Feld v. Fireman's Fund Ins. Co.

Decision Date09 March 2020
Docket NumberCivil No. 12-1789 (JDB)
CourtU.S. District Court — District of Columbia

Plaintiff Kenneth Feld and his insurer, defendant Fireman's Fund Insurance Company ("FFIC"), have been fighting over attorney's fees for the better part of a decade. The present fees action stems from a separate personal injury dispute between Feld and his sister, filed in 2008, in which Feld incurred more than $4.5 million in legal fees and costs. FFIC paid over $2 million but refused to fully reimburse him, and Feld filed this suit in 2012 in an attempt to force FFIC to pay up in full. A lengthy discovery period ensued, followed by several motions, a trip to the court of appeals, and a trial. Now before the Court is Feld's motion for attorney's fees. He seeks the remainder of what he claims FFIC owes him for the initial dispute, prejudgment interest on that amount, and fees and expenses for this litigation (which itself has been contested for nearly eight years).

For the reasons explained below, the Court will (1) grant the motion in full as to the fees for the initial dispute, (2) grant the motion in part as to the fees and expenses for this litigation, and (3) deny the motion as to the requested prejudgment interest.

I. Background

The facts of this case have been summarized at length in prior opinions of this Court and in the D.C. Circuit's opinion, see Feld v. Fireman's Fund Ins. Co., 909 F.3d 1186, 1190-93 (D.C. Cir. 2018); Feld v. Fireman's Fund Ins. Co., 292 F.R.D. 129, 132-34 (D.D.C. 2013), so a brief recitation of the details will suffice here. In 2007, Feld hosted a Shiva—a Jewish mourning ritual—for his recently deceased aunt in a condo he owned in Washington, D.C. Feld, 909 F.3d at 1190. He hired security guards for the event. Id. His sister, Karen, attended the Shiva but was later ejected from the condo building by Feld's guards. Id. Karen sued Feld in 2008 for injuries allegedly sustained during her removal from the building. Id.

At the relevant time, Feld had personal liability insurance coverage through FFIC that "provided that FFIC would defend Feld against covered claims or suits against him." Feld v. Fireman's Fund Ins. Co., 206 F. Supp. 3d 378, 381 (D.D.C. 2016). Feld notified FFIC of Karen's personal injury suit against him (the "Underlying Litigation"), and FFIC agreed to both provide a defense and permit Feld to select his own counsel. Id.

Feld selected the law firm Fulbright & Jaworski, LLP1 to represent him in the Underlying Litigation, which culminated in a highly publicized and contentious two-week jury trial. Id. The jury found Feld not liable for any of the claims. See Feld, 909 F.3d at 1193. The lengthy and hard-fought litigation ended up generating a legal bill of more than $4.5 million dollars. Feld, 206 F. Supp. 3d at 381. But FFIC reimbursed Feld for only $2.1 million, insisting that Fulbright was bound by an alleged "rate agreement" that capped Fulbright's reimbursable rates at $250/hour for partners, $225/hour for associates, and $100/hour for paralegals. Feld, 909 F.3d at 1191-93.About $2.2 million of the remaining $2.4 million of unreimbursed fees and expenses resulted from the "disparity between the hourly rates charged by Fulbright and those paid by FFIC," and the last $200,000 related to certain costs and expenses that FFIC deemed unreasonable. Id. at 1193.

Feld filed this action (the "Fee Litigation") in November 2012 to recover the outstanding $2.4 million, claiming that FFIC had breached its "contractual obligation to pay reasonable defense fees and expenses." Id. In late 2015, following discovery, both parties moved for summary judgment. See Def. FFIC's Mot. for Summ. J. & Mem. of P. & A. in Supp. Thereof [ECF No. 68]; Pl. Kenneth Feld's Mot. for Summ. J. & Statement of Supporting P. & A. [ECF No. 69]. The primary issue on summary judgment was whether a rate agreement had existed. See Feld, 206 F. Supp. 3d at 381. The parties' briefing also put the reasonableness of the hours billed by Fulbright into dispute. See, e.g., Def. FFIC's Opp'n to Pl.'s Mot. for Summ. J. [ECF No. 83] at 21 ("Not only are the rates sought by Feld unreasonable, but many of the tasks for which he seeks reimbursement are on their face unreasonable."); Reply to Def. FFIC's Opp'n to Pl. Kenneth Feld's Mot. for Summ. J. [ECF No. 89] at 20-21 ("By approving as reasonable and necessary 98% of the hours for which Mr. Feld sought reimbursement, FFIC has waived its ability to argue that those same hours were unreasonable.").

The Court ruled on the summary judgment motions in September 2016. The Court's opinion resolved three issues. First, it rejected an argument made by FFIC that Feld had provided FFIC with "late notice" of his insurance claim. See Feld, 206 F. Supp. 3d at 384. Second, the Court held that a rate agreement existed as a matter of law, and thus Feld's "breach of contract action fail[ed] as to the $2,224,121.61 attributable solely to the parties' dispute as to attorney rates." Id. at 389-90 (internal quotation marks omitted). Third, the Court rejected Feld's claim that FFIC had breached an implied covenant of good faith and fair dealing. Id. at 393. The Court'sopinion also, in Section III, left in dispute at least one issue: whether FFIC had "breached its obligation to pay reasonable expenses." Id. at 392. The opinion did not explicitly address the reasonableness of the hours billed by Fulbright.

After the Court's summary judgment opinion was issued, the parties began negotiations to "settle the issues remaining before the Court." Joint Status Report [ECF No. 98] at 1. On November 6, 2017, the parties filed a joint stipulation for partial dismissal with prejudice, informing the Court that they had "entered into a Settlement Agreement and Partial Release . . . with respect to any and all matters remaining in dispute in the Lawsuit after the entry of the Court's [September 12, 2016 opinion], including those parts of Plaintiff's claims identified in Section III." Joint Stip. For Partial Dismissal with Prejudice & Entry of Final J. [ECF No. 102] at 1. The stipulation noted that the agreement "does not apply to those matters resolved through the Memorandum Opinion." Id. The Court thereafter entered an order dismissing the case with prejudice pursuant to the terms of the parties' Settlement Agreement, retaining jurisdiction only to enforce the terms of the agreement. Order of Nov. 8, 2017 [ECF No. 103].

Feld then appealed to the D.C. Circuit, primarily challenging this Court's ruling that a binding rate agreement existed as a matter of law. See Pl.'s Notice of Appeal [ECF No. 104]; Feld, 909 F.3d at 1193. Finding material facts at issue, the D.C. Circuit vacated this Court's decision and remanded for a jury trial on the question whether a rate agreement existed, noting that "[i]f the jury reaches a verdict in favor of Feld and finds that no agreement was reached, then a determination will have to be made regarding reasonable rates for fees." Feld, 909 F.3d at 1198.

This Court held a trial on the rate agreement question in July 2019. The jury found that FFIC had not proven that a rate agreement existed. See Verdict Form [ECF No. 147]. The Court then set a briefing schedule for the present motion for attorney's fees. That briefing revealed thatFeld and Fulbright had entered into a contingency fee agreement with respect to the Fee Litigation, see Post-Trial Br. in Supp. of Pl. Kenneth Feld's Reasonable Att'y's Fees & Expenses ("Feld Br.") [ECF No. 157] at 44 n.33, and the Court ordered Feld to file that agreement under seal, see Minute Order of Dec. 16, 2019.

The contingency fee agreement "memorializes the terms and conditions" for Fulbright's representation of Feld in the Fee Litigation. Fee Agreement [ECF No. 170-1] at 1. The agreement was "in lieu of an hourly billing arrangement" and provides that Feld will pay Fulbright a percentage of the "Gross Recovery" obtained in the Fee Litigation, with the percentage varying depending on when recovery is obtained. Id. at 1-2. For instance, if recovery is obtained after discovery but before trial, Feld would owe Fulbright 33% of the Gross Recovery; if recovery is obtained after the first day of trial, he would owe Fulbright 40% of the Gross Recovery. See id. Gross Recovery means "any recovery actually obtained and received from FFIC by settlement or judgment or otherwise, on account of any or all of the Client Claims." Id. at 2. As the case is now in the post-trial stage of litigation, Feld owes Fulbright 40% of the Gross Recovery. The agreement also provides that Feld is responsible for "pay[ing] all charges for other services and expenses . . . incurred," such as for "messenger fees" or "postage." Id. Moreover, the agreement "does not include the prosecution or defense of any appeals." Id. at 1.

After receiving the fee agreement, the Court held a motions hearing on December 17, 2019. At the hearing, it emerged that the Court needed additional briefing on two issues: (1) whether FFIC had "legally waived or otherwise forfeited its right to challenge the reasonableness of hours with respect to the underlying litigation" and (2) the appropriateness of the contingency fee agreement and its possible effect on the calculation of attorney's fees. See Minute Entry of Dec.17, 2019. The Court has now received the supplemental briefing, and the motion for attorney's fees is ripe for decision.

II. Legal Framework

The applicable state law governing Feld's insurance policy, and thus this attorney's fees request, is Maryland law. See Feld, 909 F.3d at 1194; United States v. One Parcel of Property Located at 414 Kings Highway, 1999 WL 301704, at *4 (D.D.C. May 11, 1999) ("In diversity cases, attorney's fees are considered substantive and are controlled by state law." (citing Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 259 n.31 (1975))). In Maryland, "[t]he pa...

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