Federal Judge Rejects $1M Lawyer Fees in $125K Bad Faith Case

A lawyer’s request for more than $1 million in attorneys’ fees was rejected by a federal judge in Pennsylvania.

Bernie Clemens sued New York Central Mutual Fire Insurance Company for bad faith in federal court. The case went to trial in late 2015 over an alleged delayed payment of a car crash claim. The plaintiff was awarded $100,000 in punitive damages by the jury. While the award was appealed, the lead plaintiff counsel, Michael Pisanchyn, filed a bill of costs that amounted to well over $1 million in attorneys’ fees, interest and costs. Plaintiff’s counsel detailed the billing as follows: $48,050 for the underinsured motorist (UIM) claims, $827,515 on the bad faith claim, $27,090 for the preparation of the petition for attorneys’ fees, as well as an additional amount of $175,630.70 as interest.

This was on a claim that had a total award of $25,000. According to the court, $25,000 was for settlement on the UIM claim and the $100,000 was the punitive damages verdict.

The judge noted that the plaintiff lead attorney’s actions during trial required that he be admonished multiple times.

The bill was scrutinized by the judge who noted that, “The plaintiff’s counsel billed approximately 2,583 hours for working on this case alone. Assuming an eight-hour billable work day, this would mean that the plaintiff’s counsel worked on nothing else but this case, every day, for approximately 323 days.”

The judge noted that it is completely within the trial court’s decision to assess attorneys’ fees, costs and interest.

In ruling on the request, the judge calculated interest at $4986.58 instead of the $175,630.70 plaintiff’s counsel was seeking.

With respect to the attorneys’ fees, the court chose to determine reasonable fees by using the lodestar method – multiplying the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.

Plaintiff’s firm did not keep track of time spent on tasks for this case, so co-counsel was designated to reconstruct over six years of work and time spent on the case. She did this by guessing, according to the facts stated in the ruling. Attorney and paralegal hours were reduced significantly on both the bad faith and UIM claim.

After careful analysis, the petition for attorneys’ fees was granted in part and denied in part. The only award was in the amount of $4986.58. The rest of the plaintiff’s request in its petition were denied. The judge went so far as to report the lead counsel’s actions in the case to the Disciplinary Board of the Supreme Court of Pennsylvania.