Bodine v. Federal Kemper Life Assur. Co.
| Decision Date | 02 April 1992 |
| Docket Number | No. 85-1814-Civ-T-17.,85-1814-Civ-T-17. |
| Parties | Edmund J. BODINE, Jr., Plaintiff, v. FEDERAL KEMPER LIFE ASSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Middle District of Florida |
Peter W. Martin, Timothy Litchet, Martin & Bomar, Chartered, Sarasota, Fla., Mark R. Wolfe, Emmett Abdoney, P.A., Tampa, Fla., for plaintiff.
Edward F. Gerace, Kass Hodges, P.A., Tampa, Fla., for Peter Martin.
Ted R. Manry, III, James M. Martin, MacFarlane, Ferguson, Allison & Kelly, Tampa, Fla., for Kemper Life Ins. Companies and Amex Life Assur. Co.
Michael A. Tonelli, Barr, Murman & Tonelli, P.A., Tampa, Fla., for Attorney's Group Ins. Administrators.
Morris Weinberg, Jr., Robert W. Courtney, Tampa, Fla., Gary V. Dixon, Ross, Dixon & Masback, Washington, D.C., for John Patrick Fisher individually and on Behalf of Underwriters at Lloyds of London.
This cause is before the Court on a report and recommendation issued by Magistrate/Judge Charles R. Wilson on November 6, 1991 and supplement to report and recommendation issued on November 26, 1991. The Court specifically referred the motion for an order determining the amount of charging lien to the assigned Magistrate/Judge. The Magistrate/Judge recommended that the motion be granted in the amount of $450,081.82, plus interest.
Pursuant to Rule 6.02, Rules of the United States District Court for the Middle District of Florida, the parties had ten (10) days after service to file written objections to the proposed findings and recommendations, or be barred from attacking the factual findings on appeal. Nettles v. Wainwright, 677 F.2d 404 (5th Cir.1982) (en banc). Objections were filed by plaintiff on the report and recommendation and supplement to report and recommendation on November 18, 1991, and December 5, 1991, respectively.
On October 31, 1985, Edmund J. Bodine Jr. retained Peter W. Martin, of Martin & Stinnett, P.A. to represent him, pursuant to a written contingency fee agreement providing Martin up to 50% of any recovery, if appealed, in the prosecution of a lawsuit against Federal Kemper Life Assurance Company. During the lawsuit's pendency at trial, Mr. Bodine filed for bankruptcy in the Southern District of New York on June 5, 1986. Notwithstanding, over the course of 4 years, Martin principally conducted the case, which involved complex and uncertain legal theories, ultimately advancing it to a successful and considerable trial judgment of $1 million. Subsequent to Federal Kemper seeking appeal of the trial court judgment, Martin agreed, in July, 1989, to renegotiate the contingency fee agreement to substitute a flat rate of 46% of any recovery for the earlier 50% ceiling. Afterwards, Martin prepared and filed written briefs and personally appeared and argued the case before the Eleventh Circuit Court of Appeals. Shortly before the Eleventh Circuit's decision reducing Bodine's recovery to $750,000.00, Bodine discharged Martin from the action and retained new counsel, which managed matters thereafter.
Martin moved to enforce an attorney's charging lien against the judgment, and this court reserved jurisdiction to determine the amount of the lien and to enforce said lien by order of December 13, 1990. Also, on April 18, 1991, at the urging of Mr. Bodine and the application of the Trustee, the United States Bankruptcy Court Southern District of New York modified the automatic stay in the related bankruptcy proceedings to permit this Court to determine issues regarding Mr. Martin's charging lien. Upon referral of the matter for a report and recommendation, Mr. Bodine persuasively convinced the Magistrate/Judge that the contingency fee agreements were merely executory contracts rendered unenforceable by reason of § 365 of the Bankruptcy Code, and that quantum meruit was the appropriate means of determining the amount of the charging lien. Thereafter, the Magistrate/Judge held a subsequent evidentiary hearing in order to assess the charging lien on a quantum meruit basis. On November 6, 1991, the Magistrate/Judge issued his report and recommendation finding 1,200 hours at $300 per hour to be reasonable in light of the circumstances involving Martin's services, and advised that a charging lien be assessed for these services on Bodine's behalf in the sum of $360,000.00. This amount equated to 48% of Bodine's gross award of $750,000.00 in the underlying action. When Federal Kemper finally satisfied the judgment with a total payment of $937,607.47, Martin sought a pro-rata share of the additional monies. On Martin's motion, the Magistrate/Judge issued a supplement to report and recommendation dated November 26, 1991, modifying the lien to include an additional $90,081.82 denoted as Martin's share of the interest received by Bodine on his recovery.
The report and recommendation applied the lodestar standards set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974), and considered each element of this analysis in separate sections. Bodine asserts several points of contention with the report raised in the objections: 1) bankruptcy law guides this court's determination of the charging lien and forecloses any recovery of fees by Martin as he purportedly failed to follow bankruptcy procedures; 2) the lodestar standards of Johnson v. Georgia Highway Express, Inc., supra, are inapplicable to the determination of attorney's fees against an attorney's own client; 3) those hours awarded Martin in excess of 950 to 1000 are clearly excessive and lack proper supporting evidence; 4) a rate of $300 per hour is clearly excessive, with $100 to $200 per hour more accurately reflecting a standard and reasonable charge; 5) the quantum meruit award of attorney's fees equating to 48% of Bodine's recovery improperly exceeded the maximum limits of a prior contingency fee agreement of the parties; 6) addition to the charging lien of 48% pro-rata share in interest awarded to plaintiff on his recovery was erroneous; 7) several motions made prior to the hearing were improperly denied. The Court will address these objections in turn.
As an initial matter, the Court specifically overrules plaintiff's objections contending that bankruptcy precedents bind resolution of the issues before it. In this regard, plaintiff asserts that Martin failed to apply to the bankruptcy court for permission to continue as attorney in the Federal Kemper case, and implores that bankruptcy laws operate to foreclose any recovery of attorney's fees under such a circumstance. Also, plaintiff objects to the Magistrate/Judge's utilization of non-bankruptcy precedents relating to time records and determination of the lien amount. However, plaintiff fails to recognize that such matters are not the concern of this Court.
Alternatively, the concerns raised by the plaintiff focusing upon an attorney's application to represent the estate or the trustee, and the submission of detailed, contemporaneous time records in support of a fee application, refer directly to the administration of the bankruptcy estate. Section 327 of the Bankruptcy Code, and related Bankruptcy Rules, counsel that court approval is necessary to validate the trustee's or estate's employment of attorneys and other professional persons. Such approval relates to the management and preservation of the bankruptcy estate. However, the manner in which the New York bankruptcy court administers an estate or renders professional compensation is not this Court's province.
Specifically, the Bankruptcy Court involved here issued an order dated April 18, 1991, expressly modifying the automatic stay in plaintiff's bankruptcy case to allow this Court "to hear and determine any and all issues regarding the validity as between debtor and his attorneys of the charging liens for attorney's fees in this matter." emphasis supplied. Consequently, the Court resigns itself to determining the validity and amount of the charging lien as between plaintiff and Martin, and leaves to the Bankruptcy Court decisions relating to representation of the trustee or estate. In this regard, bankruptcy law principles do not govern the existence or amount of an attorney's charging lien for services rendered in a non-bankruptcy case. See, e.g., Adams, George, Lee, Schulte, & Ward, P.A. v. Westinghouse Elec. Corp., 597 F.2d 570 (5th Cir.1979); United States v. Transocean Air Lines, Inc., 356 F.2d 702 (5th Cir.1966); In re Banks, 94 B.R. 772 (Bankr. M.D.Fla.1989). Moreover, the Court notes that plaintiff's own efforts were instrumental in the Bankruptcy Court modifying its stay and is somewhat wary of his attempts to now cast the issues as determinable under bankruptcy principles. For the foregoing reasons, the plaintiff's objections relating to the Magistrate/Judge's utilization of non-bankruptcy precedents in his report and recommendation regarding the validity of the charging lien, as it exists between plaintiff and Martin, are overruled.
The Court finds that the Magistrate/Judge properly relied on the standards outlined in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974), and overrules the plaintiff's objection maintaining that such standards are inapplicable to this case. In objecting to the Magistrate/Judge's utilization of the lodestar analysis in Johnson, the plaintiff asserts that this analysis applies only to attorney's fees rendered against an opposing party, and states that "there are no cases where a lodestar multiplier was applied against an attorney's own client. . . ." The Court cannot agree with the plaintiff's contentions on this matter, as several cases exist where the Johnson standards are specifically applied to ascertain the amount of fees a client owes its attorney. See, e.g., In re TLC of Lake Wales, 13 B.R. 593 (Bankr.M.D...
To continue reading
Request your trial