Opinion ID: 885550
Heading Depth: 2
Heading Rank: 2

Heading: gallagher's fees.

Text: ¶ 56 Whether the District Court abused its discretion by calculating Ms. Gallagher's fees at her 1991 hourly rate? ¶ 57 In its findings of fact and conclusions of law in support of its interim order, the District Court excluded all of the fees requested by the Patients for attorney Mary Gallagher for the period she was employed by the State of Montana. On appeal, we held that the District Court abused its discretion in denying Gallagher's fees for the period she was employed by the state. Ihler I, 259 Mont. at 248, 855 P.2d at 1014. On remand, the Hospital moved to reassess attorney fees given our decision in Ihler I. In the Hospital's memorandum in support of their motion to reassess attorney fees, dated August 24, 1993, they contended that Gallagher's fees should be calculated as follows: Gallagher claimed 1,770.4 hours. Of this total, the Court allowed her time expended after April 5, 1991, when she left state employment. This time was 175.5 hours. Subtracting the 175.5 hours from the total claimed, 1,770.4 hours, leaves 1,594.9 hours. The Court reduced Gallagher's hours by 25 percent for duplication. Reducing the 1,594.9 by this percentage leaves 1,196.2 uncompensated hours that should be compensated. The Court authorized Gallagher's fees at $75.00 per hour, so that the amount authorized for her is 1,196.2 times $75, which equals $89,715.00. ¶ 58 In response, the Patients requested that the District Court recalculate the entire fee award in light of our decision in Ihler I. As part of their response, the Patients asserted that the District Court's initial award of Gallagher's fees at a rate of $75 was erroneous because it was without support in the record. On September 8, 1994, the Patients filed a Motion to Award Undisputed Attorneys' Fees in which it sought Gallagher's fees in the amount of $89,715. The Patients asserted that Missouri v. Jenkins (1989), 491 U.S. 274, 109 S.Ct. 2463, 105 L.Ed.2d 229, required the court to use current hourly rates to account for a delay in the payment of an award of attorney fees, but observed that [t]he court may avoid some of the current rate issue by directing the Defendants to pay the undisputed portion of the fees now, pending the court's ruling on the outstanding motion (apparently referring to the Patients' motion to reassess the entire attorney fees award). ¶ 59 On September 15, 1994, the District Court issued an Order Granting Interim Award of Attorneys' Fees in which it awarded fees to the Patients in the amount of $89,715. The Hospital objected based upon the possibility that the District Court's reassessment of the total fee award could be less than what the Hospital had already paid to the Patients. On October 30, 1994, the Patients and the Hospital entered into an agreement whereby the Hospital agreed to pay the Patients $89,715 conditioned upon the Patients' refunding of any overpayment. ¶ 60 On June 22, 1998, the District Court issued its Order on Remand. In this order, the District Court stated: Mary Gallagher requested compensation for 1770.4 hours. As noted in the earlier findings of fact, this case was significantly overstaffed. The Court finds that a 25 percent reduction should be applied to arrive at a reasonable number of hours for Ms. Gallagher. The initial lodestar amount for her work is thus $99,585 (1327.8 hours at an hourly rate of $75). The District Court then reduced Gallagher's fees by an additional 25 percent, representing a reduction for the Patients' limited successa reduction the court made in its order prior to Ihler I and which we affirmed on appeal. This 25 percent reduction was not reflected in the interim award. Consequently, Patients were awarded $74,688.75 for Gallagher's fees. ¶ 61 The Patients filed a Motion to Alter or Amend Order on Remand in which they claimed that the court erred as a matter of law pursuant to Jenkins by not recalculating Gallagher's fees at her 1998 rate. The Patients submitted the affidavits of Gallagher and Bernadette Franks-Ongoy which contain declarations of Gallagher's 1998 billing rate and the Montana Advocacy Program's 1998 billing rates. The District Court noted that the Patients had received payment for Gallagher's fees in 1994 and denied the Patients' request for fees based on Gallagher's 1998 rates. ¶ 62 On appeal, the Patients now contend that the District Court should have applied Gallagher's 1994 rate when it issued its interim award of fees on September 14, 1994. The Hospital contends that the Patients never properly presented the issue of whether the District Court should have applied Gallagher's current or historical rate. The Hospital observes that the Patients never moved the court for an evidentiary hearing and filed no briefs or supporting affidavits regarding the current versus historic rate issue. Instead, the Hospital contends, the Patients waited until an adverse ruling and then attempted to supplement the record with evidence of Gallagher's 1998 hourly rate. ¶ 63 The issue of whether the District Court should have calculated Gallagher's fees at her 1994 rate was never properly raised below. Significantly, the Patients never requested the District Court to award them Gallagher's fees based on Gallagher's 1994 rate. Furthermore, as the Patients admit, direct evidence of Gallagher's 1994 rate was never before the court below and, consequently, this evidence is not before us. Gallagher's affidavit, attached to the Patients' Motion to Alter or Amend Order on Remand only contains evidence of Gallagher's 1998 rate. ¶ 64 The Patients contend that simple extrapolation and inference [from Gallagher's 1998 rate] results in a [1994] rate of $100. However, we cannot conclude that the District Court abused its discretion by not awarding attorney fees at Gallagher's 1994 rate when direct evidence of that rate was never presented to the court. As the Patients have observed, a District Court abuses its discretion when its findings are not based on evidence in the record. See, e.g., Rum Creek, 31 F.3d at 179 (reversing district court's adjustments to hourly rates because they were without basis in the record). Lastly, we note that Jenkins does not require a trial court award fees at current rates; rather, Jenkins states only that an enhancement for delay is within the contemplation of § 1988, and is not ... barred by the Eleventh Amendment. Jenkins, 491 U.S. at 284, 109 S.Ct. at 2469; see also Barjon, 132 F.3d at 503 (affirming denial of compensation for delayed payment). Accordingly, we affirm the award of Gallagher's fees based on her historic rate. However, pursuant to our holding above under heading IA2, Gallagher's fees shall be recomputed based on her requested rate of $80.