v. Meadow Gold Products Co., 52 F.R.D. 165, 168 (E.D. Pa. 1971) (After removal, pleadings are "treated as if done under federal rules initially".) See generally, Pennsylvania National Bank & Trust Co. v. American Home Assurance Co., 87 F.R.D. 152, 154 (E.D. Pa. 1980); Fed. R. Civ. P. 81(c). Accordingly, we conclude that any award of counsel fees and costs must be pursuant to federal law.
Recognizing that any award of fees which it may recover from the interpleader fund cannot prejudice the government's asserted tax lien, Campagna-Turano Bakery, Inc. v. United States, 632 F.2d 39, 41 (7th Cir. 1980); Bank of America National Trust & Savings Ass'n v. Mamakos, 509 F.2d 1217, 1219 (9th Cir. 1975); Spinks v. Jones, 499 F.2d 339, 340 (5th Cir. 1974), IFIC moves for an order awarding it fees in excess of $7,600.00 upon the condition that plaintiffs, and not the IRS, ultimately prevail.
Plaintiffs, resisting any potential award to IFIC from the corpus of the fund, argue that such an award would defeat the purpose of an interpleader action: preservation of the fund for the proper recipient. Additionally, plaintiffs assert that attorney fees generated by IFIC in the interpleader action are within the normal course of their business and that any award is, therefore, inappropriate. See e.g., Minnesota Mutual Life Ins. Co. v. Gustafson, 415 F. Supp. 615, 617-18 (N.D. Ill. 1976).
The priority of a counsel fee award, whether conditional or unconditional, is committed to the sound discretion of the trial court which considers what is "appropriate" under the circumstances. Mutual of Omaha Ins. Co. v. Dolby, 531 F. Supp. 511, 516 (E.D. Pa. 1982) (Becker, Circuit Judge; sitting by designation). The positions taken by plaintiffs and the IRS subject IFIC to a "real risk of vexatious, conflicting claims", Manufacturers Life Ins. Co. v. Johnson, 385 F. Supp. 852, 854 (E.D. Va. 1974) (quotations omitted); as such, we conclude that they are entitled to counsel fees upon the condition that plaintiffs ultimately prevail.
In properly exercising our discretion to award fees we must, of course, make an informed decision as to the amount of time reasonably expended by IFIC counsel in their successful effort to extricate their client from this litigation. However, we cannot properly discharge this function on the record currently at bar. Affidavits submitted by IFIC aver that highly qualified counsel expended 98.5 hours on this matter and that an award of $7,604.25 is warranted; this figure represents slightly more than half of the corpus of the interpleader fund. At this juncture we simply cannot discern whether all the hours which counsel for IFIC worked on the case were necessary to bring this matter to its current posture. Indeed, the long, expensive hours expended by IFIC are perplexing and troublesome in light of the fact that IFIC's unopposed interpleader petition consisted of nine pages and that its answer to the government's complaint in interpleader is only four pages. By so noting, we do not imply that each hour expended by counsel should correlate to some specific amount of docketed material or briefs. Rather, we simply observe that there is no indication from the docketed material that this matter took so long to prepare. Indeed, based upon the relative paucity of difficult legal issues which have so far imbued the case, we find it difficult to imagine how 98.5 hours were spent on the file. Cf. In re: Nation/Ruskin, Inc., 22 Bankr. 207 (E. D. Pa. 1982) (specifying the contents of an appropriate fee petition).
Counsel for IFIC, seeking to justify the fee award, aver that the interpleader was of "unusual complexity" in that the action was originally instituted in state court and subsequently removed. However, as plaintiffs properly point out, the interpleader was accomplished while the case was pending in state court. We are, therefore, unsure how a subsequent removal petition complicated the preparation of the previously-filed interpleader.
We conclude that IFIC is entitled to a conditional fee award but only upon a properly documented and supported request. Accordingly, we grant IFIC's motion to discharge it from this action and from further liability with respect to claims here at issue. However, we deny without prejudice its request for a conditional award of counsel fees in the amount of $7,604.25. An appropriate order will issue.
AND NOW, this 16th day of September, 1982, IT IS ORDERED that International Fidelity Insurance Company is discharged from this action and from all further liability with respect to claims at issue herein.
IT IS FURTHER ORDERED that International Fidelity Insurance Company's motion for conditional counsel fees is GRANTED, but that its motion to set such fees in the amount of $7,604.25 is DENIED without prejudice.
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