Contested Attorney-Fee Requests Require an Evidentiary Record; Rule 54(d)(2)(D) Cannot Shift the Movant’s Burden

1. Introduction

Joan Falcao v. Mitchel Richardson arises from a $16,000 loan documented by a promissory note containing a fee-shifting clause: “In the event this note shall be in default, and placed with an attorney for collection, then the undersigned agree to pay all reasonable attorney fees and costs of collection.” After a bench trial, the Superior Court initially held the note unenforceable and instead awarded plaintiff damages on an unjust-enrichment theory. Plaintiff appealed, and the Vermont Supreme Court held the note enforceable “according to its terms—including the attorney-fee provision,” remanding for further proceedings. Falcao v. Richardson, 2024 VT 78, ¶ 23, 220 Vt. 310.

On remand, plaintiff moved for over $105,000 in attorney’s fees using a “lodestar” calculation. Defendant opposed, asserting the fees were “unreasonable” and included work unrelated to collection of the note. The trial court nonetheless awarded $84,108, holding defendant had forfeited any reasonableness arguments not expressly detailed in his opposition and relying on V.R.C.P. 54(d)(2)(D)’s preference to avoid “extensive evidentiary hearings.”

The key issue on appeal was whether the trial court may award substantial contractual attorney’s fees when reasonableness is disputed but the moving party does not present evidence establishing the reasonableness of the hours and rates—particularly in light of Rule 54(d)(2)(D).

2. Summary of the Opinion

The Vermont Supreme Court reversed and remanded. It held that reasonableness is the touchstone of Vermont fee awards, and when the opposing party disputes reasonableness, the party seeking fees must produce evidence supporting the hours worked and rates charged. The Court concluded the trial court erred by treating defendant’s opposition as insufficient to contest reasonableness and by using V.R.C.P. 54(d)(2)(D) to effectively relieve plaintiff of her evidentiary burden. The case was remanded for further proceedings in which plaintiff must establish the reasonableness of the requested fees on an adequate record.

3. Analysis

A. Precedents Cited

1) The case’s procedural anchor: Falcao v. Richardson, 2024 VT 78, ¶ 23, 220 Vt. 310

The prior appeal established that the promissory note—including its attorney-fee clause—was enforceable. This narrowed the remand to implementation issues, including the amount of “reasonable” fees. The present decision does not revisit enforceability; it enforces the requirement that the fee clause’s “reasonable” limitation be proven, not presumed.

2) Lodestar methodology and reasonableness factors: Kwon v. Eaton, 2010 VT 73, ¶ 21, 188 Vt. 623 (mem.) and Perez v. Travelers Ins. ex rel. Ames Dept. Stores, Inc., 2006 VT 123

Plaintiff framed her request under the lodestar approach described in Kwon v. Eaton: hours reasonably expended multiplied by a reasonable hourly rate. Perez v. Travelers Ins. ex rel. Ames Dept. Stores, Inc. supplies both (i) the “touchstone” principle—reasonableness governs Vermont fee awards—and (ii) examples of adjustment factors (novelty, experience, results obtained). The Court’s point here is structural: invoking “lodestar” in a motion is not enough; the court must have a factual basis to determine whether the claimed hours and rates are reasonable.

3) The evidentiary-burden line of cases: Bruntaeger v. Zeller, 147 Vt. 247 (1986); Fine Foods, Inc. v. Dahlin, 147 Vt. 599 (1986); Vt. Nat. Bank v. King, 135 Vt. 551 (1977) (per curiam)

These cases drive the holding.

  • Bruntaeger v. Zeller states the governing rule: even though fee determinations are discretionary, the movant “has the burden to provide evidence of services upon which value can be determined.” The Court analogized this case to Bruntaeger, where counsel submitted only a bill and “offered no further evidence,” requiring reversal because the record could not sustain the award.
  • Fine Foods, Inc. v. Dahlin reinforces that reasonableness is “ordinarily a question of fact” and that when reasonableness is disputed and evidence is lacking, an award is “without foundation,” requiring remand.
  • Vt. Nat. Bank v. King is cited for the same burden principle: the party seeking fees must provide evidence of services and their value when the court is asked to adjudicate the matter.

Together, these precedents show the Court treating evidentiary support not as a best practice but as a necessary condition of an adjudicated fee award once the issue is contested.

4) Contractual fee clauses still follow general lodestar/burden rules: Ring v. Carriage House Condo. Owners' Ass'n, 2014 VT 127, ¶ 21, 198 Vt. 109

Ring v. Carriage House Condo. Owners' Ass'n is used to reject any suggestion that contractual fee-shifting provisions warrant a relaxed method. The Court reiterates that Vermont will not “diverge from the lodestar method” or “abandon” the general principles placing the burden of proof on the moving party merely because fees are authorized by contract.

5) Billing reasonableness as both rate and hours: Hum. Rts. Com'n v. LaBrie, Inc., 164 Vt. 237 (1995)

Hum. Rts. Com'n v. LaBrie, Inc. is cited for a core component of “reasonable fees”: they must be reasonable as to both billing rates and the number of hours spent advancing the successful claims. This frames the evidentiary need: a court cannot assess hours or rates in the abstract without proof (often via affidavit/testimony and properly supported billing records).

6) Common-core-of-facts arguments and apportionment: Kneebinding, Inc. v. Howell, 2018 VT 101, ¶ 121, 208 Vt. 578

Plaintiff relied on Kneebinding, Inc. v. Howell to argue that, where claims share a common core of facts, it may be an abuse of discretion to divide the suit into discrete claims and apportion fees rigidly. The trial court accepted this in part, deducting some unrelated time but largely treating the litigation as intertwined.

The Supreme Court did not reject the “common core” concept; rather, it held that even if apportionment is flexible, the movant must still prove the reasonableness of the total hours and rates claimed. “Common core” does not eliminate the need for an evidentiary record.

7) Rule 54’s limits and substantive-rights constraints: Samis v. Samis, 2011 VT 21, ¶ 11, 189 Vt. 434

The trial court relied on V.R.C.P. 54(d)(2)(D) to avoid what it perceived as an “ambush” at the hearing and to resolve fees without an evidentiary process. The Supreme Court invoked Samis v. Samis (quoting 12 V.S.A. § 1) to emphasize that procedural rules cannot “abridge, enlarge or modify” substantive rights. In context, the “substantive” principle is the burden rule from Bruntaeger/Fine Foods: when reasonableness is disputed, the fee claimant must prove it.

8) The small-fee exception and why it doesn’t apply: Gokey v. Bessette, 154 Vt. 560 (1990)

The Court addressed Gokey v. Bessette, which allowed a trial court, in limited circumstances, to award a reasonable fee without evidence where “the fee requested is not large” and reasonableness is not disputed. The Court distinguished it: the fee request here exceeded $100,000 and reasonableness was clearly disputed. Gokey therefore “has no bearing” on these facts.

9) Preservation/forfeiture comparison: Burton v. Jeremiah Beach Parker Restoration and Construction Management Corp., 2010 VT 55, 188 Vt. 583 (mem.)

Plaintiff analogized to Burton v. Jeremiah Beach Parker Restoration and Construction Management Corp., where a statutory challenge was not preserved below. The Court rejected the analogy: this case concerns not the availability of fees (undisputed due to the note) but the reasonableness of the amount. Defendant raised that below; thus the dispute was preserved and required evidentiary treatment.

B. Legal Reasoning

  1. Reasonableness governs and is factual. The Court reaffirmed that “reasonableness” is the touchstone and is “ordinarily a question of fact,” requiring a record adequate for findings.
  2. The lodestar is mandatory as the starting point. Courts “must begin” with hours reasonably expended times a reasonable rate, then consider potential adjustments.
  3. The movant bears the evidentiary burden when reasonableness is disputed. Citing Bruntaeger, Fine Foods, and Vt. Nat. Bank, the Court treated proof of services and value as required once contested.
  4. A general reasonableness objection suffices to trigger that burden. The Court held defendant’s opposition was “sufficient to put both plaintiff and the court on notice that reasonableness was disputed,” making it error to proceed as if defendant had forfeited the point.
  5. Rule 54(d)(2)(D) limits hearing length; it does not eliminate proof. The Rule instructs courts to avoid “extensive” evidentiary hearings “insofar as possible,” and allows referral to a master under Rule 53. The Court reasoned that when reasonableness is disputed, it is not “possible” to resolve the matter without the moving party meeting its burden; the procedure must accommodate proof (whether by a streamlined hearing, affidavits, or a master), not dispense with it.

C. Impact

  • Reinforces evidentiary minimums for fee awards. Vermont trial courts may not award substantial fees based solely on motion papers and unauthenticated invoices when reasonableness is contested; they must require a record that supports findings on hours and rates.
  • Clarifies Rule 54(d)(2)(D)’s function. The decision constrains use of Rule 54(d)(2)(D) as a shortcut: it is an efficiency directive (avoid “extensive” hearings), not a mechanism to shift or dilute the movant’s burden.
  • Guidance on what “contested” means. Parties opposing fees need not provide a fully developed factor-by-factor rebuttal to trigger the movant’s burden; a clear statement that fees are “unreasonable,” coupled with a coherent basis (e.g., unrelated work), is enough to require proof.
  • Practical consequences for fee motions. Fee-seeking parties should expect to support requests—especially large ones—with admissible billing records and testimony/affidavits explaining staffing, hourly rates, necessity of tasks, and the relationship between claims and compensable work. Opponents should clearly dispute reasonableness to ensure an evidentiary proceeding is required.

4. Complex Concepts Simplified

  • Lodestar method: A two-step baseline calculation: (1) reasonable hours worked × (2) reasonable hourly rate = “lodestar.” The court may then adjust up or down based on factors like complexity and results.
  • Fee-shifting clause (“reasonable attorney fees”): A contract term requiring the losing/defaulting party to pay the other side’s attorney’s fees, but only to the extent they are reasonable.
  • Burden of proof: The obligation to produce evidence. Here, the party asking for fees must prove their amount is reasonable if the other party disputes it.
  • Forfeiture / preservation: A party can lose an argument on appeal if it wasn’t adequately raised below. The Court held defendant did raise reasonableness sufficiently, so the issue was preserved.
  • “Common core of facts” (fees across multiple claims): When claims are factually intertwined, courts may avoid rigidly splitting fees claim-by-claim. But the overall time and rates still must be reasonable and proven.
  • Rule 53 master: A court-appointed neutral who can take evidence and make findings on issues like the value of legal services, allowing the court to avoid a long in-court evidentiary hearing while still building a proper record.

5. Conclusion

The decision reasserts a strict but familiar Vermont principle: when attorney’s fees are requested—and the amount is contested—the court cannot award them without an evidentiary foundation supporting reasonableness. V.R.C.P. 54(d)(2)(D) promotes efficiency, not evidentiary waiver; it cannot be used to excuse the moving party from proving hours and rates. The case is remanded so the trial court can determine a reasonable fee on an adequate record, consistent with Vermont’s lodestar framework and longstanding burden-of-proof doctrine.