Cunningham v. City of McKeesport

• Decision Date: 13 February 1985
• Docket Number: No. 84-3209,84-3209
• Citation: 753 F.2d 262
• Parties: Rebecca L. CUNNINGHAM, an individual, Appellant v. The CITY OF McKEESPORT, William Weissert, Samuel R. Vidnovic, Gerald F. Boyle, Joseph P. Graziano, James Heatherington, Charles A. Sharbaugh, Nicholas J. Skezas, Carolyn O. Young and Omslaer Wrecking Co., Robert Clyde Omslaer t/d/b/a Omslaer Wrecking Company.
• Court: U.S. Court of Appeals — Third Circuit

Page 262

753 F.2d 262

Rebecca L. CUNNINGHAM, an individual, Appellant v. The CITY OF McKEESPORT, William Weissert, Samuel R Vidnovic, Gerald F. Boyle, Joseph P. Graziano, James Heatherington, Charles A. Sharbaugh, Nicholas J. Skezas Carolyn O. Young and Omslaer Wrecking Co., Robert Clyde Omslaer t/d/b/a Omslaer Wrecking Company.

No. 84-3209.

United States Court of Appeals Third Circuit.

Argued Oct. 25, 1984.

Decided Jan. 15, 1985.

Rehearing and Rehearing En Banc

Denied Feb. 13, 1985.

James R. Cooney (Argued), Nernberg & Laffey, Pittsburgh, Pa., for appellant.

Deborah R. Olszewski (Argued), Trushel, Wood & Israel, Pittsburgh, Pa., for appellees.

Before GIBBONS and BECKER, Circuit Judges, and KATZ, District Judge ^*.

OPINION OF THE COURT

GIBBONS, Circuit Judge.

Rebecca Cunningham, a successful plaintiff in a civil action brought pursuant to 42 U.S.C. Sec. 1983 (1982) against the City of McKeesport, Pennsylvania, its building inspector, and others, appeals from the judgment awarding attorneys' fees. Pursuant to 42 U.S.C. Sec. 1988 (1982), she requested a fee award of $35,887.50. The court awarded $5,875.00. Cunningham contends that the court erred in reducing the requested fees to this extent. Because the court did not properly apply the standards applicable for statutory fee awards in this circuit, we reverse.

I. The Underlying Case

Cunningham, in 1980, purchased an unoccupied house and garage in the City of McKeesport from the United States Department of Housing and Urban Development for $2,700. Cunningham made some minor repairs. She then applied for a subsidized loan from the Improvement Program of Allegheny County (IMPAC) which approved a $15,000 interest-free loan to be repaid in fifteen years. Cunningham, intending to live in this house, then contracted to have the property rehabilitated for $15,000. Before the rehabilitation work could be commenced, without prior notice to Cunningham, the City of McKeesport demolished the house and garage.

To seek redress, Cunningham retained the Pittsburgh firm of Nernberg & Laffey which accepted her case on a contingent fee basis. It assigned primary responsibility to an associate, James R. Cooney, who, after investigating the circumstances leading to the demolition, filed a complaint on her behalf charging that the defendants had deprived her of property without due process. The complaint sought recovery for the post-renovation market value of the house, for loss of the opportunity to receive the $15,000 interest free loan, for emotional distress, and for punitive damages. The defendants contested both liability and damages, and asserted several affirmative defenses including immunity. Both parties engaged in extensive discovery. At a pretrial conference the trial court ordered that briefs be filed on a number of contested issues, and that the parties submit proposed points for charge with legal citations for each point raised.

Trial began on April 12, 1983 and continued through April 15, 1983. At the end of the plaintiff's case the trial court directed a verdict in favor of some defendants. The trial continued against the City, the building inspector, and the demolition contractor. The case was submitted to the jury on special verdict interrogatories. The jury returned a verdict in favor of the demolition contractor, but against the City and the building inspector. It found that these defendants had deprived her of property without due process of law in violation of 42 U.S.C. Sec. 1983. In answer to the question "[w]hat was the market value, if any, of plaintiff Rebecca Cunningham's house and garage immediately prior to demolition?" the jury answered $20,000. In answer to the question "[w]hat damages, if any, is plaintiff Rebecca Cunningham to recover for the loss of the IMPAC loan?" the jury answered $15,000. Thus the verdict would support a judgment in Cunningham's favor for $35,000.

Following the verdict the City and the building inspector moved for a new trial on the ground that the court erred in admitting testimony concerning the interest-free loan. They also moved for a remittitur on the ground that the jury verdict finding a value of $20,000 for the house and garage was not supported by the evidence. They urged, as well, that the court committed several trial errors requiring a new trial. Cunningham moved to amend the verdict to include pre-judgment interest. The trial court, by order, directed that the parties file briefs on these motions.

In its ruling on the post-trial motions the trial court declined to award Cunningham pre-judgment interest, reduced the award for destruction of the house and garage to $17,000, and held that the value of the interest-free loan was not a proper element of damages. It denied the defendants' motion for a new trial. Judgment was entered in Cunningham's favor against the City and the building inspector for $17,000. Neither party has appealed from this part of the judgment although counsel for Cunningham advised her that the verdict should not have been reduced.

II. The Fee Award

Cunningham filed a timely motion, pursuant to 42 U.S.C. Sec. 1988 (1982) for an award of counsel fees. In support of that motion she filed the affidavit of James R. Cooney. That affidavit states in detail the number of hours spent by Cooney in various stages of trial preparation and trial. Cooney claims he spent 50 hours prior to filing the complaint, 247.75 hours in pretrial discovery activities, trial preparation, and trial, and 16.75 hours on post-trial motions; a total of 314.50 hours. In addition, W. Thomas Laffey, a partner in Nernberg & Laffey, spent 11.5 hours in trial preparation activities. Laffey also spent 32 hours giving direction and supervision to Mr. Cooney, for which no compensation was sought.

Cooney's affidavit states that "[t]he ordinary billing rate for work performed by Mr. Cooney during the course of this case was $100.00 per hour, and the ordinary billing rate for work performed by Mr. Laffey during the course of this case was $125.00 per hour all on a monthly basis." Cooney Affidavit, App. 55a. It also states that "[o]f the total work performed by Nernberg & Laffey, approximately 75% of the work is performed on a per hour basis, with the balance of approximately 25% of the work performed being in the nature of personal injury/contingent fee litigation. During the pendency of this case, a substantial amount of the work performed and hours expended on this matter were diverted from other work pending in the office which could have been billed at a per hour fee charge." Cooney Affidavit, App. 56a.

The defendants filed no affidavits in opposition to the motion for an award of counsel fees, and did not seek an opportunity to cross-examine Cooney on his affidavit. Thus no challenge was made to the accuracy of the Cooney affidavit. Instead a brief was filed advancing two legal arguments. Defendants contended, first, that since Cunningham had agreed to a contingent fee arrangement, she should not be permitted to recover a fee under section 1988. Alternatively they argued that since Cunningham was pursuing vindication of her own civil rights, not those of the public at large, she is not entitled to a section 1988 award.

Despite the fact that Cooney's affidavit was uncontradicted, on February 14, 1984, the trial court ordered that counsel for Cunningham file a supplemental affidavit setting forth the precise number of hours devoted to specific tasks. The court also ordered disclosure of the contingent fee agreement. Counsel complied with this order, filing a new affidavit on March 6, 1984. No opposing affidavit was filed by the defendants; no request was made to cross-examine Cooney; no further briefing occurred; no argument was held. On March 19, 1984 the court entered an order awarding $5,875.

In justifying this figure the trial court disallowed all but 219 hours of the time set forth in Cooney's affidavit. Moreover it disregarded Cooney's sworn statement that Nernberg & Laffey ordinarily billed $100 per hour for his time, awarding instead, $50 per hour. This produced a lodestar calculation for time spent on the case of $10,950, which was then reduced by 50%. In supporting that downward adjustment the court reasoned:

The Lindy amount as calculated above will be subject to a post-Lindy discretionary adjustment. See, Ursic v. Bethlehem Mines, 719 F.2d at 677. Plaintiff's counsel did not successfully advance new law which might serve the public interest in the future. The decision affected only an individual plaintiff who was subject to an isolated act of deprivation for which she was adequately compensated. There was no indication of bad faith in defense of the action. See Swicker v. William Armstrong & Sons, Inc., 484 F.Supp. 762, 766 (E.D.Pa.1980). In light of these considerations, a reduction of the Lindy amount by 50% to $5475 is fair and equitable in this case.

App. 80a. Cunningham requested compensation for 15 hours devoted to prosecution of the fee petition. The court concluded that only 8 hours should reasonably have been devoted to that task, and awarded $400. Thus the total award was $5875. ¹

III. Our Ruling

It has long been settled in this court that the standards for resolution of disputes over attorneys' fees in statutory fee cases are those first announced for fund in court cases in Lindy Bros. Bldrs., Inc. of Phila. v. Am. Radiator & Standard Sanitary Corp., 487 F.2d 161, 165 (3d Cir.1973) (Lindy I ). ² Recently we resurveyed those standards in In re Fine Paper Antitrust Litigation, 751 F.2d 562 (3d Cir.1984). Under the governing law in the Circuit the judgment of the district court must be reversed.

A. Calculation of the Lodestar

Disputes over awards of attorneys' fees, whether in equitable fund cases or in statutory fee cases, must be resolved in a manner which affords the parties an opportunity for a hearing to present evidence on disputed issues of fact as to what hours should be...