American Zurich Insurance Company v. Jasso

United States District Court,

W.D. Texas, Midland-Odessa Division,

Midland-Odessa Division.

American Zurich Insurance Company, Plaintiff,

v.

Sandra Jasso, Beneficiary of Hilario Jasso, Deceased, Defendant.

MO-12-CV-007

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Signed October 31, 2013.

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Filed 11/01/2013

ORDER GRANTING IN PART DEFENDANT’S MOTION FOR AWARD OF ATTORNEY’S FEES

ROBERT JUNELL, United States District Judge

*1 Before the Court are Defendant’s Motion for Award of Attorney’s Fees (Doc. No. 39), Plaintiff’s Response to Defendant’s Motion for Award of Attorney’s Fees (Doc. No. 41), and Defendant’s Reply to Plaintiff’s Response to Motion for Approval of Attorney’s Fees (Doc. No. 44). After consideration, the Court is of the opinion that the motion should be granted in part.

BACKGROUND

On January 25, 2012, Plaintiff filed suit seeking a judgment setting aside the final decision of the Appeals Panel of the Texas Department of Insurance, Division of Workers’ Compensation. The Appeals Panel found Hilario Jasso was in the course and scope of employment when he died and Sandra Jasso was therefore entitled to death benefits. Plaintiff counterclaimed seeking a judgment affirming the final decision of the Appeals Panel.

On December 17, 2012, both Plaintiff and Defendant filed motions for summary judgment. On March 1, 2013, the Court issued an order granting Defendant’s motion and denying Plaintiff’s motion. Defendant then filed its motion for award of attorney fees on March 15, 2013. Plaintiff, however, filed a Motion for Reconsideration on March 21, 2013. Thereafter, the Court issued an Order Denying Plaintiff s Motion for Reconsideration of Trial Court’s Order on Summary Judgment on October 23, 2013. Now that the Court has ruled on Plaintiff s motion for reconsideration, it will address Defendant’s motion for award of attorney fees.

STANDARD OF REVIEW

In diversity cases, like this one, state law determines whether a party is entitled to an award of attorney’s fees. Atchison, Topeka and Santa Fe Ry. Co. v. Sherwin–Williams Co., 963 F.2d 746, 751 (5th Cir. 1992). A fee award is governed by the same law that serves as the rule of decision for the substantive issues in the case. Kona Tech. Corp. v. S. Pac. Transp. Co., 225 F.3d 595, 614 (5th Cir. 2000). Further, state law controls both the award of and the reasonableness of fees awarded where state law supplies the rule of decision. See, e.g., Mathis v. Exxon Corp., 302 F.3d 448, 461 (5th Cir. 2002); Northwinds Abatement, Inc. v. Emp’rs Ins., 408.221 regulates the award of attorneys’ fees to counsel who represent claimants before the Division or a court in disputes under the Workers’ Compensation Act. See Tex. Lab.Code § 408.221. Section 408.221(c) provides an insurance carrier that seeks judicial review of a final decision of a Texas Workers’ Compensation Commission (“TWCC”) Appeals Panel regarding the compensability or eligibility of income benefits is liable for “reasonable and necessary attorney’s fees ... incurred by the claimant as a result of the insurance carrier’s appeal if the claimant prevails on an issue on which judicial review is sought by the insurance carrier....” Tex. Lab. Code § 408.221(c). The concept of “prevailing party” is not defined in the statute. However, it has been defined in other contexts as when “one of the parties to a suit ... successfully prosecutes the action or successfully defends against it, prevailing on the main issue, even though not to the extent of its original contention.” City of Amarillo v. Glick, 991 S.W.2d 14, 17 (Tex. App.—Amarillo 1997, pet. denied). Whether a party “prevails” should be based upon success on the merits, rather than whether damages are awarded. Glick, 991 S.W.2d at 17; Scholl v. Home Owners Warranty Corp., 810 S.W.2d 464, 468 (Tex. App.—San Antonio 1991, no writ). Here, the Court granted summary judgment in favor of Defendant. Therefore, Defendant is the prevailing party in this case.

*2 Further, attorney’s fees must be approved by the TWCC or the trial court and must be based upon the attorney’s time and expense as evidenced by written documentation. See Tex. Lab. Code § 408.221(a)–(b). The manner and amount of the award of attorney’s fees, however, is within the trial court’s discretion. Tex. Emp’rs Ins. Ass’n v. Motley, 491 S.W.2d 395, 397 (Tex. 1973); Smith v. City of Austin, 670 S.W.2d 743, 744–45 (Tex. App.—Tyler 1984, no writ). In addition, § 408.221(c) states the trial court shall take into consideration the additional factors listed in § 408.221(d) in making its determination as to the amount of attorney’s fees that are reasonable and necessary. Tex. Lab. Code § 408.221(c). Those additional factors are as follows:

1) the time and labor required;

2) the novelty and difficulty of the questions involved;

3) the skill required to perform the legal services properly;

4) the fee customarily charged in the locality for similar legal services;

5) the amount involved in the controversy;

6) the benefits to the claimant that the attorney is responsible for securing; and

7) the experience and ability of the attorney performing the services.

Tex. Lab. Code § 408.221(d). It is not necessary, however, to establish each of these factors. Hays & Martin, L.L.P. v. Ubinas–Brache, 192 S.W.3d 631, 636 (Tex. App.—Dallas 2006, pet. denied).

DISCUSSION

In Defendant’s motion, she seeks attorney’s fees and expenses in the amount of $38,118.75 and $2,516.79, respectively, at the trial level. Defendant also seeks $750.00 in attorney’s fees to respond to the post-judgment motion filed by Plaintiff. Further, if Plaintiff appeals, Defendant seeks further attorney’s fees and expenses for an appeal to the United States Court of Appeals for the Fifth Circuit and the United States Supreme Court in the amount of $13,325.00 and $24,975.00, respectively.

Defendant filed the Affidavit of Kevin B. Miller, counsel for Defendant, along with an itemized billing statement as evidence of reasonableness of the fees. In Miller’s Affidavit, he testifies his billing rate of $375 is reasonable and customary in this case. Miller Aff. ¶¶ 12, 14. The billing statement (dated from January 25, 2012 to March 1, 2013) details the professional services rendered, which includes telephone conferences, depositions, travel, preparation of legal documents, court appearances, legal research, and pre-trial preparation. See Billing Statement. This report shows the services performed, the time spent on the matter, and the hourly rate charged for the services. See id.

In its Response, Plaintiff makes two objections to Defendant’s motion for attorney’s fees. First, Plaintiff argues the $375 hourly rate charged by Defendant’s attorney is too high. Second, Plaintiff objects to the request for 33 hours incurred in travel time associated with this case. The Court will address each objection below.

I. Objection to Hourly Rate Charged by Defense Counsel

Plaintiff first disputes the $375 hourly rate charged by Defendant’s attorney. Among the eight factors used in determining the reasonableness of an award is the fee customarily charged in the locality for similar services. See Franco v. Lopez, 307 S.W.3d 551, 555 (Tex. App.—Dallas 2010, no pet); Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997). The forum district—Odessa, Texas—is generally the relevant “market.” Hawkins v. Nat’l Ass’n of Sec. Dealers, Inc., No.3–96–CV–3219–R, 1998 WL 74259, at *1 (N.D. Tex. Feb. 13, 1998).

Here, the billing statement shows Defendant’s attorney expended a total of 101.65 hours on this case and 2 hours post-judgment. See Billing Statement. Plaintiff does not dispute it was necessary to expend the number of ours set forth by Miller except the 33 hours in travel which will be discussed below. Rather, Plaintiff objects to the hourly rate charged by Miller. Miller states in his Affidavit he is familiar with what a reasonable and customary attorney fee should be in this case based upon his extensive experience. Miller Aff. 7. Miller claims $375 per hour is reasonable. Miller Aff. ¶¶ 12, 14. Plaintiff presents evidence to the contrary, and points out the hourly rate sought by Miller is twice the amount ($150) set forth in the guidelines under Texas Administrative Code § 152.4. Plaintiff also asserts the requested rate exceeds the reasonable hourly rate for same or similar work in Texas. Although Plaintiff attached the Texas Lawyer’s Annual Salary and Billing 2012 Survey and the State Bar of Texas 2011 Hourly Fact Sheet as evidence in support of its argument, Defendant contends Plaintiff has not put forth evidence of the amount of a fee charged in Odessa when a judicial review of a Texas Workers’ Compensation Decision and Order is tried in federal court.

*3 As to Plaintiff’s assertion that Miller’s hourly rate is twice that set forth in the guidelines, the Court notes while its determination of reasonable fees is bound by the factors in § 408.221(d) of the Texas Labor Code, it is not constrained by the Texas Workforce Commission guidelines set forth in 28 Texas Administrative Code §§ 152.4 and 152.5. Section 408.221(f) of the Texas Labor Code provides “[t]he commission by rule shall provide guidelines for maximum attorney’s fees for specific services in accordance with this section.” Tex. Lab. Code § 408.221(f). Section 408.221(c), however, states “[a]n award of attorney’s fees under this subsection is not subject to commission rules adopted under Subsection (f).” Id. at § 408.221(c). Here, it is undisputed the award of attorney’s fees to Defendant is made pursuant to Texas Labor Code § 408.221(c) because Plaintiff sought judicial review of a final decision of the appeals panel regarding Defendant’s eligibility for death benefits and Defendant prevailed on the issue on which judicial review was sought. As such, Defendant’s attorney’s fees are not subject to the rules adopted by the Texas Workforce Commission. See id.

Nevertheless, Plaintiff has put forth evidence that Defendant’s $375 hourly rate is not consistent with prevailing market rates in Odessa, Texas. Plaintiff submitted evidence which showed the average billing rate for equity partners in San Antonio in 2012 was $285 per hour, and that rates for equity partners in areas in Texas, other than Dallas, Houston, or San Antonio, average $289 per hour. See Texas Lawyer’s Annual Salary and Billing Statement 2012. Additionally, Plaintiff presented evidence that the median rate in West Texas for personal injury litigation is $205 per hour and $257 per hour for labor and employment litigation. See State Bar of Texas 2011 Hourly Fact Sheet. Lastly, Plaintiff presented evidence that attorneys with approximately 25 years of experience in West Texas, like Miller, are paid an average of $288 per hour. See id.

Based on prevailing market rates in the relevant community for similar services by lawyers of comparable skill, experience, and reputation, the Court finds the evidence does not support a charge of $375 per hour. Instead, looking to Miller’s years of experience and the market rates in West Texas, the evidence supports a finding that $288¹ per hour is a reasonable fee.

II. Objection to Charging for Travel Time

Plaintiff next objects to the request for 33 hours incurred in travel time associated with this case. Plaintiff points out Miller has an office in Odessa, Texas where his client lived. Plaintiff recognizes Miller has several offices throughout Texas. Nevertheless, Plaintiff argues Miller failed to segregate travel associated with this case from travel associated with other matters or the general travel requirements associated with the practice in Odessa, Texas.

Defendant requests reimbursement at Miller’s full hourly rate for the time expended by traveling from San Antonio to Odessa, Midland, and Fredericksburg for meetings, depositions, and hearings. Many courts permit attorneys to recover fees for travel time, although often times at 50% of the attorney’s rate in the absence of documentation that any legal work was accomplished during travel time. See, e.g., In re Babcock & Wilcox Co., 526 F.3d 824, 828 (5th Cir. 2008) (evaluating Fifth Circuit precedent from various types of cases and concluding as a general rule that “it is not an abuse of discretion to discount non-working (and even working) travel time”); Watkins v. Fordice, 7 F.3d 453, 459 (5th Cir. 1993) (affirming district court’s decision to discount hourly rate billed by 50% for travel time, in a Voting Rights Act case); Saldivar v. Rodela, 894 F.Supp.2d 916, 939 (W.D. Tex. 2012) (awarding attorney fees for travel time at one-half of normal hourly rate in a Hague Convention on the Civil Aspects of International Child Abduction case); Wilkerson v. Atascosa Wildlife Supply, 307 S.W.3d 357, 360 (Tex. App.—San Antonio 2009, no pet) (finding the trial court did not abuse its discretion in awarding attorney’s fees for travel time when it was reduced for the time when attorney was not actively working on case related matters).

*4 Defendant provides no documentation that any legal work was accomplished during travel time in this case. Further, Defendant did not demonstrate “comparably skilled practitioners” charged their full hourly rate for travel time. See In re Babcock & Wilcox Co., 526 F.3d at 828. The Court thus believes a reduction in the number of hours billed for travel is appropriate. Therefore, Miller’s rate for the time entries that reflect travel time will be reduced by 50%. Although Plaintiff only objects to 33 hours of travel, Miller’s billing statement shows 35 hours of travel. As such, Defendant may recover for 35 hours of travel time at a rate of $144.00. In other words, Defendant may recover 17.5 hours of travel time at a rate of $288.00.

III. Determination of Reasonable and Necessary Attorney’s Fees

Turning to § 408.221(d) factors, the Court finds factor one (time and labor required) was partially discussed above in sections I. and II. To reiterate, the billing statement showed Miller expended a total of 101.65 hours in this case, and 2 hours post-judgment. Plaintiff objected to the hourly rate charged by Miller. Above, the Court found Defendant’s attorney’s hourly rate and rate charged for traveling were unreasonable, and therefore adjusted said rates. The Court notes Plaintiff did not dispute it was necessary to expend the number of ours set forth by Miller except the travel hours. Based on the written evidence, the Court now finds the time expended (save travel time) was reasonable.

Factors two (novelty and difficulty of case) and three (skill required to prosecute it) have presumably been considered above, insofar as they played a role in the determination of reasonable hourly rates in this case. Nonetheless, Miller states the questions involved are novel and complicated. Miller Aff. ¶ 9. Plaintiff does not dispute this. Miller further asserts this case required a litigator proficient in both workers’ compensation practice as well as Federal Civil Procedure, a combination which is allegedly rare. Id. 10. Miller states prevailing in workers’ compensation cases requires a particular set of skills which he possesses. Id. ¶ 11. Again, Plaintiff did not dispute this. Although the Court finds this case required a certain degree of skill and was in some ways difficult, as it involved death benefit issues, this case, was basically an ordinary workers’ compensation case.

Factors four (customary fee charged in the locality for similar legal services) and seven (the experience and ability of the attorney performing the services) have already been considered in the Court’s determination of the hourly rate charged by Defendant’s attorney. Plaintiff does not appear to question that Miller is an experienced and able attorney. Miller states in his Affidavit he has been licensed to practice in Texas since 1988, and his practice has been devoted primarily to personal injury, commercial litigation, workers’ compensation, and criminal defense. Id. ¶ 2. Miller further asserts he has tried numerous cases in state, county and federal courts, as well as administrative hearings. Id. Above the Court found the $375.00 rate, however, was ultimately not reasonable in light of the prevailing market rates in Odessa, Texas for similar services by lawyers of comparable skill, experience, and reputation.

As to factors five (amount involved in the controversy) and six (benefits to the claimant that the attorney is responsible for securing), Plaintiff does not dispute Miller’s statement in his affidavit: “the benefits at stake in this matter are substantial.” Miller Aff. ¶ 13. That is, this case is about Death Income Benefits which entitle Defendant to receive over $750.00 per week in benefits until she dies or remarries. The Court agrees the benefits involved in this case are substantial. Nevertheless, the Court will consider these two factors in conjunction with all of the factors listed in § 408.221(d).

*5 After a thorough review of the above-listed factors and in light of the written evidence, the Court determines the reasonable and necessary attorney’s fees for work performed by Defendant’s attorney in this case to date are as follows:

IV. Expenses

Defendant’s attorney also listed $2,516.79 as incurred expenses in his billing statement. Section 408.222(a) of the Texas Labor Code specifically provides “an attorney’s fee under this section is based on the attorney’s time and expenses according to written evidence presented to the ... court.” Tex. Lab. Code § 408.221(b) (emphasis added). Although Plaintiff does not dispute this amount, Defendant’s attorney did not present any written evidence outside of the merely listed lump sum. As Defendant’s attorney is not entitled to recover his expenses in the absence of authenticating documents, the Court orders Miller to provide the Court with invoices, receipts, and supporting affidavits (including descriptions of the nature of each expense and the reasons therefore) within 10 days of the date of this order. See Tex. Lab. Code § 408.221(b); see also Old Republican Ins. Co. v. Stafford, No. 3:03–CV–1611, 2005 WL 2026853, at *9 (N.D. Tex. Aug. 22, 2005).

V. Appellate and Supreme Court Fees

Defendant’s attorney also seeks attorney’s fees if Plaintiff appeals to the Fifth Circuit and the United States Supreme Court. A district court’s refusal to award appellate attorney’s fees before an appeal has even been taken is not error. Instone Travel Tech Marine & Offshore v. Int’l Shipping Partners, Inc., 334 F.3d 423, 433 (5th Cir. 2003); Penton v. Am. Bankers Ins. Co., 115 Fed.Appx. 685, 687 (5th Cir. 2004) (“Now that this court has ruled in favor of the Pentons in the underlying appeal, the matter of their appellate attorney’s fees will be ripe for adjudication by the district court”); Cyiark v. City of Houston, 976 F.Supp. 591, 598–99 (S.D. Tex. 1996) (“Plaintiff’s request for attorneys’ fees in the event Defendant appeals the judgment is premature under the circumstances of this case. Such fees must be determined after completion of the appeal.”). The Fifth Circuit has held the issue of appellate attorney’s fees is a matter for the district court on remand following the resolution of the underlying appeal. See Instone, 334 F.3d at 433. As such, this Court denies without prejudice Defendant’s attorney’s request for additional appellate fees at this time.

CONCLUSION

Based on the above stated facts, Defendant’s motion should be granted in part. Defendant shall have and recover from Plaintiff her reasonable and necessary attorney’s fees in the amount of $24,811.20. Additionally, the Court reserves judgment on Defendant’s request for approval of expenses until Defendant’s attorney submits the appropriate documentation. Lastly, at this time the Court declines to award Defendant’s attorney’s appellate fees. Accordingly,

*6 IT IS ORDERED that Defendant’s Motion for Award of Attorney’s Fees (Doc. No. 39) is hereby GRANTED IN PART consistent with this Order.

IT IS FURTHER ORDERED regarding expenses incurred by Defendant’s attorney in this case, that Miller provide the Court with invoices, receipts, and supporting affidavits (including descriptions of the nature of each expense and the reasons therefore) within 10 days of the date of this Order.

IT IS FURTHER ORDERED that Defendant’s attorney’s request for additional appellate fees is denied without prejudice at this time.

IT IS SO ORDERED.

SIGNED on this 31st day of OCTOBER, 2013.