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Attorneys Get Fraction of Fees Sought in USAA Bad Faith Trail

June 16, 2020 | Posted in : Fee Reduction, Fee Request, Lodestar / Multiplier

A recent Law 360 story by Cara Salvatore, “Attys Score Fraction of Fees Sought in USAA Bad Faith Trial” reports that an Oregon federal judge has ruled that lawyers who helped a driver win claims in a two-phase trial against her insurer will be paid only $179,000 for the second phase, or a quarter of the $715,000 they'd requested.  The suit concerned USAA Casualty Insurance Co.'s alleged refusal to pay out an uninsured motorist policy to plaintiff Peggy Foraker, who was hurt when a suspect fleeing from police crashed into her.  After a two-day, two-phase bench trial, U.S. District Judge Michael Simon found in April that USAA acted in bad faith and awarded Foraker $323,000.

But Judge Simon said that Foraker's lawyers deserved much less in legal fees than the $715,000 lodestar they requested, because their wins in the second phase were limited — unlike the first phase, where they got more than $1 million in fees.  "Based on plaintiff's pretrial filings and the time spent at trial, it appears to the court that approximately 75 percent of plaintiff's efforts were directed toward plaintiff's unsuccessful claims and arguments.  This is also consistent with the results obtained.  Thus, the court will award plaintiff an attorney fee award at Phase II equal to 25 percent of plaintiff's Phase II lodestar figure," the judge said.

In the first phase, a different judge awarded Foraker the full $1 million USAA uninsured motorist policy limit, but rejected her claim that the insurer breached its contract because USAA hadn't denied her claim in full before she sued.  "Much of the legal and factual work spent by plaintiff at Phase II related to plaintiff's claim for non-economic damages, plaintiff's claim for economic damages based on the lost gains that she would have earned in her investment portfolio, and other legal issues on which plaintiff did not prevail," the judge said.  Judge Simon also called the attorneys' 340-page sheaf of submitted bills "massive but poorly organized."  In the first phase, Foraker was awarded legal fees of $1.31 million.