In Baker v. Fireman’s Fund Insurance Company, et al., Case No. 76218-4-I (October 15, 2018), the Court of Appeals of the State of Washington held that the trial court acted well within its discretion in determining the insureds’ reasonable attorney fees in the amount of $1,209,757.25, through the use of the lodestar method and a 1.3 multiplier.
The Court of Appeals addressed both an appeal by the insureds and a cross-appeal by the insurance company. There was no dispute that the insureds were the prevailing party and thus entitled to reasonable attorney fees under Washington law. Consequently, the court’s analysis focused on whether the trial court abused its discretion in determining the insureds’ reasonable attorney fees.
As to the insureds’ appeal, the Court of Appeals held the trial court did not abuse its discretion in determining the reasonable attorney fees. The court held that the “primary consideration” in determining an appropriate award of attorney fees is reasonableness. The court held that the lodestar method is an established method of determining a reasonable attorney fee award. The Court of Appeals agreed with the trial court’s determination in excluding or reducing hours billed for fees related to the following: (1) tax foreclosure, as Fireman’s Fund promptly paid the bill after being notified, and the property tax bill was at best tangential to the Bakers’ claims against Fireman’s Fund; (2) fees related to PRP claims, as the Bakers failed to carry their burden to demonstrate the fees were non-duplicative or necessary for the Bakers’ claims against Fireman’s Fund; (3) fees incurred litigating against OneBeacon, as the common-fund doctrine did not apply and Fireman’s Fund likely secured its right to contribution from OneBeacon at the time the Bakers tendered their claim to OneBeacon, as the right was created by the continuous-trigger doctrine; and (4) fees for acting as Bakers’ personal counsel, as the tax consequences of the settlement were irrelevant to establishing Fireman’s Fund’s liability to the Bakers and the record showed that the parties agreed to settlement in principle.
The Court of Appeals also held that there was not an abuse of discretion by applying a 1.3 multiplier instead, of the insureds’ requested 2.5 multiplier. It reasoned that the trial court considered the risk (albeit not large) that no recovery might be obtained, the length of time it took to resolve, that the insureds’ private counsel recovered no fees or costs for up to nine years and the contingent nature of Bakers’ fee agreement, as proper reasons supporting a multiplier. The court’s decision was supported by its findings and substantial evidence and did not abuse its discretion in awarding a 1.3 multiplier to the lodestar fee.
As to the cross-appeal, the Court of Appeals found that the record before them demonstrated that the trial court had considered the entire record, and that the insurance company had failed to show that the trial court’s decision was manifestly unreasonable. The Court of Appeals also rejected the insurance company’s argument that it was error to calculate the lodestar without evidence of actual hourly rates. The Court of Appeals held that the trial court’s determination of reasonable hourly rates was supported by substantial evidence and was not an abuse of discretion.
Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.