It was almost two years ago that I wrote about Wright v. Wright, No. M2007-00378-COA-R3-CV (Tenn. Ct. App. Dec. 12, 2007). (Post 1) (Post 2) Wright 1 is an opinion authored by Judge Walter Kurtz that reversed a decision to award a plaintiff’s lawyer a one-third contingent fee in a personal injury case brought on behalf of a minor. The lawyer seeking the fee not only did know how much time he spent on the matter but did not submit an affidavit or any evidence of how much time was spent. Nor did he introduce into evidence any information relevant to the RPC 1.5(a) factors that govern fees issues. Frankly, the lawyer here simply assumed that the trial judge would enforce the fee contract (one-third of the recovery) and did not think about the record.
The case was remanded so that a reasonable fee could be determined. After discovery and a hearing, the trial judge awarded the plaintiff’s lawyer a fee of $131,000. (The amount of the settlement of wrongful death case was $425,000.) The child’s guardian ad litem perfected another appeal, arguing that the fee was too high.
Wright v. Wright, No. M2008-01181-COA-R3-CV (Tenn. Ct. App. Oct. 8, 2009) ("Wright 2") affirmed the Trial Court’s award of the $131,000 fee. The opinion details the extensive work done on the case, and reveals how plaintiff’s counsel was able to settle the case for $425,000 despite the fact that the applicable insurance coverage was only $50,000. Also important to the outcome: the child was suing her grandmother, and thus a substantial judgment (or any judgment) was certainly in doubt.
This is what the Court said about the effort of Plaintiff’s counsel:
In sum, we agree with the trial court’s finding that Attorney Dunaway spent a total of 128.2 hours working on Kaitlyn’s behalf. Attorney Dunaway testified that this work included filing the complaint, gathering, reviewing, and preparing summaries of Kaitlyn’s extensive medical records, drafting and serving initial discovery requests,responding to the defendants’ discovery, examining the parties’ insurance coverage for sources of possible recovery, researching property records to determine the extent and location of the estate’s assets, having his associate attend three depositions on his behalf, reviewing and summarizing those depositions, negotiating with the insurer regarding its subrogation interest, and attending mediation. He introduced as exhibits various summaries he had prepared of the medical records, medical expenses, and property records, in anticipation of trial. The trial judge found that Attorney Dunaway acted reasonably and performed all legal services in a proper manner.
the “amount involved and the results obtained.” Attorney Dunaway described the uncertainty he faced if the case proceeded to a jury trial, explaining that a jury might not like the fact of a child suing her grandmother’s estate and could award a minimal recovery. The trial judge also stated, “I don’t know if a Fentress County jury would have given that kind of money in that type of lawsuit.” The judge said that Attorney Dunaway obtained a “good settlement,” stating, “this was some good lawyering here to get this kind of money for this child.” We also note that the initial complaint sought $250,000 in damages, the amended complaint sought $500,000, and the settlement was $425,000. Kaitlyn’s medical expenses totaled over $180,000, but Attorney Dunaway negotiated a settlement of the insurance company’s subrogation interest for only $62,517, resulting in a benefit to her of about $118,000. The trial judge noted that Attorney Dunaway’s negotiation “sav[ed] the child a substantial amount of money.”
The Tennessee Supreme Court specifically rejected the “lodestar approach” to setting attorney’s fees in United Medical Corp. of Tennessee, Inc. v. Hohenwald Bank and Trust Co., 703 S.W.2d 133, 137 (Tenn. 1986). “The ‘lodestar’ approach places primary emphasis on the hours of effort reasonably expended by the attorney and the rate customarily charged[.]” Id. In Tennessee, “[t]he determination of what constitutes a reasonable fee is [] a subjective judgment based on evidence and the experience of the trier of facts,” to be made after considering the factors set forth above. Id. “The amount of time expended, and the hourly rate commonly charged by attorneys for doing similar work in the community, while important, are not the only, or even the controlling, factors to be considered.” Id. at 136.