In this week's Alabama Law Weekly Update, we bring you a case from the Alabama Court of Civil Appeals addressing recovery of attorney's fees under the Alabama Prompt Pay Act.
Diamond Concrete & Slabs, LLC v. Andalusia-Opp Airport Authority, [Ms. 2130629, May 15, 2015] — So. 3d — (Ala. Ct. Civ. Ap. 2015) (adopting existing 12-part test for recovery of reasonable attorney's fees under the Alabama Prompt Pay Act).
In Diamond Concrete, the Court of Civil Appeals addresses what the phrase “reasonable attorney's fees” means in the context of the Alabama Prompt Pay Act. The Alabama Prompt Pay Act allows contractors, subcontractors, and material suppliers to recover the cost labor and materials expended on a construction project. The Act also provides the recovery of court costs, interest, and “reasonable attorney's fees” if the party seeking payment is ultimately successful.
In this case, the Court of Civil Appeals addresses what “reasonable attorney's fees” means as that phrase is used in the Prompt Pay Act. Diamond Concrete, a subcontractor, brought a claim for recovery of $14,055.00 plus interest and attorney's fees. After judgment was entered in Diamond's favor, the trial court ultimately entered a judgment for $5,622.00 in attorney's fees, holding that a fee equal to 40% of the principal sued for was reasonable. However, Diamond's counsel had expended almost 1,000 hours, totaling approximately $247,275.00 in attorney's fees, in the case. Because of the length of trial and complexity of the case, the Court of Civil Appeals held that a fee equal to 40% of the principal was not reasonable.
In determining what “reasonable attorney's fees” means under the Prompt Pay Act, the Court of Civil Appeals adopted the same criteria used to determine whether fees are reasonable in other contexts. Those criteria, 12 in all, include the complexity of the case and amount of time consumed, the two most important criteria according to the court. Given the amount of time the Diamond Concrete case consumed, the Court of Civil Appeals determined that a fee based on a percentage of the amount recovered was not reasonable, although it could be in other cases. The case was returned to the trial court to consider all twelve factors in determining a reasonable fee.