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GA Appeals Court Vacates $12M Fee Award in Wrongful Death Suit

March 17, 2021 | Posted in : Contingency Fees / POF, Fee Agreement, Fee Award, Fee Award Factors, Fee Issues on Appeal, Fees & Judicial Discretion, Hourly Rates, Hours Billled, Lawyering, Settlement Data / Terms

A recent Law 360 story by Rosie Manins, “Split Ga. Court Nixes $12M Atty Fees in Wrongful Death Suit,” reports that a divided Georgia appellate court vacated a $12.7 million attorney fees award in a wrongful death case that netted a Georgia widow $32.8 million in damages, ruling 8-6 that the trial court's calculations were incorrect.  The whole court decided two appeals in a case over the 2007 death of Georgia man Keith Mayfield in a state highway crash for which Georgia woman Vickie Kennison was found predominantly responsible.  The majority of appellate judges affirmed the trial court's handling of evidence, despite allegations by Kennison of motion in limine violations, but they vacated and remanded the attorney fees order.

Presiding Judge Sara L. Doyle wrote in the majority opinion that the trial court awarded attorney fees under a Georgia law that authorizes them after rejection of a good faith settlement offer and that it based its calculation on a 40% contingency fee agreement that Mayfield's wife, Tanisha Mayfield, and the administrator of his estate made with their lawyers in the case.  The court applied 40% to the difference between the plaintiffs' $1 million settlement offer in 2015 and the $32.8 million judgment in their favor in 2019.

But Doyle said that under Georgia law, the mere existence of a contingency fee agreement does not warrant reasonable attorney fees without additional evidence showing the true value of the work performed.  That the lead plaintiffs' attorney in the case testified his usual hourly rate in such a case is $1,900 was not enough, she said.  "There is a distinction between the risk/reward bargain made between the client and his or her attorney and the actual value of the professional services rendered by the attorney," Judge Doyle wrote in the majority opinion.  "It is recovery of the reasonable value of those services, not the contingency fee agreement itself, that is authorized by [Georgia law]."

Judge Doyle also found fault with the trial court's justification of the award on the basis that the plaintiffs' lawyers had worked for 11 years on the case, because she said seven of those years were before the settlement offer.  Her findings on attorney fees, while supported by seven other judges of the court, were rejected by six judges, including Chief Judge Christopher J. McFadden, who wrote in a partially dissenting opinion that the attorney fees award should be affirmed.

Judge McFadden said the trial court carefully followed the applicable law, exercised its broad discretion within the law's boundaries and heard extensive evidence about the value of the attorneys' work.  He said the lower court "took care to ensure that the plaintiffs were awarded only fees incurred after the rejection of their settlement offer."  Judge McFadden said plaintiffs' lead counsel testified that he and his firm had spent a minimum of about 8,000 hours on the case, of which around 6,400 hours were after the settlement offer was rejected.  He disagreed with the majority's contention that any effect a lawyer's efforts might have on the amount of a settlement or judgment is irrelevant to the value of the actual work done.

"If that were so, there would be no reason for anyone to hire a lawyer," Judge McFadden said. "Law is not art.  Legal services are not purchased for their intrinsic value."  He said settlement offers are not driven by injuries "and other facts as such," but by parties' expectations of what a judge or jury might do, and that "lawyering can change those expectations and those eventual outcomes."  Judge McFadden said it was a troubling case, because the jury verdict was "strikingly large" and the circumstances of the fatal crash could have elicited a defense verdict in Kennison's favor.  But he said that wasn't for the appeals court to decide.