West Virginia Ct. Articulates Factors for Determining Reasonableness of Attorney Fees Awarded to HOA

West Virginia Supreme Court of Appeals decision (November 6, 2015).

This case involved a dispute between a homeowners association (“Association”) and two homeowners (“Owners”) who had constructed a fence on a portion of the common area property belonging to the Association. Despite notification that the fence was in violation of Association’s restrictive covenants and repeated demands by the Association for the removal of the fence, the Owners failed to do so. Thus, the Association filed an action against Owners seeking enforcement of the applicable restrictive covenants and orders directing the Owners to remove the fence and to pay the costs and legal fees incurred by the Association. Owners ultimately admitted that the fence violated the restrictive covenants but disputed their liability for Owners costs and legal fees. The trial court granted summary judgment in favor of the Association, which included an award of $33,887.03 in attorney fees, and Owners appealed.

The appellate court affirmed and adopted the decision of the trial court which explained the basis for the award of the $33,887.03 in attorney fees. The court pointed out that the Association’s restrictive covenants provided authority for the Association to recover its attorney fees and costs and furthermore, Association was entitled to recover its costs and fees because Owners acted in bad faith both before and during the litigation. Prior case decisions had established that an award of costs and attorney fees on the basis of bad faith is appropriate.

In addressing the issue of the reasonableness of the amount of attorney fees that were awarded, the court commented that in West Virginia there is no set test for determining “reasonable” attorney fees when a homeowner has violated a restrictive covenant and the determination of reasonableness depends upon a consideration of numerous factors such as: (i) the time and labor required; (ii) the novelty and difficulty of the questions; (iii) the skill requisite to perform the legal service properly; (iv) the preclusion of other employment by the attorney due to acceptance of the case; (v) the customary fee; (vi) whether the fee is fixed or contingent; (vii) time limitations imposed by the client or the circumstances; (viii) the amount involved and the results obtained; (ix) the experience, reputation, and ability of the attorneys; (x) the undesirability of the case; (xi) the nature and length of the professional relationship with the client; and (xii) awards in similar cases.

See case decision: Amaker_v._Hammond’s_Mill_Hom