Opinion ID: 2330512
Heading Depth: 2
Heading Rank: 3

Heading: Unreliable Billing Records

Text: The trial court also reduced Ms. Lively's attorneys' fee request by an additional 8% on the grounds that the billing records were unreliable. The sole evidence of this unreliability cited by the trial court is a single settlement negotiation letter dated February 12, 2004, that was written by Ms. Lively's counsel to FPA's counsel in an effort to reach a settlement of all matters still outstanding, including the payment of attorneys' fees. In this letter, Ms. Lively's counsel estimated that the total attorneys' fees logged up to that date were $809,000.00. In the petition for attorneys' fees, however, which was filed on October 3, 2005, Ms. Lively's counsel sought fees in the amount of $1,179,481.50. The trial court found that such an increase, amounting to $370,481.50, could not have resulted from the minimal litigation of the intervening months. Thus, it was apparently on that basis alone that the trial court concluded that the billing records of Ms. Lively's counsel were unreliable and made the 8% deduction from the fees requested. Ms. Lively's counsel now argues that the trial court should not have taken into account the information in the settlement letter. [13] We agree and conclude that the trial court abused its discretion in reducing the attorneys' fees award by 8% based upon a statement made in a settlement letter. As a matter of evidentiary admissibility, our case law provides, as does FED.R.EVID. 408(a)(1), that as a general rule, statements and admissions made by a party during the course of settlement negotiations are not admissible at trial. The purpose behind the rule precluding such statements and admissions made during settlement negotiations is to encourage unfettered dialogue in negotiations, so as to further the underlying policy favoring out-of-court settlement of disputes. Wayne Insulation Co. v. Hex Corp., 534 A.2d 1279, 1281 (D.C.1987); see also FED. R.EVID. 408(a)(1). The Advisory Committee Notes to Fed.R.Evid. 408 further clarify the policies behind this rule. The Notes, citing McCORMICK, EVIDENCE §§ 76, 251 (1954), point out that such evidence is irrelevant, since the offer may be motivated by a desire for peace rather than from any concession of weakness of position. Moreover, the Notes add, a more consistently impressive ground [for exclusion of this evidence] is promotion of the public policy favoring the compromise and settlement of disputes. [14] We believe that these two reasons provide strong support for the conclusion that a trial court should not, any more than a jury should, use the information provided in settlement letters for the purpose of determining what is an appropriate resolution of a matter. [15] Accordingly, we direct a re-calculation of the attorneys' fees owed to reinstate $82,363.24 back into the total award (representing 8% of $1,029,540.50).