Title: Dockins v. State Farm Ins. Co.

State: oregon

Issuer: Oregon Supreme Court

Document:

Filed:  February 24, 2000 
IN THE SUPREME COURT OF THE STATE OF OREGON

TROY DOCKINS AND DONNA DOCKINS,
	Petitioners on Review,
	v.
STATE FARM INSURANCE COMPANY,a corporation,
	Respondent on Review.
(CC 9605-03556; CA A98608; SC S45747)

	On petition for attorney fees filed September 24, 1999.*
	William A. Drew, Portland, filed the petition for
petitioners on review.  With him on the petition were Robert E.
L. Bonaparte, and Bonaparte, Elliott, Ostrander & Preston, P.C.,
Portland. 
	Michael A. Lehner, of Lehner, Mitchell, Rodrigues & Sears,
Portland, filed the opposition to the petition for respondent on
review.
	Before Carson, Chief Justice, and Gillette, Van Hoomissen,
Durham, Kulongoski, and Leeson, Justices.**
	GILLETTE, J.
	Petitioners are awarded $41,513.12 as reasonable attorney
fees on appeal. 
	*329 Or 20, 985 P2d 796 (1999); on review from the Court of
Appeals, 155 Or App 377, 963 P2d 119 (1998).	
    **Riggs, J., did not participate in the consideration or
decision of this case.
		Last year, this court decided Dockins v. State Farm
Ins., 329 Or 20, 985 P2d 796 (1999), a case involving an action
on an insurance policy.  Petitioners were plaintiffs in that
action.  They prevailed on appeal, thereby establishing their
right to collect "reasonable" attorney fees from defendant
insurer (respondent) under ORS 742.061.  Petitioners now seek a
specific amount of fees -- $41,513.12 -- for the work their
lawyers performed in the course of that appeal.  Respondent
opposes the petition for attorney fees, arguing that the amount
requested is unreasonable and that a sum of $15,000 would be
appropriate.  For the reasons that follow, we award to
petitioners the amount that they have requested.
		In 1992, petitioners became embroiled in a dispute with
respondent over coverage for damage caused by a leaking
underground oil tank located on their property.  Dockins, 329 Or
at 22-25.  Petitioners approached a law firm (petitioners'
lawyers), who agreed to represent them in the dispute on a
"contingent" fee basis. (1)  The contingent fee agreement
contemplated two possible scenarios:  (1) an early settlement
that would include some amount for attorney fees or (2) a more
significant award of "reasonable" attorney fees under ORS 742.061
if petitioners prevailed after more protracted litigation. (2)  
		Respondent initially declined to settle the dispute. 
Petitioners then filed their action.  Approximately eight months
after the action was filed, respondent offered to settle with
petitioners for $15,000, but expressly excluded any additional
amount for attorney fees.  Petitioners accepted that offer as
settlement of the underlying insurance claim, but only after
respondent agreed to litigate the issue of petitioners'
entitlement to attorney fees.  
		Subsequently, petitioners petitioned the trial court
for an award of attorney fees, and respondent opposed their
petition.  The trial court denied the petition, concluding that
petitioners were not entitled to attorney fees under ORS 742.061. 
Petitioners appealed and, eventually, obtained review by this
court.  We reversed the trial court's denial of the petition and
held that petitioners were entitled to attorney fees under ORS
742.061, because their recovery exceeded the amount of any timely
tender by respondent.  Dockins, 329 Or at 34. 
		Our earlier opinion in Dockins involved only the trial
court's denial of petitioners' petition for attorney fees at that
level.  We remanded the case to that court to award a reasonable
amount for the efforts of petitioners' lawyers at that level. 
Id. at 35.  However, ORS 742.061 also provides for reasonable
attorney fees on appeal.  The present petition pertains to fees
on appeal and, as noted, seeks an award of $41,513.12.  
		Petitioners explain their $41,513.12 request as
follows:  For each lawyer and legal assistant who worked on
petitioners' appeal, petitioners have multiplied the number of
hours they billed by a "reasonable hourly rate," which is based
on the respective lawyer's or assistant's standard rate for the
work at issue. (3)  When the total fees for each lawyer and legal
assistant are added, the result is the amount requested.
		As factual support for their request, petitioners' lawyers have submitted detailed records documenting their
individual time expenditures on various appeal-related
activities (4) and a verified statement (5) in which they assert that
they ordinarily charge paying clients between $150 and $200 per
hour for their work, that the prevailing market rate for similar
legal work is between $150 and $275 per hour, and that the
claimed hours and hourly rates are reasonable in light of six
relevant factors:  (1) the novelty and difficulty of the question
involved; (2) the skills needed to perform the work properly; (3)
the fees customarily charged for similar legal services; (4) the
result obtained (which they describe as having "preserved a
meaningful right to [the] attorney fees * * * provided by ORS
742.061"); (5) their experience, reputation and abilities; and
(6) the fact that they devoted a substantial amount of time to
the case on a contingent fee basis.  
		The six factors identified by petitioners as supporting
the reasonableness of their request are in fact items that this
court considers in determining an appropriate attorney fee award. 
The factors are drawn from Disciplinary Rule (DR) 2-106 of the
Code of Professional Responsibility, which sets out factors that
bear on the reasonableness of an attorney's fee.  This court has
indicated that the factors enumerated in DR 2-106 are relevant in
determining a reasonable attorney fee under ORS 742.061. (6)  See,
e.g., Chalmers v. Oregon Auto. Ins. Co., 263 Or 449, 455, 502 P2d
1378 (1972) (so stating). (7)  Therefore, to the extent that those
listed factors (including the ones relied upon by petitioners)
are relevant, we ordinarily include them in our analysis.  In
addition, because this petition pertains to fees for prosecuting
an appeal in this court, we ordinarily consider the extent to
which counsel's written and oral arguments assisted the court in
reaching a decision.  Id. at 456.
		Respondent does not deny that petitioners are entitled
to some award of attorney fees.  Neither does it challenge the
actual amount of time expended or question whether the time was
devoted to the tasks reported by petitioners.  As noted, it
challenges only the reasonableness of the amount of time expended
and the hourly rates that are claimed for that time.  We turn to
a discussion of those factors that relate to the reasonableness
of time expended and hourly rate charged.
		In determining a reasonable attorney fee, our analysis
largely will be framed by the opponent's objections to a
petitioner's request.  We depend on a petitioner's opponent to
raise objections to the petitioner's request with as much
particularity as possible and to support those objections with
argument and (where appropriate) documentation that will assist
this court in its efforts. (8)  See McCarthy v. Oregon Freeze Dry,
Inc., 327 Or 185, 189, 957 P2d 1200 (1998) (on reconsideration)
(holding, in context of discretionary decision by Court of
Appeals to award an attorney fee, that "the objections of a party
who resists a petition for attorney fees plays an important role"
in court's decision).
		We turn to respondent's first objection -- that
petitioners' lawyers have claimed an excessive and, therefore,
unreasonable, number of hours.  Petitioners' lawyers claim to
have spent 193.8 hours on the appeal (including 19 hours of legal
assistant time) and have submitted documentation that accounts
for that time and the matters attended to on a daily basis.  As
noted, respondent does not question the accuracy of petitioners'
documentation, but suggests that the time expended by
petitioners' lawyers on the case was unreasonable in light of (1)
the disproportionality between the time claimed by petitioners'
lawyers and the time expended on the same matter by respondent's
own lawyer, (9) (2) the fact that the case was not particularly
complex, i.e., "it required the court to construe a single
statute," and (3) the claims made by petitioners' counsel of
substantial experience in litigating and appealing insurance
coverage disputes.
		The latter two objections require little discussion. 
Although this case certainly is not among the most difficult
cases that this court has heard in recent years, neither is it
among the simplest.  And, although the hours claimed by
petitioners' lawyers might lie toward the high end of the range
of hours that are claimed in ordinary appeals of moderate
difficulty by experienced, competent counsel, they are not
patently outside that range.
		Neither are we persuaded by respondent's
disproportionality argument.  Although it might be useful to
compare the hours claimed by a petitioner's lawyer with those of
lawyers arguing similar positions in similar cases, respondent is
not offering such a comparison here.  As respondent's lawyer
acknowledges, an appellant's task might be more difficult than
that of a respondent.  An appellant's counsel reasonably might
devote more time to an appeal as a consequence.  Respondent has
not made a sufficient showing that the amount of time expended in
this case lies outside the permissible range.  We accept the
claimed time expenditure, 193.8 hours, as reasonable.  
		Respondent also objects to the reasonableness of the
various hourly rates sought by petitioners' lawyers in their
petition.  In support of that objection, respondent's lawyer
avers that, (1) "in [his] experience, lawyers practicing in
insurance law do not obtain the hourly rates sought by
petitioners in this case;" (2) his own billing rate for appellate
work is lower; and, (3) in his opinion, a reasonable hourly rate
for petitioners' lawyers in this case is significantly lower than
those sought by petitioner's lawyers.     
		The first and last assertions are of limited assistance
in determining the reasonableness of the hourly rates that
petitioners have requested.  Respondent's lawyer, who avers that
he has testified as an expert witness on attorney fee issues in
other cases, argues that a rate that is from 14 to 22 percent
less than those claimed (10) would be reasonable in this case. 
Counsel has not persuaded us that the requested rates are
unreasonable.
		The second point from the affidavit, that respondent's
lawyer's own billing rate is lower than the rates requested, also
fails to persuade us that petitioners' lawyers' requested fees
are unreasonable.  We already have noted the potentially limited
utility of comparing directly the respective tasks of appellant's
and respondent's lawyers, and that information illustrates our
point.  For example, we specifically note that lawyers in a
position like that of respondent's lawyer often have long-term
relationships with the insurance companies that they represent --
a fact that tends to drive down their billing rates in comparison
to lawyers for insureds, who commonly represent a client in a
single matter.  Given the broad range of rates that lawyers
charge and the broad range of reasons that can affect the rate
that a particular lawyer charges a particular client, the billing
rate of a lawyer who shares little more with petitioners' lawyers
than a similar area of practice does not assist us materially in
setting a reasonable rate for the work of petitioners' lawyers on
this matter.
		The foregoing disposes of respondent's specific
objections.  In the ordinary case, we are loath to undertake a
wide-ranging, independent review of a petitioner's request for
attorney fees, inasmuch as any questions or doubts that we might
have might not be shared by the objecting party.  This is such an
ordinary case.
		Petitioners are awarded $41,513.12 as reasonable
attorney fees on appeal. 

1. 	The amount of the fee was not "contingent" in the
traditional sense of a graduated fee based on the length of the
litigation and the size of the judgment for the client.  Rather,
it was a contingent fee of the kind made possible by legislative
choice to encourage certain forms of legal actions that are
desirable from a policy standpoint but that would not be viable
economically without a statutory authorization to award a
"reasonable" fee to the prevailing party.

2. 	ORS 742.061 provides, in part:
		"If settlement is not made within six months from
the date proof of loss is filed with an insurer and an
action is brought in any court of this state upon any
policy of insurance of any kind or nature, and the
plaintiff's recovery exceeds the amount of any tender
made by the defendant in such action, a reasonable
amount to be fixed by the court as attorney fees shall
be taxed as part of the costs of the action and any
appeal thereon."

3. 	Petitioners have multiplied their standard rates by a
factor that they say represents the increased risk inherent in
taking a case on a contingent fee basis.  The use of that factor
is not an issue in this proceeding.

4. 	Petitioners' lawyers assert that they "exercised their
billing judgment" when they billed time to the appeal and
eliminated all time that they considered to be excessive or
otherwise unreasonable.

5. 	Under ORAP 13.10(5)(a), petitioners were required to
submit 
	"a statement of facts showing the total amount of
attorney time involved, the amount of time devoted to
each task, the reasonableness of the amount of time
claimed, the hourly rate at which time is claimed and
the reasonableness of the hours."
ORAP 13.10(5)(b) requires petitioners to address any factor that
this court may consider in determining a reasonable attorney fee
under ORS 742.061.

6. 	DR 2-106 is the disciplinary rule that prohibits
lawyers from charging fees in excess of a reasonable fee.
Subsection (B) of the rule lists factors to be considered in
determining whether a fee is reasonable:
		"(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 ability of
the lawyer or lawyers performing the services.
		"(8) Whether the fee is fixed or contingent."

7. 	The legislature expressly has directed courts to
consider the same set of factors (among others) when determining
the amount of an attorney fee award under ORS 20.075.  ORS 20.075
applies only when "attorney fees are authorized by statute and * * * the court has discretion to decide whether to award
attorney fees."  (Emphasis added.)  ORS 742.061, the fee shifting
statute at issue here, provides that "a reasonable * * * attorney
fee[] shall be taxed as part of the costs of the action and any
appeal thereon," if certain preconditions are met.  As such, it
allows courts no discretion on the question whether to award an
attorney fee.  

8. 	If an opponent of a fee award fails timely to raise any
objection to a request for attorney fees, then this court has
declared by rule that it will award the amount requested.  ORAP
13.10(9) provides:  
		"In the absence of timely filed objections to a
petition under this rule, the Supreme Court * * * will
allow attorney fees in the amount sought in the
petition, except [in certain circumstances not
applicable in the present case]."

9. 	In support of its objection, respondent has filed an
affidavit showing that its own lawyer in the matter devoted only
54.8 hours to responding to petitioners' appeal.  Although
respondent's lawyer acknowledges, in that affidavit, that it
might take more time to prepare an appellant's case than a
respondent's, he suggests that the disparity in this case is
"exceptional."  Respondent's lawyer states that, in his opinion,
petitioners' lawyers should have been able to prosecute their
appeal in 100 hours or less.

10. 	Petitioners' lawyers billed their work at basic rates
of $190 per hour for two senior lawyers, $175 per hour for a
third lawyer, and $48 per hour for a legal assistant. 
Petitioners' lawyers enhanced their basic fees by a percentage
based, inter alia, on the contingent nature of their clients'
claim.  We understand respondent's objection as addressing the
basic rates mentioned in the petition and not the rates
reflecting the contingency enhancement.