Adolph Coors Co. v. Globe Dist. CV-92-447-JD 03/29/95 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Adolph Coors Company
v. Civil No. 92-447-JD
Globe Distributors, Inc., et al.
v. Civil No. 92-496-JD
O P I N I O N
In its order and memorandum opinion of May 27, 1992, the
Bankruptcy Court awarded the plaintiffs. GlobeDistributors, Inc.
and Dennis Bezanson, Trustee ("Globe")a thereasonableattorney's
fees and costs accrued during its successful litigation against
the defendant, Adolph Coors Co. ("Coors"). Before the court is a
consolidated appeal of the Bankruptcy Court's order. The court's
appellate jurisdiction is based on 28 U.S.C. § 158 (a) (1993) .
Background
I. Underlying Proceedings
On October 25, 1985, Globe, a beer distributor, entered into
a five-year distributionagreementwith Coors. Globe's sales
skyrocketed and at onepoint it was the second or third most successful Coors distributor in the region. However, during the
summer of 1988 the company began to experience cash flow
difficulties and on October 18, 1988, Coors announced that it was
going to terminate product shipment because it believed Globe was
no longer financially capable of properly servicing the market.
Globe filed a chapter 11 bankruptcy petition on December 22,
1988 .
Globe filed this adversary action alleging that Coors
violated its contractual obligations and state law when it
terminated the distributorship agreement. The bankruptcy court
dismissed a number of Globe's legal theories and heard the
remaining ones during a four day trial in October 1990.
In a memorandum opinion issued on May 31, 1991, the bank
ruptcy court ruled that: (1) Coors breached the distributorship
agreement with Globe and violated the Wholesale Fair Dealing
Agreements for the Distribution of Fermented Malt Beverages Act,
N.H. Rev. Stat. Ann. ("RSA") § 181:36 et seq.; (2) Coors breached
the common law duty of good faith and fair dealing; and (3) Coors
engaged in unfair or deceptive practices in violation of the
consumer protection act, RSA § 358-A:l et seq. The bankruptcy
court awarded Globe $5,166,118 in "actual damages" which was
doubled under the consumer protection act. The bankruptcy court
2 further awarded Globe its reasonable attorney's fees and costs,
again under the consumer protection act.
II. Fees and Costs
In an order and memorandum opinion issued on May 27, 1992,
the bankruptcy court ordered Coors to pay Globe's attorneys, the
law firm of Wadleigh, Starr, Peters, Dunn & Chiesa ("Wadleigh")
$296,348.00 in fees and $2,536.11 in expenses. Globe Dis
tributors, Inc. v. Adolph Coors Co., Adv. No. 88-97, slip op. at
17 (Bankr. D.N.H. May 27, 1992) . When computing the attorney's
fees, the bankruptcy court accepted Wadleigh's claim that it
expended 1,376 attorney and paralegal hours handling the
litigation which, at the firm's regular hourly rates, yields a
fee of $148,174. Id. at 2-3. The bankruptcy court then doubled
this figure, reasoning that under federal law the circumstances
of the case warranted a fee multiplier of two. Id. at 15.
The computation of the attorney fee award is the subject of
this consolidated appeal. The bankruptcy court ruled that
because the fees were awarded under the New Hampshire consumer
protection act, RSA § 358-A:10, the actual amount of the award is
to be calculated according to state law. Id. at 7-8, n.8.
However, the bankruptcy court, constrained by the apparent
absence of state law setting out the "applicable standards or
3 methods" for determining the fee, concluded that the federal
"lodestar" method best approximates what a New Hampshire court
would apply under the fee-shifting provisions of the consumer
protection act. Globe Distributors, Inc. v. Adolph Coors Co.,
Adv. No. 88-97, slip op. at 4 (Bankr. D.N.H. Aug. 6, 1992).
In its application of state law, the bankruptcy court
rejected Wadleigh's original reguest that it receive approx
imately $4.2 million, or one-third of Globe's damage award, under
its contingency fee arrangement with the plaintiffs. Globe
Distributors, slip op. at 14-15 (Bankr. D.N.H. May 27, 1992) .
Rather, the bankruptcy court applied the criteria of Furtado v.
Bishop, 635 F.2d 915, 920, 924 (1st Cir. 1980), and other federal
cases to determine the lodestar fee award. Id. at 7-10, 14-16.
The bankruptcy court next found that "the risk of nonpayment
deserves some multiplier or upward adjustment . . .[and] a
multiplier of two is reasonable." Id. at 15.
On August 6, 1992, the bankruptcy court denied Globe's
motion to reconsider the fee award. Globe Distributors, slip op.
at 1 (Bankr. D.N.H. Aug. 6, 1992). Coors' appeal and Globe's
cross-appeal followed and have been consolidated into the instant
action.
4 Discussion
Coors appeals the order on several grounds, inter alia, that
the risk of nonpayment does not as a matter of law justify a
lodestar multiplier of two; that the bankruptcy court erroneously
awarded fees for legal services unrelated to the adversary
proceeding; and that Globe's entire fee application should be
dismissed for its lack of good faith. Brief for the Appellant,
Adolph Coors Co. ("Coors Brief") at 1, 9-10. Globe cross-appeals
the order on several grounds, inter alia, that New Hampshire has
not adopted the federal lodestar method; that New Hampshire law
places greater weight on the risk of nonpayment and the existence
of a contingency fee agreement; and that the application of
federal law denied Globe egual protection of the law. Brief of
Globe Distributors, Inc. and Dennis Bezanson, Trustee ("Globe
Brief") at 1, 7-9.
I. Standard of Review
District courts have jurisdiction to hear appeals of "final
judgments, orders, and decrees" of the bankruptcy court. 28
U.S.C.A. § 158(a) (West 1993). The court reviews "legal
determinations de novo and factual findings on a clearly
erroneous standard." In re DN Associates, 3 F.3d 512, 515 (1st
Cir. 1993) (guoting In re Gonic Realty Trust, 909 F.2d 624, 626
5 (1st Cir. 1990); citing In re G .S .F . Corp., 938 F.2d 1467, 1474
(1st Cir. 1991)). "A finding of fact is 'clearly erroneous'
when, after reviewing the evidence, the [court] is 'left with the
definite and firm conviction that a mistake has been committed.'"
In re G.S.F. Corp., 938 F.2d at 1474. Moreover, the court grants
considerable deference to "factual determinations and
discretionary judgments made by a bankruptcy judge, such as may
be involved in calculating and fashioning appropriate fee awards
. . . ." In re DN Associates, 3 F.3d at 515.
Historically, bankruptcy courts have been accorded wide discretion in connection with fact-intensive matters, and in regard to the terms and conditions of the engagement of professionals . . . . The bankruptcy judge is on the front line, in the best position to gauge the ongoing interplay of factors and to make the delicate judgment calls which such a decision entails.
Id. (guoting In re Martin, 817 F.2d 175, 182 (1st Cir. 1987)).
II. New Hampshire Law Governs the Calculation of a Reasonable Attorney's Fee Awarded under RSA § 358-A
Globe, as the prevailing party under the consumer protection
act, is entitled to receive litigation costs and "reasonable
attorney's fees." RSA § 358-A:10 (1984). New Hampshire law
governs the availability and determination of the "reasonable"
fee. Northern Heel Corp. v. Compo Indus., Inc., 851 F.2d 456,
475 (1st Cir. 1988); see Blanchette v. Cataldo, 734 F.2d 869, 878
(1st Cir. 1984) ("where an award of fees or costs rests on state
6 law, state law also controls the method of calculating the size
of the award"). However, where "state law is devoid of specific
self-contained criteria . . . or seems silent or incomplete on
the manner of calculation, . . . federal standards may well
become relevant." Northern Heel, 851 F.2d at 475, n.ll
(quotations omitted).
The fee-shifting provisions of RSA § 358-A:10 do not specify
the proper method for calculating an award under the act. See
RSA § 358-A:10. The act does invite courts to be "guided by the
interpretation and construction given section 5(a)(1) of the
Federal Trade Commission Act (15 U.S.C. 45(a) (1)), by the Federal
Trade Commission and the federal courts." RSA § 358-A:13; see
Rousseau v. Eshleman, 128 N.H. 564, 571, 519 A.2d 243, 248 (1986)
(dissenting opinion) ("courts often look to cases decided under
the antitrust laws in construing cases under the Federal Trade
Commission Act"). Moreover, the act tracks the language of the
Massachusetts consumer protection act, Mass. Gen. L. ch. 93A, and
New Hampshire courts have frequently relied on Massachusetts law
when interpreting RSA § 358-A. Chroniak v. Golden Inv. Corp.,
983 F.2d 1140, 1146, n.ll (1st Cir. 1993) (citing Chase v.
Dorais, 122 N.H. 600, 602, 448 A.2d 390, 391-92 (1982)); Donovan
v. Digital Equipment Corp, No. 93-97-JD, slip op. at 23-25
(D.N.H. Dec. 13, 1994) (construing RSA § 358-A according to
7 Massachusetts law); see Roberts, 138 N.H. at 532, 643 A.2d at 960
(expressly adopting statutory construction of the Massachusetts
Appeals Court); see also McClarv v. Erie Engine & Mfg. Co., No.
93-521-SD, slip op. at 3-4 (D.N.H. November 23, 1994) (expressly
relying on decision of the Massachusetts Appeals Court).
Although there are no reported decisions which set out the
proper method for calculating attorney's fees awarded under RSA §
358-A:10, New Hampshire courts routinely determine whether a fee
award is "reasonable" in the context of other fee-shifting
statutes or common law exceptions to the ordinary rule that
litigants bear their own fees and costs. E.g., McCabe v. Arcidv,
138 N.H. 20, 29-30, 635 A.2d 446, 452-53 (1993) (determination of
"reasonableness of a fee" in context of attorney lawsuit to
recover from guarantor of client under written fee agreement);
City of Manchester v. Doucet, 133 N.H. 680, 681, 582 A.2d 288,
289 (1990) (determination of "reasonable counsel fees" in context
of workers' compensation statute, RSA § 281:37-A); Cheshire
Tovota/Volvo, Inc. v. O'Sullivan, 132 N.H. 168, 170, 562 A.2d
788, 789-90 (1989) (same); Funtown USA, Inc. v. Town of Conway,
129 N.H. 352, 354-56, 529 A.2d 882, 883-854 (1987) (determination
of "reasonableness" of attorney's fee awarded following bad faith
or frivolous appeal, N.H. Sup. C t . R. 23). New Hampshire courts
enjoy broad discretion when calculating a reasonable attorney's fee, e.g.. Drop Anchor Realty Trust v. Hartford Fire Ins. Co.,
126 N.H. 674, 681, 496 A.2d 339, 344 (1985) (quoting In re
Bergeron Estate, 117 N.H. 963, 967, 380 A.2d 678, 681 (1977)),
and are guided by several criteria drawn from the New Hampshire
Rules of Professional Conduct:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and the ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent.
McCabe, 138 N.H. at 29, 635 A.2d at 452 (citations omitted); see
N.H. Rules of Professional Conduct 1.5 (1990). "There can be no
rigid, precise measure of reasonableness, however, because the
weight accorded each factor depends on the circumstances of each
particular case." McCabe, 138 N.H at 29, 635 A.2d at 451. Prevailing litigants, particularly in the workers'
compensation area, have received attorney's fee awards based on a
contingency agreement. E.g., Couture v. Mammoth Groceries, Inc.,
117 N.H. 294, 296-97, 371 A.2d 1184, 1186 (1977) (award based on
percentage of plaintiff's recovery held reasonable). Although
the court may model a fee award after a contingency agreement,
this is merely one approach and, regardless of the method of
calculation, the ultimate award must be reasonable under the
established criteria. See Doucet, 133 N.H. at 683, 582 A.2d at
290 ("While a contingent fee arrangement is not to be 'rubber
stamped,' it is one of a number of factors for a court to
consider in determining a reasonable fee.") (guoting Cheshire
Tovota/Volvo, 132 N.H. at 171, 562 A.2d at 790); Corson v. Brown
Prods, Inc., 120 N.H. 665, 667, 421 A.2d 1005, 1007 (1980)
(rejecting argument that court is bound by contingent fee
arrangement when calculating reasonable fee award under workers'
compensation statute); see also Mammoth Groceries, 117 N.H. at
296-97, 371 A.2d at 1186 (contingent fee arrangement neither per
se reasonable nor per se unreasonable).
III. New Hampshire Has Not Adopted the Federal Lodestar Method
In its cross-appeal. Globe argues that the Bankruptcy Court
erroneously adopted the federal lodestar method when it should
10 have calculated attorney's fees according to state law criteria,
including a consideration of the contingent fee agreement and the
attendant risk of nonpayment. Globe Brief at 10-17. In
contrast, Coors asserts that the federal lodestar approach is an
appropriate method for fee calculation under New Hampshire law.
Reply Brief for the Appellant, Adolph Coors Co. ("Coors Reply
Brief" ) at 2-8.
The bankruptcy court correctly observed that "neither the
legislative history . . . nor New Hampshire case law specifically
sets forth the applicable standards or method for determining the
amount of reasonable attorney's fees under the consumer
protection act." Globe Distributors, slip op. at 3 (Bankr.
D.N.H. Aug 6, 1992). Despite the absence of direct authority on
the issue, the supreme court has articulated the criteria to be
used when determining a "reasonable" fee to be awarded under
various statutory and common law fee shifting schemes. The court
finds that the criteria, supra, are sufficiently developed and
well-suited for the calculation of an award under RSA § 358-A:10
to obviate the need to adopt the federal lodestar method or to be
guided by methods employed in other jurisdictions. C f . Northern
11 Heel, 851 F.2d at 475, n.ll (federal standards relevant where
state law is incomplete, silent or devoid of criteria).1
The bankruptcy court recognized that the federal lodestar
method incorporates several of the factors outlined in the New
Hampshire Rules of Professional Conduct and subsequently adopted
1Coors asserts that "state and federal courts in New Hampshire apply the lodestar method in determining the reasonable amount to be awarded under fee-shifting statutes" and, thus, the bankruptcy court correctly adopted the federal method as a matter of state law. Coors Reply Brief at 2; Coors Brief at 10-11, n.2 (citing Refuse & Env. Svs., Inc. v. Industrial Servs. of America, 732 F. Supp. 1209 (D. Mass 1990), aff'd in part, rev'd in part, 932 F .2d 37 (1st Cir. 1991); Funtown USA, 129 N.H. 352, 529 A.2d 882; Rousseau, 128 N.H. 564, 519 A.2d 243 (dissenting opinion); Scheele v Village Dist. of Edelweiss, 122 N.H. 1015, 453 A.2d 1281 (1982)). The argument fails because it is based on a misreading of the cited authority. First, because New Hampshire has formulated its own fee calculation criteria the court need not determine the proper method by crude analogy to federal antitrust law or to the incorrect interpretation of Massachusetts law by a federal court sitting in that state. See Rousseau, 128 N.H. at 571, 519 A.2d at 248 (dissenting opinion) (antitrust law used to construe Federal Trade Commission Act); Refuse, 932 F.2d at 44-45 (lodestar fee award granted under state consumer protection statute remanded for calculation under state law criteria). Second, the supreme court did not adopt the federal lodestar method in Scheele but rather used it to calculate an award under 42 U.S.C. § 1988, a federal civil rights statute. See 122 N.H. at 1020-21, 453 A.2d at 1284-85. Finally, although the special master who recommended the fee award in Funtown USA "also noted" that the amount requested would be reasonable under the lodestar method, on appeal the supreme court reviewed the reasonableness of the award by applying the state law criteria adopted from the Rules of Professional Conduct. See 129 N.H. at 355-58, 529 A.2d at 884-85. The court finds that, as a matter of New Hampshire law, the lodestar method is an incorrect basis upon which to calculate fees awarded under the state consumer protection statute.
12 by the state supreme court. As a practical matter the
similarities may result in the same or a similar fee award under
either the lodestar or the New Hampshire approach. However, the
fact that the two approaches may yield the same result in a given
case does not justify the application of the federal method of
calculation where state statute provides the rule of decision and
the fee-shifting remedy and where the state has adopted its own
method of calculation. See Refuse, 932 F.2d at 44 ("The award of
attorney's fees [under Massachusetts consumer protection law]
must, of course, be governed by Massachusetts law."). In Refuse,
the First Circuit ruled that the lodestar method was incorrectly
used to calculate an award under the fee shifting provisions of
the Massachusetts consumer protection act notwithstanding the
district court's conclusion that the Massachusetts approach
"would produce the same results." Id. at 44-45. The case was
remanded for re-calculation according to the state law criteria
for determining a reasonable fee. Id.
The court finds the bankruptcy court correctly ruled that
New Hampshire law governs the calculation of fee awarded under a
state statute but erred in its application of state law by
erroneously employing the federal lodestar method of
13 calculation.2 This case must be remanded for the calculation of
a reasonable attorney's fee award under the New Hampshire common
law criteria.
IV. Fee Arrangements Are Properly Considered Under the New Hampshire Criteria Even if They Do Not Comport With RSA § 508:4-e and the Rules of Professional Conduct.
Coors also asserts that the contingency agreement is an
improper basis upon which to calculate a fee award because
Wadleigh failed to file a written agreement with the bankruptcy
court at the time of pleading as reguired by state law. Coors
Brief at 12-14, n.4 (citing RSA § 508:4-e (Supp. 1993); N.H.
Rules of Prof. Conduct 1.5(c)). Coors further asserts that
Wadleigh has "forefeit[ed] rights to compensation" by failing to
secure from the bankruptcy court prior approval of the con
tingency arrangement as reguired by federal law. Id. (citations
2Coors also argues that the bankruptcy court incorrectly enhanced the fee award to reflect the contingency agreement and Wadleigh's attendant risk of nonpayment. Coors Brief at 14 (citing City of Burlington v. Dague, 112 S. C t . 2638 (1992)). Coors is correct that "enhancement for contingency is not per mitted under the [federal] fee-shifting statutes at issue" in Dague. Id. at 2644. However, given the ruling, supra, that the lodestar method does not govern a fee award under RSA § 358-A:10, the court is not bound by the Supreme Court's interpretation of the federal method. Indeed, the New Hampshire criteria ex plicitly reguire consideration of whether the fee was fixed or contingent. See, e.g., McCabe, 138 N.H. at 26, 635 A.2d at 452.
14 omitted). Somewhat inexplicably. Globe has not responded to the
argument. See Globe Brief.
Coors' federal law argument fails because state law governs
the fee award in this case. However, the state law argument does
present guestions about the validity and enforceability of a
contingent fee agreement executed in disregard of the statutory
formalities. In New Hampshire,
all written contingency fee agreements entered into pursuant to Rule 1.5(c) of the Rules of Professional Conduct shall be filed with the court at the time of the entry of pleadings by the plaintiff's attorney.
RSA § 508:4-e (III) .
The bankruptcy court addressed the argument in its May 27,
1992, order and found that "the fee agreement between plaintiff
Globe and their counsel is a contract between those parties, and
has no binding effect upon this Court's determination of a
'reasonable fee' to be paid by the losing defendant in this
litigation." Globe Distributors, slip op. at 5 (Bankr. D.N.H.
May 27, 1992).
The court, constrained by the incomplete record filed with
the appeal, cannot determine whether Globe has, indeed, failed to
satisfy these reguirements. However, neither party nor their
attorneys have attempted to enforce the contingency agreement
and, as such, the guestion of whether the agreement satisfies the
statutory reguirements for enforceability is irrelevant.
15 Moreover, Coors does not challenge the veracity of the affidavits
submitted by Globe as evidence of the contingency agreement.
Coors Brief at 13, n.4 ("[The] writing and prior approval
reguirement prevent a fee applicant from submitting an
opportunistic claim to a contingency fee after the fee has been
ordered to be paid by another party. . . . Coors is not
suggesting that this occurred here."). There is apparently no
dispute that a court applying the New Hampshire fee criteria may
consider the nature of the attorney's employment arrangement,
even if that arrangement may not be enforceable against the
client. The court finds that any failure to satisfy the
statutory reguirements does not prevent the bankruptcy court from
relying on the "fixed or contingent fee" factor when it re
calculates the award under the New Hampshire common law criteria.
V. Failure to Discount Award to Reflect Attorney Resources Expended on Unrelated Matters.
Coors alleges the bankruptcy court erroneously awarded Globe
fees for legal services expended on dismissed claims, failed
claims, the unsuccessful defense of counterclaims, and other
legal matters unrelated to the adversary proceeding. Coors Brief
at 16.3 Globe responds that the bankruptcy court's decision to
3Coors advances strong federal authority, including Hensley v. Eckerhart, 461 U.S. 424 (1983), for the proposition that under the federal lodestar approach the court "may attempt to identify
16 include these legal services in the fee calculation constitutes a
discretionary ruling entitled to deference on appeal. See Globe
Brief at 24.
New Hampshire courts consider the "time and labor reguired"
for a particular task when applying the fee determination
criteria. See, e.g., McCabe, 138 N.H. at 29, 635 A.2d at 452.
Attorney resources expended on claims which are "analytically
separate," "distinct," and "severable" from the claim upon which
the fee award is based cannot be considered "time and labor
reguired" for purposes of calculating a fee award. See Funtown
USA, 129 N.H. at 356, 529 A.2d at 885; see also McCabe, 138 N.H.
at 29, 635 A.2d at 452.
The bankruptcy court addressed the substance of Coors'
present argument in its May 27, 1992, order:
Coors objects that, because some of the counts of plaintiffs' original Complaint were stricken, because plaintiffs only prevailed on three of the nine counts in their Complaint, and because plaintiffs were unsuccessful in their defense of Coors' counterclaims, plaintiffs should not recover attorneys' fees for time spent on those matters.
specific hours that should be eliminated, or it may simply reduce the award to account for the limited success" of certain attorney efforts. 461 U.S. at 436-37. However, the fee award in this case is not properly calculated under the lodestar method and, therefore, the court is not bound by judicial interpretations of that method. See Funtown USA, 129 N.H. at 356, 529 A.2d at 884- 85 ("Hensley is not controlling authority" on awards calculated under state law fee-shifting schemes).
17 In my judgment, the hours expended by plaintiffs' counsel on the litigation involved in this adversary proceeding clearly were not excessive, nor were the hourly rates anything but reasonable in terms of the complexity and toughness that the lawsuit presented. . . . I find that the matters upon which plaintiffs were unsuccessful were relatively minor and were subsumed into the entire litigation. Accordingly, plaintiffs' failure to prevail on certain claims, for one reason or another, should not result in a reduction of their counsel's hours in the context of this "reasonable fee" determination.
Globe Distributors, slip op. at 3-4 (Bankr. D.N.H. May 27, 1992)
(emphasis supplied) (footnotes omitted).
The bankruptcy court, having presided over the myriad of
proceedings underlying the instant appeal, is intimately familiar
with the progress of the case and therefore is best eguipped to
make the "factual determinations and discretionary judgments
. . . involved in calculating and fashioning appropriate fee
awards." See In Re DN Associates, 3 F.3d at 515. The
determination of which services are sufficiently related to the
adversary proceeding to be properly compensable under the fee-
shifting statute necessarily involves a "fact-intensive" analysis
accorded wide discretion on appeal. See id. (guoting In re
Martin, 817 F.2d at 182). Of course, even under the court's
deferential standard of appellate review, findings of fact may be
set aside if "clearly erroneous" or contrary to applicable law.
Id. Because the case is remanded for a re-calculation of the fee
award under the New Hampshire criteria, the court need not
18 determine whether the bankruptcy court's findings relative to the
inclusion of all claimed hours is clearly erroneous.
VI. Constitutional Issues
In its cross-appeal Globe argues that the bankruptcy court's
application of the lodestar method unconstitutionally created
"two classifications of plaintiffs and defendants [in] violat[ion
of] the egual protection rights of Globe and others in its
position under New Hampshire law." Globe Brief at 20. Given the
ruling, supra, that the lodestar method does not govern the
determination of a RSA § 358-A:10 fee award, the court need not
determine whether the bankruptcy court's error was of a
constitutional dimension.
VII. Neither Party Has Litigated in Bad Faith
As an additional grounds for appeal Coors asserts that
Globe's petition for a fee award of more than four million
dollars constitutes an "inexcusable reaching" and "opening
gambit" such as to warrant a rejection of the entire fee petition
under Lewis v. Kendrick, 944 F.2d 949 (1st Cir. 1991) . Coors
Brief at 28. Globe responds that Lewis does not govern fee
awards under RSA § 358-A:10 and, even if First Circuit law did
control, that it filed the fee petition in good faith under New
19 Hampshire law. Globe Brief at 27-28. Globe next asserts that
Coors' Lewis argument lacks a legal basis and "should be
sanctioned as frivolous." Id. at 28 ("[I]t is actually Coors
which is acting in bad faith . . .").
The court takes a dim view of these cross accusations of bad
faith lawyering as they reflect poorly on counsel, they cloud the
legitimate legal issues presented by each party to this appeal,
and they unnecessarily consume judicial resources.
The dominant issue on appeal is whether the bankruptcy court
correctly relied on the federal lodestar method when calculating
the RSA § 358-A:10 fee award. Although the court has ruled that
the bankruptcy court incorrectly employed the lodestar method,
the reliance on federal law was not an obvious error. Thus, it
was entirely appropriate for Coors also to base its argument on
federal caselaw construing the lodestar method, such as the First
Circuit's recent decision in Lewis. By the same token. Globe's
argument that New Hampshire law governs the fee calculation had
merit when unsuccessfully advanced before the bankruptcy court
and, in fact, has prevailed before this court. Specifically, New
Hampshire courts have in the past held fees calculated under a
contingency agreement to be "reasonable" and, thus. Globe had a
good faith basis to petition for a full one-third recovery, even
20 though such a fee award would be disporportionately greater than
that calculated under the traditional hourly billing method.
The court finds that Globe's conduct does not warrant an
outright rejection of its fee petition under Lewis, as argued by
Coors. Likewise, the court finds Coors' Lewis argument (i.e.
that the fee petition be rejected outright) does not warrant
sanctions, as argued by Globe.
VIII. Interest Rate Calculation
Coors and Globe each raise arguments in their respective
briefs concerning the appropriate rate of interest to be applied
to the damages awarded following the adversary proceeding. See
Globe Brief at 22-24; Coors Reply Brief at 11-16.
The bankruptcy court's orders of May 27, 1992, and August 6,
1992, are the subjects of this appeal. These orders only concern
Globe's petition for fees under RSA § 358-A:10 and did not
purport to resolve any other dispute or legal issue relative to
the adversary proceeding. The court need not consider the merits
of the apparent dispute involving interest calculation since the
issue was not addressed in the bankruptcy court orders now on
appeal.
21 Conclusion
The court finds that, as a matter of state law, fees awarded
under RSA § 358-A:10 are to be calculated according to the New
Hampshire common law criteria and not by the federal lodestar
method. The case is remanded to the bankruptcy court for the re
calculation of Globe's reasonable attorney's fees in a manner
consistent with this opinion. The clerk's office is ordered to
close this case and to forward a copy of this opinion to the
bankruptcy court.
SO ORDERED.
Joseph A. DiClerico, Jr, Chief Judge March 29, 1995
cc: Kenneth E. Churbuck, Esguire William S. Gannon, Esguire Charles A. Szypszak, Esguire Earle D. Bellamy II, Esguire Peter W. Mosseau, Esguire George Vannah, U.S. Bankrupcy Court