Julie Berryman v. Farmers Insurance Company ( 2013 )

fr-f rrn
i i/*i - ^ •' ''•"'"
--• i °
^.-••-l '
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
JULIE BERRYMAN,
No. 68544-9-1
Respondent,
DIVISION ONE
v.
AKEEM METCALF and JANE DOE
METCALF, and the marital community
comprised thereof, and RITA METCALF
and JOHN DOE METCALF, and the
marital community comprised thereof
and JEFFREY WALKER and JANE
DOE WALKER, and the marital
community comprised thereof, and
MICHAEL A. WARD and JANE DOE
WARD, and the marital community PUBLISHED OPINION
thereof,
FILED: November 12, 2013
Defendants,
and
FARMERS INSURANCE COMPANY
OF WASHINGTON,
Appellant.
Becker, J. — The thai court approved as reasonable a total of 468.55
hours billed by two attorneys for taking a minor soft tissue injury case through a
short trial de novo, where the defendant did not improve its position after a
mandatory arbitration. The court then applied a multiplier of 2.0 because
No. 68544-9-1/2
counsel, working on a contingent fee arrangement, substantially risked receiving
no compensation or inadequate compensation. Under the circumstances of this
unexceptional case, the fee award of nearly $292,000 was an abuse of
discretion. We reverse the award of attorney fees and remand for meaningful
consideration of what constitutes a reasonable fee. However, we find no abuse
of discretion in the trial court's evidentiary rulings and consequently hold that the
defendant is not entitled to a new trial.
FACTS
This case arose from a three-car collision on February 24, 2007. Plaintiff
Julie Berryman was in her Chevrolet Caprice, preparing to turn into a driveway.
An uninsured driver in a Dodge Caravan rear-ended the Caprice. Another
uninsured driver, who was driving a Honda Accord, rear-ended the Dodge and
pushed it into Berryman's Caprice. Berryman felt pain in her neck and back that
night and sought treatment from a chiropractor two days later. Over the next
three and a half years, she continued with chiropractic treatment.
Berryman had underinsured motorist coverage from Farmers Insurance
Company of Washington. Berryman received personal injury protection
payments of $7,393.47 from Farmers.
In May 2009, Berryman retained the Premier Law Group, PLLC. She
signed a contingency fee agreement. Berryman sued the uninsured drivers in
superior court in January 2010. The uninsured drivers defaulted. Farmers
intervened to assert the defenses the drivers would have presented.
No. 68544-9-1/3
Berryman certified that her claim for damages was not in excess of
$50,000. The case was transferred to mandatory arbitration under chapter RCW
7.06. The arbitration took place on December 10, 2010. The arbitrator awarded
Berryman $13,724 in special damages and $22,000 in general damages, for a
total of $35,724 in compensatory damages.
Farmers requested trial de novo. Berryman offered to settle for $30,000.
Farmers did not accept the offer.
Farmers conceded before trial that according to the police report, the
uninsured drivers were at fault.1 Farmers made no attempt thereafter to prove
anyone else was at fault. The issues for trial were causation and whether the
medical expenses Berryman claimed were necessary and reasonable.2
Farmers retained Dr. Allan Tencer, a University of Washington professor
of biomechanical engineering, to testify at trial about the forces involved in the
accident. Dr. Tencer prepared a report stating his opinion that "The forces acting
on Ms. Berryman's body in this accident appear to be within the range of forces
experienced in daily living."3 Berryman successfully moved pretrial to exclude Dr.
Tencer's testimony.
Farmers also planned to present testimony by Dr. Thomas Renninger, a
chiropractor who had examined Berryman before the arbitration. In his original
report, Dr. Renninger gave his opinion that in view of the minor nature of the
1 Clerk's Papers at 57 (answer to interrogatory number 3).
2Clerk's Papers at 113-15 (order granting Berryman's motion for partial summary
judgment only as to liability, June 3, 2011).
3Clerk's Papers at 208.
No. 68544-9-1/4
accident, no more than six weeks of treatment was reasonably needed. In an
addendum filed after he reviewed Dr. Tencer's report, Dr. Renninger amended
his opinion and said that Berryman did not sustain any injury as a result of the
accident.
Trial began on Wednesday, December 14, 2011. On that first day, the
court announced that all motions in limine by both parties would be granted. One
of these was Berryman's motion to prohibit Dr. Renninger from expressing an
opinion based on Dr. Tencer's report and to exclude any references by counsel
or witnesses to vehicle damage or Tencer's report. Another was Berryman's
motion to exclude photographs of Berryman's car. After the jury was selected
and sworn, Farmers asked the court to reconsider the order excluding testimony
about damage to Berryman's car. Farmers hoped to counter any suggestion that
Berryman had been the victim of a high-impact accident by eliciting evidence that
the visible damage to her car and its trailer hitch was minimal. The court
declined to reconsider, reasoning that property damage was not at issue and
"one cannot surmise anything about personal injury from the state of the vehicle."
The day ended with both parties making opening statements.
On Thursday, December 15, Berryman presented her case, beginning
with Dr. Chinn, one of the chiropractors who treated her. The jury heard
Berryman's fiancee and Berryman's mother briefly report their observations
about how Berryman's back pain had impaired her everyday activities. A second
chiropractor, Dr. Saggau, testified by videotaped deposition. In the opinion of
No. 68544-9-1/5
both chiropractors, the accident caused Berryman significant injury, and the
treatment expenses she was claiming were reasonable and necessitated by the
accident. The day closed with Berryman's testimony.
On Monday, December 19, Farmers presented the defense case. Dr.
Renninger testified that he did not consider Berryman's injury "significant." He
opined that at most, six weeks of treatment was reasonable, and beyond that
Berryman would have been better off to adopt an exercise regimen. The cross-
examination emphasized that Dr. Renninger had examined Berryman only once.
Counsel brought out the substantial income Dr. Renninger received from doing
insurance defense work in car accident cases. After Dr. Renninger testified,
Berryman presented rebuttal witness Dr. Bangerter, a chiropractor who testified
on the basis of a records review that Berryman had significant and chronic
injuries related to the collision that would continue to require at least monthly
treatment for up to five years.
On Tuesday morning, December 20, the jury heard closing arguments.
Berryman requested damages between $53,000 and $56,000. Farmers argued
that a verdict of $7,000 was appropriate. After deliberating for about two hours,
the jury awarded Berryman a total of $36,542 in damages. The components
were $18,042 for past medical expenses, $2,000 for future medical expenses,
and $16,500 for past and future noneconomic damages.
A party who appeals the award in a mandatory arbitration and fails to
improve his position on trial de novo must pay the attorney fees incurred by the
No. 68544-9-1/6
nonappealing party. RCW 7.06.060(1). Ifthe nonappealing party serves a timely
written offer of compromise, the offer replaces the amount of the arbitrator's
award for the purpose of determining whether the appealing party has improved
his position. RCW 7.06.050(1 )(b). Because the jury's verdict exceeded
Berryman's offer of compromise, Farmers failed to improve its position at the trial
de novo, and the trial court correctly determined that Berryman was entitled to an
award of fees and costs. RCW 7.06.060; Niccum v. Enquist, 175 Wash. 2d 441,
286 P.3d 966 (2012).
Berryman's two attorneys, Patrick Kang and Jason Epstein, submitted a
fee request based on an hourly rate of $300. They presented contemporaneous
timekeeping records that had been sent to Berryman as monthly invoices. The
records submitted by Kang and Epstein documented a total of 468.55 hours. In
keeping with MAR 7.3, which limits the award of fees and costs to those incurred
after the request for trial de novo is filed, the hours they claimed were all incurred
during the period of approximately one year between the request for trial de novo
and the entry of judgment, from January 11, 2011, to February 2, 2012. They
requested a multiplier of 1.5 to 2.0.
Over Farmers' objections, the court found the claimed hours and rates
were reasonable, for a lodestar of $140,000 for pre-verdict work. The court
granted a multiplier of 2.0. The total award was $291,950 in attorney fees
(including $11,950 for post-verdict work) and $9,317 in costs. The trial court
denied Farmers' motion for a new trial. Farmers appeals.
No. 68544-9-1/7
EXCLUSION OF EVIDENCE
Farmers assigns error to the exclusion of Dr. Tencer's testimony.
Dr. Tencer has been retained frequently as an expert defense witness in
similar cases. See Stedman v. Cooper, 172 Wash. App. 9, 292 P.3d 764 (2012);
Ma'ele v. Arrinqton, 111 Wash. App. 557, 562-64, 45 P.3d 557 (2002). The
testimony he was prepared to give in this case, as set forth in his report, was
similar to the testimony offered by the defendant in Stedman. The trial court's
exclusion of Dr. Tencer was consistent with this court's reasoning in affirming the
decision to exclude his testimony in Stedman. Following Stedman, we conclude
it was not an abuse of discretion to exclude Dr. Tencer's testimony as well as the
portions of Dr. Renninger's testimony that referred to and relied on Dr. Tencer's
report.
Farmers also assigns error to the trial court's decision to exclude
photographs of Berryman's car. The court ruled on the first day of trial that no
mention should be made of damage to the car unless Berryman or her witnesses
opened the door:
No reference to vehicle damage would be admitted, and that
includes asking questions of the plaintiff, that includes asking
questions of any other witness regarding what they saw. The
property damage is not at issue.
So, ifthe plaintiff opens the door by saying, you know, it was
a tremendous crash, or, It was a loud bang, or, you know, any other
description of the collision that leads the jurors to think this was a
serious collision, then the door is open, Mr. Feldmann, and you can
pursue it at that point. But otherwise, no.[4]
4 Report of Proceedings at 191-92.
7
No. 68544-9-1/8
The next day, Berryman's attorney questioned Dr. Chinn, a chiropractor,
about the cause of injury. Dr. Chinn responded that the primary cause "seemed
to be the high impact rear end accident that she had about a year earlier."5
Later, Dr. Saggau, testifying by video deposition, relayed Berryman's report that
she "began to turn into the driveway when she heard loud screeching brakes,
slam, and was hit from another car from the rear."6 Although the trial court had
made it plain that such remarks would allow Farmers to seek reconsideration of
the ruling in limine, Farmers did not timely object or otherwise specifically argue
that the chiropractors' comments about a "high impact" accident and a "slam"
opened the door to the photographs.7 We conclude Farmers has waived its
objection to the ruling excluding the photographs. See Breimon v. General
Motors Corp., 8 Wash. App. 747, 757, 509 P.2d 398 (1973).
Farmers also assigns error to the court's order denying the motion for a
new trial. A trial court's decision to deny a new trial is reviewed for abuse of
discretion. A.C. ex rel. Cooper v. Bellinqham Sch. Dist.. 125 Wash. App. 511, 521,
105 P.3d 400 (2004).
Farmers' motion for a new trial was based almost entirely on the court's
exclusion of Dr. Tencer's testimony and the portion of Dr. Renninger's testimony
that relied on Tencer's report. Farmers argued a new trial was necessary
because "cumulative" error, including keeping the photographs out and allowing
5 Report of Proceedings at 261.
6 Report of Proceedings at 346-47.
7 Report of Proceedings at 286-95.
8
No. 68544-9-1/9
the "high impact" testimony, unfairly painted a picture of a serious collision that
Dr. Tencer's testimony could have rebutted. But Farmers failed to object to the
"high impact" testimony as it was given and neglected to ask the trial court to
admit the vehicle photographs once the door had been opened. Since the trial
court did not commit error as a matter of law by excluding Tencer's testimony
and the evidence that flowed from it, we conclude the trial court did not abuse its
discretion in denying Farmers' motion for a new trial.
ATTORNEY FEE AWARD ON TRIAL DE NOVO
Farmers assigns error to the trial court's award of attorney fees for 468.55
hours at $300 per hour with a multiplier of 2.0. Farmers contends the award is
excessive, rewards duplicative and unsuccessful work, and inappropriately
applies a multiplier to a standard damages case. We agree.
The general rule in Washington, commonly referred to as the "American
rule," is that each party in a civil action will pay its own attorney fees and costs.
Cosmopolitan Enq'q Grp., Inc. v. Ondeo Deqremont. Inc., 159 Wash. 2d 292, 296,
149 P.3d 666 (2006). But trial courts may award attorney fees when authorized
"by contract, statute, or a recognized ground in equity." Cosmopolitan, 159
Wash. 2d at 297. Here, a statute—RCW 7.06.060(1)—expressly entitles a
nonappealing party in a trial de novo to attorney fees and costs if the appealing
party fails to improve his position after requesting a trial de novo.
An appellate court will uphold an attorney fee award unless it finds the trial
court manifestly abused its discretion. Discretion is abused when the trial court
No. 68544-9-1/10
exercises it on untenable grounds or for untenable reasons. Chuonq Van Pham
v. City of Seattle. 159 Wash. 2d 527, 538, 151 P.3d 976 (2007). The burden of
demonstrating that a fee is reasonable is upon the fee applicant. Scott Fetzer
Co. v. Weeks. 122Wn.2d 141, 151, 859 P.2d 1210 (1993).
The trial court signed Berryman's proposed findings of fact and
conclusions of law without making any changes except to fill in the blank for the
multiplier of 2.0. The findings related to the calculation of the lodestar amount
did not address Farmers' detailed arguments for reducing the hours billed to
account for duplication of effort and time spent unproductively. The court simply
found that the hourly rate and hours billed were reasonable.
"Courts must take an active role in assessing the reasonableness of fee
awards, rather than treating cost decisions as a litigation afterthought. Courts
should not simply accept unquestioningly fee affidavits from counsel." Mahler v.
Szucs. 135 Wash. 2d 398, 434-35, 957 P.2d 632, 966 P.2d 305 (1998).
In Mahler, a plaintiff injured in a car accident had settled with the
tortfeasor. State Farm, her insurer, demanded to be reimbursed for all the
payments furnished to the plaintiff under her coverage for personal injury
protection. State Farm rejected the plaintiffs' demand for State Farm's share of
the attorney fees incurred in obtaining the settlement with the tortfeasor. The
dispute with State Farm went to mandatory arbitration and the plaintiff prevailed.
State Farm requested a trial de novo and failed to improve its position. The trial
court awarded fees and costs of $32,694.59 pursuant to MAR 7.3, and a larger
10
No. 68544-9-1/11
amount pursuant to Olympic S.S. Co. v. Centennial Ins. Co.. 117 Wash. 2d 37, 811
P.2d 673 (1991). The Supreme Court determined that Olympic S.S. was not a
valid basis for awarding fees under the circumstances. Because the trial court
had not explained its analysis in entering the fee award, Mahler. 135 Wash. 2d at
430, the Supreme Court remanded and established the rule that an award of
attorney fees must be supported by findings of fact and conclusions of law:
This case exemplifies the rationale for such a rule. The
record discloses affidavits from four different counsel or firms who
represented Mahler. We cannot discern from the record if the trial
court thought the services of four different sets of attorneys were
reasonable or essential to the successful outcome. We do not
know if the trial court considered if there were any duplicative or
unnecessary services. We do not know if the hourly rates were
reasonable. We note the trial court found two different amounts
reasonable, depending upon whether MAR 7.3 or Olympic S.S. was
the basis for fees.
Mahler. 135 Wash. 2d at 435.
While the trial court did enter findings and conclusions in the present case,
they are conclusory. There is no indication that the trial judge actively and
independently confronted the question of what was a reasonable fee. We do not
know if the trial court considered any of Farmers' objections to the hourly rate,
the number of hours billed, or the multiplier. The court simply accepted,
unquestioningly, the fee affidavits from counsel.
A trial court does not need to deduct hours here and there just to prove to
the appellate court that it has taken an active role in assessing the
reasonableness of a fee request. But to facilitate review, the findings must do
more than give lip service to the word "reasonable." The findings must show how
11
No. 68544-9-1/12
the court resolved disputed issues of fact and the conclusions must explain the
court's analysis.8
Here, the finding that the hours and rates charged were reasonable
cannot by itself support the lodestar of $140,000, particularly in view of Farmers'
very specific objections that certain blocks of time billed were duplicative or
unnecessary. A trial court's failure to address such concerns is reversible error:
The cross-appellants challenged several of the attorneys'
time entries. They claimed that Mayer's attorneys had double
charged for some of the work they performed. They also claimed
that Mayer was requesting fees for wasted efforts, duplicative
efforts, unidentifiable costs, and inconsistent or vaguely worded
time entries. Finally, the cross-appellants claimed that Mayer was
requesting fees for work unrelated to the MTCA claim. For
instance, cross-appellants contested Mayer's request for fees for
time spent drafting the initial complaint, which did not contain a
MTCA claim. The court accepted Mayer's request in full as
reasonable, without addressing any of the cross-appellants' specific
challenges.
Because the trial court made no findings regarding the
specific challenged items, the record does not allow for a proper
review of these issues. On remand, therefore, the trial court is
directed to enter thorough findings regarding these specific
challenged time entries.
Mayer v. City of Seattle. 102 Wash. App. 66, 82-83, 10 P.3d 408 (2000), review
denied. 142 Wash. 2d 1029 (2001).
The findings and conclusions in the present case suffer from the same
lack of scrutiny as in Mayer and must be reversed.
8 For exemplary findings and conclusions in support of a fee award and
multiplier, see Bloor v. Fritz. 143 Wash. App. 718, 746-52, 180 P.3d 805 (2008) (Judge
Nelson Hunt), and Brovles v. Thurston Countv, 147 Wash. App. 409, 446-49, 195 P.3d 985
(2008) (Judge David Foscue).
12
No. 68544-9-1/13
Normally, a fee award that is unsupported by an adequate record will be
remanded for the entry of proper findings of fact and conclusions of law that
explain the basis for the award. See Mahler. 135 Wash. 2d at 435; Eagle Point
Condo. Owners Ass'n v. Cov. 102 Wash. App. 697, 715-16, 9 P.3d 898 (2000)
(remanded because trial court "simply announced a number"). This is because
the trial judge is "in the best position to determine which hours should be
included in the lodestar calculation." Chuonq Van Pham. 159 Wash. 2d at 540.
Because the judge who entered the findings is no longer serving on the superior
court, Farmers suggests that this court undertake the task of determining a
reasonable fee. We conclude, however, that in this case a remand on the
existing record is the better course of action because it will preserve to the trial
court its traditional role of resolving disputed facts and exercising suitable
discretion. As an appellate court, our responsibility is "to ensure that discretion is
exercised on articulable grounds." Mahler. 135 Wash. 2d at 435. To that end, we
reiterate from Washington cases the parameters within which the discretion of
the trial court is to be exercised, and we identify the features of this fee award
where those parameters appear to have been exceeded.
Lodestar calculation
A determination of reasonable attorney fees begins with a calculation of
the "lodestar," which is the number of hours reasonably expended on the
litigation multiplied by a reasonable hourly rate. Mahler, 135 Wash. 2d at 433-34.
A lodestar fee must comply with the ethical rules for attorneys, including the
13
No. 68544-9-1/14
general rule that a lawyer shall not charge an unreasonable fee. RPC 1.5;
Fetzer. 122 Wash. 2d at 149-50. This consideration applies whether one's fee is
being paid by a client or the opposing party. Fetzer. 122 Wash. 2d at 156.
The "lodestar" is only the starting point, and the fee thus calculated is not
necessarily a "reasonable" fee. Fetzer. 122 Wash. 2d at 151. In assessing the
reasonableness of a fee request, a "vital" consideration is "the size of the amount
in dispute in relation to the fees requested." Fetzer. 122 Wash. 2d at 150.
It is true that the court "will not overturn a large attorney fee award in civil
litigation merely because the amount at stake in the case is small." Mahler. 135
Wash. 2d at 433. This cautionary observation should not, however, become a
talisman for justifying an otherwise excessive award. In a mandatory arbitration
case, where the sole objective of filing suit is to obtain compensatory damages
for an individual plaintiff, the proportionality of the fee award to the amount at
stake remains a vital consideration.
The jury awarded Berryman $36,542 in damages. The lodestar of
$140,000 as determined by the trial court is almost four times as much as the
jury's valuation of the case. A lodestar figure that "grossly exceeds" the amount
in controversy "should suggest a downward adjustment" even where other
subjective factors in the case might tend to imply an upward adjustment. Fetzer,
122Wn.2dat150.
In Fetzer, our Supreme Court reversed an award of fees where "a total of
481.49 hours—the equivalent of almost 3 months of uninterrupted legal work by
14
No. 68544-9-1/15
one attorney—was awarded, with no examination of the actual reasonableness
of these hours." Fetzer, 122 Wash. 2d at 152. The court found that the attorneys
had failed to exercise "'billing judgment'" and reduced the award to 70 hours.
Fetzer, 122 Wash. 2d at 156-57, quoting Henslev v. Eckerhart, 461 U.S. 424, 437,
103 S. Ct. 1933, 1941, 76 L Ed. 2d 40 (1983).
The attorneys in Fetzer demonstrated a lack of billing judgment when they
fashioned a claim for over $200,000 in attorney fees out of the simple facts of a
"run-of-the-mill" commercial dispute over 120 vacuum cleaners worth less than
$20,000. Fetzer, 122 Wash. 2d at 156. Berryman's attorneys similarly
demonstrated a lack of billing judgment when they fashioned a claim for almost
$292,000 in attorney fees out of a run-of-the-mill minor injury case. The case
had previously been prepared for and taken through an arbitration, the fault of
the uninsured drivers was conceded before trial, the witnesses gave ordinary
testimony typical of such cases, and trial took three and a half days. The value
of the case in terms of compensatory damages was between $30,000 and
$40,000, as evidenced by the arbitrator's award of $35,724, Berryman's
settlement offer of $30,000, and the jury verdict of $36,542. It was a manifest
abuse of discretion for the trial court to accept 468.55 hours as reasonable for
this case.
The amount of time actually spent by a prevailing attorney is relevant, but
not dispositive. Nordstrom, Inc. v. Tampourlos, 107 Wash. 2d 735, 744, 733 P.2d
208 (1987). Particularly in cases where the law is settled, there is a "great
15
No. 68544-9-1/16
hazard that the lawyers involved will spend undue amounts of time and
unnecessary effort to present the case." Nordstrom, 107 Wash. 2d at 744. The
lodestar must be limited to hours reasonably expended. The total hours an
attorney has recorded for work in a case is to be discounted for hours spent on
"unsuccessful claims, duplicated effort, or otherwise unproductive time." Bowers
v. Transamerica Title Ins. Co.. 100Wn.2d 581, 597, 675 P.2d 193(1983).
Duplicated effort includes overstaffing. The record of the first two days of
trial reflects that Kang handled the motions in limine, the opening statement, and
all of the plaintiffs' witnesses, while on the next two days Epstein cross-examined
the defense witnesses and made the closing argument. The only overlap was
that Kang and Epstein each conducted a portion of the voir dire on the first day.
Yet the two of them each billed for all four days of trial. The two attorneys also
billed for preparing for and attending the same depositions, reviewing the same
documents, and engaging in the same pretrial preparation. This would be
unreasonable if the client they were representing in litigation over a $40,000
dispute was paying by the hour, and it is equally unreasonable when the bill is
being paid by the opposing party.
The record in this case includes attorney fee awards that other superior
court judges granted in three similar minor injury cases involving trial de novo
after mandatory arbitration. In one of these, the trial judge disallowed the hours
claimed by a second attorney, commenting, "While it is certainly helpful to have
two attorneys in court, the defendant is not required to pay for a Cadillac
16
No. 68544-9-1/17
approach to a Chevrolet case."9 We endorse that observation. The number of
hours deemed reasonable in that case was less than one-third of the hours
deemed reasonable in this case. The trial court here abused its discretion by
failing to address Farmers' objection that it was unreasonable to bill for two
attorneys.
It is also appropriate to discount for unproductive time. Bowers, 100
Wash. 2d at 597, 600. By Farmers' count, Kang and Epstein recorded 43.1 hours
for their attempt to obtain discovery of Farmers' claims files. This was an
ordinary negligence claim, not a bad faith case. No justification is apparent for
allowing recovery for time spent on a matter so unlikely to contribute to success
in the case at hand.
Another category in dispute is the time related to excluding Dr. Tencer's
testimony. The trial court should address Farmers' complaint that the attorneys'
combined billing of more than 80 hours in this category was excessive. How to
deal with testimony such as Dr. Tencer typically provides is not a novel issue.
Practice advisories exist on how to argue for the exclusion of such testimony.10
Another issue is the allegedly excessive time billed for preparing the
witnesses. By Farmers' count, the attorneys billed a combined total of 97.4
hours for "client and witness preparation," they billed additional hours for "witness
9 Clerk's Papers at 739 (Robinson v. Kim. No. 05-2-30841-9 SEA (King County
Super. Ct., Wash. Mar. 22, 2007)).
10 See, e.g., Karen K. Koehler's and Michael D. Freeman's article, Why crash test
studies cannot provide a reliable or scientific basis forbiomechanical expert opinion on
injury thresholds. 3 LMISTC §61:1.
17
No. 68544-9-1/18
preparation" on trial days, and they billed an additional 33.5 hours for
"preparation for trial" not otherwise detailed.11 Berryman responded that
Farmers' count was not supported by the record because the entries in question
that involve some kind of trial preparation also include other work.12
The block billing entries tend to be obscure. For example, on November
3, 2011, Kang billed 11.7 hours for meeting with Berryman about trial preparation
and also for drafting a reply brief in support of plaintiffs motions in limine.13 How
many hours were devoted to meeting with Berryman, and how many to drafting a
reply brief, is impossible to tell, but either way, the amount of time spent is
questionable, particularly since Epstein billed 2.5 hours on the same day for
witness preparation of Berryman and her fiance.14 The trial court must make an
independent judgment about how much time is reasonably spent in "client and
witness preparation" where all but one of six witnesses had testified in the
arbitration, and one of the expert witnesses testified by videotape. The court
should keep in mind that the attorney's reasonable hourly rate encompasses the
attorney's efficiency, or "ability to produce results in the minimum time." Bowers,
100Wn.2dat600.
The billing details discussed above are only some of the concerns
Farmers raised below that the trial court failed to address. On remand, the trial
11 Clerk's Papers at 818 (Opposition to Motion for Attorney Fees, Feb. 13, 2012).
12 Clerk's Papers at 880 (Plaintiff's Reply in Support of Motion for Award of Fees
and Costs, Feb. 14, 2012).
13 Clerk's Papers at 703.
14 Clerk's Papers at 776.
18
No. 68544-9-1/19
court should conduct a careful review of the record and make its own
independent determination of the number of hours to include in the lodestar.
A useful way for a trial court to determine a lodestar is to prepare a simple
table that lists, for each attorney, the hours reasonably performed for particular
tasks and the rate charged, which may vary with the type of work. Bowers, 100
Wash. 2d at 597-98. Such a table would be helpful in this case to cut through the
fog generated by block billing. Cf. 224 Westlake. LLC v. Enqstrom Props.. LLC.
169 Wash. App. 700, 740, 281 P.3d 693 (2012) (fee request did not "distinguish
among the tasks accomplished during the hours claimed").
In short, the trial court's decision to include all the hours claimed in the
lodestar does not rest on tenable grounds. The billing appears grossly inflated
and it does not appear that the trial court gave any meaningful review to the
concerns raised by Farmers' well-documented objections.
Multiplier
After calculating a lodestar amount of $140,000, the trial court adjusted it
upward using a multiplier of 2.0.
Berryman requested a multiplier based on the contingent nature of
success. The contingency fee agreement that Berryman signed advised her that
her alternative to the contingent fee arrangement was to pay $300 per hour on an
ongoing basis. Berryman understandably decided against paying by the hour,
and instead agreed to pay counsel a percentage of recovery if there was one.
She further agreed that if a court or arbitrator awarded attorney fees in an
19
No. 68544-9-1/20
amount greater than the percentages established by the agreement, the amount
so awarded would be the amount of compensation to the attorneys.15
The court found a multiplier of 2.0 was appropriate to reflect "the
contingent nature of this case based on the substantial risks borne by Plaintiffs
counsel in recovering no compensation or inadequate compensation to pay
expenses and attorney's fees."16 Farmers assigns error to the award ofthe
multiplier.
In Washington, adjustments to the lodestar product are reserved for "rare"
occasions. Sanders v. State. 169 Wash. 2d 827, 869, 240 P.3d 120 (2010); Mahler.
135 Wash. 2d at 434. The United States Supreme Court has concluded that
enhancement for contingency under fee-shifting statutes is not permitted at all.
City of Burlington v. Daque. 505 U.S. 557, 567, 112 S. Ct. 2638, 120 L. Ed. 2d
449 (1992). In discussing Daque. our Supreme Court declined to prohibit
contingency enhancements altogether. But our court retains the presumption
that "the lodestar represents a reasonable fee." Chuonq Van Pham. 159 Wash. 2d
at 542. Chuonq Van Pham was a case brought under the Washington Law
Against Discrimination, chapter 49.60 RCW. In remanding the fee award, the
court leftthe door open for a multiplier to be applied as an exception to the
presumption because in antidiscrimination cases the law "places a premium on
encouraging private enforcement and, as discussed above, the possibility of a
multiplier works to encourage civil rights attorneys to accept difficult cases."
15 Clerk's Papers at 666-68.
16 Clerk's Papers at 905 (finding of fact 12 and 13).
20
No. 68544-9-1/21
Chuonq Van Pham. 159 Wash. 2d at 542. In such a case, it is possible that "the
lodestar figure does not adequately account for the high risk nature of a case."
Chuonq Van Pham. 159 Wash. 2d at 542.
The burden of justifying any deviation from the lodestar rests upon the
party proposing it. Adjustments to the lodestar are considered under two broad
categories: the contingent nature of success and the quality of work performed.
Bowers. 100 Wash. 2d at 598. The court may consider the factors listed in the
Rules of Professional Conduct (RPC) 1.5(a), although these factors are in large
part subsumed in the determination of a reasonable fee under the lodestar
method. Fetzer. 122 Wash. 2d at 150; Bowers. 100 Wash. 2d at 597.
To judge by published appellate opinions, our trial courts grant multipliers
sparingly. The first case in which a fee multiplier is mentioned is Wilkinson v.
Smith. 31 Wn. App. 1,14, 639 P.2d 768, review denied. 97 Wash. 2d 1023 (1982).
The plaintiff prevailed in a claim brought under the Consumer Protection Act.
The plaintiff's attorney claimed 482 hours at an hourly rate of $50 and asked for a
multiplier. The court reduced the hours, awarded a fee of $15,000, and denied
the request for a multiplier. This result was affirmed on appeal.
In the second case, a consumer protection issue was a small portion of
the plaintiff's claim; a small award of attorney fees was affirmed on appeal, and
so was a denial of a multiplier. Nuttall v. Dowell. 31 Wash. App. 98, 115, 639 P.2d
832 (unreasonable that counsel would seek not only the full amount of his fees
for the entire litigation but also request to have it increased by a multiplier which
21
No. 68544-9-1/22
"would impute to counsel an unwarranted measure of extraordinary skill"), review
denied, 97 Wash. 2d 1015 (1982).
Next came the landmark case of Bowers. The attorneys made a one-third
contingent fee agreement with the plaintiffs. They prevailed in a consumer
protection claim against an escrow agent for engaging in the unauthorized
practice of law—a case that presented novel issues. Unless plaintiffs prevailed,
their attorneys would receive no fee. Bowers, 100 Wash. 2d at 600. The trial court
doubled the lodestar of $19,262 by adding 50 percent to reflect the contingent
nature of success and 50 percent to recognize the high quality of the attorneys'
work. Bowers, 100 Wash. 2d at 594, 600-601.
The Supreme Court reversed and remanded the award with directions to
calculate a lodestar figure that did not include time for duplicated work or
otherwise unproductive time. The court allowed that the lodestar thus obtained
could then be adjusted upward to reflect the risk the attorneys assumed at the
outset that the litigation would be unsuccessful and no fee would be obtained.
Bowers, at 598-99, 601. The appropriate incremental factor, or multiplier, is
determined "by reference to the chances of success in the litigation." Bowers.
100 Wash. 2d at 601. But no adjustment was to be made for the quality of work.
Bowers. 100 Wash. 2d at 601. This is because "in virtually every case the quality of
work will be reflected in the reasonable hourly rate." Bowers. 100 Wash. 2d at 599.
Since Bowers in 1983, there have been roughly forty published appellate
cases where the facts show a request for a multiplier was made at the trial court
22
No. 68544-9-1/23
level. See Appendix attached to this opinion, at A. True to Bowers, none of
these cases have affirmed multipliers granted solely for the outstanding quality of
the work. The recurring question has been whether the business risk inherent in
taking a contingent fee case justifies enhancing the lodestar.
Most often, trial courts have been affirmed in their exercise of discretion,
whether they granted or denied a request for a multiplier, but there are a number
of cases where the trial court's decision was not sustained on appeal. See
Appendix at B.
In determining the amount of an award, the court must consider the
purpose of the statute allowing for attorney fees. Fetzer. 122 Wash. 2d at 149;
Brand v. Dep't of Labor & Indus., 139 Wash. 2d 659, 667, 989 P.2d 1111(1999). A
statute's mandate for liberal construction includes a liberal construction of the
statute's provision for an award of reasonable attorney fees. Progressive Animal
Welfare Soc'v v. Univ. of Wash.. 114 Wash. 2d 677, 683, 790 P.2d 604 (1990);
Eagle Point Condo. Owners. 102 Wn. App at 713; Brand, 139 Wash. 2d at 668.
Most of the cases in which multipliers have been considered were brought under
remedial statutes with fee-shifting provisions designed to further the statutory
purposes. See Appendix at C.
Multipliers have been considered in six mandatory arbitration cases
brought under RCW 7.06.050, a statute that does not contain a mandate for
liberal construction. See Appendix at D. The published cases do not provide
clear guidance for a case like this one.
23
No. 68544-9-1/24
Thus, the present case brings us to a crossroads of sorts. Whereas the
Supreme Court has cautioned that multipliers should be reserved for rare
instances, the argument Berryman's attorneys presented to the trial court
suggests that multipliers should always be awarded when attorneys take small
injury cases to mandatory arbitration on a contingent fee agreement and the
result at trial de novo does not improve the defendant's position. Multipliers are
necessary, the argument goes, to ensure that aggressive defense tactics used by
insurance companies to drive up costs will not deter attorneys from representing
clients who have minor soft tissue injuries. Berryman's motion for an award of
fees referred to "the systemic claims abuses engaged in by Farmers to deter
plaintiffs' lawyers from taking on cases of this nature due to the amount of risk
and work involved vs. the likely benefits."17
The trial court found the argument persuasive. The court entered the
following findings and conclusions proposed by Berryman's attorneys:
This Court has considered the facts set forth in RPC 1.5(a) when
determining a reasonable attorney's fee, including: (a) the time and
effort required; (b) the terms of the fee agreement and whether the
fee is contingent; (c) whether the work will preclude acceptance of
other cases by the lawyer; (d) the fee customarily charged for
similar work or similar cases; (e) the results obtained; and (f) the
lawyers' experience, reputation, and ability. [Finding of Fact 11].
. . . The Court also finds that the Lodestar should be
adjusted upwards to reflect the contingent nature of this case based
on the substantial risks borne by Plaintiffs counsel in recovering no
compensation or inadequate compensation to pay expenses and
attorney's fees. [Finding of Fact 12].
.. . The Court further concludes as a matter of law that
under the factors enumerated in Bowers v. Transamerica Title Ins..
17 Clerk's Papers at 648.
24
No. 68544-9-1/25
100 Wash. 2d 581, 597-602 (1983), and all the factors provided by
Plaintiff in her motion and the supporting declarations as well as
considerations of resolving Court congestion, a Lodestar multiplier
of 2.0 is appropriate here. [Conclusion of Law 5][181
The trial court was not blazing a new path. The exhibits submitted in
support of the fee award include documents from three unappealed mandatory
arbitration cases in King County Superior Court with virtually identical findings of
fact and conclusions of law to support the award of multipliers.19
18 Clerk's Papers at 904-96.
19 In the first, Robinson v. Kim. No. 05-2-30841-9 SEA (King County Super. Ct.,
Wash. Mar. 22, 2007), the trial court awarded a multiplier of 2.0 for a total attorney fee
award of $100,450 (137.6 hours times hourly rate of $350, plus hours spent postverdict):
This case involved soft tissue injuries caused by a motor vehicle collision.
Evidence presented by the Plaintiff suggests that these cases are costly
to litigate in comparison to the recovery in many such cases and that the
defense vigorously defends such cases, causing many lawyers to be
reluctant to accept such cases. [Finding of Fact 13]
. . . The lodestar fee for the attorney time spent through verdict
should be adjusted upward by a multiple of 2.0, due to the undesirability
of this case, the fact that the case was handled on a contingency basis by
Plaintiff's counsel, the risks to Plaintiff's counsel that no fee would be
earned if a verdict had been returned for the amount requested by
defense counsel, the risks to Plaintiff's counsel in advancing over $8,000
in costs to take the case through trial, the fact that working on this case
prevented Plaintiff's counsel from working on other cases, and the
reputation of Plaintiff's counsel. [Conclusions of Law 5]
Clerk's Papers at 739-40.
In the second, Brown v. Beery. No. 06-2-12479-1 KNT (King County Super. Ct.,
Wash. Sept. 10, 2007), the trial court awarded a multiplier of 2.0 for a total attorneyfee
award of $125,157 (200 hours times hourly rate of $300, plus hours spent postverdict):
This case involved "soft tissue" injuries caused by a motor vehicle
collision. This court's experience, as well as evidence presented by
Plaintiff, suggests that these cases are inherently costly and risky to
litigate particularly when compared to the anticipated recovery in many
such cases and that defendants, through their automobile insurance
carriers, often vigorously defend such cases, causing many lawyers to
decline accepting taking these cases or to decline taking these cases to
trial. [Finding of Fact 24].
... An upward adjustment... is reasonable and appropriate in
this case given the court's consideration ofthe factors set forth in RPC
25
No. 68544-9-1/26
When the granting of a multiplier becomes routine, it undermines our
Supreme Court's repeated statement that adjustments to the lodestar should be
rare. When some judges but not others will grant a multiplier in a mandatory
arbitration case solely because the plaintiff's attorney had a contingent fee
agreement and the defendant's attorney is provided by an insurance company, it
raises concern about arbitrariness in the setting of fees. See Dague. 505 U.S. at
566-67. Because affirming the trial court's rationale for awarding a multiplier in
this case will likely lead to multipliers being routinely granted in all such cases,
we must consider whether the rationale is legally sound.
1[.5](a). . . and the substantial risk assumed by plaintiff's lawyers by
accepting and trying this case on contingency . . .
. . . because of the increased risk borne by the plaintiff and her
counsel of recovering either no compensation or inadequate
compensation to pay for trial expenses and attorney fees for time spent
pursuing the case to trial. . .
. . . [and] because of the amount of time spent by plaintiff's
counsel in this case at the exclusion of other more profitable and less
risky cases in counsel's contingency law practice. [Conclusions of Law 5-
7]
Clerk's Papers at 750-52.
In the third, Haaen v. Hilstad. 05-2-37298-2 SEA (King County Super. Ct., Wash.
Jan. 24, 2007), the trial court, presided over by the same judge as in this case, awarded
a multiplier of 1.5 (50 percent upward adjustment) for a total attorney fee award of
$91,800 (204 hours times an hourly rate of $300):
An upward contingency adjustment to the Lodestar amount is reasonable
and appropriate in this case given the results obtained, the court's
consideration of the factors set forth in RPC 1[.5](a), the results obtained,
the skill and experience of plaintiff's counsel, the existence of a
contingency fee agreement, and the increased risk assumed by plaintiff
and her attorney by trying this case on contingency . . .
. . . [and] because of the increased risk borne by the plaintiff and
her counsel of recovering either no compensation or inadequate
compensation to pay for trial expenses and attorney fees for time spent
pursuing the case to trial. [Conclusions of Law 5 and 6]
Clerk's Papers at 732.
26
No. 68544-9-1/27
The mandatory arbitration statute makes arbitration available for damage
cases where the amount in controversy is relatively small. "Mandatory arbitration
is intended to provide a relatively expedient procedure to resolve claims where
the plaintiff is willing to limit the amount claimed." Williams v. Tilave. 174 Wash. 2d
57, 63, 272 P.3d 235 (2012).20 The primary goal of mandatory arbitration "is to
reduce congestion in the courts and delays in hearing cases." Hudson v.
Hapner, 170 Wash. 2d 22, 30, 239 P.3d 579 (2010).
The attorney fee award required by the mandatory arbitration statute is not
intended to put a premium on private litigation of small personal injury claims. Its
purpose "is to discourage meritless appeals of arbitration awards, to reduce
delay in hearing civil cases, and to relieve court congestion." Yoon v. Keeling, 91
Wash. App. 302, 305, 956 P.2d 1116 (1998). The statute carries out this intent by
making it financially risky to request a trial de novo. The statute establishes a
fee-shifting mechanism for cases that otherwise would be governed by the
American rule requiring each party to bear its own fees and costs. Under RCW
7.06.060, only the party requesting the trial de novo is at risk of paying the other
party's attorney fees. The party requesting the trial de novo must improve its
position or pay its opponent's attorney fees. RCW 7.06.060(1). "By this
mechanism, the nonappealing party is compensated for having been put through
20 Mandatory arbitration originating in superior court is not necessarily the only
forum available to a plaintiff who has suffered minor injuries in a car accident. District
courts can hear low damage cases, and electing binding private arbitration may be a
choice under the insurance contract, as Farmers contended it was in this case. See
Clerk's Papers at 817 (Farmers' Opposition to Motion for Attorney Fees at 6).
27
No. 68544-9-1/28
a useless appeal and the attorney fees operate as a disincentive or penalty for a
party that pursues a meritless appeal. The penalty can be substantial." Williams.
174 Wash. 2d at 64. Farmers could have limited its loss in this case to as little as
$30,000 by accepting Berryman's offer of compromise. By risking trial de novo
and failing to improve its position, Farmers will now have to pay Berryman's
attorney fees on top of the verdict, a substantial penalty.
In the opinion of Berryman's attorneys, the penalty prescribed by the
statute is not substantial enough unless a multiplier is granted. Kang declared
that "a lot of these cases result in either a zero recovery or a small recovery,
which essentially results in the advanced costs not being repaid .. . and the
plaintiffs' attorneys ultimately have to swallow the loss of the advanced costs."21
The motion for an award of fees urged the trial court "to send a message to
Farmers and other carriers who conduct themselves similarly that when they
gamble on matters such as this one, and lose, they will not get off easily."22
Berryman's attorneys submitted declarations from four other personal
injury lawyers to support their fee request. The common theme is that insurance
companies are bringing meritless appeals from MAR arbitration awards. For
example, according to attorney Thomas Bierlein, the conduct of insurance
companies creates an "access to justice" problem because carriers use "scorch
earth litigation tactics." He recommended doubling the lodestar to compensate
the attorneys for the risk of taking the case on contingency. Attorney Scott Blair
21 Clerk's Papers at 659 (Declaration of Patrick J. Kang).
22 Clerk's Papers at 648 (Motion for Award of Fees and Costs, Feb. 6, 2012)
28
No. 68544-9-1/29
called the multiplier a "critical device in leveling the playing field and sending a
strong message" to carriers who flood the courts "with cases that really should be
resolved in the claims phase." He too recommended doubling the lodestar.
Attorney Brad Moore said, "it is difficult to justify taking on a case like this if I
know it is likely going to trial because of juror attitudes about minor property
damage and soft tissue injuries." He also declared that "the only way that
everyone can have equal access to the courts without worrying about the
economic barriers being placed in their way is to make it economically painful
enough for the carriers like Farmers who choose to pursue this approach."
Attorney Brad Fulton recommended a multiplier of 2.0 because "Farmers would
rather litigate cases than attempt to make a reasonable settlement offer." He
declared that Farmers' "cynical strategy" seems to be "to drag plaintiffs through
the most protracted and expensive process possible to discourage claims and
punish claimants." He asserted that Farmers and other insurers "have decided,
systemically and as part of a company policy, to abuse the court system and
processes in this fashion, and it will continue until judges begin to make these
practices not pay off." All four expressed the opinion that the total of 468.55
hours Kang and Epstein claimed was entirely reasonable.
The argument that multipliers must be routinely granted to deter insurance
companies from requesting trials de novo is unpersuasive for several reasons.
First, the legislature has already defined the risk that any party assumes by
requesting a trial de novo. If the risk of having to pay an unmultiplied award of
29
No. 68544-9-1/30
attorney fees is not enough of a penalty to achieve the statutory purposes of
discouraging meritless appeals and relieving court congestion, the problem
inheres in the statute as presently designed and should be solved by legislative
action, not by courts imposing unlegislated penalties.
Second, routinely handing out multipliers in trial de novo cases assigns
disproportionate value to litigation of minor cases. Berryman experienced a
private injury. There is no statute declaring that personal injury claims in general,
or claims for minor soft tissue injuries in particular, serve public policy goals so
important that private attorneys must be given incentives to bring them. In this
respect, the purpose of the fee-shifting provision in the mandatory arbitration
statute is different from the purpose of fee-shifting provisions in remedial
statutes. For example, when litigation under the Consumer Protection Act
produces protection for everyone who might in the future be injured by a specific
violation, then it follows that the reasonableness of the attorney's fee should be
governed by substantially more than the import of the case to the plaintiff alone.
Connelly v. Puget Sound Collections. Inc.. 16 Wash. App. 62, 65, 553 P.2d 1354
(1976). Similarly, in cases brought under the Washington Law Against
Discrimination, the prospect of an upward adjustment in a contingency case is
recognized as "an important tool in encouraging litigation." Wash. State
Commc'n Access Project v. Regal Cinemas. Inc.. 173 Wash. App. 174, 221, 293
P.3d 413. review denied, 308 P.3d 643 (2013). Discrimination "is not just a
private injury which may be compensated by money damages." Martinez v. City
30
No. 68544-9-1/31
ofTacoma. 81 Wash. App. 228, 241, 914 P.2d 86, review denied. 130Wn.2d 1010
(1996). The law "places a premium on encouraging private enforcement" of
antidiscrimination law. Chuong Van Pham, 159 Wash. 2d at 542. The value in
advancing civil rights cases is not limited to pecuniary considerations, and so an
award of fees should not depend on obtaining substantial financial relief for the
plaintiff. Perry v. Costco Wholesale. Inc.. 123 Wash. App. 783, 808-09, 98 P.3d
1264(2004).
Many plaintiffs have brought risky contingent-fee cases under remedial
statutes instilled with public interest, have endured years of litigation and gone
through lengthy and complex trials against aggressive and well-funded
opponents, and yet their attorneys have not been granted multipliers. In cases
where multipliers have been awarded, the multiplier has almost never exceeded
1.5. If the mandatory arbitration class of contingent fee plaintiffs must receive
multipliers as a matter of law, then fairness dictates that all other contingent fee
plaintiffs who face determined opposition should receive the same treatment.
Again, this result would run counter to the Supreme Court's statements that
adjustments to the lodestar should be rare.
Third, the argument of Berryman's attorneys asks this court to assume
many things about insurance companies that are documented in the record only
by boilerplate declarations. Are all insurance company requests for a trial de
novo meritless and abusive of the judicial system? If so, the trial court can
impose appropriate sanctions under CR 11 or RCW 4.84.185 (frivolous actions or
31
No. 68544-9-1/32
defense). Do insurance companies insist on a trial de novo because juries are
more likely than arbitrators to be suspicious of claims for soft tissue injuries? If
so, are the juries necessarily wrong? An insurance company can hardly be
faulted for weighing the risk of a possible award of attorney fees against the
possibility of having to pay nothing at all.
Fourth, it is well established that a multiplier should be denied where the
hourly rate underlying the lodestar fee "comprehends an allowance for the
contingent nature of the availability of fees." Bowers, 100 Wash. 2d at 599; see
Ross v. State Farm, 82 Wash. App. 787, 800, 919 P.2d 1268 (1996), rev'd on other
grounds, 132 Wash. 2d 507, 940 P.2d 252 (1997). To be sure, establishing an
attorney's reasonable hourly rate can be challenging when the attorney has a
personal injury practice in which most or all cases are handled on a contingent
fee basis. In this case, Kang declared that $300 per hour was his "customary"
rate, and Epstein declared that $300 per hour was "warranted" by the skill level
involved, the size of the award, his reputation, and the undesirability of the case.
They submitted declarations by other attorneys that $300 per hour was a
reasonable hourly rate. Farmers argued that $300 was excessive given the
simple nature of the case, the brevity of the trial, and the limited issues and
witnesses. Farmers submitted a declaration that defense attorneys who charge
by the hour would typically charge $150 to $200 for handling this type of case.
A rate of $300 per hour is not outside the range of rates charged in the
Seattle area by moderately experienced and efficient attorneys who work on an
32
No. 68544-9-1/33
hourly basis. The issue that deserves closer examination, however, is whether
the claimed rate of $300 per hour already had the ups and downs of contingent
fee practice built into it. As the United States Supreme Court explained in
Daque, an attorney operating on a contingency-fee basis "pools the risks
presented by his various cases: cases that turn out to be successful pay for the
time he gambled on those that did not." Dague, 505 U.S. at 565. As a general
rule, courts do not have an obligation to protect attorneys who have taken the
risk that a contingent fee case will end in a defense verdict with no
reimbursement for advanced costs.
Under their fee agreement with Berryman, her attorneys would earn a fee
of one-third for an early settlement without the need for filing suit or arbitration,
40 percent for a recovery at arbitration or the trial court level, and 50 percent in
the event of an appeal. Berryman's attorneys were informed by their research
into reports of jury verdicts that "most plaintiffs in minor impact soft tissue cases
receive eithera defense verdict or nominal damages."23 Berryman had certified
her damages were below $50,000. Ifthe case did not settle early and instead
required her attorneys to put in more than 66 hours to recover damages for
Berryman at arbitration or trial, they would have earned less than $300 per hour
even if they avoided a defense verdict and achieved a top award of $50,000.
($50,000 X .4 / 300 = 66.66.) In other words, the fee agreement itself indicates
that they were willing to work for less than $300 per hour. Our calculation
23 Clerk's Papers at 761 (Declaration of Jason Epstein).
33
No. 68544-9-1/34
includes many variables, but it illustrates the possibility that the hourly rate of
$300 the trial court used to determine the lodestar was not the attorneys'
established rate for billing clients who pay by the hour, or even their baseline
expectation for achieving recovery in a contingent fee case. Rather it may be the
rate that will allow them to make up for time they devote to less successful
contingent-fee cases. If so, the lodestar of $300 per hour times a reasonable
number of hours already accounts for the risks inherent in taking Berryman's
case. This is another reason for concluding a multiplier was not warranted. The
risks the attorneys complain of (the extra hours and costs required by Farmers'
request for trial de novo, the possibility of Dr. Tencer's testimony being admitted)
were generic. Overcoming these risks did not require skill or endurance beyond
what is normally to be expected in a personal injury case.
In short, we reject the argument that a contingency enhancement is
justified as matter of law after a trial de novo that does not improve the
defendant's position. While trial courts must retain the discretion to award
multipliers in exceptional cases, nothing in the record of the present case justifies
a multiplier.
To summarize: Under Mahler, meaningful findings and conclusions must
be entered to explain an award of attorney fees. Under Bowers, the trial court
must make an independent evaluation of the reasonableness of the fees claimed
and discount for unproductive time. Under Fetzer, when an attorney fails to use
billing judgment and instead submits a grossly inflated fee request for handling a
34
No. 68544-9-1/35
small case, the court may consider a downward adjustment. Under Chuong Van
Pham, occasionally a trial court will be justified in making an upward adjustment
to account for risk, particularly in cases brought to enforce important public
policies that government agencies lack the time, money, or ability to pursue.
Presumptively, however, the lodestar represents a reasonable fee. A party who
seeks an upward adjustment bears the burden of proving it is warranted by
arguments rooted in the record, not in rhetoric.
Attorney Fees on Appeal
Berryman requests an award of attorney fees on appeal under MAR 7.3,
which states, "The court shall assess costs and reasonable attorney fees against
a party who appeals the award and fails to improve the party's position on the
trial de novo." Because Farmers failed to improve its position as measured
against Berryman's offer of compromise, Berryman is entitled to a modest award
of attorney fees and costs on appeal for the portion of the appeal concerned with
preserving the verdict, subject to compliance with RAP 18.1(d). No fee shall be
awarded for defending the fee award.
The judgment on the jury verdict is affirmed. The award of attorney fees
and costs is reversed and remanded for reconsideration on the existing record,
consistent with this opinion.
35
No. 68544-9-1/36
*l.
WE CONCUR:
€£VW^fi,Cff.
36
No. 68544-9-1/37
APPENDIX
A. List of Cases
1986-1993
Nast v. Michels, 107 Wash. 2d 300, 302, 730 P.2d 54 (1986); Travis v. Wash. Horse
Breeders Ass'n. Inc.. 111 Wash. 2d 396, 412-13, 759 P.2d 418 (1988); Evergreen
Int'l Inc. v. Am. Cas. Co.. 52 Wash. App. 548, 553, 761 P.2d 964 (1988); Styrk v.
Cornerstone Invs.. Inc.. 61 Wash. App. 463, 472-74, 810 P.2d 1366 (1991), review
denied. 117Wn.2d 1020 (1991); Vogt v. Seattle-First Nat'l Bank. 117 Wash. 2d 541,
547, 817 P.2d 1364 (1991); Xieng v. Peoples Nat'l Bank of Wash.. 63 Wash. App.
572, 586-87, 821 P.2d 520 (1991), affd, 120 Wash. 2d 512, 844 P.2d 389 (1993);
Burnside v. Simpson Paper Co.. 66 Wash. App. 510, 532-33, 832 P.2d 537 (1992),
affd. 123 Wash. 2d 93, 864 P.2d 937 (1994); Wash. State Physicians Ins. Exch. &
Ass'n v. Fisons Corp..122 Wn.2d 299, 335-36, 858 P.2d 1054 (1993).
1994-1999
Sing v. John L Scott. Inc.. 83 Wash. App. 55, 74-75, 920 P.2d 589 (1996), rev'd.
134 Wash. 2d 24, 34, 948 P.2d 816 (1997); Ross v. State Farm Mut. Auto. Ins. Co..
82 Wash. App. 787, 800, 919 P.2d 1268 (1996), rev'd. 132 Wash. 2d 507, 940 P.2d
252 (1997); McGreevv v. Or. Mut. Ins. Co.. 90 Wash. App. 283, 294-95, 951 P.2d
798 (1998); Brand v. Dep't. of Labor & Indus.. 91 Wash. App. 280, 286, 297, 959
P.2d 133 (1998), rev'd. 139 Wash. 2d 659, 664 n.3, 989 P.2d 1111(1999); Seattle-
First Nat'l Bank v. Wash. Ins. Guar. Ass'n. 94 Wash. App. 744, 750, 763, 972 P.2d
1282 (1999); Mike's Painting. Inc. v. Carter Welsh. Inc.. 95 Wash. App. 64, 69-70,
37
No. 68544-9-1/38
975 P.2d 532 (1999); Steele v. Lundoren. 96 Wash. App. 773, 781, 982 P.2d 619
(1999). review denied. 139Wn.2d 1026(2000).
2000-2003
Henningsen v. Worldcom. Inc.. 102 Wash. App. 828, 847-48, 9 P.3d 948 (2000);
Olivine Corp. v. United Capitol Ins. Co.. 105 Wash. App. 194, 202-04, 19 P.3d 1089
(2001), rev£ in eart, 147 Wash. 2d 148, 52 P.3d 494 (2002), dismissed after
remand. 122 Wash. App. 374, 92 P.3d 273 (2004); Ethridge v. Hwang. 105 Wn.
App. 447, 461-62, 20 P.3d 958 (2001); Somsak v. Criton Technologies/Heath
Tecna, Inc.. 113 Wash. App. 84, 98-99, 52 P.3d 43, 63 P.3d 800 (2002); Boeing
Co. v. Heidv. 147 Wash. 2d 78, 90-91, 51 P.3d 793 (2002); Smith v. Behr Process
Corp.. 113 Wash. App. 306, 342-43, 54 P.3d 665 (2002); Carlson v. Lake Chelan
Cmtv. Hosp.. 116 Wash. App. 718, 728-29, 741-43, 75 P.3d 533 (2003), review
dismissed. 150 Wash. 2d 1017 (2004).
2004-2006
Alvarez v. Banach, 120 Wash. App. 93, 96-97, 84 P.3d 278 (2004); rev'd. 153
Wash. 2d 834, 840, 109 P.3d 402 (2005); Perry v. Costco Wholesale. Inc.. 123 Wn.
App. 783, 808-09, 98 P.3d 1264 (2004); Maver v. Sto Indus.. Inc.. 123 Wash. App.
443, 454, 460-61, 98 P.3d 116 (2004), affd in eart, rev'd in eart, 156 Wash. 2d 677,
695, 132 P.3d 115 (2006); Farai v. Chulisie. 125 Wash. App. 536, 551, 105 P.3d 36
(2004): Tribble v. Allstate Prop. & Cas. Ins. Co.. 134 Wash. App. 163, 171-73, 139
P.3d 373 (2006); Banuelos v. TSA Wash.. Inc.. 134 Wash. App. 607, 615-17, 141
38
No. 68544-9-1/39
P.3d 652 (2006).
2007-2010
Chuong Van Pham v. City of Seattle. 159 Wash. 2d 527, 541-44, 151 P.3d 976
(2007); Bostain v. Food Exp.. Inc.. 159 Wash. 2d 700, 722, 153 P.3d 846, cert-
denied. 552 U.S. 1040 (2007); Morgan v. Kingen. 141 Wash. App. 143, 169 P.3d
487 (2007), affd, 166 Wash. 2d 526, 540, 210 P.3d 995 (2009); Bloor v. Fritz. 143
Wash. App. 718, 750-53, 180 P.3d 805 (2008); Brovles v. Thurston County. 147
Wash. App. 409, 446-53, 195 P.3d 985 (2008); Durand v. HIMC Corp.. 151 Wn.
App. 818, 823, 827, 214 P.3d 189 (2009), review denied. 168 Wash. 2d 1020
(2010); Sanders v. State. 169 Wash. 2d 827, 869, 240 P.3d 120 (2010); Collins v.
Clark Countv Fire Dist. No. 5. 155 Wash. App. 48, 101-02,231 P.3d1211 (2010).
2012-present
Jenbere v. Lassek, 169 Wash. App. 318, 320, 279 P.3d 969. review denied. 175
Wash. 2d 1028 (2012); Fiore v. PPG Indus.. Inc.. 169 Wash. App. 325, 355-58, 279
P.3d 972, review denied, 175Wn.2d 1027 (2012); 224 Westlake, LLC v.
Engstrom Props.. LLC, 169 Wash. App. 700, 737-39, 281 P.3d 693 (2012); Deep
Water Brewing, LLC v. Fairway Res., Ltd., 170 Wn. App. 1,10-11, 282 P.3d 146
(2012); Wash. State Commc'n Access Project v. Regal Cinemas. Inc., 173 Wn.
App. 174, 221-22, 293 P.3d 413 (2013). review denied. 308 P.3d 643 (2013);
Collinos v. City First Mortg. Servs.. LLC. 175 Wash. App. 589, 608-10, 308 P.3d
692 (2013); Wright v. State. No. 42647-1-11, 2013 WL 4824373 (Wash. Ct. App.
39
No. 68544-9-1/40
Sept. 10, 2013); and Gautam v. Hicks. No. 69406-5-I, 2013 WL 5519971 (Wash.
Ct. App. Oct. 7, 2013).
B. Affirmance and Reversal
In fourteen cases, the appellate court affirmed where the trial court
considered but rejected a request for a multiplier: Evergreen Int'l, Styrk, Xieng,
Seattle-First Nat'l Bank, Mike's Painting, Steele, Boeing, Farai, Morgan, Collins,
Sanders, and Deep Water Brewing. In Ross, the request for a multiplier was
denied at the trial level and ultimately there was no award of fees at all. In
Alvarez, it appears the outcome was to reinstate the trial court's decision, in
which a multiplier was denied.
In fourteen cases, the appellate court affirmed where the trial court
granted a request for a multiplier: Burnside (multiplier of 1.3), Fisons (1.5),
Olivine (1.5), Ethridqe (1.25), Somsak (1.5), Smith (1.5 up to dispositive ruling),
Carlson (1.5); Mayer (1.57); Banuelos (1.5 up to summary judgment), Bloor (1.2),
Brovles (1.5), Durand (1.5), Wash. State Commc'n Access Project (1.5), and
Collings (1.2). In Tribble, the trial court granted a 1.5 multiplier, and the case
was remanded for the court to determine if the multiplier should be altered in
view of appellate reduction of the damage award.
However, there are a number of cases where the trial court's decision to
grant or deny a multiplier was not sustained on appeal. In four cases, the trial
court's decision to grant a multiplier was reversed, at least in part: Travis (1.5)
(fees were not truly contingent), McGreevv (court awarded contingent fee of
40
No. 68544-9-1/41
$145,000 instead of lodestar of $45,620), Westlake (3.0) (fees not truly
contingent; no statutory provision encouraging the litigation), and Fiore (.25).
In three cases, the trial court's denial of a multiplier was reversed
because the stated reason for denying one was irrelevant: Perry (lack of
proportionality not a good reason in civil rights case), Chuong Van Pham
(plaintiffs proof problems irrelevant to premium for risk), and Bostain (existence
of bona fide dispute in a wage case and unsettled nature of the law do not justify
refusing a multiplier).
In five cases, the appellate court found there was no basis for an award of
fees and the multiplier disappeared along with the rest of the fee award: Nast,
Sing (1.5), Lassek (2.0), Wright (2.0), and Gautam (1.5). In some cases, the
outcome was uncertain because although the trial court granted a multiplier, the
case was remanded to have more specific findings entered or for some other
reason: Brand (1.5), Henninosen (1.25), and Olivine.
C. Fee Shifting Statutes
Most of the cases in which multipliers were considered have been cases
brought under liberally construed remedial statutes with fee-shifting provisions
designed to further the statutory purposes. In the majority of these cases, the
plaintiffs ended up with a multiplier.
Thirteen cases were brought under the Consumer Protection Act: Travis,
Evergreen Int'l, Styrk, Vogt, Fisons. Sing. Ethridge. Smith. Carlson. Mayer.
Banuelos, Bloor, and Collings. Eight of these ended up with multipliers; Travis,
41
No. 68544-9-1/42
Evergreen Int'l. Styrk and Sing did not. In Vogt. the ultimate outcome of the
request for a multiplier is unclear because there was a remand.
Ten cases were brought under the Washington Law Against
Discrimination: Xieng. Burnside. Steele. Henningsen. Carlson. Perry. Chuong
Van Pham. Brovles. Collins, and Wash. State Comm. Access Project. Seven
ended up with multipliers affirmed, or at least the possibility of a multiplier being
awarded on remand. Xieng. Steele, and Collins did not get multipliers.
Four cases were for wage claims: Morgan, Bostain. Durand, and Fiore.
Plaintiffs in the first three received a multiplier; the plaintiff in Fiore did not.
Three cases involved an industrial insurance claim; a multiplier was
approved in Somsak but denied in Boeing; the outcome of the request was left
unclear in Brand.
Three cases—Nast, Sanders, and Wright— involved the Public Records
Act; none received a multiplier.
Relatively few cases involved a private contractual dispute; none of the
prevailing parties ended up with a multiplier. In Mike's Painting and Deep Water
Brewing, the trial court's decision not to grant a multiplier was affirmed. In
Westlake. the multiplier granted by the trial court was reversed. Three cases
included in this category are Ross, McGreevy, and Olivine, where the fee award
was based on Olympic S.S. In Olivine, the trial court awarded a multiplier but
further proceedings made it unlikely the fee award was ever collected.
42
No. 68544-9-1/43
D. Mandatory Arbitration Cases
In Alvarez and Farai. the trial courts denied a multiplier; that result did not
change on appeal. In Lassek and Gautam. the trial courts awarded multipliers of
2.0 and 1.5 respectively, but in each case the entire award was reversed on
appeal on the ground that the appealing party had improved his position and thus
did not need to pay the other party's attorney fees. In Fiore. the court reversed
the multiplier awarded by the trial court in a wage claim litigated in a mandatory
arbitration.
In Tribble. the arbitrator awarded $35,000.00; the jury awarded
$373,542.50 in a four-day trial de novo. The trial court established an attorney
fee lodestar based on Tribble's uncontested attorney fees of $27,000.00 and
then granted a multiplier of 1.5 for a total fee award of $40,500.00. This court
reversed the damage award and remanded for a reduction to $50,000.00, the
policy limits for the underinsured motorist coverage in question. We held it was
proper for the court to consider the contingent nature of the case, but the trial
court had also based the multiplier in part on the result obtained. The fee award
was remanded for reconsideration in view of the significant reduction of the
damage award.
43