INSURANCE-BAD FAITH-ATTORNEY’S FEES

October 10th, 2018 by Rieders Travis in Insurance

Bernie Clemens, Nicole Clemens v. New York Central Mutual Fire Insurance Company, and/or NYCM Insurance Group and/or NYCM Holdings, Inc., 3d Cir. 2018 (Greenaway, Jr., J.  After a jury awarded him $100,000 in punitive damages under the Pennsylvania Bad Faith Statute, 42 Pa. Cons. Stat. § 8371, Appellant Bernie Clemens submitted a petition for over $900,000 in attorney’s fees from Appellee New York Central Mutual Fire Insurance Company (“NYCM”). The District Court denied this petition in its entirety, reasoning that it was not adequately supported and that the requested amount was grossly excessive given the nature of the case. Finding no abuse of discretion, we will affirm and, in doing so, take the opportunity to formally endorse a view already adopted by several other circuits – that is, where a fee-shifting statute provides a court discretion to award attorney’s fees, such discretion includes the ability to deny a fee request altogether when, under the circumstances, the amount requested is “outrageously excessive.” Brown v. Stackler, 612 F.2d 1057, 1059 (7th Cir. 1980); see also, e.g., Envtl. Def. Fund, Inc. v. Reilly, 1 F.3d 1254, 1258-60 (D.C. Cir. 1993); Fair Hous. Council of Greater Wash. v. Landow, 999 F.2d 92, 97 (4th Cir. 1993); Lewis v. Kendrick, 944 F.2d 949, 956-58 (1st Cir. 1991). Although it was unusual, we cannot say that this decision was an abuse of discretion. Review of the record and the District Court’s comprehensive opinion makes clear that denial of a fee award was entirely appropriate under the circumstances of this case. Counsel’s success was severely deficient in numerous ways. All the more troubling is the fact that counsel’s (supposedly) hard work did not appear to pay off at trial. As the District Court explained, counsel had “to be repeatedly admonished for not being prepared because he was obviously unfamiliar with the Federal Rules of Evidence, the Federal Rules of Civil Procedure and the rulings of th[e] court.” App. 630 (emphasis omitted). Given counsel’s subpar performance and the vagueness and excessiveness of the time entries, the District Court did not abuse its discretion in disallowing all 562 hours. Although we have never had the opportunity to formally endorse such an approach, other circuits have, holding that district courts have the discretion to deny a fee request in its entirety when the requested amount is “outrageously excessive” under the circumstances. Brown v. Stackler, 612 F.2d 1057, 1058 (7th Cir. 1980); see also, e.g., Scham v. District Courts Trying Criminal Cases, 148 F.3d 554, 556-59 (5th Cir. 1998), abrogated on other grounds as recognized in Bailey v. Mississippi, 407 F.3d 684, 686-87 (5th Cir. 2005); Envtl. Def. Fund, Inc. v. Reilly, 1 F.3d 1254, 1258-60 (D.C. Cir. 1993); Fair Hous. Council of Greater Wash. v. Landow, 999 F.2d 92, 97 (4th Cir. 1993); Lewis v. Kendrick, 944 F.2d 949, 956-58 (1st Cir. 1991). Here, the District Court provided a thorough explanation of how counsel failed to fulfill their duty to the court. This failure coupled with the other deficiencies in the petition and counsel’s substandard performance, justified the District Court’s decision to deny the fee request in its entirety. That decision was not an abuse of discretion. 

Appellant’s counsel in district court were Michael J. Pisanchyn & Michael R. Mey.