Attorney Fees

Judge denies 'exorbitant' request for nearly $1M in attorney fees after $125K recovery

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A federal judge in Pennsylvania has denied a request for nearly $1 million in attorney fees and promised to refer the lawyers who sought the money to ethics regulators.

U.S. District Judge Malachy Mannion of Scranton deemed the fee request “astounding,” “exorbitant” and “woefully deficient.” He criticized claims for various portions of work as “abusively excessive” and “mind-boggling.” Some entries were redundant and some were vague, he said. The Legal Intelligencer (sub. req.), the Scranton Times-Tribune and the Associated Press have stories; Mannion’s Aug. 29 opinion is here.

“As other courts have noted,” Mannion said, quoting from another opinion, “a fee request is not the opening salvo in a back and forth negotiation with the court. The request is not the sticker price on a used car that all parties understand is the starting point for spirited dickering.”

The plaintiff’s lawyers had sought $902,655 in attorney fees, which swelled to $1.12 million with costs and interest, after prevailing on a bad-faith insurance claim. Jurors who heard the case in November 2015 awarded $100,000 on the bad-faith claim, while the underlying uninsured motorist claim settled for $25,000.

The lawyers seeking the fees were Michael Pisanchyn of the Pisanchyn Law Firm, who verified the fee petition, and a lawyer who once worked there, Marsha Lee Albright, who prepared the petition.

Albright had testified that there were no contemporaneous records of hours spent on the case and time logs had to be reconstructed, Mannion said in the opinion. The time logs submitted to the court were her “guess” as to hours spent on the case over six years based on the task descriptions in the firm’s case management system and hard-copy documents, according to Mannion. The system didn’t track time spent on individual tasks.

Mannion said that reconstructing time logs this way is “flabbergasting to the court and, quite frankly, disturbing.” Counsel had billed about 2,583 hours for the case, which was resolved in a trial that lasted five days, Mannion said. “Assuming an eight-hour billable work day, this would mean that the plaintiff’s counsel worked on nothing else but his case, every day, for approximately 323 days.”

Mannion determined that allowable hours for lawyers, paralegals and technology specialists in the case total about 13 percent “at best” of the fee request submitted to the court.

Pennsylvania law permits–but does not require–an award of attorney fees in bad faith insurance cases, and Mannion said he was using his discretion to deny the entire award. The law also permits an award of interest on the amount of the claim; Mannion awarded nearly $5,000.

Pisanchyn told the Legal Intelligencer he didn’t think the fee request was unreasonable, given nine years of litigation in the case. “The defendants took the position of a scorched earth litigation, and we had to go toe-to-toe with them every step of the way,” he said.

Pisanchyn told the Times-Tribune that Mannion’s opinion would discourage other lawyers from pursuing cases against insurers. “What attorney is going to take a case when they get their head bashed in for filing a fee petition?” he asked. He also said that, if he prevails on appeal, he will donate attorney fees, less money paid for experts, to charity.

The publications were unable to reach Albright for comment, but she said at an Aug. 11 court hearing that she felt insulted that her integrity was questioned. She had moved to Rawle & Henderson, but she was no longer with the firm on Aug. 25, according to a woman at the firm who spoke with the Legal Intelligencer.

The case is Clemens v. New York Central Mutual Fire Insurance Co.

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