O'Brien v. Travelers Property & Casualty Insurance

Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
5-22-2003
O'Brien v. Travelers Prop Cslty
Precedential or Non-Precedential: Non-Precedential
Docket 02-2892
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Recommended Citation
"O'Brien v. Travelers Prop Cslty" (2003). 2003 Decisions. Paper 536.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 02-2892
JOHN J. O’BRIEN, III, ESQUIRE;
O’BRIEN & O’BRIEN ASSOCIATES,
Appellants
v.
TRAVELERS PROPERTY & CASUALTY INSURANCE COMPANY,
SUCCESSOR IN INTEREST TO AETNA INSURANCE COMPANY
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 00-cv-06258)
District Judge: Hon. Ronald L. Buckwalter
Submitted Under Third Circuit LAR 34.1(a)
May 22, 2003
Before: SCIRICA, Chief Judge, SLOVITER and NYGAARD, Circuit Judges
(Filed May 22, 2003)
OPINION OF THE COURT
SLOVITER, Circuit Judge.
John O’Brien, III (which encompasses here appellant O’Brien & O’Brien
Associates), appeals the order of the District Court refusing to award attorney’s fees and
costs following O’Brien’s recovery of an arbitral award of $30,000 in his breach of
contract suit against Travelers Property & Casualty Insurance Company. We will affirm.
I.
O’Brien was retained by Aetna Casualty and Surety Company from 1979 to 1985
to represent Garfield Molding which was a defendant in forty-one asbestos related
lawsuits. As evidenced from extensive correspondence between AETNA and O’Brien,
AETNA agreed to pay the counsel fees O’Brien incurred. O’Brien submitted a final bill
to Aetna in 1998 after the lawsuits were completed. By this time Aetna had transferred
the defense of these claims and the responsibility to pay any outstanding bills to Travelers
Property & Casualty Insurance Company (“Travelers”). Travelers refused to pay the
outstanding bill.
In 2000, O’Brien sued Travelers for, inter alia, breach of contract seeking
$47,306.95 for outstanding bills. Thereafter, O’Brien adjusted the amount to $50,921.61.
Mediation failed and the dispute went to arbitration, where O’Brien was awarded
$30,000. Travelers did not appeal this award which it paid in full, and the judgment was
marked as satisfied with the Clerk’s office.
O’Brien then brought suit against Travelers for attorney’s fees and costs,
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amounting to $18,317.41, that he incurred in bringing the breach of contract suit, and for
interest on the arbitration award at 6%, amounting to $6,800. O’Brien sought a total of
$25,117.41. The District Court denied O’Brien’s claim for attorney’s fees and interest
and O’Brien appealed after his motion for reconsideration was denied.1
II.
Travelers argued that the issue of O’Brien’s attorney’s fees was adjudicated in the
arbitration of the underlying breach of contract action. The District Court seemed to
agree, as the Memorandum and Order denying O’Brien’s motion for reconsideration
stated:
Plaintiff [O’Brien] sought to recover $60,000 from defendant,
$10,000 of which was attorney’s fees in bringing the suit.
After a hearing, the arbitration panel thought his claim was
worth $30,000.
Memorandum & Order dated June 28, 2002 (emphasis added).
O’Brien correctly notes that this contains an inaccuracy, as the amount O’Brien
claimed was $50,921.61 not $60,000. However, O’Brien’s argument that the $30,000
arbitration award is for resolution of the outstanding bills, without attorney’s fees and
costs incurred in bringing this claim, is also incorrect. O’Brien’s original complaint seeks
“Judgment against the defendant in an amount in excess of Fifty Thousand ($50,000.00)
1
We have jurisdiction to entertain this appeal pursuant to 28 U.S.C. § 1291. We
must defer to the District Court’s decision not to award attorneys’ fees and costs unless it
has erred legally or the facts on which it made its determination are clearly erroneous.
Pennsylvania v. Flaherty, 40 F.3d 57, 60 (3d Cir. 1994).
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Dollars which includes interest, costs and attorneys fees.” App. at 13 (emphasis added).
We thus agree with Travelers that O’Brien is seeking recovery of attorney’s fees
and costs which were already adjudicated by arbitration of the underlying breach of
contract action. The arbitration panel reduced O’Brien’s claim of $50,921.61, which
“included attorneys fees and costs,” to $30,000. There was no mention that the $30,000
excluded attorney’s fees and costs. O’Brien’s acceptance of this award and marking it as
satisfied represented full resolution of the issues between the parties.
O’Brien asserts that Travelers presented false evidence to the Magistrate Judge
about its past payments to O’Brien. Even if this were true, such conduct has no bearing
on the issue before us as O’Brien took no appeal from the award that was reached by an
arbitration panel. We also note that there appears to be merit in Travelers’ argument that
O’Brien’s motion for attorney’s fees and costs was untimely filed. Under Fed. R. Civ. P.
54(d)(2), a motion for attorney’s fees must be filed “no later than 14 days after entry of
judgment.” The judgment in this case was filed on May 9, 2002, but under the counting
established by the Federal Rules of Civil Procedure, O’Brien’s motion for attorney’s fees
was not filed until May 24, fifteen days later. O’Brien has not filed a reply, and therefore
there is no explanation for the late filing.
Finally, and most important, there is no legal basis to support O’Brien’s request for
fees. As the Supreme Court has made clear, in the absence of an agreement or statute
providing for attorney’s fees, the American rule is that “the prevailing litigant is
4
ordinarily not entitled to collect a reasonable attorneys’ fee from the loser.” Alyeska
Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 247 (1975); see also Pennsylvania
v. Flaherty, 40 F.3d 57, 60 (3d. Cir. 1994) (plaintiff cannot recover attorneys’ fees from
the opposing party unless there is a statute or agreement between the parties that provides
for the awarding of attorney’s fees).
This case does not fall within any of the exceptions to the American Rule on which
O’Brien relies. In Trustees of Univ. of Pa. v. Lexington Ins. Co., 815 F.2d 890, 910-11
(3d Cir. 1987), we applied the Pennsylvania courts’ exception enunciated in Kelmo
Enterprises v. Commercial Union Ins. Co., 426 A.2d 680 (Pa. Super. Ct. 1981), allowing
an award of attorney’s fees based on an insurer’s breach of duty, but that is inapplicable
here because O’Brien was not the insured. Nor is he entitled to attorney’s fees under 28
U.S.C. § 1927 which was the basis of the award in Hicks v. Arthur, 891 F.Supp. 213,
215-16 (E.D. Pa. 1995). That statute authorizes recovery of fees only against an attorney,
not an attorney’s client. Finally, O’Brien’s reliance on Southern Nat’l Bank of Houston
v. Crateo, Inc., 458 F.2d 688 (5th Cir. 1972), and Nepera Chemical, Inc. v. Sea-Land
Serv., 794 F.2d 688 (D.C. Cir. 1986), is misplaced. In those cases, the courts permitted
the recovery of attorney’s fees incurred in prior litigation against a third party where they
were a natural consequence of the defendant’s wrongful act. In this case, O’Brien seeks
attorney’s fees against the defendant in this litigation, not in prior litigation.
It follows that this situation is governed by the general American Rule disallowing
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the recovery of attorney’s fees and costs from the unsuccessful defendant.
III.
For the reasons set forth, we will affirm the decision of the District Court rejecting
O’Brien’s claim for attorney’s fees and costs.
TO THE CLERK:
Please file the foregoing opinion.
/s/ Dolores K. Sloviter
Circuit Judge