United States District Court, D. Montana, Billings Division
LOUISE KING, individually, and as Personal Representative of the Estate of Timothy King, Plaintiff,
GEICO INSURANCE COMPANY, Defendant.
RICHARD W. ANDERSON, Magistrate Judge.
On December 11, 2013, the Court entered an Order granting a motion for summary judgment filed by Plaintiff Louise King ("King"). Thereafter, King filed the pending Motion for Award of Attorney's Fees on January 7, 2014, seeking an award of fees and costs in the amount of $50, 727.88. (Doc. 59.) GEICO opposed King's request for fees. The Court held King's request for fees in abeyance pending trial, which was held February 24, 25, 26, and 27, 2014, in Billings. The jury returned a verdict in favor of King. Following trial, the Court entered an Order on March 3, 2014, granting the parties time to file supplemental memoranda on the fee issue and on another matter not germane to the fee issue. On March 13, 2014, King's counsel L Randall Bishop ("Bishop"), instead of filing a supplemental memorandum, filed a Supplemental Declaration seeking an additional award of fees in the amount of $63, 735. On that same date, King's counsel John Heenan ("Heenan") filed a Declaration requesting fees of $30, 900. GEICO filed a supplemental memorandum on March 31, 2014, opposing the fees requested.
II. FACTUAL BACKGROUND
GEICO issued a motor vehicle liability policy numbered XXXX-XX-XX-XX ("the Policy) to Timothy King which covered two motorcycles. The Policy was in effect on August 27, 2011, when Timothy King was involved in a motorcycle collision that resulted in his death.
The driver who caused the accident that resulted in Timothy King's death was an underinsured driver within the meaning of the Policy. After learning that the driver who caused the accident was underinsured, Timothy King's spouse, King, contacted GEICO and requested payment of all underinsured motorist ("UIM") benefits due and owing under the Policy. GEICO offered to pay the Estate of Timothy King the full "each person" limits of $100, 000 (two stacked $50, 000 coverages) in exchange for a release of all other claims under the GEICO policy. King declined GEICO's offer, and instead, in a letter dated February 29, 2012, agreed to give GEICO a signed acknowledgment of receipt of payment.
GEICO subsequently retained legal counsel in Montana for further assistance with the claim. After consultation with Montana legal counsel, GEICO issued a check to the Estate of Timothy King for $100, 000 which was sent by GEICO's legal counsel to King on April 20, 2012. GEICO's counsel explained in a letter that accompanied the check that GEICO was seeking a release of the wrongful death and survival claims that could be advanced by the Personal Representative, and further explained that GEICO was not seeking a release of King's own bodily injury. Consistent with the letter, GEICO's counsel also sent King a general release which identified the "Releasor" as "Annie Louise Holmes King, P.R. for the Estate of Timothy W. King, its heirs, executors, personal representatives, successors, and assigns." The release reserved unto King "any other claim for own bodily injury, " but made no mention of reserving any other type of claim, such as her severe emotional distress claim.
King did not deposit GEICO's check or respond to GEICO's offer of payment. Instead, King commenced this action on June 18, 2012, in the Montana Thirteenth Judicial District Court, Yellowstone County, to obtain the UIM benefits available under the Policy issued to Timothy King by GEICO. On December 11, 2013, in response to competing motions for summary judgment, the Court concluded that King, who was married to Timothy King on the date of the accident, but who was not involved in the accident, did not witness the accident, and did not suffer any bodily injury as a result of the accident, was a covered person under the Policy who could assert a stand alone emotional distress claim. The Court also ruled that King was entitled to the immediate payment of the $100, 000 owed to the Estate of Timothy King, and that GEICO had breached its insurance contract by requiring King to sign a release before it would pay King the $100, 000 that GEICO admitted owing to the Estate of Timothy King.
King's counsel filed the pending Motion for Award of Attorney's Fees on January 7, 2014. The affidavit of King's counsel asserts he spent 143.8 hours over a period of two years and four months on legal work relating directly to issues that resulted in the entry of this Court's summary judgment ruling. (Doc. 59-1.) The affidavit also includes $397.88 of litigation costs for prosecuting Counts One and Two of King's complaint against GEICO. GEICO opposed such request. As noted earlier, King's counsel is now seeking additional fees of $94, 635.
A federal court sitting in diversity applies the substantive law of the forum state to state law claims. Mason and Dixon Intermodal, Inc. v. Lapmaster Intern. LLC, 632 F.3d 1056, 1060 (9th Cir. 2011). Here, the Court applies Montana law.
"Montana follows the general American Rule that a party in a civil action is not entitled to attorney fees absent a specific contractual or statutory provision." Mountain W. Farm Bureau Mut. Ins. Co. v. Brewer, 315 Mont. 231, 69 P.3d 652, 655 (2003) (citing Mountain W. Farm Bureau Mut. Ins. Co. v. Hall, 308 Mont. 29, 38 P.3d 825, 828 (2001)). Under the "obligatory insurance exception, " Montana case law recognizes courts may award attorneys' fees when "the insurer forces the insured to assume the burden of legal action to obtain the full benefit of the insurance contract...." Riordan v. State Farm Mut. Auto. Ins. Co., 589 F.3d 999, 1006 (9th Cir. 2009) (quoting Brewer, 69 P.3d at 660). The exception only applies when the insured prevails. See Brewer, 69 P.3d at 654.
GEICO opposes King's request for fees on several grounds. First, in its opposition filed January 21, 2014, GEICO argues that King's request for fees is premature under Rule 54(d)(2), because fees can only be awarded after entry of judgment. FED.R.CIV.P. Rule 54(d)(2)(A) states that, "[a] claim for attorney's fees and related nontaxable expenses must be made by motion unless the substantive law requires those fees to be proved at trial as an element of damages." The motion must be filed "no later than 14 days after the entry of judgment." FED.R.CIV.P. 54(d)(2)(B)(i). This objection is, as GEICO concedes in its supplemental brief filed March 31, 2014, moot because Judgment in King's favor was entered on March 3, 2014.
GEICO next objects to King's request for fees arguing that the hourly billing rate of $350.00 charged by Bishop and $300.00 charged by Heenan is unreasonable and should be reduced. King's and GEICO's counsel have since agreed, as reflected in a stipulation filed April 16, 2014, that "[i]n the event the Court awards attorney's fees to Bishop and Heenan, the hourly rate shall be $350.00/hour and $300.00/hour, respectively." Aside from the ...