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Kenneth Feld v. Fireman's Fund Insurance Company, 17-7169 (2018)

Court: Court of Appeals for the D.C. Circuit Number: 17-7169 Visitors: 1
Filed: Dec. 07, 2018
Latest Update: Mar. 03, 2020
Summary: United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT Argued September 17, 2018 Decided December 7, 2018 No. 17-7169 KENNETH FELD, APPELLANT v. FIREMAN’S FUND INSURANCE COMPANY, APPELLEE Appeal from the United States District Court for the District of Columbia (No. 1:12-cv-01789) Jonathan S. Franklin argued the cause for appellant. With him on the briefs was Matthew H. Kirtland. Thomas S. Schaufelberger argued the cause for appellee. With him on the brief was Matthew J. Antonelli.
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 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued September 17, 2018         Decided December 7, 2018

                        No. 17-7169

                      KENNETH FELD,
                       APPELLANT

                             v.

          FIREMAN’S FUND INSURANCE COMPANY,
                       APPELLEE


        Appeal from the United States District Court
                for the District of Columbia
                    (No. 1:12-cv-01789)


    Jonathan S. Franklin argued the cause for appellant. With
him on the briefs was Matthew H. Kirtland.

    Thomas S. Schaufelberger argued the cause for appellee.
With him on the brief was Matthew J. Antonelli.

    Before: GARLAND, Chief Judge, GRIFFITH, Circuit Judge,
and EDWARDS, Senior Circuit Judge.

   Opinion for the Court filed by Senior Circuit Judge
EDWARDS.
                                2

     EDWARDS, Senior Circuit Judge: Appellant Kenneth
Feld (“Feld”) retained the law firm of Fulbright & Jaworski,
LLP (“Fulbright”) in 2008 to defend him in an action brought
by his sister, Karen Feld (“Karen”). After a jury trial, Feld
prevailed in that action. This case is a follow-up to the action
between Feld and his sister. It involves a claim by Feld against
appellee, Fireman’s Fund Insurance Company (“FFIC”), for
reimbursement of expenses, largely attorney fees, that he
incurred in the action brought by his sister. According to Feld,
FFIC has refused to reimburse him for the full amount of
reasonable defense costs associated with the successful
representation provided by Fulbright. FFIC, in turn,
acknowledges that it agreed to cover Feld’s defense costs and
that it paid Fulbright over $2.1 million for its representation of
Feld. However, FFIC contends that the additional $2.4 million
in attorney’s fees and costs sought by Feld are based on rates
substantially higher than the rates agreed to by the parties.

     Feld filed suit against FFIC in the District Court to recover
the disputed expense costs. The District Court granted
summary judgment in FFIC’s favor. The court concluded that
the parties had agreed to the rates at which FFIC paid Feld’s
counsel and, therefore, FFIC had satisfied its obligations to
Feld. Feld v. Fireman’s Fund Ins. Co., 
206 F. Supp. 3d 378
(D.D.C. 2016), reconsideration denied, 
263 F. Supp. 3d 74
(D.D.C. 2017).

     Feld’s principal argument before the District Court, and
this court as well, is that there was no “agreement” between the
parties limiting fees and costs as FFIC suggests. In particular,
Feld contends that

   FFIC . . . never identified any written agreement, instead
   arguing that the purported agreement was struck during
                                3
   a telephone call between an FFIC manager and a
   Fulbright associate and was confirmed when that
   associate sent an expressly non-binding budget
   estimating what the representation could cost if FFIC’s
   preferred rates were used. But what transpired during
   that call was hotly disputed by the two participants, and
   the budget document expressly disclaimed any binding
   effect.

Appellant’s Br. at 2–3. On this view of the record, Feld argues
that the District Court erred in “holding that there was no
dispute of material fact as to whether the parties entered into a
binding, enforceable agreement.” 
Id. at 3.
In rejecting Feld’s
claim, the District Court observed that, “[w]hen the full history
of the dealings between Feld (or Fulbright on his behalf) and
FFIC is examined, it would take a contortionist to twist the
facts to support the absence of a rate agreement.” Feld, 206 F.
Supp. 3d at 389–90. We disagree.

    Summary judgment is proper only if, viewing the evidence
in the light most favorable to the non-movant and drawing all
justifiable inferences in its favor, there are no genuine disputes
of material fact for a jury to resolve. See Anderson v. Liberty
Lobby, Inc., 
477 U.S. 242
, 247–48, 255 (1986). The record in
this case indicates that the parties never reduced any purported
rate agreement to writing. Instead, FFIC relies on genuinely
disputed communications between the parties’ representatives
to support its position. And the disputed communications to
which FFIC points do not unambiguously show that the parties
entered a rate agreement as asserted by FFIC. Summary
judgment cannot be granted on these terms. We therefore
reverse this portion of the District Court’s judgment and
remand the case for trial. However, we affirm the District
Court’s denial of Feld’s Motion to Compel certain
communications between FFIC and its attorneys.
                                4
                       I. BACKGROUND

A. Factual Background

     Feld’s aunt passed away in September 2007. At the time
of her death, the aunt resided in a condo owned by Feld in
Washington, D.C. Feld hosted a Shiva – a Jewish mourning
ritual – for his aunt in the condo. His sister, Karen, attended the
Shiva, but she was eventually removed from the condo building
by security guards who had been hired by Feld. In September
2008, Karen filed suit against Feld for injuries allegedly
sustained during her removal from the building, raising claims
of assault, battery, false imprisonment, intentional infliction of
emotional distress, and negligent infliction of emotional
distress. See Complaint, Feld v. Feld, No. 08-cv-01557 (D.D.C.
Sept. 9, 2008), reprinted in Joint Appendix (“J.A.”) 267–99
(the “Underlying Litigation”). Feld retained Fulbright to
defend him in the Underlying Litigation. In April 2009, the
District Court in the Underlying Litigation dismissed the
negligent infliction of emotional distress claim. Feld then filed
an Answer and Counterclaim, raising self-defense and defense
of property affirmative defenses and countersuing Karen for
trespass.

     During the relevant time period, Feld held two insurance
policies with FFIC: a homeowner’s insurance policy and an
excess policy. See J.A. 194–223 (primary policy); J.A. 224–40
(excess policy). Each of those policies provided liability
insurance coverage for bodily injuries to others. Both policies
excluded coverage for intentional tort claims, but provided
coverage if those acts were committed in defense of self or
property. Each policy also provided coverage of legal defense
expenses for covered claims.

    In June 2009, Feld notified FFIC of Karen’s case against
him. FFIC assigned the claim to Charles Kirk (“Kirk”), who
                               5
was then employed by FFIC as a “high-exposure director.” In
August 2009, Kirk sent Feld a letter expressing FFIC’s
agreement to defend Feld in the Underlying Litigation “subject
to a full and complete reservation of all of FFIC’s rights under
the terms and conditions of the Policy.” J.A. 345. The August
2009 letter noted that “[a]ll of the claims of the Complaint
allege intentional conduct by Kenneth Feld” and, therefore,
“are not covered by” Feld’s policies. J.A. 353. However, FFIC
agreed to pay for a defense “because Mr. Feld has denied the
allegations and has alleged that he was acting in ‘self-
defense.’” 
Id. at 354.
    Although FFIC agreed to defend Feld, it reserved the right
“to withdraw from the defense of Kenneth Feld in the
Underlying Action and to deny coverage when and if further
investigation reveals that there is no coverage existing under
the Policy [and/or] that Kenneth Feld was not acting in self-
defense.” 
Id. FFIC further
“reserve[d] the right to seek
contribution and/or reimbursement from Kenneth Feld for any
and all defense costs and/or other monies paid, for which it is
determined that there is no coverage.” 
Id. The August
2009 letter also provided:

   Subject to [FFIC’s] reservation of rights, you may elect
   to choose your own counsel to defend you in this matter;
   otherwise we can appoint counsel for you. FFIC agrees
   to pay, at an agreed hourly rate, the reasonable and
   necessary legal fees and Court costs incurred by counsel
   to defend you subsequent to the date this matter was
   tendered to FFIC under a full reservation of rights . . . .

Id. In his
deposition, Kirk explained that FFIC had two
approaches to paying independent counsel. If FFIC reached a
rate agreement with the insured’s selected counsel, FFIC would
pay all of the fees charged. If a rate agreement was not reached,
                               6
however, FFIC would give the insured the option of either
“locating other alternative counsel or paying the differential
between what [FFIC was] proposing and what [independent
counsel] was going to charge.” J.A. 422.

     In mid-September 2009, Kirk spoke on the phone with
Fulbright associate Caroline Mew (“Mew”) regarding FFIC
payment of Fulbright’s fees in the Underlying Litigation.
During that conversation, Kirk suggested that FFIC could pay
rates as high as $250 per hour for partners, $200 per hour for
associates, and $95 per hour for paralegals. See J.A. 408. Mew
acknowledged these rates but did not accept them during the
September call. See J.A. 364, 409. In addition, Mew informed
Kirk that Fulbright was then billing over $500 per hour. See
J.A. 408–09.

     Kirk and Mew spoke again on October 4, 2009. By this
point, Mew had informed Kirk that Feld was planning to
remain with Fulbright regardless of the outcome of Fulbright’s
discussions with FFIC about payment rates. See J.A. 427.
During his deposition, Kirk testified that, during the October 4
call, he and Mew “discuss[ed] 225 for an associate rather than
200.” J.A. 419. Although he could not recall whether Mew ever
used the word “agree,” his recollection of the October 4 call
was that Mew “asked [him] if [he] could increase the rates from
the initial ones [he] proposed back in September,” he agreed to
do so, and she “thanked [him] for that.” J.A. 439. Kirk testified
that he “took that to mean that going forward, those would be
the rates that would be billed on this case.” 
Id. Mew, on
the
other hand, testified that she did not respond to FFIC’s
proposed rates during the October 4, 2009 phone call. See J.A.
366 (“Q: And how did you respond? A: I didn’t. He was just
telling me FFIC’s stated position.”).
                               7
      Following the phone call on October 4, 2009, Kirk sent
Mew a follow-up email. That email stated: “As insured selected
counsel, we will agree to pay a rate not to exceed $250/hour for
partners; $225/hour for associates; and $100/hour for
paralegals. Any amount in excess of those rates would continue
to be the insured’s responsibility.” J.A. 521. Kirk also attached
FFIC’s billing guidelines and requested an “initial evaluation
report.” 
Id. The billing
guidelines attached to the October 4,
2009 email state that an initial evaluation report should include
“an itemized budget for the proposed defense.” J.A. 523. The
billing guidelines also provide that appeals of any “deduction
or declination of payment by Fireman’s Fund” must be
submitted within thirty days or will be deemed waived. J.A.
530.

     On October 28, 2009, Mew sent Kirk a proposed budget.
See J.A. 534–40. The rates in the proposed budget reflected the
rates FFIC had agreed to pay in its October 4, 2009 email. See
J.A. 535. The proposed budget was attached to a cover letter
written by Mew, which stated:

   At your request, enclosed herewith is a proposed budget
   in the above-referenced matter. This is a good faith
   estimate of the amount of time and expenses we
   anticipate expending in this case as of the present date.
   We do not consider this to be a binding representation of
   the fees and expenses that actually will be incurred in
   this matter. We ultimately will be guided by our
   professional judgment to use the time and resources
   necessary to zealously represent our client’s interests.

J.A. 534.

    Following Mew’s letter and the proposed budget, Erik K.
Lindemann (“Lindemann”) of Rivkin Radler, LLP (“Rivkin
Radler”), sent a response to Mew on November 18, 2009, on
                              8
behalf of FFIC. Lindemann objected to many aspects of the
proposed budget including the proposed staffing levels and
estimated hours, asking Fulbright to “contact Charles Kirk for
approval prior to the commencement of any substantial work,
including . . . any work involving more than four hours of
billable time.” J.A. 590–91. Lindemann also noted the
existence of a rate agreement. See J.A. 591 (“FFIC and
Fulbright have agreed on specific hourly rates for the defense
of Feld.”).

     Lisa Zeiler Joiner (“Joiner”), a partner at Fulbright,
responded to Lindemann’s letter on December 8, 2009. See
J.A. 598–601. In her letter, Joiner wrote,

   FFIC is currently paying only a fraction of [Fulbright]’s
   hourly rates with the remaining amounts being charged
   to Mr. Feld notwithstanding the insurance he has
   purchased from FFIC. To further attempt to restrict the
   type of work done or to reduce the hours worked, which
   [Fulbright] considers necessary for the defense, is
   inappropriate.

J.A. 599–600. Joiner also addressed a provision in the billing
guidelines that creates a thirty day appeal window for
deductions or declinations of payment:

   Once [invoices are] submitted, we will not spend
   additional, extraneous time haggling over the bill with
   RivkinRadler or anybody else purporting to act on
   FFIC’s behalf. [Fulbright]’s efforts need to be focused at
   this stage on defending Mr. Feld from the named
   adversary in the case, the plaintiff, rather than the
   insurance company. Accordingly, we do not accept the
   proposal that any disagreements with FFIC regarding
   deductions or failure to pay [Fulbright]’s invoices must
   be appealed within 30 days. . . . To simplify matters,
                                9
    FFIC may presume that [Fulbright] and Mr. Feld contest
    any and all amounts unpaid by FFIC on any bills
    presented by [Fulbright] to FFIC for payment unless
    FFIC is notified otherwise.

J.A. 599.

     Fulbright sent FFIC its first bill for defense expenses on
August 10, 2010. See J.A. 510. That bill reflected billing rates
at Fulbright’s normal rates, not the rates preferred by FFIC. See
J.A. 509. On October 11, 2010, FFIC sent a payment to
Fulbright adjusted to reflect FFIC’s preferred rates. See J.A.
636. In a cover letter to which FFIC’s check was attached, Kirk
wrote, “The hourly rates charged exceeded the agreed upon
rates between Fulbright and FFIC. Please see Fulbright’s
October 28, 2009 budget wherein Fulbright agreed to the
following rates: $250/hour for partners; $225/hour for
associates; and $100/hour for paralegals.” 
Id. Fulbright deposited
the check without responding to the cover letter. See
Feld, 206 F. Supp. 3d at 388
.

     After a two week trial, a jury found that Feld was not
liable, specifically concluding that Karen had failed to prove
several of her tort claims and that Feld had acted in self-defense
with respect to one claim. See Feld v. Feld, 
688 F.3d 779
, 781
(D.C. Cir. 2012). This judgment was affirmed on appeal. See
id. at 783.
     Following resolution of the Underlying Litigation,
Fulbright billed a total of $4.5 million in defense fees and costs,
of which FFIC paid $2.1 million, leaving $2.4 million in
dispute. Of that $2.4 million, $2.2 million is attributable to a
disparity between the hourly rates charged by Fulbright and
those paid by FFIC, with the remainder arising from disputed
litigation costs. See J.A. 28.
                               10
B. Procedural History

     In November 2012, Feld filed this action in the District
Court against FFIC to recover the $2.4 million in dispute. Feld
claimed that FFIC had breached a contractual obligation to pay
reasonable defense fees and expenses. Feld also claimed that
FFIC’s actions amounted to a breach of the duty of good faith
and sought a declaratory judgment that FFIC had an obligation
to pay Feld’s entire, reasonable defense fees. The District Court
granted summary judgment for FFIC on the good faith claim,
and Feld does not challenge that decision on appeal. See 
Feld, 206 F. Supp. 3d at 392
–93.

     In May 2013, during discovery, the District Court largely
granted two Motions to Compel filed by FFIC to obtain
materials related to Fulbright’s communications with Feld
regarding the alleged rate agreement. See J.A. 63–84 (finding
Feld waived the attorney-client privilege); J.A. 93–114
(finding Feld waived the work product privilege).
Subsequently, in November 2014, Feld filed a Motion to
Compel, seeking “all documents concerning (1) the supposed
‘agreement’ regarding hourly rates and (2) the reasonableness
of Plaintiff’s defense costs,” including FFIC’s communications
with Rivkin Radler. J.A. 133. The District Court denied this
Motion on attorney-client privilege grounds, concluding that
Feld “put both the purported rate agreement and the
reasonableness of incurred costs at issue when he filed this
suit” and FFIC’s response “cannot put at issue questions that
were already there.” J.A. 136.

     After discovery closed, both parties moved for summary
judgment. On September 12, 2016, the District Court granted
summary judgment for FFIC with respect to the primary
dispute between the parties, concluding that the parties entered
a binding and enforceable rate agreement and, therefore, Feld
                               11
was not entitled to $2.2 million of the $2.4 million in dispute.
See 
Feld, 206 F. Supp. 3d at 390
. The court denied summary
judgment as to the remaining fees and expenses in dispute. See
id. at 392.
After the District Court denied Feld’s Motion for
Reconsideration of its ruling granting partial summary
judgment, the parties filed, and the District Court granted, a
stipulated dismissal as to the remaining fees and expenses in
dispute.

                        II. DISCUSSION

A. Standard of Review

     This court reviews the District Court’s ruling on summary
judgment de novo. See Aref v. Lynch, 
833 F.3d 242
, 250 (D.C.
Cir. 2016). In ruling on a motion for summary judgment, both
the District Court and this court are obligated to “examine the
facts in the record and all reasonable inferences derived
therefrom in a light most favorable to” the non-moving party.
Robinson v. Pezzat, 
818 F.3d 1
, 8 (D.C. Cir. 2016) (quoting
DeGraff v. District of Columbia, 
120 F.3d 298
, 299–300 (D.C.
Cir. 1997)). The principal question before the court is whether
“there are any genuine factual issues that properly can be
resolved only by a finder of fact because they may reasonably
be resolved in favor of either party.” 
Anderson, 477 U.S. at 250
.
“This mode of analysis serves to separate the ‘jury functions’
of making ‘[c]redibility determinations, . . . weighing . . . the
evidence, and . . . drawing . . . legitimate inferences from the
facts’ from the district court’s role as the arbiter of legal
questions.” 
Robinson, 818 F.3d at 8
(quoting 
Anderson, 477 U.S. at 255
).

     “[A]lthough a jury might ultimately decide to credit the
version of the events described by the defendants over that
offered by the plaintiff, this is not a basis upon which a court
may rest in granting a motion for summary judgment.” 
Id. 12 (quoting
Arrington v. United States, 
473 F.3d 329
, 333 (D.C.
Cir. 2006)). A district court’s order of summary judgment must
be reversed “if, based on the record, inferences contrary to
those drawn by the trial court are also plausible.” United States
v. Spicer, 
57 F.3d 1152
, 1160 (D.C. Cir. 1995) (quoting
Santiago v. Lane, 
894 F.2d 218
, 223 (7th Cir. 1990)); see also
Keefe Co. v. Americable Int’l, Inc., 
169 F.3d 34
, 38 (D.C. Cir.
1999) (“Where more than one plausible inference can be drawn
from the undisputed facts, summary judgment is not
appropriate.”).

B. Existence of a Rate Agreement

     This action is based on diversity jurisdiction arising under
28 U.S.C. § 1332. A federal court sitting in diversity applies
the choice-of-law rules of the jurisdiction in which it sits. See,
e.g., Bode & Grenier, LLP v. Knight, 
808 F.3d 852
, 864 (D.C.
Cir. 2015). The District Court held that Maryland law governs
the insurance policy, but that D.C. law governs the question of
formation of any rate agreement. Because the law of contract
formation is the same under D.C. and Maryland law, the court
applied D.C. law. See 
Feld, 206 F. Supp. 3d at 384
n.1. The
parties do not dispute these conclusions, and we find no error
in the District Court’s decision. See USA Waste of Md., Inc. v.
Love, 
954 A.2d 1027
, 1032 (D.C. 2008) (“A conflict of laws
does not exist when the laws of the different jurisdictions are
identical or would produce the identical result on the facts
presented.”).

     D.C. courts “adhere[] to an objective law of contracts,
meaning that the written language embodying the terms of an
agreement will govern the rights and liabilities of the parties
regardless of the intent of the parties at the time they entered
the contract, unless the written language is not susceptible of a
clear and definite meaning.” Carlyle Inv. Mgmt. LLC v. Ace
                              13
Am. Ins. Co., 
131 A.3d 886
, 894–95 (D.C. 2016) (quoting
Aziken v. District of Columbia, 
70 A.3d 213
, 218–19 (D.C.
2013)). The party seeking to establish the existence of an
enforceable contract bears the burden of proving that one
existed. See Kramer Assocs., Inc. v. Ikam, Ltd., 
888 A.2d 247
,
251 (D.C. 2005). This includes showing a genuine offer and a
valid acceptance of that offer. See 1836 S Street Tenants Ass’n,
Inc. v. Estate of B. Battle, 
965 A.2d 832
, 836–37 (D.C. 2009).

     Summary judgment on a contract dispute is generally
inappropriate unless the dispute is controlled by unambiguous
contract language. See NRM Corp. v. Hercules, Inc., 
758 F.2d 676
, 682 (D.C. Cir. 1985) (“When . . . [contract] language is
unclear and the search for intent extends beyond the four
corners of the agreement, the intended meaning of the contract
is a disputed and, necessarily, material question of fact and
summary judgment is improper.”). Whether a contract is
ambiguous is a question of law for the court. See Segar v.
Mukasey, 
508 F.3d 16
, 22 (D.C. Cir. 2007). And an ambiguity
will be found to exist if the purported contract “is reasonably
susceptible of different constructions.” 
Id. (quoting Bennett
Enters., Inc. v. Domino’s Pizza, Inc., 
45 F.3d 493
, 497 (D.C.
Cir. 1995)).

         1. Offer and Acceptance

     It is undisputed that Feld had two homeowner insurance
policies with FFIC. It is also undisputed that FFIC agreed to
pay Feld’s counsel “reasonable and necessary legal fees” in the
Underlying Litigation. J.A. 354. The dispute in this case
concerns whether Feld and FFIC reached a binding agreement
regarding the hourly rates that would be deemed “reasonable”
by the parties. In order to show that a contract was formed,
FFIC must show both that an offer was made and that it was
unequivocally accepted by Feld.
                              14
     FFIC proffers two theories regarding purported “offers”
between the parties. First, FFIC suggests that an offer was
extended by Feld during telephone calls between Kirk and
Mew. Kirk’s deposition testimony that Mew asked Kirk if
FFIC could agree to rates of $250 per hour for partners, $225
per hour for associates, and $100 per hour for paralegals
supports this theory. See J.A. 439. However, this testimony was
directly contradicted by Mew’s deposition testimony that she
did not make this request or otherwise respond to Kirk’s
proposed rates. See J.A. 366. Crediting Feld’s evidence, as the
court must do at the summary judgment stage, the phone
conversations between Kirk and Mew do not unambiguously
show that Mew extended an offer on Feld’s behalf. Thus,
FFIC’s first theory fails.

     FFIC’s second, and principal, theory is that Kirk extended
an offer to Mew via email on October 4, 2009, and that Mew
accepted the offer on October 28, 2009, when she sent Kirk the
proposed budget incorporating the rates preferred by FFIC.
Kirk’s email states, in relevant part: “As insured selected
counsel, we will agree to pay a rate not to exceed $250/hour for
partners; $225/hour for associates; and $100/hour for
paralegals.” J.A. 521. As we explain below, although this email
may have been an offer, an agreement between the parties
concerning rates was not unambiguously consummated.

     FFIC argues, and the District Court concluded, that a
contract was formed no later than October 28, 2009, when Mew
sent the proposed budget and cover letter to FFIC. See 
Feld, 206 F. Supp. 3d at 387
. However, a reasonable factfinder could
conclude that the budget proposal did not constitute an
acceptance resulting in a binding contract. The mere
incorporation of FFIC’s preferred rates in a budget is not, on
its face, an acceptance of those rates. Incorporation of the
proposed rates in a budget is merely consistent with
                               15
acceptance. It is also consistent with the absence of a rate
agreement.

     A reasonable factfinder could conclude that Mew simply
used FFIC’s preferred rates in the budget as a placeholder,
pending final resolution of any dispute between the parties over
the appropriate rates to be paid. In other words, the reference
to rates in the budget falls far short of an unambiguous
agreement between the parties.

     Furthermore, the cover letter to which the budget is
attached disclaims Fulbright’s intention to be bound to the
“fees and expenses” stated therein. J.A. 534. We recognize that
the cover letter does not explicitly disclaim an intent to be
bound to the rates in the proposed budget and does explicitly
mention attorney hours and expenses. Nevertheless, the term
“fees” can reasonably be construed to include both rates and
hours. And Mew explained that her disclaimer regarding fees
covered both hours and rates. See J.A. 798. Thus, a reasonable
factfinder could conclude that Mew’s reference to “fees”
embraced rates as well as hours.

     A reasonable jury might also infer from the other
disclaimers in the letter that the budget proposal was nothing
more than a provisional estimate. On this point, Feld
convincingly argues that “a reasonable juror could conclude
that Mew’s use of FFIC’s proposed rates in preparing a non-
binding budget estimate was merely an effort to respond to
FFIC’s inquiry as to how much the litigation might cost if its
rates were used.” Appellant’s Br. at 30.

    In addition, Feld had already decided to have Fulbright
represent him regardless of the outcome of Fulbright’s
discussions with FFIC. Therefore, it was not necessary for
Fulbright to resolve the rate at which FFIC would reimburse
Fulbright attorneys prior to resolution of the litigation because
                               16
Fulbright’s defense of Feld would not be affected by FFIC’s
coverage.

     Moreover, a reasonable factfinder might look to the wide
gulf between FFIC’s proposed rates and Fulbright’s normal
rates to conclude that the budget proposal was not an
acceptance of any offer from FFIC. As FFIC was aware,
Fulbright was then billing at rates over $500 per hour for
attorney time, substantially more than FFIC seemed willing to
pay. Even based on the number of hours Fulbright estimated in
its proposed budget, which substantially underestimated the
number of hours actually spent on the Underlying Litigation, a
decision to agree to FFIC’s preferred rates would be quite
costly. A reasonable jury could infer from the money at stake
that Fulbright would not communicate any acceptance through
a proposed budget sent to FFIC by an associate attorney, as
opposed to a written contract signed by both parties.

     The dealings between FFIC and Feld following
submission of the budget proposal on October 28 do not put the
dispute to rest because, as the District Court correctly noted,
those interactions are a “mixed bag.” See 
Feld, 206 F. Supp. 3d at 388
. On one hand, Lindemann’s November 18 letter states
that the parties reached a rate agreement and Joiner’s
December 8 response to Lindemann does not explicitly dispute
this assertion. On the other hand, in her December 8 letter,
Joiner characterizes FFIC’s rates as the rates FFIC is “currently
paying . . . notwithstanding the insurance [Feld] has purchased
from FFIC,” which is not, on its face, an acknowledgement of
a rate agreement. J.A. 599. Significantly, Joiner also asserts in
the December 8 letter that Fulbright’s “efforts need to be
focused at this stage on defending Mr. Feld from the named
adversary in the case, the plaintiff, rather than the insurance
company.” 
Id. Joiner’s letter
is, therefore, at least consistent
with the view that incorporating FFIC’s proposed rates into the
                               17
budget was done merely to provide an estimate of expenses if
FFIC’s rates were considered reasonable, rather than an
agreement by Feld to those rates.

     It is also noteworthy that Fulbright’s invoices were
calculated at Fulbright’s normal billing rates and FFIC’s
payments were reduced to the rates proposed by FFIC.
Fulbright did not object to FFIC’s partial payment of its first
invoice but, in the December 8 letter, Joiner had already
informed FFIC that neither Fulbright nor Feld intended to
appeal deductions within thirty days and, “[t]o simplify
matters, FFIC may presume that [Fulbright] and Mr. Feld
contest any and all amounts unpaid by FFIC on any bills
presented by [Fulbright] to FFIC for payment unless FFIC is
notified otherwise.” 
Id. In this
context, it says little that
Fulbright failed to object to FFIC’s deductions from its first
invoice.

     We recognize that a reasonable jury might find that a rate
agreement was formed. If a jury credited Kirk’s testimony that
Mew asked him to raise his proposed rates and he agreed to do
so, her use of the rates in the budget proposal could be evidence
that the parties reached an oral rate agreement during the
October 4 phone call. Or, FFIC might persuade a jury that by
incorporating the rates in the proposed budget and failing to
disclaim a rate agreement in either the cover letter attached to
the proposed budget or Joiner’s December 8 letter, Feld
accepted FFIC’s rates. But such a conclusion cannot be reached
as a matter of law. See 
Anderson, 477 U.S. at 255
(“Credibility
determinations, the weighing of the evidence, and the drawing
of legitimate inferences from the facts are jury functions, not
those of a judge . . . .”).

     In sum, while a reasonable factfinder might conclude that
the parties agreed to rates, “inferences contrary to those drawn
                              18
by the trial court are also plausible.” 
Spicer, 57 F.3d at 1160
(quoting 
Santiago, 894 F.2d at 223
). Therefore, summary
judgment was improper.

         2. Material Terms

     On appeal, Feld further argues that no agreement was
formed because “the parties’ course of dealing shows that no
agreement was reached on numerous material terms, even
putting aside the question of rates.” Appellant’s Br. at 20.
However, Feld failed to raise this argument with the District
Court and, thus, forfeited it. This court does not consider
forfeited arguments absent “exceptional circumstances.” Flynn
v. Comm’r, 
269 F.3d 1064
, 1068–69 (D.C. Cir. 2001) (quoting
Marymount Hosp., Inc. v. Shalala, 
19 F.3d 658
, 663 (D.C. Cir.
1994)). Feld has not argued that this case meets the
“exceptional circumstances” standard, nor are exceptional
circumstances apparent. Therefore, we decline to reach Feld’s
argument that the purported agreement fails for lack of material
terms.

         3. Consideration

     In addition to arguing that there was no rate agreement,
Feld argues that the purported agreement fails for lack of
consideration. Before the District Court, Feld argued that “no
contract could have formed between Fulbright and FFIC for
lack of consideration given that all FFIC stated it would do was
pay what it considered to be the amounts it already was
obligated to pay under the Policy as reasonable and necessary
defense costs.” 
Feld, 206 F. Supp. 3d at 389
. He presses the
same argument with this court. We reject this claim because it
is both illogical and meritless.

    The D.C. Court of Appeals has explained that,
                                 19
    In determining whether a valid contract exists, [the
    court] “will not inquire into the adequacy of”
    consideration, even where it is “arguably slight,” as long
    as it is “legally sufficient.” Riggs v. Aetna Ins. Co., 
454 A.2d 818
, 821 (D.C.1983). “An exchange of promises”
    or a “detriment to the promisee” constitutes legally
    sufficient consideration, “so long as it is bargained-for.”
    Pearsall v. Alexander, 
572 A.2d 113
, 118 (D.C.1990)
    (citing RESTATEMENT (SECOND) OF CONTRACTS § 75
    (1932)).

Wash. Inv. Partners of Del., LLC v. Sec. House, K.S.C.C., 
28 A.3d 566
, 574–75 (D.C. 2011). This is the starting point in
determining what constitutes legally sufficient consideration.

     Feld argues that the disputed agreement, which included
FFIC’s preferred rates for attorney fees, was not supported by
legally sufficient consideration because FFIC had a preexisting
duty to pay Feld’s selected counsel at a reasonable rate. See
Appellant’s Br. at 38–45. Feld bases this argument on his view
of the Maryland duty to defend doctrine. See Brohawn v.
Transamerica Ins. Co., 
347 A.2d 842
, 854 (Md. 1975).
According to Feld, because he has a conflict of interest with the
insurer, FFIC is obligated under Maryland law to pay counsel
of Feld’s choice at a reasonable rate. Even accepting Feld’s
claims regarding the requirements of Maryland law and the
existence of a conflict of interest, his claim that the purported
agreement lacked consideration makes no sense.

     If, as Feld claims, he is entitled to an attorney of his choice,
that obligation was met when FFIC agreed to his choice of
counsel. As to Feld’s claim for “reasonable rates” for attorney’s
fees, FFIC did nothing to abrogate this alleged right. FFIC
merely argued before the District Court that Feld agreed to the
rates to be paid to his attorneys and that this agreement satisfied
                                20
the insurer’s obligation to pay reasonable rates for attorney
fees. Feld does not contend that “reasonable rates” are defined
by Maryland’s duty to defend obligation. Nor does he question
the right of the parties to agree on specific rates. So, of course,
he does not doubt that parties may reach an agreement, for their
mutual interests, on reasonable rates. Legally sufficient
consideration surely supports any such agreement.

     If the parties do not agree on “reasonable rates,” as Feld
claims is the case here, then the matter will be subject to a
disposition in a court of law. On remand, when this matter goes
to trial, a jury will determine whether the parties reached an
agreement on reasonable rates for attorney’s fees, as FFIC
claims and the District Court found. If so, the matter is over,
because the jury will have determined that the parties are bound
by a mutually acceptable agreement on reasonable rates. If the
jury reaches a verdict in favor of Feld and finds that no
agreement was reached, then a determination will have to be
made regarding reasonable rates for fees. In sum, Feld’s
argument about consideration is much ado about nothing.

     Any other conclusion would amount to a holding that
parties to an insurance contract cannot, as a matter of law, enter
a rate agreement where there is a conflict of interest between
the insurer and the insured. We can find nothing in Maryland
or D.C. law to support this conclusion. Indeed, Feld has not
urged such a result. Instead, Feld focuses on the specific rates
purportedly offered by FFIC. But that is not the point. FFIC
does not contend that the rates it prefers are what a jury might
find to be reasonable. Rather, FFIC contends that Feld agreed
to the rates and that the parties’ purported agreement resolved
any dispute over “reasonable rates.” If FFIC is right, then the
matter is at an end because, as noted above, the adequacy of
consideration is not a matter for the court to determine. See
Wash. Inv. Partners of Del., 
LLC, 28 A.3d at 574
–75. If the
                              21
jury rules in Feld’s favor, however, then the question of
reasonable rates for fees will remain to be determined.
Therefore, Feld’s consideration argument fails.

C. Ruling on Motion to Compel

     Finally, Feld appeals the District Court’s December 19,
2014, Ruling denying his Motion to Compel. See J.A. 135–38.
As noted above, Feld’s motion sought “all documents
concerning (1) the supposed ‘agreement’ regarding hourly
rates and (2) the reasonableness of Plaintiff’s defense costs,”
including FFIC’s communications with its attorney Rivkin
Radler. J.A. 133. The District Court concluded that these
communications were protected by attorney-client privilege,
and that FFIC had not waived the privilege.

     We review discovery rulings for abuse of discretion. See
Kapche v. Holder, 
677 F.3d 454
, 468 (D.C. Cir. 2012). And we
will not overturn a trial judge’s discovery ruling unless it is
“clearly unreasonable, arbitrary, or fanciful.” 
Id. (quoting Bowie
v. Maddox, 
642 F.3d 1122
, 1136 (D.C. Cir. 2011)). We
hold that on the record before us, the District Court was within
its discretion to deny Feld’s Motion to Compel.

     The essence of Feld’s argument is that, because the
District Court ruled in 2013 that Feld had waived both the
attorney-client privilege and the work-product privilege by
placing his communications with Fulbright “in issue,” it was
unreasonable and arbitrary for the District Court not to reach
the same conclusion with respect to the communications
between FFIC and its attorney. However, the situations were
not comparable.

     First, under D.C. law, it is well established that a party
seeking indemnification for attorney fees waives the attorney-
client privilege “with respect to [billing statements] and any
                               22
other communications going to the reasonableness of the
amount of the fee award.” Ideal Elec. Sec. Co., Inc. v. Int’l
Fidelity Ins. Co., 
129 F.3d 143
, 152 (D.C. Cir. 1997) (applying
D.C. law). The same rule does not apply to communications
between an insurer and its attorney.

    Second, Feld was represented throughout all discussions
with FFIC by his counsel at Fulbright, who acted as his agent.
FFIC, however, was represented by Kirk. FFIC’s attorney at
Rivkin Radler did not communicate with Fulbright until
November 2009, after the rate agreement was allegedly
formed.

     In sum, it was neither unreasonable nor arbitrary for the
District Court to view Feld’s communications with Fulbright
differently than it did the communications between FFIC and
Rivkin Radler. And the District Court did not err in
determining that FFIC did not waive the attorney-client
privilege regarding communications with Rivkin Radler.

                      III. CONCLUSION

     For the reasons explained above, we vacate the District
Court’s grant of partial summary judgment for FFIC as to the
existence of a rate agreement and remand for trial on this issue.
However, we affirm the District Court’s ruling rejecting Feld’s
Motion to Compel.

                                                    So ordered.

Source:  CourtListener

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