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ARKANSAS COURT OF APPEALS
No CV 17-325
Opinion Delivered Dcccmbcr 1 3,2017
STATE FARNI MUTUAL AUTOMOBILE
INSULヽ NCE COMPANY
APPEtt FROM THE BENTON
COUNTY CIRCUIT COURT
HONOMBLE ROBIN F GREEN,
I-ARRY D. VAUGHT,Judge
Appellant State Fatm Mutual Automobile Insuance Company (State Farm) appeals
the amount of attorney's fees that the Benton County Circuit Court awatded to appeliee
Alvaro Espatza pursuaflt to Atkansas Code Annotated section 23-89-208(Q $.epl. 201,4) after
a jury found
in favot of Espana on his claim for delayed
expenses. We affi.rm the fee award.
Alvaro Esparza and his two chjldren wete involved in a motot-vehicle accident on
october 1.5, 2013.
insued by State Farm, and his policy included medical-
payment covefage of$5,000 pef percon. Espatza and his children were iniuted in the accident,
and he subsequently submitted theL medical exPenses to Sute Farm fot payment undet the
policy- State Farm refused to pay. He and his children then brought suit, through their attorney
I(en Swindle, to recovet the unpaid medicai exPeflses. Swindle also teptesented Esparza and
his children in their petsonal-iniury lawsuit against the other motorist, and they had entered
into written attorney-client
with Swindle in which they agreed to pay him
peicentage of their recovery.
Aftet a two-day trial, t}e jury awarded Esparza and his children a combined total of
$12,535 in delayed medical-expense payments. Espatza and his chil&en then filed a motion
for attorney's fees pursuant to section 23-89-208(f), which ptovides:
In the event the insuret is required by the action to pay the ovetdue benefits,
the insuter shall, in addition to the benefits teceived, be required to pay the teasonable
aftorney's fees incured by the other party, plus twelve percent (12%) penalty, plus
interest theteon ftom the date these sums became overdue.
The court awarded
in attorney's fees based on an hout\ tate calculation. On
appeal, State Farm does not contest that Espatza is entided to an awatd of attotney's fees or
that the fee awaid represented a teasonable tate and numbet of hours worked. The onlv issue
on appeal is whether an houtly fee awatd was permissible when Espatza and his chil&en had
entered into a contingency-fee agteement.
Under the Amedcan rule, parties bear their own litigation expenses, and attotney's fees
are not allowed except when expressly provided
,800 S.W.2d 717 (1990). An awafd of attomey's fees will not be set aside absent
anabuseof discreuon by the circuit court.
fot by statute oi contract. Chiwl
12-13,518 S.W.3d 89, 97 (citing chisco,304 Atk.
,800 s.W.2d 717). While the decision
to award attorney's fees and the amouot awarded ate reviewed undet an abuse-of-discretion
standatd, we review factual findings by a circuit corft on the existence
of the Chisco factorsr
of fees, while
disctetionary, should be informed by considetation of the experience and abiliry
attorney, ttre time and labot required to perform the legal service plgetfl, the
involv# in the case and the results obtained, the novelty and difficulty of the issues involved,
1ln Chisco, the Arkansas Supreme Court held that a circuit court's award
under a clearly erroneous standard of review. Dauis u. lYilliansoa, 359 Atk. 33, 194 S.!7.3d 197
(2004). Due to the circuit court's intimate acquaintance with the record and the quality
service rendered, we also recognize the superior perspective of the trial judge in assessing the
State Farm argues that, because Esparza and his children entered into a written
attorney-client agteemeflt in which Swindle agreed to iepresent them fot a set petcentage
what they recoveted,2 and because the award of fees exceeded that petcentage, the fee award
violated the statute's authorization to awaid the "fees incured" by the party. \X/hile this
argument is persuasive,
fot one very simple teason: the contingency-fee conttact on
which State Farm relies was applicable only to Swindle's reptesentation of the Esparzas in
theu personai-iniury case and did not apply to the Esparzas' claim for delayed medical
The ckcuit court was presented with ample evidence to conclude that the contingencyfee contract did not apply to Swindle's
wotk on the Esparza's delayed medical-payments claim.
The contract speciflcally refers to "damages sustained," and
references the date
motor-vehicle accident. The conttact also anticipates that a copy
eventualiy be served on "the defendant
any insutance comPany
of the agreement
of the defendant" for
establishing ao attorney's Lien, which seems to indicate that the anticipated
the fee customarily chatged in the locality fot similat legal sewices, whether the fee is fixed ot
contiogent, the time limitations imposed on the client or by the circumstances, and the
Likelihood, if appareot to the clieng that the acceptance of the patticulat employrnent will
preclude othet employmeflt by the lawyer. Chisco,304 Atk. at 229 , 800 S.W.2d at 718.
zlhe contingency-fee agteement entided Swindle to foty petcent of the amount
recovered if the case went to ttial.
defendant is the tortfeasor, not an insurance company. Most telling, howevet, is the fact that
Esparza executed an affidavit, which was submitted to the circuit cout, explicidy stating that
the contingency-fee contract was solely for the purposes of representation in the petsonal-
in)ury case and that "it was never my intention that my attorney take as an attotney fee
percentage ofmy medical bi]ls won in [this] case." Esparza also submitted
letter from Swindle
to State Farm's attomey that specifically warned of the hours Swrndle had already expended
wotking on this case, the additional hours he would likely incut if the case went to trial, and
the type of hourly fee he had pteviously been awarded in a similar delayed medical-payments
case against State Farm. Swindle's iettet invited State Fatm
to serde the delayed medical-
payments case and wamed of the potential fot a high hourly fee awatd
if the case went to trial.
This letter cleady indicates that it was Swindle's undetstanding and intention to pursue this
case on an
hourly fee basis. Therefote, we hold that it was not an abuse of disctetion fot the
circuit coutt to awatd aftorney's fees based on an houtly fee calculation mther than
contingency- fee calculation.