Friolo v. Frankel

• Decision Date: 27 February 2008
• Docket Number: No. 107, Sept. Term, 2006.,107, Sept. Term, 2006.
• Citation: 942 A.2d 1242,403 Md. 443
• Parties: Joy FRIOLO v. Douglas FRANKEL, et al.
• Court: Court of Special Appeals of Maryland

942 A.2d 1242

403 Md. 443

Joy FRIOLO v. Douglas FRANKEL, et al.

No. 107, Sept. Term, 2006.

Court of Appeals of Maryland.

February 27, 2008.

Leizer Z. Goldsmith (The Goldsmith Law Firm, LLC, on brief), Washington, D.C., for petitioner.

Matthew J. Focht (Gerard J. Emig, Gleason, Flynn, Emig & Fogleman, Chartered, on brief), Rockville, for respondents.

Kieron F. Quinn, Cory L. Zajdel, Quinn, Gordon & Wolf, Chtd., Towson, Suzanne Sangree, Janet Hostetler, Francis D. Murnaghan Appellate Advocacy Fellow, Baltimore, brief of Amici Curiae The American Civil Liberties Union of Maryland, Casa of Maryland, Inc., The D.C. Employment Justice Center, Labor Council for Latin American Advancement, Maryland Employment Lawyers Association, Metropolitan Washington Lawyers Association, The National Council of Law Raza, National Federation of the Blind of Maryland, and the Public Justice Center.

Argued before BELL, C.J., RAKER, CATHELL^*, HARRELL, BATTAGLIA, GREENE and ALAN M. WILNER (Retired, Specially Assigned), JJ.

BELL, C.J.

This case has its genesis in an employment dispute, originating in the late 1990's between Joy Friolo (hereinafter "Friolo"), the petitioner, and Douglas Frankel, M.D. and the Maryland/Virginia Med Trauma Group (collectively, "Frankel"), the respondents. It is also the second time that these same parties have been before this Court on substantially the same issue. In this case, we are asked to determine: (i) whether, under the Labor & Employment Article, Maryland Code (1991, 1999 Repl. Vol.), § 3-427(d)¹ and § 3-507.1(b),² an employee who has recovered a judgment against her employer for violations of Maryland's Wage Payment and Collection Law, §§ 3-501 et seq.³ (hereinafter, the "Payment Law") and Maryland's Wage and Hour Law, §§ 3-401 et seq.⁴ (hereinafter, the "Wage Law"), which judgment has been satisfied and as to which an attorneys' fee award has been made by the trial court, recover, in addition, attorneys' fees incurred during post-judgment litigation, the sole purpose of which is to challenge the amount of attorneys' fees awarded by the Circuit Court and (ii) whether the Circuit Court properly applied the lodestar analysis in determining the amount of attorneys' fees to award. Put another way, the issue here is: Where trial has concluded, judgment has been satisfied, and attorneys' fees for those proceedings have been awarded, may a plaintiff recover, under Maryland's Wage and Payment Laws, the additional attorneys' fees he or she incurred to challenge the methodology used for determining, and, thus, the amount of, the attorneys' fees the trial court awarded? Our answer is "yes." For the reasons set forth hereinafter, we shall affirm the judgment of the Court of Special Appeals insofar as it holds that the record does not sufficiently show that the trial court applied, or properly applied, the lodestar analysis in arriving at its fee award and, like that court, remand the case to the Circuit Court for Montgomery County for further proceedings consistent, however, with this opinion.

HISTORY

In 2001, Friolo⁵ sued Frankel in the Circuit Court for Montgomery County seeking to recover unpaid bonuses and overtime and, pursuant to Maryland Code (1991, 1999 Repl.Vol.) § 3-507.1(b) of the Labor and Employment Article, an award of enhanced damages, i.e. three times the unpaid wage.⁶ A jury returned a verdict in favor of Friolo, for $6,841 in bonuses and $4,937 in overtime pay, which subsequently was reduced to judgment. On the other hand, the jury expressly denied Friolo any award of enhanced damages. The respondents paid the judgment, and Friolo filed a Notice of Satisfaction of Money Judgment. Thereafter, pursuant to §§ 3-427(d) and 3-507.1(b), Friolo filed a motion for attorneys' fees, ultimately requesting an award of $63,399.50. The Circuit Court granted the motion for attorneys' fees, but not the amount sought. Instead, it ordered Frankel to pay 40% of the judgment, $4,711, as attorney's fees, plus $1,552 in costs.

Friolo noted an appeal to the Court of Special Appeals, but this Court, on its own motion and in advance of proceedings in that court, issued a writ of certiorari, Friolo v. Frankel, 371 Md. 261, 808 A.2d 806 (Table) (2002), and reversed. Friolo v. Frankel, 373 Md. 501, 819 A.2d 354 (2003) (hereinafter, "Friolo I"). We held that, in Maryland, the lodestar approach is the proper way in which to determine a reasonable attorneys' fee under fee shifting statutes, including both the Wage Law and the Payment Law, those at issue in the instant case. Id. at 504-05, 819 A.2d at 356. "We stress[ed], however, that the approach we approve[d] is broader than simply hours spent times hourly rate but also includes careful consideration of appropriate adjustments to that product, which, in almost all instances, will be case-specific. Under that approach, it is necessarily incumbent upon the trial judge to give a clear explanation of the factors he or she employed in arriving at the end result." Id. Noting that the record was insufficient for the purpose, this Court opined:

"We cannot conclude from this record that the trial court used that approach; its remarks were far too ambiguous in that regard. Even if it intended to apply that approach, it gave no real indication of how and why it concluded that a fee equivalent to a 40% share of the recovery was appropriate-why the $57,000 claimed should be reduced to that amount. One of the benefits of the lodestar approach is that it allows the court to make appropriate findings, so that the parties and any reviewing appellate court can follow the reasoning and test the validity of the findings."

Friolo I, 373 Md. at 529, 819 A.2d at 371. We remanded the case to the Circuit Court for analysis under the lodestar approach, in the process identifying relevant issues that also must be addressed by the trial court. Id. at 529-30, 819 A.2d at 371.

On remand, Friolo, having filed a supplemental petition for attorneys' fees, sought $127,810 in attorneys' fees. The Circuit Court issued an opinion acknowledging the applicability of the lodestar approach, briefly discussing it and purporting to have applied it to arrive at the attorneys' fee award it made:

"Using the lodestar system, this court determined a judgment of reasonable attorney's fees. The lodestar system calculates a fee by determining the number of hours expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an `initial estimate' of the value of the attorney's services. Hours that are excessive, unnecessary and redundant are excluded from calculation. The trial court may, in its discretion, eliminate specific hours or simply reduce the award to account for the limited success of particular parts of litigation as there is no precise rule or formula for making those determinations."

In an accompanying order, it ordered the respondents to pay the petitioner an attorneys' fee of $65,348:

"Defendant shall forthwith pay to plaintiff and her counsel attorneys' fees in the lodestar amount of $65,348, which was calculated by multiplying Plaintiff's counsel's reasonable hourly rate of ($295 per hour and $200 per hour) by the reasonable number of hours Plaintiff's counsel expended in connection with this matter (194.4 hours at an hourly rate of $295; 35 hours at an hourly rate of $200). This calculation takes into consideration the reasonable hours expended, the complexity of the litigation, the success rate of the different parts of the litigation and the uniqueness of the issues."

Both Frankel and Friolo filed motions to alter or amend the judgment and Frankel, in addition, moved to stay its enforcement. In her motion to alter or amend, presaging her appellate argument, Friolo claimed that the court erroneously denied her appellate and post-appellate attorneys' fees. The court denied all post-trial motions, whereupon both parties appealed.

The Court of Special Appeals vacated the attorneys' fee award, remanding the case to the Circuit Court for the purpose of properly and clearly applying the lodestar approach. Frankel v. Friolo, 170 Md. App. 441, 450-51, 907 A.2d 363, 368-69 (2006) (hereinafter, "Friolo II"). The intermediate appellate court concluded that a plaintiff is not entitled to an award of attorneys' fees under either the Wage Law or the Payment Law "for appellate and post-remand services where the plaintiff's judgment has been satisfied and the sole issue on appeal is counsel's dissatisfaction with the trial court's award." Id. at 452, 907 A.2d at 370. Furthermore, the Court of Special Appeals held that

"Friolo is not entitled to attorneys' fees for appellate and post-judgment services that are unrelated to (1) protecting the underlying judgment, (2) securing the specific relief afforded by the trial court, or (3) overturning a grossly disproportionate award, or an outright denial of attorneys' fees."

Id. at 457, 907 A.2d at 372. Notwithstanding that the trial court stated that it did consider several lodestar factors in making its attorney fee award, the intermediate appellate court also concluded that, without a clear and thorough explanation of the factors the court considered in arriving at the award using the lodestar approach, the record did not support the conclusion that, and it was therefore unable to determine if, the lodestar approach, in fact, had been used. Id. at 451, 907 A.2d at 369.

Thus, having determined that, in making the award of attorneys' fees, the Circuit Court erred as a matter of law, the intermediate appellate court remanded the case to that court for further proceedings. The Court of Special Appeals also identified, in the process, factors, in addition to the other considerations set forth in this Court's Friolo I opinion, 373 Md. 501, 819 A.2d at 354, that the trial court should consider on remand: (i) the jury's specific denial of enhanced damages; (ii) the amount of time counsel...