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Bagher v. Auto-Owners Insurance Co.

United States District Court, District of Colorado

March 27, 2015

HOSSEIN BAGHER, d/b/a CHERRY CREEK ORIENTAL RUGS, Plaintiff,
v.
AUTO-OWNERS INSURANCE COMPANY, Defendant.

ORDER GRANTING MOTION FOR ATTORNEY FEES

Robert E. Blackburn United States District Judge

The matter before me is the Plaintiff’s Motion for Attorney Fees [#121][1] filed May 15, 2014. The defendant filed a response [#129], and the plaintiff filed a reply [#133]. I grant the motion.

I. BACKGROUND

This case concerns two insurance claims made by the plaintiff, Hossein Bagher. The first insurance claim was made in 2009, and the second in 2011. At the conclusion of the jury trial in this case, the jury found in favor of the plaintiff, Hossein Bagher, on his claims for unreasonable denial of insurance benefits concerning the 2009 and 2011 insurance claims. Both claims were asserted under §10-3-1116, C.R.S. In addition, the jury found in favor of Mr. Bagher on his breach of insurance contract claim. The breach of contract claim concerned only the 2011 insurance claim. The jury found in favor of the defendant, Auto-Owners Insurance Company, on the two bad faith breach of insurance contract claims asserted by Mr. Bagher. These two claims were also based on the 2009 and 2011 insurance claims. Mr. Bagher now requests an award of attorney fees as a portion of his statutory damages.

II. STANDARD OF REVIEW

A plaintiff who successfully asserts a claim for unreasonable delay or denial of insurance benefits under §10-3-1116, C.R.S., may recover, inter alia, reasonable attorney fees as a part of damages. Thus, Mr. Bagher seeks an award of reasonable attorney fees under §10-3-1116.

The claims of Mr. Bagher, including his claim for an award of attorney fees, are claims under the laws of the state of Colorado. Therefore, Colorado law controls. In Colorado, if a statute providing for an award of reasonable attorney fees does not provide a definition of reasonableness, “the amount of the award must be determined in light of all the circumstances, based upon the time and effort reasonably expended by the prevailing party's attorney.” Tallitsch v. Child Support Services, Inc., 926 P.2d 143, 147 (Colo. App.1996) (internal quotation and citation omitted). Section 10-3-1116 does not provide a definition of reasonableness. Nevertheless, “[i]n awarding attorney fees, the trial court may consider, among other factors, the amount in controversy, the duration of representation, the complexity of the case, the value of the legal services to the client, and the usage in the legal community concerning fees in similar cases. No one of these factors is conclusive.” Melssen v. Auto-Owners Ins. Co., 285 P.3d 328, 339 (Colo. App., 2012) (citation omitted).[2] “The party requesting an award of attorney fees bears the burden of proving by a preponderance of the evidence its entitlement to such an award.” American Water Development, Inc. v. City of Alamosa, 874 P.2d 352, 383 (Colo. 1994)

The fact that a matter is handled by an attorney under a fee agreement does not, per se, require a court to award the amount to which the attorney and client agreed. Spensieri v. Farmers Alliance Mutual Insurance Co., 804 P.2d 268, 271 (Colo. App.1990). The general criterion for the court “is not what the parties agreed, but what reflects reasonable value for services rendered.” Id. (citing Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974)).

The Colorado and federal standards for calculating reasonable attorney fees are essentially identical. The starting point for any calculation is the “lodestar, ” that is, the number of hours reasonably expended multiplied by a reasonable hourly rate. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Malloy v. Monahan, 73 F.3d 1012, 1017-18 (10th Cir. 1996). In determining the reasonable number of hours spent on the litigation, the applicant must exercise the same “billing judgment” as would be proper in setting fees for a paying client. Hensley, 461 U.S. at 437; Malloy, 73 F.3d at 1018. “‘Hours that are not properly billed to one’s client also are not properly billed to one’s adversary pursuant to statutory authority.’” Hensley, 461 U.S. at 434 (quoting Copeland v. Marshall, 641 F.2d 880, 891 (D.C. Cir. 1980) (en banc)) (emphasis in Copeland). Counsel, therefore, must make a good faith effort to exclude hours that are “excessive, redundant or otherwise unnecessary.” Id.

III. ANALYSIS

A. Attorney Fees As Damages

Auto-Owners contends attorney fees are an inextricable component of damages for under §10-3-1115 and §10-3-1116, C.R.S. Auto-Owners contends that if damages in the form of attorney fees were not proven at trial, then Mr. Bagher may not recover attorney fees.

Under Colorado law, which controls, the law is otherwise. “When attorney fees are treated as damages, they are often awarded and set by a court, even in a jury trial.” Hall v. American Standard Ins. Co. of Wisconsin, 292 P.3d 1196, 1201 (Colo.App. 2012). In Hall, the court determined that the trial court, and not the jury, determines the amount of attorney fees due on a successful claim under §10-3-1115 and §10-3-1116. Id. This approach is adopted and extended in the Colorado Jury Instructions - Civil. “Though determined post-trial by the court, even in jury trials, reasonable attorney fees and costs allowed by §10-3-1116(1), C.R.S., constitute statutory damages that must be reduced to judgment before appeal may be taken.” CJI-Civ. 4th ...


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