The state Court of Appeals overturned a Waukesha County judge who said lemon-law lawyer Vince Megna shouldn't get paid for the time he spent in court arguing over legal fees.
Megna, whose specialty practice was targeted by a new law that generally limits fees in such cases to three times the actual damages, won a new chance to collect some $80,000 in fees for a case against Chrysler that settled for a fraction of that.
"This case is a good example on how fees can get out of control when the manufacturer is not reasonable, smart or has bad attorneys," Megna said.
Gary and Sandra Zimmerman had sued over their 2006 Chrysler minivan. The parties agreed to a partial settlement in which Chrysler would pay $10,000 and the couple would keep the van. But they couldn't agree about fees and costs. Megna said they were $27,500; Chrysler offered $8,000. Ultimately, both sides agreed to let the court determine reasonable fees.
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Typically, that takes a few hours. But Circuit Judge Ralph Ramirez held five days of hearings over several months during which Megna argued for his initial number, and the extra cost of arguing the fees. Chrysler's attorneys tried to show why $8,000 was reasonable.
Ramirez awarded nearly $24,000, and nothing for any time spent litigating the issue of the fees, even though Chrysler had agreed that would be part of the calculation.
"I do not believe it is reasonable under the circumstances of this case for me to award any more fees for the time period that occurred after the resolution of the underlying issue," Ramirez decided in 2010.
He called the request mind-boggling, disturbing and outrageous. Ramirez thought the accountings didn't appear to reflect "efforts to rigorously represent the Zimmermans as much as efforts to geometrically compound attorneys' fees."
The Court of Appeals reversed him.
The appeals court's logic? Since Ramirez awarded a figure closer to Megna's request than Chrysler's offer for the work leading up to the settlement, "some amount of attorney fees must have been reasonable under the particular facts of this case for litigating attorney fees."
Had Ramirez initially found the fees should be $8,000, he could have ruled it was unreasonable for Megna to litigate for more and likely wouldn't have been reversed.
A new hearing on fees probably won't be held for months. But when it is, Megna's bill to Chrysler will have grown again - to cover all the hours spent on the successful appeal.
Michael Palese, a spokesman for Chrysler, said: "We are encouraged that the court of appeals recognized the trial court's findings that the fees requested by Attorney Megna were 'outrageous,' 'disturbing,' 'mind-boggling,' and appeared 'not to reflect so much efforts to rigorously represent the Zimmermans as much as efforts to geometrically compound attorney's fees.'
"We are currently reviewing our legal options."
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