Government Employees Insurance Co. v. Dunst

Filing 41

Order

UNITED STATES DISTRICT COURT
DISTRICT OF ALASKA

GOVERNMENT EMPLOYEES
INSURANCE COMPANY,
Plaintiff,
vs.
GARY DUNST,
Defendant.

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3:04-cv-272 JWS
ORDER FROM CHAMBERS
[Re:

Motions at Dockets 29 & 30]

I. BACKGROUND AND MOTIONS PRESENTED
As the court explained in its order at docket 37, the parties briefed the issues of
attorneys’ fees and costs before formally settling this case. The court directed the
parties to file closing papers by May 26, 2006, and warned them that if they did not, the
court would deny defendant Gary Dunst’s motion for attorneys’ fees at docket 29
without prejudice to re-filing. In addition, the court denied Dunst’s motion for costs
without prejudice as not ripe.
In response to the order at docket 37, the parties filed a stipulation for entry of
judgment on May 26, 2006. The parties stipulated to entry of a judgment declaring that
Dunst is entitled to uninsured/underinsured motorist coverage for the accident on
June 3, 2004, under three policies.1 They also agreed to renew Dunst’s motion for
costs at docket 30, which has been fully briefed. That motion joins Dunst’s motion at
1

Doc. 38, p. 2.

docket 29, which also has been fully brief, on the court’s docket. Oral argument has not
been requested on either motion and would not assist the court.
II. DISCUSSION
A. Dunst Is the Prevailing Party
The basis of this court’s jurisdiction is the diversity of the parties’ citizenship, and
therefore the court will apply the law of the forum state in awarding attorneys’ fees.2
Under Alaska Civil Rule 82(a), a party is entitled to recover a portion of its attorneys’
fees if it is the “prevailing party.” A party is the prevailing party if it succeeds on the
“main issues” in the case.3
The Government Employees Insurance Company (“GEICO”) sought an order
declaring that Dunst is not entitled to recover on his insurance policies, while Dunst
sought an order declaring the opposite.4 Judgment is being entered in Dunst’s favor on
all the main issues presented in this case. In an effort to show Dunst did not succeed
on the main issues, GEICO points out the court ruled against Dunst on his motion to
dismiss. The issues raised by that motion were minor compared to the issues resolved
by the judgment that is being entered in Dunst’s favor. Dunst is the prevailing party.
B. Amount of Attorneys’ Fees
Under Rule 82(b)(2), a prevailing party is entitled to a portion of its “reasonable
actual attorney’s fees which were necessarily incurred ...[,] includ[ing] fees for legal
work customarily performed by an attorney but which was delegated to and performed
by an investigator, paralegal or law clerk.” In a case, such as this one, that is resolved
without money judgment and short of trial, the presumptive recoverable portion of
attorneys’ fees is 20 percent.5
2

MRO Commc’ns v. Am. Tel. & Tel. Co., 197 F.3d 1276, 1281 (9th Cir. 1999) (citing
Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 259 n.31 (1975)).
3

Bowman v. Blair, 889 P.2d 1069, 1075 (Alaska 1995) (citing Alaska Placer Co. v. Lee,
553 P.2d 54, 63 (Alaska 1976); Cooper v. Carlson, 511 P.2d 1305, 1308 (Alaska 1973)).
4

Doc. 4, ex. 1, amended complaint for declaratory judgment, p. 6; doc. 18, answer and
counterclaim for declaratory judgment, pp. 9-10.
5

ALASKA CIV. R. 82(b)(2).

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Dunst submits that his attorneys’ fees total $36,458.75, consisting of: 1) $10,000
for attorney W. Michael Moody’s 40 hours of work at $250 per hour; 2) $13,101 for
attorney Christopher J. Slottee’s 79.4 hours of work at $165 per hour; and
3) $13,357.75 for paralegal Lewis E. Baker’s 157.15 hours of work at $85 per hour.6
GEICO raises several issues concerning Dunst’s fees. The first is that most of
them were incurred in state court proceedings in which Dunst took depositions that led
to the discovery of the identity of the other driver involved in his accident and her
insurance status. GEICO asserts Dunst may not recover those fees in this case,
because Rule 82 applies only to fees incurred in this action, and not those incurred in
other proceedings.7 Dunst would circumvent this problem by citing the Alaska Supreme
Court’s decision in Aloha Lumber Corp. v. University of Alaska for the proposition that
he may recover fees incurred in the state court proceedings because those proceedings
were “closely related to” and “made necessary by” this action.8
To a large extent, the court agrees with Dunst. The state court proceedings were
“closely related to” these proceedings up to the discovery of the other driver’s identity
and insurance status, because that information was critical to this case. After that, the
state court proceedings were not related to these proceedings because they concerned
information, such as the other driver’s driving record, that is irrelevant here. As for
whether the state court proceedings were “made necessary by” this action, an argument
could be made that they were not, because the depositions taken under state court
authority could have been taken under this court’s authority pursuant to Federal Rule of
Civil Procedure 45. Still, the court finds persuasive the fact it stayed these proceedings,
and then extended the stay, to allow Dunst “to pursue discovery in his state court

6

Doc. 29, ex. 11, affidavit of W. Michael Moody, p. 2, ¶ 2.

7

Torrey v. Hamilton, 872 P.2d 186, 187 (Alaska 1994) (citing Alaska State Hous. Auth. v.
Riley Pleas, Inc., 586 P.2d 1244, 1249 (Alaska 1978)).
8

994 P.2d 991, 1003 (Alaska 1999).

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proceeding[s].”9 By doing that, the court effectively allowed Dunst to substitute the state
court proceedings for proceedings in this court under Rule 45 and thus made the state
court proceedings a necessary part of his action before this court.
GEICO also notices some of Moody and Slottee’s time was spent on a motion to
dismiss that Dunst filed in this court and lost. However, the Alaska Supreme Court has
indicated it is not appropriate to parse the award of attorneys’ fees based on which party
may have prevailed on which motion during the course of the litigation.10 In the exercise
of its discretion, this court will not reduce the fees to reflect the lack of success on that
motion.
The third issue GEICO points out is the fact some of Moody and Slottee’s work
occurred before GEICO filed its action. Notably, GEICO does not dispute that the work
was necessary to this case. The court will not penalize Dunst for his attorneys’ head
start by denying him fees for the work they performed before this case’s formal
beginning.
Finally, GEICO highlights the fact Moody’s fees are not itemized – a result of his
representing Dunst on a contingency fee basis, he says. Moody’s hours were within the
range the court would have expected him to spend on this case; his affidavit shows his
hours were in fact devoted to this case, and his hourly fee is reasonable.11
Consequently, his fees are recoverable despite the fact they were not itemized.
After considering the concerns raised by GEICO, the court concludes Dunst’s
claimed fees must be reduced by the amount corresponding to the time spent on the
state court action after his confirmation of the other driver’s identity and insurance
status. According to Dunst, that occurred at her deposition, which the billing records

9

Doc. 16, pp. 2-3, 7-8 (order granting stay during pendency of state court proceedings);
doc. 17, p. 1 (order extending stay).
10

Gold Bondholders Protective Council v. Atchison, Topeka and Santa Fe Rwy. Co., 658
P.2d 776, 779 (Alaska 1983).
11

See doc. 29, ex. 11, affidavit of W. Michael Moody.

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reflect happened on August 18, 2005.12 The only hours claimed after that point are 9.2
hours Baker worked between August 19 and October 10, 2005.13 Subtracting the fees
associated with those hours from the total fees claimed leaves $35,676.75.
Having determined the amount of fees Dunst appropriately may claim to have
incurred for purposes of Rule 82, the next question is what percentage of that amount
may he recover. The presumption is twenty percent, which would be $7,135.35.
The presumptive award may be increased or decreased based on consideration
of factors set out in Rule 82(b)(3). Dunst argues the following Rule 82(b)(3) factors
support a larger award: 1) the reasonableness of GEICO’s claims and defenses; 2) the
relationship between the amount of work performed and the significance of the matters
at stake; and 3) basic equity.14
After considering the papers submitted by the parties, the court concludes none
of those factors favors a larger award. Some of the legal positions GEICO advanced in
correspondence with Dunst’s counsel may not have been accurate, but they were not
so obviously unreasonable as to support an enhanced award. The amount of work
performed does not seem so small in relation to the significance of the matters at stake
to warrant an increase. Lastly, basic equity does not support enhanced fees because
this litigation’s result – coverage for Dunst exceeding $1.6 million – is fair, and adding
additional attorneys’ fees to Dunst’s total recovery is not needed to assure a reasonable
and just result.
C. Dunst May Not Recover His Costs
Dunst’s motion for costs raises an interesting question in an area of law that
otherwise might be regarded as sleepy. Dunst is entitled to recover certain costs
because he is the prevailing party,15 but it appears the costs he seeks to recover were

12

Id., ex. 11-A, p. 8 (entry for August 18, 2005, noting Baker’s “videotap[ing of] Amanda
Torres deposition”).
13

Id., ex. 11-A, p. 9.

14

ALASKA CIV. R. 83(b)(3)(F), (H), (K).

15

See 28 U.S.C. § 1920; FED. R. CIV. P. 54(d)(1).

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incurred in the state court proceedings.16 Those costs comprise $1,420.10 for
depositions; $37.50 for witness fees; $373.69 for “copies of papers necessarily obtained
for use in this case”; and $50 for service of a state court civil action on the other driver.17
GEICO questions the propriety of awarding those costs on the ground they were
incurred in state court.
GEICO has a point, particularly regarding the $50 cost for service of the state
court action on the other driver. It is inconceivable such a cost may be recovered in an
action in federal court, no matter how related are the two actions. As for the other
costs, they may be denied without deciding whether the fact they were incurred in state
court proceedings necessarily bars their recovery here. The depositions taken by Dunst
were not used at trial, awarding costs for depositions not used at trial is within the
court’s discretion,18 and this case’s circumstances counsel against such an award.
Awarding witness fees also is in the court’s discretion,19 and the fact the witnesses were
not deposed under this court’s authority20 cuts against such an award. Dunst claims
$373.69 for “copies of papers necessarily obtained for use in this case” under 28 U.S.C.
§ 1920(4), but that statute provides authority for recovering costs associated with
papers used at trial21 and this case did not go to trial.

16

Doc. 30, p. 3, nn.1-2.

17

Id., p. 3 and attached bill of costs.

18

Wash. State Dept. of Transp. v. Natural Gas Co., 59 F.3d 793, 806 (9th Cir. 1995)
(citing Econs. Lab., Inc. v. Donnolo, 612 F.2d 405, 411 (9th Cir. 1979)).
19

10 CHARLES ALAN WRIGHT, ET AL., FEDERAL PRACTICE AND PROCEDURE § 2678 (3d ed.

1998).
20

See 28 U.S.C. § 1821(a)(1).

21

10 CHARLES ALAN WRIGHT, ET AL., FEDERAL PRACTICE AND PROCEDURE § 2677 (3d ed.

1998).

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III. CONCLUSION
For the reasons set out above, the motion at docket 29 is GRANTED in part and
DENIED in part, and the motion at docket 30 is DENIED. Dunst shall recover from
GEICO the sum of $7,135.35 in attorneys’ fees.
The court cautions Dunst’s counsel to take care to avoid accidentally claiming the
hours at issue here in the state court action against the other driver. If Dunst should
prevail in that action, he again would be entitled to recover attorneys’ fees. The court
can imagine a scenario in which Dunst’s counsel submits billing records in which the
hours claimed here are unintentionally included. It would be understandable if that
happened, because the work is necessary to both actions. To help ensure that error
does not occur, Dunst’s counsel is directed to send a copy of this order to counsel for
the other driver within ten (10) days of the date of this order. This precautionary
measure does not imply that Dunst’s attorneys would intentionally seek a double
recovery of fees.
DATED at Anchorage, Alaska, this 9th day of June, 2006.

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

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