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Category: Fee Entitlement

AIG Unit Can Recover Attorney Fees in Coverage Litigation

July 21, 2020

A recent Law 360 story by Mike LaSusa, “AIG Unit Nabs $212K in Atty Fees After Coverage Row” reports that AIG unit National Union can collect nearly $212,000 in attorney fees after fending off a medical services company's coverage claims stemming from a pair of employee harassment complaints, with a Florida federal judge shooting down several objections to the final fee figure.  U.S. District Judge Roy B. Dalton Jr. accepted a magistrate judge's recommendation to order TMH Medical Services LLC to pay $211,720.50 in attorney fees to National Union Fire Insurance Co. of Pittsburgh, Pa. — a slight reduction from National Union's request for $223,143.50 in fees.

Judge Dalton swept aside TMH's argument that National Union couldn't collect fees for litigation that happened after July 17, 2019, when the judge issued an order saying National Union would be entitled to attorney fees while leaving the amount undetermined.  TMH had argued that Florida law doesn't allow litigants to collect attorney fees racked up while fighting over the amount of attorney fees owed.  But Judge Dalton said his order last year didn't specify an amount and didn't end the battle over whether National Union was entitled to fees.

Judge Dalton noted that TMH had asked the court to reconsider its decision.  The judge rejected that request on March 20, meaning that date — not July 2019 — marked the end of litigation over entitlement to fees and start of the litigation over the final amount, he said.  The judge also wasn't convinced by TMH's arguments that the rates offered by National Union were unreasonable.  He said the rates of $285 per hour for of counsel and $355 for partners seemed reasonable, citing similar cases in which attorneys were paid as much as $550 per hour.

Fifth Circuit Says Fee Entitlement Needs Reconsideration

July 13, 2020

A recent Law 360 story by Michelle Casady, “5th Circ. Says $1M Atty Fee Request Needs Reconsideration” reports that the Fifth Circuit has determined that drilling data company Petrolink Services Inc. will get another chance to prove it's entitled to about $1 million in attorney fees for a lawsuit in which it beat back copyright infringement claims but was found by a jury to have unjustly enriched itself.  In an opinion, a three-judge panel agreed with Petrolink that a trial court had wrongly denied its request for fees without consideration in the lawsuit brought by competitor Digital Drilling Data Systems LLC, or Digidrill.  Digidrill accused Petrolink of hacking into its software at various oil rig sites in order to "scrape" valuable drilling data in real time.

Both companies appealed the trial court's judgment in early 2019.  After granting summary judgment dismissal on Digidrill's claims that Petrolink violated the Copyright Act and the Digital Millennium Copyright Act, the trial court denied Petrolink's request for about $1 million in attorney fees.  On appeal, Petrolink argued it was entitled to the award as the prevailing party on those claims.

Quoting the district court, the Fifth Circuit wrote that the lower court declined to award costs or fees to either side, because "both prevailed on different issues."  "It is difficult to make sense of this language in light of the fact that Petrolink only sought fees related to Digidrill's copyright and DMCA claims, on which Petrolink clearly and solely prevailed," the panel wrote.  "It matters not whether Digidrill ultimately prevailed on its state law unjust enrichment claim."  The Fifth Circuit sent the case back to the trial court for it to "properly analyze the motion" for attorney fees.

FL Appeals Court Orders Reconsideration of “Fees on Fees’ Ruling

July 9, 2020

A recent Daily Business Review story by Michael Mora, “Appeals Court Orders Reconsideration of $115K Legal Award for ‘Fees on Fees’ Litigation” reports that a Florida appeals court said a Miami law firm’s $115,000 fee award, already reduced from $200,000, must be reduced further because that award improperly encompassed the law firm’s work in asking for fees.  The ruling by the Third District Court of Appeal on cross-appeal ultimately stated the Silver Law Group is entitled to fees for its work in the underlying litigation, but ordered the Monroe County Circuit Court to reevaluate that amount.

The main takeaway lawyers should get from the ruling, said John W. Annesser, a partner at Annesser Armenteros in Miami, is that “fees on fees would not be awarded as a sanction” under Florida Statutes Section 57.105.   Annesser represents Silver Law, which saw its fee reduced in the ruling.  Annesser is planning to appeal the Third DCA’s decision to the Florida Supreme Court.  He said the ruling, if allowed to stand, would encourage needless litigation that is expensive to challenge.

According to the amended complaint filed in the circuit court, Silver Law sought fees for work that took place between June 2009 and December 2014 for “numerous legal matters” in which it represented Paul Bates and Coconut Cove Resort & Marina.  Silver Law eventually sued Bates and the resort for attorney fees amounting to nearly $203,500.  Bates, through his original counsel, Chepenik Trushin, filed a counterclaim alleging malpractice by Silver Law, according to the amended complaint.

The Circuit Court found the counterclaim was “malicious and frivolous,” which formed the basis for the sanctions award against Bates, the resort and their counsel.  Lawyers for Bates and the resort argued that the lower court abused its discretion by awarding any fees at all to Silver Law.  The Third DCA cited its 1995 decision in Eisman v. Ross, which found no statutory basis for a lower court to grant a portion of an award that represented cost and attorneys’ time spent litigating the amount of fees.

Annesser disputed that ruling, and cited to Florida Statutes Section 57.105, which states that when the “moving party proves by a preponderance of the evidence that any action taken by the opposing party … was taken primarily for the purposes of unreasonable delay,” the court should award damages for the reasonable expenses, including attorney fees and “other loss resulting from the improper delay.”  “As the court pointed out in oral arguments in the case, the effect for not rewarding the attorneys’ fees for litigating the amount of fees when it comes to a sanction,” Annesser said, “is to dilute the sanction itself and to encourage more litigation arising from the underlying sanctionable activity.”

Law Firms Dispute Over Attorney Fees Ends After Years of Litigation

July 8, 2020

A recent Daily Business Review story by Michael Mora, “Mintz Truppman Loses 70% of Fees Sought in Litigation Against Cozen O’Connor” reports that it’s bad news for Mintz Truppman in a case that pitted two law firms against each other over attorney fees, and played out over years in several Florida courtrooms.  Timothy H. Crutchfield, a partner and representative for Mintz Truppman in North Miami, sought about $828,000 in attorney fees from the opposing parties, Lexington Insurance Co. and Cozen O’Connor.  But Florida’s Third District Court of Appeal affirmed the federal district court ruling that found Mintz Truppman was only entitled to about 29 percent of that amount, or about $240,000.

According to Charles C. Kline, a partner for Cozen O’Connor in Miami—representative for that firm, Lexington Insurance and Cozen O’Conner West Palm Beach member John David Dickenson—said the most critical takeaway for lawyers is to respect the court’s jurisdiction.  “You need to present all the arguments you have to get the right judgment,” Kline said.  “Don’t sit on your rights.  Don’t fail to object to evidence.  Don’t think you can go to another court to redo what the first court did, because that is just contrary to our principles of collateral estoppel.”

The Third DCA stated damages for the additional fees sought by Mintz Truppman for representing Daphne Query “have already been adjudicated by the federal court.” It granted Cozen, which has several offices in the U.S., including Washington, D.C., and Dallas, Texas, and Lexington’s petitions for prohibition, but dismissed their petitions for certiorari as moot.

The case stems from a broken pipe dispute that caused substantial water damage to Query’s Miami-Dade home in 2014.  Lexington insured the home, according to the Third DCA opinion.  Two years later, Query’s property damage claim was settled at mediation.  The parties also agreed that Query was entitled to attorney fees but were unable to agree on the amount.

When mediation to resolve the fee dispute failed, Query filed a motion for attorney fees in federal court, seeking a contingency risk multiplier of two based upon the total hours incurred by Mintz Tupperman and its co-counsel and the hourly rate for each of the four attorneys who worked on the matter.  That number came to just over $828,000.  Lexington countered that the amount owed should be no more than $70,000 to $85,000.

A federal magistrate judge in February 2017 determined Query was entitled to total lodestar attorney fees of nearly $240,000 after reviewing “all relevant submissions,” according to the Third DCA’s opinion.  Query failed to object and the federal district court judge accepted the magistrate judge’s report and recommendation.  One month later, the federal district court entered final judgment.

Meanwhile, in November 2016, Mintz filed an action in the Miami-Dade Circuit Court seeking a determination under state law on the amount of fees to which it was entitled.  The Third DCA eventually ruled that the lower court lacked subject matter jurisdiction and granted Cozen and Lexington’s petitions seeking prohibition.  Crutchfield, the representative for Mintz Truppman, expressed frustration with the Third DCA for focusing on “one issue,” namely attorney fees, instead of the underlying cause of the action.  Crutchfield also characterized the Third DCA’s language as “concerning.”

“It seems to imply that the court can petition for prohibition.  It looked at what was believed to be behind the complaint instead of looking at the actual allegations line by line in the different counts and determining whether or not there is subject matter jurisdiction,” Crutchfield said.  “That statement is concerning in a much broader implication than just this case.”

Ninth Circuit Expands Access to Attorney Fees in Copyright Actions

July 6, 2020

A recent Law 360 story by Dave Simpson, “Atty Fees OK in Copyright Declaratory Relief Actions: 9th Circ.” reports that any legal action that hinges on the existence of a valid copyright and whether that copyright has been infringed, even if the claim is for declaratory relief, invokes the Copyright Act and is therefore eligible for attorney fees, the Ninth Circuit ruled vacating a lower court's order.  In a unanimous, published decision, a three-judge panel disagreed with a California federal judge who shot down Dolores Press Inc.'s bid for attorney fees after the Christian media company defeated a copyright abandonment challenge from rival Doc's Dream LLC.

U.S. District Judge Manuel L. Real held that fees were not available to Dolores because the determination of copyright abandonment did not require construction of the Copyright Act, but the appellate panel found numerous examples of Judge Real relying on the act in his decision.  "Certainly, the elements required for copyright abandonment — overt acts and intent — parallel other forms of property abandonment," the panel said.  "But it is difficult — if not impossible — to properly evaluate an intellectual property creator's alleged abandonment without invoking the Copyright Act."

The dispute centers on video-recorded sermons created by the pastor Dr. Eugene Scott, who died in 2005.  Dolores Press licenses the rights to Scott's sermons from his widow, Melissa Scott, but Doc's Dream, which was denied permission to share the sermons, posted them on its website "to stick it to the devil" and "get the ball rolling in this legal battle."  The ball got rolling in 2015, with Dolores filing three infringement suits against Doc's Dream and Doc's Dream filing a fourth against Dolores, claiming Scott abandoned the rights to all his works before his death.

Dolores was ultimately victorious in all four suits. Dolores then argued that Doc's Dream brought its failed copyright abandonment action in bad faith and asked the court to grant it attorney fees under a provision of the Copyright Act.  But Judge Real shot the bid down, making, in the words of the panel, two unpersuasive "leaps of logic."

"First, it held that in order to be a civil action under the Copyright Act, a declaratory judgment must require 'construction' of the Copyright Act," the panel explained.  "Second, the district court reasoned that because copyright abandonment is a judicially created doctrine based in principles of equity and not on any provision of the Copyright Act, a declaratory relief action based on abandonment does not invoke the Copyright Act."

In the first instance, Judge Real misread a "leading treatise" on copyright law, called "Nimmer on Copyright."  The panel's decision included a close read of Nimmer's thoughts on the Copyright Act provision and ultimately agreed with the conclusion that the discretionary award of attorney fees is available in any action where the scope of the copyright is at issue.  In rejecting the second leap of logic, the panel pointed to three instances in which Judge Real had considered the Copyright Act in dismissing the complaint from Doc's Dream.

"In sum, we think that a declaratory relief action alleging abandonment of a copyright invokes sufficient 'construction' of the Copyright Act to allow for the discretionary award of attorney's fees," the panel said.  It vacated the lower court's decision and remanded the question of attorney fees for its consideration.