Deitz v. The Univ. Of Denver

Decision Date16 February 2011
Docket NumberCivil Action No. 97-cv-00897-WDM-OES,Civil Action No. 95-cv-02756-WDM-OES
PartiesSHEILA R. DEITZ, Plaintiff, v. THE UNIVERSITY OF DENVER, COLORADO SEMINARY, et al., Defendants.
CourtU.S. District Court — District of Colorado

SHEILA R. DEITZ, Plaintiff,
v.
THE UNIVERSITY OF DENVER, COLORADO SEMINARY, et al., Defendants.

Civil Action No. 95-cv-02756-WDM-OES
Civil Action No. 97-cv-00897-WDM-OES

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO

Dated: February 16, 2011


Senior Judge Walker D. Miller

ORDER ON OBJECTIONS TO MAGISTRATE JUDGE'S ORDERS

This resolves two long-pending motions concerning attorney fee lien claims against funds deposited in the court registry as part of the settlement of the underlying lawsuit. The first is Plaintiff Sheila R. Deitz's ("Deitz" or "Plaintiff") Motion for Dismissal of Lien and Certification (ECF No. 376) and the second is the motion of the Andrew T. Brake law firm ("Brake") for an order determining the allocation of settlement proceeds (ECF No. 414). Both motions were referred to Magistrate Judge O. Edward Schlatter who treated each as a non-dispositive motion to be decided by his own order pursuant to Fed. R. Civ. P. 72(a) and not as a dispositive matter to be the subject of his recommended disposition pursuant to Rule 72(b). On February 28, 2001, Judge Schlatter entered his order denying Deitz's motion for dismissal of lien and awarded lien claimant Nancy Johnson ("Johnson") her lien in the amount of $40,986.92 (ECF No. 409). On April 9, 2001, Judge Schlatter entered his order denying the Brake law firm's

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motion and directed that the Clerk disburse the settlement proceeds to Johnson (ECF No. 426). Plaintiff timely objected to Judge Schlatter's order denying her motion to dismiss (ECF No. 417) and Brake timely objected to Judge Schlatter's denial of its motion on April 19, 2001 (ECF No. 430). As part of the objection process the parties filed transcripts of the two-day motion hearing (ECF Nos. 428, 429 & 431). These objections are properly before me for resolution. I have fully reviewed the motions, briefs, objections and all other relevant pleadings, the transcripts and status hearings. I conclude that oral argument would not aid my decision-making process. For the reasons set forth below, I interpret Magistrate Judge Schlatter's orders as recommendations which I reject in part, accept in part, and modify in part pursuant to Rule 72(b)(3) as set forth below.

Background

Johnson1 filed this action on behalf of Deitz alleging claims of discrimination based on gender, disability, and retaliation ("Deitz I") on October 31, 1995. Compl., ECF No. 1. Johnson remained counsel of record until she was allowed to withdraw on March 15, 1996. Ex. 21. These disputes arose out of that representation.

Deitz was a psychologist employed as a full professor in the School of Professional Psychology at Defendant University of Denver ("DU"). Deitz advertised herself as a forensic psychologist who had consulted in more than 1, 000 legal cases, served as an expert witness in more than 200 cases, and had worked as a professor of

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law. See Ex. 36. Deitz also had some experience as a litigant, as she had previously sued her former employer, the University of North Dakota. Deitz's husband, William Thoms ("Thoms"), was an attorney and a law professor who specialized in labor and employment law. He was quite involved throughout Deitz's litigation against DU.

In September of 1995, Deitz retained Johnson to act as her attorney to review her claims and perhaps file suit against DU. Deitz agreed to pay Johnson $145 an hour which was a discount from her ordinary hourly rate of $160. See Ex. 1. As matters evolved, Johnson testified that Deitz and Thoms told her they would have significant money to spend on the case after January 1, 1996. It was agreed that Johnson would not be paid much until the first part of 1996, while in the meantime she would not be sending detailed bills. Id. In fact, the record indicates that no regular bills were ever sent, monthly or otherwise, during the entire period of representation.

The case apparently involved a multitude of issues concerning employment and status within an academic community. Those issues, combined with personalities of the parties, resulted in Johnson charging an extraordinary amount of time on this case. From the beginning until December 14, 1995, she claims to have spent 453.25 hours in a little over three months. See Deitz Case Timeline with Fees, Ex. 37. Between December 15, 1995, and January 31, 1996, she claims 319.10 hours, constituting 6.6 hours daily, including weekends and Christmas. For February, Johnson has claimed 339.42 hours, which reflects charging almost 12 hours for each of the month's 29 days. (It was leap year.) Ex. 37. For March, she charged 158.65 hours through March 22, 1996, representing over 7 hours per day, including weekends. For each and every day

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from February 1, 1996, until March 22, she billed an average of 9.7 hours daily.2 Id. Ultimately, she asserts spending 1, 270.42 hours in her time alone for total fees of $184,210.90, at $145 per hour. Id. Adding paralegal, law clerk and investigation fees raised her fee claim to $202,376.70, which, together with various expenses of $12,327.46, totaled $214,704.16. Ex. 38.

Against these accruing, unbilled charges, Deitz paid $8,500 in 1995. See last page of Ex. 38. In January 1996, rather than paying large amounts as Johnson expected, Deitz paid another $15,000 in three separate payments of $5,000. Id. 38. However, during that same time period Johnson's fees increased from $75,255 by the end of 1995 to $111,990.75 to January 31, 1996, representing additional fees of $36,635 for January. Accordingly, as of the end of January 1996, after deduction of the amounts paid by Deitz, Johnson was allegedly owed $88,490.75 for her fees alone without consideration of expenses and staff costs.3

In mid-February, the parties met to discuss the accruing fees and the failure of Deitz to pay. On February 19, 1996, Johnson presented her letter to Deitz and Thoms entitled "Amended Legal Services Agreement." Ex. 11. At the same time she presented a bill for services through February 18, 1996, which totaled $142,289 in fees. Ex. 43.4 The February 19 letter sets forth in detail the perceived demands of the

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litigation and the work to be performed by Johnson and others on behalf of both Deitz and Thoms. It addressed the fact that she had not received funds promised to her and different rates for various type of work needed to be charged to compensate her for continuing to represent Deitz in the litigation. The letter also emphasized the demands of Deitz's case were limiting her practice for other clients. Deitz and Thoms accepted and agreed to the terms of the February 19 letter and added a handwritten commitment to pay fees as follows: $6,200 on February 19, 1996; $28,000 to be paid on February 24, 1996; and $67,000 to be paid on March 1, 1996. Ex. 11 at 5. However, when Deitz and Thoms did not make the payment due on February 24, Johnson drafted a motion to withdraw and informed Deitz and Thoms of her intent to do so unless a payment was made.

The parties met again on Sunday, February 25, 1996, and important revisions were again made to their agreement, both in terms of services to be performed and amount owed for those services. As summarized in Johnson's February 26, 1996 letter to Deitz (Ex. 15), Thoms was to replace Johnson as primary counsel but she agreed to provide a limited scope of legal and paralegal services for which she was to be paid upon submission of her bill. As to the amount owed Johnson as of February 25, Johnson agreed to write down amounts due as summarized in her letter (Ex. 15):

I have agreed to write my bill down to a total of $120,000, less amounts already paid, totaling $29,600. [The amount was actually $29,700.00, see below.]. You agree to bring me your Uva [sic] check endorsed over to me on the day you receive it, and another check on March 1 in the amount of $65,000 (plus an additional $1,500 if Pat Pacey is unwilling to contract

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separately with Bill for the remainder of her fee for preparing her report.....)

The precise amount of this "write-down" is unclear. At the time of the February 19 conference, Johnson submitted a bill of $142,289 for her time alone. Ex. 43. As of February 25, the date of the "write-down, " she may have accrued as much as another forty or more hours since February 19. See Ex. 37 at p. 2. However, when she presented her fee claims for work performed after February 26, she expressly provided that her letter "bill" was pursuant "to the fee arrangement entered into with you and Bill Thoms on Sunday, February 25" and the statement was "for services rendered from and including February 26 through and including March 3, 1996." Ex. 18. Similarly, her second letter "bill" of March 18, 1996, provided that it too was pursuant to this February 25 agreement but covered the two-week period "including March 3-March 18, 1996." Ex. 26. From these exhibits and their sequence I infer that the "write-down" encompassed all fees and expenses through February 25, 1996, so that the total amount due Johnson as of that date was the stated $120,000 before any credits for payments actually made.5

Against that $120,000 and any other amounts found owing, it is undisputed that Deitz and Thomas paid Johnson the following amounts on the following dates. (See

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Ex. 38):

Oct. 6, 1995 1000.00

Oct. 23, 1995 1000.00

...

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