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Category: Fees as Damages

Eleventh Circuit: Insurer Doesn’t Have to Pay Attorney Fees in Dismissed Action

May 9, 2023

A recent Law 360 by Ganesh Setty, “11th Circ. Says No Attorney Fees for Cos. In Tossed Insurance Suit,” reports that a home builder and contractor accused of faulty stucco work can't seek attorney fees from their insurance company after a Florida federal court found the insurer lacked standing to litigate whether it had a duty to defend the companies, the Eleventh Circuit ruled.  Under the circuit's 1984 decision in Certain British Underwriters at Lloyds of London v. Jet Charter Serv. Inc. , statutory attorney fees are an element of damages and are therefore part of the merits of a case itself, U.S. Circuit Judge Elizabeth L. Branch wrote in the court's unpublished opinion.

Thus, when U.S. District Judge Timothy J. Corrigan tossed Southern-Owners Insurance Co.'s suit because it failed to meet the federal $75,000 amount-in-controversy threshold, the court lacked the subject-matter jurisdiction to hear any ensuing dispute over attorney fees, Judge Branch found. U.S. Circuit Judge Gerald Bard Tjoflat penned a separate concurrence, while U.S. Circuit Judge Britt C. Grant issued a dissent.

According to the decision, the dispute began in August 2013, when the home builder, Maronda Homes Inc. of Florida, sold a house to a couple who later complained of various construction defects related to the home's stucco installation. Maronda had hired JROD Plastering LLC to perform the installation, which held a commercial general liability policy with Southern-Owners that listed Maronda as an additional insured.

The insurer subsequently sued Maronda and JROD in Florida federal court seeking a declaration it had no coverage obligations over the alleged construction defects.  But Judge Corrigan dismissed the suit for lack of subject-matter jurisdiction, finding that the insurer failed to meet the $75,000 amount-in-controversy threshold for federal litigation.

Maronda and JROD sought attorney fees under the now-repealed Florida statute § 627.428, which allowed a court to award attorney fees to insureds who prevailed in coverage litigation against their insurer.  The district court further dismissed those motions, citing in part the Jet Charter decision.  In that case, the Eleventh Circuit ruled that "attorney's fees recovera[bl]e by statute are to be regarded as 'costs' only when made so by statute," and are otherwise "treated as an element of damages," according to excerpts included in Friday's decision.

Though the Eleventh Circuit in Prime Insurance Syndicate Inc. v. Soil Tech Distributors Inc. ruled the opposite way in 2008, finding that attorney fees are "collateral issues" within the court's purview even if the underlying case isn't, that decision was not published, Judge Branch noted.  And even if it were, circuit precedent holds that in the case of conflicting published panel decisions, the oldest one controls, she said.

"All in all, while some Florida courts have reached a different result than we did in Jet Charter, these decisions are too varied to constitute a definitive change in law," Judge Branch added in a footnote.  "As such, we decline to exercise our discretionary power to rewrite our circuit's precedent which means that we are bound to follow Jet Charter."

Judge Wants Sabre to Pay Attorney Fees in $1 Antitrust Win

April 14, 2023

A recent Law 360 story by Piper Hudspeth Blackburn, “Judge Wants Sabre to Pay Fees in Airline’s $1 Antitrust Win,” reports that a federal magistrate judge has recommended that airline booking giant Sabre should cover the costs of attorney fees for US Airways, which pursued antitrust claims that ultimately resulted in a mere $1 jury award after more than a decade of litigation.  In a report, U.S. Magistrate Judge James L. Cott determined that the airline is entitled to fees because of the "plain language" of federal antitrust law despite the nominal damages award. Judge Cott also noted that the amount could be reduced after looking at billing records.

Because a jury returned a verdict for US Airways on its monopolization claim under Section 2 of the Sherman Act, "a plain reading" of Section 4 of the Clayton Act allows US Airways to recover the cost of the suit, "including a reasonable attorney's fee," the report stated.  In 2022, a Manhattan federal jury found, after a three-week trial, that Sabre willfully maintained monopoly power through exclusionary conduct. It was a redo of a 2016 trial that had awarded US Airways $15 million in damages before the Second Circuit scrapped the verdict on technical legal grounds.

Sabre has argued that U.S. Supreme Court precedent shows that when a party recovers only nominal damages, the only reasonable fee is "usually no fee at all."  However, US Airways insists that the damages it received shouldn't affect its ability to recover costs and attorney fees.  According to Judge Cott, Sabre's argument fails because the precedent the booking company pointed towards, Farrar v. Hobby, doesn't apply to this case but rather to the reasonableness of fee awards in civil rights cases. Farrar holds that the reasonableness of a fee award is indicated by the size of damages awarded.

"Farrar concerned the entitlement to fees under § 1988 of the U.S. Code, not the Clayton Act or any other mandatory fee statute, and there is no suggestion in the opinion itself that its holding extended beyond § 1988," the report stated.  Judge Cott pointed toward a Second Circuit decision on "an identical issue" to this one, United States Football League v. National Football League, instead.  In that case, the court had to determine whether a plaintiff is entitled to reasonable attorney fees "after decade-long antitrust litigation resulting in a $1 jury verdict only on Sherman Act Section 2 grounds."

Not only did the court decide that the plaintiff could recover attorney fees, it "further explained that civil rights cases are inapposite as they concern discretionary awards of fees, while Section 4 mandates them," the report continued.  Judge Cott also rejected Sabre's argument that in the event it must pay attorney fees, the amount should be reduced by 99% because US Airways only "obtain[ed] .0000003% of its alleged damages ... and no injunctive relief."

While no legal rule requires that fees be proportional to the requested amount and the recovered damages, Judge Cott, wrote that the court can reduce the requested fees after analyzing billing records.  While "a downward adjustment is undoubtedly warranted" in this case, Judge Cott noted that the court couldn't determine the amount without first calculating the lodestar.

"The court's eventual reduction will be guided by comparable cases in this circuit, which do not necessarily dictate the extreme slashing that Sabre seeks," the report stated.  The litigation began in 2011, when US Airways sued Sabre, alleging that the company had monopolized the market for systems that connect airlines to travel agents and violated federal antitrust laws.

NALFA Releases 2021 Litigation Hourly Rate Survey & Report

July 19, 2022

Every year, NALFA conducts an hourly rate survey of civil litigation in the U.S.   Today, NALFA released the results from its 2021 hourly rate survey.  The survey results, published in The 2021 Litigation Hourly Rate Survey & Report, shows billing rate data on the very factors that correlate directly to hourly rates in litigation:

City / Geography
Years of Litigation Experience / Seniority
Position / Title
Practice Area / Complexity of Case
Law Firm / Law Office Size

This empirical survey and report provides micro and macro data of current hourly rate ranges for both defense and plaintiffs’ litigators, at various experience levels, from large law firms to solo shops, in regular and complex litigation, and in the nation’s largest markets.  This data-intensive survey contains hundreds of data sets and thousands of data points covering all relevant billing rate categories and variables.  This is the nation’s largest and most comprehensive survey or study on hourly billing rates in litigation.

This is the second year NALFA has conducted this survey on billing rates.  The 2021 Litigation Hourly Rate Survey & Report contains new cities, additional categories, and more accurate variables.  These updated features allow us to capture new and more precise billing rate data.  Through our propriety email database, NALFA surveyed thousands of litigators from across the U.S.  Over 8,400 qualified litigators fully participated in this hourly rate survey.  This data-rich survey was designed to aid litigators in proving their lodestar rates in court and comparing their rates to their litigation peers.

The 2021 Litigation Hourly Rate Survey & Report is now available for purchase.  For more on this survey, email NALFA Executive Director Terry Jesse at terry@thenalfa.org or call us at (312) 907-7275.

Georgia High Court Allows Double Recovery of Attorney Fees

March 9, 2022

A recent Law 360 story by Clark Mindock, “Ga. Justices Allow Double Recovery of Atty Fees” reports that the Georgia Supreme Court affirmed that a car wreck plaintiff can recover attorney fees and litigation costs under each of two Georgia statutes, rejecting an argument that doing so would constitute an impermissible double recovery.  In coming to that conclusion, the state's high court reversed a lower appellate court's decision to side with driver Joao Junior's claims that he should have been allowed to seek recovery of attorney fees and costs under Georgia's offer of settlement statute as well as the fees and costs he won at trial.

Junior was awarded about $1.2 million in attorney fees along with $3 million in damages by a jury in his case against at-fault driver Sharon Graham.  He argued he was entitled to additional fees under the statute because Graham had rejected a settlement offer that would have spared everyone from that trial.  The justices said that since Graham rejected what was a reasonable settlement, the state's offer of settlement law and statute for damages and litigation expenses allow Junior to seek a penalty and attorney fees on top of that earlier award.

"Because we conclude that the provisions provide for different recoveries despite using somewhat similar measures for calculating the respective amount of damages or sanction, a prevailing plaintiff may recover under each statutory provision without regard to any recovery under the other," the Georgia Supreme Court justices said.  Ben Brodhead, an attorney at Brodhead Law LLC who represents Junior, told Law360 that the supreme court "followed the legislative direction to control bad behavior both before a suit is filed and after a suit is filed."

"We are pleased that the Supreme Court ruled in a way that will promote settlement and reduce litigation," he said.  Laurie Webb Daniel of Holland & Knight LLP, an attorney for Graham, said the ruling has "surprised" a lot of people, but that its practical implication "is rather narrow."  Once the case returns to the trial court, Junior will have the burden of proof to show the value of the legal services that were actually rendered after the settlement offer expired, she said.

The dispute stems from a car accident in 2010 between Graham and Junior. Before the case was set to go to trial, Junior had offered to settle all of his claims against Graham for $600,000, but Graham rejected that offer after she failed to accept it within 30 days of its issuance.  At trial, Junior was awarded $3 million in compensatory damages plus $1.2 million in attorney fees, and $51,554.95 in litigation expenses.  Because that award of compensatory damages was more than 125% of the original settlement offer, Junior then filed a post-trial motion for attorney fees and litigation expenses under the state's settlement law.

While Georgia's statute for damages and litigation expenses generally bars litigation costs as part of the damages in a case, an exception can be made where the defendant has acted in bad faith, been stubbornly litigious or caused the plaintiff unnecessary trouble and expense.  In those instances, a jury can award attorney fees and costs as part of the damages, according to court documents.  After Junior filed those claims, a trial court rejected the motion for attorney fees and costs under the settlement statute, and the Georgia Court of Appeals affirmed that conclusion in October 2020. The state high court agreed to take the case in July.

Safeco Tells Eleventh Circuit Attorney Fees Aren’t Damages

May 3, 2021

A recent Law 360 story by Brett Barrauquere, “Safeco Tells 11th Circ. Atty Fees Aren’t Damages,” reports that Safeco Insurance wants the Eleventh Circuit to affirm a lower court ruling that another insurer is time-barred from seeking attorney fees on a $1.6 million judgment stemming from a fatal motorcycle accident.  Safeco Insurance of Illinois and Safeco Insurance Co. of America said in a brief said that Endurance American Specialty Insurance Co. waited eight months too long to request attorney fees.

Endurance should have either sought attorney fees within 14 days of the judgment as the prevailing party or presented evidence at trial to claim them as damages, Safeco argued.  Because it did neither, Endurance isn't entitled to anything, Safeco said.  "Endurance cannot circumvent the time requirement of the federal and local rules by arguing its fees were damages, either," Safeco said.

Endurance asked the federal appeals court in April to overturn a lower court decision that the insurer says improperly adopted recommendations by a magistrate judge that said Endurance had waited too long to argue it was due attorney fees.  A federal jury that had sided with Endurance decided that another insurer had violated an agency agreement, which included an indemnity provision that forces it to pay attorney fees to Endurance, according to the company's brief.  That jury finding supports Endurance's fee request, it says.

Safeco argues that under the controlling Florida law, attorney fees aren't recoverable as damages and that they are an ancillary claim based on a contractual provision.  And Endurance has no legal way of beating the 14-day deadline for claiming attorney fees, Safeco said.

Endurance didn't present evidence to back up its claim for attorney fees at trial, and it failed to move to appeal the final judgment and claim that the fees were wrongly excluded, Safeco said.  "Because Endurance never argued it's attorney's fees were damages to the magistrate judge, the district court was within its discretion to decline to consider the argument," Safeco said.

U.S. Magistrate Judge Christopher P. Tuite had issued a report and recommendation saying that Endurance filed its motion for fees almost a year after judgment was entered. The judge said the company "provides no rationale for its belated filings."  Judge Tuite's first denial was based on Florida statute.  The second one at issue is for recovery of fees "expended in enforcing the agency agreement's indemnification provision."  Judge Tuite said it looked like Endurance filed the second motion "after it gleaned from the [first report and recommendation] that it might not prevail on its first motion."