| Opinion: | Folsom v. Century Life Assurance Co., 2021 OK CIV APP 50 |
| Subject matter: | Insurance Bad Faith; Attorney Fees |
| Date Decided: | November 5, 2021; Mandate Issued: December 8, 2021 |
| Trial Court: | District Court of Muskogee County; Judge Payton |
| Route to this Court: | Appeal of trial court’s award of attorney fees following Plaintiff’s acceptance of an offer to confess judgment. |
| Facts: | The Plaintiff/Appellee filed this action after the Defendant/Appellant’s bad-faith refusal to honor an $11,000.00 accidental death insurance policy, claiming that the insured death was a result of natural causes and not a covered loss under the policy. Following initial discovery, Appellant filed its first offer to confess judgment in the amount of $33,000.00 exclusive of costs and attorney fees. Following additional discovery and the involvement of expert witnesses, Appellant filed a second offer to confess judgment just seventeen (17) days before trial in the amount of $125,000 exclusive of costs and attorney fee. The Appelle accepted this second offer to confess judgment. As the prevailing party, the Appellee made application to recover reasonable attorney fees and costs under 36 O.S. §3629(B) (attorney fees) and 12 O.S. §928 (costs). Appellant did not dispute Appellee’s status as prevailing party with a right to recovery of fees and costs. The trial court made a detailed finding that the appropriate lodestar attorney fee was $221,407.50 and upon consideration of Burk (1979 OK 115) factors, found that the Appellee was entitled to a 300% fee enhancement, resulting in a total fee award of $885,630.00. Century Life appealed. |
| Standard of Review: | A trial court’s award of attorney fees is reviewed for an abuse of discretion. |
| Analysis: | A fee enhancement was warranted in this case, but the amount of the fee must be modified. Appellee’s fee application was in part based upon block billing, vague entries, and billing for duplicative time. A 20% reduction in the trial court’s lodestar fee from $221,407.50 to $177,126.000 is warranted to account for the issues regarding Appellee’s counsel’s time-keeping methods. While the trial court’s determination that a fee enhancement was warranted was appropriate and should be affirmed, the amount thereof –300%– was against reason and evidence and must be decreased by a factor of ten (10). The amount of money at issue and the results obtained were noteworthy. Appellee’s counsel secured an offer to confess judgment in an amount ten (10) times greater than the amount purportedly owed the insured and almost four (4) times greater than the Appellant’s first offer to confess. This is truly an extraordinary result. However, the amount of the trial court’s enhancement was so great as to constitute abuse of discretion. Attorney fees must bear some reasonable relationship to the amount in controversy. Here, the trial court awarded a total attorney fee that was more than seven (7) times the amount of the recovery. The record and the law constrain us to award a 30% incentive, or bonus fee (a 1.3x multiplier), above the lodestar fee. Thus, the attorney fee award is $230,263.80. |
| Outcome: | Affirmed as modified |
| Vote: | Prince, J. (author), Goree, P.J., Mitchell, J., concur. |
| Other: | Cert was not sought. |