A recent Courthouse New Service story, “Fee Award Wraps Up $3.9 Million Judgment,” reports that with newly awarded $149,500 in attorney's fees and expenses, a federal judgment against California-based fitness chain Sky High Sports comes to $3.9 million, for lying to an insurer that its workers do not use trampolines.

U.S. District Judge Howard McKibben awarded $149,464 in attorney's fees, expenses and interest to Companion Property and Casualty Group.  McKibben in October ordered Sky High Sports and Sky High Sports Orange County Operations to pay $3,485,000 plus $248,127 in prejudgment interest.  A jury found for the insurer after a five-day trial for negligent misrepresentation.

Sky High Sports told Companion its workers do not use trampolines when it sought workers' compensation insurance coverage.  But Companion had to pay a claim after a Sky High worker broke his neck while using a trampoline.

The jury found Sky High was 60 percent to blame and Companion 40 percent to blame, and awarded $8 million to Companion.  McKibben reduced the award by 40 percent, and sliced off another $1.3 million in offsets.  Companion then sought $222,668.50 in attorney's fees, largely based on Sky High's rejection of settlement offers and a trial continuance.

McKibben considered whether the settlement offers were reasonable and timely, whether Sky High's rejection was unreasonable, whether Sky High provided a suitable defense at trial, and whether the fee request was reasonable.  "In light of the amount of the offers and Sky High's belief that it had a strong case, the decision to go to trial was not unreasonable," McKibben wrote.

Though Sky High lost, McKibben said, it made a viable argument that Companion's underwriting practices were at fault.  He found that Companion made reasonable and timely settlement offers of $2 million, less than a year after the suit was filed in 2012, which was early enough to avoid significant legal costs in the three-year case, and after Sky High had sufficient time to review discovery findings and evaluate its claims.

After deducting 40 percent for Companion's culpability, as determined by the jury, plus other deductions, McKibben awarded Companion $109,538 in attorney fees, $34,228 in expenses, and $5,699 in interest.