Allred v. Fairchild
| Docket Number: | 2004-CA-00882-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 12-08-2005 Opinion Author: GRAVES, Holding: Reversed and Rendered |
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| Additional Case Information: |
Topic: Accounting fees - M.R.C.P. 54(d) - Exceptional judicial discretion - Reasonableness of fees Judge(s) Concurring: Smith, C.J., Cobb, P.J., Carlson and Dickinson, JJ., Non Participating Judge(s): Waller, P.J., Diaz and Randolph, JJ., Dissenting Author : Easley, J., Procedural History: Bench Trial Nature of the Case: CIVIL - OTHER |
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| Trial Court: |
Date of Trial Judgment: 03-26-2004 Appealed from: Covington County Chancery Court Judge: Percy L. Lynchard, Jr. Disposition: Denied that the Appellant was entitled to any relief Case Number: 9971 |
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| Party Name: | Attorney Name: | |||
| Appellant: | WILLIAM WALLACE ALLRED |
OTIS JOHNSON, KEITH R. RAULSTON |
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| Appellee: | WILEY FAIRCHILD; FAIRCHILD-WINDHAM EXPLORATION COMPANY, A PARTNERSHIP; JOHN M. FAIRCHILD, MICHAEL B. MOORE AND MARK A. FAIRCHILD, TRUSTEES OF THE MARIE L. FAIRCHILD LIFE INSURANCE TRUST; B. R. NOEL, MARK A. FAIRCHILD AND JOHN M. FAIRCHILD, EXECUTORS OF THE ESTATE OF WILEY FAIRCHILD, DECEASED | LAWRENCE CARY GUNN |
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| Topic: | Accounting fees - M.R.C.P. 54(d) - Exceptional judicial discretion - Reasonableness of fees |
| Summary of the Facts: | William Allred filed suit against Wiley Fairchild alleging that he was due a commission for services rendered in connection with the sale of oil and gas leases, minerals and royalties in a transaction referred to as the Windham Properties. The chancellor chancellor held that Allred was not entitled to any relief, and Allred appealed. The Supreme Court reversed and remanded the chancellor’s decision. On remand, the chancery court awarded Allred over $6,000,000. Allred filed a costs bill with the chancery court in the amount of $79,858.35. The sum represented fees paid to Oscar Hartman, an oil and gas accountant, for his work preceding and during the trials. Fairchild filed an objection to the costs bill. The chancery court found that there were no exceptional circumstances to warrant Allred’s recovery of the fees paid to Hartman and declined to grant the fees to Allred. Allred appeals. |
| Summary of Opinion Analysis: | Fairchild argues that Allred is not entitled to recover accounting fees as costs under M.R.C.P. 54(d). Allred relies solely upon the exercise of exceptional judicial discretion as referenced in the comments to Rule 54(d) and argues that but for Fairchild’s fraud, he would not have incurred the costs and expenses of payout determination and accounting for the monies due to him. Exceptional circumstances must exist in order for the court to exercise exceptional judicial discretion under Rule 54(d). Based upon the evidence present in the record, the Court found Fairchild’s actions to be riddled with fraud and deception and that the confidential relationship between the parties allowed Fairchild to perpetrate the fraud for a substantial period of time. The Court also determined that Fairchild denied the very existence of an oral contract, until he was presented with documented evidence that an oral contract existed. It is axiomatic that one is liable for the full measure of the reasonably foreseeable consequences of their actions. It was entirely foreseeable by Fairchild that his breach of the contract and his continued denial of its existence would lead to substantial litigation and accounting costs. Those costs should be borne by Fairchild. Considering these facts, Allred has proven that exceptional circumstances existed. The chancellor used hindsight to speculate as to what the parties would have done absent litigation instead of solely relying on the record before him. Through the custom and practice of the parties, Allred relied upon Fairchild to perform the accounting. Until a dispute arose between the parties, Allred never employed an accountant to determine the status of his financial dealings with Fairchild, primarily because he trusted Fairchild to provide an honest and accurate accounting of funds. The chancellor was manifestly wrong in determining that Allred would have initially hired an accountant absent litigation. The chancery court erred in finding that there was nothing before it to show that Hartman’s fees were reasonable. Hartman is a certified public accountant who attached an affidavit which was submitted with the costs bill detailing the services he rendered. |
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