Daly v. Hill

Decision Date21 April 1986
Docket NumberNo. 84-1715,84-1715
Citation790 F.2d 1071
PartiesGeorge DALY, Nicholas Street and David Layton, Appellants, Margaret Suzanne Starnes, Appellee, v. Charles Vernon HILL; Ralph Eugene Miller; James Michael Neff; Paul Douglas; Johnny Wayne Wagner; Charles L. Waldrep and Gaston County, North Carolina, Appellees. In re Margaret Suzanne STARNES, Plaintiff, v. Charles Vernon HILL; Ralph Eugene Miller; James Michael Neff; Paul Douglas; Johnny Wayne Wagner; Charles L. Waldrep and Gaston County, North Carolina, Defendants.
CourtU.S. Court of Appeals — Fourth Circuit

Robert T. Wilder (George Daly, Charlotte, N.C., on brief) for appellants.

Frank B. Aycock, Charlotte, N.C., (Margaret Suzanne Starnes, pro se, on brief), for appellees.

Before RUSSELL and ERVIN, Circuit Judges, and KELLAM, United States District Judge for the Eastern District of Virginia, sitting by designation.

ERVIN, Circuit Judge:

This is an appeal from an order awarding attorney's fees to the plaintiff in a Sec. 1983 police brutality case, 589 F.Supp. 341 (W.D.N.C.1984). George Daly and Nicholas Street brought this action on behalf of Margaret Suzanne Starnes against Gaston County police officers and Gaston County, North Carolina. Starnes agreed to pay her attorneys a 25% contingency fee. The case settled before trial, resulting in a $35,000 damage award for Starnes. The consent decree contemplated an award of attorney's fees, costs and expenses to be determined by the court, in addition to the damage award. Daly, Street and Street's law partner, David Layton, then sought attorney's fees, costs and expenses under 42 U.S.C. Sec. 1988, as well as enforcement of the contingency fee agreement. In awarding fees, the district court disallowed certain requested hours and expenses, disallowed fees to Layton and reduced the allowable hourly rate for Daly and Street. The court declined to adjust the fee upward to account for excellent results obtained. The court also refused to grant additional compensation under the contingency fee agreement. Daly and Street now appeal, claiming that the district court abused its discretion by reducing the hourly rate, disallowing certain hours and expenses, refusing to adjust the award upward, and refusing to order compensation under the contingency fee agreement. We affirm in part and reverse in part.

I.

In the underlying Sec. 1983 action in this case, Starnes alleged that on the evening of May 27, 1982, Gaston County Sheriff's deputies in plain clothes driving an unmarked vehicle chased her without cause and shot at her car, very nearly hitting her. She alleged that at no time during this chase did they identify themselves as sheriff's deputies. Starnes was understandably terrified during this incident and alleged that she suffered continuing emotional harm thereafter. Criminal charges were brought as a result of this event, and four of the five deputies involved were indicted. None of the deputies were convicted following a September 1982 criminal trial at which Starnes testified.

Attorneys in the civil case discussed the possibility of settlement prior to the criminal trial. At that point Nicholas Street was sole counsel for the plaintiff. Street suggested a $60,000 settlement. Defense counsel Frank B. Aycock, III refused the offer, but indicated an interest in settling after the criminal trial. In October 1982, Street brought George Daly into the case due to Daly's expertise in civil rights actions. In January of 1983, after the criminal trial, Aycock suggested a $10,000 settlement. Daly then proposed a counter-offer of $200,000. At that point settlement negotiations broke off. Attorneys for both sides then engaged in discovery and preparation for trial. After resuming negotiations in December 1983, the parties reached a settlement, which was filed on March 5, 1984. Pursuant to the settlement, Starnes received $35,000 in damages and was entitled to recover "her costs, reasonable expenses and reasonable fee for her counsel, in amounts to be set by the court."

Daly, Street and Layton, Street's law partner, then filed a petition for attorney's fees, costs and expenses. They sought compensation for hours and rates as follows:

                Counsel             Hours              Rate                 Fee
                ------------------  -----------------  ----------------  ----------------------
                Daly                188.1              120               22,572.00
                Street              220.7               80               17,656.00
                Layton               20.2               80                  408.04 1
                Note FN1. It is unclear whether the requested fee for Layton represents an
                Note intentioonal reduction or an error in mathematics.  This discrepancy is of no
                Note consequeence, however, as Layton does not appeal the district court's decision
                Note denying him any attorney's fees in this case
                                                                         ----------------------
                Total                                                    40,636.04
                

In addition, they sought $5,466.07 in costs and expenses. They also requested that, to the extent they were not awarded all fees requested, the court enforce a contingency agreement between Starnes and her attorneys. The agreement contemplated that Starnes would pay her lawyers 25% of her net recovery. The agreement further stated that "client acknowledges that lawyers may, if successful, apply to the court for a further fee award, beyond the contingent fee she agrees to pay. Client understands that, were such a further award not a possibility, lawyers would not take her case except upon a substantially increased contingent fee." Daly and Street argue that under this contract Starnes was required to pay them any difference between their requested rates and hours and the attorney's fee awarded by the court.

In ruling on the petition for attorney's fees, costs and expenses, the district court considered the factors outlined in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.1974), and adopted by this court in Barber v. Kimbrell's, Inc., 577 F.2d 216, 226 (4th Cir.), cert. denied, 439 U.S. 934, 99 S.Ct. 329, 58 L.Ed.2d 330 (1978). 2 The court found, in part, that the case was not novel or difficult, that the skill required in the case was not greater than that usually required of Daly, that the attorneys were not precluded from other employment due to their acceptance of the case, 3 that the results obtained were "most satisfactory," that Daly was an experienced attorney in 1983 actions, and that the type of case was not "undesirable." Considering these factors and the affidavits submitted by the parties, the court concluded that the hourly rates requested by Daly and Street were unreasonable. Rather, $90 per hour was a proper rate for Daly's out-of-court work during 1982 and 1983, and $70 per hour was a proper rate for Street, particularly in light of the facts that Street practiced in Gastonia, North Carolina where customary rates tended to be lower than in Daly's location in Charlotte, North Carolina, and that Street did not have expertise in Sec. 1983 cases. Important to the court's reduction in the requested rates was its belief that it was not proper to award fees based upon current market rates. Rather, the court determined that fees should be awarded based upon the rates at the time the work was performed. The court did not adjust the rates from prior years to account for inflation or delay in payment.

The district court then considered the propriety of the hours claimed by the attorneys and concluded that certain requested hours were not reasonable. The court found that 24.6 hours spent by Daly and 10.3 hours spent by Street in preparing and arguing the motion for the fee award was "totally unreasonable in this case," (emphasis in original) because there was no dispute as to the attorneys' entitlement to fees, but only as to the amount of the fee award. The court found that five hours for Daly and two for Street was a proper allotment of time.

The court also found that 107.4 hours claimed by Street for client conversations was unreasonable. The court determined that "[t]en hours of conferences with the client would be a most generous allowance at $70 per hour. The court doubts that Mr. Street would have the gall to bill the plaintiff, a family friend, for the 107.4 hours in conversations." The court also found that Street's time charged for 84 different instances of "File Review" in conjunction with client conversations was not reasonable. Street had claimed 47 hours for depositions and preparation for depositions. The court found some of this time to be duplicative because most of the depositions were handled by Daly. Consequently Street was only entitled to compensation for 25 hours of deposition work. Finally, the court disallowed 1.5 hours claimed by Street for "File Review and conversations with staff about time," and 1.1 hours for "[t]elephone conversation with Press." In sum, of the 188.1 hours requested by Daly, 165.3 were allowed and 22.8 disallowed. Of the 220.7 hours requested by Street, 90.5 were allowed and 130.2 disallowed. The court also disallowed the 20.2 hours claimed by Layton, finding that he was not sufficiently involved in the case to warrant compensation.

In addition to attorney's fees, the Consent Decree provided for compensation for costs and expenses. The district court determined the expense award according to what would have been proper under 28 U.S.C. Sec. 1920 and Fed.R.Civ.P. 54(d) if the case had been tried. The court did not allow expenses for investigative charges, telephone charges, copying charges, postage charges, or attorney travel charges "because, if the attorneys are adequately compensated, those expenses are absorbed in the overhead and compensated for by the reasonable fee." Consequently, of the $5,683.52 in costs and expenses requested, the court allowed $4,028.10.

Finally, the court found that Daly and...

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