PARKER ET AL., APPELLANTS, v. I&F INSULATION COMPANY, INC. ET AL., APPELLEES.
No. 99-1473
Supreme Court of Ohio
Submitted April 11, 2000 — Decided July 12, 2000
89 Ohio St.3d 261, 2000-Ohio-151
- A party “prevails” on appeal within the meaning of
R.C. 1345.09(F) if it obtains a substantial modification of the trial court‘s judgment. - A party awarded attorney fees under
R.C. 1345.09(F) is entitled to postjudgment interest on those fees in accordance withR.C. 1343.03(A) .
APPEAL from the Court of Appeals for Hamilton County, No. C-980502.
Appellants, Jeffrey and Miriam Parker, hired appellee I&F Insulation Company, Inc., to remove lead paint from their home and to install insulation in the home. Disputes between the parties arose, and I&F Insulation left the worksite having completed only part of the paint-removal project and none of the insulation project. According to the Parkers, I&F Insulation left debris containing high levels of lead on the Parkers’ property, abandoned a barrel of hazardous waste in the Parkers’ yard, and removed sixty custom shutters from the home and refused to return them.
The Parkers sued I&F Insulation Company, Inc., its parent company, its successor, and two of the company‘s principals (hereinafter referred to collectively as “I&F“) on claims of breach of the two contracts, fraudulent inducement, conversion, intentional exposure to hazardous waste, intentional
The Parkers filed a motion to conform the damages award to the evidence on the breach-of-insulation-contract and CSPA claims, for treble damages on the CSPA claim, and for prejudgment interest. In addition, they filed a motion for attorney fees. I&F moved for a new trial based on evidentiary issues. The trial court granted the Parkers’ motions and denied the motion by I&F. It then entered judgment according to the jury‘s verdict, but modified it to award damages of $3,542 on the insulation-contract claim; $76,604.13 on the CSPA claim, which it then trebled (pursuant to
I&F appealed the judgment to the court of appeals, asserting eight assignments of error. The court of appeals held that the trial court had lacked the power to modify the jury‘s verdict because the Parkers’ motion had not provided a legal basis on which to do so, and remanded the action to the trial court. The
On remand, the Parkers filed a motion in the trial court for, inter alia, postjudgment interest of $32,286.12 on the attorney fees awarded after trial. They also claimed to have been the prevailing party on appeal pursuant to
The court of appeals reversed both the appellate attorney fees and postjudgment interest awarded, holding that (1) the Parkers were not the “prevailing party” on the first appeal within the meaning of
The cause is now before this court pursuant to the allowance of a discretionary appeal.
Dinsmore & Shohl, L.L.P., Mark Vander Laan, Anthony J. Celebrezze, Jr., and Bryan E. Pacheco, for appellants.
Benjamin, Yocum & Heather, Anthony J. Iaciofano and Christopher J. Mulvaney, for appellees.
COOK, J. This case presents the following questions:
(1) Under the Consumer Sales Practices Act, how is a court to determine who a “prevailing party” is for purposes of an award of appellate attorney fees?
(2) Is a party entitled to postjudgment interest on an award of attorney fees under the Consumer Sales Practices Act?
I. PREVAILING PARTY ON APPEAL
Rather, the parties are divided on the issue of whether the Parkers were the “prevailing party” in their appeal. The Parkers assert that a party prevails on appeal if it preserves at least part of an original judgment in its favor, while I&F argues that a party prevails if it achieves a substantial modification of a judgment against it. The text of the statute neither defines “prevailing party” nor provides criteria by which a party may be deemed to have “prevailed” on appeal.
I&F relies on Korn v. State Med. Bd. (1991), 71 Ohio App.3d 483, 594 N.E.2d 720, as support for its position that it was the prevailing party on appeal and that the court of appeals, therefore, properly reversed the trial court‘s award of appellate attorney fees to the Parkers. In Korn, the plaintiff sued the State Medical Board of Ohio for appellate attorney fees in connection with his appeal of the revocation of his medical license. In that appeal, Korn had obtained a reversal of three of the four original charges against him and a remand to the trial court of the fourth. Claiming to be the prevailing party on appeal, Korn applied to the trial court for appellate attorney fees, relying on
The trial court denied Korn‘s application, and he appealed. The Tenth District Court of Appeals, noting that “a substantial portion of [the Board‘s] findings were reversed and its order vacated,” held that the plaintiff had prevailed on appeal: “A party who appeals an order or judgment and prevails to the extent that he obtains a new trial, or a modification of the judgment, is a ‘prevailing party’ within the contemplation of
We agree with the court of appeals below because the “substantial-victory” test accords with the intent and purpose of the statutory allowance of attorney fees. As the court of appeals stated, deeming the consumer the prevailing party on appeal “simply because some measure of the damage award under the Act survived the appeal * * * would essentially penalize an appellant achieving anything less than a complete victory even though, as is the case here, the appeal was meritorious and achieved a substantial reduction of the judgment.” See, also, Payless Car Rental Sys., Inc. v. Draayer (1986), 43 Wash.App. 240, 246, 716 P.2d 929, 933, and Farmers Ins. Co. of Wash. v. Romas (1997), 88 Wash.App. 801, 811-812, 947 P.2d 754, 759-760 (substantial-victory test applied to appeals in actions under state consumer protection law). Moreover, as the court of appeals below stated, “the procedural error that gave rise to the modification of the judgment was at the urging of the Parkers and in no way the fault of I&F.” We hold that a party “prevails” on appeal within the meaning of
The Parkers cite Brenner Marine, Inc. v. George Goudreau, Jr. Trust (Jan. 13, 1995), Lucas App. No. L-93-077, unreported, 1995 WL 12118, appeal not allowed (1995), 72 Ohio St.3d 1530, 649 N.E.2d 839, in support of their position. Brenner is instructive, assert the Parkers, because it provides the only definition to be found in Ohio case law of “prevailing party” within the meaning of the CSPA. In Brenner, the court held that a consumer is the “prevailing party” in a CSPA action if it is awarded either rescission or damages by the trial court. As I&F points out, however, Brenner was concerned with the definition of “prevailing party” only at the trial court level. It did not address the issue of who would be deemed the prevailing party on appeal if, as here, the consumer was awarded damages at trial and then the defendant obtained a substantial reduction of that award on appeal. On the other hand, Korn, even though it involved a different statute, did address this very issue:
“A party who appeals an order or judgment and prevails to the extent that he obtains a new trial, or a modification of the judgment, is a ‘prevailing party’ within the contemplation of
This reasoning applies here with equal force, regardless of the fact that the two cases involve different statutes. Having already concluded that
II. POSTJUDGMENT INTEREST ON ATTORNEY FEES
The parties also ask us to decide whether postjudgment interest may be awarded for the Parkers’ trial-level attorney fees.
“We hold the award of post-judgment interest on the attorney fees to be improper, however, for a reason neither party has discussed. That reason is that the attorney-fee award should have been taxed as court costs, upon which post judgment interest may not be assessed.”
But a conclusion that attorney fees in this case are “costs” does not answer the question of whether postjudgment interest may accrue on them. The court of appeals cited a case from Ohio‘s Sixth Appellate District, Chaney v. Breton Builder Co., Ltd. (1998), 130 Ohio App.3d 602, 720 N.E.2d 941. In Chaney, the appellant argued that the trial court had erroneously awarded the appellee attorney fees as part of the judgment and then ordered the appellant to pay postjudgment interest on the entire amount. The Chaney court, finding the trial court‘s order to be unclear, held that attorney fees are “to be taxed as costs, not as damages,” id. at 607, 720 N.E.2d at 945, and entered “the judgment the trial court should have rendered, i.e., that the $340 in attorney fees awarded * * * is hereby ordered taxed as court costs, and interest shall accrue at the rate of ten per cent per annum on only the $50 judgment awarded to appellee * * *.” Id. at 609, 720 N.E.2d at 946.
Chaney clashes with the modern trend that favors the awarding of postjudgment interest on attorney fees as a general rule. The Supreme Court of Florida, for example, held that “the burden of nonpayment is fairly placed on the party whose obligation to pay attorney fees has been fixed,” and approved the reasoning of a lower court in another case that failure to award such interest “would be to penalize the prevailing party * * * for [the opposing party‘s] delay in paying the attorney‘s fees found due after their concession of liability upon settlement of the underlying claims; it would reward [the losing party] for continuing to contest [the prevailing party‘s] reimbursement of attorney‘s fees by allowing [the losing party] interest-free use of the money for more than a year. Such a result would be inconsistent with the intent and purpose of statutory provisions allowing attorney‘s fees to the prevailing party.” Quality Engineered Installation, Inc. v. Higley South, Inc. (Fla.1996), 670 So.2d 929, 930, 931 (citing Inacio v. State Farm Fire & Cas. Co. [Fla.App.1990], 550 So.2d 92. 97-98). See, also, Bailey v. Leatherman (Fla.App.1996), 668 So.2d 232, 233.
Similarly, courts in other states have determined that interest is appropriately awarded on attorney fees. See, e.g., Isaacson Structural Steel Co. v. Armco Steel Corp. (Alaska 1982), 640 P.2d 812, 818 (“post-judgment interest is ‘a form of compensating for the period that the [prevailing party] remains “less than whole” ’ “); Gaulin v. Commr. of Pub. Welfare (1986), 23 Mass.App.Ct. 744, 748-749, 505 N.E.2d 898, 901-902 (attorney fees should be awarded to successful civil rights plaintiffs because it would facilitate the “strong system of private enforcement of Federal civil rights” created by Congress) (affirmed, Gaulin v. Commr. of Pub. Welfare [1987], 401 Mass. 1001, 515 N.E.2d 583, 584). Accord Nardone v. Patrick Motor Sales, Inc. (1999), 46 Mass.App.Ct. 452, 453, 706 N.E.2d 1151, 1152. See, also, In re Tucknall (Bankr.D.Conn.1989), 94 B.R. 277, 279 (interpreting Connecticut‘s postjudgment interest statute).
Likewise, federal courts interpreting
”
“We see no reason to distinguish between the two statutes in allowing interest on attorney‘s fees. Indeed, given the acknowledged purpose of
In 1990, a federal district court even called the rule that interest is to be awarded on attorney fees “well-settled.” Jenkins v. Missouri (W.D.Mo.1990), 731 F.Supp. 1437, 1438. See, also, Foley v. Lowell (C.A.1, 1991), 948 F.2d 10, 22 (“considering the time value of the dollar, the only way in which a fee award will retain its stated worth is by adding interest in order to compensate for delay in payment from that point forward“). Accord Rini v. United Van Lines, Inc. (D.Mass.1995), 903 F.Supp. 234, 239.
We are convinced that the modern trend represents the better-reasoned view. Not only does an award of postjudgment interest on attorney fees properly recognize the time value of money by making the prevailing party truly whole and preventing the nonprevailing party from enjoying the use of money that no longer rightfully belongs to it, but it also promotes the purposes of the CSPA. These purposes include making private enforcement of the CSPA attractive to consumers who otherwise might not be able to afford or justify the cost of prosecuting an alleged CSPA violation, which, in turn, works to discourage CSPA violations in the first place via the threat of liability for damages and attorney fees. See Tanner, 82 Ohio App.3d at 765-766, 613 N.E.2d at 650.
We hold, therefore, that a party awarded attorney fees under
Judgment affirmed in part and reversed in part.
MOYER, C.J., DOUGLAS, F.E. SWEENEY, PFEIFER and LUNDBERG STRATTON, JJ., concur.
RESNICK, J., concurs in part and dissents in part.
ALICE ROBIE RESNICK, J., concurring in part and dissenting in part. I dissent from Part I of the majority opinion, but concur as to Part II.
APPENDIX
“For a violation of
“(A) Where the violation was an act prohibited by
“(B) Where the violation was an act or practice declared to be deceptive or unconscionable by rule adopted under division (B)(2) of
“(C) In any action for rescission, revocation of the consumer transaction must occur within a reasonable time after the consumer discovers or should have discovered the ground for it and before any substantial change in condition of the subject of the consumer transaction.
“(D) Any consumer may seek a declaratory judgment, an injunction, or other appropriate relief against an act or practice that violates this chapter.
“(E) When a consumer commences an individual action for a declaratory judgment or an injunction or a class action under this section, the clerk of court shall immediately mail a copy of the complaint to the attorney general. Upon timely application, the attorney general may be permitted to intervene in any private action or appeal pending under this section. When a judgment under this section becomes final, the clerk of court shall mail a copy of the judgment including supporting opinions to the attorney general for inclusion in the public file maintained under division (A)(3) of
“(F) The court may award to the prevailing party a reasonable attorney‘s fee limited to the work reasonably performed, if either of the following apply:
“(1) The consumer complaining of the act or practice that violated this chapter has brought an action that is groundless, and the consumer filed or maintained the action in bad faith;
“(2) The supplier has knowingly committed an act or practice that violates this chapter.”
Notes
“Under [