Don't Miss
Home / Fulltext Opinions / Supreme Court of Virginia / HOLMES v. LG MARION CORP.

HOLMES v. LG MARION CORP.



NOTICE: The opinions posted here are
subject to formal revision. If you find a typographical error or
other formal error, please notify the Supreme Court of Virginia.


HOLMES

v.

LG MARION CORP.


November 5, 1999

Record No. 982638

TERONNIE HOLMES

v.

LG MARION CORPORATION

FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY

Frank A. Hoss, Jr., Judge

Present: All the Justices

OPINION BY JUSTICE ELIZABETH B. LACY


In this appeal, Teronnie Holmes challenges the
amount of the damage and attorneys’ fee awards entered in his
favor against LG Marion Corporation (LG Marion) for a willful
violation of the Virginia Consumer Protection Act (VCPA), Code
?? 59.1-196 through –207. Holmes also asserts that
the trial court erred in striking Holmes’ claim for a violation
of the Magnuson-Moss Warranty Act (the Warranty Act), 15 U.S.C.
? 2301, et seq. (1996). We will affirm the judgment of the
trial court because we conclude that the trial court did not
abuse its discretion in determining the amount of the attorneys’
fee award or in refusing to enhance the amount of actual damages
pursuant to Code ? 59.1-204. Although the trial court erred
in striking Holmes’ claim for a violation of the Warranty Act,
such error was harmless.

On March 21, 1996, Holmes purchased a 1989
Isuzu Impulse Turbo automobile from LG Marion. The Isuzu had
previously been owned by Rian Kirkman. In 1993, when Kirkman
purchased the vehicle for $5,790, the odometer showed 27,941
miles. According to Kirkman, the vehicle leaked oil "like a
sieve," emitted white smoke from the tailpipe, the
transmission made noises, and he had performed little maintenance
on the vehicle. In 1996, Kirkman sold the vehicle to Tyson’s Ford
for a trade-in cash value of $1,600. LG Marion purchased the
vehicle from Tyson’s Ford for $2,100.

Prior to his purchase, Holmes visited the
dealership and test drove the vehicle with Marion Cloud, the
owner and principal salesman of LG Marion. Holmes asked Cloud
about a "whining noise" coming from the vehicle. Cloud
told Holmes the noise was the sound of the turbo-charged engine.
Holmes again asked about the "whining noise" when he
returned to purchase the vehicle, and was again told that it was
the sound of the engine.

Holmes paid $5,695 for the vehicle and $795 for
the "Wynn’s Product Warranty Program." This program was
described as a "limited warranty agreement" between
Holmes and Wynn Oil Company. It provided for reimbursement to
Holmes by Wynn of up to $3,000 for certain costs incurred to
repair or replace parts for two years following the purchase of
the vehicle. Holmes also received a "Buyers Guide"
indicating that the vehicle was being sold without a service
contract and "as is;" however, Holmes was not asked to
and did not sign an acknowledgement in the "Buyer’s
Guide" stating that the vehicle was sold "as is."
At the time Holmes purchased the vehicle, the odometer showed
83,945 miles.

Within a few days of the purchase, while
changing the oil in the vehicle, Holmes discovered that the oil
had turned black. Following a trip to Kentucky in early April,
the vehicle began to emit smoke, make noises, shake, and use
large quantities of oil. According to Holmes, the vehicle ran
"like a lawnmower." LG Marion refused Holmes’ request
to repair the vehicle. At this point, the odometer showed over
89,700 miles. In May, Holmes took the vehicle to an Isuzu
dealership and was told that the whining noise came from the
transmission, and that the engine, transmission, and exhaust
systems required overhaul or replacement. The dealership
estimated the cost of these repairs to be at least $5,000. Holmes
did not seek repair under the Wynn’s Product Warranty Program.
The vehicle subsequently stopped running.

Holmes filed a motion for judgment against LG
Marion alleging a violation of the Warranty Act, common law
fraud, constructive fraud, violations of the VCPA, and breach of
contract. At a bench trial, following presentation of Holmes’
liability evidence, the trial court granted LG Marion’s motion to
strike Holmes’ claim under the Warranty Act. At the close of all
evidence, the trial court awarded Holmes $4,000 in actual
damages, and found that LG Marion had willfully violated the VCPA
by misrepresenting the condition of the vehicle to Holmes prior
to the sale. The trial court denied Holmes’ motion seeking
reconsideration of its ruling striking his Warranty Act claim and
refusing to increase the damage award under Code
? 59.1-204(A) of the VCPA.

Following this ruling, the parties presented
further evidence and argument to the trial court on Holmes’
request for $18,532 in attorneys’ fees, $1,389.81 in costs,
pursuant to Code ?? 59.1-204(B), 14.1-178, and -198, and
$2,757.30 in attorneys’ fees and costs as sanctions under Rule
4:12(c).
[1] The trial court awarded Holmes
$4,000 in attorneys’ fees pursuant to Code ? 59.1-204(B),
and $1,500 in costs pursuant to Code ?? 14.1-178 and -198,
and Rule 4:12(c).

On appeal Holmes assigns error to the actions
of the trial court in failing to increase the damage award under
Code ? 59.1-204(A) to reflect LG Marion’s willful violation
of the VCPA, in "limiting Mr. Holmes’ attorneys’ fees under
Code ? 59.1-204(B) to his awarded damages," and in
striking his claim under the Warranty Act.

I. Enhanced Damages

Holmes does not challenge the amount of actual
damages awarded by the trial court. He asserts, however, that the
trial court should have trebled the $4,000 actual damage award
because it found that LG Marion engaged in a "willful"
violation of the VCPA. Holmes bases his request on Code
? 59.1-204(A), which states that "[i]f the trier of
fact finds that the violation [of the VCPA] was willful, it may
increase the damages to an amount not exceeding three times the
actual damages sustained, or $1,000, whichever is greater."
Code ? 59.1-204(A). This section, Holmes asserts,
represents the General Assembly’s intent that willful violators
of the VCPA suffer a punitive sanction in the form of enhanced
damages.

The purpose of Code ? 59.1-204(A) is to
provide a penalty for intentional violations of the VCPA in
addition to restitution for damages incurred. The General
Assembly, nevertheless, did not mandate the imposition of such
penalty, but left that decision to the discretion of the trier of
fact. Therefore, on appellate review, we will not disturb the
trial court’s decision unless we find that the decision was an
abuse of discretion.

LG Marion’s violation of the VCPA was willful,
according to the trial court, because LG Marion knew there were
problems with the vehicle. When Holmes asked about its condition,
LG Marion either intentionally misrepresented the condition of
the vehicle or purposely failed to ascertain its true condition.
In determining the damages, however, the trial court expressed
concern over its ability to ascertain the damage which flowed
from this misrepresentation. Holmes drove the vehicle over 6,000
miles after he noticed the problems with it and before he had the
vehicle independently evaluated in order to determine its true
condition. Holmes’ actions in this regard not only had an adverse
effect on determining the actual damages Holmes incurred, but
also on the extent punitive sanctions should flow from the
willful misrepresentation.

While the VCPA is remedial legislation and
should be liberally applied, the statutory authorization to
impose enhanced actual damages is not a requirement to do so.
Under the facts of this case, we cannot say that the trial court
applied erroneous principles of law or otherwise abused its
discretion in declining to impose enhanced damages under Code
? 59.1-204(A).

II. Attorneys’ Fees

Holmes’ next assignment of error is that the
trial court erred "by limiting Mr. Holmes’ attorney’s fees
under Section 59.1-204(B) to his awarded damages." We reject
this assignment of error on two grounds. First, although Holmes
asserts that the trial court "limited" his attorneys’
fee award to the amount of his actual damages, nothing in the
record, other than the fact that the amounts are identical,
supports this conclusion.

Holmes argues that he introduced sufficient
evidence to support his claim that the requested fees of over
$18,000 were reasonable. LG Marion, Holmes asserts, presented no
evidence rebutting the reasonableness of these fees and thus, in
awarding only $4,000 in attorneys’ fees, the trial court ignored
Holmes’ evidence and improperly limited the amount of the
attorneys’ fees award to the amount of his damage recovery. We
disagree.

In discussing Holmes’ request for attorneys’
fees, the trial court did not make any statement reflecting
either a belief or a requirement that the amount of the
attorneys’ fees should be limited to the amount of actual
damages. Rather, the trial court evaluated the nature of the
litigation and the work performed by counsel. The trial court
concluded that the fee amount Holmes requested was
"unreasonable" for a "case of this nature."
This record simply does not support the assertion by Holmes that
the trial court limited its award of attorneys’ fees to the
amount of the damage award.

We also reject this assignment of error to the
extent it includes an argument that the attorneys’ fees award was
inadequate. When, as here, recovery of attorneys’ fees is
authorized by statute, the fact finder must determine "from
the evidence the amount of the reasonable fees under the facts
and circumstances of each particular case." Tazewell Oil
Co. v. United Virginia Bank
, 243 Va. 94, 111, 413 S.E.2d 611,
621 (1992). The trier of fact must "’weigh the testimony of
attorneys as to the value of the services, by reference to their
nature, the time occupied in their performance, and other
attending circumstances, and by applying to it their own
experience and knowledge of the character of such
services.’" Beale v. King, Administratrix, 204 Va.
443, 446, 132 S.E.2d 476, 478-79 (1963) (citation omitted). On
appeal the trial court’s determination of the amount of the
attorneys’ fees to be awarded will be set aside only upon a
finding of abuse of discretion. See Coady v. Strategic
Resources, Inc.
, 258 Va. 12, 18, 515 S.E.2d 273, 276 (1999); RF&P
Corporation v. Little
, 247 Va. 309, 323, 440 S.E.2d 908, 917
(1994); Rappold v. Indiana Lumbermens Mutual Ins., 246 Va.
10, 15-16, 431 S.E.2d 302, 306 (1993).

Holmes produced numerous records and the
affidavit of an expert witness to support the reasonableness of
his fee request. LG Marion did not contest the hourly fee rate of
Holmes’ counsel, but it did object to the inclusion of a number
of items which it asserted were "excessive, redundant or
otherwise unnecessary." The items challenged by LG Marion
included time spent in seeking to disqualify LG Marion’s counsel,
time LG Marion alleged was spent as a result of lack of
preparation by Holmes’ counsel, and time spent on claims upon
which Holmes did not prevail. Furthermore, although Holmes
submitted expert opinion evidence regarding the reasonableness of
the fees, the trial court was not bound by that testimony. Beale,
204 Va. at 446, 132 S.E.2d at 478.

As recited above, the trial court considered
the evidence before it, the circumstances of the litigation, and
its "own experience and knowledge of the character of such
services" in reaching its decision. It determined that the
amount requested was unreasonable and that an award of $4,000 in
attorneys’ fees was reasonable. Based on this record we cannot
say that the trial court abused its discretion in determining the
amount of the award of attorneys’ fees.
[2]

III. Warranty Act Claim

Count I of Holmes’ motion for judgment alleged
that LG Marion breached the Wynn’s Product Warranty Program and
breached the implied warranty of merchantability in violation of
the Warranty Act. The trial court dismissed Count I, holding that
Holmes failed to prove that LG Marion violated the warranty
contained in the Wynn’s Product Warranty Program. Dismissal of
the entire count was error because the claim for breach of the
implied warranty of merchantability in violation of the Warranty
Act was a separate claim unconnected to the alleged breach of the
Wynn’s Product Warranty Program. For the reasons that follow,
however, we conclude that the trial court’s error was harmless
because it did not deny Holmes the ability to recover any sums in
addition to those awarded by the trial court.

As Holmes conceded, the actual damages he would
be entitled to recover resulting from a violation of the VCPA and
of the Warranty Act are the same.
[3] Holmes has not challenged the amount of actual damages
awarded by the trial court and a litigant is not entitled to
double recovery of actual damages. See Tazewell Oil Co.,
243 Va. at 113, 413 S.E.2d at 621-22. Therefore, striking the
allegations of a violation of the Warranty Act was harmless as to
the amount of actual damages which Holmes could recover in this
action.

The VCPA and the Warranty Act allow recovery of
attorneys’ fees.
[4] Both statutes require that the
award of attorneys’ fees be reasonable as determined by the trial
court. As discussed above, the trial court in this case
determined that Holmes’ requested attorneys’ fees were
unreasonable and awarded an amount it considered reasonable for
this case. There is no indication that the determination of
reasonable attorneys’ fees would be different if made pursuant to
the Warranty Act.

The only possible difference between recovery
under the VCPA and the Warranty Act is the potential recovery of
costs and expenses of litigation. The VCPA provides recovery for
"court costs" and the Warranty Act allows recovery of
"cost and expenses . . . determined by the court
to have been reasonably incurred by the plaintiff for or in
connection with the commencement and prosecution of such action
. . . ." 15 U.S.C. ? 2310(d)(2). Costs
and expenses recoverable under the Warranty Act could include
recovery for trial–related expenses such as expert witness
fees, which are not recoverable under the rubric of "court
costs" allowed by Code ? 59.1-204(B).

However, in addition to the court costs
authorized by the VCPA, Holmes sought recovery of litigation
expenses pursuant to Code ?? 14.1-178 and -198, and Rule
4:12(c). Holmes’ request pursuant to Code ?? 14.1-178 and
-198 included not only filing fees, service fees, and subpoena
fees, but also reasonable costs for depositions taken
out-of-state and the "fees and/or costs to secure" the
services of two of Holmes’ witnesses. The total requested for
these items was $1,389.81.
[5]

Holmes also sought $2,757.30 as sanctions under
Rule 4:12(c) for attorneys’ fees, costs, and expenses incurred
for the services of his automotive expert Godfrey and to conduct
the deposition of Kirkman. Approximately $1,600 of this amount
was designated as attorneys’ fees, and the remaining amount was
for the same witness’ expenses listed in Holmes’ request for
costs under Code ?? 14.1-178 and -198.

The trial court considered all these requests
and awarded Holmes $1,500 pursuant to Code ?? 14.1-178 and
–198, and Rule 4:12(c). This award for litigation expenses
was not limited to the court costs allowed under the VCPA. The
only limitation on the award imposed by these sections and this
rule is that the amount of the award be reasonable, in the
opinion of the trial court. This same limitation –
reasonableness – is imposed on litigation expenses
recoverable under the Warranty Act.

Under these circumstances, we conclude that the
expenses requested and recovered by Holmes encompassed the same
type of expenses he could have recovered under the Warranty Act.
There is nothing in this record to indicate that any expense, and
certainly no significant expense, related to the litigation was
omitted from Holmes’ request for recovery of costs and expenses
presented to the trial court. The rationale of reasonableness was
applied by the trial court to Holmes’ requests. There is no
indication that a different result would have been reached had
the trial court applied the standard of reasonableness under the
Warranty Act.

In summary, because there would have been no
difference in the amount of actual damages, reasonable attorneys’
fees, court costs, and reasonable litigation expenses had Holmes
pursued and prevailed in his claim for a breach of the implied
warranty of merchantability in violation of the Warranty Act, the
trial court’s error in striking Holmes’ claim under the Warranty
Act was harmless.

For the above reasons, we will affirm the
judgment of the trial court.

Affirmed.


JUSTICE KINSER, with whom JUSTICE HASSELL
joins, concurring in part and dissenting in part.

I respectfully dissent from the majority’s
decision with regard to the issue of attorneys’ fees. While
I recognize that this Court should reverse an award of
attorneys’ fees only when the trial court has abused its
discretion, see Coady v. Strategic Resources, Inc.,
258 Va. 12, 18, 515 S.E.2d 273, 276 (1999), I am convinced that
such an abuse occurred in this case.

Teronnie Holmes presented detailed records in
support of his request for attorneys’ fees in the amount of
$18,532. Holmes also submitted an affidavit from an attorney
experienced in the area of consumer rights litigation, who opined
that the amount of time expended on this case and the hourly fees
charged were reasonable, necessary, and fair. LG Marion
Corporation presented no countervailing evidence, but only argued
that some of the hours billed were unnecessary. LG Marion
characterized the requested amount of attorneys’ fees as
"perhaps the biggest travesty of this case, that it is three
times the cost of the car."

Based on this evidence, the circuit court
concluded that the amount requested was "unreasonable."
However, the court did not make any factual findings but merely
stated, "I feel like the money store. . . . I
think it is . . . shameful to have to spend $20,000 on
a case of this nature." While I do not necessarily disagree
with the circuit court’s comments, I do not consider the
statements to be a proper evaluation of the attorneys’ fees
requested by Holmes. In Mullins v. Richlands Nat’l Bank,
241 Va. 447, 403 S.E.2d 334 (1991), we said that "[i]n
determining a reasonable fee, the fact finder should consider
such circumstances as the time consumed, the effort expended, the
nature of the services rendered, and other attending
circumstances." Id. at 449, 403 S.E.2d at 335. See
also Tazewell Oil Co., Inc. v. United Virginia
Bank/Crestar Bank
, 243 Va. 94, 112, 413 S.E.2d 611, 621
(1992). I cannot determine from the record whether the circuit
court considered any of these factors.

Nevertheless, the majority concludes that the
circuit court did not limit the amount of attorneys’ fees
awarded to an amount equal to the amount of Holmes’ actual
damages. Absent evidence of a reasoned analysis by the circuit
court of the amount of the requested fees, the only inference
that I can draw from the record is that the circuit court did
limit the amount of attorneys’ fees to the amount of damages
awarded to the Holmes. An award of attorneys’ fees
calculated in that manner is improper. See Riverside v.
Rivera
, 477 U.S. 561, 575-79 (1986) (rejecting contention in
civil rights action that attorneys’ fees should be
proportional to damages awarded because attorneys should be
encouraged to represent persons with legitimate civil rights
complaints); Cieri v. Leticia Query Realty, Inc., 905 P.2d
29, 48 (Haw. 1995) (in action under state consumer protection
act, "the amount of fees need not be restricted to the
amount of actual damages"); Bittner v. Tri-County Toyota,
Inc.
, 569 N.E.2d 464, 465 (Ohio 1991) ("reject[ing] the
contention that the amount of attorney fees awarded
. . . must bear a direct relationship to the dollar
amount of" damages in action under state consumer protection
act).

For these reasons, I conclude that the circuit
court abused its discretion and therefore respectfully dissent.
However, I join the majority opinion with regard to the other
issues presented in this appeal.

 

FOOTNOTES:

[1] Code ?? 14.1-178 and -198
were repealed in 1998. Code ?? 17.1-601 and -626,
effective October 1, 1998, are the successor statutes,
respectively, and contain no substantive changes. For purposes of
this opinion we will refer to the provisions by their former
statutory designations.

[2] Holmes also argues here, as he
did before the trial court, that the amount of attorneys’ fees
should be calculated by the so-called "lodestar" award
method. That method requires identification of the hours
reasonably incurred in the litigation multiplied by a reasonable
hourly rate and then adjustment of the award by consideration of
a number of specific factors. Hensley v. Eckerhart, 461
U.S. 424 (1983). Because we conclude that the attorneys’ fee
award is reasonable in this case, we do not address this
argument. Nevertheless, as LG Marion points out, many of the
factors cited within the "lodestar" approach are
included in the elements considered by the trial court here,
including the novelty and difficulty of the questions raised, the
skill required, and the "overall relief obtained by the
plaintiff in relation to the hours expended on the
litigation." Id. at 435.

[3] The VCPA states in relevant part:

Any person who suffers loss as the
result of a violation of this chapter shall be entitled
to initiate an action to recover actual damages. . . .

Code ? 59.1-204(A).

The provision of the Warranty Act relating to
damages states:

[A] consumer who is damaged by the
failure of a supplier, warrantor, or service contractor
to comply with any obligation under this chapter, or
under a written warranty, implied warranty, or service
contract, may bring suit for damages and other legal or
equitable relief.

15 U.S.C. ? 2310(d)(1).

[4] The provisions relating to
attorneys’ fees state:

[I]n addition to any damages awarded,
such person also may be awarded reasonable attorney’s
fees and court costs.

Code ? 59.1-204(B).

If a consumer prevails . . . , he may
be allowed by the court to recover . . . a sum equal to
the aggregate amount of cost and expenses (including
attorneys’ fees based on actual time expended) determined
by the court to have been reasonably incurred by the
plaintiff . . . ."

15 U.S.C. ? 2310(d)(2).

[5] We note that although this
amount is less than the sum of the amounts assigned to each
element of expense sought, it is the total amount Holmes
requested under these statutory provisions in both his pleadings
and argument before the trial court.

 

Scroll To Top