Sarens USA, Inc. v. Lowery
| Decision Date | 12 March 2021 |
| Docket Number | Case No. CV 20–47–M–DWM, Case No. CV 20-60-M-DWM |
| Citation | 525 F.Supp.3d 1257 |
| Parties | SARENS USA, INC., Plaintiff, v. Amy LOWERY, Defendant. |
| Court | U.S. District Court — District of Montana |
Micah D. Dawson, Fisher & Phillips, LLP - Denver, Denver, CO, for Plaintiff.
Philip A. Hohenlohe, Law Office of Philip Hohenlohe, PLLC, Helena, MT, for Defendant.
This administrative review case stems from claims Amy Lowery ("Lowery") brought against her former employer, Sarens USA, Inc. ("Sarens") for hostile work environment, discriminatory discharge, and retaliation. A Hearing Officer at the Office of Administration Hearings sustained Lowery's hostile work environment claim and awarded $50,000 in emotional distress damages. The parties cross-appealed to the Montana Human Rights Commission, which affirmed the Hearing Officer's decision. Following a hearing on January 7, 2021, this Court affirmed the agency decision and remanded the issue of attorney fees. (Doc. 28.) The clerk entered a $50,000 judgment in Lowery's favor. (Doc. 29.)
Subsequently, Lowery requested that the judgment be amended to award interest and attorney fees. (Doc. 30.) The Court granted Lowery's request in part, agreeing to determine a fee award in the first instance. (Doc. 36.) Lowery therefore requests $76,410 in attorney fees and $6,271.38 in costs. (Doc. 32.) Sarens opposes the motion. (Doc. 41.) The parties also provided further briefing on the question of interest. (See id. at 15–16; Doc. 40.) Ultimately, the January 8 judgment will be amended to include both pre- and post-judgment interest; a fee award of $61,725.00; and a cost award of $4,301.34.
On March 2, 2021, Sarens filed a Notice of Appeal, appealing the January 8 Opinion, Order, and Judgment and February 2 Order. (Doc. 42.) Nevertheless, "[i]f a party files a notice of appeal after the court announced or enters a judgment—but before it disposes of [a motion to alter or amend a judgment]—the notice becomes effective to appeal a judgment or order, in whole or in part, when the order disposing of the last such remaining motion is entered." Fed. R. App. P. 4(A), (B)(i). Thus, this Court retains jurisdiction to address the motions.
In her original motion to alter or amend, Lowery sought post-judgment interest from September 20, 2019 (the date of the Hearing Officer's decision) to the present. (See Doc. 30 at 2; Doc. 31 at 4–5.) Following the Court's request for additional briefing, however, Lowery now seeks prejudgment interest from October 21, 2019 (the date her right to recover vested following Hearing Officer's decision) through January 8, 2021 (the date of this Court's judgment) and post-judgment interest from January 9 until the judgment is satisfied. (Docs. 31, 40.) Sarens, on the other hand, concedes that Lowery is entitled to post-judgment interest from February 13, 2020 (the date of the Commission's decision) onward but insists that she is not entitled to prejudgment interest. (Doc. 41 at 15–17.)
Thus, there are three contenders for the operative "judgment": (1) the Hearing Officer's September 20, 2019 decision (which vested October 21, 2019), (Doc. 33-2); (2) the Commission's February 13, 2020 final agency decision, (Doc. 33-5); and (3) this Court's January 8, 2021 judgment, (Doc. 29). Though the answer is far from clear, this Court's January 8 judgment makes the most sense. Both the state and federal post-judgment interest statutes specifically refer to interest following a court decision. See Mont. Code Ann. § 25–9–204 (); 28 U.S.C. § 1961(a) (). Moreover, "[i]n diversity cases such as this one, the court looks to state law to determine the rate of prejudgment interest while federal law determines the rate of post judgment interest." Lagstein v. Certain Underwriters at Lloyd's of London , 725 F.3d 1050, 1055 (9th Cir. 2013). It would be impossible for the federal rate to kick in any earlier than this Court's judgment because the case was not yet in federal court and might never have been. Thus, the relevant "judgment" for interest purposes was entered on January 8.
Because post-judgment interest is awarded as a matter of right under 28 U.S.C. § 1961 after that point, the question then is whether Lowery is entitled to prejudgment interest. She is. Sarens first argues that Lowery is not entitled to such interest because it was not pled. However, Lowery's March 10, 2020 petition requests the full award amount "with interest." (See CV 20–60–M–DWM, Doc. 1-2 at 7.) Sarens next argues that such interest is not appropriate under § 27–1–210, Mont. Code Ann., because the amount was disputed. But prejudgment interest here is governed by § 27–1–211, Mont. Code Ann., which provides:
[e]ach person who is entitled to recover damages certain or capable of being made certain by calculation and the right to recover that is vested in the person upon a particular day is entitled also to recover interest on the damages from that day except during the time that the debtor is prevented by law or by the act of the creditor from paying the debt.
Accordingly, Edwards v. Cascade Cty. , 351 Mont. 360, 212 P.3d 289, 296 (2009). Thus, "the accrual start date for prejudgment interest necessarily varies depending on the particular facts and circumstances of each case." Warrington v. Great Falls Clinic, LLP , 400 Mont. 360, 467 P.3d 567, 570 (2020).
All three prerequisites are met here as of October 21, 2019. First, on September 20, 2019, the Hearing Officer issued her decision finding in favor of Lowery. Second, the Hearing Officer awarded $50,000 in emotional distress, a fixed sum. Third, the Hearing Officer gave Sarens thirty (30) days to pay the award. (See Doc. 33-2 at 42.) Thus, Lowery is entitled to prejudgment interest from October 21, 2019 to January 8, 2021 at the Montana rate.
Based on the foregoing, the January 8 judgment shall be amended to award: (1) prejudgment interest from October 21, 2019 to January 8, 2021 at the Montana rate, Mont. Code Ann. § 25–9–205(1) ; and (2) post-judgment interest from January 9, 2021 until paid at the federal rate, 28 U.S.C. § 1961.
Lowery seeks $76,410.00 in fees and $6,271.38 in costs for 254.7 hours of service at $300 per hour. (Doc. 34 at ¶¶ 26–27.) Sarens argues that this request "is excessive and should be significantly reduced." (Doc. 41 at 5.) Fees are awarded in the amount of $61,725.00 and costs in the amount of $4,301.34.
Sarens first argues that Lowery's fee request should be rejected as untimely under § 49–2–505(8), Mont. Code Ann., which provides that "an action for attorneys’ fees must comply with the Montana Rules of Civil Procedure." Pursuant to those Rules, a request for attorneys’ fees must be made by motion and, inter alia , "be filed no later than 14 days after the entry of judgment." Mont. R. Civ. P. 54(d)(2)(i). Sarens argues that because Lowery failed to request attorney fees within fourteen days of either the Hearing Officer decision or the Commission's final agency decision, her request is untimely. However, as discussed above, the operative judgment is this Court's January 8, 2021 judgment. (See Doc. 29.) Even though Rule 54(a) defines "judgment" as "any order from which an appeal lies," which could include the agency decisions, Rule 54(d)(2)’s requirement that attorney fees be pursued through a "motion" does not line up with § 49–2–505(8) ’s provision that a prevailing party can bring an "action for attorney fees" in the district court. Ultimately, because Lowery filed her motion for fees eight days after this Court's judgment, (see Doc. 32) her request is timely.
"In a diversity action the question of attorney's fees is governed by state law." Klopfenstein v. Pargeter , 597 F.2d 150, 152 (9th Cir. 1979). Montana recognizes two methods of calculating reasonable fees: (1) "the lodestar method, which involves multiplying the number of hours reasonably spent on the case by an appropriate hourly rate in the community for such work" and (2) "the percentage recovery method, which authorizes fees to be paid from a percentage of a common fund or a contingency fee agreement." Gendron v. Montana University System , 399 Mont. 470, 461 P.3d 115, 119 (2020) (internal quotation marks omitted). Although both parties argue the current motion under the lodestar method, it appears that Lowery's counsel was under a pseudo-contingency agreement: "Our fee agreement provided that I be paid either 40% of the total recovery after a contested case hearing, or my hourly rate of $250 per hour, whichever is greater." (Doc. 34 at ¶ 24.) Forty percent of Lowery's $50,000 award is $20,000. Under the lodestar method, on the other hand, counsel seeks $76,410.00 for 254.7 hours of service at $300 per hour. (Id. at ¶¶ 26–27.)
Thus, the first question is whether counsel should be limited to the $20,000 contingency amount. "Ordinarily, when lawyers undertake a representation on a contingency basis, they bargain for a percentage of recovery ... [that] accounts for the risk of nonrecovery." Buckman v. Mont. Deaconess Hosp. , 238 Mont. 516, 776 P.2d 1210, 1212 (1989) (quoting Wight v. Hughes Livestock, Inc. , 204 Mont. 98, 664 P.2d 303, 309–10 (1983) ). But here, the only risk to counsel under the agreement was that his client may not prevail. Should she prevail, counsel was entitled to reasonable fees by statute, determined through the lodestar or cost...
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