Opinion ID: 2628016
Heading Depth: 3
Heading Rank: 6

Heading: Did the Superior Court Abuse Its Discretion by Calculating Attorney's Fees Based on the Reduced Amount?

Text: An award of attorney's fees is reviewed for abuse of discretion and will not be overturned unless manifestly unreasonable, arbitrary or designed for a purpose other than justly deserved compensation. [19] Gibson argues that the superior court should have calculated attorney's fees based on the jury's verdict of $68,611 rather than the $18,611 that remained after the superior court reduced the verdict by $50,000. Gibson relies primarily on the language of the collateral source statute, AS 09.17.070, and Falconer v. Adams. [20] GEICO argues that the insurance contract limited attorney's fees in UIM cases to the limit of liability of [UIM] coverage. GEICO also argues that Alaska case law requires attorney's fees to be based on net, not gross recovery. In Falconer this court was called upon to interpret AS 09.17.070, which, as we have stated above, does not apply. [21] Thus this argument fails. Gibson also argues that the superior court's award of attorney's fees was an abuse of discretion. Gibson does not allege bad faith and seems to argue that an upward variance would have been reasonable, not that denial of the upward variance was an abuse of discretion. Gibson focuses her argument on GEICO's refusal to arbitrate. Gibson reasons that arbitration keeps costs down and that [w]hen an insurer forces an expensive forum upon its insured, the costs and risks of implementing that expensive forum should be completely borne by the insurer. Gibson is probably right that arbitration would have been a less expensive way to resolve this case  UIM claims often are arbitrated. Moreover, it is possible that GEICO litigated this case influenced by considerations apart from the case at bar  a ground warranting an adjustment in scheduled fees. [22] But this is only hinted at by Gibson, and it is countered by GEICO, which notes that it made an offer of judgment that was only slightly below the jury verdict. On balance, while enhanced fees might have been reasonable, we are unable to conclude that it was an abuse of discretion for the court to refuse to award them.