Orchano v. Advanced Recovery, Inc.

• Citation: 107 F.3d 94
• Decision Date: 11 February 1997
• Docket Number: No. 730,D,730
• Parties: Robert ORCHANO, Plaintiff-Appellant, v. ADVANCED RECOVERY, INC., Defendant-Third-Party-Plaintiff, Bank of New Haven, Defendant-Third-Party-Defendant-Appellee. ocket 96-7701.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 94

107 F.3d 94

Robert ORCHANO, Plaintiff-Appellant, v. ADVANCED RECOVERY, INC., Defendant-Third-Party-Plaintiff, Bank of New Haven, Defendant-Third-Party-Defendant-Appellee.

No. 730, Docket 96-7701.

United States Court of Appeals, Second Circuit.

Submitted Dec. 16, 1996.

Decided Feb. 11, 1997.

Joanne S. Faulkner, New Haven, CT (Arthur Riccio Jr., Branford, CT, of counsel), for Plaintiff-Appellant.

Tobin & Melien, New Haven, CT (Mary Elizabeth Oppenheim, Joseph M. Tobin, New Haven, CT, of counsel), for Defendant-ThirdParty-Defendant-Appellee.

Before: FEINBERG, KEARSE, and CARDAMONE, Circuit Judges.

KEARSE, Circuit Judge:

Plaintiff Robert Orchano appeals from so much of a supplemental judgment of the United States District Court for the District of Connecticut, Alfred V. Covello, Judge, as ordered defendant Bank of New Haven (the "Bank") to pay him only $6,000 in attorneys' fees and expenses in connection with his successful suit under 42 U.S.C. § 1983 (1994) for violation of his right to due process and under state law for debt collection by means of abusive and deceptive conduct. On appeal, Orchano, who recovered a total of $10,500 in compensatory and punitive damages against the Bank and sought an award of $37,020.88 for fees and expenses, contends principally that the district court erred in calculating the fee without reference to a lodestar figure and in providing no adequate explanation for its award of no more than $6,000. We agree, and we therefore vacate the supplemental judgment and remand for reconsideration and appropriate findings.

I. BACKGROUND

This suit was brought by Orchano in 1991 for the wrongful repossession of his car. The original defendants were Advanced Recovery, Inc. ("Advanced Recovery"), a repossession In 1994, Orchano reached a settlement with the police officers, and a default was entered against Advanced Recovery. Following pretrial discovery and several unsuccessful motions by the Bank to dismiss Orchano's complaint, a jury trial was held on September 29 and 30 on Orchano's claims against the Bank and on the damages recoverable against Advanced Recovery. The jury returned a verdict in favor of Orchano, finding that the Bank had violated his rights under the Constitution and under state law. In its special verdict, the jury found that the Bank had deprived Orchano of due process, had done so while acting under color of state law, and had acted in reckless disregard of Orchano's due process rights; on this constitutional claim, the jury awarded Orchano $500 in compensatory damages and $7,000 in punitive damages. On the state-law claims, the jury found that the Bank had engaged in harassing or abusive conduct and had used fraudulent, deceptive, or misleading practices in connection with the collection of Orchano's debt; on this claim, the jury awarded Orchano $3,000 in compensatory damages. In addition, the jury determined that the amount of damages Orchano should recover from Advanced Recovery was $5,000.

company, and two local police officers who had assisted in the repossession. Orchano alleged that they violated his right to due process, as well as his rights under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (1994), and various provisions of Connecticut law. Thereafter, the Bank was brought in as a third-party defendant by Advanced Recovery, which alleged that it had an indemnity agreement with the Bank; and in early 1993, Orchano filed an amended complaint ("complaint") asserting that the Bank was liable to him directly for the due process and state-law violations because Advanced Recovery had seized the car acting on instructions from the Bank. Orchano alleged that defendants had peremptorily seized his car claiming a default in loan payments when, in fact, as defendants were aware, Orchano's credit disability insurance payer was making payments on the loan. The complaint requested that the court award Orchano actual, statutory, and punitive damages in unspecified amounts.

Following the entry of judgment on the jury's verdict, Orchano applied, as a prevailing plaintiff on his claims under § 1983 and state law, for an award of attorneys' fees in the amount of $36,200, plus $820.88 in expenses, for a total of $37,020.88. In support of the fee application, Orchano submitted affidavits from his two single-practitioner attorneys describing their professional experience and normal hourly rates and detailing the time each had spent on specified tasks related to Orchano's case. The $36,200 fee request was calculated by multiplying the time the attorneys spent on the case, a total of 181 hours, by their standard rates, $200 per hour. The Bank opposed the application, contending, inter alia, that both the requested hourly rate and the hours expended were excessive and that reasonable fees would be $9,250.

In a ruling dated March 19, 1996 ("First Fee Ruling"), the district court decided that Orchano was entitled to fees and expenses totaling only $6,000. The court described the relevant standard as follows:

A reasonable attorney's fee is one that is "adequate to attract competent counsel, but ... [does] not produce[ ] windfalls to attorneys." Blum v. [Stenson], 465 U.S. 886, 897, 104 S.Ct. 1541, 1548, 79 L.Ed.2d 891 (1984). "The district court also should exclude from this initial fee calculation hours that were not 'reasonably expended.' " Hensley v. Eckerhart, 461 U.S. 424, 434, 103 S.Ct. 1933, 1939-40, 76 L.Ed.2d 40 (1983). "Counsel for the prevailing party should make a good faith effort to exclude from a fee request hours that are excessive, redundant or otherwise unnecessary...." Id.

The court has also considered other factors that may aid a court in determining a reasonable attorney's fee. "The product of reasonable hours times a reasonable rate does not end the inquiry. There remain[ ] other considerations that may lead the district court to adjust the fee upward or downward...." Hensley v. Eckerhart, 461 U.S. 424, 434, 103 S.Ct. 1933 [1940], 76 L.Ed.2d 40 (1983). "Indeed, the most critical factor in determining the reasonableness First Fee Ruling at 4-5 (footnote omitted). The district court listed the 12 Hensley v. Eckerhart factors as follows:

                of a fee award is the degree of success obtained."  Farrar v. Hobby,  U.S.  [103, 114, 113 S.Ct. 566, 574, 121 L.Ed.2d 494] ... (1992)....  "[A] district court, in fixing fees, is obligated to give primary consideration to the amount of damages awarded as compared to the amount sought.  Such a comparison promotes the court's 'central' responsibility to make the assessment of what is a reasonable fee under the circumstances of the case."   Farrar,  U.S.  [at 114-15], 113 S.Ct. at 575 (citations omitted;  internal quotations omitted).  "Having considered the amount and the nature of the damages awarded, the court may lawfully award a low fee or no fee without reciting the 12 factors bearing on ... reasonableness."  Id
                

(1) the time and labor required; (2) the novelty and difficulty of the question; (3) the skill requisite to perform the legal service properly; (4) the preclusion of employment by the attorney due to the acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the "undesirability" of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.

Id. at 5 n. 1 (citing Hensley v. Eckerhart, 461 U.S. at 430 n. 3, 103 S.Ct. at 1937 n. 3). The district court stated that, "[i]n light of these factors the court concludes that ... reasonable and just attorneys' fees and expenses are awarded in the amount of $6,000." First Fee Ruling at 5-6.

Orchano moved for reconsideration, contending that the $5,179.12 fee portion of the $6,000 awarded by the district court ($6,000 minus $820.88 for expenses) was unjustifiably low in light of the importance of the constitutional rights vindicated in the action and the reasonableness of the attorneys' rates and hours. He also pointed out that the court had not specified which of the factors it enumerated had actually led to the reduction and had not explained its reasoning. In a ruling dated May 15, 1996 ("Second Fee Ruling"), the court granted Orchano's motion to reconsider, but reaffirmed its decision to award fees and costs totaling $6,000. The court stated:

In addition to considering the degree of success obtained, the court has considered the twelve factors enumerated in Hensley ... and finds the following to militate in favor of the court's $6,000 award: (1) the time and labor required for this type of litigation; (2) the novelty and difficulty of this type of case; (3) the skill requisite to perform the legal service properly for this type of case; (5) [sic ] the experience, reputation, and ability of the attorneys; and (6) awards in similar cases.

Second Fee Ruling at 2.

The supplemental judgment was entered awarding $6,000 in fees and expenses, and this appeal followed.

II. DISCUSSION

There is no dispute here that, under 42 U.S.C. § 1988 (1994), Orchano should recover reasonable attorneys' fees. The legislative history of § 1988 makes clear that a plaintiff who has prevailed on a claim under § 1983 "should ordinarily recover an attorney's fee unless special circumstances would render such an award unjust." S.Rep. No. 94-1011, at 4 (1976), reprinted in 1976 U.S.C.C.A.N. 5908, 5912 (internal quotation marks omitted). "The function of an award of attorney's fees is to encourage the bringing of meritorious civil rights claims which might otherwise be abandoned because of the financial imperatives surrounding the hiring of competent counsel." Kerr v. Quinn, 692 F.2d 875, 877 (2d Cir.1982). What is at issue here is the district court's ruling that fees in excess of...