Penn-am. Ins. Co. v. Lucky Ent.
| Decision Date | 04 February 2011 |
| Docket Number | Case No. 8:08-cv-02538-EAK-AEP |
| Parties | PENN-AMERICA INSURANCE COMPANY, Plaintiff, v. LUCKY ENTERTAINMENT, LLC and ICE CREAM 4 YOU INTERNATIONAL, LLC, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
This cause is before the Court on Defendant, Lucky Entertainment, LLC's, (Lucky) Motion for Attorney Fees and Costs (Doc. 51); Plaintiff, Penn-America Insurance Company's (Penn-American) Memorandum of Law in Opposition to Plaintiffs Motion for Attorney Fees and Costs (Doc. 54); Defendant, Lucky's, Motion for Hearing on Amount of Fees and Costs (Doc. 55); Defendant, Lucky's, Supplemental Motion for Attorney Fees and Costs (Doc. 61), Plaintiff, Penn-America's, Supplemental Memorandum of Law in Opposition to Defendant's Affidavit, Supplement to Motion for Attorney Fees and Costs (Doc. 64); and Plaintiff, Penn-America's, Amended Supplemental Memorandum of Law in Opposition to Defendant's Affidavit, Supplement to Motion for Attorney Fees and Costs (Doc. 66). Based on the following discussion, the Court grants the motion and awards the Defendant $91,906.00 in attorney's fees and costs.
1. This Court's Order dated July 30, 2010 (Doc. 49), incorporated herein by reference determined that the settlement between Penn-America Insurance Company (Penn-America) and Lucky Entertainment, LLC, (Lucky) operates as a confession of judgment and that Lucky was entitled to recover attorneys fees pursuant to §627.428, Florida Statutes. (Doc. 50).
2. On August 24, 2010, Lucky filed its Motion to Tax Attorney's Fees and Costs (Doc. 51).
3. On September 21, 2010, Lucky filed its Motion for Hearing on Amount of Attorney Fees and Costs (Doc. 55) and submitted the Affidavit of Mark P. Buell regarding same (Doc. 56) which was later corrected (Doc. 57).
4. On October 5, 2010, Penn-America filed a Memorandum of Law in Opposition to the Motion for Hearing on Amount of Attorney Fees and Costs and accompanying Affidavits (Doc. 58).
5. On October 27, 2010, this Court granted in part the Lucky's Motion for Hearing on Amount of Attorney Fees and Costs, stating that a hearing would not be held but that Lucky and Penn-America would have an opportunity to supplement their positions (Doc. 59).
6. On November 12, 2010, Lucky filed the Affidavit of George A. Vaka in support of its Motion to Tax Attorney Fees and Costs (Doc. 60), supplemented its Motion to Tax Attorney Fees and Costs (Doc. 61), and filed a Proposed Bill of Costs (Doc. 62).
7. On November 26, 2010, Penn-America filed a Memorandum of Law in Opposition to Defendant's Affidavit, Supplement to Motion to Tax Attorney Fees and Costs, and Proposed Bill of Costs (Doc. 64).
8. On December 1, 2010, Penn-America filed an Amended Supplemental Memorandum of Law in Opposition to Defendant's Affidavit, Supplement to Motion to Tax Attorney Fees and Costs, and Proposed Bill of Costs (Doc. 66).
Lucky argues that Penn-America should be assessed approximately $209,847.00 in attorney fees and $1,013.29 in costs. It reaches this number by using a lodestar calculated by multiplying its average "reasonable hourly wage" by 187.1 hours totaling $75,940.00 (plus other fees for a total of $77,940.00), which it then multiplied by a contingency risk multiplier of 2.0 for a total of $170,540.00 and 2.5 for a total of $209,510.00. (Doc. 56).1 The details of this billing are set forth in Exhibits 1 and 2 of the Affidavit of Mark P. Buell (Docs. 56-1 and-2). Lucky supplemented its motion with an affidavit from attorney George A. Vaka which supported attorney Buell's claim that $450.00 hourly is a reasonable rate.
Mark Buell, the affiant and Lucky's attorney, attested that the contingency risk multiplier should be between 2.0 and 2.5 because, (Doc. 56). Thus, by using the formula as set out in Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145, 1150 (Fla. 1985), multiplying the reasonable rate by the number of hours to calculate a lodestar which is then multiplied by a contingency factor, as stated in and modified by Standard Guaranty Insurance Co. v. Quanstrom, 555 So. 2d 828, 834 (Fla. 1990), the total fees assessed should equal $209,847.00 in fees and $1,013.29 in costs (Doc. 56).
Plaintiff agrees with the formula Defendant uses in support of its argument, as it also relies on Quanstrom and Rowe (Doc. 66). However, Plaintiff calculates the attorney fees differently, both arguing that the number of hours charged is too great and that the fee charged is unreasonably high. Id. Plaintiff argues that only 185.4 hours should be charged, and that the ratesshould be capped at $360.00 hourly, with associates and staff billing even less. Id. Penn-America argues that Lucky's attorney billed for redundant hours and for fees charged for litigating the amount of fees which are not compensable. Id. Further, Penn-America argues that the hourly rate exceeded what is reasonable. Id. Finally, Penn-America argues that no contingency multiplier should be used because there was no valid contingency agreement and that to compensate for a contingency without an agreement would be contrary to public policy. Id. Penn-America contends that it should only be billed $60,572.00 total. Id.
Both parties have accurately represented the law of Florida governing attorney fee calculations under Rowe, 472 So. 2d at 1150, and Quanstrom, 555 So. 2d at 834. (Docs. 56 and 66). However the two parties assert wildly different figures for the fees that should be charged. As there are three numbers used in the calculation of attorney fees in such cases, the Court will evaluate each in turn.
As this case is before the Court in diversity jurisdiction, the law of the state in which the state Court sits will govern for substantive matters whereas federal law will govern for procedural matters. See Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938). While attorney fees, as they arise out of the course of this, federal, litigation may seem to be procedural law, the United States Supreme Court has determined that where the statute for attorney fees arises in state law and is part of a larger policy objective, state law will govern. Chambers v. NASCO, Inc., 501 U.S. 32, 52 (1991). Moreover, the Eleventh Circuit has expressly held that the statute under discussion in this case, Fla. Stat. §627.428, reflects a substantive policy of the state and will therefore govern in diversity cases in Florida's federal courts. All Underwriters v. Weisberg, 222 F.3d 1309, 1310-1312 (11th Cir. 2000).
The defendant's counsel, Mark Buell of Buell & Elligett, P.A. charged to its client Lucky, $450.00 hourly and supported this fee with an affidavit by himself and another area attorney George A. Vaca. (Doc. 61, Exhibits A & C). Penn-America argues that the affidavits are insufficient support, first by asserting that Buell's affidavit lacks evidentiary value and then asserting that Mr. Vaca's affidavit, as it is his personal opinion, is not satisfactory evidence (Doc. 66). Penn-America relies on Norman v. Housing Authority of Montgomery for this proposition (Doc. 66; 836 F.2d 1292, 1299-1301 (11th Cir. 1988)). However, Norman specifically states, and Penn-America argues, that more than the affidavit of the attorney performing the work is required. (Doc. 66; 836 F.2d at 1299). The affidavit of Mr. Vaca is certainly sufficient in this regard, as he is not the attorney that performed the work.
Penn-America then argues that Mr. Vaca's affidavit is his own personal opinion. (Doc. 66). However, Mr. Vaca's affidavit leads the Court to conclude that, if nothing else, he is an "expert" for the purpose of enabling the Court to determine whether Attorney Buell's fee is reasonable. (Doc. 61, Exhibit C.; see Norman, 836 F.2d at 1299). Moreover, Penn-America does not show that Mr. Vaca is unqualified to make such a determination, other than alleging that this will also enable him to obtain a high hourly rate. (Doc. 66). This argument lacks merit: if an attorney cannot aver that another attorney's fee is reasonable, then no one can. Of course, a poll of all attorneys' fees charged in the local market would be welcome by the Court, but this is not a requirement, especially when the initial evidence brought to the Court's attention is uncontroverted. The Norman court held that the District Court must "winnow[ ] down the comparables offered by the parties"; however, here, only one rate was given and it was uncontroverted. 836 F.2d at 1300. The "party who seeks the fees carries the burden of establishing the prevailing 'market rate.'" and here Lucky has satisfactorily carried that burden. Rowe, 472 So. 2d at 1151. The Court finds that the $450.00 fee charged by Attorney Buell is reasonable, and that the other fees charged by associates and staff are also reasonable. Therefore, the average billable rate of $416.00 will be used. The separately itemized costs and expenses in the amount of $548.11 are also compensable (Doc. 61).
The vast majority of the time that Attorney Buell billed is not in dispute. Importantly, this is the factor that compensates the attorney for time and labor required and the complexity and novelty of the issue upon which he is working. Rowe, 472 So. 2d at 1150. Penn-America is correct in asserting that courts may not award attorney fees for litigating the amount of fees (Doc. 66; Palma, 629 So. 2d at 833). Penn-America is also correct in asserting that this Court Ordered Penn-America to pay Lucky's reasonable attorneys fees on July 30, 2010, receipt of which is...
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