Court rules judge was right to award nothing after $1M fee request
The Legal Intelligencer
A federal appeals court has upheld the denial of a $1 million fee request by a Scranton attorney in an auto insurance case that produced a verdict almost a 10th of the requested legal compensation.
In its denial, the U.S. Court of Appeals for the 3rd Circuit, joining other circuit courts, also held that it is within a judge’s discretion to award no attorney fees at all, especially if the fee request is deemed “outrageously excessive.”
The ruling stems from plaintiff Bernie Clemens’ bad-faith case against New York Central Mutual Fire Insurance over its handling of his auto accident case. The claims went before a jury and ended with a $100,000 punitive damages award. The defendants had settled Mr. Clemens’ uninsured motorist claim for $25,000.
The case was handled by Mike Pisanchyn of the Pisanchyn Law Firm in Scranton. After the case was resolved, Mr. Pisanchyn asked the court to award the sevenfigure fee amount. U.S. District Judge Malachy Mannion of the Middle District of Pennsylvania was taken aback by the sheer size of the number — so much so that he awarded Mr. Pisanchyn and his firm nothing and referred Mr. Pisanchyn for disciplinary review.
Reached for comment, Mr. Pisanchyn disagreed that his firm’s fee request was excessive.
“In essence, despite us obtaining a $100,000 award on a zero written offer case while we represented the plaintiff over eight to nine years of litigation, the court has determined the plaintiff’s attorney should be awarded nothing,” he said in an email.
“However, we do take comfort in the fact that our clients have been compensated and are extremely happy with our representation of them through this almost decade of litigation.”
James Haggerty of Haggerty, Goldberg, Schleifer & Kupersmith in Philadelphia represented Mr. Clemens on appeal.
“The decision is important in that it addresses an issue regarding the award of counsel fees which had not heretofore been considered by the 3rd Circuit,” Mr. Haggerty said, “The court issued a well-reasoned and wellwritten opinion, finding that the district court did not abuse its discretion in refusing to award counsel fees to trial counsel following his successful recovery of bad faith damages from the defendant insurer.”
Judge Mannion’s 100-page opinion went line-by-line through the request, slashing billed fees he deemed vague, duplicative and excessive. Judge Mannion also took issue with how the firm recreated its timesheets, saying that, while recreating timesheets is allowable if the attorneys did not make them contemporaneously, a number of the entries appeared to be based on guesswork.
The 3rd Circuit agreed with Judge Mannion’s handling of the request, which found that Mr. Pisanchyn and his firm were entitled to recover only 13 percent of the fees they asked for.
“In light of that substantial reduction, the district court deemed Clemens’ request ‘outrageously excessive’ and exercised its discretion to award no fee whatsoever,” 3rd Circuit Judge Joseph Greenaway wrote for the panel, which also included Judges Luis Felipe Restrepo and Stephanos Bibas.
“Although it was unusual, we cannot say that this decision was an abuse of discretion,” Judge Greenaway added. “Review of the record and the district court’s comprehensive opinion makes clear that denial of a fee award was entirely appropriate under the circumstances of this case. Counsel’s success at trial notwithstanding, the fee petition was severely deficient in numerous ways.”
Judge Mannion had said one of the most “egregious” requests included billing 562 hours for trial preparation, with the plaintiffs attorneys entering between 20 and 22 hours per day on some days. The 3rd Circuit examined that figure in detail.
“All the more troubling is the fact that counsel’s (supposedly) hard work did not appear to pay off at trial. As the district court explained, counsel had ‘to be repeatedly admonished for not being prepared because he was obviously unfamiliar with the Federal Rules of Evidence, the Federal Rules of Civil Procedure and the rulings of th[e] court,’” Judge Greenaway said.