Friolo v. Frankel, 825

Citation28 A.3d 752,201 Md.App. 79
Decision Date07 September 2011
Docket NumberSept. Term,No. 825,2010.,825
PartiesJoy FRIOLOv.Douglas FRANKEL, M.D., et al.
CourtCourt of Special Appeals of Maryland

OPINION TEXT STARTS HERE

Leizer Z. Goldsmith, Washington, D.C., for appellant.Matthew J. Focht (Gerard J. Emig, Gleason, Flynn, Emig & Fogleman Chartered, on the brief), Rockville, MD, for appellee.Panel: MATRICCIANI, WATTS and IRMA S. RAKER (Retired, Specially Assigned), JJ.MATRICCIANI, J.

On February 4, 2000, appellant, Joy Friolo, filed a complaint in the Circuit Court for Montgomery County against appellees, Douglas Frankel and the Maryland/Virginia Med Trauma Group. On July 3, 2001, the court entered judgment in favor of Friolo in the amount of $11,778.85 and awarded her attorney's fees of $4,711.00 and $1,552.00 in costs. The Court of Appeals vacated the judgment awarding attorney's fees and costs and remanded the case, and on March 18, 2005, the circuit court entered a second judgment awarding Friolo attorney's fees of $65,348.00. After both parties filed appeals, this Court issued an opinion vacating the judgment and remanding the case for further proceedings in circuit court, and the Court of Appeals affirmed that decision on March 5, 2008. On September 1, 2010, the circuit court entered judgment awarding Friolo attorney's fees of $5,000.00 and $2,277.00 in costs, and in a separate judgment ordered her to pay $7,575.00 for one-half of the special master's fee. Friolo now appeals these last two judgments.

Questions Presented

Appellant presents one question for our review:

Whether the circuit court erred as a matter of law or abused its discretion in awarding statutory attorney's fees and costs? 1

For the reasons set forth below, we enter modified judgment in favor of appellant as authorized by the Maryland Rules of appellate procedure. Md. Rule 8–604(e) (“In reversing or modifying a judgment in whole or in part, the Court may enter an appropriate judgment directly or may order the lower court to do so.”).

Factual and Procedural History

On February 4, 2000, appellant, Joy Friolo, joined by her husband, Victor Salazar, filed suit against appellees, Douglas Frankel and the Maryland/Virginia Med Trauma Group, in the Circuit Court for Montgomery County. The Court of Appeals described their allegations most succinctly in this case's first appeal, Friolo v. Frankel, 373 Md. 501, 505–06, 819 A.2d 354 (2003) (“ Friolo I ”):

Friolo and Salazar alleged that, in February, 1998, Dr. Frankel, a physician, hired Friolo as a medical biller, responsible for billing and collections, at a base salary of approximately $30,000. She averred that the practice, at the time, was a “failing venture,” that, at some point, Frankel offered all of his employees a percentage interest “in the practice,” that she accepted his offer, and that, as a result, she and Frankel agreed that she would get a 5% ownership interest in the medical practice in exchange for her participation in “evaluating and developing the practice.” The goal, she said, was to make the practice worth $1 million by the end of 1999, to open four satellite offices within five years, and then to sell the entire practice in 2004. She was to get 5% of the sales price.

Friolo claimed that she worked more than 40 hours a week to maximize the recovery of receivables but that she never received any overtime pay, that she often worked at home on monthly, quarterly, and annual reports but was not paid for that time, and that she and Salazar attended strategic planning meetings and made various recommendations with respect to the practice. Salazar, though not formally employed by Frankel, asserted that he frequently worked on Frankel's behalf by attending marketing meetings, assisting in the preparation of reports, and doing clerical work. Friolo claimed that, as part of her 5% ownership interest, she was to receive, on a monthly basis, 5% of all medical insurance reimbursements and collections received, but that she did not receive full payment of those amounts. Frankel, she said, had agreed to put this arrangement in writing by December 15, 1998, but failed to do so.

Friolo went on bereavement leave from March 9 to March 25, 1999, but worked from March 26 to April 2. On Sunday, April 4, Frankel called her at home, complained that she had been rude to two patients and had not been doing her job properly, and discharged her....

Friolo and Salazar's complaint consisted of ten counts, including breach of express contract, breach of implied contract, unjust enrichment, fraudulent inducement, and violations of the Maryland Wage Payment and Collection Law (“Payment Law”), Maryland Code (1991, 1999 Repl.Vol.), §§ 3–501 et seq. of the Labor & Employment Article (“LE”), and the Maryland Wage and Hour Law (“Wage and Hour Law”),2 LE §§ 3–401 et seq.3

The complaint requested monetary judgment including $50,000.00 for Friolo's lost interest in the practice, $9,441.00 of unpaid monthly receivable incentives,4 and $9,070.00 of overtime, as well as $1,030.00 for Salazar's overtime pay, and statutory treble damages for all of these claims. In addition to those $128,164.00 in economic and statutory damages, Friolo and Salazar sought punitive and non-economic damages for the “embarrassment and humiliation” of appellees' alleged fraud. Finally, Friolo and Salazar's complaint sought reasonable statutory attorney's fees. (To that request we shall return, with much to say.)

As their case proceeded in circuit court, Friolo and Salazar whittled down their claims. Approximately five months prior to trial, the parties submitted a joint pretrial statement in which Friolo abandoned her claim to an interest in the practice, and Friolo consented at trial to dismissal of her counts alleging breach of implied contract, unjust enrichment, and fraudulent inducement. Salazar conceded that he failed to prove his implied contract and unjust enrichment claims and consented to their dismissal, and the court dismissed his remaining claims for breach of contract and violations of the Wage and Hour Law and the Payment Law. Thus, the only issues submitted to the jury were Friolo's claims for breach of express contract, violation of the Payment Law, and violation of the Wage and Hour Law. The jury found that appellees had failed to pay $6,841.00 in bonuses and $4,937.85 in overtime pay. When asked how much Friolo should be awarded in additional damages that could be “up to three times the amount” of each claim, the jury answered “$0.” Accordingly, the court entered judgment in favor of Friolo on July 3, 2001, in the amount of $11,778.85.

After the court entered judgment in her favor, Friolo filed a petition seeking attorney's fees and costs of $69,637.50. At that time, the Wage and Hour Law provided for attorney's fees as follows:

§ 3–427. Action against employer

* * *

(d) Costs.—If a court determines that an employee is entitled to recovery in an action under this section, the court may allow against the employer reasonable counsel fees and other costs.

The Payment Law included a similar provision authorizing both attorney's fees and enhanced damages in the same circumstances:

§ 3–507.1. Recovery of unpaid wages

* * *

(b) Award and costs.—If, in an action under subsection (a) of this section, a court finds that an employer withheld the wage of an employee in violation of this subtitle and not as a result of a bona fide dispute, the court may award the employee an amount not exceeding 3 times the wage, and reasonable counsel fees and other costs.

In her petition, Friolo argued that [i]n Admiral Mortgage[ , Inc. v. Cooper, 357 Md. 533, 745 A.2d 1026 (2000) ], the Court of Appeals strongly suggested that Maryland courts generally follow the law and procedure developed under federal fee-shifting statutes,” now well-known as the “lodestar method,” which we explore at great length in our discussion, below. Friolo began her proffered lodestar calculation with hourly rates taken not from her contractual fee arrangement, but instead from a matrix used by the U.S. District Court for the District of Columbia in Laffey v. Northwest Airlines, Inc., 572 F.Supp. 354, 371 (D.D.C.1983), rev'd in part on other grounds, 740 F.2d 1071, 238 U.S.App. D.C. 400 (D.C.Cir.1984). Friolo thus claimed that her lead counsel Leizer Goldsmith's time should be compensated at the rate of $305.00 per hour, time for his associates Karen Bower and Julie Martin at $250.00 per hour, and law clerk Regina Schowalter at $90.00 per hour. Friolo's petition then addressed the quantity of work performed and referred the court to its attached exhibits of “detailed time records documenting all the work of each attorney in this case based upon the contemporaneous computerized entries of each timekeeper.” These time record documents are a ledger in which each line contains an attorney's name, a brief description of his or her task, and an amount of time devoted to that task. Out of several hundred time entries, only a handful are assigned to one or more discrete claims; the remainder do not differentiate among the particular facts or theories to which the work corresponded.

Friolo then explained the general quality and necessity of the work and fees she claimed, as follows:

The work performed in this case, was necessary to obtain the excellent end result. This civil case included the usual, court appearances, depositions, written discovery and pretrial. Plaintiff's counsel developed their theory of the case, and were able to prevail ultimately at trial even while streamlining their presentation.5 Ms. Friolo had no choice but to pursue his [sic] claims all the way through a two-day jury trial. Defendant never made any settlement offer even remotely close to the amount of the judgment.

Friolo's petition acknowledged that not all of her claims were successful but maintained that her claims for breach of contract—express and implied—and unjust enrichment were factually and legally identical to her claim under the Payment...

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