Protecting Attorney’s Fees Awards from Appeal

Georgia courts cannot award attorney’s fees to a party unless specifically authorized to do so by statute or contract. This is the “American Rule” that probably every litigating attorney knows. But some may not know that, to withstand appeal, fees awards generally should contain some degree of legal and factual support. An award that simply states an amount of attorney’s fees to be paid by one party to another may be vacated by an appellate court.

The recipient of a fees award ran afoul of this principle in Lundy v. Lundy, A15A0122, decided January 9 by the Georgia Court of Appeals. The trial court awarded $4,500 in attorney’s fees to Kristina Lundy after she succeeded in a custody dispute. But “[t]he order [did] not specify the statutory basis for the award of attorney fees, nor [did] it contain any findings of fact in support of the award.” Slip op. p. 1. The Court of Appeals vacated the fees award. Although Ms. Lundy had moved for fees under OCGA § 19-6-2, which gives courts discretion to award fees in divorce and alimony cases based on the parties’ financial circumstances, there was no indication that the trial court had considered such circumstances. Ms. Lundy argued alternatively that OCGA § 19-9-3(g) (providing for certain fees in custody cases) supported the award, but “appellate review under this Code section [was] not possible” without any factual findings. Slip. op. p. 2. Similarly, the frivolous litigation statute, OCGA § 9-15-14, could not support an award without factual findings. The appeals court remanded the case for the trial court “to explain the statutory basis for the award and to make any findings necessary to support it.” Slip. op. p. 3.

The Court of Appeals relied primarily upon Ward v. Ward, 289 Ga. 250 (2011), one in a line of cases vacating and remanding attorney’s fees awards where the trial court did not specify whether OCGA § 19-6-2 or OCGA § 9-15-14 was the basis, and where the record did not clarify the issue. This is far from the only context where attorney’s fees awards should contain factual and legal support. Even if it is clear that an award is under OCGA § 9-15-14, for example, the award must contain findings as to the conduct justifying the award and the reasonableness of the amount (generally including facts such as the actual costs, time spent, hourly rate, and reasonableness of the rate). See generally In re Serpentfoot, 285 Ga. App. 325, 328-29 (2007). Vacatur is not automatic; if the basis for the award can be determined from the record, the appeals court will generally uphold it. See, e.g., Viskup v. Viskup, 291 Ga. 103 (2012). And appellate courts evaluate fees awards under deferential “any evidence” or “abuse of discretion” standards of review. But appeals from unsupported fees awards play out differently than other appeals; the appellee is effectively put in the unusual position of needing to find support in the record for the trial court’s decision, rather than the appellant finding error.

In short, it is often not enough for a trial court’s attorney’s fees award to be correct; the award (together with the appellate record, if necessary) must show why it is correct.

It’s worth considering why attorney’s fees awards are treated this way, when many other trial court orders are treated differently. Appellate courts sometimes apply the “right for any reason” rule when interpreting trial court decisions (often, but not always, summary judgment decisions). “Under the ‘right for any reason’ rule, an appellate court will affirm a judgment if it is correct for any reason, even if that reason is different than the reason upon which the trial court relied.” City of Gainesville v. Dodd, 275 Ga. 834, 835 (2002). (Occasionally courts apply the right for any reason rule to aspects of fee awards. See Eaddy v. Precision Franchising, LLC, 320 Ga. App. 667, 671 (2013).) “By focusing upon the ultimate correctness of a trial court’s ruling, rather than upon the possibly erroneous reasons enunciated therefor, the right-for-any-reason rule allows the courts to reach a just result without the unnecessary expenditure of additional time and expense that would be occasioned by a reversal or remand.” Farmer v. State, 266 Ga. 869, 873 (1996) (Carley, J., dissenting). If the right for any reason rule (or similar principles) applied to fee awards, an award could be upheld if it was correct under any applicable statute. It might also affect the “burden” on appeal, in the sense that it could change the outcome in cases (like Lundy)where the appellate record is lacking.

Some statutes specifically require trial courts to explain the reasoning behind an award of attorney’s fees. E.g., Fed. R. Civ. P. 11(c)(6) (“An order imposing a sanction must describe the sanctioned conduct and explain the basis for the sanction.”). For other statutes, such as OCGA § 9-15-14, the requirement of findings in the award is a court creation. In part, it likely reflects the general disfavor toward attorney’s fees awards inherent in the American Rule. And the harm associated with vacatur and remand of ambiguous or unsupported fee awards will usually be relatively small. In most cases the trial court will likely reissue an award for the same amount, but with additional reasoning, and the only harm is the delay and expense of an appeal.

What can an attorney who receives a favorable but unsupported attorney’s fees award do to avoid the expense and delay of an appeal? A preliminary step, of course, is to ensure that the legal grounds and factual support for an award are provided to the trial court in the first place. But this isn’t always easy to do. The fees expended on a matter may continue going up as the case progresses, so no one wants to submit a detailed fee request too early. Moreover, demonstrating the amount and reasonableness of fees requires disclosing information that, while not privileged, is sometimes sensitive. A party may want to withhold doing so until after the trial court has determined that there is justification for an award.

After the trial court has issued an unsupported award, one way of correcting it is for the trial court to issue a supplemental order. See, e.g., McCarthy v. Ashment-McCarthy, 295 Ga. 231, 234 (2014). But getting the trial court to issue such an order isn’t costless or risk-free. There’s always a chance that the trial court, presented with an opportunity to reconsider a decision, will reduce the fees award or rescind it entirely. The successful party may want to take the chance that the opponent will decide not to appeal.

Vacatur and remand of unsupported attorney’s fees awards happens quite frequently in Georgia. Trial courts don’t always include the reasoning behind their awards. Attorneys must be alert to the need for support in the award.