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Smith v. Auto-Owners Insurance Co.

United States District Court, D. New Mexico

August 2, 2017

MELVIN SMITH and STAN FOWLER, Plaintiffs, [1]
v.
AUTO-OWNERS INSURANCE COMPANY, Defendant.

          MEMORANDUM OPINION AND ORDER

          STEPHAN M. VIDMAR United States Magistrate Judge.

         THIS MATTER is before the Court on Plaintiff Fowler's Motion for Reasonable Attorney's Fees and Cost[s] pursuant to the . . . Offer of Judgment and Acceptance [Doc. 94], filed on February 3, 2017. Briefing is complete, [Docs. 95, 104, 109], and oral argument was held on June 19, 2017. Having considered the briefing, record, oral argument, and the relevant law, the Court finds that Defendant has shown that it would be unreasonable, inequitable, or excessive to award Plaintiff Fowler more than $47, 073.61 in attorney fees and costs.

         Background

         Plaintiff Stan Fowler was traveling in an automobile owned by Principal Mobility and insured by Defendant Auto-Owners Insurance Company (“AOI”) in July of 2012 when it was struck from behind by a vehicle driven by a State Farm insured. State Farm's driver was at fault for the accident. State Farm contributed its $100, 000 liability policy limits to satisfy the claims of the various injured parties, including Plaintiff Fowler. As a result of the accident, Plaintiff Fowler received $46, 168.90 from State Farm. [Doc. 104] at 2. Plaintiff Fowler also attempted to recover from Pekin Insurance, through which he had a motorcycle policy, but he was not successful. Id.; see [Doc. 109] at 4.

         Plaintiff Fowler made an underinsured motorist claim to Defendant for $939, 231.42, which included his $30, 530 in medical bills. [Doc. 104] at 2; [Doc. 109] at 3. Defendant did not pay that amount, and Plaintiff Fowler filed suit.[2] [Doc. 1-1]. Eventually, Defendant tendered an Offer of Judgment to Plaintiff Fowler for “the total amount of Fifty Thousand Dollars ($50, 000.00), plus a reasonable amount of attorney[']s fees and costs as agreed upon by the parties or, if an agreement cannot be reached, as determined by the Court.” [Doc. 78] at 1. Plaintiff accepted the Offer of Judgment on September 29, 2016, but the parties cannot agree on a “reasonable amount of attorney[']s fees and costs.” Id. Plaintiff requests $89, 850.57. [Doc. 109] at 8. Defendant argues that only $46, 300.03 would be reasonable. [Doc. 104] at 1-2.

         Standard

[W]here contracting parties have agreed that [one] party will be liable for attorneys' fees, the purpose of the award is to give the parties the benefit of that bargain, and the court's responsibility is to enforce that bargain. Normally, where the court is merely enforcing a contractual provision authorizing attorneys' fees, the fees are routinely awarded and the contract is enforced according to its terms. See Fortier v. Dona Anna Plaza Partners, 747 F.2d 1324, 1337-38 (10th Cir. 1984) (applying New Mexico law).
. . . . This does not mean, however, that the trial court should simply award the full amount billed by the [moving] party's attorneys. . . . Clearly, the trial court has discretion to adjust or even deny a contractual award of fees if such an award would be inequitable or unreasonable.
. . . .
. . . . In considering whether a fee is unreasonable or excessive, the trial court need not wholly disregard the familiar factors from the federal cases awarding fees in a statutory context [such as the number of hours reasonably spent in the litigation, reasonable hourly rate, reduction for claims lost, and enhancement for exceptional success]. See, e.g., Ramos v. Lamm, 713 F.2d 546[, 553-58] (10th Cir. 1983). . . .

United States ex rel. C.J.C., Inc. v. W. States Mech. Contractors, Inc., 834 F.2d 1533, 1548-50 (10th Cir. 1987) (internal citations omitted). The payor bears the burden of proving that the fees are unreasonable, inequitable, or excessive. Simplot v. Chevron Pipeline, Co., 563 F.3d 1102, 1119 (10th Cir. 2009).

         Analysis

         The disputed amounts can be divided into three categories. First, the parties dispute whether Plaintiff is entitled to fees for his efforts to obtain settlements from State Farm and Pekin. See Defendant's Exhibit 6 [Doc. 104-2] at 16-19 (fees disputed on this ground). Defendant argues that such efforts would have been incurred regardless of whether Plaintiff had pursued any claim against Defendant. [Doc. 104] at 5-7; see Exhibit 6 [Doc. 104-2] at 16-19 (billing entries). In other words, these fees were not incurred in connection with this litigation. [Doc. 104] at 5-7. Plaintiff argues that Defendant should pay the fees because Defendant benefitted from the work. Defendant's ability to pay underinsured motorist benefits is reduced, or offset, by the liability proceeds received from State Farm. Therefore, as Plaintiff sees it, Defendant benefitted from the work and should pay for it. [Doc. 94] at 3; [Doc. 109] at 3-4.

         The Court agrees with Defendant. Under the circumstances of this case, Plaintiff's efforts to recover from State Farm and Pekin are too attenuated from Plaintiff Fowler's claims against Defendant in this litigation. Plaintiff would have incurred these fees irrespective of the claims against Defendant in this litigation. Plaintiff asks the Court to interpret the phrase “a reasonable amount of attorney['s] fees” as “any and all attorney's fees incurred by Plaintiff between the date of the accident and the settlement of Plaintiff's claims against Defendant.” That is an unreasonable interpretation. The Court believes the reasonable interpretation to be, “all reasonable attorney's fees incurred in obtaining a settlement of Plaintiff's claims raised in this litigation.” It would be unreasonable and inequitable to interpret a “reasonable amount of attorney[']s fees and costs” as ...


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