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Keywords

contractattorneyequityappealburden of proof
plaintiffdefendantlitigationattorneyburden of proofwill

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McKenzie Const., Inc. v. Maynard, 758 F.2d 97

Facts

McKenzie Construction, Inc., represented by its president James H. King, entered into a contingent fee agreement with attorney Desmond L. Maynard after the government of the Virgin Islands terminated their construction contract. King initially sought legal representation to prevent the termination but was unsuccessful. After hiring Maynard, they settled for $195,000, but King later contested the attorney's fee of approximately $65,000, claiming it was excessive. The district court found that the fee was not clearly excessive but did not consider the burden of proof correctly.

The district court found that King, as an experienced and knowledgeable businessman, was aware of the nature of the contingent fee agreement.

Issue

Did the district court err in placing the burden of proof on the client to show the reasonableness of the attorney's fee and in applying the wrong standard for determining the fee's reasonableness?

The first error plaintiff attributes to the district court is its determination that the plaintiff had the burden of proof in its attack on defendant's fee.

Rule

In disputes over attorney fees, the burden of proof rests on the attorney to demonstrate the reasonableness of the fee, and the standard for determining unreasonableness should be based on equity and fairness rather than the more stringent 'clearly excessive' standard.

An attorney has the burden of proof as to the reasonableness of his fee when he sues to recover from his client.

Analysis

The appellate court determined that the district court incorrectly placed the burden of proof on the client, which is contrary to the established principle that the attorney must prove the reasonableness of their fee. Furthermore, the court criticized the district court for applying a 'clearly excessive' standard, which is more appropriate for ethical violations, instead of an equity and fairness standard that considers the circumstances surrounding the fee agreement and its enforcement.

We therefore conclude that it was error to place on the plaintiff the burden of showing the reasonableness of the fee.

Conclusion

The Court of Appeals vacated the district court's judgment and remanded the case for further proceedings, allowing for a reevaluation of the fee under the correct legal standards.

The judgment of the district court will be vacated and the matter remanded for further proceedings consistent with this opinion.

Who won?

Desmond L. Maynard prevailed in the district court, but the appellate court's decision to vacate the judgment indicates a shift in favor of McKenzie Construction, Inc. regarding the burden of proof and the standard applied.

The majority holds, and I agree, that in litigation over the amount of an attorney's fee, the burden of establishing the reasonableness of the fee rests on the attorney, even in circumstances in which the client is required to initiate the action.

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