United States District Court,

S.D. Indiana,

Indianapolis Division.

Russell SPAZIANI and Kathleen Spaziani, Plaintiffs,

v.

FEDEX CORPORATE SERVICES, INC., D.W. Nicholson Corporation, and SSOE Group and/or SSOE, Inc., Defendants.

 

Cause No. 1:12–cv–810–WTL–MJD.

Signed Jan. 7, 2015.

 

Bradford James Smith, Nathan D. Foushee, Ken Nunn Law Office, Bloomington, IN, for Plaintiffs.

 

Houston Hum, John M. Choplin, II, Matthew W. Melton, Norris Choplin & Schroeder LLP, Indianapolis, IN, for Defendants.

 

ENTRY ON DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT

WILLIAM T. LAWRENCE, District Judge.

*1 This cause is before the Court on FedEx Corporate Services, Inc., and D.W. Nicholson Corporation’s motions for summary judgment (Dkt. Nos. 113 and 116).FN1 The motions are fully briefed, and the Court, being duly advised, GRANTS the motions for the following reasons.FN2

 

FN1. Defendant SSOE Group and/or SSOE, Inc., (collectively, “SSOE”) also filed a motion for summary judgment (Dkt. No. 108); however, the Court has been advised that the Plaintiffs and SSOE have reached a settlement. See Dkt. No. 157 at 2. Accordingly, the Court will not rule on SSOE’s motion for summary judgment at this time.

 

FN2. In light of this Entry, FedEx Corporate Services, Inc., and D.W. Nicholson Corporation’s Joint Motion to Exclude/Limit the Testimony of Frank Burg (Dkt. No. 161) and Joint Motion to Exclude Testimony of John Morse (Dkt. No. 163) are DENIED AS MOOT.

 

I. STANDARD

Federal Rule of Civil Procedure 56(a) provides that summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” In ruling on a motion for summary judgment, the admissible evidence presented by the non-moving party must be believed and all reasonable inferences must be drawn in the non-movant’s favor. Hemsworth v. Quotesmith.com, Inc., 476 F.3d 487, 490 (7th Cir.2007); Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir.2009) (“We view the record in the light most favorable to the nonmoving party and draw all reasonable inferences in that party’s favor.”). However, “[a] party who bears the burden of proof on a particular issue may not rest on its pleadings, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial.” Id. Finally, the non-moving party bears the burden of specifically identifying the relevant evidence of record, and “the court is not required to scour the record in search of evidence to defeat a motion for summary judgment.” Ritchie v. Glidden Co., 242 F.3d 713, 723 (7th Cir.2001).

 

II. BACKGROUND

The present lawsuit arises out of an incident that occurred at FedEx Corporate Services, Inc., (“FedEx”) facility at the Indianapolis Airport. On May 25, 2011, Russell Spaziani, an employee of Adaptive Associates, Inc., (“AOA”), was injured when he fell from a ladder at FedEx while performing routine maintenance on a piece of equipment. Thereafter, he and his wife, Kathleen Spaziani, sued FedEx, SSOE, which designed the ladder, and D.W. Nicholson Corporation (“DWN”), which installed the ladder. The facts that follow are those taken in the light most favorable to the Plaintiffs.

 

In 2006, FedEx contracted with SSOE and DWN to expand the sorting system at its Indianapolis Airport facility. Prior to 2006, the Indianapolis Airport facility had only six package handling lines. FedEx’s goal was to be able to process 99,000 packages per hour, and the project became known as the “99K expansion.” Specifically, DWN was contracted to “complete the fabrication and installation of the Equipment,” and SSOE was contracted to provide “the engineering services for the design and installation of the Equipment.” Part of the expansion was to create a “non-con” conveyor (“Line 7”) that would be used to transport large or awkwardly-shaped items like golf clubs.

 

Around 2009, before the 99K expansion was complete, FedEx requested that DWN construct a Mass Dimension Scanning System (“MDSS”) platform and ladder for Line 7. This project was not contained in the original contract. With regard to the ladder, FedEx instructed DWN to “duplicate existing on-site installation.” Following these instructions, DWN referred to the “typical ladder detail” it had used throughout the 99K expansion. SSOE was not contacted regarding the ladder design for Line 7.

 

*2 FedEx requested a ladder, despite the fact that its internal policies provided that “other catwalks or platforms” or “stairs” were the preferred means to access elevated platforms. Moreover, instead of using the “typical ladder detail,” DWN modified the ladder design. It used 2″ x 2″ x12″ angle iron instead of 2″ x 2″ x 1/4 ” angle iron, the ladder had a 25–inch opening instead of a 24–inch opening, and DWN “flared” the top end of the ladder, widening the side rails of the ladder above the height of the platform.

 

On May 25, 2010, Mr. Spaziani came to the FedEx facility to service the MDSS system; his employer, AOA, contracted with FedEx to provide such maintenance services. As he descended the ladder, his left hand slid off the angle-iron side rail because he could not properly grip the rail. He fell off the ladder to the floor below, sustaining serious injuries.

 

The Plaintiffs filed suit in Marion County Circuit Court on February 23, 2012; the case was removed to this Court on June 12, 2012. In the Plaintiffs’ Third Amended Complaint, Mr. Spaziani asserts one count of negligence against FedEx (Count One), one count of negligence against DWN (Count Two), and one count of negligence against SSOE (Count Three). Mrs. Spaziani asserts one count of loss of consortium against each of the Defendants (Count Four). FedEx and DWN move for summary judgment on all claims against them in the Plaintiffs’ Third Amended Complaint. The Court now turns to their respective motions.

 

III. FEDEX’S MOTION FOR SUMMARY JUDGMENT

The Plaintiffs’ Third Amended Complaint alleges that FedEx was negligent in allowing a dangerous condition—the ladder—to exist at its facility. In Indiana,

 

the owner of property has no duty to furnish the employees of an independent contractor a safe place to work in the broad sense as the phrase is applied to an employer. However, the owner is under a duty to keep the property in a reasonably safe condition for business invitees, including employees of independent contractors.

 

Merrill v. Knauf Fiber Glass GmbH, 771 N.E.2d 1258, 1264–65 (Ind.Ct.App.2002) (internal citation omitted). Indiana has adopted the Restatement (Second) of Torts § 343 (1965) to “define” this duty:

A possessor of land is subject to liability for physical harm caused to his invitees by a condition on the land if, but only if, he

 

(a) knows or by the exercise of reasonable care would discover the condition, and should realize that it involves an unreasonable risk of harm to such invitees, and

 

(b) should expect that they will not discover or realize the danger, or will fail to protect themselves against it, and

 

(c) fails to exercise reasonable care to protect them against the danger.

 

See Pfenning v. Lineman, 947 N.E.2d 392, 406 (Ind.2011). Based on this, FedEx argues that it is entitled to summary judgment because it did not know that the ladder presented an unreasonable danger to Mr. Spaziani.

 

*3 In their Response, the Plaintiffs make several arguments in opposition. First, they argue that FedEx was negligent in choosing to use a ladder instead of stairs as the means to access the MSDS equipment. In support, they rely on Section 14515 of FedEx’s design guidelines, entitled “Structural and Miscellaneous Steel/Design.” See Dkt. No. 155–1. Subsection 1.10, “Maintenance Platforms,” provides the following:

 

1. To be Accessible … by (in order of preference):

 

a. Other catwalks or platforms.

 

b. Stairs.

 

c. Ladders.

 

Dkt. No. 155–1. Therefore, the Plaintiffs argue the following:

Fed Ex’s internal construction guidelines establish certain construction preferences. Among those is the preference—presumably for safety reasons—that stairways or catwalks be utilized instead of ladders whenever personnel are required to access elevated platforms. Nevertheless, Fed Ex decided against using a stairway or catwalk to access the MSDS platform and instead opted for a ladder.

 

Dkt. No. 148 at 7. This is simply not sufficient to support a finding that FedEx was negligent in choosing to use a ladder. While it may have been preferable to use stairs, FedEx’s internal guidelines specifically allow ladders to be used. Moreover, as FedEx notes, “[t]he law has long recognized that failure to follow a party’s precautionary steps or procedures is not necessarily failure to exercise ordinary care.” Wal–Mart Stores, Inc. v. Wright, 774 N.E.2d 891, 894 (Ind.2002) (citing 57A Am.Jur.2d Negligence § 187 at 239 (1998)). Other than the choice not to use preferred methods of access, the Plaintiffs have pointed to no evidence that the use of a ladder was negligent.

 

The same is true with the Plaintiffs’ argument that FedEx should have chosen an engineer to design the ladder and/or had the ladder reviewed after-the-fact to evaluate its safety. First, DWN produced a ladder that was based on approved designs from SSOE, an engineering firm. Therefore, it is inaccurate for the Plaintiffs to allege that an engineer did not design the ladder. See, e.g., Dkt. No. 156–1 (DWN construction manager noting that the ladder in question was built in accordance with SSOE-approved ladder designs). More troubling, however, is the fact that the Plaintiffs have submitted no evidence illustrating that had an engineering firm evaluated the design or had the ladder itself been evaluated for safety, FedEx would have been told that the ladder was unreasonably dangerous.

 

Finally, the Court agrees with FedEx that the Plaintiffs’ argument that FedEx was negligent in allowing DWN to “design” the ladder is wholly undeveloped. As FedEx notes,

 

[i]n Indiana, the long-standing general rule has been that a principal is not liable for the negligence of an independent contractor. However, five exceptions have been recognized for more than half a century. The exceptions are: (1) where the contract requires the performance of intrinsically dangerous work; (2) where the principal is by law or contract charged with performing the specific duty; (3) where the act will create a nuisance; (4) where the act to be performed will probably cause injury to others unless due precaution is taken; and (5) where the act to be performed is illegal.

 

*4 Bagley v. Insight Commc’ns Co., L.P., 658 N.E.2d 584, 586 (Ind.1995) (internal citations omitted). Even assuming that DWN was negligent in its design, the Plaintiffs have not explained how FedEx is liable under the above standard nor submitted evidence that would support a finding of liability.

 

In all, the Plaintiffs have failed to produce any evidence showing that FedEx either knew or should have known that the ladder in question was unreasonably dangerous. Furthermore, because FedEx is entitled to summary judgment on Mr. Spaziani’s negligence claim, Mrs. Spaziani’s loss of consortium claim against FedEx also must fail. See Branham v. Celadon Trucking Servs., Inc., 744 N.E.2d 514, 525 (Ind.Ct.App.2001) (“Similarly, with no host tort, Becky Branham’s loss of consortium claim also fails.”). Accordingly, FedEx’s motion for summary judgment (Dkt. No. 113) is GRANTED.

 

IV. DWN’S MOTION FOR SUMMARY JUDGMENT

The Plaintiffs’ Third Amended Complaint alleges that DWN was negligent in designing, constructing and/or installing the ladder. DWN argues that it “breached no duty to Spaziani because it followed the directions and orders of FedEx.” Dkt. No. 117 at 8. In short, it argues that it “only had the ‘typical ladder detail,’ so that is what it built.” Id. at 10. It relies on Raytheon Engineers & Constructors, Inc. v. Sargent Elec. Co., for support which noted that “ ‘there is no breach of duty and consequently no negligence where a contractor merely follows the plans or specifications given him by the owner so long as they are not so obviously dangerous or defective that no reasonable contractor would follow them.’ ” 932 N.E.2d 691, 695 (Ind.Ct.App.2010) (quoting Peters v. Forster, 804 N.E.2d 736, 742 (Ind.2004)).

 

The Plaintiffs, however, argue that “DWN made substantial material changes which deviated from the design specifications provided by the ‘typical ladder detail.’ ” Dkt. No. 144 at 4. Specifically, they argue that

 

DWN used a different thickness of steel than the typical ladder detail called for, flared the side rails of the ladder from 18 inches to 24 inches at the top, though the typical ladder detail provided no design for such an expansion, and constructed the ladder with a 25–inch opening where the typical ladder detail called for a 24–inch opening.

 

Id. at 7. However, in Indiana

noncompliance with the specifications alone does not impose liability beyond the point of acceptance by the owner. Only where such noncompliance creates an imminently dangerous condition would liability survive such acceptance.

 

Here, Appellants do not assert that the drop-off was turned over in a condition presenting imminent danger to third persons, nor do they assert that INDOT’s plans with respect to the drop-off were obviously defective. They merely assert that Cavett cannot take advantage of the contractor immunity rule where it failed to comply with the contract and such failure to comply resulted in injury to a third party. Such is not the law.

 

*5 Ross v. State, 704 N.E.2d 141, 148 (Ind.Ct.App.1998) (emphasis added). Here too, the Plaintiffs have directed the Court to no evidence that DWN’s deviations from the “typical ladder detail” created a ladder that was “imminently dangerous.” They have not explained how the extra thickness of the angle iron, the flaring, or the one-inch larger opening created an imminent danger that caused Mr. Spaziani’s fall. See Dkt. No. 144 at 8 (Plaintiffs simply noting the variations). Their only argument is that DWN is not entitled to summary judgment because it did not strictly adhere to the “typical ladder detail.” This is not the law, and it is not the Court’s role to make the Plaintiffs’ arguments for them. See Johnson v. Cambridge, 325 F.3d 892, 901 (7th Cir.2003) (“As we have said before, summary judgment is the put up or shut up moment in a lawsuit, when a party must show what evidence it has that would convince a trier of fact to accept its version of events.”).

 

Because DWN is entitled to summary judgment on Mr. Spaziani’s negligence claim, Mrs. Spaziani’s loss of consortium claim against DWN also must fail. See Branham, 744 N.E.2d at 525. Accordingly, DWN’s motion for summary judgment (Dkt. No. 116) is GRANTED.

 

V. CONCLUSION

Discovery in this case closed on July 9, 2014, see Dkt. No. 94 at 2, and the Plaintiffs have directed the Court to no evidence to support a finding of liability for either FedEx or DWN. For all the foregoing reasons, FedEx’s motion for summary judgment (Dkt. No. 113) and DWN’s motion for summary judgment (Dkt. No. 116) are GRANTED. Because SSOE remains a Defendant, no final judgment will issue at this time.

 

SO ORDERED.

United States District Court, W.D. Virginia,

Roanoke Division.

Tommy Joe WILLIAMS, Conservator of Michael Sprick, an incapacitated individual,

v.

OLD HB, INC., et al., Defendants.

 

No. 7:13–cv–00464.

Signed Jan. 8, 2015.

 

Michael Andreas Kernbach, Michael A. Kernbach, P.C., Manassas, VA, Paul Rice Thomson, III, Thomson Law Firm, PLLC, Roanoke, VA, for Tommy Joe Williams.

 

Harry Robert Yates, III, Leclair Ryan, Charlottesville, VA, Patrick Michael Regan, Regan Zambri & Long, PLLC, Washington, DC, for Defendants.

 

ORDER

MICHAEL F. URBANSKI, District Judge.

*1 After conditionally approving the $21,000,000 settlement of this personal injury case, the court referred the matter to United States Magistrate Judge Robert S. Ballou for proposed findings of fact and recommendations as to the appropriateness of the proposed attorney’s fee award and costs. On December 31, 2014, the magistrate judge issued a report recommending that the court approve the one-third contingency fee sought by plaintiff’s counsel and endorsed by Michael Sprick’s sister and conservator, Alexandra Heidebruch, and award counsel their out-of-pocket expenses of $165,952.91. The parties filed a response to the report and recommendation the same day, indicating that counsel for neither plaintiff nor defendants had any objection to the magistrate judge’s report.

 

The court has carefully reviewed the magistrate judge’s report and is satisfied that the contractually agreed upon one-third contingency fee is fair and reasonable given the extraordinary efforts undertaken by counsel to secure the best possible result for Michael Sprick in this case. As such, it is ORDERED as follows:

 

1. The magistrate judge’s report and recommendation (Dkt.# 80) is ADOPTED in its entirety;

 

2. The $7,000,000 in attorney’s fees and $165,952.91 in costs incurred by plaintiffs counsel are fair and reasonable and are hereby APPROVED;

 

3. The Clerk is DIRECTED to disburse the $7,165,952.91 held pursuant to the court’s December 22, 2014 Order (Dkt. # 76, at ¶ 4), as well as any accrued interest, as follows:

 

a. Michael Kernbach, Esquire:

 

 

i.

Attorney’s Fee:

$5,250,000.00

ii.

Costs:

$68,372.01

 

 

b. Paul R. Thomson, III, Esquire:

 

 

i.

Attorney’s Fee:

$1,750,000.00

ii.

Costs:

$97,580.90

 

 

It is SO ORDERED.

 

REPORT AND RECOMMENDATION

ROBERT S. BALLOU, United States Magistrate Judge.

The attorneys for Michael Sprick (“Sprick”), an incapacitated adult, ask this court to approve a one third contingency fee and associated costs of litigation arising from a $21 million personal injury settlement.FN1 Sprick suffered catastrophic injuries in an accident on October 8, 2011 which rendered him incompetent and unable to care for his own personal and financial affairs. The court is charged with protecting the interests of vulnerable parties such as Sprick, and reviewing the proposed settlement of his personal injury claims for fairness and reasonableness. Thus, the court must assure that a $7 million attorney’s fee and associated costs are reasonable in this case. The Fourth Circuit instructs that when reviewing a proposed attorney’s fee associated with a personal injury settlement, the court must recognize and respect the value that contingency fee arrangements provide, especially to those who otherwise have no access to legal representation. In re Abrams & Abrams, P.A., 605 F.3d 238, 245–46 (4th Cir.2010). I have examined in detail and with care the materials submitted enumerating the history of the accident, the injuries Sprick suffered, and the work the attorneys undertook to achieve this settlement. I have also considered each of the factors set forth in Johnson v. Georgia Highway Express Inc., 488 F.2d 714, 717–19 (5th Cir.1974), and specifically the degree of success obtained, “the most critical factor in determining the reasonableness of a fee award.” Doe v. Chao, 435 F.3d 492, 506 (4th Cir.2006). The attorneys for Michael Sprick achieved an excellent result for their client, which will pay for his extensive medical care for the remainder of his life. Having fully considered the Johnson factors, the catastrophic injury underlying this case, the work performed by Sprick’s attorneys, and the successful result achieved, I find that the one third contingency fee sought by plaintiff’s counsel, and endorsed by his sister and conservator Alexandra Heidebruch (“Heidebruch”), should be approved.

 

FN1. The district judge has approved the overall settlement amount, and asked me to provide a report and recommendation on approval of the contingent attorneys’ fee and costs, pursuant to 28 U.S.C. § 636(b)(1)(B). Dkt. Nos. 62 & 66.

 

I.

*2 On October 8, 2011, 40–year–old German citizen Michael Sprick was struck by a truck while riding his bicycle on the shoulder of Route 100, a two-lane road in Pulaski County, Virginia. Sprick was an avid cyclist, and had traveled to the United States from Germany in September 2011 for a cycling trip that would take him from Chicago to Miami over a number of months. Sprick was cycling through Virginia a month into his trip when this accident occurred. According to witnesses, at the time of the accident, a Freightliner truck traveling behind Sprick drifted over the right white line and onto the shoulder, striking Sprick, who suffered grave injuries as a result of the accident. At the accident scene, Sprick went into cardiac arrest and incurred anoxic brain damage. Sprick was airlifted to Carilion Roanoke Memorial Hospital (“Carilion”), where the medical staff initially recommended that his family discontinue lifesaving care. However, Sprick remained on a ventilator at Carilion the next three months, receiving treatment for his severe injuries, including the traumatic brain injury. At the request of his family, Sprick was flown back to Germany on a medically equipped jet in December 2011. Since that date, he has undergone multiple surgeries, and has been confined to a hospital or skilled nursing facility where he requires 24–hour care to assist him with all activities of daily living. Sprick does not use a ventilator, but is unable to speak, feed or care for himself, and is confined to a wheelchair or bed.

 

Sprick is single with no children. Shortly after the accident, his sister, Alexandra Heidebruch, flew to Roanoke from Germany, and sought a bilingual attorney to assist her while she handled Sprick’s pending medical and legal issues. Heidebruch’s request reached German-speaking Virginia lawyer Michael Kernbach by email on October 13, 2011, and he traveled to Roanoke to meet with Heidebruch a few days later. During their initial meeting, Kernbach explained the legal and insurance process in the United States to Heidebruch in German. Kernbach also reviewed his retainer agreement with Heidebruch, and the terms under which he would represent Sprick relating to his personal injury claim and issues relating to his medical care in the United States. The retainer agreement provided for a one third contingency fee to be paid from any monies collected in Sprick’s personal injury claim. Heidebruch expressed her wish that Sprick be returned to Germany as soon as possible, so that her father could see him one last time. Heidebruch agreed to hire Kernbach after their initial meeting because, “he told me to call him anytime; email him as often as I needed; and he offered to do what he could to get Sprick home and would come to Germany whenever it was needed. This was all discussed with me in German so I understood what work he would be doing.” Dkt. No. 60–1.

 

Kernbach immediately began to represent Sprick’s interests and pursue his legal claims, performing tasks such as obtaining Sprick’s personal effects from the accident scene, hiring an accident investigator, sending letters to the Virginia State Police to preserve and obtain radio traffic transmissions and dispatch logs from the accident, contacting the investigating trooper and eye witnesses, recording the traffic court hearing for the driver in the accident, obtaining interim medical progress reports while Sprick was at Carilion and having them translated into German and sent to Heidebruch, hiring a life care plan expert, retaining an attorney in Germany for the appointment of Heidebruch as conservator for Sprick, and preparing a complaint to be filed in Pulaski Circuit Court.

 

*3 Kernbach helped return Sprick to Germany by working with Sprick’s physicians, who initially refused to allow Sprick to travel due to potential complications in flight. Kernbach negotiated with the insurance carrier for the truck and driver involved in the accident and convinced it to pay the $68,000 needed to cover Sprick’s flight to Germany, even though they had not yet accepted liability for the accident. Kernbach communicated with physicians in both Virginia and Germany to coordinate the transition of Sprick’s medical care to Germany, drafted German medical releases, and was present in Roanoke to assist with Sprick’s trip on December 7, 2011. Believing that these were likely Sprick’s final days, Kernbach hired a videographer to videotape a day in Sprick’s life while he was at Carilion, and videotape the flight to Germany.

 

After Sprick arrived in Germany, Kernbach continued to pursue Sprick’s claims both in Germany and the United States by developing relationships with Sprick’s treating physicians, navigating the German health care system to obtain medical records and bills for treatment, monitoring Sprick’s unstable medical condition,FN2 and remaining in constant communication with Heidebruch.

 

FN2. After his arrival in Germany, Sprick contracted MRSA, and underwent several medical procedures, including placement of a shunt to remove excess fluid from his brain and implantation of an intrathecal Baclofen pump to reduce spasticity in his limbs. Dkt. No. 60–23, p. 6.

 

On October 24, 2011, a little over two weeks after the accident, Kernbach filed suit in the Pulaski County Circuit Court on Sprick’s behalf against Norman Richard Marchant (truck driver), International Brands Corporation, Merita d/b/a Merita Bread Box, and Hostess Brands. See Michael Sprick v. Norman Richard Marchant, et als., Case No. CL1100000593. That action remains pending in state court with no service having been attempted against any defendant. In January 2012, Hostess filed for Chapter 11 bankruptcy in the Southern District of New York, which automatically stayed Sprick’s state court action. Kernbach, with Heidebruch’s consent, recruited Roanoke attorney Paul R. Thomson to join as counsel in the case, and hired New York law firm Klestadt & Winters, LLP, to assist with filing motions in the bankruptcy court in an effort to lift the bankruptcy stay to allow the personal injury case to go forward outside of the bankruptcy proceedings.

 

Kernbach and Thomson began what became a year and a half long process of lifting the bankruptcy stay, which prevented Sprick’s case from moving forward. FN3 Their first two motions to lift the stay were denied by the bankruptcy judge because Hostess’s insurance policy included a $1.5 million deductible that was secured with collateral. In the meantime, the bankruptcy court consolidated Sprick’s case, along with over four hundred other lawsuits against Hostess pending across the United States, in an Alternate Dispute Resolution (“ADR”) process. The ADR process required plaintiffs to participate in binding arbitration and obtain a judgment, which would then be treated as a general unsecured claim against Hostess.

 

FN3. Kernbach and Thomson took the lead on reviewing correspondence and drafting pleadings in the bankruptcy case, to limit additional costs charged by Klestadt & Winters, LLP.

 

In November 2012, the bankruptcy court liquidated Hostess’s assets, which threatened to eliminate the available funds both to administer the ADR process and to secure the collateral for Hostess’s insurance deductibles. Kernbach and Thomson prepared and sent a demand package to four insurers for Hostess with a written summary of Sprick’s case, along with extensive attachments including photographs, videos of Sprick, a life care plan, wage information, a transcript of the traffic court hearing for the driver in the accident, and German and U.S. records and bills of Sprick’s medical care and treatment. In September 2013, Kernbach and Thomson filed a third motion to lift the stay, which was eventually stipulated and agreed to by counsel for Hostess and granted by the bankruptcy court.

 

*4 Kernbach and Thomson re-filed the personal injury action in this court on October 7, 2013. The case was set for trial on September 8–12, 2014, and a pre-trial order was put in place to assure that discovery progressed in an orderly fashion and that the parties were ready to proceed on the trial date. During the pendency of the case in this court, Kernbach and Thomson engaged in discovery and filed multiple motions for summary judgment. Dkt. Nos. 23, 26 & 29. On July 15, 2014, the parties reached an agreement to resolve this case for $21 million.

 

II.

The court has a duty to protect the interests of those who may be especially vulnerable to manipulation or who may be unable to protect themselves, such as minors and incapacitated adults. Abrams, 605 F.3d at 243. In fulfilling that duty, the court has the inherent power and an obligation to ascertain whether an attorney’s fee agreement involving an incompetent, including a contingent fee contract, is reasonable. Bergstrom v. Dalkon Shield Trust (In re A.H. Robins Co.), 86 F.3d 364, 373 (4th Cir.1996); Allen v. United States, 606 F.2d 432, 435 (4th Cir.1979). The court must make an independent investigation into the fairness and reasonableness of a fee to be charged against an incompetent person’s estate, and that inquiry is guided by the twelve factors first set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717–19 (5th Cir.1974), and adopted by the Fourth Circuit in Barber v. Kimbrell’s, 577 F.2d 216, 226 (4th Cir.1978) and Allen, 606 F.2d at 435–46 (“the Johnson factors”). Abrams, 605 F.3d at 243–44. The Fourth Circuit has construed the Johnson factors as:

 

(1) the time and labor required in the case, (2) the novelty and difficulty of the questions presented, (3) the skill required to perform the necessary legal services, (4) the preclusion of other employment by the lawyer due to acceptance of the case, (5) the customary fee for similar work, (6) the contingency of a fee, (7) the time pressures imposed in the case, (8) the award involved and the results obtained, (9) the experience, reputation, and ability of the lawyer, (10) the “undesirability” of the case, (11) the nature and length of the professional relationship between the lawyer and the client, and (12) the fee awards made in similar cases.

 

Abrams, 605 F.3d at 244. Not all factors may apply to a given case; the court must consider and provide detailed findings with regard to each of the twelve factors. Id. at 436. I review each of the twelve Johnson factors in detail below.

 

A. The Award Involved and the Results Obtained

The Fourth Circuit has instructed that “the most critical factor in determining the reasonableness of a fee award is the degree of success obtained.” Doe, 435 F.3d at 506; see also Abrams, 605 F.3d at 247 (finding it erroneous for the district court to “fail to recognize that an $18 million settlement served the client well by any standard and particularly in light of National Union’s $21 million policy limit.”). Here, Sprick’s counsel achieved a great deal of success by securing a significant settlement for his claim. The settlement will pay all outstanding medical bills and liens in both the United States and Germany, and all legal costs and expenses. A fund in excess of $13 million will remain to provide for Sprick’s future medical care. Heidebruch has been appointed to serve as Sprick’s permanent conservator, and with the guidance and counsel of an attorney in Germany, the net settlement proceeds will be structured to last through Sprick’s expected lifetime. These funds will be appropriately administered in accordance with German law through the oversight of the German courts.

 

*5 All parties involved agree that this settlement is a successful resolution of Sprick’s claims. As counsel noted, this is one of the largest personal injury settlements ever recovered in Virginia. Heidebruch was satisfied with the amount of settlement, and actively supports the attorneys’ fee award sought by counsel. Likewise, counsel for Hostess filed an affidavit supporting the attorneys’ fees sought and representing that plaintiff’s counsel ultimately received a full settlement value for Sprick’s case. Dkt. No. 57, p. 4. I am satisfied that plaintiff’s counsel secured the best result possible for Sprick’s claims.

 

B. Contingency Fee Awards

The significant settlement amount resulted in a correspondingly large one-third contingency fee of $7 million. Such a hefty fee may provoke a concern on the surface of fairness and reasonableness based purely on its size. However, I remain mindful of Judge Wilkinson’s admonition in Abrams of the significant role and benefits a contingency fee plays in our legal system. Indeed, contingency fee arrangements often provide the only practical means by which a plaintiff can economically obtain the services of a competent lawyer to prosecute his claim. The contingency fee is sometimes called the “poor man’s key to the courthouse door,” and it enables a litigant with a meritorious cause of action to obtain competent counsel. Abrams, 605 F.3d at 245. “[A]ccepting reasonable contingency agreements … increases the likelihood that a claimant can find an attorney sufficiently committed and skilled to litigate successfully.” Wells v. Sullivan, 907 F.2d 367, 372 (2d Cir.1990).

 

Certainly, in this case the contingency fee agreement was the “key to the courthouse door” that allowed Heidebruch to retain attorneys to immediately assist with Sprick’s legal claims and eventually yield an outstanding recovery for his long-term medical needs. Without such an arrangement, Heidebruch likely would not have been able to actively and promptly pursue Sprick’s legal claims against both the tortfeasors and their insurance carriers, including securing the early payment from the liability insurance carrier to allow Sprick’s medical airlift to Germany, so he could be with his family shortly after the accident. Dkt. No. 60–1, p. 2. Faced with Sprick’s dire medical condition, his mounting medical bills, an uncertain future, and the need to bring her brother home, Heidebruch, who came from her home in Germany to assist with Sprick’s medical needs, was not in a position to hire an attorney, pay a retainer, and finance the investigation and preparation of Sprick’s case. The contingency fee agreement allowed Heidebruch to dedicate Sprick’s financial resources to his ongoing medical needs during the pendency of the litigation, while his attorneys advocated his claims over a period of four years with no request for payment of costs or fees. Notably, Heidebruch filed an affidavit with the court stating her belief that the attorneys’ fees and costs incurred were a reasonable amount and properly incurred, and thus, she asks that the full contingency fee be awarded in full. Dkt. No. 60–1, p. 4.

 

*6 I am also cognizant of the need to avoid any comparison of the contingency fee to the amount of a reasonable recovery using an hourly billing rate. See Abrams, 605 F.3d at 245–46. Unlike hourly billing rates, contingency fee agreements transfer a significant portion of the risk of loss in the case to the attorneys, which many attorneys are unwilling to accept without a guaranteed contingency percentage of the recovery. “[I]t may be necessary to provide a greater return than an hourly fee offers to induce lawyers to take on representation for which they might never be paid, and it makes sense to arrange these fees as a percentage of any recovery.” Abrams, 605 F.3d at 246; see also In re Sunbeam Sec. Litig., 176 F.Supp.2d 1323, 1335 (S.D.Fla.2001) (quoting Behrens v. Wometco Enters., Inc., 118 F.R.D. 534, 548 (S.D.Fla.1988) (“A contingency fee arrangement often justifies an increase in the award of attorney’s fees.”). Thus, contingent fees must compensate not only for the attorneys’ time and effort, but also for the risk of a small fee or no recovery and the uncertainty of when any fee award may be received. In short, a contingency fee “automatically handles compensation for the uncertainty of litigation” because it “rewards exceptional success, and penalizes failure.” Kirchoff v. Flynn, 786 F.2d 320, 326 (7th Cir.1986).

 

C. Customary Fee for Such Work

Here, the retainer agreement provides for a one-third contingency fee and reimbursement of expenses incurred. Dkt. No. 60–1, p. 11. Kernbach notes that he would ordinarily charge a 40 percent contingency fee for this type of case; however, Kernbach stated in his affidavit that “as I understood the injuries to be catastrophic at that time, I decided to only charge a contingency fee of one-third in this case.” Dkt. No. 60–24, p. 2. Heidebruch represented that she “understood that [Kernbach] would be paid his fee based on the outcome of the case by way of a contingency fixed at one-third of the settlement. I also understood that he would be paying for the expenses of the case and keeping a ledger of those costs, and that he would be reimbursed for those costs from the settlement as well.” Dkt. No. 60–1, p. 2. When Thomson was added as counsel in the case, Heidebruch understood that he would be paid out of the original contingency agreement and would also be reimbursed for his expenses from any settlement amount.FN4 Dkt. No. 60–1, p. 2.

 

FN4. Thomson agreed to a fee split of 25 percent of the one-third attorneys’ fee, plus reimbursement for costs. Dkt. No. 59.

 

In this court’s experience and as reflected in the numerous affidavits of attorneys supporting this fee request, a one-third contingency rate is reasonable for this type of case. See Dkt. Nos. 60–30–60–38. Accordingly, I find that at the time this retainer agreement was signed, it was fair and reasonable for Kernbach and Heidebruch to agree to a one-third contingency fee.

 

The remainder of this opinion examines whether such a fee agreement remains reasonable, given the additional Johnson factors.

 

D. Time and Labor Expended

*7 Sprick’s attorneys devoted significant time and resources to obtain this settlement result, and have submitted voluminous affidavits and supporting documents summarizing the professional time they have devoted to this case. The majority of the time set forth in these summaries is corroborated by copies of time log entries and billing reports, which document the extensive time and labor required to prosecute this case.

 

Kernbach and Thomson both estimate that they each spent around 1,900 hours on this case, for a conservative total of 3,800 hours. Dkt. Nos. 59 & 60–24. Kernbach further represented that during the course of this litigation he exchanged or reviewed over 7,600 emails, received and reviewed over 3,000 documents filed in Hostess’s bankruptcy case, and traveled to Germany five times. Dkt. Nos. 60–24 & 63–1. These claims are bolstered by Heidebruch’s testimony that she exchanged “hundreds of emails, text messages and Facebook messages” with plaintiff’s counsel. Dkt. No. 60–1, p. 5. She further states that “Mr. Kernbach called me and emailed me at many times when it was late at night in the United States; weekends and holiday times, especially when I was concerned for Michael [Sprick] when he suffered medical complications and serious medical setbacks. I have no reason to doubt that both lawyers devoted extensive time and effort in this case and had set aside time for me when they were on vacations or holiday times.” Dkt. No. 60–1, p. 5.

 

The various tasks performed by plaintiff’s counsel in their representation of Sprick in two different courts over the past four years is set forth in detail in the documents supporting their attorneys’ fee request, and will not be restated here. Notably, counsel’s representation included assisting the family in arranging Sprick’s medically assisted flight to Germany; having almost every document involved in the case translated from English to German or vice versa; navigating the German public health care system both for purposes of pursuing high-level healthcare for Sprick and obtaining records of Sprick’s medical care and costs; developing relationships with Sprick’s health care providers in Germany and preparing them to give deposition testimony; tackling the effect of settlement on subrogation or lien issues in Germany; addressing the bankruptcy litigation that stayed Sprick’s personal injury case and threatened to force his claim into an ADR process; hiring numerous experts, including an economist, accident reconstructonist and life care planner; and arranging for defense counsel to visit Sprick at his long-term care facility in Germany.

 

Kernbach and Thomson both made numerous trips to Germany to meet with Sprick’s medical providers and family, obtain medical records, and determine his future medical costs. Sprick’s expert life care planner traveled to Germany on multiple occasions to meet Sprick’s physicians and family and assist with developing his life care plan. Additionally, Kernbach and Thomson were in constant communication with Heidebruch throughout the litigation regarding Sprick’s unstable medical condition.

 

*8 The successful mediation of this case occurred just two months before the scheduled trial date; thus counsel was also required to complete most of the preparation needed to present Sprick’s case at trial. They arranged for Sprick’s treating physicians and therapists to testify either live at trial or by video deposition; scheduled the depositions of Heidebruch, Sprick’s father, and their life care expert; and conducted a mock trial using a focus group to finalize their strategy and determine a likely trial verdict. It is apparent from the documentation before the court that this case was exceedingly time and labor intensive.

 

E. The Novelty and Difficulty of the Questions Presented and the Skill Required to Perform the Necessary Legal Services

This case involved novel and difficult issues presented by the severity of Sprick’s brain injury, cross-continent medical evaluation and treatment, and recent medical advancements with regard to various states of mental awareness with brain injury. Due to the severity of Sprick’s brain injury, counsel faced the difficult task of understanding the nature of his brain injury to determine his level of consciousness. Whether Sprick experienced some degree of consciousness or environmental awareness, as opposed to being in a persistent vegetative state, had a significant impact on his ability to experience pain and suffering, the nature of the medical treatment he received, and his life expectancy. Measuring consciousness and awareness is an evolving area of brain injury medicine, much more complicated than simply observing the patient for signs of wakefulness. Counsel was required to educate themselves and work closely with Sprick’s health care providers to understand recent medical strides in this area, retain experts, and create video footage for consideration by the insurance carriers and jury. All of these uncertainties no doubt impacted the value of the case.

 

Further, this case presented the unique challenge of having the client and his medical providers located in Germany, and all of the medical records written in German. Thus, counsel was required to develop relationships with Sprick’s German treating physicians to gain their trust and cooperation, prepare fact and physician witnesses for depositions in both the United States and Germany, and address medical lien and reimbursement issues in both countries. Counsel’s representation required the ability to speak German fluently, navigate a foreign country’s medical and legal systems, and prepare a significant traumatic brain injury case involving liability and trucking issues for trial. Overall, the case required a high degree of unique skills, not only to prepare and present a complicated personal injury case involving a traumatic brain injury, but further to avoid questions of liability, navigate the bankruptcy proceedings, and determine the future medical costs for Sprick’s life care plan.

 

F. The Experience, Reputation and Ability of the Lawyers

*9 Kernbach and Thomson submitted their curricula vitae to the court, along with numerous affidavits of local attorneys, lauding their experience, reputations and abilities. Counsel for defendants represented that the litigation reflected a very civil and cooperative administration of the case, which lowered the overall expenses and ultimately led to the eventual settlement of the case. Dkt. No. 57, p. 4. Kernbach and Thomson are known to this court, they have considerable experience litigating complex personal injury cases, and I am satisfied that they possess the expertise in their fields necessary for this matter and likewise have the professionalism, skill set, and necessary foresight to manage this difficult case—as the results of the successful mediation demonstrate.

 

G. The Time Pressures Imposed in the Case and the Preclusion of Other Employment

The uncontradicted affidavits of Kernbach and Thomson represent that their concentration of efforts on this case drastically reduced the number of other matters they could accept during that time. Dkt. Nos. 59 & 60–24. Kernbach and Thomson are both solo practitioners, and the necessity of multiple trips to Germany alone reflects that they were required to devote significant time to this case and to reschedule or turn away other matters. A case of this magnitude would certainly be very time consuming, and I accept counsel’s representation that their continuing responsibility for the prosecution of this matter precluded them from accepting other legal work while this case proceeded.

 

H. The “Undesirability” of the Case

At first blush, Sprick’s case may seem quite desirable to experienced personal injury attorneys. This is frequently the view when looking backward knowing the outcome of the litigation and the settlement achieved. However, at the outset, this case may not have seemed so attractive in October 2011. “ ‘Undesirability’ and relevant risks of a case must be evaluated from the standpoint of plaintiff’s counsel as of the time they commenced the suit, not retroactively, with the benefit of hindsight.” In re Checking Account Overdraft Litig., 830 F.Supp.2d 1330, 1364 (S.D.Fla.2011). “The point at which plaintiffs settle with defendants … is simply not relevant to determining the risks incurred by their counsel in agreeing to represent them.” Skelton v. General Motors Corp., 860 F.2d 250, 258 (7th Cir.1988); see also Alderman v. Pan Am World Airways, 169 F.3d 99, 103 (2d Cir.1999) (“The reasonableness of a contract including an attorney fee agreement, is to be evaluated at the time it was made.”)

 

Sprick’s claim presented substantial challenges and required attorneys with specific skill sets. Kernbach and Thomson faced significant risks when they undertook their representation, which, in hindsight, would be handsomely rewarded. Here, when plaintiff’s counsel undertook their representation entirely on a contingent fee basis, they assumed a significant risk of nonpayment or underpayment due to liability issues, insurance coverage questions, and Sprick’s precarious health condition.

 

*10 Defendant denied liability in this case until April 21, 2014. The truck driver was charged with reckless driving as a result of the accident, but maintained that another vehicle passed him on the left and started to enter his lane, and at the same time Sprick began to enter his lane from the right. The truck driver further alleged that he left the scene to follow the other car and obtain a license plate number, but was unable to do so and returned to the accident scene. There were several eyewitnesses to the accident, but none were able to conclusively confirm or deny the driver’s claim that a car passed him on the left at the time of the accident. Further, Sprick was found at the scene of the accident without a helmet, which raised possible defenses to recovery.

 

Sprick’s unstable medical condition created risks as well, as the determination of the nature of his injuries impacted his life expectancy and the value of future costs necessary for his care. At the time Kernbach undertook this representation, there were no assurances that this case would yield a substantial verdict. Rather, the full scope of the claim became apparent only after extensive investigation and work by counsel. Even assuming that plaintiff’s counsel was successful in proving liability and Sprick survived the litigation, the case also faced the risk of insufficient or unavailable funds to cover a damages award. Plaintiff’s counsel knew that the truck driver was likely to be judgment-proof, and they faced the possibility of either no recovery, or a greatly reduced recovery, without access to insurance coverage. Hostess’s bankruptcy declaration also created a great deal of uncertainty as to the availability of insurance funds to cover a settlement or ADR award.

 

This case also required an investment of substantial resources by plaintiff’s counsel with no compensation for an undetermined period of time. Kernbach and Thomson collectively expended over $165,000 in out-of-pocket expenses during the pendency of this litigation, covering such costs as the forensic evaluation of Sprick’s computer and cell phone found at the accident, accident reconstruction, travel to Germany, translation of documents to German and English, expert fees and costs, medical illustrations, copying costs, and international cell phone charges. Dkt. Nos. 60–40, 60–41, 63–1, & 69–1. The nature of this case, involving the cross-continental litigation of a severe traumatic brain injury, demanded the advancement of significant costs by counsel, without assurance of reimbursement.

 

I. The Nature and Length of the Professional Relationship

Kernbach’s representation of Sprick began just days after his accident, and will continue after this court approves the fee award in this case. Indeed, while the approval of attorneys’ fees was pending in our court, Kernbach and Thomson continued to work on resolving the German legal and tax issues for Sprick. Kernbach traveled to Germany for a fifth time in December to meet with the legal and claims department of Sprick’s health insurance, and to explain to the German court the basis of the distribution of the net the proceeds to Sprick. With regard to the nature of the representation, the court need look no further than Heidebruch’s representation that, “I believe the attorneys’ fees and costs incurred by both attorneys are reasonable and properly incurred by them which reflect the significant amount of effort, legal work and travel needed to properly obtain the funds necessary to take care of my brother.” Dkt. No. 60–1, p. 4.

 

J. Fee Awards in Similar Cases

*11 It is difficult to find many similar cases for comparison of the fee award in this district, given the size of this settlement. However, a one third contingency fee is a standard fee agreement for this type of personal injury case. Further, after the Abrams case was remanded to the district court for the Eastern District of North Carolina, the court ultimately awarded the one third contingency fee sought in that case. Pellegrin v. Nat’l Union Fire Ins. Co., Case No. 5:08–cv–349 (E.D.N.C. July 19, 2010) (Dkt No. 53). A review of fee awards across the country reflect that courts routinely approve or award fees up to and in excess of 30 percent in multi-million dollar settlements. See generally Waters v. Int’l Precious Metals Corp., 190 F.3d 1291 (11th Cir.1999) (affirming fee award of 33 1/3 percent of settlement of $40 million); Gaskill v. Gordon, 160 F.3d 361 (7th Cir.1998) (affirming fee award of 38 percent of settlement of $20 million); In re Linerboard Antitrust Litig., Civ. Action No. 99–1000, 2004 WL 1221350 (E.D. Pa. June 2, 2004) (awarding fees of 30 percent of $202 million).

 

K. Costs

Plaintiff’s counsel set forth out-of-pocket expenses in the amount of $165,952.91 for the entire course of this litigation.FN5 Dkt. No. 76. These expenses include many items that are routinely billed to clients, such as copying charges, telephone charges, travel, and expert fees, in addition to regular hourly rates or contingency fees. Dkt. Nos. 60–40, 60–41, 63–1, 69–1. No party has contested or objected to any of the items set forth as costs. After a review of these items, I find them to be reasonably incurred, particularly for litigation of this scope and magnitude, and recommend that the requested costs be approved.

 

FN5. Calculated as follows: Michael Kernbach’s Costs: $68,372.01 + Paul R. Thomson’s Costs: 97,580.90 = $165,952.91. See Dkt. No. 76.

 

III.

The task before me is to determine whether a contractual agreement for attorneys’ fees, which all parties support, is reasonable and fair and should be approved. It is not my role to place a value on counsel’s representation in this case, or retroactively impose a different bargain than that agreed to by Heidebruch and counsel. Rather, I am charged with reviewing the agreement for reasonableness, using the twelve Johnson factors, to ensure that Sprick’s interests are sufficiently protected. I have reviewed the hundreds of documents submitted in support of this request, and considered each of the Johnson factors in detail. I have also remained mindful of the positive societal benefits created by contingent fees and the need to properly incentivize such agreements. Considering the significant amount of the settlement award, the benefits that counsel’s representation has provided and will continue to provide to Sprick, the risks present when counsel initially undertook representation of this case, and the remaining Johnson factors, I find that the fees sought in this case are reasonable and fair and recommend that they be approved.

 

The clerk is directed to transmit the record in this case to the Honorable Michael F. Urbanski, United States District Judge, and to provide copies of this Report and Recommendation to counsel of record. Both sides are reminded that pursuant to Rule 72(b), they are entitled to note any objections to this Report and Recommendation within fourteen (14) days. Any adjudication of fact or conclusion of law rendered herein by the undersigned that is not specifically objected to within the period prescribed by law may become conclusive upon the parties. Failure to file specific objections pursuant to 28 U.S.C. § 636(b)(1)(C) as to factual recitations or findings, as well as to the conclusion reached by the undersigned, may be construed by any reviewing court as a waiver of such objection.