Illiana Surgery and Medical Center LLC v. Hartford Fire Insurance Company

Filing 220

OPINION AND ORDER granting in part and denying in part 209 MOTION for Attorney Fees and Request for Entry of Judgment filed by Illiana Surgery and Medical Center LLC, iHealthcare Inc. Hartford is DIRECTED to pay Illiana's attorneys fee s in the amount of $25,191.67 within fourteen (14) days of this Order.The 211 MOTION for Leave to Submit Amended Declaration of Donald M. Snemis filed by Illiana Surgery and Medical Center LLC is granted. Signed by Magistrate Judge Andrew P Rodovich on 12/6/11. (kjp)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
ILLIANA SURGERY AND MEDICAL
CENTER LLC nka Heartland
Memorial Hospital LLC,
iHEALTHCARE, INC.,
Plaintiffs
v.
HARTFORD FIRE INSURANCE
COMPANY,
Defendant

)
)
)
)
)
)
)
)
)
)
)
)
)

Case No. 2:07 cv 3

OPINION AND ORDER
This matter is before the court on the Attorney Fee Petition
and Request for Entry of Judgment [DE 209] filed by the plaintiffs, Illiana Surgery and Medical Center and iHealthcare, Inc.,
on September 20, 2011, and the Motion for Leave to Submit Amended
Declaration of Donald M. Snemis [DE 211] filed on October 7,
2011.

In light of the lack of response in objection, the Motion

for Leave to Submit Amended Declaration of Donald M. Snemis [DE
211] is GRANTED.

For the following reasons, the attorney fee

reward is GRANTED IN PART and DENIED IN PART.

The attorney fee

award is reduced to $25,191.67.
Background
The plaintiff, Illiana, through its counsel, Ice Miller,
LLP, has spent the duration of this suit trying to recover
documents from Hartford’s insurance claim file.

At the Rule 16

conference, the court first directed Hartford to produce its
claims file.

Hartford did not turn over the file, causing

Illiana to file a motion to compel on April 17, 2008. Hartford
objected, citing attorney-client privilege.

The court determined

that the attorneys who handled the claim were serving in their
capacity as outside claims adjusters rather than attorneys and
that the attorney-client privilege was inapplicable.

On June 30,

2008, this court ordered Hartford to produce the documents in the
claim file.

Although Hartford represented to Illiana that it

produced the claim file in its entirety, Hartford later produced
a myriad of additional documents upon Illiana’s suspicion that
all of the documents had not been produced.
Illiana proceeded to subpoena Steve Palazzo, Hartford’s lead
claims adjuster, and Jack Keeley, Hartford’s computer consultant.
In doing so, Illiana requested copies of documents pertaining to
Jack Keeley’s work on Illiana’s claim that had not already been
produced by Hartford.

A year earlier, Hartford’s counsel had

promised to search for and produce any such documents.

However,

53 documents were produced immediately before Keeley’s deposition.

Illiana also issued a deposition subpoena to Kevin

Pugliese, the Fisher Kanaris attorney who performed most of the
adjusting and investigation of Illiana’s claim.

Hartford moved

to quash the subpoena, raising the same arguments that it made in

2

response to Illiana’s motion to compel.

The court again ex-

plained that Pugliese was acting as a claims adjuster, not as an
attorney, and that the attorney-client privilege was inapplicable.

At the court’s direction, Hartford served an additional 441

documents from its claims file, the same one it previously told
Illiana was produced in its entirety.

None of the documents were

listed in Hartford’s privilege log, and Illiana had no way of
knowing the documents existed.
Because Hartford defied the court’s April 4, 2007, June 30,
2008, and November 18, 2008 Orders, the court granted Illiana’s
motion for sanctions on June 13, 2011.

The parties appealed the

Order to Judge VanBokkelen, who modified the sanctions imposed by
this court.

Judge VanBokkelen directed Illiana to file an

attorney fee affidavit.

Illiana filed its request for attorney

fees on September 20, 2011, asking for $42,359.17 in attorney’s
fees.

Hartford opposes the fees as unreasonable.
Discussion
Federal Rule of Civil Procedure 37(a)(5)(A) states:
If the motion [to compel] is granted--or if
the disclosure or requested discovery is
provided after the motion was filed--the
court must, after giving an opportunity to be
heard, require the party or deponent whose
conduct necessitated the motion, the party or
attorney advising that conduct, or both to
pay the movant's reasonable expenses incurred
in making the motion, including attorney's
fees.
3

The recoverable fees are limited to the reasonable fees that an

Bowerman v. Wal-Mart Stores,

attorney would charge a client.

Inc., 2000 U.S. Dist. LEXIS 21616, *3 (S.D. Ind. Nov. 30, 2000).
The court will consider whether the costs reportedly incurred in
making the motion were reasonably necessary by evaluating the
reasonableness of the time spent preparing the motion and the
rates charged.

Equal Employment Opportunity Commission v.

Accurate Mechanical Contractors, Inc., 863 F.Supp. 828, 834 (E.D.
Wis. 1994).
"The attorney's standard hourly rate is the best measure of
the attorney's reasonable hourly rate."

Accurate, 863 F.Supp. at

834 (citing Gusman v. Unisys Corp., 986 F.2d 1146, 1150 (7th Cir.
1993)); Parish v. City of Elkhart, 2011 WL 1360810, *4 (N.D. Ind.
April 11, 2011)(explaining that an attorney’s billing rate is
presumptively appropriate).

This is because the rate clients are

willing to pay the attorney accounts for his individual skill and
ability.

Gusman, 986 F.2d at 1150.

In rendering this judgment,

the court generally will take the attorney’s experience and
qualifications into consideration.

Accurate, 863 F.Supp. at 834.

An attorney may charge higher than average fees for work completed in his specialty, but he must demonstrate that he is
deserving of the same inflated rate for areas outside his common
practice.

Parish, 2011 WL 1360810 at *4.

4

The court also will

look to the market rate for comparable services.

Perry v. City

of Gary, 2011 WL 344007, *2 (N.D. Ind. Aug. 8, 2011).

If ser-

vices of a similar quality were available within the market where
the services were rendered for a reduced amount, the court may
decrease the requested fees accordingly.

Perry, 2011 WL 344007

at *2-3.
The court also must determine whether the time allotted to
the given task was reasonable under the circumstances.
863 F.Supp. at 834.

Accurate,

The court will consider the length of the

motion or memorandum, the complexity of the case, and the amount
of authority the document refers to when assessing the reasonableness of the time allotted to the activities.

Maxwell v.

South Bend Work Release, 2010 U.S. Dist. LEXIS 114462, *13-14
(N.D. Ind. Oct. 25, 2010); Arrington v. La Rabida Children's

Hosp., 2007 WL 1238998, *3 (N.D. Ill. Apr. 25, 2007) (reducing
requested time when brief in support of motion did not cite any
case law); Mattenson v. Baxter Healthcare Corp., 2003 WL
22317677, *1 (N.D. Ill. Oct. 9, 2003) (finding that two hours was
a reasonable length of time to complete a three page motion).
Duplicate and excessive time cannot be recovered, and the court
must carefully scrutinize a fee petition for such.
2000 U.S. Dist. LEXIS 21616 at *3.

Bowerman,

To enable the court to

complete this task, "[t]he billing records must be sufficiently

5

clear to enable the district court to identify what hours, if
any, are excludable because they are excessive, redundant, or
otherwise unnecessary."

Shoney’s, Inc. v. Schoenbaum, 894 F.2d

93, 97 (4th Cir. 1990).
Illiana’s fee affidavit is littered with redundant and excessive fees that would not be appropriate to bill to a client.

See Bowerman, 2000 U.S. Dist. LEXIS 21616, at * 3 (explaining
that attorney fees are limited to those an attorney would charge
a client).

Although the court acknowledges Illiana’s perpetual

struggle to obtain the claim file from Hartford, this does not
entitle Illiana to excessive fees.
As an initial matter, Illiana attempts to recover fees for
researching and preparing the motion for sanctions at the senior
partner billing rate of $415 per hour.

The court acknowledges

that senior partners of Snemis’ background may charge fees in
excess of this rate, however, Illiana should not be awarded for
its inefficient allocation of resources.

See Parish, 2011 WL

1360810 at *4 (acknowledging that an attorney’s billing rate work
in his primary concentration is "presumptively appropriate",
including fees up to $600 an hour, but that fees outside an
attorney’s specialty must be reduced accordingly).

Much of the

basic research could have been completed by less experienced
attorneys and at a much lower billing rate.

6

In fact, the same or

similar services could have been completed by Snemis’ own firm at
a lower billing rate.

See Perry, 2011 WL 3444007 at *2 (explain-

ing that the court may reduce an out of town attorney’s fees if
services of equal quality were available at a lower charge within
the market where the services were rendered).
Thomas or Calhoon could have researched and drafted the
motion and supporting brief for Snemis to review, reducing the
cost nearly in half.

Ice Miller has not demonstrated that the

issues were particularly complex, requiring the expertise of a
more experienced attorney, nor has it shown that Snemis was an
expert in handling motions for sanctions and deserved the excess
rate.

Therefore, the court must reduce Snemis’ rate to that of

the associate who could have completed much of the work and will
assign an hourly rate of $250 for the time he spent researching
and preparing the motion for sanctions and briefs in support.
To the extent the court can discern the amount of time
Snemis spent reviewing the briefs and responses, an activity
customary for a senior partner to perform, the court will assign
Snemis’ traditional hourly rate of $415.

For these same reasons,

the court will assign Burke’s hourly rate of $465 for time spent
reviewing the motions and responses but will reduce the rate for
any time spent completing work that could have been done at a
lower hourly rate.

Because the rates charged by Thomas and

7

Calhoon are reasonable for this market, the court will not adjust
their hourly rates for the time billed for legal services.

See

Pace v. Pottawattomie Country Club, Inc., 2009 WL 4843403, *11
(N.D. Ind. Dec. 11, 2009) (finding $250 per hour is a reasonable
rate for an attorney in the Northern District of Indiana).
Having affixed the appropriate hourly rates, the court must
consider whether the time spent on the various tasks was reasonable.

With regard to the original motion for sanctions, Snemis

spent 18.5 hours researching and preparing the motion.

Calhoon

billed 13.5 hours for the same motion, most of which was spent
researching.

Calhoon, Burke, Thomas, and Snemis each reviewed

the motion, adding another 3.2 hours.

It is difficult to fathom

that attorneys of this caliber would spend almost an entire work
week, 35.9 hours, preparing a motion for sanctions, particularly
when a senior partner is performing the majority of the work.

In

any case, the court must eliminate excessive and redundant fees.
Illiana has not justified the need for four attorneys to review
the same motion, nor has it provided any insight on what each
additional attorney contributed.

Therefore, the court will

eliminate the fees charged by Burke on February 25, 2011, and
Thomas on February 28, 2011, for reviewing the motion.

The time

Calhoon spent researching, 13.5 hours, is excessive for a motion
for sanctions and will be reduced to 8 hours.

8

Snemis’ activities

will be charged at $250 an hour, the rate of an associate who
could have completed the majority of the work, for all activities
except his final review.

See Perry, 2011 WL 344007 at *2 (ex-

plaining that the court may reduce an out of town attorney’s fees
to the rate charged for comparable services in the market where
the services are rendered).
The fee affidavit next shows that Snemis researched and
prepared the reply to the motion for sanctions, and then Thomas,
a less experienced attorney, reviewed Snemis’ work.

This ar-

rangement defies the logical progression of review.

If Ice

Miller was careful in allocating resources, Thomas, rather than
Snemis, would have researched and prepared the reply for Snemis,
the senior partner, to review.

The court will award Snemis his

customary rate for reviewing the brief in opposition and reply
but will reduce the fees to $250 an hour for the time he spent
preparing the reply brief.
It is also unclear from the fee affidavit what Thomas
contributed on April 6, 2011.

His billing entry states that he

conferred with Snemis, called the court regarding paper copies of
recent filings, and gave attention to the motion for sanctions.
Because Snemis researched and compiled the reply brief, it is
unclear what Thomas actually contributed through these tasks,
some of which appear to be purely administrative and not subject

9

to recovery.

Shoney’s, 894 F.2d at 97 (explaining that the

billing records must be sufficiently clear to enable the court to
identify what hours were unnecessary). Therefore, Thomas will not
be awarded fees for his services on April 6, 2011.
Snemis next reviewed the order on the motion for sanctions
issued by this court and began to draft an objection.

Again,

Snemis, the partner, researched and drafted the opinion for the
associate to review.

The same product could have been produced,

but at a cheaper cost, if Ice Miller efficiently allocated the
work and had Thomas or Calhoon draft the brief for Snemis to
review.

Therefore, Snemis’ hourly rate is reduced to $250 for

the work completed on June 14, 15, 16, 21, and 22, 2011.

Thomas

reviewed the motion on three separate occasions for a total of
3.2 hours.

The fee affidavit does not reflect that the motion

was changed in any of the three times he revised the motion.

The

court therefore reduces the time spent reviewing the motion to
the 2.2 hours Thomas reported on June 20, 2011.

Thomas also

reported time for drafting a motion to clarify the court’s order
scheduling the oral argument on the objections to the magistrate
judge’s order.

This is beyond the scope of the attorney fee

award, which was limited to the cost of "researching, presenting
and arguing its motion for sanctions" and will not be accounted
for in the total.

10

Ice Miller allocated a substantial time to preparing for the
hearing on the motion for reconsideration of the motion for
sanctions.

The fee affidavit states that Ice Miller spent 47.3

hours preparing for and attending the hearing, 14.2 hours of
which were used to prepare the exhibits.

Although Ice Miller is

permitted to take advantage of the court’s technology, Hartford
is not responsible for its training, and the fees recorded August
17, 2011, for Thomas’ training are not recoverable.

The court

also finds that 14.2 hours preparing exhibits is excessive.
Illiana should not be responsible for such trivial and administrative tasks as packing the lap top bag.

The court declines to

award attorney’s fees for the work performed by Spellman setting
up the Trial Director program.

Ice Miller has not justified

these fees, and the rate and time allotted are excessive and over
inclusive.

Thomas also recorded 10.2 hours preparing exhibits.

Although Ice Miller argues that the time spent is reasonable
because of the number of documents produced, Ice Miller would
have had to go through the documents regardless of the motion for
sanctions and has failed to show that these fees are directly
related to the motion for sanctions.

The court will reduce

Thomas’ time preparing the exhibits to 3 hours.
Thomas further recorded 9.6 hours for traveling and attending the hearing on the motion for sanctions, and Snemis recorded

11

9.2 hours.

Snemis reports that he continued to prepare for the

hearing on the way to Hammond.

However, "travel time is not time

in which a lawyer performs highly efficient legal services for
the client."

Olson v. HMS Westpac Exp., Inc., 2008 WL 4192066,

*4 (S.D. Ind. 2008).

Because the court cannot determine what

amount of this time was spent preparing during travel and what
amount of time was spent at the hearing, Snemis’ $415 per hour
fee will be reduced in half for the entire time.

See Olson, 2008

WL 4192066, *4 (reducing attorney’s fees for work done traveling
to half the requested rate).

Furthermore, Thomas was not prepar-

ing for the hearing during the commute, nor does the record
reflect that he offered any substantive help at the hearing.

His

time is therefore reduced to the rate assigned to administrative
assistants, $75 an hour, for the 9.6 hours he spent traveling to
and assisting at the hearing.
Thomas and Kim Jeffers recorded 2.9 hours of time preparing
the fee affidavit and motion.

This time is reasonable and will

stand as recorded.
Finally, Ice Miller submitted $1,804.17 for expenses researching the motion for sanctions. Hartford argues that Ice
Miller did not offer supporting documentation or detail for these
charges.

However, the entries clearly show they were Westlaw

searches for the motion for sanctions.

12

It is not clear what

additional details Hartford seeks.

The court will award the

$1,804.17 in research expenses.
By taking into consideration the redundancy of tasks,
inefficient allocation of resources, and excessive time allotted
to various tasks, the court finds that Hartford is responsible
for $25,191.67 in attorney’s fees.

Hartford is DIRECTED to pay

Illiana’s attorney’s fees in the amount of $25,191.67 within
fourteen (14) days of this Order.
ENTERED this 6th day of December, 2011

s/ ANDREW P. RODOVICH
United States Magistrate Judge

13