Colorado Hospitality Services Inc. v. Owners Insurance

154 F. Supp. 3d 1173, 2015 U.S. Dist. LEXIS 173463, 2015 WL 9583383
CourtDistrict Court, D. Colorado
DecidedDecember 31, 2015
DocketCivil Action No. 15-CV-01046-RBJ, Civil Action No. 15-cv-01046-RBJ
StatusPublished
Cited by1 cases

This text of 154 F. Supp. 3d 1173 (Colorado Hospitality Services Inc. v. Owners Insurance) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Colorado Hospitality Services Inc. v. Owners Insurance, 154 F. Supp. 3d 1173, 2015 U.S. Dist. LEXIS 173463, 2015 WL 9583383 (D. Colo. 2015).

Opinion

R. Brooke Jackson, United States District Judge

ORDER

Plaintiff moves for an award of attorney’s fees in the amount of $383,040.00 and costs in the amount of $27,524,54. Defendant responds that the amount is excessive, although defendant does not propose a specific number that it would regard as reasonable. The Court held an evidentiary hearing on December 29, 2015. For the reasons discussed in this order, the Court awards $154,847.50 in attorney’s fees and $19,828.55 in costs.

BACKGROUND

This is an insurance coverage case. The plaintiff,- Colorado Hospitality Services, Inc., doing business as Peoria Hospitality, LLC (“Peoria”), operates a hotel in Denver. After sustaining damage in a hail storm on June 6, 2012, Peoria submitted a claim to , its property insurer, Owners Insurance Company. An adjustment service engaged by Owners estimated the loss at $52,231.13. On June 10, 2013 Owners made an Actual Cash Value payment to Peoria of $23,777.53, reflecting depreciation of $23,453.60 and a $5,000 deductible.

Peoria was not satisfied with Owners’ payment, and it retained a “public adjuster” to assist in ■ adjusting the loss. The insurance policy provided that if the parties disagreed on the value of the property or the amount of the loss, either of them could demand an appraisal whereunder each party would select a “competent and impartial appraiser” to determine separately thé amount of the loss. If they then disagreed, their differences would be submitted to an umpire, and a decision of any two of the three, presumably the umpire and one of the appraisers, would be binding.

The parties disagreed, and the appraisal procedure was invoked. The individual selected by the public adjuster to serve as the plaintiffs appraiser determined that the loss, was $911,652.18 (actual cash value) or $1,066.357.52 (replacement cost). The appraiser selected by Owners determined a number unknown to this Court but represented to be a small fraction of the plaintiff’s appraisal. The umpire agreed with the plaintiff’s numbers.

Unfortunately for the plaintiff, however, the Court determined that the individual selected by the public adjuster was not an impartial appraiser. In an order issued July 14, 2015 the Court vacated the appraisal award. ECF No 59. Therefore, the parties were left to resolve their dispute the old fashioned way — by jury trial. At the conclusion of the trial, which was held July 20-23 and 27, 2015 the jury found that the actual cash value of the damage caused by the hailstorm was $70,871.70. The -jury also found that Owners delayed or denied payment of the full benefit provided by the policy without a reasonable basis. Verdict, ECF. No. 87.

The Court entered judgment for the plaintiff on its breach of contract claim for [1176]*1176$42,094.17 — the amount by which the insurance benefit as determined by the jury exceeded the amount previously paid by Owners. ECF No. 92. In addition, because of the jury’s determination that Owners had unreasonably delayed or denied payment of the full benefit, the Court entered judgment for a penalty of two times the unpaid portion of the benefit ($84,188.34), pursuant to C.R.S. §§ 10-3-1115 and - 1116. Id. The Amended Final Judgment also provides that, pursuant to C.R.S. § 10-3-1116(1), plaintiff is entitled to an award of its reasonable court costs and attorney’s fees. Id. The parties now dispute the amounts of the costs and fees to which plaintiff is entitled.

FINDINGS AND CONCLUSIONS

A. Attorney’s Fees.

The determination of a reasonable attorney’s fee begins with calculation of the “lodestar amount,” i.e., the product of hours “reasonably expended” times a “reasonable hourly rate.” Robinson v. City of Edmond, 160 F.3d 1275, 1281 (10th Cir.1998). Plaintiff was represented by two law firms. One of these firms, Childress Duffy, Ltd of Chicago, Illinois, billed $207,800 for its time, representing 592.5 hours at various hourly rates. Affidavit of Thomas J. Loucks, ECF No 95-3 at 2. The other firm, The Drake Firm, P.C. of Denver, Colorado, billed $125,440.00, representing 389.7 hours at various hourly rates. Affidavit of Marie E. Drake, ECF No. 95-4, at 2. Collectively, the product of hours billed times rates used is $333,240, which was the amount sought by the plaintiff in its motion.

However, the Court must determine whether the hours and rates were reasonable, sometimes referred to as the adjusted lodestar. In assessing reasonableness courts often consider the 12 guidelines originally listed in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.1974).1 This Court also considers Rule 1.5 of the Colorado Rules of Professional Conduct, which lists eight non-exclusive factors that should be considered in determining the reasonableness of a fee.2 There is substantial overlap between the two' sets of factors, and some of the factors are not applicable to the present dispute.

1. Reasonable Hours.

I find that the factors most relevant to the determination of the reasonable number of hours in this case are (1) the time and labor required; (2) the novelty and difficulty of the questions presented; (3) the amount involved and result obtained; and (4) whether the fee was fixed or contingent.

[1177]*1177A party seeking an award of attorney’s fees has a responsibility to “exercise billing judgment with respect to the number of hours worked and billed.” Praseuth v. Rubbermaid, Inc., 406 F.3d 1245, 1257 (10th Cir.2005). Even so, the district court “is not obligated to accept the fee applicant’s billing judgment uncritically.” Id. However, the court may not simply “eyeball the fee request and cut it down by an arbitrary percentage.” Robinson, 160 F.3d at 1281 (quoting People Who Care v. Rockford Bd. of Educ., Sch. Dist. No 205, 90 F.3d 1307, 1314 (7th Cir.1996)).

Plaintiffs counsel initially presented the time as recorded without further review or evaluation. But shortly before the hearing they retained an “expert,” Richard M. Crane, the current co-chairman of the Insurance Bad Faith Committee of the Colorado Trial Lawyers Association. He has 25 years of experience representing plaintiffs in personal injury cases, including numerous insurance coverage cases in which he has contended that insurers unreasonably delayed or denied claims contrary to C.R.S. §§ 10-3-1115 and -1116. Mr. Crane reviewed plaintiffs fee application, although he did not study the individual time entries. In his opinion, the number of hours recorded by plaintiffs counsel should be reduced by 25 to 30 percent based on his impression that the time entries contain some duplication, that the hourly rates used are “slightly high,” and that the fees requested are somewhat disproportionate to the result obtained. He therefore would reduce the hours from 982.2 to a range of between -687 and 736 hours, mathematically producing a suggested lodestar of between $233,000 and $250,000.

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154 F. Supp. 3d 1173, 2015 U.S. Dist. LEXIS 173463, 2015 WL 9583383, Counsel Stack Legal Research, https://law.counselstack.com/opinion/colorado-hospitality-services-inc-v-owners-insurance-cod-2015.