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Category: Fees in Arbitration

Quinn Emanuel Seeks to Collect $15M in Unpaid Fees

November 18, 2020

A recent Law 360 story by Diamond Naga Siu, “Quinn Emanuel Looks to Collect $15M in Unpaid Fees,” reports that Quinn Emanuel Urquhart & Sullivan LLP urged a D.C. federal judge to confirm and enforce a $15 million arbitration award for unpaid legal fees after the Indian textile manufacturer it previously represented ignored documents to confirm the amount for more than a year.  CLC Industries Limited — formerly known as Spentex Industries Limited — used the law firm when it initiated a failed cotton investment claim against Uzbekistan in 2013 for bankrupting three cotton processing plants it invested in.

After the case was tossed, CLC Industries allegedly did not pay Quinn Emanuel its legal fees, and the firm initiated arbitration in the United States with the Judicial Arbitration and Mediation Services, Inc., or JAMS, against the textile company to receive payment.  JAMS awarded the fees in 2018, according to Quinn Emanuel's affidavit, ruling that the law firm could collect them as described under a letter of engagement the law firm and company entered ahead of the arbitration against Uzbekistan.

"More than 500 days elapsed since Respondents were served with the Petition," Quinn Emanuel wrote in its filing, referring to how long the firm's petition to confirm the award amount has been ignored.  "Petitioner respectfully requests the entry of a default against Respondents."  "Petitioner served the Petition and accompanying exhibits on Respondents by Federal Express on July 3, 2019, pursuant to Respondents' consent to service of process 'by regular mail or courier' in the Engagement Agreement," the firm added.

Quinn Emanuel said that CLC Industries received and signed for the documents at its New Delhi, India, office within the week the petition was sent.

CLC Industries opened a case in the Delhi High Court in India, asking Judge Jayant Nath to dismiss certain fees in its letter of engagement with Quinn Emanuel.  CLC and the law firm had signed the original agreement in 2013 but amended it in 2015 after they realized the case would be complex and expensive to fight, according to Judge Nath's opinion.

He ruled in favor of the law firm in May, saying that the textile company was responsible for paying Quinn Emanuel's contingency fees, which aren't permitted in India.  The judge ruled that since the letter of engagement was governed by U.S. laws, the fee arrangement was allowed.  "They have chosen to abstain themselves from the arbitration proceedings and the award has already been passed," Judge Nath wrote, referring to the award of legal fees.  "They are free to take appropriate steps as per law against the award."

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.

Sixth Circuit: Attorney Fees Can Be Awarded in Arbitration

August 16, 2020

A recent Law 360 story by Emma Cueto, “6th Circ. Orders Atty Fee Paid in Power Co.’s $5M Arbitration,” reports that the Sixth Circuit has overturned a lower court decision regarding attorney fees in a nearly $5 million contract dispute between a power company and its supplier, with the appellate court ruling that the contract did allow for the court to grant attorney fees even though the arbitrator could not.

The court said in a split decision that Bay Shore Power Company had made a case that even though its contract with supplier Oxbow Energy Solutions LLC expressly did not allow an arbitrator to award attorney fees, it was reasonable to interpret other provisions as allowing a court to make such an award.  As such, the majority said, the Ohio trial court was wrong to conclude that the seemingly contradictory provisions closed off the possibility of attorney fees.

"Ultimately, the provisions at issue can either be read together to permit the recovery of attorneys' fees in court but not before an arbitration panel, or they are hopelessly contradictory and unenforceable," U.S. Circuit Judge Eric L. Clay wrote for the majority.  "Bay Shore presents a reasonable construction of the terms to harmonize them while Oxbow only presents reasons to be skeptical of Bay Shore's interpretation.  None of those reasons are compelling."

In a dissent, U.S. Circuit Judge Eric E. Murphy said that, while he also disagreed with the trial court's reasoning, the request for attorney fees before the trial court went against the Federal Arbitration Act and the terms of the agreement and should have been denied.

The FAA gave the court the authority to confirm an award, but by requesting attorney fees of the court, Judge Murphy wrote, Bay Shore was essentially asking the court to modify the award.  However, he said, courts are not permitted to reverse an arbitration panel's decision that attorney fees are not allowed.

In addition, he added, the contract specifically mandated that all disputes that could not be resolved informally or through mediation submit to arbitration.  There was nothing in the contract that allowed for a special judicial proceeding over attorney fees, he said.

The parties filed for arbitration in 2016 after failing to work out the dispute in mediation, according to the decision.  In 2017, the arbitration panel sided with Bay Shore and awarded it nearly $5 million in damages, plus costs and interest, the decision said.

However, the arbitration panel concluded that it could not grant attorney fees because of a clause in the contract at the heart of the dispute, which specified that attorney fees in an arbitration could not be awarded and should be paid separately, according to the decision.  Bay Shore filed to confirm the award and also asked the court to award attorney fees.

It pointed to two other provisions in the contract that mandated that attorney fees be awarded, according to the decision.  The three provisions could be reconciled, it argued, if the contract prevented only an arbitrator or arbitration panel — but not a court — from granting such fees.  The trial court rejected this analysis, but the majority of the Sixth Circuit panel found it to be a valid interpretation.  The appellate court sent the case back to the trial level with instructions to calculate reasonable attorney fees.

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
JAMS
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