The Home Loan Investment Company v. The St. Paul Mercury Insurance Company
Filing
92
ORDER Granting in Part and Denying in Part Plaintiff's 78 Post-Trial Motion Regarding Damages, Attorney Fees and Costs, Pre-Judgment Interest, and Request for Entry of Final Judgment. This case is DISMISSED in its entirety. By Judge Christine M. Arguello on 11/25/2014. (athom, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 12-cv-02308-CMA-CBS
THE HOME LOAN INVESTMENT COMPANY, a Colorado corporation,
Plaintiff,
v.
THE ST. PAUL MERCURY INSURANCE COMPANY,
d/b/a or a/k/a TRAVELERS, a Connecticut corporation,
Defendant.
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S POST-TRIAL
MOTION REGARDING DAMAGES, ATTORNEY FEES AND COSTS, PREJUDGMENT INTEREST, AND REQUEST FOR ENTRY OF FINAL JUDGMENT
The parties, Home Loan Investment Company (“Home Loan”) and St. Paul
Mercury Insurance Co., d/b/a Travelers (“Travelers”), tried this insurance-related matter
to a jury in June of 2014. The jury found in favor of Home Loan as to both of its claims.
Specifically, the jury determined that Travelers (1) breached its insurance contract with
Home Loan, and (2) unreasonably denied payment of Home Loan’s insurance claim
pursuant to Colo. Rev. Stat. §§ 10-3-1115 and -1116 (Doc. # 77.) Home Loan now
requests damages, attorney fees and costs, a pre-judgment interest award, and an
entry of final judgment (Doc. # 78.) As explained below, this Motion is GRANTED IN
PART and DENIED IN PART.
The parties do not dispute the amount of the covered benefit ($466,483), but do
dispute the amount of permissible statutory damages. Home Loan contends that an
insured party may recover two times the covered benefit as statutory damages under
Colo. Rev. Stat. § 10-3-1116 in addition to the covered benefit itself. Travelers
counters that Home Loan may only recover a total amount of two times the covered
benefit, and that this recovery is inclusive of the covered benefit. As explained below,
the Court adopts the decision of the Colorado Court of Appeals in Hansen v. American
Family Mutual Ins. Co., 2013 COA 173, ¶ 61, and holds that Home Loan may recover
the covered benefit as well as statutory damages of twice the covered benefit, pursuant
to Colo. Rev. Stat. § 10-3-1116(1).
As for attorney fees, the Court may award reasonable attorney fees under Colo.
Rev. Stat. § 10-3-1116(1). With a single exception, Travelers concedes that Home
Loan’s counsel spent a reasonable number of hours litigating this case. However,
Travelers argues that Home Loan’s hourly rates for work are unreasonable. The Court
agrees, and approves modified attorney fees.
Regarding costs, the Court holds that Home Loan may recover some of its costs,
with several exceptions (including its expert witness fees and mediation costs), as
detailed below.
As for prejudgment interest, Home Loan may recover 8% interest on its unpaid
covered benefits as of November 21, 2011 – i.e., the date of Travelers’ denial of its
insurance benefits. Home Loan also may recover postjudgment interest after the date
of final judgment at the federal postjudgment interest rate.
2
I. STATUTORY DAMAGES UNDER COLO. REV. STAT. § 10-3-1116(1)
Colorado law provides that when an insurer unreasonably delays or denies a
claim for a covered benefit, an insured party “may bring an action in a district court to
recover reasonable attorney fees and court costs and two times the covered benefit.”
Colo. Rev. Stat. § 10-3-1116(1) (“Section 1116(1)”) (emphasis added). State law also
provides that such an action “is in addition to, and does not limit or affect, other actions
available by statute or common law, now or in the future. Damages awarded pursuant
to this section shall not be recoverable in any other action or claim.” Id. § 10-3-1116(4)
(“Section 1116(4)”).
In the instant action, Home Loan argues that it is entitled to damages equal to
$1,399,449.00, consisting of: (1) the covered benefit itself ($466,483.00), i.e., the
damages from its breach of contract claim, and (2) the statutory damages authorized
under Section 1116(1), i.e., two times the covered benefit ($932,966.00). In contrast,
Travelers interprets Section 10-3-1116(4) as effectively limiting an insured’s total
recovery, such that Home Loan’s recovery of two times the covered benefit under
Section 1116(1) is inclusive of the recovered benefit itself. (Id. at 6-7.) Both parties
point to the plain language of the statute in support of their respective interpretations.
As a preliminary matter, the Court notes that in cases arising under diversity
jurisdiction, as here, the Court’s task is not to reach its own judgment regarding the
substance of the common law, but simply to “ascertain and apply the state law.” Wade
v. EMCASCO Ins. Co., 483 F.3d 657, 665-66 (10th Cir. 2007) (internal quotation marks
omitted). Where no controlling state law exists, the federal court must endeavor to
3
predict what the state’s highest court would do if it were faced with the same facts and
issues. Stickley v. State Farm Mut. Auto. Ins. Co., 505 F.3d 1070, 1077 (10th Cir.
2007). In making that prediction, a court considers “analogous decisions by the [state]
Supreme Court, the decisions of the lower courts in [the state], the decisions of the
federal courts and of other state courts.” Phillips v. State Farm Mut. Auto. Ins. Co.,
73 F.3d 1535, 1537 (10th Cir. 1996); see also Johnson v. Riddle, 305 F.3d 1107, 1118
(10th Cir. 2002) (noting that a federal court applies what it finds to be the state law after
giving “proper regard” to the relevant rulings of other courts in the state). In particular,
the decision of an intermediate appellate state court “is a datum for ascertaining state
law which is not to be disregarded by a federal court unless it is convinced by other
persuasive data that the highest court of the state would decide otherwise.” Stickley,
505 F.3d at 1077 (emphasis added) (quoting West v. Am. Tel. & Tel. Co., 311 U.S. 223,
237 (1940)).
Although there is no controlling Colorado Supreme Court authority, the Colorado
Court of Appeals recently held that an insured party may recover the amount of an
unreasonably delayed or denied covered benefit as well as two times the amount of
that covered benefit in statutory damages under Section 1116(1). Hansen, 2013 COA
173, ¶ 61. Citing traditional standards of statutory interpretation, the Court of Appeals
rejected the precise argument Travelers makes here, explaining that Section 1116(1)
expressly created a new right of action with a concomitant remedy of “reasonable
attorney fees and court costs and two times the covered benefit.” Id., ¶ 60 (quoting
Section 1116(1)). Accordingly, an insured party’s total recovery (excluding attorney
4
fees and costs) could amount to three times the covered benefit, consisting of “awards
aris[ing] from different claims: one-third . . . from the claimant’s breach of contract claim,
and two thirds from her statutory claim under [S]ection 10–3–1116.” Id., ¶ 61.
The Court of Appeals reasoned that Section 1116(4)’s plain language – providing
that the cause of action was “in addition to, and does not limit or affect, other actions
available by statute or common law, now or in the future” – clearly anticipated that an
insured party could simultaneously bring both a common-law breach of contract claim
to recover any unpaid benefits to which he or she was entitled, and a Section 1116(1)
claim for either delay or denial of those benefits. Id., ¶ 62 (citing Rabin v. Fid. Nat.
Prop. & Cas. Ins. Co., 863 F. Supp. 2d 1107, 1110-12 (D. Colo. 2012) (concluding that
although an insured’s “total receipt” of damages from a combined breach of contract
claim and a 1116(1) claim could amount to three times the benefits at issue in his or
her Section 1116 claim, that “receipt would derive from multiple sources . . . . which
is different from receiving three times the covered benefit directly and entirely from
the [S]ection 1116 claim”). 1
1
Although neither party analyzed the relevant legislative history in its brief, the Court of Appeals’
interpretation in Hansen is entirely consistent with that history. In proposing the legislation that
eventually became Section 1116, then-state Representative Andrew Romanoff described the
bill as “increas[ing] the penalties on companies that unreasonably delay or deny payments by
offering consumers . . . a private right of action beyond the remedies in existing law.”
Hearing on H.B. 1407 Before the H. Comm. on Business Affairs & Labor, 66th Gen. Assemb.,
2d Sess. (Apr. 24, 2008) (emphasis added). Additionally, the “Bill Summary” of the final bill
stated that the legislation would “create a cause of action” allowing a claimant “to recover
2 times the actual damages sustained.” An Act Concerning Strengthening Penalties for the
Unreasonable Conduct of An Insurance Carrier, and Making an Appropriation in Connection
Therewith, H.B. 08-1407, 2008 Sess. (CO. 2008), available at
http://www.leg.state.co.us/clics/clics2008a/csl.nsf/fsbillcont3/D26CDE1842EE880E872573F500
5
Travelers argues that the second sentence of Section 1116(4) – providing
that “[d]amages awarded pursuant to this section shall not be recoverable in any
other action or claim” – indicates that an insured party is precluded from also recovering
the covered benefit amount. (Doc. # 87 at 7) (quoting Section 1116(4)) (emphasis
added). Although the Court of Appeals did not explicitly analyze the import of this
second sentence in Hansen, Travelers’ interpretation contravenes the plain language
of the statute, because damages awarded pursuant to a breach of contract claim would
not be awarded “pursuant to this section” (i.e., Section 1116(1)), but rather, would be
awarded for an entirely different claim (i.e., a successful breach of contract claim).
Additionally, Colorado law provides that this Court must give effect to the intent of
the legislature by construing the plain language of the statute as a whole and giving
“consistent, harmonious, and sensible effect” to all of its parts – including both of the
sentences in Section 10-3-1116(4). See St. Vrain Valley Sch. Dist. RE-1J v. A.R.L.,
2014 CO 33, ¶ 10, 325 P.3d 1014, 1019 (Colo. 2014); see also Frazier v. People,
90 P.3d 807, 811 (Colo. 2004) (“A statutory interpretation leading to an illogical or
absurd result will not be followed”). Travelers’ interpretation is directly at odds with
the first sentence in Section 1116(4), which provides that a claim for damages under
Section 10-3-1116 is “in addition to, and does not limit or affect other actions available
by statute or common law, now or in the future.” Accordingly, the Court concludes that
562BD9?Open&file=HB1407_f1.pdf (last visited November 19, 2014). Accordingly, Section
1116 does not preclude a party from receiving the remedies of existing law, that is, breach of
contract remedies; instead, it creates a new cause of action with separate, additional damages.
This cause of action merely uses the actual damages figure as a kind of “yardstick” for
measuring these separate, additional damages.
6
Section 1116(4) does not bar traditional, “benefit of the bargain” damages for a breach
of contract claim (such as that brought here), but rather, bars a plaintiff from recovering
both the penalty damages under 1116(1) and other, separate penalty damages derived
from different claim, such as a violation of the Colorado Consumer Protection Act.
Etherton v. Owners Ins. Co., No. 10-CV-00892-PAB-KLM, 2013 WL 5443068, at *2-3
(D. Colo. Sept. 30, 2013).
The Court of Appeals’ decision in Hansen is not only well reasoned and sound,
but Travelers has also failed to convince the Court that the Colorado Supreme Court
would decide this issue differently than the Court of Appeals. 2 See Stickley, 505 F.3d at
1077. Indeed, the handful of federal cases interpreting Section 10-3-1116 have carefully
and cogently rejected Travelers’ arguments. 3 See Etherton, 2013 WL 5443068 at *3;
Rabin, 863 F. Supp. 2d at 1110-12; D.R. Horton, Inc. Denver v. Mountain States Mut.
Cas. Co., No. 12-CV-01080-RBJ, 2013 WL 6169120, at *6-7 (D. Colo. Nov. 25, 2013).
Although Travelers cites several state district court cases supporting its interpretation
2
The Court notes that the Colorado Supreme Court recently granted certiorari review of
Hansen. See Am. Family Mut. Ins. Co. v. Hansen, No. 14SC99, 2014 WL 5510047, at *1 (Colo.
Nov. 3, 2014). This fact alone does not constitute evidence that the court will overturn Hansen;
the Colorado Appellate Rules indicate that there are a variety of reasons why the court grants
such review, including, as applicable here, that the Court of Appeals’ decision addressed an
issue of first impression and the existence of conflicting decisions between state district courts.
See C.A.R. Rule 49(a)(1), (2).
3
Travelers cites C&M Towing & Recovery, Inc. v. Redland Ins. Co., 2010 WL 326335, at *1,
*1 n.1 (D. Colo. 2010), in which Judge Kane concluded that a party failed to meet the federal
amount in controversy requirement. In C&M Towing & Recovery Inc., Judge Kane subtracted
the covered benefit from the allowable statutory damages under Section 1116(1). However,
the Court does not find this case to be persuasive authority in support of Travelers’ position:
in making a preliminary jurisdictional decision, Judge Kane did not explicitly decide this issue
(indeed, his analysis was confined to a single footnote and it appears that the plaintiff did not
argue that it was entitled to two times the covered benefit under Section 1116 and the covered
benefit itself). Additionally, Judge Kane made his decision without the benefit of Hansen.
7
of Section 10-3-1116, see (Doc. # 87 at 4), the Court has fully reviewed and considered
these decisions, and disagrees with the statutory interpretation therein, for the reasons
provided above.
Accordingly, Home Loan is entitled to recover $1,399,449.00 in damages,
consisting of: the covered benefit itself ($466,483.00), and two times the covered
benefit ($932,966.00).
II. ATTORNEY FEES
A. Legal Standard
Colo Rev. Stat. 10-3-1116(1) authorizes an insured party whose claim for
payment of benefits has been unreasonably delayed or denied to recover “reasonable
attorney fees and court costs.” As a general rule in diversity cases, if “state law does
not run counter to a valid federal statute or rule of court, and usually it will not, state law
denying the right to attorney’s fees or giving a right thereto, which reflects a substantial
policy of the state, should be followed.” Garcia v. Wal-Mart Stores, Inc., 209 F.3d
1170, 1177 (10th Cir. 2000) (quoting Alyeska Pipeline Serv. Co. v. Wilderness Soc'y,
421 U.S. 240, 259 n. 31 (1975)). Accordingly, although both parties assessed the
reasonableness of a fee award under federal law, the Court applies state law in
determining the reasonableness of the attorney fees in this case.
A party seeking attorney fees bears the burden of proving by a preponderance
of the evidence that it is entitled to such an award. Kinsey v. Preeson, 746 P.2d 542,
551-52 (Colo. 1987). A court makes an initial estimate of a reasonable attorney fee by
calculating the lodestar amount. Tallitsch v. Child Support Servs., Inc., 926 P.2d 143,
8
147 (Colo. App. 1996). The lodestar amount represents the number of hours
reasonably expended on the case, multiplied by a reasonable hourly rate. Id.
The court’s calculation of the lodestar carries with it a strong presumption of
reasonableness. Payan v. Nash Finch Co., 2012 COA 135, ¶ 18 (citing Hensley
v. Eckerhart, 461 U.S. 424, 433 (1983)). The court may then adjust this amount based
on the factors outlined in Colo. RPC 1.5, 4 including: (a) the time and labor required,
the novelty and difficulty of the questions involved, and the skill requisite to perform
the legal service properly; (b) the experience, reputation, and ability of the lawyer or
lawyers performing the services; and (c) the fee customarily charged in the locality for
similar legal services. People v. Shifrin, 2014 COA 14, ¶ 113. When, as here, a statute
providing for a fee award does not furnish a specific definition of “reasonableness,” the
amount must be determined in light of all the circumstances, based upon the time and
effort reasonably expended by the prevailing party’s attorney. Tallitsch, 926 P.2d at
147.
4
Colo. RPC 1.5 provides that the following factors are to be considered by the court in
determining the reasonableness of a fee:
(1) the time and labor required, the novelty and difficulty of the questions involved,
and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular
employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing
the services; and
(8) whether the fee is fixed or contingent.
9
B. The Lodestar Calculation in the Instant Case
The Court begins by determining the reasonable number of hours expended by
counsel working on the case. Payan v, 2012 COA, ¶ 21 (citing Hensley, 461 U.S. at
434). Here, Home Loan’s attorneys and staff have submitted timekeeping records that
provide specific, detailed descriptions of their work. Travelers does not object to the
substantiation of the time spent by Home Loan’s counsel, nor to the number of hours
spent on this case – with a single exception regarding the recoverability of time spent in
preparation of the instant Motion. Therefore, barring time spent on the instant Motion
(as discussed below), the Court concludes that the number of hours spent on this action
was reasonable. See Bell v. Bd. of Cnty. Comm'rs of Jefferson Cnty., No. 03-2148KHV, 2005 WL 361510, at *3 (D. Kan. Feb. 15, 2005) (“Defendant does not object to
the number of hours expended . . . . The Court therefore finds that plaintiff reasonably
expended the hours reported.”)
A trial court should base the hourly rate on the prevailing market rate of private
lawyers in the community. Balkind v. Telluride Mountain Title Co., 8 P.3d 581, 588–89
(Colo. App. 2000); see also Colo. RPC 1.5(3), *(7) (listing the fee customarily charged
in the locality for similar legal services and the experience, reputation, and ability of the
lawyers performing the services as relevant factors in determining appropriate attorney
fees). The trial court is vested with broad discretion to determine whether the fees
requested by a particular legal team are justified for the particular work performed and
the results achieved in a particular case. Payan, 2012 COA, ¶ 46; see also Am. Water
Dev., Inc. v. City of Alamosa, 874 P.2d 352, 388 (Colo. 1994) (“Having participated in
10
each stage of the proceeding, the trial judge was capable of understanding what was
reasonably expended in attorney fees.”)
Here, Travelers argues that the proposed lodestar amount is unreasonable due
to the hourly rate charged by the partners, associates and paralegal who represented
Home Loan in this action. These rates are provided below:
Name and Title
2012 Rate
2013 / 2014 Rate
Mr. Quiat (Partner)
Years of
Experience 5
29
$545
$570
Mr. Curtis (Partner)
11
$375
$400
Mr. Schact (Associate)
4
$285
$315 / $330
Ms. Donnelly (Associate)
7
$290
Mr. Thompson (Associate)
1
Ms. Bliss (Paralegal)
Not provided
$230
$215
$225 / $230
The instant Motion is supported by the Declaration of Laurin D. Quiat (“The Quiat
Declaration”) (Doc. # 78-1). Mr. Quiat is a partner at Baker & Hostetler LLP, and his
Declaration details the number of years of experience and the educational backgrounds
of the attorneys who litigated the instant case. It attaches a 2014 “Survey of Law Firm
Economics” from the National Law Journal, a “2012 Economic Survey Snapshot” from
the Colorado Bar Association, and a “2010 Economic Survey” from the Colorado Bar
5
The Declaration of Laurin D. Quiat (Doc. # 78-1), submitted in support of the instant Motion,
provided the law school attended by the relevant attorney, the date of the attorney’s graduation
from that law school, and when the attorney began practicing “in the state and federal courts of
Colorado.” (Id. at 2.) The Court assumes that the number of years of practice in Colorado were
equal to the attorney’s number of years of experience as no further information was provided.
Mr. Thompson is listed here as having one year of experience because he passed the bar exam
in 2013 (either May of 2013 or February of 2013) (doc. # 78-1 at 2), and the billing records
reflect that he worked on this case in March of 2014 (Doc. # 78-7 at 66-9).
11
Association. See (Doc. ## 78-1 at 2, 78-8, 78-9, 88-1). Home Loan’s brief in support
of the instant Motion also cites five cases approving somewhat-similar rates to those
Home Loan is requesting here. (Doc. # 78 at 8.)
The Quiat Declaration states that Mr. Quiat is a senior partner with 29 years of
experience; that Mr. Curtis is a partner with 11 years of experience; and that associates
Mr. Schacht, Ms. Donnelly, and Mr. Thompson have four, seven, and one year of
experience, respectively. (Doc. # 78-1 at 2.) It lists the law schools attended by the
lawyers and their graduation dates, but does not provide further information regarding
their qualifications, nor does it cite similar fee awards that have been won by the
attorneys in the past. (Id.)
Only two of the cases cited by Home Loan arguably support the high rates it is
requesting for Mr. Quiat ($545 / $570 per hour) and Mr. Curtis ($375 / $400 per hour),
and none support the requested rate of compensation for paralegal work ($215 / $225 /
$230 per hour). In Rocky Mountain Christian Church v. Board of County
Commissioners of Boulder County, No. 06-cv-00554-REB-BNB, 2010 WL 3703224, at
*4-5 (D. Colo. Sept. 13, 2010), Judge Blackburn approved an hourly rate of $547.32 for
an appellate litigator. Travelers contends that the unique circumstances of Rocky
Mountain Christian Church required specialized skills which justified the higher hourly
rates approved in that case, and that these unique circumstances do not exist here.
The Court agrees. Specifically, Rocky Mountain Christian Church was on appeal to the
Tenth Circuit and implicated “many” esoteric issues of constitutional law as well as a
statute with relatively undeveloped case law; accordingly, Judge Blackburn held that
12
it was reasonable for the appellees to hire an attorney from Washington, D.C. with
“specialized knowledge and skills in the areas of constitutional law, including the First
Amendment, and appeals in the federal courts of appeal.” Id. at *5.
Home Loan also cites Biax Corp v. NVIDIA Corp., No. 09-cv-1257-PAB-MEH,
at *6 (D. Colo. 2013). In Biax, Judge Brimmer approved an hourly rate in the $700 per
hour range for a senior partner with over 35 years of experience, and an hourly rate in
the $600 per hour range for a partner with 15 years of experience. Id. However, Biax
was a patent lawsuit, and Judge Brimmer specifically noted that the rates he approved
were only reasonable “given the complexity of the subject matter, the high stakes of the
case, and the contentiousness of the dispute.” Id. at *7.
In contrast, this case required some experience in commercial litigation but little
specialized knowledge. It was a relatively straightforward breach of contract and bad
faith denial suit – albeit one with high monetary stakes. Although Home Loan’s counsel
notes that an adverse verdict would have been costly, it does not provide sufficient
evidence that this case involved such uniquely complex or esoteric issues to justify
such a significant upward deviation from the fees customarily charged in this locality
for similar legal services. See Colo. RPC 1.5(3).
In opposition to Home Loan’s Fee Motion, Travelers submitted an affidavit from
Robert M. Baldwin, an expert witness with thirty years of experience in insurance law.
(Doc. # 87-5.) Mr. Baldwin opined that a reasonable range for experienced insurance
attorneys would be $350 for both Mr. Quiat and Mr. Curtis, $225 an hour for Mr. Schact,
$200 an hour for Mr. Donnelly, and $175 an hour for Mr. Thompson. (Id. at 2); see also
13
Payan v. Nash Finch Co., 310 P.3d 212, 222 (Colo. App. 2012) (approving an hourly
rate of $350 for a senior partner and $200 for a junior associate). These numbers
are quite a bit lower than what Home Loan is requesting, but closer to the reported
prevailing market rates provided by Home Loan in the Denver area. Although
Mr. Baldwin’s affidavit did not provide any detail regarding his precise experience
in insurance law, the Court believes that this case was not especially complex, and
accordingly, his opinion was helpful to the Court. However, the Court recognizes that
the rates suggested are lower than many of the numbers provided by the CBA Survey,
particularly when it comes to the rates charged by larger law firms. Further,
Mr. Baldwin’s proposed reasonable rates fail to reflect the significant differences
in experience between Mr. Quiat and Mr. Curtis. The Court also recognizes Home
Loan’s counsel provided a large “professional discount” to Travelers, and it does not
want to discourage law firms from providing such discounts prior to requesting attorney
fees.
After careful consideration of all of the relevant variables provided in Colo. RPC
1.5 – especially the complexity of the case, the amount in controversy, the experience
of the lawyers, and the favorable results obtained for Home Loan – as well as the
numbers from the “2012 Economic Survey Snapshot” from the Colorado Bar
Association (“the CBA Survey”), 6 which provide a helpful baseline in determining
the customary rates in the community for lawyers of reasonably comparable skill,
6
The Court has thoroughly studied the rate surveys submitted in support of the instant Motion
and believes that because the 2012 CBA survey provides the most recent data and is specific
to Colorado, it provides the best indication of the current reasonable hourly rate in the Denver
area.
14
experience, and reputation, the Court determines that the following hourly rates are
reasonable in this case (“the approved rates”):
•
•
•
•
$420 an hour for Mr. Quiat (in recognition of his almost-30 years of
experience);
$375 an hour for Mr. Curtis (in recognition of his eleven years of experience);
$250 an hour for Mr. Schact and Ms. Donnelly; and
$175 an hour for Mr. Thompson (in recognition of his newly-minted attorney
status).
These rates are very much in line with the CBA Survey data, which indicated that
the median hourly rate for attorneys with 25 years in practice is $255, and the hourly
rates at the 75th and 95th percentiles are $320 and $423, respectively. (Doc. 78-9 at
15.) The median hourly rates for attorneys with one to ten years of experience are in
the $175 to $225 range, and the hourly rates at the 75th percentile are in the $200 to
$258 range. (Id.) The median hourly rate for attorneys at larger firms with 50-plus
attorneys – such as Baker & Hostetler here – is $278, with the 75th percentile at $356.
(Id.) The median hourly rate for attorneys in the “insurance law (not torts)” field was
$250, and the hourly rate at the 95th percentile was $335. (Id. at 16.) The approved
rates are also similar to the national 2014 “42nd Annual Survey of Law Firm
Economics,” which indicated that the median hourly rate for equity partners in the
mountain region is $420 (and $495 at the upper quartile), while the median hourly
rate for an associate is $250 (and $361 at the upper quartile). 7 (Doc. # 88-1 at 15.)
7
Home Loan cites this survey for the proposition that “[f]or lawyers in the Mountain region
employer by firms like Baker Hostetler, the standard hourly rate for partners is $575 and for
associates $361.” (Doc. # 88 at 6) (emphasis added). However, the Court notes that the $575
and $361 rates come from the “ninth decile” (i.e., the 90th percentile) of the “Standard Hourly
Billing Rates” chart – not the “median” column. (Doc. #88-1 at 15.)
15
See also Xtreme Coil Drilling Corp. v. Encana Oil & Gas (USA), Inc., 958 F. Supp. 2d
1238, 1259 (D. Colo. 2013) (approving requested rates not including a 10% discount of
$450 per hour for Mr. Quirat and $350 per hour for Mr. Curtis, as well as $262 per hour,
without a discount, for Mr. Schact); Jankovic v. Exelis, Inc., Case No. 12–cv–01430–
WJM–KMT, 2013 WL 1675936 (D. Colo. Apr. 17, 2013) (approving rate of $430 per
hour for lead counsel). 8
As for paralegal compensation, Travelers argues – with support from
Mr. Baldwin’s affidavit – that hourly rates between $215 and $230 are not reasonable,
and proposes a rate of $125 an hour. (Doc. # 87-5 at 1.) The Quiat declaration
provided no details whatsoever regarding Ms. Bliss’s qualifications, her education,
the number of years she has been employed as a paralegal, nor any other evidence
justifying a rate above the average, reasonable hourly rate of $100-$110. See Hitchens
v. Thompson Nat'l Properties, LLC, No. 12-CV-02367-LTB-BNB, 2014 WL 2218094, at
*3 (D. Colo. May 29, 2014) (noting that $110 per hour is a reasonable paralegal rate).
The Court agrees that Home Loan’s proposed paralegal rates are unreasonable, and
accordingly approves a rate of $125 per hour for Ms. Bliss’s work.
Lastly, although Travelers objects to an award of any attorney fees for the time
spent preparing Plaintiff’s Post-Trial Motion Regarding Damages, Attorney Fees and
Costs, Pre-Judgment Interest, and Request for Entry of Final Judgment (“Fee Motion”),
section 1116 does not limit the recovery of fees in this fashion. See Dubray v. Intertribal
Bison Co-op., 192 P.3d 604, 607 (Colo. App. 2008) (rejecting argument that a party was
8
Any federal cases cited herein are cited only by way of persuasive authority.
16
“entitled to recover only the attorney fees incurred in preparing the motion to dismiss,”
because the statute allowing for attorney fees “does not so limit an award and instead
expressly authorizes ‘attorney fees in defending the action’”); see also Case v. Unified
Sch. Dist. No. 233, Johnson Cnty., Kan., 157 F.3d 1243, 1254 (10th Cir. 1998) (noting
that “[a]n award of reasonable attorneys' fees may include compensation for work
performed in preparing and presenting the fee application.”); Mares v. Credit Bureau
of Raton, 801 F.2d 1197, 1205 (10th Cir. 1986) (same).
However, the Court believes that the amount of time spent on the Fee Motion
and Reply – 85 total hours, see (Doc. ## 78-7 at 101, 88-3 at 2-3) – was excessive,
particularly because both the Motion and the Reply failed to cite, much less analyze,
many critical cases. “The district court . . . should exclude from [the] initial [lodestar]
calculation hours that were not ‘reasonably expended.’” Payan, 2012 COA, ¶ 23
(quoting Hensley, 461 U.S. at 434). Deductions include those for hours that are
“excessive, redundant, or otherwise unnecessary.” Id.; see also Tallitsch, 926 P.2d at
147. Most notably, these papers failed to cite a single Colorado state case in support
of the argument that Home Loan should be awarded costs under state law, see (Doc.
## 78 at 10-12, 88 at 9), nor was a single state law case cited in support of the
argument that Home Loan should receive prejudgment interest under state law as of
November 21, 2011, see (Doc. ## 78 at 12-13, 88 at 9-10). Additionally, both the Fee
Motion and the Reply failed to analyze relevant contrary authority regarding whether
Home Loan should receive, for example, expert witness fees under Colorado law and
17
at what date prejudgment interest should commence. 9 See (Doc. ## 78 at 10-13, 88 at
9-10). Furthermore, the Reply failed to respond to Travelers’ rather detailed expenseby-expense analysis in Response to the Fee Motion, and merely reasserted, in a single
paragraph, that its costs should be recoverable under state law. Compare (Doc. # 88
at 9), with (Doc. # 87 at 11-15). Accordingly, Court was forced to spend finite
government resources conducting its own research; this research simply would not
have been necessary had the Motion been adequately briefed. In recognition of these
serious shortcomings, the Court reduces the recoverable number of hours on the Fee
Motion and Reply by 75%; accordingly, Home Loan may recover 21.25 hours of the
time it spent on the Fee Motion and Reply, at the above-referenced rates.
III. COSTS
As a threshold matter, the Court must determine the appropriate legal rules in
evaluating Home Loan’s bill of costs. If the recovery of costs is governed solely by Fed.
R. Civ. P. 54(d), many of Home Loan’s claimed costs cannot be recovered here, as that
rule limits recoverable expenses to those enumerated in 28 U.S.C. § 1920 (“Section
1920”). The recoverable expenses under Section 1920 include fees for transcripts
necessarily obtained for use in the case, fees and disbursements for printing and
witnesses, and fees for exemplification and the costs of making copies of any materials
when the copies were necessarily obtained for use in the case.
9
Nor was this contrary authority difficult to find. For example, if an attorney were to type
the following plain language search into WestlawNext – ("prejudgment interest" and
"commencement date" and "5-12-102") – he or she would find Bowen v. Farmers Insurance
Exchange, 929 P.2d 14 (Colo. Ct. App. 1996), listed as the fifth result.
18
Travelers argues that taxing costs is a “procedural matter” and accordingly
governed by federal law, that is, Fed. R. Civ. P. 54(d) and Section 1920. Home Loan
counters that costs not allowable under Rule 54(d) are recoverable here, because
substantive state law applies, and its costs are recoverable under Section 1116. The
Court also notes that the general cost provision statute in Colorado is Colo. Rev. Stat.
§ 13-16-122.
In Trierweiler v. Croxton & Trench Holding Corp., the Tenth Circuit explained how
to determine whether to apply a state rule of civil procedure in a diversity case: “where a
federal rule of procedure is directly on point, that rule applies. Otherwise, in the ‘typical,
relatively unguided Erie choice,’ courts are to heed the outcome-determination
approach while also relying on the policies underlying the Erie rule: ‘discouragement of
forum-shopping and avoidance of inequitable administration of the laws.’” Trierweiler,
90 F.3d 1523, 1539 (10th Cir. 1996) (quoting Hanna v. Plumer, 380 U.S. 460, 467–68
(1965)). In Garcia, the Tenth Circuit applied Trierweilder and held that because Rule
54(b) was not directly on point and therefore consistent with an award of actual costs
under a particular Colorado statute, the costs were taxable under that state statute.
209 F.3d at 1177-78. The court noted that if a federal court did not apply the Colorado
statute in situations where there was no conflict with the federal cost rules, the
difference in availability for such costs in state actions versus federal diversity actions
could lead to forum-shopping and could foster inequitable administration of the laws.
Id. (citing Hanna, 380 U.S. at 467-68).
19
In other words, to the extent that a Colorado state statute authorizes the award
of costs other than those costs authorized by 28 U.S.C. § 1821 (“Section 1821”) and
Section 1920, and there is no preemption by these Sections, such costs are
recoverable. Id. at 1178. When evaluating a particular cost under Colorado law, the
Court bears in mind that the party seeking costs “must provide the court with sufficient
information and supporting documentation to allow a judge to make a reasoned decision
for each cost item presented.” Brody v. Hellman, 167 P.3d 192, 206 (Colo. App. 2007).
Specifically, Travelers contends that the following items may not be taxed as
costs under Section 1920:
•
•
•
•
•
Expert witness fees;
Witness fees for witnesses who were representatives of Home Loan and testified
as party representatives;
Deposition costs (with the exception of the deposition of Clark Dahl);
Delivery services and postage/fax, travel, mileage, parking, lodging, and meals;
and
Mediation costs.
Each objected-to cost is addressed in turn below. 10
A. Expert Witness Fees
Section 1116 does not explicitly authorize the recovery of expert witness fees,
but Colo. Rev. Stat. § 13-33-102(4) does provide for additional compensation for expert
witnesses. Nevertheless, in Garcia, the Tenth Circuit specifically held that
notwithstanding the existence of Colo. Rev. Stat. § 13-33-102(4), federal law preempts
the recovery of costs for expert witness fees, such that such fees are recoverable only
10
The Court recognizes that Home Loan is not billing Travelers for the entire costs it incurred;
specifically, the Quiat Declaration provided that “Home Loan received discounts on its invoices
related to costs/expenses in the exercise of billing judgment in the amount of $5,055.77.” (Doc.
# 78-1 at 4.)
20
to the extent authorized under Sections 1821 and 1920. 209 F.3d at 1177 n. 5 (quoting
Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 442 (1987)) (“‘[I]t is clear that
in §§ 1920 and 1821, Congress comprehensively addressed the taxation of fees for
litigants’ witnesses,’ effectively preempting state law on such fees.’”); see also
Chaparral Res., Inc. v. Monsanto Co., 849 F.2d 1286, 1293 (10th Cir. 1988) (holding
that because Colo. Rev. Stat. § 13–33–102(4) did not “explicitly authorize the
assessment of expert witness fees as costs, the [district] court was bound by the
limitations set out in the federal costs statute and, as a consequence, its taxation of
expert witness fees must be limited” by Sections 1821 and 1920); Bullock v. Wayne,
No. 08-CV-00339-PAB-KMT, 2010 WL 1258038, at *2 (D. Colo. Mar. 29, 2010)
(denying a party’s motion for costs for its expert fees under Colo. Rev. Stat. § 13-17202, because “Fed. R. Civ.P. 54 and 28 U.S.C. §§ 1821 and 1920 effectively preempt
a claim for actual costs in the form of expert witness fees.”)
Section 1920(3) allows the Court to tax as costs “[f]ees and disbursements for
. . . witnesses.” Expert witness fees are taxable under Section 1920(3) only to the
relatively modest extent allowed by Section 1821. Crawford Fitting Co., 482 U.S. at
445; see also Hull ex rel. Hull v. United States, 978 F.2d 570, 572–73 (10th Cir. 1992)
(holding that district court erred in awarding expert witness fees in excess of those
allowed by Section 1821). However, witness fees for expert witnesses that do not
testify in court are not an allowable cost under 28 U.S.C. § 1920. Jones v. Unisys
Corp., 54 F.3d 624, 633 (10th Cir. 1995) (citing Crawford Fitting, 482 U.S. at 445);
Sorbo v. United Parcel Serv., 432 F.3d 1169, 1179 (10th Cir. 2005) (holding that it was
21
legal error for a district court to award fees and expenses incurred in connection with
expert witnesses in excess of the standard witness fee listed in Section 1920(3) and
fixed by Section 1821, because such matters were “not within the scope of [Section]
1920.”) Because the experts retained by Home Loan did not testify in court, no expert
witness fees are recoverable here.
B. Fees for Witnesses Who Testified As Party Representatives
Travelers argues that witness fees are not recoverable for any witnesses who
testified as party representatives of Home Loan. In support of this proposition, it cites
Moore’s Federal Practice, which provides that:
As interpreted by the courts . . . ‘witness’ does not include parties to the
action; a party may not collect fees as a witness, nor may those fees be
taxed as costs. Whether a witness should be construed to be a real
party in interest turns upon whether the witness attended primarily
to testify or to direct the course of the proceedings.
James Wm. Moore et Al., Moore’s Federal Practice § 54.103[3][c] (3d ed. 1999)
(emphasis added). Although such authority might, at first blush, indicate that recovery
of costs for such witnesses would be preempted by Section 1821, Travelers does not
explain how Home Loan’s party representatives “directed” the litigation, and the record
indicates that these witnesses merely testified on behalf of Home Loan at trial. See
WH Smith Hotel Services, Inc. v. Wendy's Intern., Inc., 25 F.3d 422, 429 (7th Cir. 1994)
(holding that although parties are not entitled to witness fees for their own appearances
in court, when corporate officers and directors testified on behalf of a corporation, costs
could be assessed for their testimony because the witnesses were not personally
involved in the litigation); see also Barber v. Ruth, 7 F.3d 636, 645-46 (7th Cir. 1993)
22
(holding that a district court did not err in taxing travel and subsistence witness fees
as costs when beneficiaries of an estate testified at trial rather than managing the
litigation); Baker v. Echostar Commc'ns Corp., No. 06-CV0-1103, 2008 WL 5216794, at
*2 (D. Colo. Dec. 11, 2008) (rejecting the party-representative argument and approving
witness costs for such witnesses). Consequently, all of the non-expert witness costs
are recoverable here.
C. Deposition Costs
Colorado law provides that “[a]ny costs of taking depositions for the
perpetuation of testimony, including reporters’ fees, witness fees, expert witness fees,
mileage for witnesses, and sheriff fees for service of subpoenas” are recoverable.
Colo. Rev. Stat. § 13-16-122 (emphasis added). Here, Travelers does not argue that
Home Loan’s deposition costs were frivolous and not for the “perpetuation of testimony”;
rather, it asserts that the deposition costs (with the exception of Mr. Dahl’s) were not
“necessarily obtained for use at trial.” (Doc. 87 at 14.) However, this very strict
standard has no authority in either state or federal law. In Cherry Creek Sch. Dist.
No. 5, 859 P.2d at 813, the Colorado Supreme Court implied that Colo. Rev. Stat. § 1316-122 should be broadly construed, as “the list of items awardable as costs in section
13–16–122 is illustrative rather than exclusive,” and specifically held that discovery
deposition expenses are recoverable as costs under that statute. Additionally, even
under the stricter, federal standard, depositions need not be obtained for actual use
at trial. See In re Williams Sec. Litig.-WCG Subclass, 558 F.3d 1144, 1149 (10th Cir.
2009) (holding that Section 1920 does not require a party to prove that depositions were
23
used in deciding a summary judgment motion or designated for use at trial, but only that
the materials were “reasonably necessary for use in” the case at the time the expenses
were incurred).
Here, all of the deposition expenses which Home Loan seeks to tax as costs
were reasonably necessary (under federal law) and clearly “for the perpetuation of
testimony” (under state law). All of the depositions (except for Katie Sweet’s) were cited
in Travelers’ Summary Judgment Motion or Home Loan’s Response. Additionally,
because Ms. Sweet was one of the witnesses Travelers considered calling at trial, her
deposition also met this standard. Accordingly, all of the deposition costs herein are
recoverable by Home Loan.
D. Counsel’s travel, mileage, parking, lodging, and meals, and delivery
services and postage/fax.
Home Loan seeks $2851.87 for travel, mileage, parking, lodging and meals
incurred by its counsel during the course of litigation and trial. Although such expenses
are not recoverable as costs under Section 1920, see Sorbo v. United Parcel Serv., 432
F.3d 1169, 1180 (10th Cir. 2005), they do appear to be recoverable under Colorado
state law. See Cherry Creek Sch. Dist., 859 P.2d at 813 (affirming the district court’s
award of travel expenses counsel incurred in taking an out-of-state discovery
deposition); Valentine v. Mountain States Mut. Cas. Co., 252 P.3d 1182, 1194 (Colo.
App. 2011) (citing Cherry Creek Sch. Dist., 859 P.2d at 813 and noting that “although
section 13–16–122 does not list travel expenses counsel incurs in meeting with experts
and clients as permissible costs, these costs may be awarded so long as the requesting
party proves that the expenses were reasonable and necessarily incurred.”)
24
Home Loan also seeks $348.70 for delivery services and postage/fax expenses.
When such costs are not commingled with the general costs of conducting a law firm’s
business, they do not constitute overhead and, in the court’s discretion, may be
recovered. Kennedy v. King Soopers Inc., 148 P.3d 385, 389 (Colo. App. 2006)
(collecting cases). In the alternative, there is also a body of federal precedent
recognizing that certain expenses that do not fall within § 1920—e.g. delivery expenses,
postage expenses, etc.—may nevertheless be awarded (usually as a part of the fee
calculation) “if such expenses are usually charged separately in the area,” that is, as a
general practice in the local legal market. Sussman v. Patterson, 108 F.3d 1206, 1213
(10th Cir.1997) (citing Ramos v. Lamm, 713 F.2d 546, 559 (10th Cir. 1983) (holding that
a district court did not err in refusing to reimburse firm for postage and telephone use,
because it “properly found such costs are normally absorbed as part of the firms’
overhead.”)) The Quiat Declaration represents that Baker & Hostetler has separately
itemized and billed these expense items to Home Loan, and Travelers does not contend
that this practice is somehow atypical in the local legal market or normally billed as
overhead. Accordingly, the Court will not question this $348.70 in expenses, and
awards them to Home Loan as part of its fees.
E. Mediation Costs
Home Loan seeks $1,511.25 in mediation costs, and submits an invoice in
support providing that "[t]his bill is for your share of the total charges. It has been split
between the [two] parties referenced above." (Doc. # 78-8 at 54.) Home Loan asserts
that these costs are awardable, but it does not provide evidence – for instance, the
25
mediation agreement – indicating it reserved the right to seek recovery of this fee under
that agreement. Accordingly, the Court denies recovery of Home Loan’s portion of the
mediation costs, as it failed to demonstrate that this cost is awardable. See Valentine v.
Mountain States Mut. Cas. Co., 252 P.3d 1182, 1193 (Colo. App. 2011) (providing that
an agreement between the parties to pay half of the mediator’s fees “precluded the
court from awarding these fees as costs” when a party failed to provide evidence that
it reserved the right to seek recovery of its portion of mediation fees.)
IV. PRE-JUDGMENT INTEREST
Interest questions in diversity cases are determined by state law. Pegasus
Helicopters, Inc. v. United Technologies Corp., 35 F.3d 507, 512 (10th Cir. 1994).
Accordingly, the Court applies Colo. Rev. Stat. § 5-12-102(1)(a), which states that a
prevailing party is entitled to pre-judgment interest when money has been “wrongfully
withheld,” and that this interest is awarded “from the date of wrongful withholding to
the date of payment or to the date judgment is entered, whichever first occurs.” The
statute also provides that, at the election of the claimant, interest “shall be at the rate
of eight percent per annum compounded annually for all moneys . . . after they are
wrongfully withheld or after they become due to the date of payment or to the date
judgment is entered, whichever first occurs.” Colo. Rev. Stat. § 5-12-102(1)(a), (b).
Home Loan reported a claim on September 15, 2011, and Travelers began its
investigation that same day. (Doc. # 87 at 16.) On October 12, 2011, Travelers
requested further information and documentation pertaining to the claim, and Home
Loan provided such information on October 17, 2011. (Id.) On October 19, 2011,
26
Travelers informed Home Loan that it was continuing to investigate the claim because
there appeared to be an issue about whether the property qualified for coverage.
(Id. at 16-17.) Travelers actually denied the claim in a letter dated November 21, 2011.
(Id. at 17.)
As for commencement date of the pre-judgment interest, Home Loan argues that
it is entitled to pre-judgment interest at 8% per annum compounded annually beginning
on October 15, 2011, pointing to language in the insurance policy providing that “within
30 days after we reach agreement with you on what we owe you for a covered loss,
we’ll pay you that amount.” (Doc. # 78-9 at 67) (emphasis added). In its view, then,
October 15, 2011 represents “the date under the insurance policy on which the claim
should have been timely paid and, as a result, the date on which Travelers’ wrongful
withholding of Home Loan’s monetary benefit began.” (Doc. # 78 at 13.)
Travelers counters that interest should begin to accrue about 45 days later – as
of November 21, 2011 – i.e., the date Travelers actually denied the claim. It cites
regulations issued by the Colorado Division of Insurance, which provide that an insurer
is not required to make a claim decision within 60 days if there is a “reasonable dispute”
between the parties concerning the claim. Colo. Div. of Ins. Reg. § 5-1-14(1);
4(A)(1)(a). These regulations define “reasonable dispute” as including a situations in
which “Information necessary to make a decision on the claim has not been submitted
or obtained”; “Coverage under the policy for the loss claimed has not been determined;”
or “Indicators are present in the application or submission of the claim and additional
investigation is necessary.” Id. § 2(b).
27
This situation represents, by definition, a counterfactual inquiry: had Travelers
made the correct decision as to insurance coverage, by what date would it have paid
the claim? Although the Colorado Supreme Court has held that “one who is damaged
by a breach of contract is entitled to recover prejudgment interest of eight percent
annually from the time of the breach,” Mesa Sand & Gravel, 776 P.2d at 365, it has
not determined at what point a breach occurs for prejudgment interest purposes in
the insurance context. The Court imagines this breach could be conceptualized as
occurring at several different points – e.g., the date when the insured provides notice of
the claim to the insurer, the date after which sufficient investigation should have led the
insurer to pay the benefit, and the insurer’s refusal to pay the benefit. However, the
Colorado Court of Appeals has definitively held that the prejudgment interest should be
awarded pursuant to § 5-12-102(1) as of the date when the insurer refused to pay the
claim. Bowen v. Farmers Ins. Exch., 929 P.2d 14, 17 (Colo. App. 1996). This case is
more persuasive to the Court than the regulations cited by Travelers, because these
regulations merely describe the procedure and circumstances under which penalties will
be imposed by the agency for failure to make timely decisions and/or payment on first
party claims. Colo. Div. of Ins. Reg. § 5-1-14(1).
Travelers’ policy provides only that it will pay claimants “within 30 days after we
reach agreement with you on what we owe you for a covered loss, we’ll pay you that
amount.” (Doc. # 78-9 at 67) (emphasis added). This provision is accordingly
inapplicable here, as the parties were clearly unable to reach an agreement as to what
28
Travelers owed. 11 Thus, Travelers did not begin its “wrongful withholding” of Home
Loan’s claim award until after Travelers would have paid the claim in the normal course
of events, i.e., after an investigation was completed and Travelers notified Home Loan
of this fact. 12 That the date of denial is the touchstone for prejudgment interest makes
good sense, as insurers routinely conduct investigations in making claims decisions,
particularly when the claim decision involves a claim of over $400,000.
Awarding prejudgment interest as of the date of Travelers’ claim denial is also
implicitly supported by Colorado Supreme Court caselaw. In Goodyear Tire & Rubber
Co. v. Holmes, 193 P.3d 821, 826 (Colo. 2008), the court noted that
When damage is measured by diminution in value, interest begins to
accrue as of the date that the plaintiff suffered injury to his property,
because the plaintiff will be unable to earn a return on the amount of
damages. On the other hand, when damage is measured by cost of repair
or replacement, interest does not begin to accrue until the plaintiff actually
spends money on the repair or replacement, because the plaintiff is able
to earn a return on the money until he spends it.
Replacement damages for a breach of contract are analytically similar to damages for
an improperly denied insurance claim, insofar as Home Loan did not begin to incur
costs in performing its own repairs on the property until after Travelers denied the claim.
In other words, it was still earning interest on the money it was forced to use in place of
11
Indeed, according to the quoted policy provision, had Travelers investigated and agreed that
it was going to pay Home Loan’s claim and informed Home Loan of this fact on November 21,
2011, it would have been able to wait until December 21, 2011 to actually make the claims
payment.
12
The Court notes that if Home Loan had provided evidence that Travelers made an official
decision to deny the claim prior to November 21, 2011, but stalled in informing Home Loan
of that fact, the earlier date would constitute the relevant date of refusal. See Mesa Sand &
Gravel Co. v. Landfill, Inc., 776 P.2d 362, 364 (Colo. 1989) (“The purpose of [S]ection 5-12-102
is to discourage a person responsible for payment of a claim to stall and delay payment until
judgment or settlement.”) However, no such evidence is before the Court.
29
the unreasonably denied claim money until the denial occurred. Additionally, awarding
prejudgment interest before Travelers completed its investigation would effectively
provide a windfall to Home Loan, insofar it would allow it to recover more than Home
Loan would have received had Travelers made the decision to pay the claim. The plain
language of the statute provides that “interest shall be an amount which fully
recognizes the gain or benefit realized by the person withholding such money or
property.” Colo. Rev. Stat § 5-12-102(1); see also Goodyear Tire & Rubber Co., 193
P.3d at 826 (Colo. 2008) (“Generally, interest rates compensate for the time value of
money. . . . the purpose of prejudgment interest [under Section 5-12-102] is to
reimburse the plaintiff for inflation and lost return.”)
As for postjudgment interest, the federal postjudgment interest rate applies in
diversity cases. Latham v. First Marine Ins. Co., 16 F. App'x 834, 841 (10th Cir. 2001).
Postjudgment interest cannot be applied until the entry of judgment.
V. CONCLUSION
For the foregoing reasons, the Fee Motion is GRANTED IN PART and DENIED
IN PART. Specifically, the lodestar is recalculated as follows:
Name
Mr. Quiat
Pre-Fee
Motion
Hours
235.25
Post-Fee Motion
Hours with 75%
Reduction
(5.25+3) *.25 = 2.06
Mr. Curtis
11.25
Mr. Schact
21.5
Ms. Donnelly
427
427
$250
$106750
Mr. Thompson
26
26
$175
$4550
30
Hourly
Rate
Total
237.31
$420
$99670.2
11.25
(20.25+6) *.25 = 6.56
Total
Hours
$375
$4218.75
28.1
$250
$7025
Name
Post-Fee Motion
Hours with 75%
Reduction
(19.25+23.35) *.25 =
10.65
Total
Hours
Hourly
Rate
Total
179.15
$120
$21498
TOTAL:
Ms. Bliss
Pre-Fee
Motion
Hours
168.5
$243711.95
It is FURTHER ORDERED that Plaintiff shall be awarded $243,711.95 in
attorney fees;
It is FURTHER ORDERED that Plaintiff shall be awarded $1,399,449.00 in total
damages;
It is FURTHER ORDERED that Plaintiff shall be awarded $10,146.42 in costs
($20,800.24 minus $9142.57 in expert witness fees and $1511.25 in mediation costs);
It is FURTHER ORDERED that the damages and costs award shall be subject to
a prejudgment interest rate of 8% per annum, as of November 11, 2011;
It is FURTHER ORDERED that the damages and costs award shall be subject to
a postjudgment interest rate at the federal interest rate as of the date of final judgment;
It is FURTHER ORDERED that this case is DISMISSED in its entirety.
DATED: November 25, 2014
BY THE COURT:
______________________________
CHRISTINE M. ARGUELLO
United States District Judge
31
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