Court Opinion

ID: 4704693
Source: CourtListenerOpinion
Date Created: 2021-07-19 21:01:39.234012+00
Date Added: 2024-06-11T08:05:30.522757
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        JUL 19 2021
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

PEGGY FORAKER,                                  No.    20-35596

                Plaintiff-Appellant,            D.C. No. 3:14-cv-00087-SI

 v.
                                                MEMORANDUM*
USAA CASUALTY INSURANCE
COMPANY, a Texas corporation,

                Defendant-Appellee.

                   Appeal from the United States District Court
                            for the District of Oregon
                   Michael H. Simon, District Judge, Presiding

                        Argued and Submitted June 8, 2021
                                Portland, Oregon

Before: WARDLAW, HURWITZ, Circuit Judges, and BOLTON,** District Judge.

      On January 4, 2012, an uninsured motorist (“UM”) fleeing police struck

Peggy Foraker’s vehicle, causing her severe injury. USAA Casualty Insurance

Company (“USAA”) insured Foraker’s vehicle under a policy containing UM

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The Honorable Susan R. Bolton, United States District Judge for the
District of Arizona, sitting by designation.
coverage of $1 million. Foraker demanded the full policy limits of the UM

coverage. However, USAA only offered $250,000. Foraker then sued USAA under

Oregon law for breach of contract, breach of the implied covenant of good faith

and fair dealing, and financial elder abuse. After eight years and two separate trials

necessitated by the district court’s bifurcation of the case, Foraker received the full

$1 million, attorneys’ fees for Phase I including a 1.5 multiplier, damages for

USAA’s breach of the implied covenant of good faith and fair dealing, and

attorneys’ fees for Phase II.

      On appeal, Foraker challenges the district court’s damages award in Phase II

for USAA’s breach of the implied covenant, the district court’s Phase II attorneys’

fees award, and the district court’s denial of her motion for summary judgment in

Phase II. We have jurisdiction under 28 U.S.C. § 1291, and we affirm in part,

reverse in part, vacate in part, and remand for further proceedings.

      1.     The district court clearly erred in denying Foraker her Phase II

litigation costs as consequential damages for USAA’s breach of the implied

covenant. See Schnabel v. Lui, 302 F.3d 1023, 1029 (9th Cir. 2002). Under

Oregon law, consequential damages are available for breach of the implied

covenant so long as the claimed damages were “reasonably foreseeable” at the

time of contracting. See Welch v. U.S. Bancorp Realty and Mortg. Tr., 596 P.2d

947, 963 (Or. 1979); see also Cont’l Plants Corp. v. Measured Mktg. Serv., Inc.,

                                           2
547 P.2d 1368, 1371 (Or. 1976). A loss is reasonably foreseeable if “it is one that

ordinarily follows the breach of such a contract in the usual course of events, or

that reasonable men in the position of the parties would have foreseen as a

probable result of breach.” Cont’l Plants Corp., 547 P.2d at 1371 (citation

omitted). The district court awarded Phase I litigation costs as consequential

damages because at the time of contracting for the insurance policy, it was

reasonably foreseeable to USAA that if it breached the implied covenant Foraker

would need to incur costs to prove that breach. See id. However, the district court

denied the Phase II costs without explaining why those costs were any less

foreseeable. Because the Phase II litigation costs were also foreseeable, we reverse

the district court’s denial of the Phase II litigation costs as consequential damages

with instructions to award Foraker the uncontested amount of $109,468.86.

      2.     The district court did not clearly err in denying Foraker lost

investment profits from the sale of retirement assets as damages for USAA’s

breach of the implied covenant. See Schnabel, 302 F.3d at 1029. The district court

determined that these damages were not reasonably foreseeable at the time of

contracting, and upon our review we are not “left with the definite and firm

conviction that a mistake has been committed.” Easley v. Cromartie, 532 U.S. 234,

242 (2001) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)).

      3.     The district court did not clearly err in calculating Foraker’s damages

                                          3
for the loss of use of the $1 million to be $195,750.00. Schnabel, 302 F.3d at 1029.

The district court based its calculation on the concept of prejudgment interest, and

Foraker objects only to the decision to end the calculation on February 19, 2016—

the day USAA paid Foraker the $1 million policy limit. Foraker contends that the

district court should have continued the calculation until April 22, 2020—the date

of entry of the Phase II judgment—because part of the $1 million did not go

directly to Foraker, but rather to her attorneys as partial payment of their fees.

However, Foraker provides insufficient support for her assertion that the presence

of a lien for attorneys’ fees affects the value for the loss of use of the $1 million.

      4.     The district court did not err in denying Foraker prejudgment interest

on the Phase II damages award of $322,882.78, which consisted of $195,750.00 in

interest from the loss of use of the $1 million and $127,132.78 in Phase I litigation

costs. Foraker argues that the district court should have assessed prejudgment

interest on these amounts from February 19, 2016, to the date of entry of the Phase

II judgment, April 22, 2020. But, Foraker received the $1 million on February 19,

2016 and is not entitled to further interest on an interest-based damages award

following receipt of the underlying amount. As to the Phase I litigation costs,

Oregon law allows prejudgment interest to be awarded “on damages only when the

exact amount is ascertained or easily ascertainable by simple computation or by

reference to generally recognized standards . . . and where the time from which

                                            4
interest should run is also easily ascertainable.” Strader v. Grange Mut. Ins., 39

P.3d 903, 908 (Or. Ct. App. 2002) (citation omitted). The district court did not err

in concluding that the Phase I litigation costs were not “easily ascertainable.” See

id.

      5.     We review an award of attorneys’ fees, including the method of

calculation, for abuse of discretion. Stetson v. Grissom, 821 F.3d 1157, 1163 (9th

Cir. 2016); Barnard v. Theobald, 721 F.3d 1069, 1075 (9th Cir. 2013). However,

we are unable to determine whether the district court abused its discretion in

reducing Foraker’s requested Phase II attorneys’ fees by 75% because it failed to

provide a “concise but clear explanation” for how it arrived at the 75% figure. See

Vargas v. Howell, 949 F.3d 1188, 1195 (9th Cir. 2020) (cleaned up); see also

Gonzalez v. City of Maywood, 729 F.3d 1196, 1203 (9th Cir. 2013). The court

simply stated: “Based on [Foraker’s] pretrial filings and the time spent at trial, it

appears to the [c]ourt that approximately 75 percent of [Foraker’s] efforts were

directed toward [Foraker’s] unsuccessful claims and arguments. This is also

consistent with the results obtained.” Where such a significant reduction was made

to the requested amount, and USAA only requested a 13% reduction,1 more of an

1
 USAA’s opposition to Foraker’s motion for attorneys’ fees only asked the district
court to reduce the award by $84,298.80. We have encouraged parties opposing fee
awards to make such objections because “the burden of producing a sufficiently
cogent explanation [for reducing a fee award] can mostly be placed on the
shoulders of the losing parties.” Moreno v. City of Sacramento, 534 F.3d 1106,

                                           5
explanation is needed for us to conduct meaningful review. See Vargas, 949 F.3d

at 1195 (“[T]he larger the difference between the fee requested and the fee

awarded, the ‘more specific articulation of the court’s reasoning is expected.’”

(quoting Moreno, 534 F.3d at 1111)). We therefore vacate the district court’s Phase

II fee award and remand for further proceedings.

      6.     The district court abused its discretion in refusing to award a 1.5

multiplier on the Phase II attorney fee award. See Stetson, 821 F.3d at 1163.

Because the district court found that a 1.5 multiplier was appropriate as to the

Phase I fee award under Oregon law, see OR. REV. STAT. § 20.075(1)–(2), it was

“illogical” to conclude that many of those same factors, including the conduct

leading up to litigation and whether the case was taken on a contingency-fee basis,

were suddenly “neutral” in Phase II or “adequately addressed” in Phase I. See

Stetson, 821 F.3d at 1163. We reverse the district court’s denial of a state-law

multiplier on the Phase II attorney fee award, and instruct the court to use a 1.5

multiplier on whatever amount it ultimately concludes represents a reasonable

lodestar under Oregon law.

1116 (9th Cir. 2008); see also Dockins v. State Farm Ins., 997 P.2d 859, 862 (Or.
2000) (noting that analysis of a fee request is “largely . . . framed by the
opponent’s objections”). But the district court reduced the requested amount by
over $530,000. Although district courts are not required to explain the difference
between the reduction requested and the amount awarded, the enormous difference
between the two figures in this case further highlights the insufficiency of the
explanation provided by the district court.

                                          6
         7.    Generally, we will not review the denial of a summary judgment

motion after a full trial on the merits because such a denial is “simply a step along

the route to final judgment.” Williams v. Gaye, 895 F.3d 1106, 1122 (9th Cir.

2018) (quoting Ortiz v. Jordan, 562 U.S. 180, 184 (2011)); see also Locricchio v.

Legal Servs. Corp., 833 F.2d 1352, 1359 (9th Cir. 1987). Accordingly, we do not

reach Foraker’s challenge to the district court’s denial of her summary judgment

motion.

         AFFIRMED IN PART, REVERSED IN PART, VACATED IN PART,

AND REMANDED.2

2
    Each party shall bear their own costs on appeal. See Fed. R. App. P. 39(a)(4).

                                            7