Williams v. Auto-Owners Insurance Company

Filing 84

ORDER IMPOSING COSTS AND FEES by Chief Judge Marcia S. Krieger on 1/27/16.(msksec, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Honorable Marcia S. Krieger
Civil Action No. 12-cv-00999-MSK-CBS
CHRISTINE WILLIAMS,
Plaintiff,
v.
OWNERS INSURANCE COMPANY,
Defendant.

ORDER IMPOSING COSTS AND FEES

THIS MATTER comes before the Court pursuant to the Defendant’s (“Owners”)
Motion for Ruling on its Request for Attorneys’ Fees and Costs (# 80), Ms. Williams’ response
(# 81), and Owners’ reply (# 83). In this action, Ms. Williams alleged that Owners, her auto
insurer, failed to pay her uninsured/underinsured motorist benefits according to the terms of her
policy. The instant matter arose out of motions by both parties (# 34, 38) requesting a hearing to
determine the admissibility of opinion testimony proffered by their opponent pursuant to Fed. R.
Evid. 702.
The Court scheduled an evidentiary hearing on that motion, but the hearing was quickly
aborted after it became clear that Ms. Williams had not accurately ascertained the opinions that
her witness would be offering. The Court then entertained an oral motion from Owners for the
costs and fees it incurred in producing its own witnesses at the hearing and, after hearing from

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both parties, granted that motion.1 The Court granted Owners leave to file an affidavit
establishing the costs and fees, and Owners did so (# 47), requesting reimbursement for the
following items:
• $9,321.68 in costs for preparation and attendance of Dr. Bain;
• $5,300.00 in costs for preparation and attendance of Dr. Wortzel;
• $3,815.00 in costs for preparation and attendance of Mr. Sands;
• $7,184.59 in attorney fees incurred in preparing for and attending
the hearing;
For a grand total of $ 25,621.27.
Ms. Williams filed a response (# 50) to the affidavit, arguing that she had not challenged
the proffered testimony of Drs. Bain and Wortzel or of Mr. Sands, such that their appearance at
the Rule 702 hearing was not necessary. She also objected to the invoices that Owners had
presented as being “hearsay,” without further explanation. She also offered a single-sentence
objection to that portion of Owners’ affidavit that asserted that the amounts billed by each of the
experts was reasonable, arguing that this conclusion was “lacking the proper foundation.”
Owners filed a reply.
Due to an administrative oversight, the Court did not immediately take up the issue. 2
Meanwhile, the Court granted summary judgment to Owners on Ms. Williams’ claims, and that
ruling was affirmed on appeal by the 10th Circuit. Owners then filed the instant motion (# 80),
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Because the sanction arises from Ms. Williams’ counsel’s failure to adequately prepare
for the Rule 702 hearing, the sanction is properly imposed on Mr. Fischel, Ms. Williams’
counsel.
2

To the extent that an explanation is helpful, the Court’s electronic recordkeeping system
tracks the pendency of outstanding docket entries that are denominated as motions, but does not
have an equivalent method of tracking matters that are presented in non-motion form (e.g. orally
or via affidavits). Once the Court lost track of the fact that Owners’ request was outstanding,
nothing in the Court’s electronic record identified it as an outstanding matter.
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seeking a ruling on its costs and fee request. Ms. Williams opposed that motion, arguing that
Clerk of the Court had subsequently taxed costs against Ms. Williams incident to the entry of
judgment against her, and that this taxation of costs incorporated any claims that Owners might
have had relating to the Rule 702 hearing. Ms. Williams also argued that Owners’ motion was
now so delayed from the original hearing as to be untimely. In the alternative, Ms. Williams
requested leave to file a sur-reply, arguing that Owners’ original reply in support of its request
raised new issues that Ms. Williams had not had an opportunity to address. (She did not tender a
proposed sur-reply brief, along with her response, however.)
The Court quickly disposes of many of Ms. Williams’ arguments. Although Owners’
Bill of Costs sought reimbursement for “Defendant’s Expert Costs,” including some $11,000 for
Dr. Wortzel and $8,000 for Mr. Sands, the Clerk of the Court refused to tax those items, finding
that “Expert witness fees are not recoverable under [28 U.S.C.] § 1920.” (The Clerk did award
the $40 witness fees for each of the witnesses at the Rule 702 hearing, but the Court does not
understand Owners’ current motion to include those sums.) The types of costs available under
§ 1920 as a matter of course to prevailing parties are much narrower than the types of costs that
the Court can allocate as part of a sanction against counsel for unpreparedness. Thus, the Clerk’s
(correct) decision that Owners could not recover the experts’ costs pursuant to 28 U.S.C. § 1920
is irrelevant to the question of whether Owners is properly awarded those costs by the Court as a
sanction for Ms. Williams’ unpreparedness at the Rule 702 hearing.
The Court also rejects Ms. Williams’ argument that Owners’ motion is untimely.
Although one might criticize Owners for not alerting the Court to the pendency of the request for
costs and fees earlier – e.g. during the life of the litigation or shortly after entry of judgment,
rather than awaiting the outcome of an appeal that would not have affected the question of fees

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and costs in any event – the primary fault for the delay must rest with the Court. In addition, Ms.
Williams has not identified any particular prejudice that inured to her because of the delay. The
Court notes that Owners has not requested an additional award of interest on the sums it seeks
nor otherwise sought recompense for the lost time value of money.
The Court also rejects Ms. Williams’ request for leave to file a sur-reply. The pertinent
portion of Owners’ reply responded directly to Ms. Williams’ argument that the named experts
were “unnecessary” to have present at the hearing, with Owners explaining the reasons why it
felt the need to have the witnesses present. This is directly responsive to the issues raised by Ms.
Williams and does not introduce new or collateral topics for which a sur-reply would be
appropriate.
That leaves the Court to evaluate Owners’ request as initially-presented. Ms. Williams
raised three substantive objections: (i) that the named experts were not necessary for the
scheduled Rule 702 hearing; (ii) that the experts’ invoices constitute hearsay; and (iii) that
Owners’ affidavit attesting to the reasonableness of the costs claimed is without adequate
foundation. The Court rejects each argument.
Owners indicates that each of the experts at issue were present at the hearing in
anticipation of challenging the methodologies used by Ms. Williams’ experts in formulating their
opinions, which were the subject of the hearing. It is entirely appropriate -- indeed, most often is
necessary that a party challenging opinion testimony as to the reliability of the methodology used
to formulate the opinion to tender another expert to establish that the methodology that was used
was unreliable, and to explicate a reliable methodology according to standards or practices in the
field of expertise. (Put differently, because the Rule 702 hearing is an evidentiary hearing and
the determination of the reliability of a methodology is by a preponderance of the evidence, it is

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difficult to establish that the methodology used is not reliable without a witness to say so. Rarely,
on cross-examination will the proffered expert admit that the methodology he/she used is not
reliable, and counsel’s argument to that effect does not constitute evidence that rebuts the
witness’ testimony.) Thus, it was reasonable for Owners to have its own experts present to
testify about the methodologies used by Ms. Williams’ proffered experts.
The Court also rejects Ms. Williams’ argument that the experts’ invoices, tendered by
Owners as proof of the costs it incurred in having each expert present, are inadmissible hearsay.
Assuming (without necessarily finding) that a hearsay objection is appropriate in these
circumstances, the invoices are not hearsay because they are not being offered for the truth of the
matters contained therein. For example, Dr. Wortzel’s invoice reports that Dr. Wortzel spent 1.5
hours on December 10, 2013 on the tasks of “record review” and “meeting/hearing preparation.”
Owners does not offer the invoice to prove that Dr. Wortzel spent the indicated number of hours
on the indicated tasks on the indicated date, nor does Owners’ entitlement to reimbursement turn
on whether Dr. Wortzel’s invoice is correct. Rather, Owners offers the invoice for the more
prosaic proposition that “Dr. Wortzel billed Owners $5,300 for services” (and, presumably, that
Owners paid it). The Court’s sanction in favor of Owners is a restitutionary one, and if Dr.
Wortzel’s itemization of his time or activities is incorrect in some respect, it does not change the
fact that Owners ultimately paid that (incorrect) invoice and deserves to be reimbursed in that
amount. Thus, the Court finds that the experts’ invoices are not offered for the truth of the
matters asserted in them and they are not hearsay.
That leads, somewhat obliquely, to Ms. Williams’ final challenge: that Owners has failed
to establish a sufficient foundation for its assertion that the amounts billed by the experts are
reasonable. Notably, Ms. Williams has not submitted her own evidence – e.g. an opinion of an

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expert in such matters – to establish that the amounts claimed by Owners are unreasonable under
the circumstances. Instead, her challenge is that Owners has not set forth a sufficient
justification for its opinion that the charges reflected in the invoices were reasonable. Viewed
strictly from a foundational standpoint, the Court finds Owners’ proffer sufficient. Owners
relied on the affidavit of its counsel Amanda Burke. Ms. Burke stated that she had been an
attorney admitted in Colorado for approximately seven years at the time of her affidavit, that she
had been employed by her current firm for more than five years, that her practice focused on
matters involving bodily injury and insurance claims, and that she had handled at least five jury
trials and one arbitration. She stated that she had personally conducted pre-hearing preparation
sessions with each of the experts, and the Court notes that all three experts’ invoices claim time
for pre-hearing preparation meetings. Based on these facts, Ms. Burke opines that both the
hourly rates claimed by the experts and the number of hours claimed by them for preparation for
and attendance at the hearing are reasonable.
Ms. Williams’ opposition does not elaborate on what particular foundational defects she
believes infect Ms. Burke’s affidavit, leaving this Court with little to adjudicate. Although
reasonable people might disagree over how much experience an attorney must have before that
attorney can reliably opine as to the reasonableness of an expert’s hourly rates and hours spent,
the Court is satisfied that Ms. Burke’s more than five years of litigation experience, focusing on
the particular issues in cases like this one, arguably qualify her to render at least a prima facie
opinion on reasonableness in these circumstances. Even assuming her experience is limited to
the five jury trials and one arbitration she references (that is, assuming that she did not work with
experts on any other cases that did not proceed to a trial or hearing), Ms. Burke likely has at least
six sets of data points against which to evaluate the hourly rates and hours claimed by the experts

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in this case. Although this might not make Ms. Burke’s opinion particularly persuasive relative
to contrary evidence, Ms. Williams has not presented any evidence to the contrary. Thus, the
Court finds that Owners has carried its burden of showing the reasonableness of the hours and
rates claimed by its experts.
There being no other challenge by Ms. Williams to Owners’ computation of costs and
fees, the Court approves that request. Consonant with the Court’s oral imposition of sanctions,
Mr. Fischel shall remit payment to Owners, in the amount of $ 25,621.27 within 30 days of the
date of this Order.
Dated this 27th day of January, 2016.
BY THE COURT:

Marcia S. Krieger
Chief United States District Judge

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