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Arkansas Methodist Hospital Corp. v. Forbes

June 22, 2006

ARKANSAS METHODIST HOSPITAL CORPORATION D/B/A/ ARKANSAS METHODIST MEDICAL CENTER, PLAINTIFF,
v.
CRAIG W. FORBES, M.D., DEFENDANT.
ARKANSAS METHODIST HOSPITAL CORPORATION D/B/A/ ARKANSAS METHODIST MEDICAL CENTER, PLAINTIFF,
v.
EUGENE M. FINAN, M.D., DEFENDANT.



The opinion of the court was delivered by: Susan Webber Wright United States District Judge

Memorandum and Order

Now before the Court are plaintiff's motions for attorney's fees, costs, and prejudgment interest. Defendants responded to the motions, and plaintiff filed replies to the responses. Plaintiff asks for attorney's fees of $89,904.00 and costs of $5,767.54 from Dr. Forbes, and $88,157.00 for attorney's fees and $6,424.42 in costs from Dr. Finan. After careful consideration and for the reasons stated below, the Court concludes that it should grant plaintiff's motions.

Background

Arkansas Methodist Hospital Corporation ("Arkansas Methodist") filed these lawsuits claiming Drs. Forbes and Finan breached their contracts with Arkansas Methodist. Defendants answered, asserting the defense of fraud. Subsequently, defendants both filed counterclaims of fraud. On motions filed by defendants, the Court consolidated the cases for trial.

The cases were tried to a jury April 24-27, 2006, in Jonesboro, Arkansas. The jury found in favor of Arkansas Methodist and against Dr. Finan on his defense of fraud and awarded damages of $388,553.64. It found in favor of Dr. Forbes on his defense of fraud but found he had waived the defense. The jury awarded damages against Dr. Forbes of $529,399.13. In light of the jury verdicts, the Court dismissed the doctors' counterclaims. Arkansas Methodist now seeks attorney's fees and costs as well as prejudgment interest. Drs. Forbes and Finan concede they owe prejudgment interest but contend the amount of fees requested is unreasonable and some of the costs are duplicative.

Discussion

"Under the American Rule, attorney fees are generally not recoverable without statutory authorization." Gen. Trading Int'l, Inc. v. Wal-Mart Stores, Inc., 320 F.3d 831, 838 (8th Cir. 2003).

Arkansas Code Annotated §16-22-308 provides that a court may award a prevailing party in a contract action attorney's fees. "'The statute is clearly not mandatory and the decision whether to award attorney fees in cases governed by section 16-22-308 is left to the sound discretion of the trial court.'" Id. Acknowledging that the award of fees and costs is discretionary under § 16-22-308, Arkansas Methodist points out that according to the parties' contracts, the doctors agreed to pay attorney's fees and costs. Section 3.7 of the parties' contracts provides as follows:

The Physician and Hospital covenant and agree, in the event it shall become necessary for either party to enforce the provisions of this Agreement, by legal action or employ attorneys for the collection of moneys due hereunder, and if said party is successful in its action, to pay the said party its reasonable attorney fees and all court costs and other costs for such collection or enforcement proceedings.

Arkansas Methodist asserts, therefore, that Drs. Forbes and Finan have contracted to pay the attorney's fees and court costs associated with this litigation. The Court finds that Arkansas Methodist should be awarded fees and costs in connection with this litigation.

Turning to the amount of attorney's fees, the trial court should determine what fees are reasonable. Griffin v. First Nat'l Bank, 888 S.W.2d 306, 311 (Ark. 1994). Factors to consider in determining the reasonableness of attorney's fees are:

(1) the attorney's judgment, learning, ability, skill, experience, professional standing and advice; (2) the relationship between the parties; (3) the amount or importance of the subject matter of the case; (4) the nature, extent and difficulty of services in research; (5) the preparation of pleadings; (6) the proceedings actually taken and the nature and extent of the litigation; (7) the time and labor devoted to the client's cause, the difficulties presented in the course of the litigation and the results obtained.

Crockett & Brown, P.A. v. Courson, 849 S.W.2d 938, 941 (Ark. 1993). See also Chrisco v. Sun Indus., Inc., 800 S.W.2d 717, 718-19 (Ark. 1990)(factors include "experience and ability of the attorney, the time and labor required to perform the legal service properly, the amount involved in the case and the results obtained, the novelty and difficulty of the issues involved, the fee customarily charged in the locality for similar legal services, whether the fee is fixed or contingent, the time limitations imposed upon the client or by the circumstances, and the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer").

Defendants argue the fees requested are unreasonable. They assert the cases were not complicated as the execution of the contracts and the amounts involved were never in dispute. They state the real issues were fraudulent inducement and waiver, and that Arkansas Methodist's use of five different attorneys on the case was "overkill." Defendants also complain that Arkansas Methodist filed a number of unnecessary motions, that defendants should not have to bear the brunt of additional time that had to be incurred as a result of the continuance requested by Arkansas Methodist, and that over 100 of the time entries appear to be duplications. Defendants specifically object to an ...


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