SUSAN C. BUCKLEW, District Judge.
The Court now considers the motion, as corrected, from Defendant Auto-Owners Insurance Company for attorney's fees in the amount of $258,883.50 and costs in the amount of $221,049.27. (Docs. 596, 601.) Plaintiff Clayton Kearney urges the Court to cut the attorneys's fees by 60 percent and award Auto-Owners $103,553.40. Kearney also asks the Court to award Auto-Owners no costs beyond those permitted in 28 U.S.C. § 1920. (Doc. 606.)
Upon review, the Court awards Auto-Owners attorney's fees in the amount of
The insured, Plaintiff Clayton Kearney, sued his insurer, Auto-Owners Insurance Company, for breach of contract and bad faith under Florida law for failing to pay the limits of a primary and excess insurance policy after Kearney was severely injured in an automobile accident.
On September 18, 2009, more than 45 days before the November 9, 2009 start of the trial on the question of bad faith, Auto-Owners offered to settle the case for $1-million. Auto-Owners made the offer and settlement proposal as authorized by Rule 69 of the Federal Rules of Civil Procedure, Florida Statute § 768.79, and Rule 1.442 of the Florida Rules of Civil Procedure. Kearney did not respond to the offer, and, therefore, the offer lapsed.
On November 20, the jury in the bad faith trial returned a verdict for Auto-Owners, finding that it had not committed bad faith in failing to promptly pay Kearney's insurance claim. After the Court entered a judgment for Auto-Owners, Auto-Owners timely moved for attorney fees.
Auto-Owners seeks $258,883.50 in attorney's fees and $221,049.27 in costs for the 64-day period beginning on September 18, 2009, the day Auto-Owners made its settlement offer to Kearney, and ending on November 20, 2009, the last day of the jury trial. The fees account for the work of five lawyers and three paralegals with the law firm of Burr & Forman, LLP, based out of offices in Mobile and Birmingham, Alabama, and the work of four lawyers and one paralegal with the law firm of Valenti, Campbell, Trohn, Tamayo & Aranda, P.A. ("Valenti, Campbell"), based in Lakeland, Florida.
Burr & Forman billed $219,499.50 for 1,183.10 hours of work, and Valenti, Campbell billed $39,384 for 384 hours of work.
In the American legal system, each party generally must pay its own attorney's fees and expenses.
Because Florida Statute § 768.79 exists to implement the state's public policy, the Eleventh Circuit found in Menchise v. Akerman Senterfitt
Applying Florida law, the Court agrees that Auto-Owners is entitled to attorney's fees and expenses under Florida Statute § 768.79 because Auto-Owners properly filed an offer of judgment that complied with the statute's strict requirements and that Kearney did not accept before trial. Auto-Owners is entitled to attorney's fees for a 64-day period beginning on September 18, 2009 and ending on November 20, 2009.
Kearney does not seriously contest this point.
Just as a federal court must apply state law to determine whether a party is entitled to fees, it must also apply state law to resolve disputes about the reasonableness of fees.
Unlike federal statutes that shift attorney's fees in order to promote public policy or empower private attorney generals, Florida Statute § 768.79 operates as a sanction to punish parties who unreasonably reject settlement offers and clog the courts with cases.
When moving for attorney's fees, the party seeking fees bears the burden of establishing entitlement to the fees, and documenting hours and reasonable rates.
In this case, Auto-Owners' attorney's fees motion falls somewhat short of the standards for a well-prepared fee petition. Not only did Auto-Owners fail to provide any information about the experience, skill, or education of the most of the attorneys and paralegals who worked on this case, it did not even provide the names of the attorneys and paralegals—leaving it to opposing counsel and the Court to figure out the identity of the people whose initials appear on the firm's bills. Nor did Auto-Owners supply any affidavits from other counsel attesting to the reasonableness of their hourly rates or the number of hours charged. Many of the entries on Auto-Owners' bills also amount to "block billing" that combine into one block different entries for different type of work—some compensable, some not. Other entries are simply so vague that the Court, even if it construes how much time was spent on the task, cannot determine the nature of the work done. Auto-Owners also failed to provide a summary of its fees or calculate subtotals that group fees by the category of work.
Because Florida Statute § 768.79 "must be strictly construed in favor of the one against whom the penalty is imposed,"
Kearney first asks the Court to impose an across-the-board 60 percent cut to the total bill. Kearney argues that an overall cut, rather than itemized cuts to the 218 billing entries that Kearney opposes, is warranted for two reasons. First, Kearney argues that it would not be practicable for the Court to review all of its 218 objections. Second, Kearney argues that the itemized objections do not account for the aggregate effect of overbilling caused by Auto-Owners' legal team having "too many cooks in the kitchen." The Court does not agree with either argument.
Auto-Owners has not sought attorney's fees for years of litigation. Instead, about two months of bills are at issue. Furthermore, the Court can review Kearney's 218 objections without spending an unreasonable amount of judicial resources. Given that Kearney could identify the objections and prepare a well-researched
The Court also does not find the total bill—$258,883.50 for two months of work—to be "patently excessive" and "clearly unreasonable" on its face, as Kearney argues. The work at issue involved preparation for and participate in an intensive, 8-day trial, which involved 200 exhibits and numerous expert witnesses. Aside from the amount of attorney's fees, the number of hours spent preparing for and conducting the trial does not appear on its face to be "patently excessive." Without any context, it may appear that attorneys should not have spent a combined 1,567 hours over two months working on this case. However, with more than $30-million at stake, it would be reasonable to expect Auto-Owners's two principal lawyers and a single paralegal to work full-time on this case before the trial and during trial. If the two lawyers and one paralegal did this, not counting weekends before trial and using a 10-hour workday, they would have worked a combined 1,440 hours, which would account for 92 percent of the time in this case. That figure does not take into account the work of the other seven lawyers and three paralegals who worked on the case.
Because the attorney's fees do not appear on their face to be excessive, the Court will review Kearney's objections.
Under the lodestar method, the first step in calculating attorney's fees is determining a reasonable hourly rate. An applicant can meet its burden of supporting its hourly rate by producing direct evidence of rates charged in similar cases, or by presenting opinion evidence of reasonable rates. Auto-Owners presented neither type of evidence. In fact, because Auto-Owners provided no information to the Court about the experience of their attorneys and paralegals, the Court has little basis to approve the hourly rates submitted for attorneys whose work it did not observe. However, with two exceptions, Kearney does not object to the $225-an-hour rate charged by Auto-Owners's counsel and staff at Burr & Forman in Alabama
Kearney objects to paying paralegal Patti Grove (identified only as "PG") an hourly rate of $110, and a paralegal identified only as "AH" an hourly rate of $75. Auto-Owners provided the Court with no information about Grove's or AH's experience or skill. Therefore, the Court will treat both as entry-level paralegals. Kearney argues that the market for paralegal work in Tampa, the relevant legal community,
While Kearney does not contest the hourly rates for most of the attorneys assigned to the case, he does challenge the $175 hourly rate for a person identified only as ALS. Kearney has determined that ALS is an attorney at Burr & Forman named Anna L. Scully, who was admitted to the Alabama Bar on September 25, 2009, shortly before the trial in this case. Auto-Owners provided no information about Scully's experience, so the Court must rely on Kearney's research and on the information posted on Burr & Forman's website to evaluate Scully's experience and credentials.
In addition to objecting to the amount of time that Auto-Owners spent preparing for trial and then defending itself at trial, Kearney raises 218 objections to specific billing entries. The Court has reviewed each objection and indicated in the charts attached to this Order the Court's ruling on all 218 objections. The Court incorporates the attached charts into its Order.
Kearney's objections can be placed into one of five categories, discussed below.
As any client can attest, "block billing makes [review of bills] unnecessarily difficult."
In this case, Auto-Owners billing records are littered with block billing entries that make it difficult for the Court to know what work was done when and for how long. Block-billing prevents the Court from evaluating whether or not the attorney or paralegal spent a reasonable amount of time, in the exercise of good "billing judgment" on a task.
Kearney acknowledges that courts may award attorney's fees for conferences or meetings that allow attorneys with different strength to collaborate.
A court may award fees for work done by law clerks or paralegals only when they perform work typically done by lawyers.
In a few instances, Kearney also objects to attorneys performing clerical work. Where the Court determined in these few instances that attorneys did clerical work better performed by non-lawyers, it reduced fees accordingly.
Although Auto-Owners can opt to hire an out-of-town lawyer, an opposing party should not be required to pay for this choice unless no local counsel can be found.
In a few cases, attorneys claim that they worked while traveling to Tampa. But in most of these instances, the billing entries do not state how much time the attorneys spent working and how much time they spent traveling. Even the most industrious attorney cannot work the entire time while traveling. An attorney flying between Birmingham and Tampa, for instance, would need to put down his papers while driving, boarding a flight, and walking through airport security.
Kearney also objects to the time entries of lead counsel S. Greg Burge, who blocked hours of time for attending the trial and traveling to his hotel. Kearney asserts that Burge's entries show that he spent hours traveling from the courthouse to his hotel during trial. Kearney makes this claim because Burge billed for more time than the Court was in session during the trial. The Court does not read the billing entries to make this claim. Instead, Burge billed for time attending the trial, even though the time entries indicate travel from his hotel. Since an attorney would reasonably need to show up at the courthouse early enough to organize his materials, talk to witnesses or co-counsel, and build in time for unexpected delays, the Court is not surprised that Burge needed to bill more time than the Court was actually in session during trial. Therefore, the Court has not reduced Burge's "travel time" during trial because, despite the presence of "travel time" on the entries, the Court believes the time entries during the trial account for Burge's time spent on legal work before, during, and after the trial sessions. Even if some of the time is for travel, the Court finds the travel time during trial was necessary.
The Court agrees with Kearney that many of the billing entries are so vague that Auto-Owners failed to meet its burden to present "specific and detailed evidence from which the court can determine the reasonable hourly rate."
An accounting of the Court's reductions is attached to this Order and incorporated into the Order.
In summary, the Court made the following reductions to the requested attorney's fees:
-------------------------------------------------------------------------------------------------------------- Burr & Forman Valenti, Campbell Fees Fees TOTAL --------------------------------------------------------------------------------------------------------------TOTAL BILL SUBMITTED $ 219,499.50 $ 39,384.00 $ 258,883.50 -------------------------------------------------------------------------------------------------------------- Kearney's Proposed Reductions $ (86,245.50) $ (23,598.00) $ (109,843.50) -------------------------------------------------------------------------------------------------------------- Court's Reductions $ (41,354.50) $ (7,843.50) $ (49,198.00) --------------------------------------------------------------------------------------------------------------TOTAL FEES ALLOWED BY COURT $ 178,145.00 $ 31,540.50 $ 209,685.50 --------------------------------------------------------------------------------------------------------------
In addition to authorizing an award of attorney's fees, Florida Statute § 768.79 authorizes a court to award a defendant "reasonable costs, including investigative expenses." The statute, however, does not define "reasonable costs." Under § 768.79, though, the Court can only award costs for the 64-day period beginning on September 18, 2009.
However, costs under Florida law are not the same as costs under federal law. Costs under federal law are limited to a narrow range of items in 28 U.S.C. § 1920. In addition, as the prevailing party in this case, Auto-Owners is entitled to costs under § 1920 for the entire case-not just for the 64-day period triggered by a settlement offer. In a separate order, the Court has reviewed the costs taxed by the Clerk in this case and determined under § 1920 that Auto-Owners should receive $32,77.85 of the $221,049.27 it requested.
However, the costs awarded under § 1920 may not be the same costs that Auto-Owners could receive under § 768.79. Florida law may be more generous than federal law, and authorize payment of certain costs (such as part of Auto-Owners' $163,230 in expert witness fees) that federal law would not allow.
However, although Auto-Owners seeks costs under § 768.79, it offers no legal analysis and no case citations for why the Court should treat the "reasonable costs" provision of Florida Statute § 768.79 as substantive law that federal courts must follow in a diversity case. Normally, costs are considered procedural law, even in diversity cases such as this one.
The Court, however, will reserve a final ruling on this issue if Auto-Owners wishes
Because Kearney has suggested that the Court allow Auto-Owners to re-submit its costs under § 768.79, the Court will grant Auto-Owners a second opportunity to ask for costs, if it wishes to do so. If Auto-Owners re-submits its motion for costs, Auto-Owners should not seek costs a second time that the Court has already awarded under § 1920. Auto-Owners is not entitled to be paid the same costs twice. If Auto-Owners believes that it is entitled to costs under Florida Statute § 768.79 that would not be permitted under federal law, then it needs to make a legal argument to advance its request for individual costs sought and should cite to case law for each cost. In addition, Auto-Owners must document that the costs incurred were for work done during the 64-day period beginning September 18, 2009.
Therefore, it is
