Opinion
No. 56938-4-I.
November 6, 2006.
Appeal from a judgment of the Superior Court for King County, No. 04-2-04473-1, Paris K. Kallas, J., entered August 24, 2005.
Counsel for Appellant(s), Gregory Mann Miller, Reed Longyear Malnati Ahrens West PLLC, 801 2nd Ave Ste 1415, Seattle, WA 98104-1517.
James Elliot Lobsenz, Carney Badley Spellman, 701 5th Ave Ste 3600, Seattle, WA 98104-7010.
Counsel for Respondent(s), Eric Daniel Peterson, Attorney at Law, 800 5th Ave Ste 2000, Seattle, WA 98104-3188.
Affirmed by unpublished opinion per Agid, J., concurred in by Ellington and Dwyer, JJ.
Iva Jennings challenges the Superior Court's decision not to increase her attorney fee award by adding a multiplier. She argues a multiplier was necessary because of the contingent nature of her workers' compensation case. She also argues the court abused its discretion when it denied her motion for reconsideration. An award of attorney fees is left to the sound discretion of the trial court, and it will not be disturbed unless the court fails to state the basis for the award or the record does not support it. The trial court did not award a multiplier here because the case was not exceptional, novel or particularly complex. We agree with its reasoning and affirm.
FACTS
In September 1999, Iva N. Jennings filed a workers' compensation claim. She received interim time loss benefits of $8,021.65. On October 24, 2000, the Department of Labor Industries (Department) rejected her claim on the ground she did not sustain an occupational disease and ordered her to repay the interim benefits she received, plus interest. The Board of Industrial Insurance Appeals (Board) denied her appeal, and her attorney failed to file a petition for review on time. After the deadline had passed, Jennings filed a pro se petition, which the Board rejected as untimely. She then retained a new attorney who successfully appealed to the King County Superior Court to reinstate her petition for review to the Board. The trial court decided the Board abused its discretion under CR 60(b)(1) and directed it to consider Jennings' petition. The trial court also fixed Jennings' attorney fee award for the procedural appeal and ordered the Department to pay $9,000 in attorney fees and $110 in costs payable "if and when the accident or medical aid fund is affected by this litigation." The Board then reviewed her petition and affirmed the Department's ruling rejecting her claim. Jennings appealed this decision to superior court and, after a three day jury trial, Jennings prevailed. The court entered judgment on January 24, 2005, reversing the Department's order.
Jennings is a 62 year old housecleaner who worked for Amazing Maids, Inc., cleaning multiple high-end private homes every day.
Jennings moved for an immediate award of attorney fees, but the trial court denied this motion because the appeal was strictly procedural and RCW 51.52.130 does not authorize a fee award until the accident or medical aid fund was affected. Jennings sought discretionary review from the Court of Appeals. A commissioner denied the motion, and a panel of three judges denied Jennings' motion to modify the commissioner's ruling denying discretionary review.
Jennings requested $55,897 for attorney fees and costs for her procedural and substantive appeals: $9,110 for the procedural appeal and $46,897.50 for the substantive appeal, which included 147.7 hours for her lead attorney at $225 per hour and 109.33 hours for associate counsel at $125 per hour. She also asked the court to add a multiplier "significantly greater" than 1.5 to account for the contingent nature of her case. The Department challenged the number of hours claimed and argued against the multiplier because the issues on the merits were straightforward. The trial court awarded Jennings $46,500 in fees, which included the $9,000 previously fixed for the procedural appeal, plus costs of $110. It did not reduce the hourly rate. But it found that a deviation from the lodestar calculation was not justified because the case was not exceptional, the law was not novel, and the factual record was settled at the administrative level. The court considered both Jennings' attorneys' inexperience in workers' compensation cases and that other more experienced counsel had refused to take her case in setting the lodestar rate at the "high end." It therefore declined to consider these same factors to make an upward adjustment by applying a modifier.
To arrive at this number, the court awarded fees for 125 hours of her primary attorney's time and 75 hours for associate counsel.
Jennings moved for reconsideration of the attorney fee award, arguing a multiplier should have been automatically applied to this case. She also asserted the court failed to make adequate findings or consider the contingencies of the case. The court denied Jennings' motion for reconsideration, concluding an upward adjustment was not automatic and Jennings failed to carry her burden of proof as required by Pham v. Seattle City Light. Jennings appeals both orders.
124 Wn. App. 716, 721, 103 P.3d 827 (2004), review granted, 155 Wn.2d 1001 (2005).
DISCUSSION Enhancing Attorney Fee Awards for Contingent Risks
The reasonableness of an attorney fee award is reviewed under an abuse of discretion standard. A trial court abuses its discretion only when its decision is manifestly unreasonable or based on untenable grounds. If a fee-shifting statute does not indicate how a fee award is to be calculated, Washington courts use the lodestar method, multiplying the reasonable hourly rate by the number of hours reasonably expended. This amount may be enhanced for a number of reasons, including risks associated with cases taken on a contingency basis.
Brand v. Dep't of Labor Indus., 139 Wn.2d 659, 666, 989 P.2d 1111 (1999).
State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971).
Brand, 139 Wn.2d at 666 (citing Bowers v. Transamerica Title Ins. Co., 100 Wn.2d 581, 675 P.2d 193 (1983)).
Id. (citing Bowers, 100 Wn.2d at 597); Pham, 124 Wn. App. at 721 (citing Bowers, 100 Wn.2d at 598-99).
The lodestar method is used to calculate legal fees in workers' compensation cases. RCW 51.52.130 provides for attorney fees when an appeal in superior or appellate court reverses or modifies the Board's decision and grants additional relief to the worker. Central to the lodestar calculation is the underlying purpose behind a fee statute. RCW 51.52.130 is designed to ensure adequate representation for injured workers to whom the Department denied benefits without diminishing their award because they had to pay attorney fees. There is no limit to the amount of fees a court may award under this statute. Rather, the reasonableness and the amount awarded is left to the discretion of the court.
See id.
If, on appeal to the superior or appellate court from the decision and order of the board, said decision and order is reversed or modified and additional relief is granted to a worker or beneficiary, or in cases where a party other than the worker or beneficiary is the appealing party and the worker's or beneficiary's right to relief is sustained, a reasonable fee for the services of the worker's or beneficiary's attorney shall be fixed by the court. . . .
RCW 51.52.130. See Brand, 139 Wn.2d at 669; see also Bowers, 100 Wn.2d at 581.
Brand, 139 Wn.2d at 667.
Id. (quoting Harbor Plywood Corp. v. Dep't of Labor Indus., 48 Wn.2d 553, 559, 295 P.2d 310 (1956)).
Id. at 669; see also Absher Constr. Co. v. Kent Sch. Dist. No. 415, 79 Wn. App. 841, 847, 917 P.2d 1086 (1995) (citing Scott Fetzer Co. v. Weeks, 122 Wn.2d 141, 151, 859 P.2d 1210 (1993)).
Jennings argues the trial court abused its discretion by failing to consider the double contingency her attorneys took on in this case. When he appealed her case on procedural grounds, her lead attorney took the risk that he would not be paid. Even after he won that case, his fees remained contingent. Had he not succeeded on both appeals, he would not have recovered any fees because the October 27, 2003 award was contingent upon succeeding on the substantive appeal. Thus, she argues the court must award a multiplier to compensate for the considerable risks and to further the purpose of the statute.
The Department contends the trial court did not abuse its discretion because a multiplier is never mandatory, and Jennings failed to justify the need for a deviation from the lodestar amount. The Department argues the court compensated Jennings at a rate that would be appropriate for an experienced workers' compensation attorney who factored contingencies into his rate. The court also awarded fees for extra hours in recognition of counsels' inexperience in workers' compensation cases and adequately compensated them by awarding fees on an hourly rate at the high end of the scale. The Department relies on Perry v. Costco Wholesale, Inc. to assert the trial court correctly concluded these same factors could not also be used to make an upward adjustment. It also argues the trial court's decision was not manifestly unreasonable or based on untenable grounds because it entered sufficient findings and reached conclusions supported by the evidence in the record at both trials.
123 Wn. App. 783, 98 P.3d 1264 (2004).
While the federal courts disfavor an adjustment for contingency fees, Washington case law allows the court to add a multiplier to a lodestar fee as a contingency adjustment under circumstances discussed in Bowers v. Transamerica Title Ins. Co. In Bowers, plaintiffs' attorneys entered into a contingency fee agreement under which they would receive no fee unless their clients prevailed. The court outlined a two part test for calculating fees. First, the court must determine the lodestar amount by multiplying the total number of hours expended by the reasonable hourly rate of compensation. The hourly rate that takes into account the level of skill required, time limitations imposed on the litigation, the attorney's reputation, the amount of potential recovery and the undesirability of the case. This amount may then be adjusted to reflect factors not considered, one of which may be the risk associated with a case an attorney takes on a contingent fee basis. This adjustment involves an imprecise calculation which is largely a matter of trial court discretion. It "should apply only where there is no fee agreement that assures the attorney of fees regardless of the outcome of the case," and the hourly rate underlying the lodestar amount does not consider for the risk. In Bowers, the court applied this test and held that a 50 percent multiplier added to the lodestar fee calculation was not an abuse of discretion because the upward adjustment reflected the contingent nature of the work. The court acknowledged that attorneys who take cases on a contingency fee basis assume substantial risks, and legal representation in these cases would be impaired unless attorneys received a premium for taking the risks. Cases after Bowers have upheld awards based on this test when the court based the multiplier on factors not included in the lodestar amount.
City of Burlington v. Dague, 505 U.S. 557, 112 S. Ct. 2638, 120 L. Ed. 2d 449 (1992).
Pham, 124 Wn. App. at 723 (citing Bowers, 100 Wn.2d at 601).
Id. at 598.
Id. at 599.
Id. at 600-02.
Id. at 598.
Perry, 123 Wn. App. at 808; Somsak v. Criton Tech./Heath Tecna, Inc., 113 Wn. App. 84, 98, 52 P.3d 43 (2002) (A deviation from the lodestar fee is justified only based on factors that have not already been taken into account.).
Jennings relies on cases like Pham v. Seattle City Light and Perry v. Costco Wholesale, Inc. to argue the trial court abused its discretion in denying a multiplier. But those were cases in which we reversed because the trial courts relied on factors which are irrelevant to attorney fee calculations to deny the requests for enhanced awards. Here, the trial court awarded fees that took into account counsels' inexperience in workers' compensation cases, awarded fees for extra hours and directed that those fees be paid at the high end of the hourly rate scale. The award compensated Jennings' lead attorney for his greatest risk: persuading the court to reinstate an appeal in a substantive legal area with which he was unfamiliar before he took the case. The fees for that proceeding were already fixed when the case came to trial. The substantive appeal was neither novel nor difficult and did not warrant a multiplier. While the court did not specifically address Jennings' arguments about the contingent nature of her case, it correctly ruled that it could not consider the same factors to award an enhancement that it had considered in the original lodestar calculation. There was no abuse of discretion.
An upward adjustment to the lodestar amount is to be awarded only in rare instances. The underlying purpose of RCW 51.52.130 is to provide attorneys like Jennings' with fees in order to make sure injured individuals can retain counsel for meritorious appeals. While fees are only awarded if the worker succeeds on appeal and many attorneys rely upon the statute as their sole source of fees in these cases, this fact alone does not justify awarding a multiplier. If we were to agree with Jennings' argument here, we would be directing the trial courts to award multipliers in every workers' compensation contingent fee case. Neither the statute nor the case law governing attorney fee awards supports that result.
Mahler v. Szucs, 135 Wn.2d 398, 434, 957 P.2d 632, 966 P.2d 305 (1998) (citing Scott Fetzer Co. v. Weeks, 114 Wn.2d 109, 150, 786 P.2d 265 (1990)).
Brand, 139 Wn.2d at 669; see also Absher Constr., 79 Wn. App. at 847 (citing Scott Fetzer Co., 122 Wn.2d at 151).
Motion for Reconsideration
Jennings argues the trial court abused its discretion by rejecting her motion for reconsideration. Appellate courts review a trial court's ruling denying a motion for reconsideration under an abuse of discretion standard. For the same reasons the trial court properly denied Jennings' request for a multiplier, it did not abuse its discretion in denying the motion for reconsideration.
Graham v. Findahl, 122 Wn. App. 461, 465, 93 P.3d 977 (2004).
Attorney Fees on Appeal
Jennings seeks attorney fees and costs on appeal under RCW 51.52.130 and RAP 18.1. Because we affirm the trial court's orders, Jennings does not have a statutory right to attorney fees on appeal.
CONCLUSION
We affirm.
DWYER and ELLINGTON, JJ., concur.