Fee petitions ain't bean-bag.
A recent case out of Pennsylvania serves as a cautionary tale for attorneys seeking attorney fees pursuant to statute. The case, Clemens v. New York Central Mutual Fire Insurance Company was a “bad faith” case – where the plaintiff alleges the insurance carrier did not act appropriately in evaluating and/or resolving a claim. The case was tried to a jury from November 2, 2015 to November 6, 2015. Judge Malachy Mannion was the trial judge. Plaintiff prevailed at trial and was awarded $100,000. A couple of weeks later, counsel for plaintiff, [Michael J. Pisanchyn, Jr. and Marsha Lee Albright hereinafter “counsel”] submitted a fee petition seeking over $1.1 million for their work on the case resulting in the verdict and a companion case. After additional submissions and a hearing on the fees, Judge Mannion essentially denied the petition. The opinion, which is 100 pages long, shows, in painstaking detail, that Mannion dove deep into the petition and carefully examined the entries. Most 100 pages opinions go unread. But this opinion offers a couple valuable lessons when it comes to fee petitions.
Lesson 1 – Know your audience.
It would be an understatement to say that Mannion and Pisanchyn didn’t see eye to eye during the trial. On 75 occasions during the trial, Pisanchyn was admonished for his conduct. Mannion also noted in his opinion that Pisanchyn “…demonstrated an astonishing lack of familiarity with the Federal Rules of Civil Procedure as well as a complete disrespect for the rulings of the Court, the likes of which this court has never experienced.” Wow. One doesn’t often see that kind of personal commentary in legal opinions. Perhaps it was warranted. Perhaps not. What can’t be denied though, is that a fee petition will, under most circumstances go to the Judge who presided over trial. If trial counsel is averaging 15 daily admonishments during a five day trial, said counsel likely won’t have a lot of goodwill built up with the judge when it comes to the fee petition.
Lesson 2 – Fee Petitions are like witnesses – the good ones have credibility.
Trial counsel has an obligation to show that the requested fees are reasonable. The Court, in reviewing the submissions, noted that there was no evidence that the billing records were kept contemporaneously with the work performed – so the time logs had to be “reconstructed.” Oops. “Reconstructed” is not a word you want associated with your car, mobile phone or fee petition. It raises eyebrows. It means that at least some of the petition is not based on hard data but memory and scraps of paper or emails. “Reconstructed” is to be avoided.
Judge Mannion was also troubled that attorney Albright[the only witness who testified at the fees hearing for counsel] indicated that she reconstructed all the time for all lawyers and that the hours logged were her “”guess” as to hours spent on the case based on data extracted from the case management/billing software. “Guess” is not a word that witnesses should use. Judge Mannion demonstrated in his opinion that he didn’t really embrace the “guess” approach.
The petition listed 29 hours drafting 5 motions in limine. The opinion noted that there were actually only 4 motions, none of which was complex.
Lastly counsel’s petition including days where 20-22 hours were spent on “trial preparation.” In a particularly pointed comment, Mannion noted “Given the relatively straightforward nature of this case and the underwhelming performance of counsel at trial, the court finds the hours billed for trial preparation to be outrageous and abusively excessive. As such, the court will disallow all fees requested for trial preparation.” Ouch.
Lesson 3 – Words Matter.
Judge Mannion also problems with the verbiage counsel used in the billing records. There were 53 separate entries for paralegal services [20 hours] described as “file maintenance”. Those hours were tossed. Judge Mannion had similar issues with billing 15 minutes for “receipt of materials” – like an email. And the Judge tossed “e-mailing” time entries – citing Pennsylvania law that email is “purely clerical.” That comment is a bit outdated and ignores the prevalence of email in communications these days. But the better approach – particularly if the time entry is substantial – is to describe, what the email contained.
The time logs also contained several hours for paralegal services described merely as “other”. “Other” is low hanging fruit and will never be sufficient. Even if the judge likes you.
“Attorney Review” – with no indication of what was reviewed or why, got the boot.
And finally, 43 hours for Bates Stamping. That is alot of stamping. Mannion, to his credit, at least had a sense of humor. He noted that if the time spent on “maintenance” had been used for stamping, those hours could have been dramatically reduced. He authorized just 8 hours.
Lesson 4 – Proofreading can be your friend.
Mannion’s opinion, cites example after example where there are separate but identical time entries on the same day. All duplicative entries were struck. Similarly, the entry for “Draft of Motion and Brief in Support” – when no motions were filed by counsel at the time – was stricken. An entry for 24.5 hours for Motion in Limine revisions after the motions were filed was also stricken.
A Exhibit List reflected over 7,000 pages of documents. Mannion noted that the documents referred to be counsel totaled 229 pages.
Lesson 5 – Respect Must be paid.
To paraphrase Finley Peter Dunne, “fee petitions ain’t bean bag.” They should be carefully prepared, and vetted to insure the petition complies, in all respects with the prevailing law. If not, the consequences could be dire. Mannion concluded that the fee petition was “woefully deficient” and disallowed 87% of the hours billed. He went on to comment that “…whether the deficiencies of the petition are the result of gross negligence or some level of fraud upon the court, the court is convinced that the hours billed are not just excessive, but outrageously excessive.” The fee petition was denied. And, Mannion referred the matter to the Disciplinary Board of the Supreme Court of Pennsylvania.
Pisanchyn has commented that he didn’t think the petition was unreasonable, given nine years of litigation, noting “The defendants took the position of scorched earth litigation, and we had to go toe to toe with them every step of the way.”
This opinion for some reason reminded me of a truly bad movie – And Justice for All, featuring a young Al Pacino[pictured above] as a crusading criminal defense attorney trying to obtain some level of justice in the criminal courts of New York. Generally unwatchable, save for a truly epic Pacino courtroom meltdown scene, where he rages “You’re out of order,” at virtually everyone in the building.