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Holland v. Cypress Ins. Co.

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United States District Court for the Northern District of Georgia, Gainesville Division

September 12, 2022, Decided; September 12, 2022, Filed

Civil Action No. 2:17-CV-120-RWS

Reporter

2022 U.S. Dist. LEXIS 169220 *

PATRICIA HOLLAND, Surviving Mother of KIP EUGENE HOLLAND, and WAYNE HOLLAND, as Administrator of the Estate of KIP EUGENE HOLLAND, Deceased, Plaintiffs, v. CYPRESS INSURANCE COMPANY, J.W. HARPER FARMS, and KERI BELL, as Administrator of the Estate of JAMES WENDELL HARPER, Deceased, Defendants.

Prior History: Holland v. Cypress Ins. Co., 2019 U.S. Dist. LEXIS 232427, 2019 WL 9465896 (N.D. Ga., Jan. 14, 2019)

Core Terms

attorney’s fees, contingency fee, cases, contingency fee agreement, bad faith, customary, settlement offer, trial court, expenses, Plaintiffs’, award of attorney’s fees, hourly rate, attorney’s fees award, value of professional service, contingency fee contract, calculation, value of a service, present case, jury award, Appeals, damages, costs, expert testimony, reasonable fee, trial judge, settlement, decisions, lodestar, driving, courts

Counsel:  [*1] For Patricia Holland, the surviving mother of Kip Eugene Holland, Wayne Holland, Administrator of the estate of Kip Eugene Holland, deceased, Plaintiffs: Robert S. Lazenby, LEAD ATTORNEY, Lazenby Law Group, Gainesville, GA USA; Stacey Allen Carroll, Carroll Law Firm LLC, Roswell, GA USA.

For Cypress Insurance Company, Defendant: Grant Butler Smith, LEAD ATTORNEY, Brent Michael Estes, Dennis Corry Smith & Dixon, LLP-ATL, Atlanta, GA USA; William B. Pate, LEAD ATTORNEY, Dennis, Corry, Smith & Dixon, LLP, Atlanta, GA USA; Elliot Kerzner, Kenan G. Loomis, Cozen O’Connor-Atl, Atlanta, GA USA.

For JW Harper Farms, an entity, Defendant: Grant Butler Smith, LEAD ATTORNEY, Brent Michael Estes, Dennis Corry Smith & Dixon, LLP-ATL, Atlanta, GA USA; William B. Pate, LEAD ATTORNEY, Dennis, Corry, Smith & Dixon, LLP, Atlanta, GA USA.

For Keri Bell, Administrator of the Estate of James Wendell Harper, Deceased, Defendant: Grant Butler Smith, LEAD ATTORNEY, Brent Michael Estes, Dennis Corry Smith & Dixon, LLP-ATL, Atlanta, GA USA; William B. Pate, LEAD ATTORNEY, Dennis, Corry, Smith & Dixon, LLP, Atlanta, GA USA; Laurie Webb Daniel, Webb Daniel Friedlander LLP, Atlanta, GA USA.

Judges: RICHARD W. STORY, United [*2]  States District Judge.

Opinion by: RICHARD W. STORY

Opinion


ORDER

This case comes before the Court on remand from the Eleventh Circuit Court of Appeals for this Court to reconsider the $6 million attorney fee award in light of recent state court decisions. For the reasons that follow, the Court finds the attorney fee award is reasonable and declines to vacate or reduce the award.


I. BACKGROUND

On December 8, 2016, James Harper (“Harper”) was driving a tractor-trailer in Gainesville, Georgia and lost control of the vehicle resulting in the trailer detaching from the tractor and crushing Kip Holland, a pedestrian walking beside the roadway. A witness who had driven behind Harper for the 1.5-2 miles before the incident, testified that Harper was driving “erratically, even to the point of one time crossing over into oncoming traffic” and running another truck “off the road into some gravel.” A business’s security camera recorded the wreck, and footage showed that Holland saw the trailer headed toward him before impact. A witness at the scene testified that she and two other witnesses heard Harper moaning when they went to him. Harper died as result of his injuries.

Prior to the accident, Harper completed a required [*3]  Federal Motor Carrier Safety Administration (“FMCSA”) Medical Examination to maintain his commercial driver’s license. At that time, he completed a Department of Transportation (“DOT”) Medical Examination Report form but he concealed parts of his medical history including a past brain aneurysm, lung disease, sleep apnea, chronic back pain, coughing fits, and blackouts. Based in part on this inaccurate DOT form, Harper was cleared to drive.

Harper also had a prescription for hydrocodone to be taken four times a day and refilled every 30 days. But on his DOT form, he said “No” in response to the question, “Are you currently taking medications?”

Holland’s mother and estate (“Plaintiffs”) sued Harper’s estate for wrongful death and Harper’s insurer, Cypress Insurance Company, pursuant to Georgia’s direct-action statute. Following a four-day trial, the jury returned a verdict in favor of Plaintiffs on all issues. Specifically, the jury awarded Plaintiffs $13 million for wrongful death, $2 million for pain and suffering, and $29,363 for medical and funeral expenses. [Doc. 209]. The jury found that Cypress’s insured engaged in bad faith in the transaction, pursuant to O.C.G.A. § 13-6-11, which provides for the [*4]  expenses of litigation to be awarded as damages. In a bifurcated proceeding following the liability phase and pursuant to § 13-6-11, the jury rendered a special verdict in the amount of $6 million for litigation expenses to be awarded to Plaintiffs. [Doc. 210]. Final Judgment was entered on both verdicts and against both Defendants in the amount of $21,029,263. [Doc. 211].

On March 5, 2020, Defendants filed a Motion for Judgment Notwithstanding the Verdict (“JNOV”) pursuant to Fed. R. Civ. P. 50 and alternatively for a new trial under Fed. R. Civ. P. 59(59)(a)(1)(A). [Doc. 223]. In its JNOV motion, Cypress raised several issues including challenges to its liability for bad faith damages as well as the amount of attorney fees awarded by the jury. Based on evidence that Harper gave incomplete information when participating in medical examinations for purposes of commercial licensure, evidence that Harper was driving erratically for one and a half to two miles prior to the incident and failed to get off the road and stop the truck, and evidence that Harper may have been taking hydrocodone while driving, the Court found there was sufficient evidence to support the jury’s finding of bad faith on the part of Harper and denied the JNOV motion as [*5]  to liability for bad faith damages. [Doc. 233].

As for the amount of the attorney fee award, the Court found that Plaintiffs introduced evidence of the contingency fee contract, an accounting of time spent on the case by counsel, and testimony from a local attorney who specializes in personal injury and wrongful death actions that the fee was reasonable. ([Doc. 233] at 17). No rebuttal evidence was offered by Defendants. The Court properly instructed the jury on the Georgia law governing the award of bad faith damages. (Id.). The Court found that the jury award of attorney fees equal to the fees under the contingency fee arrangement was supported by the evidence. (Id. at 18). The motion for JNOV was denied. (Id.).

On September 21, 2020, each Defendant filed a Notice of Appeal [Docs. 235 & 236]. Also, Cypress filed a Motion for Relief from Judgment seeking to have the judgment against it reduced to $1 million based on its policy limits. [Doc. 234]. The Court agreed with Cypress and granted Cypress’s motion, ordering that the judgment against Cypress be amended to reflect a judgment of $1 million. [Doc. 256].

On the appeals, the Court of Appeals affirmed all this Court’s rulings with the [*6]  exception of the $6 million attorney fee award. [Doc. 267]. As to that award, the Court of Appeals vacated the judgment and remanded to this court to review the award in light of recent Georgia state court authority.


II. DISCUSSION


A. Evidence of Attorney Fees

At trial, Plaintiffs entered into evidence the fee agreement between Plaintiffs and counsel that provides for contingent fees of 40% of the gross proceeds of recovery in the event the case went to trial. (Pl.’s Ex. 84 [Doc. 216-54]). In the event of an appeal, the agreement calls for contingent fees of at least 45% of the gross proceeds of recovery. (Id.) Plaintiffs also submitted a statement of expenses totaling $37,158.54. (Pl.’s Ex. 85 [Doc. 216-55]). Plaintiffs’ counsel submitted time sheets showing 1073.3 hours through January 27, 2020, which did not include final trial preparation, the trial, or post-trial motions. (Pl.’s Ex. 86 [Doc. 216-56]). The Court also notes that Plaintiffs’ counsel, Mr. Lazenby, tried the case without the assistance of other counsel. The participation by multiple attorneys would certainly have been reasonable as evidenced by Defendants having two attorneys at trial.

Plaintiffs also presented expert [*7]  testimony from Matt Cook, an attorney who specializes in personal injury cases. Mr. Cook described his experience handling trucking cases and explained in detail the work required to properly prosecute such cases. He testified that the 40 % contingency contract for cases going to trial is standard in Georgia. He further testified that $37,158.54 in expenses, while low, is reasonable and customary. He acknowledged that Plaintiffs’ counsel recorded 1073.3 hours in the case but noted the time sheets did not include trial preparation and actual trial time.

Mr. Cook testified as to each of the factors set out in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), that courts regularly consider when calculating an award of attorney fees. He pointed out several exceptional factors in this case. First, the case involved several novel and difficult issues: one of the Defendants was an out-of-state insurance company; the defense of medical emergency was involved in the case; the Defendant driver died before trial and before he could be deposed. Each of these created issues outside the normal auto accident case. Second, because of the novel issues involved, special skill and knowledge were required. Because of his experience in this field, Plaintiffs’ [*8]  counsel possessed the skill and knowledge needed to address the novel issues involved. Third, the preclusion of other employment is a significant factor because Plaintiffs’ counsel is a solo practitioner. He does not manage a high volume of cases but is selective in accepting cases. Thus, it is important that he be adequately compensated for the cases he does accept. Fourth, Mr. Cook stressed that the fee requested by Plaintiffs is, almost without exception, the customary fee for this kind of work. This fee request is not an outlier, it is what is expected in cases of this kind. This fee was agreed to by counsel and his clients at the beginning of the case, and it represents the expectations of both should the litigation be successful. Based on these expectations, counsel not only invests his time, he also fronts all expenses associated with the litigation. Fifth, Mr. Cook testified that Plaintiffs’ counsel has been practicing law for 20 years and enjoys a good reputation in the county and state. Finally, the result obtained by counsel is exceptional. Taking all these factors into account, Mr. Cook offered his opinion that a 40% fee is a reasonable fee in this case.

On cross-examination, [*9]  Mr. Cook acknowledged that the jury had the authority to award the contingency fee that he testified about, a fee based on an hourly rate, or some other amount that they determined based on the evidence. He also acknowledged that a contingent fee can vary widely based on the amount of the recovery. No evidence on the attorney fee issue was offered by Defendants.

After the close of evidence and arguments by counsel, the Court instructed the jury on the law. Defendants submitted no written requests to charge in this phase of the trial. However, the Court conferred with counsel prior to charging the jury and gave an expert witness charge requested by Defendants. (Trial Tr. [Doc. 228-4] at 365). The jury was instructed that Plaintiffs must prove the actual cost of plaintiffs’ attorney fees and the reasonableness of costs. They were also instructed that they were not required to accept the opinion of the expert witness. Regarding the contingency fee agreement, the jury was instructed: “A contingency fee agreement is a guidepost to the reasonable value of the services the lawyer performed. However, you are not bound to that fee in your deliberations.” (Id. at 400). Defendants had no objections [*10]  to the instructions. (Id. at 401).

Because the fee agreement was in evidence, the jury was aware that, based on the verdict they had rendered, Plaintiffs would owe attorney fees of $6,011,745.20, representing 40% of the gross proceeds of recovery ($15,029,363), plus expenses of $37,158.54 for a total of attorney fees and expenses of $6,048,903.74. What the jury could not know at the time is that since Defendants subsequently filed an appeal, Plaintiffs now owe fees of at least, $6,763,213.35 representing 45% of the gross proceeds of recovery ($15,029,363) plus expenses of $37,158.54 for a total of attorney fees and expenses of $6,800,371.89.


B. Applicable Law

Georgia law provides “no specific formula to calculate attorney’s fees” for bad faith. In re Purvis, 512 B.R. 348, 384 (N.D. Ga. 2014). “The issue of attorney fees under OCGA § 13-6-11 is a question for the factfinder and an award will be upheld if any evidence is presented to support the award.” Burlington Air Express, Inc. v. Georgia-Pacific Corp., 217 Ga.App. 312, 312-13, 457 S.E.2d 219 (1995) (citations omitted). For an award of attorney fees, a claimant must “prove the actual costs of his attorneys and the reasonableness of those costs.” Hardnett v. Ogundele, 291 Ga. App. 241, 245, 661 S.E.2d 627 (2008) (citation omitted). “[B]oth the liability for and amount of attorney fees pursuant to OCGA § 13-6-11 are solely for the jury’s determination.” Covington square Assoc., LLC v. Ingles Markets, Inc., 287 Ga. 445, 447, 696 S.E.2d 649 (2010).

A court may consider [*11]  a contingent fee agreement and the amount it would have generated as evidence of usual and customary fees in determining both the reasonableness and the amount of an award of attorney fees. When a party seeks fees based on a contingent fee agreement, the party must show that the contingency fee percentage was a usual or customary fee for such case and that the contingency fee was a valid indicator of the value of the professional services rendered. In addition, the party seeking fees must also introduce evidence of hours, rates, or some other indication of the value of the professional services actually rendered.

Home Depot U.S.A. v. Tvrdeich, 268 Ga. App. 579, 584, 602 S.E.2d 297 (2004) (citations and quotations omitted).

In Ga. Dept. of Corrections v. Couch, 295 Ga. 469, 759 S.E.2d 804 (2014), the Georgia Supreme Court addressed the reasonable value of professional services in a § 9-11-68 case. Consistent with the above-quoted language, the court held “[W]hile certainly a guidepost to the reasonable value of the services the lawyer performed, the contingency fee agreement is not conclusive, and it cannot bind the court in determining the reasonable value.” Id. at 484. The court reversed the trial court’s award of attorney fees because the trial court had relied solely on the contingency fee agreement. The court went on to point out that such [*12]  a calculation was also erroneous because, under § 9-11-68, a party is not entitled to recover all of their attorney fees in the case. The court identified the uncertainty of when a contingent fee is earned as a complication to relying too heavily on the contingent fee in § 9-11-68 cases. Id. at 486.

“An award of attorney fees under OCGA § 13-6-11 will be affirmed if there is any evidence to support it.” Metropolitan Atlanta Rapid Transit Auth., 334 Ga. App. 665, 670 (citation omitted). “A request for attorney’s fees should not result in a second major litigation.” Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S. Ct. 1933, 76 L. Ed. 2d 40 (1983).


C. Analysis

This Court applied the foregoing applicable law in its August 21, 2020 Order (Doc. 233) denying Defendants’ motion challenging the reasonableness of the attorney fee award. The record is unchanged, and the Court finds for the same reasons previously stated that the award should not be set aside. The evidence introduced at trial that supports the decision of the jury has been reviewed in Section II.A. of this Order. That evidence satisfies the requirements of Georgia law for the award. The parties entered into a contingent fee contract requiring payment of 40% of any recovery if the case went to trial. The uncontradicted evidence showed that this contract reflected the usual and customary fee for this work. Beyond [*13]  that, an expert witness went through a full analysis of the fee as contemplated by Johnson v. Georgia Highway Express and opined that a 40% contingent fee was a reasonable fee based on those factors. Finally, plaintiffs introduced time records for time counsel spent on the case with the exception of pretrial preparation, trial, and post-trial motions. Thus, the unrefuted evidence at trial was that a 40% contingent fee was a usual and customary fee and was reasonable. As required under Georgia law, evidence of hours and rates was also provided. As all the evidence at trial supported the verdict of the jury, no further inquiry into the jury’s decision should be necessary.

However, this Court has been directed to consider its prior decision in light of two recent Georgia Court of Appeals decisions: Kennison v. Mayfield, 359 Ga. App. 52, 856 S.E.2d 738 (2021) (“Kennison”) and Cajun Contractors, Inc. v. Peachtree Prop. Sub, LLC, 360 Ga. App. 390, 861 S.E.2d 222 (2021) (“Cajun contractors”). Before addressing the cases separately, the Court will address two significant distinctions between Kennison and Cajun Contractors and the present case.

While the present case involves an award of attorney fees pursuant to OCGA § 13-6-11, both Kennison and Cajun Contractors involved claims for attorney fees pursuant to OCGA § 9-11-68, Georgia’s offer-of-settlement statute. Under that statute, a party may make an offer of settlement to an opposing party. If that [*14]  offer of settlement is rejected by plaintiff, the defendant may recover reasonable attorney fees and expenses from the date of the rejection of the offer of settlement if the final judgment against the defendant is less than 75% of the defendant’s offer. If the offer of settlement is rejected by defendant, the plaintiff may recover reasonable attorney fees and expenses from the date of the rejection of the offer of settlement if the final judgment against defendant is greater than 125% of the offer of settlement. Thus, if a party is entitled to an award of attorney fees and expenses pursuant to the statute, that award is for fees and expenses incurred from the date of the rejection of the offer of settlement through the entry of judgment. Bad faith is not a requirement for an award under the statute. Unlike OCGA § 13-6-11 which sanctions a party for bad conduct, “[t]he purpose of OCGA § 9-11-68 . . . is to encourage litigants in tort actions to make and accept good faith settlement proposals in order to avoid unnecessary litigation, which in turn supports the State’s policy of encouraging negotiations and settlements.” Shaha v. Gentry, 359 Ga. App. 613, 614, 859 S.E.2d 567 (2021).

The other distinction between Kennison and Cajun Contractors and the present case is that in both those cases, the [*15]  attorney fee decisions at issue were made by the trial judge, not a jury. The Court will now address the specific holdings of Kennison and Cajun Contractors, in turn.

In Kennison, plaintiffs made a $1 million offer-of-settlement before trial. The jury awarded plaintiffs damages of $33,438,267.82. Plaintiffs’ counsel was representing them with a contingent fee contract of 40%. Following trial, the trial judge conducted a hearing over two days and entered a 16-page order granting an attorney fee award of $12,751,258.60 and expenses of $91,018.36. Aside from the contingent fee agreement, plaintiffs also offered the following evidence in support of the fee request: estimated number of hours counsel worked on the entire case; estimated hours worked on the case after the offer of judgment was rejected; counsel’s hourly rate for handling hourly work; expert testimony as to the reasonableness of the hours worked and hourly rate of counsel; expert testimony that a 40% contingent fee is the usual and customary fee for such cases; a summary of the work performed by counsel; and the high degree of difficulty of the case. The trial judge also noted the limited evidence offered by defendants to rebut plaintiffs’ expert testimony [*16]  and the judge’s own observations regarding performance of counsel.

The decision in Kennison was splintered. The disagreement centered on two issues: (1) What was a reasonable fee? and (2) How should that fee be apportioned between pre-rejection and post-rejection work? Presiding Judge Doyle wrote the decision for the court. However, the division of the decision addressing these issues “is not binding precedent as a majority of the judges did not fully concur in the rationale in that division.” Cajun Contractors, 360 Ga. App at 406. The decision held that the evidence in the trial court failed to establish the reasonable value of the professional services rendered by counsel. The court rejected the value-added method the trial court had used to determine the value of the services. Essentially, this method involved reducing the final judgment by the $1 million offer of settlement to determine how much value was provided by the work done after the rejection of the offer of settlement. Kennison, 359 Ga. App. at 66-67. Instead, the Court of Appeals’ analysis was heavily weighted toward consideration of hours actually expended and a reasonable hourly rate, essentially a lodestar analysis. In this analysis, the court rejected the hourly rate approved by the trial [*17]  court because the trial court considered risk/reward in valuing the services. The court found that because the trial court considered the risk of nonpayment in accepting $1900 as counsel’s hourly rate, that rate was not “a valid indicator of the value of the professional services rendered,” as is required by Couch. Id. at 67-68. The Court also criticized plaintiffs’ counsel’s failure to better document his hours. Id. at 69. Little consideration was given to the contingent fee agreement by the court. As for the apportionment of the services between pre-rejection and post-rejection, the Court held that the trial court erred in its finding as to the value of services rendered after rejection of the offer because the trial judge improperly included work done on behalf of plaintiffs prior to the date of the rejection of the settlement offer. Id. at 65.

Judge McFadden wrote a dissent that was joined by four other judges, with one additional judge concurring in the judgment only. Id. at 753 (McFadden, C.J., dissenting). As an initial matter, the dissent found that the evidence presented in the trial court supported the court’s findings on the reasonable value of services. Id. at 755. In a thoughtful review and analysis of the trial court’s [*18]  decision, the dissent found that the trial court ruling was consistent with prior holdings, including Couch, which held that a contingent fee agreement could serve as the basis for a fee award if the party shows “that the contingency fee percentage was a usual or customary fee for such cases and that the contingency fee was a valid indicator of the value of the professional services rendered.” Id. at 759. The dissent found that the evidence presented to the trial court supported the trial court’s finding that the contingent fee was a usual and customary fee that indicated the value of the professional services rendered. The trial court had taken the additional step of receiving “evidence of hours, rates, or some other indication of the value of the professional services actually rendered” as required by Couch. Id. The dissent went on to disagree with the concerns raised by Presiding Judge Doyle as to the trial court’s determination of the amount of reasonable attorney fees incurred following rejection of the offer. Id. at 759-61. However, those issues are not relevant to the issues in the present case, and the Court will not address them, except to say that the ultimate need to apportion the fees between pre-rejection [*19]  and post-rejection of the offer of settlement appears to have a significant impact on the court’s calculation of the reasonable value of fees.

Turning to Cajun Contractors, the Georgia Court of Appeals upheld an attorney fee award pursuant to OCGA § 9-11-68. Plaintiff served defendant with an offer to settle the case for $75,000. Defendant rejected the offer and served on plaintiff two offers of settlement, one for $25,000 and the other for $50,000. At trial, plaintiff received a judgment of $5,250,000 and filed a motion for attorney fees pursuant to OCGA § 9-11-68. In support of the motion, plaintiff’s counsel submitted estimates of hours worked on the case between the rejection of the offer of settlement and judgment. An expert also offered an affidavit that the 40% contingent fee agreed upon was the ordinary, customary, and reasonable fee in the Atlanta area. The expert also opined that the 40% contingent fee was reasonable in the case. Based on the 40% contingent fee, plaintiff asserted he had incurred $2,100,000 in attorney fees. Plaintiff offered three alternative methods for calculating the pro rata fee under OCGA § 9-11-68: “Value Added Over Defense Offer” approach resulting in a proposed fee award of $2,080,000; “Value Added Over Plaintiff’s [*20]  9-11-68 Offer” approach resulting in a proposed fee award of $2,070,000; and “Percentage of Work Performed” approach resulting in a proposed fee award of $1,911,000.

The trial court conducted a hearing at which plaintiff did not introduce any additional evidence, but defendant presented expert testimony challenging the amount of fees requested by plaintiff. The trial court declined to use any of the approaches proposed by plaintiff. Instead, the trial court multiplied the number of hours expended by an hourly rate that it determined was reasonable obtaining a total of $350,000. Based on counsel having obtained a result worth 73 times more than the offer of judgment, the court added a multiplier of three times the $350,000 guide for a total fee of $1,050,000. The Court of Appeals held that the evidence submitted by plaintiff was sufficient to establish the value of the professional services actually rendered by trial counsel. Cajun Contractors, 360 Ga. App. at 406. The court specifically cited the 40% contingency fee as a proper factor to be included in the analysis. Id. The defendant challenged the use of a multiplier as an improper employment of the lodestar methodology used by federal courts. The court rejected the argument [*21]  finding that the court has the discretion to use the multiplier independent of any lodestar analysis that might be used by a federal court. Id. at 407-08.

The undersigned finds nothing in Kennison or Cajun Contractors that alters the conclusion that the attorney fee award in the present case is reasonable. The analysis in those cases is driven by the fact that the court must apportion the value of services between two different time periods. In that context, a court rightfully relies heavily on hours actually expended by the attorney. Apportioning a contingent fee in that context would not only be difficult but also would likely not serve the purposes of the offer-of-settlement statute. See Couch, 259 Ga. at 486. The object of the analysis in a § 9-11-68 case is to determine the value of additional work an attorney did after an offer of settlement was rejected. The inquiry is necessarily tied to time. The fact that the lawyer will receive a contingent fee, while relevant to this inquiry, is not conclusively probative of the value of the hours. Rather, it should be a factor to be considered in determining what that value is. Because § 9-11-68 is not a sanction for bad conduct but is an incentive to encourage settlement, having the fee calculation be tied to the [*22]  work resulting from the rejection of the offer is consistent with the goal of the statute. The idea is that the party is paying for the extra work required because of the rejection of the offer by that party. The award is not intended to be a windfall to the prevailing party. Rather, the payment should put the prevailing party in the same position it would have been in had the offer been accepted. In fairness to a party declining an offer, there should be an ability to calculate with some degree of certainty the risk of declining the offer. That certainty comes from the requirement that there be a reasonable fee for the lawyer’s time. Allowing a party to get a windfall based on an unexpected verdict would not serve the purpose of the statute.

On the flipside, § 13-6-11 fees are based on bad faith. A party has engaged in conduct that warrants imposition of a sanction. The idea here is not simply to hold the party responsible for additional work that it may have caused. Rather, the intent is to punish the wrongdoers by making them pay the attorney fees for the prevailing party. This is not about a mathematical apportionment of costs. The statute contemplates that all of a plaintiff’s fees and [*23]  costs will be paid by the defendant so long as they are customary and reasonable. A contingent fee is customary and reasonable in personal injury cases. Almost without exception, that is the cost the plaintiff will have in the case.

If intent of the statute is to be honored, then contingent fees should be awarded if they are customary and reasonable. The Georgia courts have approved the awarding of fees based on contingent fee agreements. See Brock Built, LLC v. Blake, 316 Ga. App. 710,715, 730 S.E.2d 180 (2012) (approving fees under a litigation employment clause based on contingent fee agreement but vacating for consideration of dismissed claim); City of Atlanta v. Hofrichter/Stiakakis, 291 Ga. App. 883, 889-90, 663 S.E.2d 379 (2008) (approving §13-6-11 bad faith fees based on contingent fee agreement with supporting evidence that this was customary fee and testimony attorney “took over 26 depositions and had spent hundreds of hours on the case”); Home Depot U.S.A.,268 Ga. App. at 884-85 (approving award of §13-6-11 bad faith fees based on contingency fee contract and testimony that counsel “probably got into five boxes and a full table of things. And it took a great deal of work”).

A review of cases cited by Defendants where a contingent fee was not awarded reveals that most of the cases are cases involving offers of judgment. These cases include Couch, Kennison, and Cajun Contractors that are discussed above. [*24]  Khalia v. Rosebud, 353 Ga. App. 350, 355-56, 836 S.E.2d 840 (2019) is a § 9-11-68 case that considered a contingent fee and awarded fees less than the contingent fee but more than the hourly rate. In those bad faith cases cited by Defendants where the court declined to follow a contingent fee agreement, the party has typically relied simply on the agreement and provided little or no additional supporting evidence. See Hagan v. Keyes, 329 Ga. App. 178, 764 S.E.2d 423 (2014) (reversing award of §13-6-11 bad faith fees when only evidence of fees was evidence plaintiff owed his attorney $12,000); Rivergate Corp. v. BCCP Enter., Inc., 198 Ga. App. 761, 761-63 (1991) (no evidence of amount or reasonableness of fees); Sims v. GT Architecture Contractors Corp., 292 Ga. App. 94, 663 S.E.2d 797, (§13-6-11 bad faith fees claim failed when only evidence of reasonableness of fees was testimony of plaintiff and her counsel as to the amount of the fees); Smith v. Travis Pruitt & Assoc., P.C., 265 Ga. 347, 348 (1995) (award of attorney fees in fraud action reversed when only evidence of amount of fees was counsel’s statement that fees “will exceed ten thousand dollars”); Southern Cellular Telecom v. Banks, 209 Ga. App. 401, 402, 433 S.E.2d 606 (1993) (holding that a court may consider but is not bound by a contingent fee agreement when awarding attorney fees); Hardy v. Cauthen, No. CV406-194, 2009 U.S. Dist. LEXIS 35162, 2009 WL 1154105, at *1) (denying attorney fees in Georgia RICO case when only evidence was contingent fee contract); Crosby v. DeMeyer, 229 Ga. App. 672, 674, 494 S.E.2d 568 z91997) (reversing jury’s award of §13-6-11 attorney fees when only evidence of fees was plaintiff’s testimony that she “had to borrow approximately $4,700 to pay fees”); Kwickie/Flash Foods, Inc., 256 Ga. App. 556, 558, 568 S.E.2d 816 (2002) (vacating trial [*25]  judge’s award of §13-6-11 attorney fees and remanding for an evidentiary hearing when only evidence in support of fees was evidence of the actual costs of the attorney); Patton v. Turnage, 260 Ga. App. 744, 746-49, 580 S.E.2d 604 (2003) (jury award of §13-6-11 attorney fees reversed when only evidence was that plaintiff had a 15% contingent fee contract with counsel).

Unlike the parties in the cases relied upon by Defendants, Plaintiffs submitted substantial evidence in support of the attorney fee claim. In fact, the Court fails to see that there is much more a party could offer to support a contingent fee agreement than was offered by Plaintiffs here. Thus, if Georgia state court decisions holding that bad faith fees may be based on a contingent fee contract remain viable, then this is a case where such an award should be upheld. If the law requires a party to justify its fees based on numbers of hours expended and a fair hourly rate, then use of the lodestar method should be acknowledged. Yet, Georgia courts have specifically denied that the lodestar method has been adopted by Georgia courts. See Cajun Contractors, 360 Ga. App. at 420 (Gobeil, J. dissenting).

A final distinction between the present case and Kennison and Cajun Contractors should be noted. “The issue of attorney fees under OCGA § 13-6-11 is a question for the (factfinder) [*26]  and an award will be upheld if any evidence is presented to support the award.” Burlington Air Express, Inc., 217 Ga. App. at 312-13 (citation omitted). Unlike a decision by a trial judge that includes findings of fact and conclusions of law that can be parsed over in search of error, the award of attorney fees in this case was made by a jury that had been properly instructed on the applicable law. “We not only can, but we must, presume that juries follow their instructions. The presumption that they do is rock solid law enshrined in a host of decisions of the Supreme Court and this Court.” In r Price, 964 F. 3d 1045, 1049 (11th Cir. 2020) (citations omitted). Therefore, the decision of the jury should be upheld.

To be clear, a jury is not required to base its award solely on the contingent fee. In his questioning, Defendants’ counsel made the point that a contingent fee can vary widely based on the amount of the recovery. (Trial Tr. [Doc. 228-4] at 396-97). If the amount a jury awarded as damages were of a magnitude that the jury concluded that the contingent fee resulting from that award was unreasonable, the jury would be authorized to award fees in an amount other than that called for by the fee agreement. Even though the plaintiff would owe her attorney fees greater than were [*27]  awarded by the jury, such an award would be consistent with Georgia law and consistent with the instructions given to the jury at trial in this case.


III. Conclusion

Having reviewed the award of attorney fees in light of recent state court decisions, the Court finds that the award complies with Georgia law and is reasonable. The Court therefore DENIES Defendants’ request that the Court reduce or vacate the attorney fee award.

SO ORDERED this 12th day of September, 2022.

/s/ Richard W. Story

RICHARD W. STORY

United States District Judge


End of Document

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