O'Neal v. State Farm Fire and Casualty Company

District Court, W.D. Washington·Decided April 11, 2025·No. 2:23-cv-00232·Unknown

Opinion

1 2 3

4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 DEBRA S. O’NEAL, CASE NO. C23-0232-KKE 8

Plaintiff, ORDER GRANTING IN PART AND 9 v. DENYING IN PART PLAINTIFF’S MOTION FOR ATTORNEY’S FEES 10 STATE FARM FIRE AND CASUALTY COMPANY, 11

Defendant. 12

13 After a jury verdict in her favor for $107,087.22, Plaintiff Debra O’Neal moved for an 14 award of $554,611.50 in attorney’s fees for the work her counsel performed from August 3, 2020 15 through January 9, 2025. Dkt. No. 160. The Court finds Plaintiff is entitled to her reasonable 16 attorney’s fees but finds the amount requested is not reasonable. Accordingly, the Court grants in 17 part and denies in part the motion and awards $269,613.75 in attorney’s fees to Plaintiff. Id. 18 I. RELEVANT BACKGROUND 19 In January 2023, Plaintiff began this action against State Farm in state court for violating 20 the Washington Insurance Fair Conduct Act (“IFCA”) and breach of contract. Dkt. No. 1-1. On 21 February 16, 2023, State Farm removed the case to this Court. Dkt. No. 1. Between the case filing 22 and the beginning of trial, the Court resolved several contested motions, though most related to 23 scheduling and procedural issues. 24 1 After a five-day trial that began on October 28, 2024, the jury found that State Farm 2 violated IFCA and awarded Plaintiff $107,087.22. Dkt. No. 158 at 3. The jury found that Plaintiff 3 incurred actual damages totaling $107,087.22, applied a 50% mitigation reduction (adjusted actual

4 damages $53,543.61), and found that Plaintiff was entitled to enhanced damages of $53,543.61 5 under IFCA. Id. 6 Plaintiff then moved for $554,611.50 in attorney’s fees under Washington Revised Code 7 48.30.015. Dkt. No. 160. After State Farm responded (Dkt. No. 173) and Plaintiff replied (Dkt. 8 No. 176), the Court found the submissions “insufficiently detailed” and ordered Plaintiff to provide 9 the attorney’s fees spreadsheet submitted in support of her motion in native format to the Court, 10 and to file “all engagement and/or fee agreements” between counsel and Plaintiff, invoices billed 11 to Plaintiff, and documents “reflecting amounts O’Neal has paid on said invoices, if any.” Dkt. 12 No. 189 at 1–2.

13 In response, Plaintiff filed two fee agreements. The first fee agreement, dated August 3, 14 2020, set Plaintiff’s counsel’s rates as follows: 15 HOURLY FEES: Services rendered by Attorney will be billed at $350 per hour. As a current LegalZoom customer, Client will be billed at $262.50. Should 16 someone other than a licensed attorney work on Client’s matter, services rendered by that person will be billed at $150 an hour. As a current LegalZoom customer, 17 Client will be billed at $112.50.

18 Dkt. No. 190 at 14 (emphasis in original). In the second fee agreement, dated April 25, 2023, 19 Plaintiff agreed to a 33% contingency fee arrangement. Id. at 9. Plaintiff also submitted a 117- 20 page PDF of invoices sent to Plaintiff, an Excel spreadsheet showing billing entries, an Excel 21 spreadsheet showing Plaintiff’s payments, and six images of receipts for payment.1 Id. at 6. The 22 23

1 These records were submitted to the Court and counsel for State Farm via email. Plaintiff is directed to file the PDF 24 and images on the docket. 1 parties filed supplemental briefing on the import of the new submissions (Dkt. Nos. 190, 199, 201) 2 and the matter is now ripe for the Court’s consideration. 3 II. ANALYSIS

4 The parties do not dispute that Plaintiff is entitled to her “reasonable attorney’s fees and 5 costs” under IFCA and Olympic Steamship case law. WASH. REV. CODE § 48.30.15(3); Olympic 6 S.S. Co. v. Centennial Ins. Co., 811 P.2d 673, 680–82 (Wash. 1991) (“An insured who is compelled 7 to assume the burden of legal action to obtain the benefit of its insurance contract is entitled to 8 attorney fees.”). Rather, it is the amount of Plaintiff’s fee request that State Farm contests. 9 A. The Court Applies the Lodestar Analysis to Determine Plaintiff’s Reasonable Attorney’s Fees. 10 Courts sitting in diversity apply state law to determine reasonable attorney’s fees. 11 Winterrowd v. Am. Gen. Annuity Ins. Co., 556 F.3d 815, 827 (9th Cir. 2009); MKB Constructors 12 v. Am. Zurich Ins. Co., 83 F. Supp. 3d 1078, 1085 (W.D. Wash. 2015) (applying Washington law 13 to a claim for attorney’s fees under IFCA). When a fee-shifting statute is silent on how reasonable 14 attorney fees should be calculated, Washington courts generally apply the lodestar method. See 15 Brand v. Dep’t of Lab. & Indus., 989 P.2d 1111, 1114 (Wash. 1999). The lodestar method involves 16 two steps: first, computing a lodestar amount by multiplying a reasonable hourly rate by the 17 number of hours reasonably expended on the matter; and second, adjusting the lodestar figure 18 either up or down to reflect factors that have not already been considered, namely the contingent 19 nature of success and the quality of the work performed. See id.; see also MKB Constructors, 83 20 F. Supp. 3d at 1085. “The Court is not bound by the lodestar value, but rather, is charged with 21 making ‘an independent decision’ as to what represents a reasonable amount of attorney fees.” 22 IDS Prop. & Cas. Ins. Co. v. Fellows, No. C15-2031 TSZ, 2017 WL 4122565, at *2 (W.D. Wash. 23 Sept. 15, 2017) (quoting Nordstrom, Inc. v. Tampourlos, 733 P.2d 208, 212 (Wash. 1987)). The 24 1 fee applicant bears the burden of proving the reasonableness of the amount requested. Scott Fetzer 2 Co. v. Weeks, 859 P.2d 1210, 1216 (Wash. 1993). 3 State Farm argues the Court should not apply the lodestar analysis and should enforce the

4 contingency fee agreement. Dkt. No. 199 at 3–5. State Farm calculates that Plaintiff’s counsel 5 should receive one third of the gross amount recovered, totaling $53,543.61, which should then be 6 halved based on the jury’s finding of Plaintiff’s failure to mitigate her damages leading to a total 7 award of $26,771.80. Id. at 5. State Farm’s argument is contrary to Washington law which rejects 8 applying a contingency fee agreement in lieu of the lodestar analysis in IFCA cases. See MKB 9 Constructors, 83 F. Supp. 3d at 1085 (“[T]he court agrees with American Zurich that MKB’s 10 request for an award of attorney’s fees by increasing the overall judgment by 33% is without 11 support under Washington law.”); Berryman v. Metcalf, 312 P.3d 745, 757 (Wash. 2013) (only 12 considering contingency arrangement after completing the first step of the lodestar analysis).

13 Accordingly, the Court will apply the lodestar two-step analysis to determine the “reasonable 14 attorney’s fees” owed to Plaintiff. 15 B. Plaintiff’s Attorney’s Fees Incurred Before 2023 Are Not Recoverable. 16 Plaintiff seeks to recover attorney’s fees from August 3, 2020 to July 7, 2022. See Dkt. 17 No. 160 at 8 (citing Dkt. No. 161 at 70–77 (Plaintiff’s “Cost Bill” in the King County case against 18 the storage facility and owner including billing entries for August 3, 2020 to July 7, 2022)). But 19 Plaintiff already sought those fees from the King County court in a separate, but related, lawsuit 20 against the storage facility. Dkt. No. 161 at 70–77. The King County court considered this request 21 for fees and issued an award. See Dkt. No.

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