Passatempo v. McMenimen

31 Mass. L. Rptr. 499
CourtMassachusetts Superior Court
DecidedApril 2, 2013
DocketNo. SUCV200600205BLS1
StatusPublished

This text of 31 Mass. L. Rptr. 499 (Passatempo v. McMenimen) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Passatempo v. McMenimen, 31 Mass. L. Rptr. 499 (Mass. Ct. App. 2013).

Opinion

Billings, Thomas P., J.

This is the last chapter in a lengthy litigation. The case was filed in the Middlesex [500]*500Superior Court on July 1,2004; removed by defendant McMenimen to federal court; remanded nine months later following dismissal of the federal causes of action; transferred to the Business Litigation Session on January 18, 2006 where it was tried twice (2010 and 2012) against different defendants. Along the way there were multiple detours to the appellate courts; mostly, on groundless petitions by McMenimen for review of interlocutory orders of this Court.

In their 2004 complaint, the plaintiffs alleged that they were persuaded by Frederick McMenimen, an agent for Provident Mutual Life Insurance Co. and its broker-dealer affiliate 1717 Capital Management Company,4 to give up $500,000 in insurance on the life of Sam Pietropaolo, Sr. in order to purchase what McMenimen told them was a $500,000 policy with Provident Mutual, but which they later discovered was only a $200,000 policy. They have proven this to the satisfaction of two juries and a judge, obtaining judgments against McMenimen in 2010 for fraud and under Chapter 93A, and following a jury trial in 2012,5 against Nationwide under Chapter 93A. The second jury awarded $440,000 in compensatory damages against Nationwide, partly on account of its vicarious liability for McMenimen’s actions and partly on account of the failure of the home office to detect and prevent McMenimen’s fraud.6 The jury also awarded multiple damages against Nationwide in both respects, 240% on account of McMenimen’s conduct and 250% on account of the home office.

Nationwide brought post-trial motions, seeking judgment n.o.v., a new trial, and/or remittitur. Although the verdict as to liability was supported by the evidence, I agreed with Nationwide that the jury’s damage assessment was problematic in several respects, and ordered a remittitur to single damages of $300,000 (the difference between the coverage represented and that received) and a punitive multiplier of 240% (the jury’s evaluation of McMenimen’s culpability, there being little evidence that Nationwide’s failure to detect and correct his misdeeds was willful or knowing). (Paper #275) The plaintiffs accepted the remittitur in lieu of a new trial on damages. Damages, before prejudgment interest, are therefore $720,000.

Before me is the plaintiffs’ motion for attorneys fees and costs against Nationwide. The initial claim, dated November 23, 2012, was for $839,622.00 in fees and $83,829.07 in costs, which plaintiffs’ counsel have divided among four “chapters” in the litigation. (The plaintiffs’ submission does not include fees for appellate work; see York Mgmt. v. Castro, 406 Mass. 17, 19-20 (1989)). To this I have added the amount of $35,159 claimed in a supplemental fee request dated January 3, 2013 (Paper #282) for post-trial motion practice, up to and including preparation of the first fee request and the hearing thereon. The plaintiffs’ total fee claim is as follows.7

Ch. Activities Hours Fees Av. Rate

1 Discovery/ 903.1 Motion Practice (12/04-8/07) $202,712.50 $224

2 Expert review & disclosure 552.0 /MSJ/tiial prep (8/07-6/09) $131,706.00 $239

3 Trial I and post-Trial I issues (6/09-11/10) 710.9 $190,563.50 $268

4 Post-SJC remand/ additional discovery/ Trial II (1/12-11/12) 957.8 $314,640.00 $329

Supplemental fee request 104.2 6 35.159.00 $33Z

TOTAL 3,228 $874,781.00 $271

DISCUSSION

A. Attorneys Fees

According to familiar principles, a judge considering a request for award of statutory fees

“should consider the nature of the case and the issues presented, the time and labor required, the amount of damages involved, the result obtained, the experience, reputation, and ability of the attorney, the usual price charged for similar services by other attorneys in the same area, and the amount of awards in similar cases.” “No one factor is determinative, and a factor-by-factor analysis, although helpful, is not required.”

Twin Fires Inv., LLC v. Morgan Stanley Dean Witter & Co., 445 Mass. 411, 430 (2005), quoting Linthicum v. Archambault, 379 Mass. 381, 388-89 (1979), and Berman v. Linnane, 434 Mass. 301, 303 (2001).

Mathematical precision is rarely possible in such matters; rather, a statutory fee award is committed to the sound discretion of the trial judge. That discretion, however, is not unbounded.

As one general limitation upon discretion, [one must] keep in mind that “when a parly other than the one who hired the lawyer is required to pay the fee, conservative criteria are in order.” As another, we remember that success does not justify extravagance. Reasonable fees and costs for a prevailing party do not include compensation for unnecessary or ineffectual activily. The fees seeker must show the utility of the services.

City Rentals, LLC v. BBC Co., 79 Mass.App.Ct. 559, 567 (2011) (citations omitted).

Nationwide has asserted a half-dozen arguments against the award sought in this case. The first two of these fail to clear the starting gate for failure to support factual allegations by affidavit, record citation, or judicially noticeable facts.8

The third and fourth arguments are that the plaintiffs should not have asserted claims against Barry Armstrong (the owner of the insurance brokerage at which McMenimen was an agent when he sold the policy in question) that Judge Hinkle rejected (under Chapter 93A) and the SJC ultimately held were time-barred (as to negligence), and should not have pleaded the two federal securities counts that the United States District Court dismissed as time-barred.

[501]*501I agree that the claim against Armstrong was thin. The limitations issue (whether tolling the statute of limitations against one defendant on account of his fiduciary status extends to another, non-fiduciary defendant) had not been “squarely addressed” in Massachusetts, but the SJC looked to “the weight of authority in other jurisdictions” to hold that the statute was not tolled as to Armstrong, and the claims against him were therefore untimely. Passatempo v. McMenimen, 461 Mass. 279 295 (2012). While the plaintiffs cannot be faulted for their lack of success in litigating an unsettled issue of Massachusetts law, this litigation did nothing to advance the claim against Nationwide. Although it is impossible to assess with any precision the marginal cost of the Armstrong claims, some deduction is appropriate, as discussed below.

The federal securities claims similarly added cost but no value, though here the cost is more readily calculable. A complaint is not a law school final exam, on which points are deducted for “missing” potential theories of recovery. This case followed a familiar and unfortunate path, in which a complaint is filed in superior court asserting numerous state-law claims and one or more iffy federal claims pleaded as apparent afterthought,9

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Cite This Page — Counsel Stack

Bluebook (online)
31 Mass. L. Rptr. 499, Counsel Stack Legal Research, https://law.counselstack.com/opinion/passatempo-v-mcmenimen-masssuperct-2013.