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Category: Offer of Judgment (Rule 68)

GA Appeals Court Affirms Jury’s $1.2M Attorney Fee Award

October 31, 2020

A recent Daily Report story by Greg Land, “Appeals Court Affirms Jury’s $1.2M Fee Award Blocks Fee Request Under Settlement Offer Law,” reports that affirming a trial judge, the Georgia Court of Appeals said an auto accident plaintiff who gleaned a $5 million judgment from a jury that included more than $1.2 million in attorney fees was not entitled to another fee award based on Georgia’s offer of judgment statute.  Lawyers for plaintiff Joao Junior had argued that the law—which allows a plaintiff to recover his fees and expenses if a defendant rejects a settlement demand then loses in court by a sum 125% or more than the spurned offer—was “clear and unambiguous” that the fees must be added.

A Fulton County judge ruled that such a double recovery was prohibited, and the appellate opinion authored by Presiding Judge Sara Doyle with the concurrence of Chief Judge Christopher McFadden and Judge Ken Hodges agreed.  The jury had awarded Junior’s fees under another statute, allowing for such an assessment for fees incurred in cases where a defendant “has acted in bad faith, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense.”

While Georgia law and prior appellate court precedent do not necessarily bar a double fee recovery under both statutes, wrote Doyle, Junior filed his motion for fees under the offer of judgment statute after having already been awarded fees by the jury.  “In some instances,” said Doyle, a party “may have incurred fees after a jury verdict but prior to entry of the final judgment by the trial court, in which case a subsequent award under [the offer of judgment statute] by a judge for such fees would be appropriate.  “Junior, however, does not contend that he incurred such fees,” she said, and they were therefore rightly denied. 

Defendant Sharon Graham and her insurer, USAA, were represented at trial by Cruser Mitchell Novitz Sanchec Gaston & Zimet partner R. Russell Grant, who was joined in the appeal by firm partner J. Robb Cruser along with Laurie Webb Daniel and Matthew Friedlander of Holland & Knight.  “We, of course, believe the Court reached the correct result, and did so with a thoughtful and thorough analysis,” said Daniel in an email.  Plaintiffs attorney Ben Brodhead III said the opinion misinterpreted both the law and Georgia Supreme Court precedent.

“Although I have only had the decision from the Court of Appeals for a few minutes, it appears that the issue of whether fees were ‘incurred’ might be an issue that needs clarification,” said Brodhead, who represents Junior with Brodhead Law colleagues Ashley Fournet, Holli Clark and John Nichols.

“It appears,” said Brodhead via email, “the Court of Appeals is under the impression that the attorneys’ fees under 13-6-11 [the stubbornly litigious statute] go to the attorney to pay the plaintiff’s attorneys’ fees.  While that might seem reasonable on the surface, it is not how contingency fee contracts are structured.”

Regardless of the fees a jury awards, the amount a lawyer makes is governed by contract, he said: 40% of the recovery in this case.  “Accordingly, whether the money recovered is for medical bills, pain and suffering, attorneys’ fees, or lost wages, it is treated the same,” he said.  Brodhead said he would be filing a motion for reconsideration or a petition for certiorari with the Georgia Supreme Court. 

As detailed in the opinion and other filings, the convoluted case began more than a decade ago when the vehicle driven by Junior, now 61, was between two other cars at a stop sign on Old Milton Parkway when Graham hit the last vehicle in line.  Junior’s Nissan Sentra was totaled, and he ultimately underwent surgery for herniated disk.  In 2010, Brodhead sent USAA a demand for Graham’s $100,000 policy limit; the insurer replied with an offer of $14,500, which Junior declined.  In 2011, Junior sued Graham in Fulton County State Court, and in 2013 Brodhead offered to settle for $600,000, which USAA also declined.  Some years later, the insurer offered it’s $100,000 limit, which Junior refused. 

Following a trial last year before Fulton County Judge John Mather, the jury found for Junior in a final judgment totaling $4,979,066, including $1,251,554 in fees and expenses under the bad faith/stubbornly litigious statute.  Junior’s lawyers then moved to have the court award attorney fees and expenses from the time the $600,000 offer was rejected under O.C.G.A. 9-11-68, the offer of judgment statute.

In rejecting the motion, Mather wrote that “the statutory language does not explicitly preclude a determination of bad faith in either scenario.”  But, Mather wrote, “[w]hile an award under the two statutes may be based upon different conduct, the fees were expended as to one defendant under one cause of action.”

“While an award under the two statutes may be based upon different conduct, the fees were expended as to one defendant under one cause of action,” he said, and “allowing Plaintiff a further award of attorney’s fees would permit a double recovery.”  In appealing the order, Junior’s lawyers wrote that the offer of judgment statute’s mandate that a prevailing party “shall be entitled to recover reasonable attorney’s fees and expenses of litigation” did not involve any other sanction issued by a court or jury. 

“Specifically,” it said, “although the amount of damages under O.C.G.A. § 13-6-11 and the amount of sanctions under O.C.G.A. § 9-11-68 are both calculated with reference to attorneys’ fees, they are different statutes with different language that apply to different conduct that occurs at different times,” Junior’s appellate brief said. 

In upholding Mather, Doyle cited the Georgia Supreme Court’s 2014 decision in Ga. Dept. of Corrections v. Couch, 295 Ga. 469, which expressly stated that fees awarded by a jury for bad faith “must be based on conduct arising from the transaction underlying the cause of action being litigated, not conduct during the course of the litigation itself.  “By contrast, attorney fees awarded under OCGA § 9-11-68 (b) are not identified as damages; they relate entirely to conduct during the course of the litigation; and they are determined post-judgment by the court rather than during trial by the jury,” that ruling said. 

Couch, however, did not address whether a claimant could recover a full amount of attorney fees under OCGA § 13-6-11 and another full amount under OCGA § 9-11-68 (b), and such a finding is not implied in this case,” Doyle wrote.  “This is because, by the time that Junior filed his motion … he had no longer ‘incurred’ the $1,251,554 in attorney fees for which he was awarded additional damages by the jury—those costs had been compensated,” Doyle wrote.

Judge: Can Counsel Tack 40% Fee Request on Top of $33M Verdict?

October 23, 2020

A recent Law.com story by Katheryn Tucker, “Judge’s Question on $12M Legal Bill: ‘I Want to Hear Why This Is Something Legitimate’, reports that a big fee was the sticking point during Zoom oral arguments before the Georgia Court of Appeals.  The panel of three—Presiding Judge Sara Doyle, Chief Judge Chris McFadden and Judge Ken Hodges—is being asked to decide whether plaintiffs lawyers can tack on their 40% contingency fee award on top of a $33 million wrongful death verdict.

“I want to hear why this is something legitimate,” Doyle said to Mike Terry of Bondurant Mixson & Elmore, arguing for the plaintiff’s side to defend the verdict and attorney fee claim.  Doyle said she understands that plaintiffs lawyers take on the risk of a case with no guarantee of being paid, and that’s “why they get more.”  But why wouldn’t the fee come out of the $33 million judgment, she asked.

Terry said plaintiffs counsel is entitled to the added fee under Georgia law after making a $1 million offer of settlement, then far exceeding that sum at trial.  So the plaintiffs counsel’s math subtracts that $1 million from the $33 million verdict, which makes $32 million, multiplies that by 40%, which is about $12 million, then adds the two together, making $45 million.

On the other side was Laurie Webb Daniel of Holland & Knight, representing the driver who turned left in front of a reportedly speeding motorcycle.  Daniel was hired by the insurance company, State Farm, which now has $45 million on the line between the verdict and the added-on fee award.  Daniel told the panel that the plaintiffs counsel had shown no documentation to justify the fee demand.  Plus she said Terry’s argument had been “based on an erroneous order,” and that “improper material had been presented to the jury.”  She said the judge allowed plaintiffs counsel to question the defendant about her prior driving record and past speeding, which had nothing to do with the case.  “The law does not allow collateral impeachment,” Daniel said.

The case was tried in February 2019 before Spalding County State Court Judge Josh Thacker. The plaintiff is the wife of a man killed 15 years ago when a car turned left in front of his motorcycle.  The jury awarded: $63,000 for medical and funeral expenses, $3.25 million for general estate damages, $4.1 million for wrongful death-loss of wages and $26 million for wrongful death-noneconomic value of the life of Daniel K. Mayfield Jr.

“This was a tragic case of a driver who turned left directly in front of a motorcyclist that she failed to see approaching,” Mayfield family attorney Ben Brodhead of Brodhead Law said after the verdict.  “The case was complicated by three independent witnesses who claimed that the motorcyclist was traveling at approximately 80 mph to 100 mph as he approached the intersection.”  But Brodhead said he was able to establish that “no one observed the motorcycle’s speed in the 10 seconds before the crash.” 

The jury apportioned 3% of the fault to Mayfield and 97% to defendant Vickie Lynn Fain Kennison, the driver who turned left into the path of Mayfield’s motorcycle.  Broadhead said he made requests for the $100,000 State Farm policy limit over the course of a decade of litigation.  He said immediately after the trial that he would be asking for the added 40% fee award in addition to 97% of the verdict, plus interest and litigation expenses.

Sixth Circuit Sets out Guidelines for Lodestar Fee Awarded in Class Actions

August 22, 2020

Attorney fee awards are a major driver of class action litigation – both in the employment and other contexts.  How they are awarded, and what is “reasonable” has been an ongoing source of contention in many cases.  A recent opinion from the Sixth Circuit provides some guidance and also places limits on methodology used by some courts to support generous, even lavish, fee awards.

The decision in Linneman v. Vita-Mix Corp., Case Nos. 19-3993/4249 (6th Cir., Aug. 12, 2020), related to the settlement of a class action involving the high-end Vita-Mix blenders used commercially and by consumers.  The plaintiffs, who owned the mixers, claimed that a seal used in the blenders was defective and would wear away with use.  The parties settled the case under a two-part structure: Consumers could get either a $70 gift card or a replacement assembly with a revised seal; commercial users would get only the assembly.  As the parties were unable to agree to a fee amount, the settlement provided that class counsel would receive a fee to be determined by the district court.  As explained below, after two years of litigation, and using a lodestar calculation, the district court awarded $3.9 million in fees ($2.2 million plus a 75% premium), and the defendant appealed.

Much of the Court of Appeals’ decision related to the application of the Class Action Fairness Act (CAFA), as it was largely undisputed that the terms of the agreement made the deal a coupon settlement.  The importance to this blog is that the court found that it was appropriate for the trial court to use a lodestar calculation rather than a percentage of the settlement.

With respect to the lodestar calculation, the court made a number of important pronouncements, ruling for the plaintiffs in some instances and for the defendant in others. Among them:

  • In a lodestar calculation, the result (reasonable hours times a reasonable rate) is presumed to be the correct reasonable rate. The court can apply a multiplier (no surprise there), but only in “rare and exceptional” circumstances.
  • A fee award can include the time spent pursuing fees (again, no surprise), but in this case, the defendant had made a reasonable Rule 68 offer of judgment on the amount ($3.1 million), calling into serious question why the fee issue needed to be litigated for another two years.
  • The rates used must be appropriate in the local community, not nationwide.  Thus, the plaintiffs were limited to the relatively lower rates charged in southern Ohio, where the case was pending, and not higher rates charged in other or “national” markets.

The court ultimately remanded the case for numerous reasons and for further determination of the issues noted above, as well as to determine whether the settlement had actually accomplished much for the class members given the steps the defendant had taken prior to the litigation to correct the alleged defect.

The Linneman case is a good example of what can happen when a court actually looks at the amount of work done, the results obtained for the class and whether a fee enhancement is actually in order.  The bottom line: Courts that look closely at what goes into lodestar fee awards in class actions may award less than the plaintiffs expect.

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 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