Opinion
No. CV 05-5000747S
October 16, 2009
MEMORANDUM OF DECISION PLAINTIFF'S MOTION FOR ATTORNEY FEES PUNITIVE DAMAGES OFFER OF JUDGMENT INTEREST
This matter is a wrongful termination claim, tried to a jury and a verdict was rendered on April 4, 2008 with a verdict in favor of the plaintiff as follows: (1) Past Economic damages $1,369,633.00; (2) Future Economic Damages $2,609,404.00; (3) Loss of Enjoyment Past/Future $225,425.00 (4) Interest $35,749.00. The jury also found that the defendant acted recklessly and therefore awarded punitive damages. The jury found defendant liable under General Statutes § 31-51q, which provides as follows:
Any employer, including the state and any instrumentality or political subdivision thereof, who subjects any employee to discipline or discharge on account of the exercise by such employee of rights guaranteed by the first amendment to the United States Constitution or Section 3, 4 or 14 of article first of the Constitution of the state, provided such activity does not substantially or materially interfere with the employee's bona fide job performance or the working relationship between the employee and the employer, shall be liable to such employee for damages caused by such discipline or discharge, including punitive damages, and for reasonable attorneys fees as part of the costs of any such action for damages. If the court determines that such action for damages was brought without substantial justification, the court may award costs and reasonable attorneys fees to the employer.
1. ATTORNEY FEES
The pending motion asks the court to set the amount of attorneys fees.
"It is well established that a trial court calculating a reasonable attorneys fee makes its determination while considering the factors set forth under rule 1.5(a) of the Rules of Professional Conduct. Sorrentino v. All Seasons Services, Inc., supra, 245 Conn. 775 ("[r]ule 1.5[a] of the Rules of Professional Conduct lists the factors that ordinarily determine the reasonableness of an attorneys fee"); Andrews v. Gorby, 237 Conn. 12, 24, 675 A.2d 449 (1996) ("[t]ime spent is but one factor in determining the reasonableness of an attorneys fee"). A court utilizing the factors of rule 1.5(a) considers, inter alia, the time and labor spent by the attorneys, the novelty and complexity of the legal issues, fees customarily charged in the same locality for similar services, the lawyer's experience and ability, relevant time limitations, the magnitude of the case and the results obtained, the nature and length of the lawyer-client relationship, and whether the fee is fixed or contingent. See, e.g., Sorrentino v. All Seasons Services, Inc., supra, 775; Andrews v. Gorby, supra, 24 n. 19." Schoonmaker v. Brunoli, 265 Conn. 210, 260 (2003) 828 A.2d 64.
In setting attorneys fees when, as here, a contingency fee agreement exists, the trial court must "first analyze the terms of the agreement itself. If the agreement is, by its terms, reasonable, the trial court may depart from its terms only when necessary to prevent substantial unfairness to the party, typically a defendant, who bears the ultimate responsibility for payment of the fee." (Footnotes omitted.) Schoonmaker v. Lawrence Brunoli, Inc., supra, 270-71.
The first dispute between the parties is that the defendant is arguing that the fee agreement does not provide for a 1/3 contingency fee award. The defendant uses the following language from the fee agreement to support its position:
Some cases also have the potential for an award of attorneys fees either by settlement or judgment. If such an award is made, you agree to pay the following, at our option:
(a) The fee award paid by settlement or court order shall be paid entirely to Garrison, Levin-Epstein Chimes Richardson, P.C., and you hereby waive all right to any part of such fee, in which case we waive all right to the contingency percentage stated above and your sole obligation will be the attorneys fee awarded by settlement or court order; or
(b) The attorneys fees will be included in calculation of the total award and the contingent fee described above will be calculated on the basis of this total award, offset by the hourly fees paid by you.
The defendant further argues that the only time a contingency fee is applicable under the agreement is when there is a settlement. The agreement is silent as to a fee on a judgment. This the defendant argues is different from the fee agreement in Burrell v. Yale University, Superior Court judicial district of Waterbury, complex litigation docket at Waterbury, Docket no X02 CV 00-0159421-S (May 26, 2005, Schuman J.) 2005 Ct.Sup 9967 39 Conn. L. Rptr. 395 which involved the same plaintiff's law firm.
The language of the agreement which the plaintiff relies upon is as follows:
The remainder of this firm's compensation will be a contingent fee basis. Therefore, if we make no recovery in your case, we are entitled to no contingent fee. We will, however, be entitled to retain the half-hourly rates which have been paid throughout the course of our representation. It we do obtain a settlement, we will be entitled to one-third of any gross amounts collected.
The court does not accept as valid the argument of the defendant that the word "settlement" as used with the one-third contingent fee limits the one-third recovery to only agreements to settle prior to trial. The agreement clearly indicates "recovery" as pertains to the one-third fee. It is clear that the one-third fee would apply to the gross funds collected. Quite frankly, it would be less than reasonable to assume that the one-third applied to funds received from a settlement, which traditionally requires less work and less billing hours than a trial with all the preparation required and time invested in the trial itself.
The major case by the Connecticut Supreme Court is Schoonmaker v. Lawrence Brunoli, Inc., supra, which states in pertinent part as follows: "We conclude that under this Court's decision in Sorrentino, when a Contingency Fee Agreement exists, a two step analysis is required to determine whether a trial court permissibly may depart from it when awarding a reasonable fee pursuant to statute or contract. The trial court first must analyze the terms of the agreement itself. In a footnote the Supreme Court stated as follows: "To be reasonable, a Contingency Fee Agreement, must, at the very least, comply with the prescriptions of subsections (c) and (d) of rule 1.5 of The Rules of Professional Conduct." Rule 1.5c of the Rules of Professional Conduct provides "a fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by subsection (d) or other law. A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined, including the percentage or percentages of the recovery that shall accrue to the lawyer as a fee in the event of settlement, trial or appeal, whether and to what extent the client will be responsible for any court costs and expenses of litigation, and whether such expenses are to be deducted before or after the contingent fee is calculated. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination." Association Resources, Inc. v. Wall, Superior Court, judicial district of Hartford at Hartford, (November 13, 2008 Rittenband, J.T.R.) Docket No. CV 05-4016170S, 2008 Ct.Sup 18079, 18080.
According to Schoonmaker v. Brunoli, supra the two step analysis is as follows:
1. Is the Contingent Fee Agreement, by its terms, reasonable, and
2. Whether the trial court may depart from the terms of the agreement in order to prevent substantial unfairness to a party.
The Court has reviewed the Contingent Fee Agreement and finds that by its terms it is reasonable. It is in compliance with Rule 1.5(c) of the rules of professional conduct and is usual and customary in cases such as this termination of employment.
The Court finds that it should not depart from the terms of the Contingency Fee Agreement because it does not do substantial unfairness. To depart from the terms of the Contingent Fee Agreement by reducing the one-third fee and the costs would be of substantial unfairness to the plaintiff. The purpose of the statute is to make the person who is deprived of his wages whole again. The plaintiff is obligated under the fee agreement with his attorneys to pay as a fee, one-third of the recovery plus the court costs. To reduce that amount would be to cut into and reduce the recovery to which this Court has found that the plaintiff is entitled.
Accordingly, this Court finds that the Contingent Fee Agreement is, by its terms, reasonable and further, that the Court should not depart from its terms because to do so would cause substantial unfairness to the parties. Therefore, the court awards attorney fees to the plaintiff of one-third of the verdict, which is $1,413,404.00.
The defendant has argued that the court should use the "lodestar" method of determining attorneys fee and cited Charron v. Town of Griswold, superior court, judicial district of New London at New London, docket no. CV-06-500849 (August 21, 2009) (Peck, J.), as being determinative on the issue. However, the facts of Charron are easily distinguished from this case and therefore the well reasoned findings of that case are not applicable here.
2. PUNITIVE DAMAGES
The inquiry here focuses on the statutory language "shall be liable to such employee for damages caused by such discipline or discharge, including punitive damages, and for reasonable attorneys fees as part of the costs of any such action for damages . . ."
Our Supreme Court has held that "common law punitive damages serve primarily to compensate the plaintiff for his injuries and, thus, are properly limited to the plaintiff's litigation expenses less taxable costs." Berry v. Loiseau, 223 Conn. 786, 827, 614 A.2d 414 (1992). The Court has recognized, however, that the common-law rule "when viewed in the light of the increasing costs of litigation, also serves to punish and deter wrongful conduct." Id. Thus, the rule "fulfills the salutary purpose of fully compensating a victim for the harm inflicted on him while avoiding the potential for injustice which may result from the exercise of unfettered discretion by a jury." (Internal quotation marks omitted.) Id.
Connecticut courts "will not interpret a statute to have the effect of altering prior statutory or common law unless the language of the statute clearly expresses an intent to have such an effect." Elliot v. Sears, Roebuck Co., 229 Conn. 500, 515, 642 A.2d 709 (1994). The language of General Statutes § 31-51q does not clearly express any alteration of the common-law measure of punitive damages. As stated by the Appellate Court in deciding to defer to the common law "reckless indifference" test governing the standard of proof of punitive damages under § 31-51q, "[s]ection 31-51q does not embody a specific test to determine the awarding of punitive damages." Arnone v. Enfield, 79 Conn.App. 501, 521, 831 A.2d 260, cert. denied, 266 Conn. 932, 837 A.2d 804 (2003). General Statutes § 35-53(b) (Uniform Trade Secrets Act) ("if the court finds willful and malicious misappropriation, the court may award punitive damages in an amount not exceeding twice any award [of compensatory damages] made under subsection (a) and may award reasonable attorneys fees to the prevailing party"). If anything, the language of § 31-51q providing that an employer "shall be liable to such employee for damages caused by such discipline or discharge, including punitive damages . . ." appears to conform to the common-law measure of punitive damages as attorneys fees, since the obligation to pay attorneys fees would normally be in order to rectify, a violation of the statute.
The fact that the statute authorizes an award to the prevailing party of "reasonable attorneys fees as part of the costs of any such action for damages" does not negate a construction of the phrase "including punitive damages" as also referring to attorneys fees. Essentially the statutory scheme calls for the plaintiff to receive an initial award of attorneys fees, mandatory upon prevailing, and the possibility of a second award of attorneys fees, contingent on the jury finding that the defendant acted with "reckless indifference to the rights of others or [based on] an intentional and wanton violation of those rights." Arnone v. Enfield, supra, 79 Conn.App. 521. It appears that our Supreme Court approved the same construction in Ford v. Blue Cross Blue Shield of Connecticut, Inc., 216 Conn. 40, 64-65, 578 A.2d 1054 (1990), in interpreting General Statutes § 31-290a, an analogous statute that prohibits discrimination against any employee who has filed a workers' compensation claim. Section. 31-290a provides that, in addition to the usual compensatory damages, "[t]he court may also award punitive damages. Any employee who prevails in such a civil action shall be awarded reasonable attorneys fees and costs to be taxed by the court . . ." General Statutes § 31-290a(b)(1). The Supreme Court stated: "Although an award of what may amount in effect to double attorneys fees is unusual, we conclude that there is no legal impediment to such a dual award in an appropriate case." Ford v. Blue Cross Blue Shield of Connecticut, Inc., supra, 216 Conn. 64-65.
In this matter, the jury made the finding that the defendant acted recklessly, they found that the defendant had punished the plaintiff for exercising his rights and awarded punitive damages. When this court denied the motion to set aside the verdict, this count find that the verdict of the jury was fair and reasonable and based upon the evidence presented at trial. Therefore, as punitive damages the court awards attorney fees and nontaxable costs in the amount of $1,424,623.00.
3. OFFER OF COMPROMISE INTEREST
On March 30, 2007 (motion number 110) the plaintiff filed an offer of compromise stating in relevant part: "Pursuant to [General Statutes] § 52-192a . . . the plaintiff does hereby file an Offer of Compromise, in the amount of Two Million Eight Hundred Thousand ($2,800,000.00) Dollars, in full satisfaction of all claims in this action against the defendant Dianon Systems, Inc."
This offer was not accepted by the defendant.
Pursuant to Practice Book Section 17-18 and C.G.S. Section 52-192a if the plaintiff subsequently recovers after trial an amount equal to or greater than the above sum, then the plaintiff shall be awarded by the court eight percent (8%) interest per annum on said amount.
The plaintiff claims that because the offer was filed within 18 months of the complaint, the Plaintiff is entitled to offer of judgment interest running from the date of the complaint until the date of judgment. The plaintiff further claims because the cause of action accrued on the date of Dr. Schumann's termination (April 4, 2005), the interest should be calculated under the original "Offer of Judgment" statute, which provides for 12% simple interest, rather than the amended "Offer of Compromise" statute, which provides for 8% interest.
The former offer of judgment statute applies to all actions that accrued before October 1, 2005. Conn. Stat. § 52-192b. C.R. Kerwin Northeast v. Bridgeport, 282 Conn. 54, 58, n. 5 (2007); Waldo v. Liberty Mutual, 2008 WL 3916458 (Conn.Super. 2008); Glover v. Turner, CV-05-4003471 (Conn.Super. 2007) [ 46 Conn. L. Rptr. 1]; Prims v. Ciccarelli, 44, Conn. L. Rptr. 343 (Conn.Super. 2007).
Finally, the Plaintiff argues that it is entitled to 12% simple interest on the total award, including attorneys fees and punitive damages. Crowther v. Garment Technologies, 8 Conn.App. 254, 266-67 (1986) (attorneys fees and costs); Kregos v. Stone, 88 Conn.App. 457 (2005) (punitive damages).
C.G.S. Section 52-192b specifies that actions accruing prior to October 1, 2005 are controlled by the applicable statutes in effect as of January 1, 2005. It is undisputed that the plaintiff's cause of action accrued before October 1, 2005 and that the Offer of Compromise was filed within 18 months of the complaint.
"In Connecticut, a cause of action accrues when a plaintiff suffers actionable harm . . . Actionable harm occurs when the plaintiff discovers or should discover, through the exercise of reasonable care, that he or she has been injured and that the defendant's conduct caused such injury." (Citations omitted, internal quotation marks omitted.) Champagne v. Raybestos-Manhattan, Inc., 212 Conn. 509, 520-21, 562 A.2d 1100 (1989).
The pertinent statutory language of § 52-192a(b) mandates that "[i]f the court ascertains from the record that the plaintiff has recovered an amount equal to or greater than the sum certain stated in the plaintiff's `offer of judgment,' the court shall add to the amount so recovered twelve per cent annual interest on said amount" contained in such offer. The court properly interpreted the word "recovered" to include the entire verdict, both punitive and compensatory damages, and the United States District Court for the District of Connecticut has adopted and applied this same reasoning. See Boulevard Associates v. Sovereign Hotels, Inc., 861 F.Sup. 1132 (D.Conn. 1994), rev'd on other grounds, 72 F.3d 1029 (2d Cir. 1995). Kregos v. Stone, 88 Conn.App. 459, 467, 872 A 2d 901 (2005).
The court finds that the cause of action in this matter accrued on April 4, 2005 when the plaintiff was terminated and that the interest rate in effect at that time under the statutes for offer of judgments was 12%. Therefore, the plaintiff is awarded interest on the jury award, attorney fees and punitive damages from the date of the complaint to the date of judgment at the rate of 12%.
Therefore the court finds as follow:
TBTABLE Jury Verdict $4,240,211.00 Attorney Fees $1,413,404.00 Punitive Damages $1,424,623.00 (including costs) Offer of Judgment Interest $3,057,777.00 12% simple interest 11/14/05— date of Judgment 7/7/09 Three years 7 months 7 days TOTAL $10,136,015.00 TB/TABLE