United States District Court, W.D. Arkansas, Fort Smith Division
HOLMES, III, U.S. DISTRICT JUDGE.
the Court is Plaintiff Entegra Bank's motion (Doc. 60)
for attorney's fees and costs, and a brief (Doc. 61) in
support of its motion. No. response has been filed.
Plaintiff's motion seeks $26, 369.00 in attorney's
fees, $5, 000.00 in future attorney's fees, and $2,
156.16 in costs. The motion will be granted in part and
denied in part.
Court must first determine whether fees and costs are
available to Plaintiff. Whether fees and costs are
recoverable is governed by North Carolina law pursuant to the
parties' agreement. (Doc. 1-1, p. 11, ¶ 8.4). Under
North Carolina law, a party may recover attorney's fees
if recovery is expressly provided by statute. Hicks v.
Albertson, 200 S.E.2d 40, 42 ( N.C. 1973). N.C. Gen.
Stat. § 6-21.2 provides, in relevant part:
Obligations to pay attorney's fees upon any note,
conditional sale contract or other evidence of indebtedness,
in addition to the legal rate of interest or finance charges
specified therein, shall be valid and enforceable, and
collectible as part of such debt, if such note, contract or
other evidence of indebtedness be collected by or through an
attorney at law after maturity, subject to the following
provisions: . . .
(2) If such note, conditional sale contract or other evidence
of indebtedness provides for the payment of reasonable
attorney's fees by the debtor, without specifying any
specific percentage, such provision shall be construed to
mean fifteen percent (15%) of the “outstanding
balance” owing on said note, contract or other evidence
parties' loan agreement includes an obligation that the
borrower (in this case Wald Wood Products, Inc.) pay or
reimburse Entegra Bank for any attorney's fees incurred
in connection with enforcing its rights under the agreement
and promissory note. (Doc. 1-1, p. 11, ¶ 8.5). Though
the obligation makes no mention of a specific percentage, the
attorney's fees Plaintiff requests amount to less than
15% of the outstanding balance owed on the note. The
provision is therefore valid and enforceable against Wald
Wood Products, Inc. Additionally, Thomas and Karen Wald both
signed an Unconditional Guarantee as guarantors. (Doc. 60-3,
p. 1; Doc. 60-3, p. 6). A provision purporting to hold a
guarantor liable for attorney's fees is enforceable if
the language puts the guarantor on notice that the guarantor
will be liable for attorney's fees. RC Assocs. v.
Regency Ventures, Inc., 432 S.E.2d 394, 397 ( N.C. Ct.
App. 1993). The Guarantee makes clear that the Walds promise
to pay “all expenses Lender incurs to enforce this
Guarantee, including, but not limited to, attorney's fees
and costs.” (Doc. 60-3, p. 3, ¶ 9A). Therefore,
Wald Wood Products, Inc., Thomas Wald, and Karen Wald, are
jointly and severally liable for any attorney's fees
incurred in enforcing the parties' agreement.
the Court determines that attorney's fees are
recoverable, it must award only fees that are reasonable.
See Cotton v. Stanley, 380 S.E.2d 419, 421 ( N.C.
Ct. App. 1989) (remanding case due to lack of evidentiary
support concerning reasonableness of fees). The Court must
make factual findings as to “the time and labor
expended, the skill required, the customary fee for like
work, and the experience or ability of the attorney.”
Id.; see also WFC Lynnwood I LLC v. Lee of
Raleigh, Inc., 817 S.E.2d 437, 444 ( N.C. Ct. App. 2018)
(vacating order of attorney's fees after trial court
failed to make factual findings on each factor).
requests $26, 369.00 in attorney's fees as well as $5,
000 in future fees. Plaintiff's request for $5, 000 in
future fees is rejected outright. The Court must assess the
value of fees for reasonableness. It is unreasonable for an
attorney to collect a fee for work he or she has not done
because any such fee is excessive. See Rev. R. Prof.
Conduct of N.C. State Bar 1.5(a) (prohibiting lawyers from
making an agreement for, charging, or collecting a clearly
Plaintiff's request for $26, 369.00 in fees, that amount
appears unreasonable. This case involved legal issues of
creditor's rights and bankruptcy law. Plaintiff was
represented by experienced attorneys knowledgeable in these
areas. The attorneys charge an hourly rate that is reasonable
for attorneys with this experience and skill practicing law
in this area. Plaintiff sought damages of $1, 339, 635.44 and
was awarded a judgment of that amount. Each of these factors
support the reasonableness of the fees requested. However,
Plaintiff's counsel requested fees for 85.8 hours of
billable work. This figure includes hours spent working
exclusively on the bankruptcy case. Though some overlap is
inevitable based on legal issues arising in this case, the
Court will not grant fees for work done outside of this
Court has reviewed the fees submitted by Plaintiff's
counsel and reduced the figure by an amount equal to the fees
earned for matters exclusive to the bankruptcy case. The
Court will therefore award attorney's fees in the amount
of $21, 504.00. This figure is reasonable in light of the
time and labor expended, the skill required, the customary
fee for like work, and the experience and ability of the
attorneys. In addition, the parties' agreement provides
for the payment of costs and expenses incurred in connection
with enforcement of the note, (Doc. 1-1, p. 11, ¶ 8.5),
so the Court will award costs in the amount of $2, 156.16.
THEREFORE ORDERED that Plaintiff's motion (Doc. 60) for
attorney's fees is GRANTED in part and the Court will
award $21, 504.00 in attorney's fees and $2, ...