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Category: Trial / Jury / Verdict

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.

Law Firm Seeks Defense Fee ‘Advance’ from Trustee

October 19, 2020

A recent Law 360 story by Andrew Strickler, “Brown Rudnick Seeks Defense Bill ‘Advance’ From Trustee,” reports that facing a $300 million malpractice suit over its work for a bankrupt chemical company, Brown Rudnick LLP told a New York federal judge it is "unmistakably" entitled to having its legal bills covered by the trustee now suing the firm and a trust director.  Rather than pursue "immunity" from the massive potential liability, Brown Rudnick told the court it only seeks an "advance" on its mounting bills under the terms of a trust agreement at issue in the case, which it said provides for the payment of legal costs for any agent sued over work for the trust.

Brown Rudnick also argued that if it ultimately loses the case, it would be required to return the money to the trustee.  Therefore, the payment would not violate ethics rules or case law disfavoring lawyers securing blanket protections from a client's legal malpractice claims.  "[T]here is no public policy concern with advancement of fees where a party commits to returning the fees if ultimately adjudicated to have committed malpractice for which it cannot receive indemnity," the firm said.

Brown's unusual stance in the case stems from work commenced nearly a decade ago for a litigation trust formed in the bankruptcy of Lyondell Chemical Company, of which a Brown Rudnick partner was the original trustee.  After the bankruptcy declaration, trustee Edward Weisfelner of Brown Rudnick filed numerous claims against investor Leonard Blavatnik's company, Access Industries Holdings Inc.  He also lost a trial three years ago in which he tried to recoup some $300 million in credit line repayments made by AIH.

A replacement trustee, Mark E. Holliday, then sued Brown Rudnick, saying the firm committed malpractice by failing to establish at trial that Lyondell had been insolvent, a finding that would have made the money available for clawback as avoidable preference payments.  Brown has denied botching the trial, and insisted that a trust advisory board refused to give Weisfelner authority to settle before it decided to "roll the dice" at trial.

In counterclaims brought in August, Brown pointed the finger at a trust advisory board member, Paul Silverstein, as personally responsible for not settling, and for going after Brown Rudnick in court.  As part of that personal liability claim, the firm accused Silverstein of breaching his duty regarding the "advance fee" portion of the trust agreement, and the board generally of "depleting whatever negligible [trust] funds remained" through their salaries and legal bills.

In the motion, which answers Holliday's own bid for a dismissal, the firm did not put a number on its legal expenses thus far.  But the firm did say that, as of March of last year, the trust had a cash balance of $1.96 million, which it called insufficient to cover its bills.  And at a September hearing, Judge Engelmayer encouraged the parties to reach a settlement, and suggested that a discovery "autopsy" on the bankruptcy court trial would be costly.  He also noted that experts alone could cost the parties $1 million.

Silverstein "committed gross negligence by, among other things, directing the assertion of this malpractice suit against Brown Rudnick despite the fact that the Trust lacked adequate funds to pursue its claims and advance Brown Rudnick's defense costs," the firm said.  The personal liability and counterclaims "clearly arise out of the same transaction/series of transactions, i.e., authorizing suit against Brown Rudnick without advancing funds, or having sufficient funds to advance, to Brown Rudnick for its defense," according to the filing.

Court Resolves $4M Attorney Fee Dispute with Law Firms

October 1, 2020

A recent Law.com story by Raychel Lean, “Court Chides Morgan & Morgan as Holland & Knight Prevails in $4 Million Attorney Fee Dispute,” reports that a federal breach of contract lawsuit which saw Holland & Knight litigators take on Morgan & Morgan came to a head when U.S. District Judge K. Michael Moore awarded more than $4.1 million in fees and costs to one side and just $550,000 to the other.  Now more than seven years in, the litigation itself has proved more costly for the plaintiffs than the actual judgment it obtained.

The dispute began in 2013, when the plaintiffs — Miami construction companies Architectural Ingenieria Siglo XXI LLC and Sun Land & RGITC LLC — sued over a failed irrigation construction contract worth $51.8 million.  Their lawsuit accused the Dominican Republic and its water resource agency, Instituto Nacional De Recursos Hidraulicos, or INDRHI, of breaching its contract by terminating the deal under force majeure, citing financial hardship.

And though the defendants were initially slapped with a $50 million default judgment for failing to respond, that was reversed when it retained Holland & Knight attorneys, who argued service hadn’t been properly handled.  Then, an eight-day bench trial resulted in a comparatively low $576,000 judgment against the water resource agency, while the Dominican Republic was absolved of liability.

Both sides moved for prevailing party fees and costs.  And after a report from U.S. Magistrate Judge Honorable Chris M. McAliley, Moore found plaintiff AIS was entitled to fees from the water resource agency; the Dominican Republic was entitled to fees from both plaintiffs; and the water resource agency was entitled to fees from plaintiff Sun Land.  In the order, Moore adopted McAliley’s findings on how much each side could recover.  And it was good news for defense attorneys Gregory Baldwin, Eduardo Ramos and Ilene Pabian of Holland & Knight’s Miami office, who’d sought more than $3.6 million in fees, along with $629,450 in non-taxable costs and $33,000 in taxable costs.

Though the plaintiffs argued those numbers were unreasonably high and moved for a 50% to 75% reduction, Moore approved the magistrate’s 15% haircut instead, shaving $144,600 off their fees.  It was a satisfying result for a case that Baldwin said “took a lot of patience, a lot of dedication and a great deal of time.”  “We’re very pleased and satisfied with the result.  We think, overall, it’s a just and fair result,” Baldwin said.  “The Dominican Republic was completely vindicated, and INDRHI received a damages award against it in an amount that we think was reasonable.”

But the ruling was bad news for plaintiff AIS, which sought $2.7 million in fees under a 2.5x contingency fee multiplier, and asked for $438,203 in nontaxable costs.  But Moore only awarded about $248,000 in fees and $302,000 in nontaxable costs — thanks to a bruising 75% reduction in fees recommended by the magistrate.

McAiley’s report levied some criticism at Morgan & Morgan, which “substantially frustrated the court’s task of working through the issues.”  The report said the firm caused extra work and delay by failing to initially disclose certain fee information, demonstrated a “lack of care” in its filings, kept unreliable records and had mixed some non-recoverable appellate costs up with trial costs.

“Obvious examples include the several entries where single timekeepers claim to have worked nearly, or more than, 24 hours in one day,” McAiley’s report said. “For instance, Morgan & Morgan maintains that one of its attorneys worked 32.7 hours in one day.”  McAiley denied Morgan & Morgan’s request for a fee multiplier and reduced its fees by 10% for failure to keep proper time records, 15% for block billing and 50% after factoring in the plaintiffs’ “very limited success” in the underlying case.  But they argued the reduction was “too much given the significant amount of work it took to litigate this case,” according to the ruling.

Moore said he wasn’t swayed by the plaintiff’s objections.  “Here, in objecting to the 75% fee reduction, plaintiffs fail to identify any factual finding in the R&R to which plaintiffs object,” Moore’s ruling said. “Rather, plaintiffs take issue with Magistrate Judge McAliley’s reasoning by arguing not that plaintiffs accurately recorded their hours worked and avoided block billing, but that the hours requested were reasonable and their success was greater in context than Magistrate Judge McAliley found it to be.”

The plaintiffs team also requested $237,400 to cover work performed by GrayRobinson.  But Moore rejected that, accepting McAiley’s finding that the retainer agreement said Morgan & Morgan was obligated to pay GrayRobinson, not that the client was

Insurer Must Pay $6M Fee Award After Jury Verdict

August 29, 2020

A recent Law 360 story by Daphne Zhang, “Insurer Must Pay $21M Jury Verdict, $6M Fee Award,” reports that a Georgia federal judge denied Cypress Insurance Co.'s bid to disregard a $21 million jury verdict and a $6 million attorney fee award to the family of a man killed by a trucker accident, ruling that the insurer gave no evidence that the jury's decision was wrong.  U.S. District Judge Richard W. Story said the jury's February verdict was supported by evidence and witness testimony, holding that Cypress failed to demonstrate and offer further proof that the trucker, its policyholder, did not act in negligence and bad faith.

Cypress previously asked the court to set the February jury verdict aside or hold a new trial after the jury awarded $21 million to the family of Kip Holland. Holland died in December 2016, after being hit by a trailer that had detached and rolled away from a semi-tractor being driven by James Harper.

The carrier has argued that the accident was caused by an "act of God," saying that a $6 million special verdict for attorney fees should be argued orally because it "equates to paying counsel at a rate of $5,500 an hour."

The judge rebuffed Cypress' challenging the $6 million attorney costs award, saying the Holland family and their attorneys sufficiently illustrated their contractual agreement of having the counsel earning a 40% fee, and the jury reasonably chose to enforce it.  "Defendants' contention that plaintiffs were required to provide evidence of an hourly rate to support their request for attorney's fees does not comport with the Court's reading of the governing law," the judge said.

Hollywood Studios Seek $6.4M in Attorney Fees in IP Trial Win

August 3, 2020

A recent Law 360 story by Hailey Konnath, “Hollywood Studios Seek $6.4M Atty Fees for VidAngel IP Win” reports that Disney and other Hollywood studios say VidAngel should pay $6.4 million in attorney fees after Munger Tolles & Olson LLP attorneys secured the studios a $62.4 million verdict in a long-running copyright suit over streamed films, claiming opposing counsel "made this litigation as difficult and costly as possible."

Last June, a California federal jury found that VidAngel Inc. willfully infringed the copyrights of nearly 820 films owned by Disney Enterprises Inc., Warner Bros. Entertainment Inc., Twentieth Century Fox Film Corp. and other Hollywood studios.  The streaming service also violated the Digital Millennium Copyright Act when it used illegal software to bypass anti-piracy measures and rip the films off DVDs, the jury found at the time.

In a motion, the studios slammed VidAngel's litigation tactics, saying the company violated a preliminary injunction and forced the studios to file a motion for contempt, which the court granted.  VidAngel also filed numerous meritless motions, including one for which it was sanctioned, raised frivolous arguments and rehashed multiple rejected arguments in post-trial motions, they said.

Ultimately, the company "forced plaintiffs to proceed to the bitter end rather than settling," the studios said.  "All told, VidAngel has forced plaintiffs to spend more than $8 million in attorneys' fees to protect their copyrights and stop VidAngel's willful infringement and violation of the DMCA," they said.  The $6.4 million request doesn't cover all the fees racked up by the studios, and, by any measure, it's a reasonable request, the studios' motion said.

VidAngel promptly fired back, saying it's not requesting the same amount of time afforded to plaintiffs to prepare their fees motion — which was four months — but are rather seeking a continuance of three weeks "to permit them to respond to plaintiffs' evidence, marshal their own evidence and arguments, and file their opposition."

"A thorough review of plaintiffs' voluminous billing document — which fills 109 small-print pages and totals 10,572.5 hours — to identify fees that are potentially unreasonable cannot be completed in one week, and if anyone is to blame for the need for a continuance it is plaintiffs," VidAngel said.