Maule v. Government Employees Insurance Company

Filing 191

Order on Motion for Attorney Fees, Order on Motion for Bill of Costs, Order on Motion for Miscellaneous Relief, Order on Motion to Strike

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA

TERESA OOTEN MAULE,
Plaintiff,
vs.
GEICO GENERAL INSURANCE
COMPANY, d/b/a GEICO,
Defendant.

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3:03-cv-00183 JWS
OPINION AND ORDER
(Re:

Motions at dockets 167,
169, 170, 174, and 176)

I. MOTIONS ADDRESSED
At docket 167, plaintiff Teresa Ooten Maule (“Maule”) asks the court to award her
attorneys’ fees as the prevailing party in this litigation. At docket 174, defendant GEICO
General Insurance Company (“GEICO”) moves for a declaration that GEICO, not Maule,
is the prevailing party. At docket 169, Maule moves for an award of pre-judgment and
post-judgment interest. At docket 170, Maule has filed what she styled as a motion for a
bill of costs. Finally, at docket 176, GEICO moves to strike Maule’s motion for a bill of
costs. All motions have been briefed and are ripe. Oral argument would not assist the
court.

II. BACKGROUND
Maule filed a complaint in state court asking the court to reform certain provisions
in the automobile liability policy she had purchased from GEICO so that GEICO would
be required to arbitrate her uninsured motorist claim. In addition to requesting
arbitration pursuant to reformed provisions in the insurance policy, Maule asked for an

award of compensatory damages.1 Shortly after the case was removed, Maule filed an
unsuccessful motion to have the case remanded to state court.2 Subsequent to his
denial of Maule’s motion to remand, Judge Singleton granted Maule’s motion to amend
her complaint to add a tort claim for bad faith by GEICO.3 In his trial brief, Maule’s
lawyer summarized the relief she was seeking: “Ms. Maule claims damages for
GEICO’s breach of contract, i.e., failing to pay what was due under the UM coverage.
Ms. Maule claims damages for GEICO’s bad faith adjustment of this claim, including
refusal to arbitrate and the subsequent litigation. She also claims punitive damages for
GEICO’s bad faith conduct. . . . “4 For its part, GEICO denied that Maule was entitled to
any relief.
The case was tried to a jury which returned a special verdict awarding Maule
$50,000 as fair compensation for the medical expenses and economic losses she
sustained as a result of the accident caused by the uninsured motorist, $20,000 for pain
and suffering resulting from the accident, and $7,500 for damages occasioned by
GEICO’s breach of the covenant of good faith and fair dealing implied in the insurance
contract. The jury’s verdict indicated that GEICO’s conduct was not outrageous. Based
on that finding, the jury did not award Maule any amount as punitive damages.

III. DISCUSSION
A. Motion at Docket 169
Maule asks the court to award her both pre-judgment and post-judgment interest
in her motion at docket 169. GEICO opposes the amount requested on the grounds
that GEICO is entitled to a reduction in the judgment based on a Medicaid lien it paid,
and to a further reduction for any amount which the court may conclude GEICO should
recover as the prevailing party. GEICO also indicates, without citation to any authority
1

Complaint in Superior Court at p. 9, attached to Doc. 2, Notice of Removal.

2

The motion is at docket 7. Judge Singleton denied the motion in an order at docket 15.

3

Doc. 36.

4

Doc. 142 at p. 3.

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or other explanation, that the court should exercise its discretion to deny Maule’s
request for interest. However, GEICO does not quarrel with Maule’s calculation of the
amount of interest to which she would be entitled absent GEICO’s contentions.
The Medicaid lien issue was resolved in favor of Maule in an earlier order.5 The
prevailing party issue is resolved in favor of Maule elsewhere in this order. The court
sees no basis for denying Maule any interest to which she has a legitimate claim. Her
request for prejudgment interest pursuant to AS 09.30.070 in the amount of $8,415.66
will therefore be granted. Her request for post-judgment interest pursuant to state law
must be denied. Once her claim has been reduced to judgment in federal court, the
post-judgment interest rate is the rate established by federal law, 28 U.S.C. § 1961.
Maule is entitled to post-judgment interest calculated in accordance with that statute.
B. Motions at Dockets 167 and 174
1. Prevailing Party
The award of attorneys’ fees in connection with claims based on Alaska law is
governed by Rule 82 of the Alaska Rules of Civil Procedure. The rule provides for an
award of partial attorneys’ fees to the party who prevails in the litigation. Maule takes
the position that she is the prevailing party, because she obtained a verdict with a net
principal value of $27,500–the court reduced the jury’s verdict of $57,500 by $30,000
previously paid to Maule by GEICO.6 GEICO contends that Maule did not prevail,
because she recovered no punitive damages. Indeed, GEICO contends that because
Maule’s punitive damage claim failed, GEICO was the prevailing party.
The Alaska Supreme Court has said: “Under Alaska law the prevailing party is
one who successfully prosecuted or defended the action and prevailed on the main
issue.”7 The question becomes whether it was the claim for compensatory damages or

5

Order at doc. 190.

6

The jury was instructed to make a full award of compensatory damages and told that
the court would then reduce the jury’s award by $30,000 to account for the payments made by
GEICO.
7

Matanuska Elec. Assoc., Inc. V. Rewire the Bd., 36 P. 3d 685, 690 (Alaska 2001).

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the claim for punitive damages which was the main issue. There is no doubt that the
claim for punitive damages potentially involved a much larger sum of money than the
claim for compensatory damages, a consideration which GEICO submits makes it the
main issue. On the other hand, the original complaint did not seek punitive damages,
and Maule was not quick to add that claim to the litigation. She did so only after her
unsuccessful attempt to have the case remanded to state court. GEICO points to the
amounts claimed by Maule’s counsel in argument to the jury as evidence that she did
not prevail. While not irrelevant, what a lawyer argues to the jury cannot be weighed
too heavily, lest lawyers be deterred from vigorous advocacy. More important is the
evidence the lawyer actually presented to the jury. Here, Maule’s counsel presented
scant evidence of the kind of outrageous behavior that would be necessary to support
an award of punitive damages. Indeed, there was barely enough evidence for the claim
to go to the jury. The court also finds it significant that Maule offered to settle the case
for $30,000 plus attorney’s fees calculated under Rule 82(b)(1), for a total which Maule
calculated to be $35,000.8
Based on all the available information, the court concludes that the main issue at
trial was the claim for compensatory damages, not the claim for punitive damages.
Given that determination, Maule’s net recovery of $27,500 is adequate to establish that
she prevailed.
2. Amount of Award
Rule 82(b)(1) sets out a schedule used to calculate the partial recovery of
attorneys’ fees to be awarded when a party recovers a money judgment. Based on that
schedule, Maule is entitled to an award equal to 20% of the first $25,000 of her recovery
and 10% of the amount by which her recovery exceeds $25,000. Her total recovery is
$35,915.66.9 Application of the schedule yields an attorneys’ fee award of $6,091.57.10

8

Ex. 1 to doc. 180.

9

This consists of the $27,500 principal plus the $8,415.66 in pre-judgment interest.

10

Twenty percent of $25,000 is added to ten percent of $10,915.66.

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Rule 82(b)(3) permits the court to adjust the size of the award based on a list of
ten factors and any other “equitable factors deemed relevant.” The first factor is the
complexity of the litigation. That factor warrants no variance. This case was a middle of
the pack civil dispute. The second factor is the length of trial. Trial in this case
commenced on Monday, January 30, 2006, and the case was submitted to the jury on
Monday, February 6, 2006. The length of the trial does not warrant a variance. The
third, fourth, and fifth factors have greater application in cases where the presumptive
award is calculated pursuant to Rule 82(b)(2). To the extent these three factors apply
here, they do not support any change in the amount determined under Rule 82(b)(1).
The sixth factor is the reasonableness of the claims and defenses pursued by each
side. In the court’s opinion, Maule and GEICO took positions that were equally
unreasonable–GEICO chose not to have Maule’s claim arbitrated, and Maule chose to
pursue punitive damages. The next factor is vexatious or bad faith conduct. Neither
party engaged in such behavior at trial, and Judge Singleton entered an order earlier
which adequately addressed concerns that arose prior to trial. None of the remaining
ten listed factors supports a variance. There is only one unlisted equitable factor which
warrants a change to the award determined under the schedule in Rule 82(b)(1). That
factor is Maule’s failure to pay GEICO the $1,072 Judge Singleton ordered her to pay
based on pre-trial conduct.11 Taking Rule 82(b)(3) into consideration, Maule is entitled
to a recovery of $5,019.57 in attorneys’ fees.12
C. Motions at Dockets 170 and 176
Federal Rule of Civil Procedure 54 contemplates that costs will be allowed to a
prevailing party and that they will be taxed by the Clerk. D.Ak.LR 54.1 sets forth the
procedure for taxing costs. The procedure must commence within 10 days from the

11

Doc. 103.

12

This is calculated by subtracting the $1,072 Maule was ordered to pay GEICO but did
not from the $6,091.57 due under the schedule in Rule 82. An argument could be made that
the $1,072 should be increased by an amount reflecting interest on the unpaid amount, but
GEICO did not make that argument. Moreover, it is unclear precisely when Judge Singleton
required the sum to be paid and what consequences he established for late payment. Finally,
the amount involved would be small. Given these considerations, no interest has been added.

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date that judgment is entered with service of a bill of costs and a notice of date for the
taxation of costs by the Clerk. Instead of following the applicable rule, Maule’s counsel
filed a motion at docket 170 seeking to recover costs. The motion at docket 170 was
filed the day after judgment was entered. Although counsel for Maule followed the
wrong procedure, his action timely alerted both the court and GEICO’s counsel that
Maule was seeking costs and what costs she sought. The failure by Maule’s counsel to
follow the proper procedure caused GEICO’s counsel to file a motion at docket 176 to
strike the motion at docket 170.
Given that the motion at docket 170 gave timely notice of the fact that Maule was
seeking costs and described the costs, the court deems it appropriate to allow Maule to
serve a bill of costs which, together with a notice of taxation, shall be filed within 10
days from the date of this order. The motion at docket 170 is DENIED without prejudice
to the Clerk’s consideration of Maule’s bill of costs if one is filed pursuant to this order.
Nothing herein may be construed to indicate that particular costs identified in the
affidavit accompanying the motion at docket 170 are recoverable. Determination of
what may be recovered is left for the Clerk. The motion at docket 170 having been
denied, the motion at docket 176 is DENIED as moot.

IV. CONCLUSION
For the reasons set out above, the court makes the following disposition of the
motions under consideration:
1. The motion at docket 167 is GRANTED as follows: Maule shall have
judgment against GEICO for attorneys’ fees in the amount of $5,19.57.
2. The motion at docket 169 is GRANTED as follows: Maule shall have
judgment against GEICO for pre-judgment interest in the amount of
$8,415.66, and the judgment in this case shall bear post-judgment interest
pursuant to 28 U.S.C. § 1961.
3. The motion at docket 170 is DENIED.
4. The motion at docket 174 is DENIED.
5. The motion at docket 176 is DENIED as moot.
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6. Maule shall have 10 days from the date of this order to serve a proper
bill of costs and to give notice of the taxation of those costs.
DATED at Anchorage, Alaska this 19th day of April 2006.

/s/
HON. JOHN W. SEDWICK
UNITED STATES DISTRICT COURT JUDGE

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