267 A.3d 1094
Me.2022Background
- Fortney & Weygandt, Inc. (F&W) was general contractor on five Dollar General stores under contracts with Lewiston DMEP IX, LLC and related entities (collectively, GBT). GBT withheld payments; F&W sued for mechanic’s liens, breach of contract, and violations of Maine’s Prompt Payment Act (PPA).
- GBT counterclaimed for liquidated damages and defective/incomplete work; F&W stopped paying subcontractors, prompting 18 subcontractor suits; all matters were consolidated in the Business and Consumer Docket (BCD).
- After partial summary judgment and a nine-day bench trial, the trial court awarded F&W prompt-payment remedies, penalties, interest, and attorney fees; the Supreme Judicial Court largely affirmed but remanded limited issues and directed attorney fees be determined post-judgment under the PPA.
- F&W filed two post-judgment fee applications seeking roughly $950,000 in fees plus expenses (including fees billed to F&W’s insurer and fees defending subcontractor claims). GBT objected, arguing PPA fees should be limited to work directly prosecuting PPA claims and challenging reasonableness and billing entries.
- The trial court awarded the full requested fees and expenses (including insurer and subcontractor-related fees) after applying the "common core of facts" approach and Johnson factors; GBT appealed.
- The Supreme Judicial Court affirmed most of the award (including fees for contract claims, counterclaims, and insurer counsel) but vacated and remanded the portion awarding fees tied to the subcontractor suits and remanded for appellate-fee consideration.
Issues
| Issue | F&W's Argument | GBT's Argument | Held |
|---|---|---|---|
| Applicability of the "common core of facts" rule to PPA fee awards | PPA entitlement to fees for the substantially prevailing party allows applying the common-core approach where claims arise from same facts | PPA fees should be limited to attorney time spent directly prosecuting PPA claims; common-core not applicable | Court may apply the Hensley/common-core analysis to PPA fee awards; appellate court affirmed use of rule. |
| Recoverability of fees for contract claims and defense of GBT counterclaims | Those contract- and defense-related fees were necessary to establish entitlement under the PPA and are inseparable from PPA work | Such fees are non-PPA work and not recoverable under §1118(4) | Fees for contract claims and defending counterclaims were recoverable because they were inextricably interwoven with PPA claims. |
| Recoverability of insurer-hired counsel (NHD) fees | Fees paid or incurred by insurer to defend F&W are compensable when they relate to PPA litigation | Insurer counsel fees not directly prosecuting PPA claims are not recoverable | Awarding insurer counsel fees was proper; excluding them would undercut PPA deterrence/purpose. |
| Recoverability of fees for defending/settling subcontractor lawsuits | Fees resolving subcontractor suits were part of the consolidated litigation and aided efficient resolution of PPA dispute | Subcontractor-related fees arose from separate suits and are not compensable under PPA | Trial court abused discretion by awarding subcontractor-related fees without articulating how they fit into the PPA common core; that portion was vacated and remanded. |
| Reasonableness and billing-judgment challenge | Submitted invoices, affidavits, and Johnson-factor analysis demonstrate reasonableness; entries were sufficiently detailed | Fees include vague, redacted, clerical, duplicative, or excessive entries and lacked billing judgment | Trial court’s Johnson-factor analysis and findings on reasonableness and billing judgment were within discretion and were affirmed (except subcontractor portion). |
Key Cases Cited
- Hensley v. Eckerhart, 461 U.S. 424 (1983) (establishes "common core of facts" approach for fee awards when claims are related)
- Advanced Constr. Corp. v. Pilecki, 901 A.2d 189 (Me. 2006) (Maine application: fee and non-fee claims arising from same facts may be inseparable)
- Sweet v. Breivogel, 201 A.3d 1215 (Me. 2019) (summarizes Johnson factors and deference to trial court on fee reasonableness)
- Jenkins, Inc. v. Walsh Bros., 776 A.2d 1229 (Me. 2001) (describes PPA’s purpose to deter untimely payment and mandate fee awards for substantially prevailing party)
- Kilroy v. Ne. Sunspaces, Inc., 930 A.2d 1060 (Me. 2007) (differentiates de novo review of fee-authority questions from abuse-of-discretion review of amount)
- Lee v. Scotia Prince Cruises Ltd., 828 A.2d 210 (Me. 2003) (trial-court factual findings on fee awards reviewed for clear error)