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City Center West LP v. American Modern Home Insurance Co.

United States District Court, D. Colorado

August 20, 2014



RICHARD P. MATSCH, Senior District Judge.

Pursuant to the Order of the United States Court of Appeals for the Tenth Circuit dated May 13, 2014 in its Case No. 12-1343, which supplemented the mandate issued originally on April 23, 2014, this action was remanded to this Court with directions to conduct any all proceedings to determine and award as sanctions the reasonable attorney's fees expended by American Modern Home Insurance Company ("American Modern") on the appeal.

City Center West LP ("City Center") argues that this Court should not proceed until after the claims that occasioned this insurance coverage dispute are finally decided in a parallel action brought by Summit Bank & Trust.

There is no merit to that argument. The Tenth Circuit has directed this Court to determine the award. The pendency of a related action does not provide any reason for delaying this Court's determination of the amount of reasonable attorneys' fees expended by American Modern on the appeal, as directed by the Tenth Circuit.

American Modern requests an award of fees and costs in the amount of $28, 035.05, and supported its request with billing statements of the Hustead Law Firm for the time period from August 31, 2012 through August 12, 2014. Those statements show the services rendered by the firm, the time spent by each attorney who worked on the case, and the attorneys' hourly rates. The billing statements reflect redactions for billing entries that are not related to the subject appeal. American Modern also submitted a description of its costs incurred in litigating the appeal and bringing the present motion.

Three lawyers from the Hustead Law Firm provided worked on the appeal - Patrick Q. Hustead, Christopher J. Shannon and Jay J. Athey. Mr. Hustead is the president and senior partner/owner of the Hustead Law Firm. American Modern submitted his declaration to describe the firm's billing rates and practices. Mr. Hustead states and the billing statements reflect that the Hustead Law Firm charged hourly rates ranging from $230 for Mr. Hustead's work to $180 for Mr. Athey's work.

City Center does not challenge the reasonableness of the hourly rates charged by American Modern's attorneys.

City Center asserts that this Court, in determining a reasonable fee to be awarded, should consider that the appeal resulted in a published opinion which affirmed the validity of the original assignment from Summit to City Center. City Center argues that the award should be limited to the fees and costs associated with the Petition for Rehearing, suggesting that the award should be no more than $8, 273.00 in fees and $308.00 in costs.

By advocating this position, City Center is attempting to reargue the Tenth Circuit's determination that the appeal was unwarranted. That question is not now before this Court. The Tenth Circuit's order cited Rule 38 of the Federal Rules of Appellate Procedure, which provides as follows:

If a court of appeals determines that an appeal is frivolous, it may, after a separately filed motion or notice from the court and reasonable opportunity to respond, award just damages and single or double costs to the appellee.

The Tenth Circuit found that City Center was not justified in proceeding with the appeal after City Center reassigned the claims to Summit. That act, which occurred on September 10, 2012, caused the appeal to become moot. The award should include the reasonable attorneys' fees and costs that American Modern incurred in connection with the appeal, including those incurred in connection with the present motion.

Fees associated with three time entries on August 31, 2012 and two entries on September 4, 2012, which total $424.00, will not be included in the award because the appeal had not yet become moot when that work was performed.

City Center contends that the Hustead Law Firm's billing statements reflect some excessive billing and duplication of effort by the three attorneys who worked on the case. City Center also contends that fees associated with some recorded time should not be included in the award because the descriptions of the work performed are insufficient. City Center submitted its Exhibits 4, 5, and 6 to highlight the fees that it characterizes as excessive, duplicative, and/or unsupported.

The award will not include $989 billed for 4.3 hours of Mr. Hustead's time, described on the billing entries for November 19 and 20, 2013 as preparation for and attendance at the oral argument before the Tenth Circuit. Mr. Shannon apparently argued the appeal on behalf of American ...

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