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Category: Fees as Sanctions

Federal Circuit Grants Attorney Fees in ‘Demeaning’ Goat IP Case

September 10, 2020

A recent Law 360 story by Tiffany Hu, “Fed. Circ. Grants Atty Fees in ‘Demeaning’ Goat IP Case, reports that the Federal Circuit ordered a New York attorney to pay legal fees after the U.S. Supreme Court refused to take up his challenge to a restaurant's registered trade dress that he personally found "demeaning" to goats.  In a nonprecedential order, a three-judge panel found that Queens-based attorney Todd M. Bank owes $28,523 in attorney fees to Al Johnson's Swedish Restaurant & Butik in his attempt to invalidate the restaurant's trade dress for goats on a grass-covered roof.

The fee order comes after the high court in June denied a certiorari petition filed by Bank, in which he argued that the Federal Circuit incorrectly found that his personal concern that the mark was "demeaning" to goats did not give him standing to challenge the trade dress.  "What can I say when the same judges who wrongly sanctioned me proceed to ignore all of the arguments that I made in response to the defense counsel's fee application, and instead abuse their power by ruling by fiat?"  Bank, who represented himself, told Law360 in an email.

Katrina G. Hull of Markery Law LLC, an attorney for the restaurant, said in an email that she and her client were "pleased with the court's order."  Al Johnson's Swedish Restaurant, which is based in Sister Bay, Wisconsin, was issued a registration in 1996 for a trade dress that "consists of goats on grass roofs," according to filings.

In 2011 and 2012, Bank petitioned to cancel the registration on behalf of a previous client, a photographer named Robert Doyle.  The Trademark Trial and Appeal Board found both times that Doyle failed to establish standing, saying in 2012 that the photographer's alleged interest in "dining and shopping in such other restaurants and gift shops with goats on their roofs" was insufficient.

Bank filed the third and latest petition "as attorney and client" last October, the restaurant said.  In asking to cancel the mark, Bank argued that the mark was offensive for being "demeaning" to goats and that the registration harms the "respect, dignity and worth of animals."

But siding with the TTAB, a Federal Circuit panel in December ruled that Bank's concern for the animals did not give him standing because he had no other interest in the trade dress.  Bank was ordered to pay the restaurant's legal fees for filing a "frivolous" appeal, with the panel noting that the TTAB has thrice dismissed his petitions to cancel the trade dress for the same reason.

Insurer Wins Recovery of $5.5M in Defense Fees

September 7, 2020

A recent Law 360 story by Daphne Zhang, “Insurer Win ‘Incompetent’ Atty Fight to Recoup $5.5M,” reports that a California federal judge axed a claims handler's suit seeking additional coverage of its legal bills from an insurer that it says hired a bad lawyer to fend off underlying litigation involving a car crash, ruling instead in favor of the insurer's counterclaim to recoup over $5.5 million in defense and arbitration costs it paid.  U.S. District Judge Janis L. Sammartino said that American Claims Management Inc.'s coverage claims are barred by Allied World Surplus Lines Insurance Co.'s policy exclusions, and since some of the claim handler's legal bills should not have been covered, the insurer is entitled to recoup its over $5.5 million payment from ACM.

Allied World has sufficiently shown that its policy's claims services and dishonest acts exclusion precludes coverage since ACM acted in bad faith and concealed information in its handling of insurance claims in the underlying case, Judge Sammartino said.  The judge dismissed ACM's allegation that Allied World breached its duty of defense because the claims handler failed to show that attorney Alan Jampol of Jampol Zimet, appointed by Allied World to defend ACM in the underlying suit, was incompetent or inexperienced, according to the order.

ACM processed claims for QBE Insurance Corp. As of October 2010, it retained Allied World to insure its work for up to $5 million and contracted with other insurance companies for an additional $10 million in coverage.  In the underlying case, a driver insured by QBE crashed into a vehicle and injured a family.  When processing the injured family's claim, ACM missed a March 2011 deadline that would have capped QBE's exposure at $30,000.  The family subsequently won a $21 million jury verdict in the underlying case, which QBE later settled for $15 million, according to filings.

QBE then offered to settle with ACM for $15 million, but Allied World allowed the matter to go to arbitration.  In July 2017, an arbitration panel awarded QBE more than $18.5 million, according to court papers.  With the portion of the over $5 million policy that Allied World paid and the $10 million paid by its other insurance carriers, ACM wanted Allied World to pay the remaining $4.9 million of the arbitration award and sued them.

In the order, Judge Sammartino said that Allied World's policy exclusions bars coverage for acts of bad faith and dishonest conduct in handling an insurance contract, and QBE specifically alleged that ACM handled the car accident claim in bad faith.  The judge said the arbitration panel in the underlying case found that ACM "chose to withhold from QBE evidence of its own negligent performance," provided QBE with "inadequate and misleading" information, and that ACM "has repeatedly tried to conceal and misrepresent the fact of timely receipt of the letter demand" from the injured family.

Additionally, the court has found that Jampol was competent at the time of his appointment by Allied World to defend ACM, Judge Sammartino said. ACM has alleged that Jampol was inexperienced with car accident cases and had never handled a "bad-faith" case as complicated as the underlying suit, according to filings.

"Plaintiff gives no reason why an auto accident case such as this would be more complex than other bad-faith insurance claims that Jampol had experience handling.  Nor does plaintiff identify any skills or knowledge necessary to litigate an auto accident case that Jampol lacked," the judge said.

Attorneys Stuck With Slashed Attorney Fees After USAA Trial Win

July 20, 2020

A recent Law 360 story by Daniel Siegal, “Atty Stuck With Slashed Fees After USAA Bad Faith Trial Win” reports that an Oregon federal judge refused to reconsider his ruling awarding only $179,000 of the $715,000 in fees requested by lawyers who helped a woman convince the court that USAA had acted in bad faith when it refused to cover her crash with an uninsured driver.  In a two-page order, U.S. District Judge Michael H. Simon did not go into the details of the arguments made by plaintiff Peggy Foraker's attorneys, but simply stated the legal standard for a motion for reconsideration and said having reviewed the motion and associated briefing, he found "no basis for reconsideration."

Foraker attorney Stephen Hendricks of Hendricks Law Firm told Law360 via email that his client intends to appeal the attorney fee ruling in addition to other matters going to the merits of the suit.  Foraker, who was hurt when a suspect fleeing from police crashed into her, won two bench trials in her suit against her insurer, which had refused to pay out an uninsured motorist policy.  In the first phase, Foraker obtained a ruling that USAA Casualty Insurance Co. owed her the full $1 million limit of that policy, and in the second phase, Judge Simon found USAA acted in bad faith and awarded Foraker $323,000.

Last month, however, Judge Simon ruled 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 $1.31 million in fees.  Judge Simon wrote that roughly three-quarters of the attorneys' time went to unsuccessful arguments and that this was "consistent with the results," and thus it made sense to award them one-quarter of their lodestar figure.  Judge Simon also called the attorneys' 340-page sheaf of submitted bills "massive but poorly organized."

In their motion for reconsideration and supporting briefing, Foraker's attorneys said they understood the case had been "exhausting" and that the court is "weary of this case," but pressed their case that the reduced attorney fee award would have a chilling effect on future bad faith insurance cases under Oregon law.  "As the first publicly watched case on the subject, the court's fee award sends a clear message that all such cases should be abandoned, as even the very successful trial outcome of such a case will be compensated at the rate of 25% of hours incurred," Foraker's attorneys wrote.  "This ignores the mandates of Oregon law and strongly disincentivizes similar plaintiffs from pursuing other meritorious claims."

The attorneys also argued that the supposedly poorly organized time records were organized the same way as the ones submitted for the phase one trial, which were accepted by the court.  Finally, in their reply brief filed on July 13, Foraker's lawyers drew a comparison between their bid for attorney fees and the recent protests for racial justice in Portland.

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.”

The Nation’s Top Attorney Fee Experts of 2020

June 24, 2020

NALFA, a non-profit group, is building a worldwide network of attorney fee expertise. Our network includes members, faculty, and fellows with expertise on the reasonableness of attorney fees.  We help organize and recognize qualified attorney fee experts from across the U.S. and around the globe.  Our attorney fee experts also include court adjuncts such as bankruptcy fee examiners, special fee masters, and fee dispute neutrals.

Every year, we announce the nation's top attorney fee experts.  Attorney fee experts are retained by fee-seeking or fee-challenging parties in litigation to independently prove reasonable attorney fees and expenses in court or arbitration.  The following NALFA profile quotes are based on bio, CV, case summaries and case materials submitted to and verified by us.  Here are the nation's top attorney fee experts of 2020:

"The Nation's Top Attorney Fee Expert"
John D. O'Connor
O'Connor & Associates
San Francisco, CA
"Over 30 Years of Legal Fee Audit Expertise"
Andre E. Jardini
KPC Legal Audit Services, Inc.
Glendale, CA

"The Nation's Top Bankruptcy Fee Examiner"
Robert M. Fishman
Cozen O'Connor
Chicago, IL

"Widely Respected as an Attorney Fee Expert"
Elise S. Frejka
Frejka PLLC
New York, NY
"Experienced on Analyzing Fees, Billing Entries for Fee Awards"
Robert L. Kaufman
Woodruff Spradlin & Smart
Costa Mesa, CA

"Highly Skilled on a Range of Fee and Billing Issues"
Daniel M. White
White Amundson APC
San Diego, CA
"Extensive Expertise on Attorney Fee Matters in Common Fund Litigation"
Craig W. Smith
Robbins Arroyo LLP
San Diego, CA
"Highly Experienced in Dealing with Fee Issues Arising in Complex Litigation"
Marc M. Seltzer
Susman Godfrey LLP
Los Angeles, CA

"Total Mastery in Resolving Complex Attorney Fee Disputes"
Peter K. Rosen
Los Angeles, CA
"Understands Fees, Funding, and Billing Issues in Cross Border Matters"
Glenn Newberry
Eversheds Sutherland
London, UK
"Solid Expertise with Fee and Billing Matters in Complex Litigation"
Bruce C. Fox
Obermayer Rebmann LLP
Pittsburgh, PA
"Excellent on Attorney Fee Issues in Florida"
Debra L. Feit
Stratford Law Group LLC
Fort Lauderdale, FL
"Nation's Top Scholar on Attorney Fees in Class Actions"
Brian T. Fitzpatrick
Vanderbilt Law School
Nashville, TN
"Great Leader in Analyzing Legal Bills for Insurers"
Richard Zujac
Liberty Mutual Insurance
Philadelphia, PA