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Finley v. Home Insurance Company12/30/1998
ur determination that it is unnecessary to adopt the reasoning of Cumis and its progeny, we must point out that, in this case, none of them are implicated. The Finleys do not challenge the actions of retained counsel or HIGA in the defense of the Aaron Defendants. The Finleys base their claim instead on an assertion that a conflict of interest automatically arose that rendered the actions of retained counsel untrustworthy. The record is devoid of any concrete claim regarding misconduct in the underlying action.
B. HIGA's cross-appeal
Because of its Disposition of the case, the ICA vacated the circuit court's award of attorneys' fees and costs. HIGA filed a cross-appeal on the issue of the circuit court's reduction of its request for fees and costs. Because we are reinstating the circuit court's judgment in favor of HIGA, we must therefore address the issues raised in the cross-appeal.
HIGA prevailed in this action. HIGA subsequently requested attorneys' fees and costs. HIGA sought $35,292.50 in fees and costs. HIGA states that it was entitled to $24,079.22 in fees and $2,911.55 in costs. As noted in footnote 5, supra, HIGA does not explain the discrepancy between the amount it now claims entitlement to and the amount in its original request. The Finleys filed a memorandum in opposition to HIGA's request arguing, inter alia, that HIGA was not entitled to attorneys' fees on count V, breach of settlement agreement, because that count was resolved in favor of the Finleys through HIGA's payment of $100,000. The circuit court entered an order stating that " he Court finds reasonable attorneys' fees to be $11,764.00 and taxable costs to be $264.00 for a total of $12,028.00." HIGA claims that the circuit court abused its discretion by reducing the amount of fees and costs requested to that awarded.
We agree that the circuit court abused its discretion in reducing the amount of taxable costs awarded without explanation or a readily discernable rationale. See Wong v. Takeuchi, 88 Hawaii 46, 961 P.2d 611 (1998) (holding that the circuit court abused its discretion in reducing, without explanation, prevailing party's request for costs). Therefore, we vacate this portion of the circuit court's order and remand for recalculation. We now turn to the issue of attorneys' fees.
HIGA requested attorneys' fees under the theory that this action is in the nature of assumpsit, and this is not challenged by the Finleys. Pursuant to HRS § 607-14 (Supp. 1997), " n all the courts, in all actions in the nature of assumpsit . . . there shall be taxed as attorneys' fees, to be paid by the losing party . . . a fee that the court determines to be reasonable[.]" "We review the [circuit] court's denial [and granting] of attorneys' fees under the abuse of discretion standard." Weinberg v. Mauch, 78 Hawaii 40, 52-53, 890 P.2d 277, 289-90, reconsideration denied, 78 Hawaii 421, 895 P.2d 172 (1995) (brackets in original) (internal quotation signals and citation omitted).
HIGA's sole ground for challenging the circuit court's award of fees is that the severe reduction in the amount of fees was excessive and that the circuit court should have been required to explain the grounds for the reduction. We disagree. An award of attorneys' fees is in derogation of common law principles that parties should be responsible for bearing their own fees incurred in litigation. "Normally, pursuant to the `American Rule,' each party is responsible for paying his or her own litigation expenses." Fought & Co., Inc. v. Steel Engineering and Erection, Inc., 87 Hawaii 37, 51, 951 P.2d 487, 501 (1998).
There is a statutory entitlement, pursuant to HRS § 607-14, to an award of reasona
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