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Attorney Fee Award Not Limited to What Insurer Paid

June 9, 2021 | Posted in : Coverage of Fees, Defense Fees / Costs, Fee Award, Fee Entitlement / Recoverability, Fee Issues on Appeal, Fee Jurisprudence, Fee Shifting, Fees & Insurance Policy, Hourly Rates, Lodestar, Prevailing Party Issues

A recent Metropolitan News story, “Attorney Fee Award Not Limited to What Insurer Paid,” reports that a California Court of Appeal has affirmed a $146,010 award of attorney fees to a defendant in a malicious prosecution action who prevailed on his anti-SLAPP motion, rejecting the plaintiff’s contention that the amount was unreasonably high because the defendant’s lawyers at Lewis, Brisbois, Bisgaard & Smith LLP had actually been paid by their client’s insurer at a lower hourly rate than the judge used in his computation.

Presiding Justice Tricia A. Bigelow of Div. Eight wrote the opinion, which was filed Monday and was not certified for publication.  The fees were set by Los Angeles Superior Court Judge Craig D. Karlan on remand from the Court of Appeal which, in 2018, reversed an order denying Santa Monica attorney Thomas McCullough Jr.’s anti-SLAPP motion.  That motion came in response to a suit by Lawrence Pasternack who had been the defendant in a suit brought by McCullough on behalf of a client.

Karlan rejected Pasternack’s position that an award must be based on an hourly rate of $140 because that’s what the insurer paid.  “The lodestar method provides that fees may be awarded for the reasonable value of that tune, not the actual rate paid,” the judge said.  He found veteran attorney Roy G. Weatherup’s $600 an hour rate to be reasonable and set payment at $96,240 for 160 hours of work on the case, including the appeal.  However, he declined to apply that rate to a second partner in the firm, Caroline E. Chan, saying, without questioning her skills, “that the nature and complexity of the legal issues on appeal does not warrant” payment at $600 an hour for two partners, and lowered her hourly rate to $250.

Weatherup had explained that a $140-an-hour rate was accorded to the insurance company as part of a package deal entailing hundreds of cases being directed to the firm. Karlan said that “$140 per hour is not the market rate for experienced appellate lawyers in Los Angeles County and the Court exercises its discretion to not so narrowly focus on the ‘package rate’ agreed to in this matter.”  “It is well established,” Bigelow wrote, “that an attorney who accepts a reduced rate from a client is not precluded from seeking a reasonable hourly rate pursuant to the lodestar method” in recovering from the client’s adversary where fee-shifting takes place.

But the cases establishing that are inapposite, Pasternack insisted, because none of them involved the circumstance where fees, fixed in advance, had already been paid to the lawyers.  There was no need, given that Lewis Brisbois had already received its fees, to determine what a reasonable amount would be to compensate it, he argued.  “We are not persuaded,” Bigelow responded.  “None of the cases limit their holding in this way.”

There was nothing unconscionable about the fee, Bigelow said, elaborating: “The record shows Lewis Brisbois submitted evidence regarding the hours expended and reasonable rates for the work done.  The trial court was entitled to rely on Lewis Brisbois’s declarations to determine the reasonable rates for experienced attorneys in Los Angeles County.  “The trial court thoroughly examined the record and reduced both the time claimed and the hourly rate for one of the partners.”