs, Inc. emphasized the consideration of whether the attorneys fees would further the interest of justice and concluded that the trial court reasonably could have concluded that they did not further the interest of justice in that case. Id. In the present case, therefore, it is at the discretion of the trial court to determine whether to award attorneys fees for the work of the defendant's attorney on this matter because those fees further the interest of justice. If the court decides to award attorneys fees, the Johnson factors, as articulated in Steiger, are appropriate in determining the amount of the award.
III
CONCLUSION
The court concludes that Rodriguez is entitled to a reasonable attorneys fee of $6,500.00 in this action to confirm an arbitration award pursuant to both TILA and CUTPA. This proposed award has been presented to the court through an affidavit of attorneys fees and has been briefed.
With regard to mandatory attorneys fees pursuant to TILA, the court relies upon the presumptively reasonable fee standard, as well as the relevant factors enumerated in Johnson . Rodriguez's attorney is a highly experienced consumer affairs lawyer. He has provided the court with a detailed account of the hours billed in this case, his customary fee in this and similar matters and hourly rates approved by courts in other cases. Generally, the court has found the briefs and filings prepared by Rodriguez's legal counsel to be concise and not overwrought. Moreover, in this case, he has received a good result for his client.
With regard to the discretionary fees permitted by CUTPA in this consumer action, arbitration was required by the retail installment contract entered into by the parties. Furthermore, the stated reason for A Better Way's application to vacate the arbitration award involved the disposition of the used vehicle, ordered transferred to it by American Credit. In its application to vacate the award, A Better Way did not dispute the award as to Rodriguez. Therefore, Rodriguez was compelled to defend her award of May 12, 2015, based upon a dispute between two other parties to this action.
Since " arbitration is designed to result in a speedy and final resolution of controversies . . ." Hartford Steam Boiler Inspection & Ins. Co. v. Underwriters at Lloyd's & Cos. Collective, 271 Conn. 474, 493-94, 857 A.2d 893 (2004), cert. denied, 544 U.S. 974, 125 S.Ct. 1826, 161 L.Ed.2d 723 (2005), an award of attorneys fees will dissuade unsuccessful parties in arbitrations from pursuing unmeritorious applications to vacate awards. In its discretion, therefore, the court awards attorneys fees to Rodriguez. In determining the reasonable fee, the court need only reiterate the analysis related to TILA in concurrently awarding attorneys fees of $6,500.00 pursuant to CUTPA.
SO ORDERED.