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Bair v. Purcell

August 17, 2010

CURTIS BAIR, ET AL., PLAINTIFFS
v.
FRANCIS PURCELL, ET AL., DEFENDANTS



The opinion of the court was delivered by: Chief Judge Kane

MEMORANDUM

Before the Court is Plaintiffs' motion for attorneys' fees.*fn1 (Doc No. 161.) The motion has been fully briefed and is ripe for disposition. For the reasons that follow, the motion will be granted in part.

I. BACKGROUND*fn2

After a nine day trial in the above-captioned matter, the jury returned a verdict in favor of Plaintiffs on three claims, including Patrice Bair's wage payment and collection claim brought in Count VII of the amended complaint. (Doc. No. 158.) The Court rendered a verdict in favor of Curtis Bair on his breach of fiduciary duty claim advanced in Count III of the amended complaint because it is equitable in nature. (Doc. No. 185.) Plaintiffs seek to recover reasonable attorney fees on these claims. (Doc. No. 161.) The Court initially determined that Plaintiffs' fee petition was inadequate to assess whether the hours worked were reasonable for the work performed and ordered the Plaintiffs to supplement the petition (Doc. No. 185 at 28-29), which they have done (Doc. No. 190). In their supplemented petition, the Plaintiffs claim $200,797.77 in attorneys' fees and costs accrued as a result of this litigation.*fn3

II. DISCUSSION

It is well established under the "American Rule" that ordinarily "the prevailing party may not recover attorneys fees as costs or otherwise." Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 245 (1975). This general rule is subject to several exceptions, including the two raised by the Plaintiffs in this case: bad faith and fee shifting statutes. See id. at 257-258. The Court will evaluate the Plaintiffs' arguments for fees under both of these exceptions in turn.

A. Bad Faith

Plaintiff Curtis Bair makes a claim for attorneys' fees for his breach of fiduciary duty and minority shareholder oppression claim under the Court's equitable jurisdiction. (Doc. No. 162 at 7.) It is well established that the courts have inherent power to award attorneys' fees in certain situations, such as when "the losing party has 'acted in bad faith, vexatiously, wantonly, or for oppressive reasons . . . ." Alyeska Pipeline, 421 U.S. at 258. "Where the behavior of a litigant has reflected a willful and persistent 'defiance of the law,' a court of equity has the power to charge an adverse party with plaintiff's counsel fees as well as court costs." Straub v. Vaisman & Co., Inc., 540 F.2d 591, 599 (3d Cir. 1976) (quoting Kahan v. Rosentiel, 424 F.2d 161, 167 (3d. Cir 1970). Most typically, attorneys' fees have been awarded on this basis for conduct occurring during litigation. Id. at 600. In some cases, however, fees have been awarded for "vexatious conduct which occurred before litigation actually commenced" and "activity which formed the basis for the suit." Id. (internal citations omitted). Awarding fees on the basis of the bad faith exception is punitive in nature. See Keck v. Commercial Union Ins. Co., 758 F. Supp. 1034, 1041 (M.D. Pa. 1991). This standard is therefore quite stringent; courts have noted that attorney fees for bad faith are not necessarily available even when punitive damages have been awarded on the claim. See id.

Plaintiffs assert this is a case that warrants the exceptional remedy of attorneys' fees for bad faith, especially considering the Purcell's outrageous conduct in their dealings with Curtis Bair. (Doc. No. 202 at 4-6.) Defendants argue that a further punitive award of attorneys' fees would be inequitable under the circumstances, considering the substantial award Curtis Bair has already received and the deteriorating finances of Defendants Francis and Norma Purcell. (Doc. No. 191 at 2-5.)

The Court must agree with the Defendants that a further punitive award of attorneys' fees is unjustified in this case. Though their defense was ultimately unsuccessful, the Court certainly cannot say that the Defendants' engaged in any conduct constituting bad faith during the course of this extended and complex litigation. Indeed, Defendants' motions resulted in the dismissal or narrowing of several counts in the amended complaint. (See Doc. No. 87.) Certainly, as the Court's findings of fact and law make clear, Francis and Norma Purcell engaged in outrageous conduct forming the basis for this lawsuit, including the use of manipulation and deception to deter Plaintiffs from enforcing their legal rights. Despite this, the Court has already crafted an equitable judgment on this claim. This judgment included full compensation for Curtis Bair's loss of ownership interest in Appalachian Baking, prejudgment interest at a rate of six percent on that ownership interest, and $750,000 in punitive damages. The Court finds that this judgment fully compensates Curtis Bair and appropriately punishes the outrageous conduct of the Purcells. As such, the Court will not further award Curtis Bair attorneys' fees on this claim.

B. Pennsylvania Wage Payment and Collection Law

Plaintiff Patrice Bair makes a claim for attorneys' fees under Pennsylvania's Wage Payment and Collection Law ("WPCL"). 43 Pa. Stat. Ann. §§ 260.1-260.11. The WPCL provides, inter alia, that "[t]he court in any action brought under this section shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow costs for reasonable attorneys' fees of any nature to be paid by the defendant." 43 Pa. Stat. Ann. 260.9a. Here, the jury found that Defendant Appalachian Baking Company ("Appalachian Baking") failed to timely pay Plaintiff Patrice Bair $855.19 in wages she had earned while an employee of the company. (Doc. No. 158.) The jury additionally found that Appalachian Baking did not have a good-faith basis to dispute their obligation to pay these wages, which entitled Patrice Bair to liquidated damages on the claim. (Id.)

Given the jury's verdict, Patrice Bair is entitled to an award of attorneys' fees. See Oberneder v. Link Computer Corp., 696 A.2d 148, 206 (Pa. 1997) ("[A]n award of attorneys' fees to a prevailing employee in an action brought under the [WPCL] is mandatory."). Despite this, the WPCL "only mandates an award of reasonable attorneys' fees. Courts retain discretion to determine the amount of the fees owed." Id. at 206 n.4.

In application of a fee-shifting statute such as the WPCL, "the most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). Performing this calculation will provide the "lodestar" figure, which is presumed to be a reasonable fee for the matter. Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990). The party seeking the attorneys' fees has the burden to prove that the requested attorney's fees are reasonable, which initially requires the fee petitioner to "submit evidence supporting the hours worked and the rates claimed." Id. at 1183; E.E.O.C. v. Federal Express Corp., 537 F. Supp. 2d. 700, 721 (M.D. Pa. 2005) (citing Hensley, at 433). This fee petition must be detailed and specific enough for the district court to ascertain whether the hours claimed are unreasonable for the work performed and should include "some fairly definite information as to the hours devoted to various general activities, e.g., pretrial discovery, settlement negotiations, and the hours spent by various classes of attorneys, e.g., senior partners, junior partners, associates." Rode, 892 F.2d at 1190. (quoting Lindy Bros. Builders, Inc. of Phila. v. American Radiator & Standard Sanatory Corp., 487 F.2d 161, 167 (3d Cir. 1973)). Despite this, "it is not necessary to know the exact number of minutes spent nor the precise activity to which each hour was devoted nor the specific attainments of each attorney." Id. Finally, The Third Circuit has held that a district court cannot decrease a fee award based on factors not raised by the adverse party. Rode, 892 F.2d at 1188 (quoting Cunningham v. City of McKeesport, 753 F.2d 262, 267 (3d Cir. 1985) ("[A] district court could not disregard the uncontested affidavits of the fee applicant when the party opposing the fee request had an opportunity to 'raise a material fact issue as to the accuracy of the representations as to hours spent, or the necessity for their expenditure.'").

1. Hourly Rate

An hourly rate is reasonable if the fee applicant demonstrates by evidence, in addition to the fee applicant's own affidavit, that the suggested rate is comparable to the current "rates prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Maldonado v. Houstoun, 256 F.3d 181, 184 (3d Cir. 2001). As the Court discussed in its prior memorandum, Defendants have not challenged the claimed hourly rate by Plaintiffs' attorneys James J. West and Robert R. Long, Jr. Mr. West has submitted his resume and qualifications along with a declaration from attorney David R. Fine, providing evidence that the claimed hourly rates of $225 per hour for Mr. West and $175 per hour for co-counsel Robert R. Long, Jr. are reasonable for the legal market in this district. (Doc. No. 162, Ex. 1-2.) Mr. West further represents in his affidavit that the billable rates charged to the Plaintiffs were discounted significantly at various points on account of the Plaintiffs' financial condition.*fn4 (Doc. No. 190-1 ΒΆΒΆ 4-6.) This resulted in the following effective billing rates during the course of the litigation: $130.93 per hour for both ...


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