Court Opinion

ID: 7800982
Source: CourtListenerOpinion
Date Created: 2022-08-16 16:00:32.680362+00
Date Added: 2024-06-11T16:29:13.317702
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 21-2914
USA GYMNASTICS,
                                                Plaintiff-Appellee,
                                v.

LIBERTY INSURANCE UNDERWRITERS, INC.,
                                             Defendant-Appellant.
                    ____________________

       Appeal from the United States District Court for the
        Southern District of Indiana, Indianapolis Division.
      No. 1:18-cv-01306-RLY-MPB — Richard L. Young, Judge.
                    ____________________

     ARGUED MAY 17, 2022 — DECIDED AUGUST 16, 2022
                ____________________

   Before SYKES, Chief Judge, and HAMILTON and BRENNAN,
Circuit Judges.
    BRENNAN, Circuit Judge. Larry Nassar, who was aﬃliated
with nonproﬁt USA Gymnastics, Inc. (“USAG”), sexually as-
saulted hundreds of female athletes. After Nassar’s conduct
came to light, USAG faced many lawsuits and multiple inves-
tigations. USAG and its insurers, including Liberty Insurance
Underwriters, Inc., litigated questions about insurance cover-
age in an adversary proceeding before a bankruptcy court. In
2                                                   No. 21-2914

a previous appeal, among other rulings, we aﬃrmed the de-
cision that Liberty had a duty to defend USAG.
    There were also ancillary disputes over the amount of at-
torneys’ fees that Liberty owed USAG. While the ﬁrst appeal
remained pending, USAG sought to enforce the order enti-
tling it to reimbursement. Liberty resisted, asserting that large
portions of the fees USAG claimed were not reasonable and
necessary. After a bench trial, the bankruptcy court recom-
mended that the district court award USAG nearly all the re-
quested fees. The district court agreed, so it adopted most of
the bankruptcy court’s ﬁndings and conclusions and entered
judgment for USAG. Liberty appeals.
   The bankruptcy and district courts correctly concluded
that USAG was entitled to a presumption that the fees it in-
curred were reasonable and necessary. Liberty must therefore
rebut the presumption by showing that various portions of
the fees did not meet that standard. Because Liberty fails to
do so, we aﬃrm.
                                I
   Our opinion resolving the previous appeal recounts the
underlying facts in detail. USA Gymnastics v. Liberty Ins.
Underwriters, Inc., 27 F.4th 499, 508 (7th Cir. 2022). In short,
Nassar used his position with USAG to sexually assault hun-
dreds of women and girls over several decades. Because of
that abuse, USAG has faced hundreds of lawsuits by former
athletes, as well as several investigations by federal and state
entities, including Congress, the Indiana Attorney General,
and the United States Olympic & Paralympic Committee
(“USOPC”). Id. at 509.
No. 21-2914                                                  3

    USAG sued several insurers in Indiana state court, argu-
ing the companies were required to defend it and pay legal
expenses related to the lawsuits and investigations. Id. One of
those insurers was Liberty, from which USAG had purchased
a claims-made directors and oﬃcers liability insurance policy.
The insurers removed the case to the United States District
Court for the Southern District of Indiana under diversity ju-
risdiction. USAG ﬁled for bankruptcy under Chapter 11, and
the insurance-coverage litigation between USAG and Liberty
took place in an adversary proceeding as part of that bank-
ruptcy. Id. The district court retained jurisdiction.
    Faced with cross-motions for summary judgment, the
bankruptcy court concluded that Liberty’s policy covered the
“athlete lawsuits” and various investigations. Id. at 509–10.
Liberty ﬁled objections to the bankruptcy court’s ﬁndings and
conclusions, but the district court overruled those objections.
In January 2020, the district court ordered Liberty to “provide
a complete defense” to USAG with respect to several matters,
including the athlete lawsuits and several investigations. The
district court also ordered Liberty to reimburse USAG for its
defense costs, but the court did not award damages in any
speciﬁc amount. Liberty appealed the district court’s order.
    In February 2022, we held that Liberty had a duty to de-
fend USAG against nearly all the athlete lawsuits. See id. at
525, 528, 530–31. We also ruled that the Congressional,
USOPC, and state-level investigations were “formal proceed-
ings” or “formal investigations” for which coverage exists un-
der the insurance policy. Id. at 531–33. We remanded, though,
for further factﬁnding on the question of whether the policy’s
“Third Party EPL” sublimit restricted the scope of coverage.
4                                                  No. 21-2914

Id. at 533–34. Liberty’s petition for rehearing was denied, and
our mandate in that appeal issued in April 2022.
    While the ﬁrst appeal was pending, the parties continued
to dispute and litigate issues concerning payment. Shortly af-
ter the district court ordered Liberty to provide coverage and
reimburse USAG for its defense costs, USAG sent Liberty a
calculation of damages. USAG sought about $3.18 million in
past defense costs, including $1.77 million for investigations
and $205,000 in prejudgment interest on past defense costs.
Liberty did not agree to USAG’s demand and sought to stay
the district court’s defense order. In turn, USAG moved to
enforce the order. After the district court denied Liberty’s mo-
tion to stay, USAG sent Liberty another letter, demanding that
the insurer identify the speciﬁc amounts of attorneys’ fees that
it disputed. Consistent with the defense order, USAG also in-
sisted that Liberty “enclose a check payable to USAG for the
entire amount [Liberty] agrees is reasonable and necessary on
the Covered Matters.” Liberty declined.
    The bankruptcy court held a bench trial on USAG’s mo-
tion to enforce the defense order. Stipulated exhibits and dep-
osition testimony were entered into the record. USAG’s Chief
Legal Oﬃcer, C.J. Schneider, testiﬁed about his role within the
organization and his eﬀorts to retain and oversee the eﬀorts
of six law ﬁrms, which performed various types of legal work
for USAG. In addition, USAG oﬀered the expert testimony of
attorney Gene Schoon, who had prior experience serving as a
national coordinating counsel during his days as a practicing
lawyer. He testiﬁed that in his opinion, all the fees USAG
sought were reasonable and necessary.
   On the other hand, Liberty presented the expert testimony
of attorney Brand Cooper. Cooper testiﬁed that because of
No. 21-2914                                                  5

several issues with the invoices submitted by the retained law
ﬁrms, he could not conclude that the attorneys’ fees USAG
sought were reasonable and necessary. When the court asked
whether he had an opinion on what the bottom-line number
of reasonable and necessary fees for one of the law ﬁrms
should have been, Cooper responded he had “no problem
with the billings that they provided, with the exceptions that
[he] noted.” Later, the court requested “a joint statement
about identifying costs that are not disputed.” The court
noted the fees that both sides agreed were reasonable and nec-
essary appeared to be “the lion’s share” of those that USAG
claimed.
    At that point, Cooper testiﬁed that he determined certain
fee amounts incurred by USAG—which totaled about $1.43
million—were reasonable and necessary. Yet almost immedi-
ately, Cooper contradicted his prior testimony. On redirect-
and recross-examination, Cooper stated his general objections
to the law ﬁrms’ invoices prevented him from determining
that any amounts were reasonable and necessary. Then, in an-
swer to the court’s questions, Cooper expanded on the nature
of his objections but refused to give concrete ﬁgures that were
not disputed.
    Shortly after the bench trial concluded, USAG sent Liberty
a third demand letter. USAG noted that Cooper’s testimony
suggested large portions of the fees were reasonable and nec-
essary. In its written response, Liberty claimed that Cooper
“could not make any ﬁnal assessment of the amount of rea-
sonable and necessary defense costs,” and Liberty further as-
serted that his testimony did not bind it.
   In September 2020, the bankruptcy court entered pro-
posed ﬁndings and conclusions. The court rejected Liberty’s
6                                                  No. 21-2914

arguments and concluded that under applicable case law,
USAG was entitled to a presumption that the fees incurred
were reasonable and necessary. The court also found Schoon
“to be the more credible and reliable expert witness.” Accord-
ing to the bankruptcy court, USAG had proved by a prepon-
derance of the evidence that $1,944,354.26 of the fees it
incurred were reasonable and necessary. So, the court recom-
mended that the district court enter judgment in that amount,
plus prejudgment interest. Liberty ﬁled objections to the
bankruptcy court’s proposed ﬁndings and conclusions.
    The district court overruled those objections and declared
its intent to enter judgment for USAG in the amount of
$1,889,278.26 ($1,944,354.26 minus $55,076.00 in legal research
costs that the district court concluded were not recoverable),
plus prejudgment interest. Liberty requested that the court
enter ﬁnal judgment under Federal Rule of Civil Procedure
54(b) on the part of USAG’s case seeking reimbursement of
past attorneys’ fees. The court agreed and entered ﬁnal judg-
ment for USAG in the amount of $2,171,951.18, plus prejudg-
ment interest. Liberty appealed from that judgment. Simulta-
neously, Liberty moved to approve a supersedeas bond and
stay execution on the judgment. The court granted the motion
and stayed execution on the judgment pending our mandate
in this appeal.
   Long after brieﬁng concluded, and just days before oral
argument, the parties notiﬁed this court that Liberty had paid
USAG $1,655,680.19 toward the judgment. According to the
parties, Liberty is without recourse to seek return of that pay-
ment. As the parties agree, that renders moot any remaining
dispute about the amounts that Cooper testiﬁed were reason-
able and necessary, as we cannot grant “any eﬀectual relief”
No. 21-2914                                                      7

in that respect. See Germeraad v. Powers, 826 F.3d 962, 967 (7th
Cir. 2016) (citations omitted). The live controversy before us
concerns the remaining $458,472.26 of the judgment.
                                II
    We ﬁrst address the parties’ arguments about a presump-
tion, under which the attorneys’ fees that a policyholder
claims after an insurer has breached its duty to defend the
policyholder are assumed to be reasonable and necessary.
Then, we consider whether Liberty has identiﬁed any special
circumstances that preclude the presumption’s application.
Finally, we review Liberty’s challenges to the trial courts’ fac-
tual ﬁndings.
    Liberty contends the bankruptcy and district courts im-
properly applied the law when they concluded that the fees
USAG incurred were reasonable and necessary. We review
the assessment of attorneys’ fees “under a highly deferential
abuse of discretion standard.” Vega v. Chi. Park Dist., 12 F.4th
696, 702 (7th Cir. 2021) (citation omitted). To the extent that
Liberty contends the bankruptcy and district courts applied
the wrong legal framework, though, our review is de novo.
Id. (citing Nichols v. Ill. Dep’t of Transp., 4 F.4th 437, 441 (7th
Cir. 2021)).
    In Taco Bell Corp. v. Continental Casualty Co., this court con-
sidered a scenario in which an insurer had breached its duty
to defend but later argued the policyholder had incurred ex-
cessive fees. 388 F.3d 1069, 1075–76 (7th Cir. 2004). Under
those circumstances, the court held, the policyholder “had an
incentive to minimize its legal expenses” such that there was
“no occasion for a painstaking judicial review.” Id. at 1076.
8                                                    No. 21-2914

    The Indiana Court of Appeals, faced with the same sce-
nario, adopted Taco Bell’s holding. Thomson Inc. v. Ins. Co. of
N. Am., 11 N.E.3d 982, 1023–24, 1031 (Ind. Ct. App. 2014). In
Thomson, the court ruled that when an insurer has breached
the duty to defend and the policyholder “has secured, super-
vised and paid for a defense without any expectation of pay-
ment, those costs are market tested and are presumed to be
reasonable and necessary.” Id. at 1023–24 (internal quotation
marks omitted). Along with Taco Bell, the court in Thomson
also relied on Metavante Corp. v. Emigrant Savings Bank, where
this court rejected the need to conduct a line-by-line analysis
of the attorneys’ fees claimed by a prevailing party—provided
that those fees were market tested. 619 F.3d 748, 772–76 (7th
Cir. 2010); Thomson, 11 N.E.3d at 1024.
    This case comes to us through diversity jurisdiction, so we
apply state substantive law and federal procedural law. Hahn
v. Walsh, 762 F.3d 617, 629 (7th Cir. 2014). Our task is to deter-
mine how the state’s highest court would rule. Smith v.
RecordQuest, LLC, 989 F.3d 513, 517 (7th Cir. 2021). If the
state’s highest court has not addressed the issue, we follow
the decisions of the intermediate appellate courts unless there
is a convincing reason to depart from them. Id. “[A] state ap-
pellate court’s decision can provide controlling guidance.” Id.
at 517–18 (citations omitted).
    Whether a particular rule is substantive or procedural can
be a close question. Romspen Mortg. Ltd. P’ship v. BGC Holdings
LLC – Arlington Place One, 20 F.4th 359, 369 (7th Cir. 2021). In
such “gray areas,” we consider whether “the scope of any fed-
eral rule or statute is broad enough either to cause a direct
collision with the state law or otherwise controls the issue be-
fore the court.” Id. (internal quotation marks omitted). No
No. 21-2914                                                      9

conﬂict is apparent here because Thomson adopted the rule in
Taco Bell. See Thomson, 11 N.E.3d at 1023–24.
    Burdens of proof in diversity cases are matters of substan-
tive law. Romspen, 20 F.4th at 369. The presumption at issue
here is akin to a burden of proof because it “determines the
outcome in cases where the evidence is in equipoise” and
therefore “advances the substantive policies of a state.” James
River Ins. Co. v. Kemper Cas. Ins. Co., 585 F.3d 382, 385 (7th Cir.
2009). This points to the presumption as more substantive
than procedural. So, state law controls, and we apply the Taco
Bell framework except where the Indiana Court of Appeals
explicitly modiﬁed it in Thomson.
     Liberty oﬀers two reasons why it believes the Thomson pre-
sumption does not apply. In Liberty’s view, USAG is not en-
titled to the presumption because it failed to adequately su-
pervise the outside counsel it engaged, and it did not pay in
full the fees it incurred. We address each of these arguments,
reviewing legal questions de novo while bearing in mind that
our review of the ultimate fee determinations is for abuse of
discretion. Vega, 12 F.4th at 702; see also Metavante, 619 F.3d at
775 (stating that a district court’s assessment of whether fees
are reasonable and necessary is reviewed for abuse of discre-
tion). When Liberty challenges portions of fees that were ad-
judicated solely based on factual ﬁndings, our review is for
clear error. See, e.g., Wilborn v. Ealey, 881 F.3d 998, 1004, 1006
(7th Cir. 2018) (ﬁndings of fact are reviewed for clear error);
Anderson v. City of Bessemer City, 470 U.S. 564, 573 (1985) (ﬁnd-
ings of fact are to be overturned only when the reviewing
court “is left with the deﬁnite and ﬁrm conviction that a mis-
take has been committed”).
10                                                 No. 21-2914

                               A
   According to Liberty, USAG did not meaningfully super-
vise outside counsel because Schneider never requested
write-oﬀs from outside counsel and rarely followed up with
them to ask questions about invoices they submitted. USAG
counters that neither Thomson nor any decision of this court
has required requests for write-oﬀs or particular questions
about bills as requirements for supervision.
    Ultimately, Liberty cannot cite precedent to support its po-
sition. Liberty relies on Metavante, where this court observed
that a “prevailing party’s general counsel, or similar corporate
oﬃcer, has a duty, imposed by various provisions of federal
and state law, to scrutinize the bills before paying them.” 619
F.3d at 775 n.22. But that duty does not require a party to ei-
ther request write-oﬀs from outside attorneys or ask them
questions about invoices.
    We hold that a litigant may supervise its outside counsel
without refusing to pay portions of legal bills or engaging in
hairsplitting about those bills. Nothing in the case law pro-
vides otherwise. Liberty’s challenge to the courts’ determina-
tions that USAG adequately supervised its outside counsel
therefore targets factual ﬁndings. Those ﬁndings are due sig-
niﬁcant deference. See Vega, 12 F.4th at 702; Wilborn, 881 F.3d
at 1004, 1006. We analyze these aspects of the appeal in Sec-
tion III.
                               B
   Liberty argues next that the Thomson presumption does
not apply because USAG failed to pay about 30 percent of the
fees it incurred. USAG responds that Liberty seeks to invent
conditions on the presumption of reasonableness that no
No. 21-2914                                                  11

court has ever imposed. USAG further contends that its pay-
ment of nearly 70 percent of the fees is suﬃcient evidence that
all the fees are reasonable.
    Important to this analysis are Taco Bell and Metavante,
which the Indiana Court of Appeals adopted in Thomson. 11
N.E.3d at 1023–24, 1031. The presumption applies when there
is “uncertainty about reimbursement” of legal expenses such
that there are “market incentives to economize.” Taco Bell, 388
F.3d at 1075–76; see also Metavante, 619 F.3d at 774–75. Neither
case mentions a requirement that the party seeking fees must
have paid its fees in full. So, under the Seventh Circuit case
law that the Indiana Court of Appeals adopted in Thomson,
payment in full is not a requirement for the presumption of
reasonableness to apply.
    We take this opportunity to clarify an aspect of the rule in
Taco Bell. The market-tested presumption applies when,
following an insurer’s breach of the duty to defend, a policy-
holder has supervised and incurred legal fees without any ex-
pectation of payment by the insurer. See Taco Bell, 388 F.3d at
1075–77. Payment by the policyholder is not necessarily re-
quired. This is because, as here, the policyholder may lack suf-
ﬁcient funds to pay fees that are reasonable and necessary to
its defense. But if the policyholder does pay a signiﬁcant
percentage of its fees—particularly when it has diﬃculty cov-
ering its day-to-day operating expenses—that is strong
evidence of market incentives to economize, rendering the
presumption applicable.
    It is undisputed that USAG paid nearly 70 percent of the
attorneys’ fees for which it now seeks reimbursement. That is
compelling evidence of a market test. This element of the
Thomson presumption supports, rather than contradicts, the
12                                                   No. 21-2914

bankruptcy and district courts’ conclusions that the fees
USAG claimed are presumed to be reasonable and necessary.
                               III
    Beyond the critiques relating to USAG’s supervision of
outside counsel and its payment of fees, Liberty also contends
that USAG is not entitled to the presumption because of ad-
ditional “special circumstances.” Although that phrase origi-
nates in Metavante, Liberty oﬀers it here without context.
There, we said that “special circumstances may arise in which
a district court will have reason to doubt whether market con-
siderations alone were suﬃcient to ensure reasonable fees. In
those instances, the district court, as a matter of its sound dis-
cretion, can require additional information of the parties.”
Metavante, 619 F.3d at 775.
    Key here, though, is the phrase “as a matter of its sound
discretion.” With narrow exceptions, a trial court need not re-
quire further information from the parties when the court is
satisﬁed that market considerations suﬃce to ensure reason-
able fees. See id. Still, we discuss three special circumstances
that Liberty believes render the Thomson presumption inap-
plicable.
                                A
    Liberty notes ﬁrst that Schneider, USAG’s Chief Legal Of-
ﬁcer, was an attorney with Miller Johnson, one of the law
ﬁrms USAG engaged as outside counsel. Because of this con-
ﬂict, Liberty contends, Schneider “could not provide disinter-
ested and meaningful oversight of Miller Johnson’s bills on
behalf of USAG.” Liberty then asserts that “[j]ust as they did
not scrutinize the fees of the other ﬁrms representing USAG,”
No. 21-2914                                                  13

the nonproﬁt’s executives “did not scrutinize Miller Johnson’s
fees despite Mr. Schneider’s patent conﬂict of interest.”
    Despite Liberty’s contentions, the governing case law does
not hold or suggest that the presumption is inapplicable when
there is an apparent conﬂict of interest. To the contrary, an
insurer’s objections to a policyholder’s selection of defense
counsel lose force when the insurer disclaims its duty to de-
fend and turns out to be wrong on the law. “Had [Liberty]
mistrusted [USAG’s] incentive … to economize on its legal
costs,” Liberty could have reserved its defense that it had no
duty to defend and assumed USAG’s defense. Taco Bell, 388
F.3d at 1076. In that scenario, Liberty could have “selected and
supervised and paid for the lawyers defending [USAG],” and
Liberty “could later have sought reimbursement if it proved
that it had indeed had no duty to defend.” Id. Liberty chose
not to do so, instead electing to gamble by not defending
USAG. See id. With the beneﬁt of hindsight, Liberty now iden-
tiﬁes a purported conﬂict of interest. The case law does not
reward such a choice, and Liberty cannot use the purported
conﬂict to render the presumption inapplicable.
    Even more, Liberty undermines its own argument about
the supposed conﬂict of interest by equating USAG’s review
of Miller Johnson’s invoices with its review of the other ﬁrms’
bills. Testimony at the bench trial was suﬃcient to support the
bankruptcy court’s ﬁnding that USAG’s internal review of le-
gal bills, which involved at least two executives other than
Schneider, was adequate. USAG’s CEO reviewed the legal
bills that outside counsel submitted to ensure they were ap-
propriate and matched the organization’s needs. The Chief Fi-
nancial Oﬃcer also reviewed the bills and approved them for
payment. Because Liberty claims USAG’s review of Miller
14                                                   No. 21-2914

Johnson’s bills was equivalent to its review of other legal bills,
Liberty eﬀectively concedes that any conﬂict of interest did
not materially impact USAG’s review of the bills that Miller
Johnson submitted.
    In any event, the bankruptcy court was aware of Schnei-
der’s dual role. The court concluded USAG’s practices were
nevertheless suﬃcient to support the Thomson presumption’s
application, as “[i]nvoices were reviewed at three diﬀerent
levels which included review by the Chief Financial Oﬃcer
responsible for overseeing and authorizing payment of
USAG’s expenses.” As a fact-speciﬁc ruling concerning attor-
neys’ fees, that determination is due signiﬁcant deference. See
Vega, 12 F.4th at 702; Pickett v. Sheridan Health Care Ctr., 664
F.3d 632, 639, 646 (7th Cir. 2011). There is not an adequate ba-
sis to disturb it.
                                B
    Liberty also contends that the bankruptcy court violated
Metavante by applying the presumption despite a special cir-
cumstance involving Gibson Dunn & Crutcher LLP, another
law ﬁrm that USAG hired. Schneider testiﬁed that during
Gibson Dunn’s representation of USAG, the two organiza-
tions agreed Gibson Dunn would seek further reimbursement
only from USAG’s insurers, not USAG. According to Liberty,
this means any fees that USAG incurred through Gibson
Dunn’s representation from then on were not market tested.
   Liberty is correct that after this arrangement was made,
USAG was no longer entitled to the presumption for fees that
Gibson Dunn later charged. From the point at which the deal
was reached, USAG knew it would not be responsible for
No. 21-2914                                                    15

paying Gibson Dunn’s fees, so USAG lacked an adequate in-
centive to keep those bills low.
    But that conclusion does not fully resolve the issue of the
reasonableness of the fees that Gibson Dunn charged. Cooper
testiﬁed that $379,541 of those fees was reasonable and neces-
sary. Moreover, the payment Liberty made to USAG in May
2022 includes the amount Cooper found reasonable for Gib-
son Dunn’s work. Given that Liberty has eﬀectively conceded
that $379,541 was reasonable and necessary, whether that
amount is entitled to the presumption does not present a live
controversy. Only $73,556 of Gibson Dunn’s fees is in dis-
pute. 1
   The bankruptcy court received testimonial and documen-
tary evidence about those fees. Based on the record, that court
concluded the entire amount USAG claimed for Gibson
Dunn’s work was reasonable and necessary. That is a factual
ﬁnding, and Liberty has a “high hurdle” in seeking to over-
turn it. Wilborn, 881 F.3d at 1006. We address this question in
greater detail in Section IV.
                                C
    Liberty’s ﬁnal challenge to applying the Thomson pre-
sumption involves grants USAG received from the National
Gymnastics Foundation (“NGF”), another nonproﬁt organi-
zation. Schneider testiﬁed that USAG received $1.6 million in
grant money from NGF in May 2020, and as of July 2020
USAG expected to receive another payment of around
$800,000 to $900,000. The bankruptcy court later found USAG

   1$453,097, the total amount USAG sought for Gibson Dunn’s work,
minus $379,541.
16                                                   No. 21-2914

had accepted at least $7.73 million in grants from NGF. In Lib-
erty’s view, this “pipeline of third-party support removed the
incentive for USAG to drive down costs, the basis for the pre-
sumption in Thomson.”
    According to USAG, most of the grant funds were used to
pay legal bills other than those for which USAG claimed re-
imbursement in this litigation. The grant funds merely helped
USAG to stay aﬂoat and keep providers from halting their ser-
vices. 2 NGF’s grants did not create a surplus that removed
USAG’s motivation to keep legal expenses down. Though
Liberty disagrees, it does not cite evidence to contest this fact.
Again, under Thomson the question is whether the policy-
holder has market incentives to economize. 11 N.E.3d at 1023–
24, 1031 (citing Taco Bell, 388 F.3d at 1075–77). The bankruptcy
court found that the grants left USAG’s market-based incen-
tives intact. In that court’s view, “USAG’s acceptance of funds
from third parties for the very purpose of paying fees when it
had insuﬃcient resources itself” was not a special circum-
stance that negated the presumption.
    We agree with the bankruptcy court. There is no dispute
that USAG was bankrupt and lacked money to spare. Liberty
has not identiﬁed evidence to challenge the factual ﬁnding
that USAG used the grant money to stay aﬂoat by paying
some bills it had incurred. The record does not support, much
less require, any ﬁnding that USAG stockpiled vast sums of
money for legal expenses, which would have removed any
need to economize. So, the NGF grants do not preclude appli-
cation of the Thomson presumption.

     2   Oral Arg. at 33:30–35:30.
No. 21-2914                                                   17

                               IV
    Next, we turn to Liberty’s arguments for why the bank-
ruptcy and district courts clearly erred in ﬁnding the Thomson
presumption was not rebutted. When the presumption ap-
plies, the insurer has the burden of proof to show the attor-
neys’ fees for which the policyholder seeks reimbursement
were unreasonable or unnecessary. See Thomson, 11 N.E.3d at
1031–32. Courts need not conduct a detailed, line-by-line re-
view of legal invoices. Metavante, 619 F.3d at 773–76; Taco Bell,
388 F.3d at 1076.
   We discuss the deference we owe to the bankruptcy
court’s ﬁndings. Then, we analyze the court’s treatment of the
parties’ opposing experts. Finally, we summarize Liberty’s re-
maining challenges to the reasonableness and necessity of the
work that each law ﬁrm performed.
                               A
    The bankruptcy court’s determinations that the fees
USAG sought for each law ﬁrm’s work were reasonable and
necessary rest primarily on factual ﬁndings. Our review of the
factual ﬁndings is for clear error. Wilborn, 881 F.3d at 1004,
1006. “We will overturn them only if the entire record leaves
us with the deﬁnite and ﬁrm conviction that a mistake has
been committed, giving due deference to the [trial] court’s
better opportunity to see and hear the witnesses.” Id. at 1006
(internal quotation marks omitted). Because trial courts are
better equipped to adjudicate factual matters and ﬁne details
than we are, that rationale applies with special force in litiga-
tion about attorneys’ fees. Vega, 12 F.4th at 702.
    After considering whether the Thomson presumption ap-
plied, the bankruptcy court scrutinized the disputed amounts
18                                                           No. 21-2914

as to each law ﬁrm’s work on behalf of USAG. The court’s as-
sessment of whether the fees at issue were reasonable and
necessary was heavily informed by its evaluation of the par-
ties’ expert witnesses—Schoon for USAG, and Cooper for Lib-
erty. We turn to that issue now.
                                     B
    As the bankruptcy court observed, Schoon and Cooper
took “vastly diﬀerent approaches” in determining whether
the fees USAG incurred were reasonable and necessary. Both
experts agreed Indiana Rule of Professional Conduct 1.5
supplied the relevant standard. 3 Schoon used a “total value”
approach that accounted for various factors, including the na-
ture and complexity of the legal work that outside counsel
performed. Cooper, on the other hand, employed a “task-
based” approach that focused on the time and labor required
for each task and the fee that is customarily charged for it.
   The court found Schoon’s “total value” approach to be the
appropriate one under Indiana law. We agree. In Thomson, the
Indiana Court of Appeals resolved a highly similar conﬂict
between two parties with diﬀering views about how to meas-
ure reasonable and necessary fees. See 11 N.E.3d at 1024–26.
According to the state appeals court, the approach for which
the insured’s expert advocated was “more sound and more
consistent with Indiana law.” Id. at 1025. “Rule 1.5 mandates

     3 That rule gives eight factors for determining whether fees are rea-
sonable. Some of those factors include the “time and labor required, the
novelty and difficulty of the questions involved, and the skill requisite to
perform the legal service properly”; the “fee customarily charged in the
locality for similar legal services”; the “amount involved and the results
obtained”; and the “experience, reputation, and ability of the lawyer or
lawyers performing the services.” IND. R. PROF. CONDUCT 1.5.
No. 21-2914                                                    19

a multi-factor total value approach. In addition to time spent,
the [c]ourt is to consider novelty, diﬃculty, skill, experience,
reputation, and ability.” Id. A myopic focus on timekeeping
and billing practices, Thomson explained, conﬂicts with Rule
1.5. Id.
   This resolves the issue of the experts’ competing method-
ologies in USAG’s favor. Schoon applied the total-value ap-
proach required under Rule 1.5 and Thomson, while Cooper
applied an approach erroneous under Indiana law. So, the
bankruptcy and district courts properly applied Indiana law
in crediting Schoon’s analytical framework rather than
Cooper’s.
    The bankruptcy court also found Schoon more credible
than Cooper, as Cooper did not base his conclusions on em-
pirical studies or data. That credibility determination, which
also encompasses a witness’s demeanor, is a factual ﬁnding
properly within a trial court’s discretion. See BRC Rubber &
Plastics, Inc. v. Cont’l Carbon Co., 981 F.3d 618, 622 (7th Cir.
2020); Madden v. U. S. Dep’t of Veterans Aﬀs., 873 F.3d 971, 973
(7th Cir. 2017). We will not disturb a court’s ﬁnding that one
expert witness in a bench trial is more credible than another
unless the ﬁnding is clearly erroneous. Madden, 873 F.3d at
973–74. USAG is correct that Liberty has not identiﬁed a clear
error. In a case of “dueling experts,” it is “left to the trier of
fact, not the reviewing court, to decide how to weigh the com-
peting expert testimony.” Id. (citation omitted). We lack an ad-
equate basis on which to override the bankruptcy court’s de-
termination that Schoon was more credible than Cooper.
20                                                  No. 21-2914

                               C
    Because the total-value approach for which Schoon advo-
cated applies here, it is unnecessary to scrutinize individual
line items in the manner Liberty requests. See Metavante, 619
F.3d at 774–76; Taco Bell, 388 F.3d at 1075–77. But we will still
analyze several of Liberty’s objections that the bankruptcy
and district courts clearly erred in ﬁnding that the insurer
failed to rebut the presumption of reasonableness. The objec-
tions are considered in descending order of the quantities of
fees at issue.
     1) Jenner & Block LLP
    USAG retained Jenner & Block LLP as its bankruptcy
counsel, and that ﬁrm also represented USAG in connection
with an investigation conducted by the Indiana Attorney Gen-
eral. For Jenner & Block’s work, USAG was awarded
$213,234.71, as the bankruptcy court concluded that amount
of the ﬁrm’s fees were reasonable and necessary. Liberty ob-
jects to that conclusion.
    Cooper’s ﬁrst concern with Jenner & Block’s fees was that
its invoices contained excessive redactions. The bankruptcy
court found that objection was misplaced because “the redac-
tions are almost entirely for costs USAG is not seeking from
[Liberty].” On appeal, Liberty fails to explain why the bank-
ruptcy court’s ﬁnding is incorrect, much less clearly errone-
ous.
   Cooper also objected to work Jenner & Block performed as
unnecessary. Jenner & Block worked on clawback requests,
seeking to recover for USAG privileged documents that had
inadvertently been produced in the Chapter 11 bankruptcy
proceeding. Cooper claimed this work was both unnecessary
No. 21-2914                                                   21

and duplicative of eﬀorts made by another law ﬁrm, Barnes
& Thornburg LLP. As the bankruptcy court noted, though, the
representation of USAG in the Chapter 11 bankruptcy was
novel and complex; the investigations involved “millions of
documents.” The court was therefore well within its discre-
tion to reject Liberty’s arguments that it was inherently un-
necessary and duplicative for multiple ﬁrms to conduct claw-
back reviews and seek the return or destruction of privileged
documents “to avoid a potentially catastrophic privilege
waiver.” Liberty has failed to identify a clear error in this re-
spect.
   2) Barnes & Thornburg LLP
   USAG hired Barnes & Thornburg to work on the Indiana
Attorney General investigation, among other matters. The
bankruptcy court awarded USAG the full amount of fees re-
quested for Barnes & Thornburg’s work—$789,049.76. Liberty
objects to $82,472.76 of those fees. Along with making criti-
cisms concerning block billing, Liberty also claims Barnes &
Thornburg performed tasks that were duplicative of those
done by another law ﬁrm.
    Under the total-value approach required by Indiana law,
the bankruptcy court was within its discretion to overrule Lib-
erty’s objection to Barnes & Thornburg’s fees. As that court
noted, it was reasonable and necessary for that ﬁrm to famil-
iarize itself with the essential aspects of the allegations made
against USAG and the supporting evidence for those allega-
tions. Indeed, had Barnes & Thornburg failed to do so, it could
have potentially risked malpractice.
22                                                 No. 21-2914

     3) Gibson, Dunn & Crutcher LLP
    USAG engaged Gibson Dunn to prepare USAG’s then-
CEO for Congressional testimony. As noted earlier, Liberty
disputes $73,556.01 of the amount USAG was awarded for
Gibson Dunn’s work. Liberty argues too many lawyers par-
ticipated in the preparation sessions.
   The bankruptcy court rejected that argument. In that
court’s view, Schoon testiﬁed credibly about the intensive na-
ture of Congressional testimony and the need for many law-
yers to prepare a witness. Given the record evidence and that
credibility determination, we have no basis to disturb the
court’s ﬁnding that all of Gibson Dunn’s fees were reasonable
and necessary. See Madden, 873 F.3d at 973–74.
     4) Faegre Baker Daniels LLP
    Faegre Baker Daniels LLP served as USAG’s national co-
ordinating counsel on Nassar-related, mass-tort litigation be-
fore ultimately withdrawing because of a conﬂict of interest.
Liberty objects to Faegre’s bills totaling $48,199.50. Several
lawyers at Faegre assisted with preparation for Congressional
testimony, and USAG sought reimbursement for work per-
formed before the conﬂict of interest forced it to withdraw.
Because of the conﬂict, Liberty submits those fees should not
be reimbursed.
   Considering Schoon’s expert testimony, the bankruptcy
court was within its discretion to overrule Liberty’s objection.
Likewise, the court was within its discretion to ﬁnd reasona-
ble and necessary the fees attributable to work that Faegre
performed before its withdrawal. Without the beneﬁt of the
hindsight Liberty employs, neither USAG nor Faegre knew
No. 21-2914                                                23

Faegre would later have to withdraw at the time the work was
performed.
   5) Miller Johnson
   Miller Johnson, a Michigan-based law ﬁrm, defended
USAG in the athlete lawsuits ﬁled in that state. USAG
eventually asked Miller Johnson to take over as its national
coordinating counsel for all Nassar-related matters. Liberty
objects to $35,362.29 of Miller Johnson’s fees as purportedly
unnecessary and duplicative of other ﬁrms’ work.
    The bankruptcy court, relying on Schoon’s testimony, re-
jected Liberty’s argument. Most relevant, in the court’s view,
was Miller Johnson’s role as national coordinating counsel:
“USAG has shown that this sort of work is reasonable and
necessary, in part based on the testimony of someone who has
actually served in that role.” Given that Cooper had no expe-
rience comparable to serving as a company’s national coordi-
nating counsel in this type of nationwide litigation, Schoon’s
testimony went unrebutted. Liberty has not identiﬁed a
clearly erroneous factual ﬁnding in the bankruptcy court’s
analysis of the fees USAG claimed for Miller Johnson’s work.
   6) Hilder & Associates, P.C.
   Hilder & Associates is a criminal defense ﬁrm that repre-
sented USAG in one of the “revocation lawsuits,” which were
brought by coaches and owners of gyms associated with
USAG to recover ﬁnancial losses allegedly stemming from its
handling of Nassar’s crimes. Liberty objects to $5,646.99 of
fees incurred, contending Hilder spent too many hours on a
successful motion to compel arbitration.
    The bankruptcy court was not persuaded. It cited Schoon’s
testimony that “winning the motion undoubtedly saved
24                                                            No. 21-2914

USAG a lot of time and money as a loss on that motion would
have led to adjudication in a very unfriendly forum.” That tes-
timony was uncontradicted. Once again, Liberty fails to iden-
tify a clearly erroneous factual ﬁnding.
                             *       *        *
    To sum up, the bankruptcy and district courts did not
clearly err in concluding Liberty did not rebut the presump-
tion that the fees USAG incurred were reasonable and neces-
sary. 4
                                     V
    In adjudicating this fee dispute, the bankruptcy court con-
cluded that the Thomson presumption applied despite Lib-
erty’s challenges to the nature of USAG’s supervision of out-
side counsel and the proportion of fees paid by USAG. That
ruling adhered to both Thomson and the Seventh Circuit au-
thority it adopted. The particular form of supervision for
which Liberty advocates is not a prerequisite for the presump-
tion that attorneys’ fees are reasonable and necessary, and

     4In its brief, USAG requests sanctions under Federal Rule of Appel-
late Procedure 38. USAG argues that Liberty used this appeal to delay
payment without any basis in controlling law, and that on appeal Liberty
has misrepresented legal principles and omitted crucial facts.
    Generally, if a party requests monetary sanctions only in its brief, ra-
ther than by separate motion, we do not consider the request. FED. R. APP.
P. 38 advisory committee’s notes to 1994 amendments (“A statement in-
serted in a party’s brief that the party moves for sanctions is not suﬃcient
notice.”); Waldon v. Wal-Mart Stores, Inc., Store No. 1655, 943 F.3d 818, 824
(7th Cir. 2019); Matter of Lisse, 921 F.3d 629, 645 (7th Cir. 2019). USAG did
not ﬁle a separate motion for sanctions, so we do not consider its request.
Although upon proper notice we may award Rule 38 sanctions on our own
motion, we decline to do so here.
No. 21-2914                                                   25

neither is the policyholder’s full payment of all the fees it in-
curred.
    The special circumstances that Liberty identiﬁes also do
not categorically preclude the presumption’s application. Ra-
ther, the bankruptcy and district courts were within their dis-
cretion to conclude it applied, subject to limited exceptions.
Finally, Liberty failed to rebut the presumption by showing
any portion of the fees was not reasonable and necessary.
   For all these reasons, we AFFIRM the judgment.