Harleysville Insurance Company v. Holding Funeral Home, Inc. et al

Filing 99

MEMORANDUM OPINION. Signed by Magistrate Judge Pamela Meade Sargent on 07/28/2017. (Bordwine, Robin)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF VIRGINIA
ABINGDON DIVISION
HARLEYSVILLE INSURANCE
COMPANY,
Plaintiff/Counterclaim
Defendant,
v.
HOLDING FUNERAL HOME,
INC., et al.,
Defendants/Counterclaim
Plaintiffs.

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MEMORANDUM OPINION
Case No. 1:15cv00057

By Memorandum Opinion and Order entered on February 9, 2017, the
undersigned denied Plaintiff’s Motion Requesting The Disqualification of
Defendants’ Counsel, (Docket Item No. 52). Nonetheless, the undersigned
determined that a lesser sanction should be imposed on defense counsel and
ordered plaintiff’s counsel to provide the court with statements of the costs and
fees incurred by their client, Harleysville Insurance Company, in pursuing the
motion. Those statements are before the court, (Docket Item Nos. 81, 82), along
with defense counsel’s response, (Docket Item No. 88), and plaintiff’s reply,
(Docket Item No. 89).
The material facts surrounding the issues before the court were set out in the
undersigned’s February 9, 2017, Memorandum Opinion, and, for sake of brevity,
will not be repeated here. Plaintiff’s counsel have filed statements with the court
seeking an award of $68,615.25 in fees and $1,749.40 costs for pursuing plaintiff’s
motion to disqualify defense counsel. Regardless of its earlier statement, the court
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is of the opinion that an award of fees and costs in that amount as a sanction would
result in a windfall to plaintiff, which is not the court’s intention. The blame for the
circumstances that have brought this matter before the court are, in the court’s
opinion, shared by each side. The court’s intent was to fashion a sanction
appropriate for the unprofessional behavior of defense counsel in failing to notify
Harleysville’s counsel that it had accessed material it should have known that
Harleysville was asserting was privileged. If defense counsel had acted as the
court believes it should have – in that it had sequestered the potentially privileged
information and notified Harleysville’s counsel of its receipt – it is still likely that
the parties would have sought the court’s decision as to whether the information
disclosed was privileged and whether any privilege had been waived by its
disclosure. Thus, much of the fees and costs sought would have been incurred any
way.
After reviewing the parties arguments, and Harleysville’s counsel’s itemized
statements, the court will award sanctions against defense counsel in the amount of
$7,137.00. This amount is roughly equal to Harleysville’s counsel’s work in
preparing and drafting the motion to disqualify, which by the court’s calculation
involved 54.9 hours of attorney time at an hourly rate of $130.00. More,
importantly, it does not include fees for time spent determining how defense
counsel acquired Harleysville’s claims file. Nor does it include time spent
reviewing the defense response to the motion or preparing and drafting
Harleysville’s reply, both of which primarily focused on the issues of privilege and
waiver. It also does not include time spent preparing for the hearing or the travel
expenses incurred to appear at the hearing. Finally, it does not include any fees and
expenses incurred in providing the court an itemization of the fees and expenses
incurred.
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While the court has based the amount of sanctions imposed on fees and
expenses incurred, this is not an award of fees and expenses. This is a sanction
imposed by the court in response to defense counsel’s actions in the case. See
Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991) (federal courts have the power
to discipline attorneys who appear before them). The assessment of fees as a
sanction is within a court’s inherent power. See Chambers, 501 U.S. at 45. While
the court has looked to fees incurred in determining the proper amount of monetary
sanction to impose, it is not bound by the analysis commonly applied to the award
of attorneys’ fees.
An appropriate order will be entered.
ENTERED: July 28, 2017.

/s/

Pamela Meade Sargent

UNITED STATES MAGISTRATE JUDGE

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