Superior Court of Pierce County. Superior Court Docket No. 91-2-05290-1. Date Filed in Superior Court: September 10, 1993, Superior Court Judge Signing: Frederick Hayes.
Written By: Wiggins, P.t.j.*fn* , Concurred IN By: Bridgewater, J., Seinfeld, C.j., dissents
WIGGINS, J.*fn* -- We must decide whether the trial court abused its discretion by limiting the successful plaintiff's attorney fee award in an employment discrimination action to the contingent fee agreement percentage of the damages found by the jury. The trial court limited the attorney fee award to fifty percent of the $8000 damages found by the jury, for a total fee of $4000. We hold that the trial court's heavy reliance on the contingent fee percentage contravenes the purposes of the fee award authorized by Washington's Law Against Discrimination. The trial court abused its discretion in setting the plaintiff's attorney fee award in this manner, and we reverse and remand for a redetermination of a reasonable attorney fee and costs.
Plaintiff Marvin G. Martinez was employed by the City of Tacoma Human Rights Department (the City) from 1984 until July 1988. Martinez worked as a contract case investigator on employment discrimination cases. He was
terminated on July 11, 1988. Martinez's prior attorneys filed this lawsuit on May 30, 1991.
In his complaint, Martinez claimed employment discrimination, intimidation, and harassment. At trial,*fn2 Martinez contended that the City discharged him because of his national heritage (Hispanic) and because he was not African-American. Martinez claimed that the City discharged him in retaliation for complaining that he was subjected to different terms and conditions of employment than other non-Hispanic case investigators. Martinez also claimed that his supervisors' coercive actions forced Martinez into accepting discriminatory practices.
Employment discrimination claims under RCW 49.60 are subject to a three year statute of limitations. This action was filed more than three years after Martinez's last working day, but before the City hired a replacement for Martinez. The statute of limitations restricted the nature of the damages Martinez could claim at trial.
Martinez asked in his complaint for $3,500,000 for his claims and $500,000 for loss of consortium for his wife Diana. Approximately ten days before trial, Martinez offered to settle with the City for $240,000. At trial, Martinez asked the jury to award $295,238 for emotional distress and lost wages for Martinez and loss of consortium for his wife Diana. After a seven day trial, the jury found in favor of Martinez, finding $8000 in damages. The jury found against Diana Martinez on her claim for loss of consortium.
Martinez sought an award of attorney fees pursuant to RCW 49.60.030. Martinez's attorney, Hugh McGavick, filed a declaration detailing his experience, which included several civil rights, discrimination, and other personal injury cases. McGavick initially assisted Martinez in trying to negotiate a settlement with the City even before Martinez was terminated. Other lawyers then represented
Martinez, but withdrew from the case three months before the trial date because they considered it "unwinnable." McGavick agreed to undertake Martinez's representation less than two months before the trial date. McGavick and Martinez signed a fee agreement that provided:
Client agrees to pay Attorney a $2,500 retainer, with $1,500 due and payable on or before April 22, 1993, and the remaining balance of $1,000 due and payable on or before May 1, 1993. Said fees shall be earned at the rate of $125 per hour.
Client agrees to pre-pay or reimburse all costs incurred in the prosecution of this case promptly, as directed by attorney.
Client has volunteered and offered, and attorney has accepted and agreed, that attorney shall be entitled to a 50% contingent fee of the gross recovery herein, whether said recovery is received as a result of settlement of judgment. This contingent fee shall be reduced by all retainer monies already paid.
In the event that there is an opportunity to submit a petition for prevailing party attorney fees, Attorney shall do so, and shall seek to be compensated at the agreed rate of $125 per hour. If Prevailing Party Attorney fees are either negotiated or awarded, such "fees" belong to the client, and Attorney shall be entitled to the agreed contingent fee percentage of such award, as well as the agreed contingent fee on the underlying gross recovery.
McGavick submitted an affidavit detailing total time of 430.6 hours from April 18 through July 9, multiplied by $125 per hour for a total lodestar request of $53,825. McGavick asked for a fifty per cent increase in the fee, for a total of $80,737. McGavick supported his claim for an hourly rate of $125 with copies of fee awards in two recent federal district court cases awarding him fees at that rate, and the affidavit of a local attorney that this was a reasonable and competitive rate. McGavick also sought to recover $6985.33 in costs, consisting largely of the services
of a legal assistant/investigator charged at $50 per hour, and copies of depositions and transcripts.
Defendant City conceded that McGavick's hourly rate was customary in the locality for similar legal services. But the City argued that the fee should be a percentage of the damage award of $8000.
The trial court stated that two factors caused him difficulty in determining an appropriate fee award. First, the court disagreed with the jury verdict that the City had engaged in discriminatory or retaliatory conduct, but conceded that the jury verdict governed the case.*fn3 Second, the court observed that McGavick did "an excellent job":
Not only that, you handled a very difficult client and a difficult set of claims with dignity and a lot of integrity, and I appreciated that, and it made the case much more believable, I think, for your client, and all in all, I think you did an excellent job as [defense counsel] Mr. Whitters did, but that makes it more difficult for me.
But the court concluded that the contingent fee agreement should govern the fee award:
I have to apply the factors that the courts keep coming back to . . . as set forth and codified in the rules of professional conduct and they're also cited in almost every case where attorneys' fees are awarded under whatever reason they're awarded: statutory or equitably and so on. I've gone through those, and I think the bottom line for me is the contingent fee agreement.
After all is said and done, that's what you both agreed to, and it carries a great deal of weight for me. I know you spent -- I'm not questioning the time you spent; I'm not questioning the hourly fee. I just think that given the result, given the agreement between you and your client, that that should be the fee that I will order the city to pay and I will.
(Emphasis added.) On reconsideration, the court clarified:
I think the more appropriate way of saying that was that, of all the factors, that it seemed to me most appropriate to grant the amount that the contingency fee called for, considering all of the things that happened in the case and all the things I'm supposed to consider in reaching that decision, and that's what I did . . . .
The court also awarded costs of $2383.91, disallowing the $3300 for investigator/legal assistant charges, and other charges as well.
The trial court denied Martinez's motion for reconsideration and ...