HELEN GILLMOR, District Judge.
The Hanover Companies entered into an insurance contract that required them to defend Anova Food, LLC in an Underlying Lawsuit,
The Court has already issued three written orders finding that the Hanover Companies are required to pay reasonable attorneys' fees for defending Anova Food, LLC in the Underlying Lawsuit.
The Hanover Companies are responsible for the Zobrist Law Firm's attorneys' fees between October 12, 2012 and December 10, 2013.
The Court has requested briefing on three separate occasions with respect to the outstanding attorneys' fees owed. The Parties agree that $284,624.72 in attorneys' fees have already been paid.
The Court
On June 19, 2014, the Hanover Companies filed a Complaint. (ECF No. 1).
On May 29, 2015, the Hanover Insurance Companies filed a First Amended Complaint. (ECF No. 39).
On March 24, 2016, the Court issued an ORDER GRANTING, IN PART, AND DENYING, IN PART, DEFENDANT/COUNTERCLAIMANT ANOVA FOOD, LLC'S MOTION FOR PARTIAL SUMMARY JUDGMENT. (ECF No. 113).
On June 23, 2016, the Court held a hearing on the Parties' Motions for Summary Judgment. (ECF No. 148). At the hearing, the Court instructed the Hanover Companies to file a Statement as to any remaining issues regarding the attorneys' fees owed to the Zobrist Law Firm. (
On June 29, 2016, the Court issued an ORDER DISMISSING ALL CLAIMS AGAINST DEFENDANT ANOVA FOOD, INC. AND DENYING PLAINTIFFS THE HANOVER INSURANCE COMPANY AND MASSACHUSETTS BAY INSURANCE COMPANY'S MOTION FOR SUMMARY JUDGMENT AND GRANTING, IN PART, AND DENYING, IN PART, DEFENDANT ANOVA FOOD, LLC'S MOTION FOR PARTIAL SUMMARY JUDGMENT. (ECF No. 151).
On June 30, 2016, the Hanover Companies filed PLAINTIFFS THE HANOVER COMPANY AND MASSACHUSETTS BAY INSURANCE COMPANY'S STATEMENT AS TO REMAINING ISSUES REGARDING THE ZOBRIST ATTORNEYS' FEES. (ECF No. 154).
On July 14, 2016, the Court issued a Minute Order instructing Defendant Anova Food, LLC to respond to Plaintiff's Statement as to the Zobrist Law Firm's Attorneys' Fees. (ECF No. 171).
On July 28, 2016, Anova Food, LLC filed a TRIAL MEMORANDUM IN SUPPORT OF THE REASONABLENESS OF ZOBRIST LAW'S ATTORNEYS' FEES. (ECF No. 177).
On August 10, 2016, the Hanover Companies submitted its TRIAL MEMORANDUM IN SUPPORT OF THEIR STATEMENT AS TO REMAINING ISSUES REGARDING THE ZOBRIST ATTORNEYS' FEES. (ECF No. 185).
On August 31, 2016, the Court issued a Minute Order denying Anova Food, LLC's Motion for Reconsideration. (ECF No. 187).
On October 21, 2016, the Court issued an ORDER DENYING COUNTER-CLAIMANT ANOVA FOOD, LLC'S BAD FAITH CLAIM. (ECF No. 188).
On October 24, 2016, the Court issued an ORDER ON REMAINING ISSUES REGARDING THE ZOBRIST LAW FIRM'S ATTORNEYS' FEES. (ECF No. 189).
On November 28, 2016, the Hanover Companies filed PLAINTIFFS THE HANOVER INSURANCE COMPANY AND MASSACHUSETTS BAY INSURANCE COMPANY'S ACCOUNTING. (ECF Nos. 190-213).
On December 28, 2016, Anova Food, LLC filed its RESPONSE TO THE HANVOER COMPANIES' ACCOUNTING. (ECF No. 214).
On January 4, 2017, Anova Food, LLC filed a MOTION FOR EXTENSION OF TIME AND RESPONSE TO PLAINTIFFS-COUNTERCLAIM DEFENDANTS THE HANOVER COMPANIES' ACCOUNTING. (ECF No. 215).
On January 11, 2017, the Court issued a Minute Order granting Anova Food, LLC's Motion for Extension and considered its Response. (ECF No. 217). The Court also allowed the Hanover Companies additional time to file its Reply. (
On January 31, 2017, the Hanover Companies filed their Reply. (ECF No. 218).
Defendant/Counter-Claimant Anova Food, LLC ("Anova LLC") was covered by Plaintiffs/Counter-Defendants the Hanover Insurance Company and Massachusetts Bay Insurance Company's ("the Hanover Companies") four commercial liability insurance policies that were in effect between July 1, 2010 and July 11, 2014. (
Anova LLC incurred attorneys' fees from the Zobrist Law Firm as a result of the Underlying Lawsuit filed against it in
On March 24, 2016, the Court ruled that the Hanover Companies had a duty to defend Anova LLC in the Underlying Lawsuit. (March 24, 2016 Order Granting, In Part, and Denying, In Part, Defendant/Counter-Claimant Anova Food, LLC's Motion for Partial Summary Judgment at pp. 26-30, ECF No. 113).
Due to the conflict in the evidence before the Court, there was no ruling as to the time period for which reasonable attorneys' fees were owed in the March 24, 2016 Order. (
The Parties filed additional summary judgment motions that addressed the time period for which outstanding attorneys' fees were owed.
On June 29, 2016, the Court issued an Order on the Parties' Motions for Summary Judgment and ruled that Anova LLC is entitled to reasonable attorneys' fees incurred by the Zobrist Law Firm from October 12, 2012 to December 10, 2013. (June 29, 2016 Order Denying the Hanover Companies' Motion for Summary Judgment and Granting, In Part, and Denying, In Part, Anova LLC's Motion for Partial Summary Judgment at pp. 49-55, ECF No. 151).
The Parties disputed the amount of attorneys' fees that were "reasonable" for the period between October 12, 2012 and December 10, 2013. The Parties filed additional briefing as to the "reasonableness" of any additional attorneys' fees.
On October 24, 2016, the Court issued another written order, entitled, "Order on Remaining Issues Regarding the Zobrist Law Firm's Attorneys' Fees." The Court set forth the standard for awarding attorneys' fees and ordered additional briefing from the Parties. (October 24, 2016 Order on Remaining Issues Regarding the Zobrist Law Firm's Attorneys' Fees, ECF No. 189).
The Parties filed the additional briefing requested.
The Zobrist Law Firm submitted five separate invoices to the Hanover Companies totaling $669,778.17 in billings for attorneys' fees. (
The Zobrist Law Firm was paid $284,624.72
The Parties agree that attorneys' fees in the amount of $352,121.46 remain in dispute as set forth in the table below. (Pla.'s Accounting at p. 9, ECF No. 190; Def.'s Response at p. 19, ECF No. 214).
The Hanover Companies assert that the Zobrist Law Firm is not entitled to any of the remaining $352,121.46 fees billed.
Anova LLC argues that the Zobrist Law Firm is entitled to the entirety of the remaining $352,121.46 for which they billed.
The Supreme Court of Florida has found that the federal lodestar approach provides an objective structure to determine reasonable attorney fees.
The party seeking attorneys' fees must present records detailing the amount of work performed to determine the reasonable hours expended, which is multiplied by a reasonable hourly rate to determine the lodestar.
The lodestar method is used to compute reasonable attorneys' fees pursuant to various Florida statutory provisions, but it is also used to calculate reasonable attorneys' fee awards pursuant to the parties' contractual agreement.
When the agreement regarding payment of attorney fees does not provide for a specific fee amount or percentage of recovery, but rather states that the fee will be a reasonable amount, it is up to the court to determine the reasonable amount of the fee. Id. at 878-79.
As an initial matter, the Hanover Companies assert in their memorandum that OneBeacon Insurance is responsible for 25% of any outstanding attorneys' fees owed for the defense of Anova Food, LLC. The Hanover Companies claim the 25% portion is based on a separate agreement they entered into with OneBeacon Insurance as to the delegation of attorneys' fees that would be paid for the defense of Anova Food, LLC. (Pla.'s Accounting at pp. 6-7, ECF No. 190).
The Hanover Companies' agreement with OneBeacon Insurance is not before the Court. OneBeacon Insurance is not a party to this case and the Hanover Companies never filed a third-party complaint against them. The Court will not consider any aspect of the alleged agreement between the Hanover Companies and OneBeacon Insurance.
The Court has already ruled that the Hanover Companies owe
The Court has also ruled that the lodestar method applies in this case. (Order dated Oct. 24, 2016 at p. 8, ECF No. 189).
The only issue remaining concerns the disputed outstanding fees of $352,121.46.
The Court uses the lodestar method in determining reasonable fees, which is calculated by multiplying the number of hours reasonably expected by a reasonable hourly rate.
The Parties do not dispute the hourly rates billed by the Zobrist Law Firm. The Hanover Companies object to the hours expended by the Zobrist Law firm on a number of grounds.
Counsel must exercise proper billing judgment and exclude hours that are "excessive, redundant, or otherwise unnecessary."
A party opposing a fee application must submit objections and proof that are specific and reasonably precise in order to explain with particularity the hours that it views as excessive, redundant, or otherwise unnecessary.
The Hanover Companies have made twelve categories of objections to the hours billed by the Zobrist Law Firm. The twelve categories are:
(Pla.'s Accounting at pp. 15-16, ECF No. 190).
The Hanover Companies did not pay for the Zobrist Law Firm's billed attorneys' fees in the following amounts based on the twelve categories of objections:
The Hanover Companies first argue that many of the Zobrist Law Firm's billing entries include multiple distinct tasks within the same time entry, a practice known as "block billing."
The Hanover Companies provided the Zobrist Law Firm with its Defense Counsel Guidelines that the Parties agreed would govern the attorneys' fees owed for tendering a defense in the Underlying Lawsuit. (Defense Counsel Guidelines attached as Ex. B to Pla.'s Accounting, ECF No. 190-3).
The Defense Counsel Guidelines provided that "[u]nless otherwise directed, the time for each activity should be separately stated. Grouping multiple activities under a single time charge greater than one-tenth of an hour ("block billing") is not acceptable." (
Courts frequently reduce hours that are block billed because they are unable to discern the reasonableness of hours billed in such a format.
District Courts have regularly reduced block billed entries by twenty percent in order to fairly balance those hours that were block billed between time spent on compensable and non-compensable tasks.
The Hanover Companies object to paying $219,711.50 in attorneys' fees due to block billing. (Pla.'s Accounting at p. 17, ECF No. 190).
Anova LLC acknowledges that a number of the entries submitted by the Zobrist Law Firm are block billed. On December 28, 2016, for the first time over a course of more than three years of litigation, Anova LLC submitted a red-lined version of the Zobrist Law Firm's billing records. The filing attempts to edit the block billed tasks into separate entries. (Red-Lined Billing Entries, attached as Ex. 1 to Anova LLC's Response filed December 28, 2016, ECF No. 216-1).
Anova LLC submitted the Declaration of Duane Zobrist in support of the red-lined billings. (Zobrist Decl., ECF No. 216). The Declaration of Duane Zobrist states that Attorney Scott Dahlquist, who no longer works at the Zobrist Law Firm, made redline edits to the firm's block-billed entries sometime in 2014. (
Duane Zobrist claims that a legal assistant named Lisa Daidone told him that she submitted the red-lined billing records created by Attorney Dahlquist to the Hanover Companies. (
The Hanover Companies object to the red-line version of the billing records submitted by Anova LLC. The Hanover Companies argue: (1) the red-lined billing records were not timely filed in this case; (2) the records were never submitted to the Hanover Companies before they were filed with the Court in 2016; and (3) the submission of the evidence is based on hearsay. (Hanover Companies' Reply at pp. 14-18, ECF No. 218).
The Court finds the Hanover Companies' objections to be credible.
First, Anova LLC's disclosure of the red-lined billing records is untimely. Anova LLC never disclosed or submitted the red-lined version of the billing records during almost three years of litigation in this case. The records were not submitted with either of the Motions for Summary Judgment, in Anova LLC's Pretrial Statement, or in its Trial Brief that specifically addressed the Zobrist Law Firm's billing records and the amount of reasonable attorneys' fees. (ECF Nos. 68, 69, 83, 103, 117, 130, 131, 160, 177).
Second, there is no evidence that the Hanover Companies received the red-lined billing entries in 2014 as alleged by Anova LLC. There is no evidence of any e-mail communication between the Parties regarding the "corrected" or "red-lined" billing records and there is no evidence that the records were submitted via its electronic billing system. (Hanover Companies' Reply at p. 17, ECF No. 218). The Hanover Companies submitted the Declaration of Joseph Dombrosky, who is the Legal Bill Reviewer for Hanover. (Dombrosky Decl., ECF No. 218-1). Dombrosky states that the Hanover Companies never received the red-lined records and that if the document was submitted to their electronic system there would be a record of the submission. (
Third, the only evidence that the red-lined billing records were created in 2014 and submitted to the Hanover Companies is based on hearsay statements. The hearsay statements are not admissible. Anova LLC did not submit a Declaration or Affidavit from either Attorney Dahlquist or Assistant Lisa Daidone to support its claims.
Fourth, the Hanover Companies' Defense Counsel Guidelines govern the attorneys' fees owed in this case. (Defense Counsel Guidelines attached as Ex. B to Pla.'s Accounting, ECF No. 190-3). The Defense Counsel Guidelines provided that "Defense counsel will send the final invoice to Hanover within thirty (30) days after entry of final judgment or execution of the settlement agreement/dismissals." (
The Court will not consider Anova LLC's late-filled, "corrected" billing entries that are attached as Ex. 1 to Anova LLC's Response filed December 28, 2016, ECF No. 216-1.
The Court relies on the billing entries first filed with the Court on March 16, 2016, attached as Exs. 5-9 to Anova LLC's Motion for Partial Summary Judgment, ECF No. 104-5-9. (
A number of the block billing entries preclude any practical review by the Court. Some entries contain specific information that document billable tasks. Other entries would require speculation in order to separate block billed entries into billable and non-billable hours or to allocate certain hours to specific tasks.
The lack of ability to differentiate the block billed hours requires the Court to reduce the Zobrist Law Firm's block billed entries by twenty percent. It is necessary because of the deficiencies in the Zobrist Law Firm's time records. The twenty percent reduction to the block billed entries fairly balances those hours that were block billed to allocate the amount of reasonable billable hours.
The twenty percent reduction results in $43,942.30 being deducted from the $219,711.50 labeled as block billed attorneys' fees.
The Hanover Companies owe an outstanding balance of
The Hanover Companies did not pay $16,445.72 in attorneys' fees based on their objection to the Zobrist Law Firm's entries they claimed included an inadequate or vague description of services.
A review of the billing records demonstrates that the Zobrist Law Firm's entries were sufficiently detailed.
For example, Attorney Craig Marshall billed for 2.32 hours on November 14, 2012 for "Review email communications, finish revisions to motion to stay." (Pla.'s Ex. G, ECF No. 194-1 at p. 7). Attorney Scott Dahlquist billed for 1.80 hours on November 20, 2012 for "Analyze orders regarding claim construction." (Pla.'s Ex. G, ECF No. 195-1 at p. 11). Such entries demonstrate sufficient detail to allow the Court to evaluate the reasonableness of the hours expended.
The Hanover Companies have not demonstrated that a reduction in fees is appropriate due to inadequate or vague billing entries.
The Hanover Companies owe an outstanding balance of
The Hanover Companies did not pay $10.00 in attorneys' fees for "rate deviation." The Hanover Companies have not identified the basis for this reduction in their Memorandum. (Pla.'s Memorandum, ECF No. 190). The Court is unable to identify the basis for such a reduction.
The Hanover Companies owe an outstanding balance of
The Hanover Companies refused to pay $16,400.50 due to billing entries that they claimed were for "in-firm conferences." (Pla.'s Accounting at p. 17, ECF No. 190).
Anova LLC argues that the majority of the Hanover Companies' objections to billing entries for "in-firm conferences" were for communications between the Zobrist Law Firm and Anova LLC client representative Darren Zobrist. (Anova LLC Response at p. 14, ECF No. 214).
The Hanover Companies admit that a portion of their objections to the Zobrist Law Firm's billing entries for inter-firm conferences were erroneous. (Pla.'s Reply at p. 18, ECF No. 218). In their Reply, the Hanover Companies have withdrawn their objections to $1,910.00 in billing entries due to in-firm conferences. (
The remaining billing entries that the Hanover Companies objected to due to "in-firm conferences" are not recoverable. The Hanover Companies Defense Counsel Guidelines are clear that discussions about a file among the law firm's own attorneys are not billable. (Defense Counsel Guidelines Section V.B.5, ECF No. 190-3 at p. 10).
The Hanover Companies owe an outstanding balance of
The Hanover Companies did not pay the Zobrist Law Firm for $120.00 in fees due to multiple attendance by the Zobrist Law Firm's attorneys. (Pla.'s Accounting at p. 17, ECF No. 190).
The Zobrist Law Firm is not entitled to fees for multiple attendance at a meeting. The Hanover Companies Defense Counsel Guidelines provided that billing for multiple attendance is not allowed. "Counsel should consult with the claim adjuster where it is anticipated that more than one timekeeper's attendance is necessary at trial, court appearances, meetings, depositions, witness interviews, inspections and other functions." (Defense Counsel Guidelines Section V.B.6, ECF No. 190-3 at p. 11). Attorneys' fees for multiple attendance are generally not recoverable because two professionals cannot reasonably bill for attending the same meeting, conference, or similar matter.
The Hanover Companies do not owe a balance as to the outstanding billing entries for multiple attorney attendance.
The Hanover Companies did not pay $4,216.25 in billing entries because the fees requested constituted clerical, secretarial, or administrative activities.
The Hanover Companies Defense Guidelines did not allow for attorneys' fees for clerical, secretarial, or administrative activities. (Defense Counsel Guidelines Section V.B.11, ECF No. 190-3 at p. 11).
Clerical costs are part of an attorney's overhead and are reflected in the charged hourly rate and are not billable separately.
The Hanover Companies do not owe a balance as to the outstanding billing entries for clerical, administrative, or secretarial tasks.
The Hanover Companies did not pay $182.00 in billing entries for travel time. The Hanover Companies stated that it paid half of the Zobrist Law Firm's travel time billings pursuant the terms of their billing guidelines. (Defense Counsel Guidelines Section V.B.11, ECF No. 190-3 at p. 11).
The terms of the Hanover Companies' billing guidelines were reasonable and provided sufficient fees for travel time.
The Hanover Companies do not owe a balance as to the outstanding billing entries for travel time.
The Hanover Companies did not pay $116.49 in billing entries for messenger, delivery, express, or overnight mail services.
Delivery costs are generally recoverable for out-of-pocket litigation expenses.
The Hanover Companies dispute the billing entries on the basis that its billing guidelines allow for recovery of such delivery fees only when "its use is necessary to the defense of the case." (Defense Counsel Guidelines Section V.C.6, ECF No. 190-3 at p. 12).
The delivery services were reasonably related to the defense of the case and the Hanover Companies are responsible for the cost.
The Hanover Companies owe an outstanding balance of
The Hanover Companies did not pay $4,119.84 in fees for computer assisted research or access charges.
The Hanover Companies' billing guidelines contained a provision stating that "Hanover will not pay for Internet access charges, monthly online docket access or subscription charges, or charges for computer assisted research such as Westlaw, Lexis, and other computer research databases. These services are considered part of the firm's overhead." (Defense Counsel Guidelines Section V.C.6, ECF No. 190-3 at p. 12).
The Hanover Companies do not owe a balance as to the outstanding billing entries for computer assisted research.
The Hanover Companies declined to pay $61,989.96 in fees for undocumented expenses for outside counsel. The billing entries submitted for these fees do not provide any information other than vague descriptions such as, "Outside Counsel," or similarly insufficient descriptions. In addition, the billing entries are requests for large flat fees with no hourly information.
For example, on November 14, 2012, the Zobrist Law Firm billed $3,755.00 for "outside counsel." (Pla.'s Ex. G, ECF No. 194-1 at p. 7). On January 9, 2013, the Zobrist Law Firm billed $15,488.80 for "outside counsel." (Pla.'s Ex. G, ECF No. 196-1 at p. 12).
There is no information that would allow the Court to evaluate if such billing entries are reasonable.
The Hanover Companies do not owe a balance as to the outstanding billing entries for external expenses.
The Hanover Companies did not pay $43,387.50 of billing entries due to excessive time.
A party opposing a fee request that it deems to be excessive must submit objections and proof that are specific and reasonably precise in order to explain its objection.
The Hanover Companies have not provided specific and reasonably precise objections to billing entries that they deemed "excessive." A review of the billing entries that the Hanover Companies identified as excessive does not demonstrate that a reduction is warranted. The nature of the Underlying Lawsuit and the extensive proceedings in the litigation support a ruling that the time requested was reasonable.
The Hanover Companies owe an outstanding balance of
The Hanover Companies did not pay $13,332.50 in billing entries that were related to the Underlying Lawsuit but they deemed were not part of Anova LLC's defense.
The Court already ruled that the Hanover Companies had a duty to defend Anova LLC
A proper defense may include counterclaims for which reasonable attorneys' fees are recoverable where there is a duty to defend.
The Hanover Companies owe an outstanding balance of
In total, the Court finds that as to the outstanding attorneys' fees that remain in dispute the Hanover Companies owe the following:
The Hanover Companies owe a total of $250,971.41 in additional attorneys' fees incurred from October 12, 2012 to December 10, 2013.
The Court
There are no remaining issues before the Court.
The Clerk of Court is
IT IS SO ORDERED.
