Holzman v. Fiola Blum, Inc

In Holzman v. Fiola Blum, Inc., 125 Md. App. 602, 637, 726 A.2d 818 (1999), a real estate broker initiated suit against the Holzmans, husband and wife, to recover a commission allegedly owed pursuant to a listing agreement executed by the parties for the sale of the Holzmans' home. Following a bench trial, the circuit court awarded the broker a money judgment for the commission in the amount of $ 37,600.00, as well as $ 12,408.00 in attorneys' fees. Numerous issues were raised on appeal. For reasons unimportant here, the Court affirmed the court's judgment pertaining to the commission. The Court disagreed, however, with the court's award of attorneys' fees. The listing agreement between the broker and the Holzmans provided, inter alia: "If Broker prevails in any court action brought to obtain payment of the fee, Broker shall also be entitled to recover in such action his/her reasonable attorney's fees and court costs." Id. at 611. In bringing its suit against the Holzmans, the broker entered into a one-third contingency fee arrangement with the law firm representing the broker. Because the broker prevailed, the focus of the Holzmans' challenge on appeal was not whether the broker was entitled to recover its attorneys' fees from the Holzmans, but whether the Holzmans were obligated to pay the contingent legal fee of $ 12,408.00 owed by the broker to its lawyer. The Court described the issue as "whether the one-third contingency fee arrangement" between the broker and its lawyer was binding upon the Holzmans, stating: "Although the Holzmans agreed to pay the broker a reasonable attorney's fee if appellee successfully brought an action to recover its commission, they did not agree to pay whatever legal fee the broker might agree to pay its attorney." Id. at 637. After detailing the tenets underlying an award of attorneys' fees, we set forth the trial court's response to the fee request: "One-third of $ 37,600. That clearly is the price that the broker is going to have to pay the attorney. Is that amount $ 12,408 unreasonable? I can't say that it's unreasonable. Can't say." The Holzmans' counsel interjected: "No testimony that it is reasonable." The court responded: "No testimony that it isn't unreasonable." We note, however, that the burden was not on the Holzmans to show that a one-third contingency fee was unreasonable. Rather, the broker had the burden to demonstrate that the fee was reasonable. (Id. at 641-42.)