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Baskett v. Country Mutual Insurance Co.

United States District Court, W.D. Washington, Seattle

May 23, 2017

NOAH and REBECCA BASKETT, Plaintiffs,
v.
COUNTRY MUTUAL INSURANCE COMPANY, Defendant.

          ORDER GRANTING PLAINTIFFS' MOTION FOR ATTORNEY FEES

          JOHN C. COUGHENOUR UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Plaintiffs' motion for attorney fees (Dkt. No. 35). Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and hereby GRANTS the motion in part for the reasons explained herein.

         I. BACKGROUND

         The underlying facts of this case have been discussed in a previous order. (See Dkt. No. 33 at 1-4.) Plaintiffs Noah and Rebecca Baskett filed a motion for attorney fees for the resolved claims, including a claim that Defendants “refus[ed] to pay the withheld depreciation, ” which was resolved in Plaintiffs favor. (See Id. at 6.) Plaintiffs seek: (1) $66, 747 in attorney fees, with a multiplier; (2) $3, 480 in legal assistant fees; and (3) $4, 916.86 in litigation expenses and costs. (Dkt. No. 35 at 1-3; Dkt. No. 38 at ¶ 4.) Plaintiffs' counsel Joel Hanson submits 234.2 hours of work, including 12.5 hours of work in bringing this motion, at a rate of $285/hour. (Id. at 5-9; Dkt. No. 38 at ¶ 4.) Defendant objects as to liability. (Dkt. No. 36 at 1-3.) If Defendant is liable, it objects to at least $798 in attorney fees, all legal assistant fees, $3, 962.35 in litigation expenses and costs, and any fee multiplier (Id. at 3-8.)

         II. DISCUSSION

         A. Entitlement to Fees and Costs

         In insurance coverage disputes, Washington law grants plaintiffs' attorney fees when “the insurer compels the insured to assume the burden of legal action, to obtain the full benefit of his insurance contract[.]” Olympic Steamship Co. v. Centennial Ins. Co., 811 P.2d 673, 681 (Wash. 1991); Ainsworth v. Progressive Cas. Ins. Co., 322 P.3d 6, 21 (Wash.Ct.App. 2014). However, plaintiffs are not entitled to attorney fees “if the issue is merely a dispute about the value of a claim.” Leingang v. Pierce Cty. Med. Bureau, Inc., 930 P.2d 288, 295 (Wash. 1995).

         Plaintiffs' successful claim for breach of contract stems from an insurance coverage dispute with Defendant. “[C]overage disputes include both cases in which the issue of any coverage is disputed and cases in which ‘the extent of the benefit provided by an insurance contract' is at issue.” Id. Plaintiffs successfully claimed that Defendant breached the contract by “refusing to pay the withheld depreciation.'”[1] (Dkt. No. 1-3 at ¶ 3.10-12; Dkt. No. 33 at 5-8.) The Court's decision hinged on a dispute over whether Plaintiffs purchased a “new” home within the meaning of their insurance policy, thereby entitling them to coverage. (Dkt. No. 33 at 6.) This was not a dispute as to the value of Plaintiffs' insurance policy, but whether the policy extended to Plaintiffs' chosen home. Such dispute was over insurance coverage and it is thus appropriate to award attorney fees to Plaintiffs for work performed in the effort to obtain relief on that claim.

         B. Calculation of Fees

         Plaintiffs' attorney fees calculation is reasonable. The Court calculates attorney fees by first calculating a “lodestar” amount based on the attorney's reasonable hourly rate multiplied by the number of hours reasonably expended on necessary claim elements. Bowers v. Transamerica Title Ins. Co, 675 P.3d 193, 201-02 (Wash. 1983). In contingency fee cases, that amount may be adjusted by an estimation of the risk assumed by the attorney in taking the case on contingency. Id. When determining the reasonableness of fees, courts should consider the “purpose for authorizing the collection of such fees.” San Juan City v. No New Gas Tax, 157 P.3d 831, 845- 46 (Wash. 2007).

         1. Attorney fees

         When determining hours for purposes of a lodestar calculation, courts must first resolve any disputed issues of fact. Miller v. Kenny, 325 P.3d 278, 303 (Wash.Ct.App. 2014). Plaintiffs seek fees for 221.7 hours of time. (Dkt. No. 35 at 5-7.) Defendant requests at least 2.8 hours be deducted to account for unsuccessful claims, wasted efforts, and administrative tasks. (Dkt. No. 36 at 3-5.) However, only 2.5 of these hours are truly disputed. (Compare Dkt. No. 36 at 4 (requesting a 0.3 hour deduction for “[i]nvestigat[ing] another [unsuccessful] insurance claim whether [Defendant] Country Mutual's adjusters had warned people not to retain a public adjuster), with Dkt. No. 35 at 43 (showing that 0.3 hours have already been deducted from Plaintiffs' counsel's time sheets for the same)).

         Plaintiffs are entitled to the remaining disputed 2.5 hours in attorney fees. It is inequitable in an insurance fee-shifting dispute to “reduce the fee award by those amounts associated with unsuccessful claims and/or vague descriptions.” Security Ins. Co. of Hartford v. Sea ‘N Air Travel, 2006 WL 1075219, at *2 (W.D. Wash. Apr. 20, 2006) “[T]o hold otherwise would leave the insured in a worse position than if the insurer had promptly acknowledged its coverage obligations, thereby defeating the Supreme Court's clear intent to make the insured whole.” Id. Plaintiffs have voluntarily discounted 4.3 hours of time for unsuccessful claim work. (Dkt. No. 35 at 7.) In light of the Court's equitable interests, the Court will not attempt to parse out the remaining disputed hours, some of which may have involved work on unsuccessful claims, and some of which may have served Plaintiffs' successful claim for breach of contract.

         Nor will the Court withhold fees due to Plaintiffs' submitted time sheet redactions. Plaintiffs' redacted time entries largely consist of emails or telephone conferences between Plaintiffs and counsel. (Id. at 23.) Presumably, at least some of these entries are redacted because they are privileged conversations. As discussed above, to the extent that such conversations involved unsuccessful claim work, withholding fees would be inappropriate. The Court has not been directed to any case that mandates the disclosure of redacted or privileged information for purposes of attorney fee determinations. Thus, ...


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