Ronald A. Baker And Joyce Baker, Apps. v. Fireman's Fund Ins. Co., Res. , 426 P.3d 776 ( 2018 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
RONALD A. BAKER, and JOYCE ) No. 76218-4-1 C)
BAKER, husband and wife, ) c:2
(pc
C
) .1r4
rn(=>
Appellants/Cross-Respondents, ) rn
-71
) DIVISION ONE
7:1
v. ) Tr.-13
nrncj
)
.ZC r-
sp:
FIREMAN'S FUND INSURANCE ) "Acit
.•
COMPANY; AMERICAN INSURANCE )
COMPANY, a member of the )
FIREMAN'S FUND INSURANCE )
COMPANIES; NORTH PACIFIC )
INSURANCE COMPANY; )
ONEBEACON INSURANCE )
COMPANY; RUBATINO REFUSE )
REMOVAL INC., a Washington )
corporation; BRUNSWICK )
CORPORATION, owner of )
BRUNSWICK FAMILY BOAT CO., INC.,)
manufacturer of Bayliner boats; and )
SNOHOMISH COUNTY, a political )
subdivision of the State of Washington, ) PUBLISHED OPINION
)
Respondents/Cross-Appellants. ) FILED: September 17, 2018
)
MANN, A.C.J. — Ronald and Joyce Baker filed suit against their insurance
companies, Fireman's Fund Insurance Company and American Insurance Company
(collectively Fireman's Fund)for breaching their duty to defend. The litigation ended in
No. 76218-4-1/2
a settlement preserving the Bakers' claim for attorney fees for resolution by the trial
court. Using the lodestar method, and a 1.3 multiplier, the trial court awarded the
Bakers $1,209,757.25 for attorney fees and costs. The Bakers appeal and argue that
the trial court erred in (1)failing to make them whole under Olympic Steamship Co., v.
Centennial Ins. Co.,117 Wn.2d 37, 811 P.2d 673(1991),(2) excluding some of their
claimed fees, and (3) applying only a 1.3 multiplier to the lodestar. Fireman's Fund
cross appeals.1 Because the trial court acted well within its discretion, we affirm.
The Bakers owned and operated the Sisco Woodwaste Landfill (landfill) in
Snohomish County. The Bakers opened the landfill in 1978 and operated it for six years
Until 1984. The Bakers purchased insurance policies for the landfill from Fireman's
Fund covering the years between 1978 and 1986. The Bakers also purchased a three
year policy from North Pacific Insurance Company, the predecessor to OneBeacon
Insurance Company, in January 1986. OneBeacon cancelled this policy after only a
year.
The landfill received waste from a number of generators, including Snohomish
County and incinerator ash from a Boeing waste-to-energy facility. After the ash was
found to contain hazardous materials, the ash deliveries were stopped. In 1983, the
Washington Department of Ecology (Ecology)found that leachate had escaped from the
landfill. A year later, in 1984, the Snohomish Health District(SHD)suspended the
Bakers' operating permit and ordered the Bakers to stop operating the landfill.
1 Respondent/Cross-Appellants Fireman's Fund filed a motion to Strike Appellant/Cross-
Respondent's Reply Brief. The motion is denied.
-2-
No. 76218-4-1/3
The landfill continued to be problematic after its closure. In August 2000, the
SHD directed the Bakers to respond to the leach ate problem and obtain a permit to
perform closure activities in accordance with the SHD sanitary code.
In October 2000, the Bakers contacted Fireman's Fund about insurance
coverage. Fireman's Fund responded and informed the Bakers that it had concluded
that some or all of the claims alleged may not be covered and "specifically reserve[d]
the right to assert any and all defenses to coverage." The letter informed the Bakers
that Fireman's Fund reserved the right to file a declaratory judgment action to determine
coverage and that it would seek reimbursement for all monies paid toward the defense
or representation if it was determined there was no coverage.
In May 2001, the SHD sued the Bakers alleging permit violations, violations of a
SHD order, and nuisance. The Bakers appeared pro se and did not retain counsel. A
default judgment was ultimately issued against the Bakers. The landfill was
subsequently identified on Ecology's hazardous sites list and ranked a "2" out of a scale
of 1 to 5 with 1 representing the highest level of concern.
In November 2005, Fireman's Fund changed its coverage determination and
agreed to participate in the "defense of claims asserted against [the Bakers] by the SHD
and DOE that the Landfill and adjacent property and/or associated groundwater are
contaminated." It agreed to provide this defense subject to a full reservation of its
rights. It also appointed Marten Law Group (Marten Law)to represent the Bakers.
In October 2006, Marten Law identified 12 waste generators and transporters
who, by disposing potentially hazardous waste at the landfill, may have been potentially
liable parties (PLPs). Marten Law identified several options for dealing with cleanup
-3-
No. 76218-4-1/4
liability at the landfill including seeking contribution from the PLPs and settlement with
the Ecology and Snohomish County.
In May 2007, the Bakers retained Hackett Beecher & Hart(HBH)on a
contingency fee agreement. The contingency agreement required the Bakers to pay
HBH one-third of the "gross amount recovered." With HBH as their attorney, the Bakers
then filed suit against Fireman's Fund and one of the PLP's identified by Marten Law.
The Bakers alleged that Fireman's Fund (1) breached its contractual duties to
investigate, defend, and indemnify them for costs incurred under the Model Toxic
Control Act(MTCA)1,(2) acted negligently and in bad faith, and (3) engaged in unfair
claims settlement practices in violation of the Consumer Protection Act(CPA).2 In May
2008, Fireman's Fund agreed to the Bakers' request to fund legal action against the
PLPs using Marten Law.
In April 2009, after Fireman's Fund unsuccessfully moved to sever the Bakers'
insurance-related claims from claims against PLPs, the parties stipulated, at the trial
court's direction, that "actions or positions taken by [Fireman's Fund] in [its] own
defense as parties to this suit. . . shall not be used or referred to in any way in
connection with any of the causes of action [the Bakers] have asserted or will assert
against[Fireman's Fund]."
In December 2009, in an effort to avoid foreclosure, the Bakers asked Fireman's
Fund if it would pay the Bakers' outstanding property tax bill of $70,286.14. Fireman's
Fund agreed and promptly paid the bill.
1 Chapter 70.105D RCW.
2 Chapter 19.86RCW.
-4-
No. 76218-4-1/5
From August 2010 until the summer of 2013, the Bakers' case against Fireman's
Fund was pending but inactive. This was because of the lengthy time periods
necessary to gather environmental data, present findings to Ecology, await the
Ecology's opinion, and then gather more data.
In July 2014, the court continued trial to March 2015 and ordered the parties to
mediate within 30 days of receiving Ecology's opinion on environmental remediation.
The parties received Ecology's opinion letter in December 2014, and began mediation
in January 2015.
Over the course of three mediation sessions, the parties resolved their disputes.
The first settlement agreement resolved the disputes over the landfill remediation
between the Bakers, Snohomish County, and two PLPs. Under this settlement,
Snohomish County agreed to take ownership and full responsibility for remediating the
landfill and closing it in return for payments on behalf of the Bakers and the two PLPs.
The Bakers and Fireman's Fund then resolved their dispute by entering a
settlement agreement, buy back of insurance policies, and release of all claims. In
exchange for monetary payments, the Bakers agreed to release all claims against
Fireman's Fund. The settlement, however, left open the Bakers' ability to separately
pursue attorney fees through the trial court:
Nothing in this Agreement shall foreclose the Bakers' ability to pursue
attorney fees from Fireman's Fund based on Olympic Steamship, alleged
Consumer Protection Act(CPA) violations, and/or bad faith, which
attorney fee claim will be resolved on motion practice in the Lawsuit. The
Bakers will file their motion for their claim for fees within 10 days of this
fully executed Agreement, or as soon as practicable thereafter given the
court's and the parties' availability for hearing the motion. The parties
agree to abide by the briefing schedule set forth in CR 56(c), i.e., the
Bakers' motion shall be filed not later than 28 calendar days before the
-5-
No. 76218-4-1/6
hearing, any opposition shall be filed not later than 11 calendar days
before the hearing, and any rebuttal shall be filed not later than five (5)
calendar days before the hearing. For purposes of the Bakers' motion for
attorney fees, CPA violations need not be proven, although Fireman's
Fund makes no concessions that a specific fee entry relates to the CPA
claim.
Consistent with the settlement, on June 10, 2016, the Bakers petitioned the trial
court for an award of their attorney fees and costs. The petitions sought fees pursuant
to either Olympic Steamship, the CPA, or under equity due to bad faith. The Bakers
asked the court to apply the lodestar method as the proper measurement of reasonable
attorney fees. In support, the Bakers offered declarations from several local attorneys
in support of a reasonable hourly rate, along with time records to support the number of
hours billed. Under the lodestar method, the Bakers sought $1,147,435 in attorney
fees. The Bakers asked the trial court to apply a "liberal multiplier" of 2.5 times the base
amount in recognition of the unusual, difficult and risky nature of the litigation. The
Bakers requested a total of $2,875,177 in attorney fees and costs. The trial court
entered findings and conclusions concurring that the Baker's requested hourly rates
were reasonable but reducing some of the hours billed for matters it deemed either
unnecessary or inappropriate. The court determined that the proper lodestar amount
was $930,582.50. The court then used a 1.3 times multiplier concluding that "it is
appropriate to take into account the exceptionally long pendency of this case during
which time HBH received no payment of fees or reimbursement for posts, the
exceptionally favorable result which they obtained on behalf of their clients, and the risk
(albeit not large) that no recovery might be obtained." The court awarded the Bakers'
$1,209,757.25 for reasonable attorney fees and $26,634.06 in reasonable costs.
-6-
No. 76218-4-1/7
After the trial court denied the Bakers' motion for reconsideration, the Bakers
appealed. Fireman's Fund cross appealed.
II
There are two relevant inquires in determining an award of attorney fees: first,
whether the prevailing party is entitled to legal fees, and second, whether the award of
attorney fees is reasonable. Public Util. Dist. 1 v. International Ins. Co., 124 Wash. 2d 789,
814, 881 P.2d 1020 (1994). Whether a party is legally entitled to recover attorney fees
is a question of law that we review de novo. King County v. Vinci Constr. Grands
Prolets/Parsons RCl/Frontier-Kemper JV, 188 Wash. 2d 618, 625, 398 P.3d 1093(2017).
Whether the amount of fees awarded was reasonable is reviewed for an abuse of
discretion. "In order to reverse an attorney fee award, an appellate court must find the
trial court manifestly abused its discretion." Pham v. Seattle City Light, 159 Wash. 2d 527,
538, 151 P.3d 976 (2007). "That is, the trial court must have exercised its discretion on
untenable grounds or for untenable reasons." Pham, 159 Wash. 2d at 538.
We first examine whether the Bakers were legally entitled to recover attorney
fees. In general, "Washington follows the American rule in awarding attorney fees."
Dayton v. Farmers Ins. Group, 124 Wash. 2d 277, 280,876 P.2d 896 (1994). Under the
American rule, a court may award attorney fees only if that award is authorized by
contract, statute, or a recognized ground in equity. Vinci Constr., 188 Wash. 2d at 625.
One such recognized equitable ground is the rule announced in Olympic Steamship.
Under Olympic Steamship,"[a]n insured who is compelled to assume the burden of
legal action to obtain the benefit of its insurance contract is entitled to attorney fees."
117 Wash. 2d at 54.
-7-
No. 76218-4-1/8
The parties do not dispute that the Bakers were the prevailing party and thus
entitled to reasonable attorney fees under Olympic Steamship.3 Consequently, our
analysis focuses on whether the trial court abused its discretion in determining the
Bakers' reasonable attorney fees.
III
The Bakers argue first that the trial court abused its discretion in failing to
consider the "make whole" purpose of an award of attorney fees under Olympic
Steamship. In essence, the Bakers assert that because the fee agreement with their
attorneys wouldn't have obligated them to pay HBH one-third of the gross recovery from
Fireman's Fund, any award of fees less than that amount does not make them whole.
We disagree.
At the outset, we agree with the Bakers that the equitable purpose supporting an
award of attorney fees under Olympic Steamship requires that the insured be made
whole. As our Supreme Court has explained:"when an insurer unsuccessfully contests
coverage, it has placed its interests above the insured. Our decision in Olympic
Steamship remedies this inequity by requiring that the insured be made whole."
McGreevy v. Oregon Mutual Ins. Co., 128 Wash. 2d 26, 39-40, 904 P.2d 731 (1995);
Panorama Village Condominium Owners Ass'n v. Allstate Ins. Co., 144 Wash. 2d 130, 144,
26 P.3d 910 (2001). We disagree, however, with the Bakers' assertion that because the
trial court failed to award attorney fees at a level commiserate with the contingency fee
3 While Fireman's Fund argues in its briefing before this court that the Bakers were not the
prevailing party under the settlement, during oral argument counsel conceded that the Bakers were the
prevailing party.
-8-
No. 76218-4-1/9
agreement between the Bakers and HBH, it failed to make them whole and therefore
abused its discretion.
The starting point, and indeed, the "primary consideration," in determining an
appropriate award of attorney fees is reasonableness. Allard v. First Interstate Bank of
Washington, N.A., 112 Wash. 2d 145, 153, 768 P.2d 998(1989). Thus, in order to assure
that an insured is made whole under Olympic Steamship, the attorney fee award must
include all reasonable attorney fees, including all expenses necessary to establish
coverage. Panorama Village, 144 Wash. 2d at 144.
One established method of determining a reasonable attorney fee award is the
lodestar method. Bowers v Transamerica Title Ins. Co., 100 Wash. 2d 581, 597, 675 P.2d
193 (1983). Under this method, the trial court first examines the attorneys' billing
records and determines the number of hours that were reasonably expended in
pursuing the litigation. Bowers, 100 Wash. 2d at 597. The total number of hours
reasonably expended is then multiplied by the reasonable hourly rate of compensation
resulting in the lodestar fee. Bowers, 100 Wash. 2d at 597-98. After the lodestar has
been calculated, the court may then consider the necessity of adjusting the rate after
considering the contingent nature of the work, and the quality of the work performed.
Bowers, 100 Wash. 2d at 598.
No Washington court has held the lodestar method is the exclusive method to
determine reasonable attorney fees.4 By the same token, no Washington court has
4 For example, the Bakers' could have presented the trial court with their underlying contingency
fee agreement and asked the court to determine if the agreement was reasonable under RPC 1.5(a)(the
RPA governing reasonableness of attorney fees), and if so, award the Bakers the agreed one-third of the
gross amount recovered from Fireman's Fund for fees. See Allard, 112 Wash. 2d at 152-154 (approving
-9-
No. 76218-4-1/10
held that a trial court abuses its discretion by using the lodestar method in order to
determine reasonable attorney fees. In this case, the Bakers agreed that the lodestar
method was appropriate:
the proper measurement of a reasonable attorney fee is the same: the
Court determines a base award by using the lodestar calculation: the
reasonable number of hours spent representing the plaintiff is multiplied
by a reasonable hourly rate.. . . The Court then determines whether that
base award should be subject to a multiplier, primarily on the basis of the
contingent nature of the fee and the risk of no recovery at the inception of
the case.
The trial court did not abuse its discretion by accepting the Bakers' argument that the
lodestar method was proper for determining the Bakers' reasonable attorney fee award
under Olympic Steamship.
IV
The Bakers next claim that the trial court abused its discretion by excluding fees
for work that were not necessary to pursue the claims against Fireman's Fund. We
disagree.
Under the lodestar method,"the party seeking fees bears the burden of proving
the reasonableness of the fees." Mahler v. Szucs, 135 Wash. 2d 398, 433-34, 957 P.2d
632(1998). In determining the base lodestar, the trial court "must limit the lodestar to
hours reasonably expended, and should therefore discount hours spent on
unsuccessful claims, duplicated effort, or otherwise unproductive time." Bowers, 100
Wash. 2d at 597. "The hours reasonably expended must be spent on claims having a
'common core of facts and related legal theories." Pham, 159 Wash. 2d at 538 (quoting
using contingency fee agreement to determine reasonable fees). But this is not what the Bakers did. The
Bakers elected to follow the lodestar method.
-10-
No. 76218-4-1/11
Martinez v. City of Tacoma, 81 Wash. App. 228, 242-43, 914 P.2d 86 (1996)). "Courts
must take an active role in assessing the reasonableness of fee awards, rather than
treating cost decisions as a litigation afterthought." Mahler, 135 Wash. 2d at 434. The trial
court is required to enter findings of fact and conclusions of law. Mahler, 135 Wash. 2d at
435.
The Bakers claim that the trial court abused its discretion in excluding or reducing
hours billed for four different matters. We address each in turn.
Fees Related to Tax Foreclosure
The Bakers' attorney time records show that they spent over 226 hours
assessing the Bakers' outstanding tax bill and possible foreclosure on their property
over the course of approximately 18 months. When the Bakers notified Fireman's Fund
of the tax issue in December 2009, Fireman's Fund agreed to pay the long overdue bill
within a week. The trial court excluded 211.7 hours spent on the Bakers' outstanding
property tax bill and related foreclosure:
Claims related to the property tax foreclosure proceedings against the
landfill property, for 211.7 hours, totaling $61,280.00. While HBH obtained
a favorable result for [the Bakers] by getting Fireman's Fund to pay the
outstanding tax bill, this was not an item covered by the applicable
insurance policies and should not be included in fees awarded against
Fireman's Fund. Arguably it does not fall within the contingent fee
agreement HBH had with the Bakers at all.
The Bakers failed to carry their burden to demonstrate these fees were
appropriate. Because Fireman's Fund promptly paid the tax bill after being notified, and
the property tax bill was at best tangential to the Bakers' claimsigainst Fireman's Fund,
the trial court did not abuse its discretion in denying the 211.7 hours spent on the
foreclosure issue.
-11-
No. 76218-4-1/12
Fees Related to PRP Claims
In May 2008, at the Bakers' request, Fireman's Fund agreed to pay Marten Law
to prosecute claims against the PRPs. There is no dispute that Fireman's Fund paid
Marten Law in full. The Bakers sought recovery for additional attorney fees by HBH for
litigation against the PRPs. Fireman's Fund did not oppose some of the claimed fees
including time spent attending depositions of witnesses related to the PRP claims, time
spent reviewing discovery, or time spent for updates from Marten Law. Fireman's fund
did, however, object to time spent by HBH for preparing for depositions, strategy and
assessment of claims, hours spent reviewing documents that consultants prepared for
Marten Law, and other duplicative tasks. The trial court agreed with Fireman's Fund
that some of these hours should be excluded:
Fees related to [PLPs] which were pursued by[MLG]on behalf of[the
Bakers], for 139.4 hours, in the amount of $58,292.50. [The Bakers] have
not established that it was necessary to prevail on their insurance claims
to incur these attorney hours when [MLG] had been retained by Fireman's
Fund to represent them with regard to issues related to the landfill clean-
up, including seeking contribution by third parties.
The Bakers argue that this time should have been included because the work
related to the Bakers' insurance claims against Fireman's Fund. They point to specific
entries where the trial court excluded time that was spent on issues relevant to both
sets of claims, the Bakers' insurance claims and the PLP litigation led by MLG. The
Bakers failed to carry their burden to demonstrate these fees were non-duplicative or
necessary for the Bakers' claims against Fireman's Fund.
The trial court did not abuse its discretion in excluding 139.4 hours for duplicative
work related to the PRP claims.
-12-
No. 76218-4-1/13
Fees incurred litigating against OneBeacon
The trial court excluded time spent litigating claims against OneBeacon, another
insurer that had issued a policy to the Bakers from 1986 to 1987:
Fees related to claims against One Beacon, for 142.6 hours, totaling
$65,540.00. Plaintiffs have not established that it was necessary for them
to pursue these claims when the contribution claims were being handled
by[MLG]on behalf of[the Bakers].
The Bakers argue that excluding time litigating with OneBeacon was error
because of the common-fund doctrine: Fireman's Fund is required to pay for the Bakers'
fees incurred recovering a contribution from OneBeacon because that contribution
ultimately lowered the amount that Fireman's Fund had to pay to Snohomish County.
(OneBeacon contributed $300,000 to the County.) The Bakers claim that the trial
court's factual mistake about OneBeacon's status—it was an insurer, but the court
appeared to treat OneBeacon as if it were a PLP—compounded the court's error.
Here, excluding time billed on OneBeacon-related work was reasonable. First,
the common-fund doctrine does not apply because in order to create the common fund,
the insured must recover from the "at-fault party" and OneBeacon is not the at-fault
party. Matsyuk v. State Farm Fire & Cas. Co., 173 Wash. 2d 643, 650, 272 P.3d 802
(2012); see Mahler, 125 Wash. 2d at 428 (discussing doctrine in context of insured
recovering from tortfeasors, not another insurer).
Second, Fireman's Fund likely secured its right to contribution from OneBeacon
at the time the Bakers tendered their claim to OneBeacon. This right was created by
the continuous-trigger doctrine: when an insured sustains continuous damages all
insurers providing coverage for any portion of the total time period of the continuing
-13-
No. 76218-4-1/14
damage are jointly and severally liable for the entire amount of damage. Am. Nat'l Fire
Ins. Co. v. B & L Trucking & Const. Co., Inc., 134 Wash. 2d 413, 424, 951 P.2d 250 (1998).
Here, since the landfill's environmental damage continued over time, under the
continuous-trigger doctrine both insurers would have been jointly and severally liable for
the entire amount of the damage at the time the Bakers tendered a claim to them.
Finally, the Bakers' argument that the trial court's factual mistake as to
OneBeacon's identity somehow led to it misapplying the common-fund doctrine is
unpersuasive. OneBeacon's identity is irrelevant to Fireman's Fund's liability under
insurance policies.
The trial court did not abuse its discretion in excluding 142.6 hours for litigating
claims against OneBeacon.
Fees for acting as the Bakers'personal counsel
The trial court excluded time that HBH spent as the Bakers' personal counsel:
Fees related to acting as personal counsel for [the Bakers] with regard to
tax consequences of the settlement to them and other issues, for 46.7
hours, totaling $21,000.00. These issues were undoubtedly of importance
to [the Bakers] but were not necessary to establishing Fireman's Fund[']s
obligations under the insurance contracts, and appear to have been
incurred after settlement was reached in March 2015.
The Bakers argue that the lodestar should include time their counsel advised
them on the settlement's tax effects for two reasons. First, Olympic Steamship and the
CPA allow a prevailing party to recover all of its fees, not just fees related to liability
issues. Second, the CR 2A Agreement did not settle the case because payment from
Fireman's Fund was contingent on the rest of the parties settling with the Bakers.
-14-
No. 76218-4-1/15
The trial court recognized that the issues regarding the tax consequences of the
settlement were important to the Bakers but irrelevant to establishing Fireman's Fund's
liability to the Bakers. Further, whether the Bakers would have reneged on the CR 2A
Agreement had HBH not advised them is irrelevant: the record shows that they settled
their claims against Fireman's Fund and that the parties in fact agreed to a settlement in
principle.
The trial court did not abuse its discretion in excluding 46.7 hours for personal
counsel.
V
The Bakers finally claim that the trial court abused its discretion by applying a 1.3
multiplier instead of their requested 2.5 multiplier. Again, we disagree.
After the court has calculated the lodestar, it may adjust it by applying a
multiplier: "the lodestar fee . .. may, in rare instances, be adjusted upward or
downward in the trial court's discretion." Mahler, 135 Wash. 2d at 434. "Adjustments to
the lodestar product are reserved for 'rare' occasions." Miller v. Kenny, 180 Wash. App.
772, 825, 325 P.3d 278 (2014). The lodestar is "presumed to adequately compensate
an attorney." Miller, 180 Wash. App. at 825.
Courts can adjust the lodestar to account for two factors: the contingent nature of
success and the quality of work performed. Bowers, 100 Wash. 2d at 598. To account for
the contingent nature of success, the trial court "must assess the likelihood of success
at the outset of the litigation. This is necessarily an imprecise calculation and must
largely be a matter of the trial court's discretion." Bowers, 100 Wash. 2d at 598. The
second basis, the quality of work performed, "is an extremely limited basis for
-15-
No. 76218-4-1/16
adjustment because in virtually every case the quality of work will be reflected in the
reasonable hourly rate." Bowers, 100 Wash. 2d at 599.
The trial court agreed with the Bakers that the reasonable hourly rate did not
reflect the quality of the work performed. The court disagreed, however, that the
Baker's requested 2.5 times multiplier was appropriate and instead applied a 1.3
multiplier. The court explained:
while this case was complicated by long delays in part due to waiting on
decisions from the Washington State Department of Ecology, the number
of parties, and the combination of claims, it did not present complex or
novel issue with regard to the insurance coverage issues. Furthermore,
the probability of ultimately prevailing on the coverage issues was high
because of Fireman's Fund's lack of responsiveness to Plaintiffs' inquiries
from 2001 to 2005 and early assertions that there was no coverage under
the policies. There is no evidence that HBH was required to turn down
other profitable work because of this case.
After considering the entire record, the court is not persuaded that
Plaintiffs have established that a 2.5 multiplier is appropriate. However,
the court concludes that it is appropriate to take into account the
exceptionally long pendency of this case during which time HBH received
no payment of fees or reimbursement for costs, the exceptionally
favorable result which they obtained on behalf of their clients, and the risk
(albeit not large) that no recovery might be obtained. For these reasons,
the court concludes a multiplier of 1.3 is supported by the record. This
results in an attorney fee award of $1,209,757.25.
The court awarded a multiplier because of "the risk (albeit not large) that no
recovery might be obtained," the length of time it took to resolve, and that HBH
recovered no fees or costs for up to nine years. This are proper reasons supporting a
multiplier. Bowers, 100 Wash. 2d at 598. The court's decision also took into account the
contingent nature of the Bakers'fee agreement. The court's decision is supported by its
finding and substantial evidence. The trial court did not abuse its discretion in awarding
a 1.3 times multiplier to the lodestar fee.
-16-
No. 76218-4-1/17
VI
Fireman's Fund cross appeals and challenges (1)the trial court's failure to
deduct hours for additional unsuccessful, duplicated, and unproductive work, and (2)the
hourly rates approved for the Bakers' attorneys. We address each in turn.
Additional Exclusions
Fireman's Fund claims first that the trial court erred in approving the following
additional fees claimed by the Bakers:(1)43 hours spent on a motion for summary
judgment that was never filed;(2)time spent consulting with the Bakers regarding
settlements that had already been agreed to;(3) time spent submitting claims for other
defense expenses after the parties had settled; and (4) communications and meetings
with the assessor's office and environmental consultants. We disagree.
The trial court rejected Fireman's Fund's argument that this work should be
excluded:
Fireman's Fund has asserted that other fees should also be deducted.
These include fees they designate as administrative, correcting discovery
responses, duplicative/excess time, unnecessary/unsuccessful, vague[,]
and not apparently related to the claims against Fireman's Fund. The
court does not agree. For example, counsel is required to correct and
supplement discovery responses. The charge for this is minimal, and the
need is not out of line with what occurs in many cases. The time spent on
researching a motion for summary judgment is not unreasonable and
cannot be said to be unnecessary. The benefits of such research would
still be applicable for trial and mediation of claims.
The record before us demonstrates that the court considered the entire record
and found that this work by the Bakers' attorneys was reasonable and necessary.
While Fireman's Fund disagrees with the court's decision, it fails to show that the court's
-17-
No. 76218-4-1/18
decision was manifestly unreasonable. The trial court did not abuse its discretion in
excluding hours from the lodestar.
Hourly Rates
Fireman's Fund claims that it was error to calculate the lodestar without evidence
of HBH's actual hourly rates. We disagree.
When attorneys have an established rate for billing clients, that rate is likely a
reasonable rate. Bowers, 100 Wash. 2d at 597. The usual rate is not, however,
"conclusively a reasonable fee and other factors may necessitate an adjustment."
The court may also consider the level of skill, time limits imposed by the litigation, the
attorney's reputation, and the undesirability of the case. Bowers, 100 Wash. 2d at 597.
Here, the Bakers did not offer evidence of actual hourly rates charged by HBH.
As the trial court explained, the fee agreement between the Bakers and HBH was
contingent and consequently, HBH was not charging an hourly rate for its work for the
Bakers. Instead, the trial court based its determination of relevant rates on declarations
from several local attorneys that do similar work in the relevant legal community. The
trial court concluded: "Based on the evidence presented, the hourly rates set forth
above are reasonable for the type of legal work performed in this case in the Puget
Sound legal community for attorneys and paralegals of similar skill, experience, and
reputation." The trial court's determination of reasonable hourly rates was supported by
substantial evidence and was not an abuse of discretion.
-18-
No. 76218-4-1/19
We affirm the trial court's fee award.5
4444,,
171 A.c
WE CONCUR:
„
5 The Bakers request attorney fees on appeal "pursuant to Olympic Steamship and the[CPA]and
RAP 18.1." We decline to award the Bakers fees because they do not prevail.
-19-