United States District Court, District of Columbia
MEMORANDUM OPINION & ORDER
D. BATES United States District Judge.
Feld filed this lawsuit to obtain reimbursement for legal
expenses under an insurance policy from Fireman's Fund
Insurance Company (“FFIC”). Feld seeks
reimbursement for legal bills totaling approximately $4.5
million generated in a civil lawsuit against him. Feld v.
Fireman's Fund Ins. Co., 909 F.3d 1186, 1189 (D.C.
Cir. 2018). FFIC alleges that it was required to pay only
about $2.1 million of Feld's $4.5 million claim.
Court granted summary judgment to FFIC, concluding that FFIC
reimbursed Feld in accordance with a rate agreement between
FFIC and Feld's counsel in the civil suit, and hence that
FFIC had satisfied its obligations to Feld. Feld v.
Fireman's Fund Ins. Co., 206 F.Supp.3d 378 (D.D.C.
2016), reconsideration denied, 263 F.Supp.3d 74
(D.D.C. 2017). The D.C. Circuit reversed and remanded to this
Court, holding that summary judgment was improper because
there remained a genuine issue of material fact as to the
existence of a rate agreement. Feld, 909 F.3d at
1199. The parties now are preparing for trial.
point, it is undisputed that the insurance policy is valid
and requires FFIC to pay some portion of the legal fees that
Feld incurred. The disputed issues in this case have been
whittled down to two: (1) whether the fees Feld's trial
counsel charged were “reasonable” such that FFIC
should have paid them in full; and (2) whether a rate
agreement existed that limited FFIC's obligation to Feld
with respect to these fees. Currently before the Court are
two competing proposals for how to structure a trial to
resolve these two issues. Joint Proposal for Further
Proceedings (“Joint Proposal”) [ECF No. 112] at
parties agree that the existence of a rate agreement
must go to a jury. The parties disagree, however, about
whether the reasonableness of legal fees is a
question for a judge or jury. Feld contends that a single
jury trial considering both the reasonableness of fees and
the existence of a purported rate agreement is appropriate.
Id. at 2-3; see Pl. Kenneth Feld's
Proposal for Further Proceedings (“Feld
Proposal”) [ECF No. 115]. Feld argues that the
reasonableness of fees is not a matter of damages-it is a
matter of liability: Feld's case-in-chief is that FFIC
breached its obligation under the insurance policy by failing
to pay reasonable fees. Id. at 8-9. Feld also notes
that as the plaintiff he has the right to present his
case-in-chief before FFIC presents affirmative defenses, and
hence FFIC cannot be permitted to argue the existence of an
agreement before Feld argues that FFIC breached its
obligations under the policy. Id. at 4 (quoting
Flying Food Corp. v. NLRB, 471 F.3d 178, 186 n.5
(D.C. Cir. 2006)).
argues that it would be more efficient to first submit the
issue of the existence of a rate agreement to a jury, and, if
a jury were to find that no rate agreement existed, only then
would the issue of reasonableness be determined-preferably by
the Court, but alternatively through a second jury trial.
Joint Proposal at 2-3; Def. FFIC's Br. Regarding
Bifurcation & Whether Issues Should Be Tried to a Jury
(“FFIC Proposal”) [ECF No. 114] at 1-8. FFIC
cites District of Columbia law for the proposition that a
right to trial by jury does not attach to a claim of
attorney's fees arising from a private contract and that
the reasonableness of attorney's fees is a question for
the trial court. FFIC Proposal at 6-8 (quoting Ideal
Electronic Sec. Co. v. Int'l Fidelity Ins. Co., 129
F.3d 143, 146-150 (D.C. Cir. 1997)).
Rule 42 of the Federal Rules of Civil Procedure, a court may
separate issues for trial “[f]or convenience, to avoid
prejudice, or to expedite and economize, ” so long as
“any federal right to a jury trial” is preserved.
Fed.R.Civ.P. 42(b). Two consecutive jury trials would not
serve the interests of judicial economy or fairness, and thus
two options are viable: a single jury trial, or a jury trial
on the existence of a rate agreement followed by an
accounting of reasonable fees by the Court. For the reasons
that follow, the Court concludes that Feld does not have the
right to a jury trial as to the calculation of reasonable
attorney's fees, and the Court therefore concludes that
the most efficacious, efficient, and convenient way to
proceed is by the latter option. To the extent that the jury
finds that a rate agreement did not exist between FFIC and
Feld's trial counsel, the Court will conduct an
accounting of reasonable fees to which Feld is entitled.
right to a jury trial in the federal courts is to be
determined as a matter of federal law in diversity as well as
other actions.” Simler v. Conner, 372 U.S.
221, 222 (1963) (per curiam). The Seventh Amendment
“preserves the right to trial by jury in ‘suits
at common law, where the value in controversy shall exceed
twenty dollars, '” but actions that “lie
strictly in equity do not give rise to a right to trial by
jury and may be tried by the court alone.” Dawson
v. Contractors Transp. Corp., 467 F.2d 727, 730 (D.C.
Cir. 1972) (quoting U.S. Const. amend. VII). “The
Seventh Amendment question depends on the nature of the issue
to be tried rather than the character of the overall
action.” Ross v. Bernhard, 396 U.S. 531, 538
(1970). To determine whether an issue is legal or equitable,
courts first “compare the statutory action to
18th-century actions brought in the courts of England prior
to the merger of the courts of law and equity, ” then
“examine the remedy sought and determine whether it is
legal or equitable in nature.” Tull v. United
States, 481 U.S. 412, 417-18 (1987). The Supreme Court
has also considered “the practical abilities and
limitations of juries” in its analysis of which issues
should be tried by jury. Ross, 396 U.S. at 538 n.10.
Of these three inquiries, the second inquiry into the nature
of the remedy sought “is the more important in our
analysis.” Chauffeurs, Teamsters and Helpers, Local
No. 391 v. Terry, 494 U.S. 558, 565 (1990).
the first and third considerations are easily resolved in
favor of finding that the reasonableness of attorney's
fees is equitable in nature. As to the nature of the claim
under the pre-merger custom, “English courts for
centuries have allowed claims for attorney's fees in both
the courts of law and equity[, ] . . . [b]ut when brought in
the courts of law, judges, not juries, determined
attorney's fees.” AIA Am., Inc. v. Avid
Radiopharmaceuticals, 866 F.3d 1369, 1373 (Fed. Cir.
2017) (citations omitted). As the Federal Circuit noted,
“since either a judge in the court of law or an equity
court would determine attorney's fees, this implies that
attorney's fees generally do not involve legal
rights.” Id. And with regard to the
“practical abilities and limitations of juries, ”
the Second Circuit aptly noted:
To compute a reasonable amount of attorneys' fees in a
particular case requires more than simply a report of the
number of hours spent and the hourly rate. The calculation
depends on an assessment of whether those statistics are
reasonable, based on, among other things, the time and labor
reasonably required by the case, the skill demanded by the
novelty or complexity of the issues, the burdensomeness of
the fees, the incentive effects on future cases, and the
fairness to the parties. Such collateral issues do not
present the kind of common-law questions for which the
Seventh Amendment preserves a jury trial right.
McGuire v. Russell Miller, Inc., 1 F.3d 1306, 1315
(2d Cir. 1993).
the second (and most important) consideration, the Court must
examine the nature of the remedy. Damages are
“equitable where they are restitutionary.”
Chauffeurs, 494 U.S. At 570. In contrast, a
plaintiff seeking “money damages” presents a
legal issue and has a right to jury trial. Id. at
573. The underlying contract issue of entitlement to
attorney's fees would unequivocally give rise to a legal
issue triable to a jury. McGuire, 1 F.3d at 1314.
For example, the Supreme Court held in Simler that a
dispute between an attorney and his client about the terms of
a contingent fee retainer contract-in which the client argued
that the retainer required payment of a
“‘reasonable' fee” but the attorney
contended that a subsequent contract required payment of 50%
of the client's recovery-presented a legal issue.
Simler, 372 U.S. at 223. However, “the
subsequent determination of the amount of attorney['s]
fees owed presents equitable issues of accounting which do
not engage a Seventh Amendment right to a jury trial.”
McGuire, 1 F.3d at 1314.
there is no dispute that Feld is entitled to some amount of
attorney's fees under his insurance policy. Although the
question of the existence of an agreement between FFIC and
Feld's prior trial counsel presents a legal issue for
which Feld has a Seventh Amendment right to a jury trial,
once this issue is resolved, no further legal issues triable
to a jury remain. The amount of a reasonable fee will either
be set by the purported rate agreement, or else it will
require an equitable accounting by the Court to determine a
reasonable fee amount. These attorney's fees, though
quantified in dollars, are not money damages to be assessed
by a jury. The fees awarded may not equal Feld's actual
monetary loss or directly compensate him for all fees he
expended; rather, the Court's duty would be to assess the
reasonableness of fees in light of conditions in the legal
marketplace and fairness to the parties. Thus, the
calculation of reasonable attorney's fees is an equitable
issue and will be determined separately by the Court.
This conclusion tracks the prevailing practice under Maryland
law, which is the law governing the parties' insurance
policy. See Feld, 206 F.Supp.3d at 384;
Feld, 909 F.3d at 1194. “Under Maryland law,
when a contract [such as an insurance policy] explicitly
provides for the recovery of reasonable costs or reasonable
attorneys' fees, the court has the right to determine
what constitutes a reasonable fee.” Fed. Leasing,
Inc. v. Amperif Corp., 840 F.Supp. 1068, 1077 (D. Md.
1993); see also Mash Enters., Inc. v. Prolease Atl.
Corp., 162 Fed.Appx. 125, 133 (3d Cir. 2005)
(“Under Maryland law, when a fee application is made
pursuant to a contractual right, a court must examine the
request for reasonableness, even if the contract contains no
such requirement.”); Atl. Contracting &
Material Co., Inc. v. Ulico Cas. Co., 844 A.2d 460, 478
(Md. 2004) (holding that “reasonableness of
attorneys' fees” under a contractual indemnity
clause “is generally a factual determination within the
‘sound discretion of the trial judge . . .'”)
(quoting Reisterstown Plaza Assocs. v. Gen. Nutrition
Ctr., Inc., 597 A.2d 1049, 1057 (Md. 1991));
Sullivan v. Easco Corp., 662 F.Supp. 1396, 1404 (D.
Md. 1987) (same, adding that ...