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District Court, Adams County, State of Colorado Court Address: Adams County Justice Center 1100 Judicial Center Drive Brighton, Colorado 80601 ___________________________________________ Plaintiff(s): SHEILA WINDHORST, v. Defendant(s):
MARK STONE; NICK TROMBETTA; and STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.
___________________ Case No. 09cv1216 Div W Ctrm: 507 ORDER ON ATTORNEY FEES
This matter is before the Court on defendant State Farm’s Motion for Attorney Fees Pursuant to C.R.C.P. 11 and C.R.S. § 13-17-102 filed on April 21, 2011. Plaintiff filed her Response on May 14, 2011. Defendant filed its Reply on May 26, 2011. Oral argument was held on June 17, 2011.
OVERVIEW
On March 29, 2011, the Court granted defendant State Farm’s summary-judgment motion on plaintiff’s claims for breach of insurance contract, bad faith breach of insurance contract, and unjust enrichment, finding (1) “that it was the Plaintiff, not Defendant State Farm, who breached the subject insurance contract because Plaintiff refused to cooperate with State Farm in the processing of her uninsured motorist claim by intentionally failing to execute medical records release authorizations and failing to give a statement under oath” (Summary-Judgment Order at 9); (2) “that as a matter of law, no reasonable jury could conclude that State Farm acted unreasonably under the circumstances because it was Plaintiff— or more appropriately her legal counsel—not Defendant State Farm, who acted unreasonably under the circumstances of this case” (Summary-Judgment Order at
EFILED Document – District Court CO Adams County District Court 17th JD 2009CV1216
Filing Date: Jun 28 2011 2:06PM MDT Transaction ID: 38397383
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10); and (3) that “Plaintiff’s unjust enrichment claim fails as a matter of law because Plaintiff has proffered no evidence that would be admissible at trial in support of her unjust enrichment claim” (Summary-Judgment Order at 11).1
As noted in the Court’s summary-judgment order, State Farm was the only party which had submitted a signed affidavit from an individual with personal knowledge of the facts of this action and which is legally sufficient under C.R.C.P. 56(f). Other than arguments of her counsel, Plaintiff failed to submit her own affidavit to counter those potentially admissible facts contained in State Farm’s Affidavit in support of its summary-judgment motion and the exhibits attached thereto. Consequently, the Court made the following findings of material facts:
1. On December 24, 2007, Plaintiff was the victim in a rear-end automobile accident. (Plaintiff’s Amended Complaint, ¶ 2).
2. On April 2, 2008, Plaintiff was the victim of a hit and run automobile accident. (Plaintiff’s Amended Complaint, ¶ 5).
3. On April 2, 2008, Plaintiff notified State Farm of the accident and on April 3, 2008, State Farm sent Plaintiff a letter informing her of her rights and obligations with respect to obtaining uninsured motorist benefits. (Plaintiff’s Exhibit 2).
4. State Farm, both orally and in writing, requested that Plaintiff execute medical records release authorizations and a medical provider summary.
(Defendant’s Exhibit B).
5. On April 14, 2008, State Farm acknowledged Plaintiff’s counsel’s Letter of Representation and therein requested that Plaintiff “complete the enclosed medical forms” so that State Farm could evaluate Plaintiff’s uninsured motorist claim. (Plaintiff’s Exhibit 4).
6. On April 24, 2008, State Farm, in writing, requested that Plaintiff execute medical records release authorizations and a medical provider summary.
(Defendant’s Exhibit C).
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From the record it appears that Mr. Bendinelli and Ms. Albano were the two attorneys in Mr. Bendinelli’s firm handling plaintiff’s legal representation. Consequently, the Court’s references to “plaintiff’s counsel” or “counsel” refers to Mr. Bendinelli and/or Ms. Albano.
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7. On April 25, 2008, State Farm sent a letter to Plaintiff’s counsel
reiterating that on April 14, 2008, State Farm responded to counsel’s second letter of representation. State Farm also reiterated that in its April 14, 2008, response letter that it requested that Plaintiff execute medical records release authorizations and a medical provider summary. (Defendant’s Exhibit C).
8. On May 19, 2008, State Farm sent a letter to Plaintiff’s counsel and again requested that counsel have Plaintiff “complete, sign and return the enclosed
Medical Authorization and Medical Provider Summary.” (Defendant’s Exhibit C). 9. On July 2, 2008, State Farm sent a letter to Plaintiff’s counsel explaining that “[W]e are writing to you as we have not yet received the medical authorization or medical provider summary sheet we requested from you previously.” The letter went on to inform counsel of Plaintiff’s certain duties or obligations with respect Plaintiff’s claim for uninsured motorist benefits, including Plaintiff’s duty to “provide written authorization for us to obtain: (a) medical bills; (b) medical records; (c) wage, salary, and employment information; and (d) any other information we deem necessary to substantiate the claim.” And the letter
concluded with the request that counsel “return the authorization and information forms by August 3, 2008.” (Defendant’s Exhibit C)(interlineation added).
10. On July 14, 2008, State Farm, in writing, requested that Plaintiff execute medical records release authorizations and a medical provider summary.
(Defendant’s Exhibit C).
11. As of July 15, 2008, Plaintiff’s counsel had in his/her possession Plaintiff’s medical records from Kaiser Permanente which indicated that, prior to the December 24, 2007, and April 2, 2008, automobile accidents, Plaintiff had been treated by Kaiser doctors for complaints of pain in her arms, back, neck, and shoulders, which are the same areas of the body in which Plaintiff claimed she was injured as a result of the December 24, 2007, and April 2, 2008, automobile
accidents. (Defendant’s Exhibit I(1); Defendant’s Exhibit I(2), Plaintiff’s Response To Defendant’s Request For Admissions, RFA Nos. 13 and 14).
12. On July 30, 2008, Plaintiff, through her attorney, informed State Farm that she would not execute medical records release authorizations. (Defendant’s Exhibit D).
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13. On August 21, 2008, State Farm sent a reservation of rights letter to Plaintiff because Plaintiff, through her attorney, refused to cooperate with State Farm’s investigation of her uninsured motorist claim. (Defendant’s Exhibit E).
14. On September 19, 2008, Plaintiff, again through her attorney, informed State Farm that she would not execute medical records release authorizations. (Defendant’s Exhibit D).
15. On September 30, 2008, State Farm, in writing, requested that Plaintiff execute medical records release authorizations and a medical provider summary. (Defendant’s Exhibit C).
16. On November 3, 2008, State Farm sent a letter to Plaintiff’s counsel chronicling its efforts to obtain signed medical records release authorizations and medical provider summaries and explained to counsel that State Farm was closing its claim file on Plaintiff’s uninsured motorist claim because of Plaintiff’s—more accurately counsel’s—refusal to cooperate. (Defendant’s Exhibit C).
17. On March 10, 2009, Plaintiff submitted her demand package for the payment of uninsured motorist benefits to State Farm requesting that State Farm pay the $100,000.00 uninsured motorist policy limits. (Defendant’s Exhibit I).
18. Pursuant to the subject insurance contract, State Farm requested that Plaintiff attend and give testimony in an “Examination Under Oath” on the
following dates: March 20, 2009, April 2, 2009, and April 9, 2009. (Defendant’s Exhibit F).
19. Plaintiff failed to appear twice for an Examination Under Oath. (Defendant’s Exhibit G).
20. On June 11, 2009, Plaintiff’s counsel informed State Farm’s counsel that Plaintiff “has had no treatment for neck, back, or knee injuries within the last ten (10) years, other than that which is related to the incidents in question. As such, there are no relevant prior records that will be provided.” (Defendant’s Exhibit J). Plaintiff’s counsel’s above representations were false because counsel did in fact possess Plaintiff’s Kaiser Permanente medical records which predated the December 24, 2007, and April 2, 2008, automobile accidents, and in which Plaintiff had made complaints to her treating doctor(s) and had been treated for issues related to her arm, back, knee, and neck. (See Undisputed Material Fact No. 11, supra).
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21. On June 12, 2009, Plaintiff appeared at State Farm’s counsel’s office for an Examination Under Oath, but that said examination was not completed because of obstreperous conduct by Plaintiff’s counsel. (Defendant’s Exhibit H).
22. The June 12, 2009, Examination Under Oath occurred before Plaintiff commenced the instant action against State Farm. (Plaintiff’s Amended
Complaint).
23. Plaintiff did not commence the instant action against State Farm until April 27, 2010, ten months after the aborted June 12, 2009, Examination Under Oath, and approximately 21 months after Plaintiff, through counsel, refused, in writing, to execute medical records release authorizations on July 30, 2008, and September 19, 2008. (Plaintiff’s Amended Complaint; Defendant’s Exhibit D). THE RELEVANT AND APPLICABLE PROVISIONS OF PLAINTIFF’S AUTOMOBILE INSURANCE CONTRACT WITH STATE FARM
24. INSURED’S DUTIES
3. Insured’s Duty to Cooperate With Us
a. The insured must cooperate with us and, when asked, assist us in: (2) securing and giving evidence;
(Defendant’s Exhibits E and M).
25. Endorsement 6044NN, Uninsured Motor Vehicle Coverage, provides for the following:
INSURED’S DUTIES
1. The following is added to Questioning Under Oath:
Each insured, or any other person or organization making claim or seeking payment under Uninsured Motor Vehicle Coverage must, at our option, submit to an examination under oath, provide a statement under oath, or do both, as reasonably often as we require. Such person or organization must answer questions under oath, asked by
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anyone we name, and sign copies of the answers. We may require each person or organization answering questions under oath to answer the questions with only that person’s or organization’s legal
representative, our representatives, any person or persons designated by us to record the questions and answers, and no other person
present.
(Defendant’s Exhibits F and M).
26. Endorsement 6044NN provides:
INSURED’S DUTIES
2. The following is added:
Other Duties Under Uninsured Motor Vehicle Coverage A person making claim must:
3. provide written authorization for us to obtain:
a. medical bills;
b. medical records;
c. wage, salary, and employment information; and
d. any other information we deem necessary to substantiate the claim.
(Defendant’s Exhibits C and M). DISCUSSION
1. Attorney fees under C.R.S. § 13-17-102
The General Assembly enacted C.R.S. § 13-17-102 because our courts are burdened with unnecessary litigation that interferes with the effective
administration of civil justice. The award of attorney fees is an important sanction available to a court in a civil case to punish an attorney or a party who engages in
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conduct improperly instigating or prolonging litigation. In re Marriage of Aldrich, 945 P.2d 1370, 1378-79 (Colo. 1997); see C.R.S. § 13-17-101. An award of fees and costs also serves the remedial purpose of compensating an opposing party who has been victimized by the misconduct of an opponent or an attorney. Aldrich, 945 P.2d at 1378-1379. Under § 13-17-102(2), a district court shall award attorney fees in any civil case when an attorney or a party has unnecessarily expanded the proceeding by asserting a claim or a defense that lacks “substantial justification,” which means that the claim or defense is “substantially frivolous, substantially groundless, or substantially vexatious.” Aldrich, supra (emphasis added); C.R.S. § 13-17-102(4).2
A claim or defense is groundless if the allegations of the complaint, although sufficient to survive a motion to dismiss for failure to state a claim, are not
supported by any credible evidence. Wheeler v. T.L. Roofing, Inc., 74 P.3d 499, 505 (Colo. Ct. App. 2003); W. United Realty, Inc. v. Isaacs, 679 P.2d 1063
(Colo.1984); Travers v. Rainey, 888 P.2d 372 (Colo.App.1994). In other words, a claim is “groundless” if the proponent has a valid legal theory, but can offer little or no evidence to support the claim. Bilawsky v. Faseehudin, 916 P.2d 586
(Colo.App.1995).
Here, as the Court previously found, other than incompetent arguments of counsel, see Hunter v. Mansell, 240 P.3d 469, 476 (Colo.App.2010)(A genuine
issue of material fact cannot be raised by counsel simply by means of argument);
Sullivan v. Davis, 474 P.2d 218, 220 (Colo.1970)(same), plaintiff presented no potentially admissible evidence on summary judgment to controvert any of the potentially admissible facts asserted by State Farm on summary judgment. More importantly, though, the facts which the Court found clearly demonstrated that State Farm did not engage in any improper conduct in the processing and evaluation of plaintiff’s UIM claim. On the contrary, it was quite clear to the
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Section 13-17-102(4), C.R.S., provides:
The court shall assess attorney fees if, upon the motion of any party or the court itself, it finds that an attorney or party brought or defended an action, or any part thereof, that lacked substantial justification or that the action, or any part thereof, was interposed for delay or harassment or if it finds that an attorney or party unnecessarily expanded the proceeding by other improper conduct, including, but not limited to, abuses of discovery procedures available under the Colorado rules of civil procedure or a designation by a defending party under section 13-21-111.5(3) that lacked substantial justification. As used in this article, “lacked substantial justification” means substantially frivolous, substantially groundless, or substantially vexatious.
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Court that it was plaintiff’s counsel who thwarted State Farm’s efforts to
reasonably and intelligently process and evaluate plaintiff’s UIM claim and that there otherwise was no factual basis for plaintiff’s claims against State Farm. Consequently, the Court finds that plaintiff’s claims against State Farm were groundless because there were no facts to support them in the first place.
A claim or defense is frivolous if the proponent cannot present a rational argument based on the evidence or law in support of that claim or defense. W.
United Realty, Inc. v. Isaacs, supra. However, this test does not apply to legitimate
attempts to establish a new theory of law or good faith efforts to extend, modify, or reverse existing law, even if the proponent does not prevail. Section 13-17-102(6), C.R.S.2002; W. United Realty, Inc. v. Isaacs, supra.
Here, there is no question that plaintiff’s counsel was not in good faith trying to extend, modify, or reverse existing law. Indeed, the facts as found by the Court do nothing more than underscore that plaintiff did not have valid claims against State Farm to begin with. Plaintiff’s counsel did nothing more than try to bully State Farm into paying policy limits without first providing State Farm with information that would have allowed it to process and intelligently evaluate plaintiff’s UIM claim. Based on this evidence, or more appropriately lack of evidence, plaintiff did not have a rational argument to support her claims against State Farm. Consequently, the Court finds that plaintiff’s claims against State Farm were frivolous.
A claim is vexatious if brought or maintained in bad faith to annoy or harass another; vexatiousness includes “conduct that is arbitrary, abusive, stubbornly litigious, or disrespectful of truth.” Consumer Crusade, Inc. v. Clarion Mortg.
Capital, Inc., 197 P.3d 285, 289-90 (Colo.App.2008); Bockar v. Patterson, 899
P.2d 233, 235 (Colo.App.1994).
The Court finds that plaintiff’s action was vexatious because it clearly was disrespectful of the truth; specifically, plaintiff’s counsel’s contention (in discovery responses and correspondence with defense counsel) that for the ten years before the complained of accident that plaintiff had not been treated for complaints of pain in her arms, back, neck, and shoulders was untrue because plaintiff’s Kaiser records proved otherwise. Plaintiff’s action against State Farm was vexatious because it was prosecuted and maintained, in part, on the above untrue factual predicate.
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In deciding whether to award attorney fees and in assessing the amount of such fees under § 13-17-102, a trial court must consider at least the factors set forth in § 13-17-103(1), which are:
(a) The extent of any effort made to determine the validity of any action or claim before said action or claim was asserted;
(b) The extent of any effort made after the commencement of an action to reduce the number of claims or defenses being asserted or to dismiss claims or defenses found not to be valid within an action;
(c) The availability of facts to assist a party in determining the validity of a claim or defense;
(d) The relative financial positions of the parties involved;
(e) Whether or not the action was prosecuted or defended, in whole or in part, in bad faith;
(f) Whether or not issues of fact determinative of the validity of a party’s claim or defense were reasonably in conflict;
(g) The extent to which the party prevailed with respect to the amount of and number of claims in controversy;
(h) The amount and conditions of any offer of judgment or settlement as related to the amount and conditions of the ultimate relief granted by the court.
C.R.S § 13-17-103(1).
a. The extent of any effort made to determine the validity of any action or claim before said action or claim was asserted.
The accident for which plaintiff claimed she was entitled to uninsured
motorist (UIM) benefits occurred on April 2, 2008. Plaintiff did not commence the instant action against State Farm until approximately April 27, 2010, a little over two years later. During those two years, the record recounted above clearly demonstrates that plaintiff’s counsel engaged in a purposeful campaign to thwart any of State Farm’s efforts to reasonably and in good faith process and intelligently evaluate plaintiff’s UIM claim. Plaintiff’s counsel undoubtedly knew he/she was obstructing State Farm’s efforts to reasonably investigate and evaluate plaintiff’s UIM claim. Despite this obvious knowledge, counsel nonetheless filed the instant action knowing full well that State Farm had requested information that every insurer does when processing an insured’s UIM claim, and counsel affirmatively (and in the Court’s mind intentionally) misrepresented plaintiff’s medical history to State Farm as detailed above. Therefore, counsel had no factual basis to believe
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that State Farm breached the insurance contract, did so in bad faith, and/or was unjustly enriched.
b. The extent of any effort made after the commencement of an action to reduce the number of claims or defenses being asserted or to dismiss claims or defenses found not to be valid within an action.
Despite knowing that there was no factual basis for plaintiff’s claims against State Farm, counsel took no action to reduce or dismiss plaintiff’s claims against State Farm. On the contrary, counsel vigorously litigated plaintiff’s factually unsupported claims against State Farm until this Court granted State Farm’s summary-judgment motion on March 29, 2011. In other words, counsel did nothing more than stoke the flames knowing full well that he never should have started the fire in the first place.
c. The availability of facts to assist a party in determining the validity of a claim or defense.
At the outset of the litigation against State Farm, counsel knew that State Farm had neither breached the insurance contract nor did so in bad faith by
engaging in reprehensible claims processing practices. The only person guilty of reprehensible claims processing practices was plaintiff’s counsel.
d. The relative financial positions of the parties involved. Although State Farm’s counsel suggested at the hearing that plaintiff’s counsel makes millions of dollars in essentially manufacturing bad faith claims against insurance companies, no competent evidence was introduced to support this contention. Consequently, the Court has before it no competent evidence of plaintiff’s counsel’s financial position.
e. Whether or not the action was prosecuted or defended, in whole or in part, in bad faith.
Based upon the Court’s findings of fact, the Court concludes that plaintiff’s claims against State Farm were prosecuted by her counsel in bad faith. In short, plaintiff’s counsel brought this action against State Farm without any factual basis for doing so.
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f. Whether or not issues of fact determinative of the validity of a party’s claim or defense were reasonably in conflict.
Here, the foundational facts for the validity of plaintiff’s claims were undisputed: They did not exist in the first place. State Farm made a number of attempts to secure relevant information to process and intelligently evaluate
plaintiff’s UIM claim only to be blocked and stonewalled by plaintiff’s counsel at every turn, including the misrepresentation that the for the ten years prior to the complained of injury that plaintiff had not treated for complaints of pain in her arms, back, neck, and shoulders when plaintiff’s Kaiser records proved otherwise.
g. The extent to which the party prevailed with respect to the amount of and number of claims in controversy.
All of plaintiff’s claims were dismissed with prejudice on summary judgment. Consequently, plaintiff prevailed on none of her claims.
h. The amount and conditions of any offer of judgment or
settlement as related to the amount and conditions of the ultimate relief granted by the court.
The Court has no information about any offers of judgment or settlement, so the Court does not take this factor into account in its decision.
Based upon the above, then, the Court finds that all of plaintiff’s claims against State Farm lacked substantial justification, in that they all were
substantially groundless, substantially frivolous, and substantially vexatious. Therefore, an award of attorney fees against plaintiff’s counsel and in favor of State Farm is appropriate under § 13-17-102(4).
2. Attorney fees under C.R.C.P. 11.
As pertinent here, C.R.C.P. 11 imposes the following independent duties on an attorney or a litigant who signs a pleading: (1) before a pleading is filed, there must be a reasonable inquiry into the facts and the law; (2) based on this
investigation, the signer must reasonably believe that the pleading is well grounded in fact; (3) the legal theory asserted in the pleading must be based on existing legal principles or a good faith argument for the modification of existing law; and (4) the pleading must not be filed for the purpose of causing delay, harassment, or an increase in the cost of litigation. Stearns Mgmt. Co. v. Missouri River Services,
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Inc., 70 P.3d 629, 632-33 (Colo.App.2003). Attorney fees may be assessed as a
sanction for violating C.R.C.P. 11. See E-470 Public Highway Authority v. Jagow, 30 P.3d 798 (Colo.App.2001), aff'd, 49 P.3d 1151 (Colo.2002).
Based upon the Court’s preceding discussion, the Court finds that plaintiff’s counsel filed claims against State Farm in violation of Rule 11. However, the Court declines to separately award attorney fees for counsel’s Rule 11 violations because to do so would be duplicative.
3. The amount of attorney fees that should be awarded.
Here, based upon the billing statements, testimony, and the affidavit of its legal counsel, Mr. Marc Levy, State Farm is requesting attorney fees in the amount of $57,277.00. This amount includes $8,323.00 of fees incurred by State Farm before this action was filed, in connection with its efforts to process and evaluate plaintiff’s UIM claim.
An award of attorney fees must be reasonable. The determination of
reasonableness is a question of fact for the trial court. Tallitsch v. Child Support
Services, Inc., 926 P.2d 143, 147-48 (Colo.App.1996); Hartman v. Freedman, 197
Colo. 275, 591 P.2d 1318 (1979).
If a statute providing for a fee award does not provide a specific definition of “reasonableness,” the amount of the award must be determined in light of all the circumstances, based upon the time and effort reasonably expended by the
prevailing party’s attorney. Spensieri v. Farmers Alliance Mutual Insurance Co., 804 P.2d 268 (Colo.App.1990).
In awarding attorney fees, the trial court may consider, among other
circumstances, the amount in controversy, the length of time required to represent the client effectively, the complexity of the case, the value of the legal services to the client, and awards in similar cases. Tallitsch, 926 P.2d 143, 147-48
(Colo.App.1996); Hartman v. Freedman, supra.
The existence of a fee arrangement, whether contingent or fixed, is a factor to consider in determining the reasonableness of a requested fee. Bakehouse &
Associates, Inc. v. Wilkins, 689 P.2d 1166 (Colo.App.1984). However, the fact that
a matter is handled by an attorney under a fee agreement does not, of itself, require a court to award the amount agreed upon between the attorney and client. Spensieri
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The initial estimate by the court of a reasonable attorney fee is reached by calculation of the “lodestar” amount. This amount represents the number of hours reasonably expended multiplied by a reasonable hourly rate and carries with it a strong presumption of reasonableness. Spensieri v. Farmers Alliance Mutual
Insurance Co., supra.
Once the lodestar amount is determined, that basic amount may be adjusted upward or downward by application of the factors listed above, together with the degree of success achieved and those factors set forth in the Colorado Rules of Professional Conduct Rule 1.5. See Porter v. Castle Rock Ford Lincoln Mercury,
Inc., 895 P.2d 1146 (Colo.App.1995) (wage claim); Hibbard v. County of Adams,
900 P.2d 1254 (Colo.App.1994) (civil rights claim); Dahl v. Young, 862 P.2d 969 (Colo.App.1993) (improper lien filing).
In determining whether the lodestar figure should be adjusted up or down based on the degree of success achieved, the amount of damages recovered by the plaintiff is relevant. Mau v. E.P.H. Corp., 638 P.2d 777 (Colo.1981). In addition, a court may consider the amount in controversy and the amount of damages sought.
See Robinson v. Lynmar Racquet Club, Inc., 851 P.2d 274 (Colo.App.1993). See also Colorado Rules of Professional Conduct Rule 1.5(a) (factors regarding
reasonableness include amount involved and results obtained).
Rule 1.5(a) of the Colorado Rules of Professional conduct provides: (a) A lawyer shall not make an agreement for, charge, or collect an
unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following: (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
14 RPC Rule 1.5.
Here, at the hearing, one of State Farm’s attorneys, Mr. Levy, testified that he and his firm have had a longstanding relationship with State Farm to provide insurance defense representation. In fact, Mr. Levy testified that his relationship with State Farm dates back to approximately 1981, about the time he was admitted to practice in Colorado. Mr. Levy further testified that he has been qualified as an expert witness in Colorado state courts in the areas of insurance bad faith and legal malpractice. At the hearing, Mr. Levy was qualified as an expert in the area of insurance bad faith.
Also received into evidence were defense counsels’ billing statements and Mr. Levy’s affidavit. Mr. Levy stated both in his affidavit and at the hearing that all of the charges his firm charged State Farm were reasonable, necessary, and customary for similar legal representation in the Denver area and based upon the experience of each attorney that had worked on the case.
After considering all of the factors suggested in R.P.C. Rule 1.5, the Court finds that Mr. Levy’s “partner” hourly rate of $200.00 per hour is reasonable and customary for insurance defense counsel in the Denver area with Mr. Levy’s 31 years of experience. In fact, the Court finds that $200.00 per hour for an attorney of Mr. Levy’s ability and experience is generally below market value; however, as Mr. Levy testified, the trade off in his hourly rate for doing insurance defense is the volume of work he and his firm receive from insurance companies.
The Court finds that an hourly rate of $80.00 per hour for Mr. Robert’s paralegal time is reasonable and customary for paralegal services in the Denver area with the same or similar experience in the Denver area.
The Court finds that the $150.00 hourly rate for Mr. Carlson, Mr. Krieter, and Ms. Judd are reasonable and customary for attorneys with the same or similar experience in the Denver area.
The Court further finds, after reviewing all of the billing statements that were admitted into evidence at the hearing, that all of the attorney fees charged by Mr. Levy and his firm were reasonable and necessary in defending State Farm, including the $8,323.00 of fees incurred by State Farm before this action was filed. However, the Court is constrained by the language of C.R.S § 13-17-102 to award attorney fees only in a civil action which has actually been commenced.
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it incurred before this action was filed. Therefore, the Court cannot award State Farm the $8,323.00 of pre-filing attorney fees.
CONCLUSION AND ORDER
In light of the above, then, the Court finds and concludes that an award of attorney fees in the amount of $48,954.00 is reasonable, just and proper under the circumstances of this case ($57,277.00 - $8,323.00 (disallowed amount) =
$48,954.00). This award hopefully will discourage Mr. Bendinelli and his law firm from engaging in similar conduct and practices in the future and is intended to compensate State Farm who has been victimized by the misconduct of Mr.
Bendinelli and his law firm. This award shall be a joint and several obligation of Mr. Bendinelli, individually, and Bendinelli Law Office, P.C. See C.R.S. § 13-17-102(3). This award constitutes a final order and judgment of the Court.
SO ORDERED THIS 28th DAY OF JUNE, 2011.
BY THE COURT:
DISTRICT COURT JUDGE
CERTIFICATE OF SERVICE
The within Order was served on all pro se parties and counsel of record via LexisNexis File and Serve this 28th day of June, 2011.
BY THE COURT:
