Feld v. Fireman's Fund Ins. Co.

• Decision Date: 07 December 2018
• Docket Number: No. 17-7169,17-7169
• Parties: Kenneth FELD, Appellant v. FIREMAN'S FUND INSURANCE COMPANY, Appellee
• Court: U.S. Court of Appeals — District of Columbia Circuit

909 F.3d 1186

Kenneth FELD, Appellant

v.FIREMAN'S FUND INSURANCE COMPANY, Appellee

No. 17-7169

United States Court of Appeals, District of Columbia Circuit.

Argued September 17, 2018

Decided December 7, 2018

Jonathan S. Franklin, Washington, DC, argued the cause for appellant. With him on the briefs was Matthew H. Kirtland.

Thomas S. Schaufelberger, Washington, DC, argued the cause for appellee. With him on the brief was Matthew J. Antonelli.

Before: Garland, Chief Judge, Griffith, Circuit Judge, and Edwards, Senior Circuit Judge.

Edwards, Senior Circuit Judge:

Appellant Kenneth Feld ("Feld") retained the law firm of Fulbright & Jaworski, LLP ("Fulbright") in 2008 to defend him in an action brought by his sister, Karen Feld ("Karen"). After a jury trial, Feld prevailed in that action. This case is a follow-up to the action between Feld and his sister. It involves a claim by Feld against appellee, Fireman's Fund Insurance Company ("FFIC"), for reimbursement of expenses, largely attorney fees, that he incurred in the action brought by his sister. According to Feld, FFIC has refused to reimburse him for the full amount of reasonable defense costs associated with the successful representation provided by Fulbright. FFIC, in turn, acknowledges that it agreed to cover Feld's defense costs and that it paid Fulbright over $2.1 million for its representation of Feld. However, FFIC contends that the additional $2.4 million in attorney's fees and costs sought by Feld are based on rates substantially higher than the rates agreed to by the parties.

Feld filed suit against FFIC in the District Court to recover the disputed expense costs. The District Court granted summary judgment in FFIC's favor. The court concluded that the parties had agreed to the rates at which FFIC paid Feld's counsel and, therefore, FFIC had satisfied its obligations to Feld. Feld v. Fireman's Fund Ins. Co ., 206 F.Supp.3d 378 (D.D.C. 2016), reconsideration denied , 263 F.Supp.3d 74 (D.D.C. 2017).

Feld's principal argument before the District Court, and this court as well, is that there was no "agreement" between the parties limiting fees and costs as FFIC suggests. In particular, Feld contends that

FFIC ... never identified any written agreement, instead arguing that the purported agreement was struck during a telephone call between an FFIC manager and a Fulbright associate and was confirmed when that associate sent an expressly non-binding budget estimating what the representation could cost if FFIC's preferred rates were used. But what transpired during that call was hotly disputed by the two participants, and the budget document expressly disclaimed any binding effect.

Appellant's Br. at 2–3. On this view of the record, Feld argues that the District Court erred in "holding that there was no dispute of material fact as to whether the parties entered into a binding, enforceable agreement." Id. at 3. In rejecting Feld's claim, the District Court observed that, "[w]hen the full history of the dealings between Feld (or Fulbright on his behalf) and FFIC is examined, it would take a contortionist to twist the facts to support the absence of a rate agreement." Feld , 206 F.Supp.3d at 389–90. We disagree.

Summary judgment is proper only if, viewing the evidence in the light most favorable to the non-movant and drawing all justifiable inferences in its favor, there are no genuine disputes of material fact for a jury to resolve. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247–48, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The record in this case indicates that the parties never reduced any purported rate agreement to writing. Instead, FFIC relies on genuinely disputed communications between the parties' representatives to support its position. And the disputed communications to which FFIC points do not unambiguously show that the parties entered a rate agreement as asserted by FFIC. Summary judgment cannot be granted on these terms. We therefore reverse this portion of the District Court's judgment and remand the case for trial. However, we affirm the District Court's denial of Feld's Motion to Compel certain communications between FFIC and its attorneys.

I. BACKGROUND

A. Factual Background

Feld's aunt passed away in September 2007. At the time of her death, the aunt resided in a condo owned by Feld in Washington, D.C. Feld hosted a Shiva—a Jewish mourning ritual—for his aunt in the condo. His sister, Karen, attended the Shiva, but she was eventually removed from the condo building by security guards who had been hired by Feld. In September 2008, Karen filed suit against Feld for injuries allegedly sustained during her removal from the building, raising claims of assault, battery, false imprisonment, intentional infliction of emotional distress, and negligent infliction of emotional distress. See Complaint, Feld v. Feld , No. 08-cv-01557 (D.D.C. Sept. 9, 2008), reprinted in Joint Appendix ("J.A.") 267–99 (the "Underlying Litigation"). Feld retained Fulbright to defend him in the Underlying Litigation. In April 2009, the District Court in the Underlying Litigation dismissed the negligent infliction of emotional distress claim. Feld then filed an Answer and Counterclaim, raising self-defense and defense of property affirmative defenses and countersuing Karen for trespass.

During the relevant time period, Feld held two insurance policies with FFIC: a homeowner's insurance policy and an excess policy. See J.A. 194–223 (primary policy); J.A. 224–40 (excess policy). Each of those policies provided liability insurance coverage for bodily injuries to others. Both policies excluded coverage for intentional tort claims, but provided coverage if those acts were committed in defense of self or property. Each policy also provided coverage of legal defense expenses for covered claims.

In June 2009, Feld notified FFIC of Karen's case against him. FFIC assigned the claim to Charles Kirk ("Kirk"), who was then employed by FFIC as a "high-exposure director." In August 2009, Kirk sent Feld a letter expressing FFIC's agreement to defend Feld in the Underlying Litigation "subject to a full and complete reservation of all of FFIC's rights under the terms and conditions of the Policy." J.A. 345. The August 2009 letter noted that "[a]ll of the claims of the Complaint allege intentional conduct by Kenneth Feld" and, therefore, "are not covered by" Feld's policies. J.A. 353. However, FFIC agreed to pay for a defense "because Mr. Feld has denied the allegations and has alleged that he was acting in ‘self-defense.’ " Id. at 354.

Although FFIC agreed to defend Feld, it reserved the right "to withdraw from the defense of Kenneth Feld in the Underlying Action and to deny coverage when and if further investigation reveals that there is no coverage existing under the Policy [and/or] that Kenneth Feld was not acting in self-defense." Id. FFIC further "reserve[d] the right to seek contribution and/or reimbursement from Kenneth Feld for any and all defense costs and/or other monies paid, for which it is determined that there is no coverage." Id.

The August 2009 letter also provided:

Subject to [FFIC's] reservation of rights, you may elect to choose your own counsel to defend you in this matter; otherwise we can appoint counsel for you. FFIC agrees to pay, at an agreed hourly rate, the reasonable and necessary legal fees and Court costs incurred by counsel to defend you subsequent to the date this matter was tendered to FFIC under a full reservation of rights....

Id. In his deposition, Kirk explained that FFIC had two approaches to paying independent counsel. If FFIC reached a rate agreement with the insured's selected counsel, FFIC would pay all of the fees charged. If a rate agreement was not reached, however, FFIC would give the insured the option of either "locating other alternative counsel or paying the differential between what [FFIC was] proposing and what [independent counsel] was going to charge." J.A. 422.

In mid-September 2009, Kirk spoke on the phone with Fulbright associate Caroline Mew ("Mew") regarding FFIC payment of Fulbright's fees in the Underlying Litigation. During that conversation, Kirk suggested that FFIC could pay rates as high as $250 per hour for partners, $200 per hour for associates, and $95 per hour for paralegals. See J.A. 408. Mew acknowledged these rates but did not accept them during the September call. See J.A. 364, 409. In addition, Mew informed Kirk that Fulbright was then billing over $500 per hour. See J.A. 408–09.

Kirk and Mew spoke again on October 4, 2009. By this point, Mew had informed Kirk that Feld was planning to remain with Fulbright regardless of the outcome of Fulbright's discussions with FFIC about payment rates. See J.A. 427. During his deposition, Kirk testified that, during the October 4 call, he and Mew "discuss[ed] 225 for an associate rather than 200." J.A. 419. Although he could not recall whether Mew ever used the word "agree," his recollection of the October 4 call was that Mew "asked [him] if [he] could increase the rates from the initial ones [he] proposed back in September," he agreed to do so, and she "thanked [him] for that." J.A. 439. Kirk testified that he "took that to mean that going forward, those would be the rates that would be billed on this case." Id. Mew, on the other hand, testified that she did not respond to FFIC's proposed rates during the October 4, 2009 phone call. See J.A. 366 ("Q: And how did you respond? A: I didn't. He was just telling me FFIC's stated position.").

Following the phone call on October 4, 2009, Kirk sent Mew a follow-up email. That email stated: "As insured selected counsel, we will agree to pay a rate not to exceed $250/hour for partners; $225/hour for associates; and $100/hour for paralegals. Any amount in excess of those rates would continue to be the insured's responsibility." J.A. 521. Kirk also attached FFIC's billing guidelines and requested an "initial evaluation report." Id. The billing...