The Hanover Insurance Company et al v. Anova Food, LLC et al
Filing
189
ORDER ON REMAINING ISSUES REGARDING THE ZOBRIST LAW FIRM'S ATTORNEYS' FEES re 101 - Signed by JUDGE HELEN GILLMOR on 10/24/2016. "The Hanover Companies shall file their accounting as required by Section III of this Order on or before Monday, November 28, 2016. The Zobrist law firm shall file its Response on or before Wednesday, December 28, 2016. The Hanover Companies may file a Reply on or before Tuesday, January 17, 2017." (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
THE HANOVER INSURANCE COMPANY;
MASSACHUSETTS BAY INSURANCE
COMPANY,
Plaintiffs,
vs.
ANOVA FOOD, LLC,
Defendant.
ANOVA FOOD, LLC,
CounterClaimant,
vs.
THE HANOVER INSURANCE COMPANY;
MASSACHUSETTS BAY INSURANCE
COMPANY,
CounterDefendants.
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Civ. No. 14-00281 HG-RLP
ORDER ON REMAINING ISSUES REGARDING THE ZOBRIST LAW FIRM’S
ATTORNEYS’ FEES
The Court previously ruled that the Hanover Companies are
required to pay reasonable attorneys’ fees incurred by the
Zobrist Law Firm in defending Anova Food, LLC between October 12,
2012 and December 10, 2013 in the Underlying Lawsuit filed in the
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United States District Court for the District of Hawaii, Kowalski
v. Anova Food, LLC, et al., Civ. No. 11-00795HG-RLP.
The Court previously ordered the Parties to provide
additional briefing as to their on-going dispute as to the
attorneys’ fees owed to the Zobrist Law Firm.
many unanswered questions.
The briefing left
Further briefing is required.
BACKGROUND
Defendant/Counter-Claimant Anova Food, LLC (“Anova LLC”) was
covered by Plaintiffs/Counter-Defendants the Hanover Insurance
Company and Massachusetts Bay Insurance Company’s (“the Hanover
Companies”) four commercial liability insurance policies that
were in effect between July 1, 2010 and July 11, 2014.
(See
Insurance Policies attached as Exs. B, C, D to Pla.’s First
Amended Complaint, ECF Nos. 39-2—6).
THE UNDERLYING LAWSUIT
On December 29, 2011, the Underlying Lawsuit, William R.
Kowalski; Hawaii International Seafood, Inc. v. Anova Food, LLC;
Anova Food, Inc., et al., Civ. No. 11-00795HG-RLP, was filed
against Anova LLC.
On October 12, 2012, Anova LLC requested the Hanover
Companies provide it a defense to the Underlying Suit pursuant to
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the relevant insurance policies.
(Declaration of Darren Zobrist
(“Zobrist Decl.”) at ¶ 6, ECF No. 75).
On December 13, 2012, the Hanover Companies agreed to
provide a defense to Anova LLC pursuant to a reservation of
rights, as long as Anova LLC’s attorneys agreed to “comply with
Hanover’s Litigation Guidelines.”
(Letter from Hanover Regional
Liability Adjuster Stephen E. Colville, dated December 13, 2012,
ECF No. 75-4).
Anova LLC agreed to have the Hanover Companies defend it in
the Underlying Lawsuit.
At that point, Anova LLC was represented
by both Attorney Gary Grimmer and the Zobrist law firm.
(Zobrist
Decl. at ¶¶ 5-6, ECF No. 75; Declaration of Craig E. Marshall,
member of the Zobrist Law Group, (“Marshall Decl.) at ¶¶ 6-8, ECF
No. 104; Letter from Hanover Regional Liability Adjuster Stephen
E. Colville, dated December 10, 2013, to counsel for Anova LLC at
pp. 4-5, ECF No. 75-5).
The Court ruled in its June 29, 2016 Order that Anova LLC is
entitled to reasonable attorneys’ fees incurred by the Zobrist
law firm between October 12, 2012 until December 10, 2013.
(June
29, 2016 Order Denying the Hanover Companies’ Motion for Summary
Judgment and Granting, In Part, and Denying, In Part, Anova LLC’s
Motion for Partial Summary Judgment at pp. 49-55, ECF No. 151).
The Court held that the Hanover Companies are required to
pay the reasonable attorneys’ fees incurred by the Zobrist law
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firm starting from October 12, 2012, which was the date when
Anova LLC requested a defense from the Hanover Companies.
at p. 55).
(Id.
The Court held that the Hanover Companies were
required to pay the attorneys’ fees for the Zobrist law firm
until December 10, 2013, which was the date the Hanover Companies
decided to provide different counsel to Anova LLC in the
Underlying Lawsuit.
(Id.)
Anova LLC claims that the Hanover Companies have not paid
the Zobrist Law Firm’s reasonable attorneys’ fees.
Anova LLC
claims that it submitted bills to the Hanover Companies for fees
incurred by the Zobrist Law Firm in the amount of $699,778, for
which the Hanover Companies paid only $284,624, leaving a balance
owed of $385,153.
The Hanover Companies assert that their billing guidelines
are the basis for how attorneys fees should be calculated.
The
Hanover Companies assert that they already paid $284,624 to the
Zobrist Law Firm and that no balance is owed because the
remaining fees billed did not comply with their billing
guidelines and were unreasonable.
STANDARD OF REVIEW
The Supreme Court of Florida has found that the federal
lodestar approach provides an objective structure to determine
reasonable attorney fees.
Florida Patient’s Compensation Fund v.
4
Rowe, 472 So.2d 1145, 1149-50 (Fla. 1985).
Pursuant to Florida
law, courts determine reasonable attorney fees by analyzing the
following criteria:
(1)
The time and labor required, the novelty and difficulty
of the question 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.1
Rowe, 472 So. at 1150 (citing Rule 2-106(b) of the Florida
Bar Code of Professional Responsibility).
The party seeking attorneys’ fees must present records
detailing the amount of work performed to determine the
reasonable hours expended, which is multiplied by a reasonable
1
Cases involving public policy enforcement such as
discrimination cases, environmental protection, and consumer
protection cases apply twelve factors in evaluating reasonable
attorneys fees pursuant to Florida law. Standard Guar. Ins. Co.
V. Quanstrom, 555 So.2d 828, 834 (Fla. 1990) (citing Johnson v.
Georgia Highway Express, 488 F.2d 714 (5th Cir. 1974)).
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hourly rate to determine the lodestar.
Id.; Standard Guar. Ins.
Co. v. Quanstrom, 555 So.2d 828, 833-34 (Fla. 1990).
Once the
court arrives at the lodestar figure, it may add or subtract from
the fee based upon a contingency risk factor and the results
obtained.
Rowe, 472 So.2d at 1151.
The lodestar method is used to compute reasonable attorneys’
fees pursuant to various Florida statutory provisions, but it is
also used to calculate reasonable attorneys’ fee awards pursuant
to the parties’ contractual agreement.
Moore v. State Farm Mut.
Auto. Ins. Co., 916 So.2d 871, 877 (Fla. Dist. Ct. App. 2005).
When the agreement regarding payment of attorney fees does
not provide for a specific fee amount or percentage of recovery,
but rather states that the fee will be a reasonable amount, it is
up to the court to determine the reasonable amount of the fee.
Id. at 878-79.
The court determines the reasonable fee amount
pursuant to the Florida Supreme Court’s holding in Rowe and its
progeny.
Id.
ANALYSIS
I.
The Hanover Companies’ Defense Counsel Guidelines and the
Lodestar Method Control the Award of Attorneys’ Fees to the
Zobrist Law Firm
Pursuant to Florida law, an insured who has accepted a
defense provided by its insurer is bound by the terms on which
the insurer’s offer to pay for the defense was tendered.
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Colony
Ins. Co. v. G & E Tires & Serv., Inc., 777 So.2d 1034, 1039 (Fla.
Dist. Ct. App. 2000).
The undisputed evidence demonstrates that Anova LLC accepted
the defense offered by the Hanover Companies.
On December 13,
2012, the Hanover Companies sent a letter to Anova LLC informing
it that they agreed to defend it in the Underlying Lawsuit if its
counsel would “agree to comply with Hanover’s Litigation
Guidelines.” (Letter from Hanover Regional Liability Adjuster
Stephen E. Colville, dated December 13, 2012, ECF No. 75-4).
Anova LLC accepted the defense provided by the Hanover Companies
and was bound by the terms of the defense they offered, including
the term that its counsel would comply with the Hanover
Companies’ Litigation Guidelines.
Colony Ins. Co., 777 So.2d at
1038-39.
The Hanover Companies provided Anova LLC with their Defense
Counsel Guidelines that were effective September 1, 2009.
(The
Hanover Companies’ Defense Counsel Guidelines, attached as Ex. A
to Hanover’s Memo. Regarding Attorneys’ Fees, ECF No. 185-2).
The Zobrist law firm, which was retained to defend Anova LLC
in the Underlying Lawsuit, was bound to provide its billing in a
manner consistent with the Hanover Companies’ billing guidelines.
Cone Bros. Contracting Co. v. Ashland-Warren, Inc., 458 So.2d
851, 854, 856 (Fla. Dist. Ct. App. 1984) (finding the clear and
unambiguous terms of the contract controlled the award of
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attorneys’ fees to the insured); see Fortenberry Professional
Bldg. v. Zecman, 581 So.2d 972, 973 (Fla. Dist. Ct. App. 1991).
The Hanover Companies’ Litigation Guidelines contained a
section on Billing.
The Billing section set forth the procedures
for the Zobrist law firm to bill for its services.
The terms of
the Guidelines provided that the Hanover Companies would pay for
“reasonable and necessary fees.”
(The Hanover Companies’ Defense
Counsel Guidelines, attached as Ex. A to Hanover’s Memo.
Regarding Attorneys’ Fees, ECF No. 185-2 at p. 9).
The lodestar method is used to determine the “reasonable and
necessary fees” that are provided for in the Parties’ agreement.
Moore, 916 So.2d at 877.
II.
The Hanover Companies Are Required to Pay Reasonable
Attorneys’ Fees Incurred by the Zobrist Law Firm Between
October 12, 2012 and December 10, 2013.
The Court ruled in its Orders on the Parties’ Motions for
Summary Judgment (ECF Nos. 113, 151) that the period of time for
which the Zobrist Law Firm is entitled to attorneys’ fees is from
October 12, 2012 to December 10, 2013.
The Hanover Companies owe the Zobrist law firm all
reasonable attorneys’ fees incurred by the Zobrist law firm from
October 12, 2012 to December 10, 2013.
In its March 24, 2016 Order, the Court ruled that Anova LLC
is not entitled to attorneys’ fees for the Zobrist law firm that
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were incurred before Anova LLC requested a defense from the
Hanover Companies on October 12, 2012.
(March 24, 2016 Order
Granting, In Part, and Denying, In Part, Anova LLC’s Partial
Motion for Summary Judgment at p. 37, ECF No. 113).
In its June 29, 2016 Order, the Court ruled that the Zobrist
law firm was not entitled to attorneys’ fees incurred after
December 10, 2013, because on December 10, 2013 the Hanover
Companies informed Anova LLC that it would be providing different
counsel to defend it in the Underlying Lawsuit.
(Order Denying
the Hanover Companies’ Motion for Summary Judgment and Granting,
In Part, and Denying, In Part, Anova LLC’s Motion for Partial
Summary Judgment at p. 55, ECF No. 151).
Anova LLC asserts in its briefing that the Zobrist law firm
is entitled to attorneys’ fees after December 10, 2013 because
the firm did not withdraw as counsel until December 27, 2013.
(Anova LLC’s Brief at p. 5, ECF No. 177).
Contrary to Anova LLC’s arguments, the Court has already
clearly ruled on the dates that the Zobrist law firm is entitled
to attorneys’ fees.
The Zobrist law firm is not entitled to
attorneys’ fees incurred before October 12, 2012, or after
December 10, 2013.
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III. Additional Briefing Is Required as to the Objections Raised
by the Hanover Companies as to the Reasonableness of the
Zobrist Law Firm’s Attorneys’ Fees
The Hanover Companies attached 212 pages of billing records
that they claim contain categories of unreasonable billing
practices by the Zobrist Law Firm including billing for
administrative tasks, block billing, and work not related to the
defense of the case.
(The Hanover Companies’ Statement as to
Remaining Issues and Ex. A, Bill Analysis Reports, ECF Nos. 154,
154-1).
The Hanover Companies have not provided a legal basis or
sufficient factual information for hundreds of the billing
entries that they challenge.
The Hanover Companies have not set
forth their objections to the invoices with any particularity.
Instead, the Hanover Companies generally assert that the invoices
are unreasonable and request that the Court comb through the more
than 200 pages of records to evaluate which bills are
unreasonable.
The Hanover Companies have generalized a number of
objections in their Memorandum and stated that “the $284,624.71
that they already paid to the Zobrist firm represents the fair
and reasonable amount for the defense of the insured during that
time.”
(The Hanover Companies’ Memorandum in Support of
Remaining Issues Regarding the Zobrist Attorneys’ Fees at p. 15,
ECF No. 185).
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FILINGS REQUIRED
The Hanover Companies shall file an accounting, consistent
with the following:
A.
The Hanover Companies shall file an accounting that
connects the amounts they paid to the Zobrist law firm
for fees incurred between October 12, 2012 and December
10, 2013 to the Zobrist law firm billing records;
B.
The Hanover Companies’ accounting shall identify the
remaining unpaid charges from the Zobrist law firm and
the basis of Hanover’s objections to paying them;
C.
For the Hanover Companies’ objections to the manner of
billing, they shall indicate how the item fails to
conform to their billing requirements;
D.
Objections to the reasonableness of the Zobrist law
firm’s billings shall indicate with particularity each
item objected to and argument as to how it is
unreasonable.
The Court will rule on all of the Hanover Companies’
objections that are set forth in conformity with this Order.
Failure to provide information and support for the objection will
be construed as a waiver of objection and the Court shall find
the previously objected to amount due and payable.
The Zobrist law firm shall respond with an accounting of the
unpaid portions of its billing.
The accounting shall address
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each objection raised as to the billing practices and
reasonableness.
CONCLUSION
The Hanover Companies shall file their accounting as
required by Section III of this Order on or before Monday,
November 28, 2016.
The Zobrist law firm shall file its Response on or before
Wednesday, December 28, 2016.
The Hanover Companies may file a Reply on or before Tuesday,
January 17, 2017.
IT IS SO ORDERED.
DATED: October 24, 2016, Honolulu, Hawaii.
The Hanover Insurance Company; Massachusetts Bay Insurance
Company v. Anova Food, LLC; Counterclaimant Anova Food, LLC v.
Counter-Defendants The Hanover Insurance Company; Massachusetts
Bay Insurance Company; Civ. No. 14-00281HG-RLP; ORDER ON
REMAINING ISSUES REGARDING THE ZOBRIST LAW FIRM’S ATTORNEYS’ FEES
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