Summary
awarding attorneys' fees totaling 17% of the total proceeds
Summary of this case from Wells Fargo Bank v. Se. Biofeedback & Clinical Neuroscience Ass'nOpinion
No. 1:00CV00789
May 17, 2002
MEMORANDUM ORDER
This case is now before the Court on Defendant Primerica's Motion for Discharge [Doc. #30]. For the reasons set forth below, Defendant's Motion for Discharge is GRANTED, and Defendant is found to be entitled to attorneys' fees.
I.
On March 20, 2002, this Court entered an Order setting forth the terms of a Settlement Agreement between Plaintiff Lettace Lindsey and Defendant Whanda Lindsey. Plaintiff Lettace Lindsey was the named beneficiary of a $100,000 life insurance policy issued by Primerica Life Insurance Company on the life of her exhusband, Marvin Lindsey, who died in July 2000. Cecilia Lindsey, the insured's mother, was named on the policy as a contingent beneficiary. Mr. Lindsey's widow, Whanda Lindsey, responded that she was entitled to the proceeds of the policy because Marvin had substantially complied with the policy's requirements for changing a beneficiary.
Lettace Lindsey initially filed a complaint for Declaratory Judgment against Primerica and Whanda Lindsey, requesting that the Court recognize her as the beneficiary of the policy. Primerica filed an answer with counterclaims and crossclaims for interpleader and paid into the registry of the clerk of court $94,900.30, the full amount of the policy minus funeral expenses and plus interest. In the Settlement Agreement, the parties agreed that Whanda Lindsey would receive $40,000 out of the $94,900.30 paid into the Court. Lettace Lindsey would receive the balance of the proceeds after the Court's award of attorneys' fees to Primerica. Primerica's fees are contested by Lettace Lindsey, but the parties agreed in the Settlement Agreement that the amount, if any, awarded to Primerica by this Court would be paid out of the remaining $54,900.30, and Lettace Lindsey would then receive the balance of the fund. Cecilia Lindsey was dismissed from this action pursuant to Fed.R.Civ.P. 55(b)(2) [Doc. # 46].
Since Lettace Lindsey and Whanda Lindsey have reached a settlement in this case, Primerica's Motion for Discharge is GRANTED. For the reasons discussed below, Primerica's request for attorneys' fees is GRANTED in the amount of $9,563.29.
II.
Plaintiff Lettace Lindsey relies on Metropolitan Life Insurance Company v. Jordan, 221 F. Supp. 842 (W.D.N.C. 1963) for her argument that Primerica should not receive attorneys' fees. However, this Court is not bound by that decision. The Fourth Circuit has not provided any guidance as to the awarding of attorneys fees in the context of the federal interpleader statute. Federal courts have the authority to award within their discretion stakeholder costs, including a reasonable attorneys' fee in stakeholder actions. James Talcott, Inc. v. Allahabad Bank, Ltd., 444 F.2d 451, 468 (5th Cir. 1971). Moreover,
In 1945, the Fourth Circuit allowed attorneys fees in Board of Education of Raleigh County. W. Va. v. Winding Gulf Collieries, 152 F.2d 382 (1945) without explanation and cited Virginia and West Virginia law to support the finding. District courts sitting in North Carolina seem to have felt constrained by that 1945 opinion, interpreting the Fourth Circuit's use of state law as a statement that federal courts should apply state law when determining attorneys fees. See Underhill v. Travelers Ins. Co., 1991 U.S. Dist. LEXIS 19319 (E.D.N.C. 1991) ("[T]he actions taken by the Fourth Circuit in Board of Education require this court, as a diversity court, to apply state law."); Metropolitan Life Ins. Co. v. Jordan, 221 F. Supp. 842, 843 (W.D.N.C. 1963) (citing Board of Education for the statement that "federal courts have indicated that in a diversity case a federal court should follow the state practice in respect to the allowance of attorney fees"). However, the fact that the Fourth Circuit included law from two states in support of its findings could also lead to the conclusion that the Court was fashioning a rule allowing attorneys fees, rather than suggesting that a particular state's law should always be followed.
[T]he [federal interpleader] statute itself seems to represent an affirmative federal policy, albeit one that technically only extends the jurisdiction of the national courts. Therefore, proceedings under it should not be equated with the typical diversity-of-citizenship actions that form the backdrop of the Erie case. The federal act represents a congressional decision to provide a forum for stakeholders in situations in which there probably is no alternative state forum in which they can seek relief against multiple vexation. Accordingly, there is no reason to apply state law regarding attorneys fees in these cases and a uniform federal policy based on an exercise of traditional equity discretion in actions brought under the statute is appropriate. A contrary conclusion might deter resort to the statutory-interpleader remedy and thereby reduce its utility.
7 Charles Alan Wright, et al., Federal Practice and Procedure § 1719 (3d ed. 2001). Significantly, the majority of courts addressing attorneys' fees in interpleader actions apply principles of equity and do not mention the need to adhere to state law. Id.; see also Underhill v. Travelers Insurance Co., No. 91-178-CIV-5-BO, 1991 U.S Dist. LEXIS 19319 at *3 (E.D.N.C. 1991).
Because this case is a classic interpleader case, where the insurance company comes to court seeking protection from multiple litigation on the same fund, Primerica should receive the requested attorneys' fees from the fund paid into court. Wright et al., supra, § 1719 (stating that the stakeholder should be made whole if interpleading party did not act in bad faith, unduly delay in seeking relief, or seek interpleader prematurely or without sufficient basis for believing it will be subjected to multiple vexation). Primerica recognized that both Lettace Lindsey and Whanda Lindsey had legitimate claims to the fund. Primerica also admitted the allegations in the complaint to the extent that it owed one of the claimants what remained of the $100,000 policy. Primerica had a genuine fear of multiple claims on the fund, as evidenced by the submissions to this Court regarding the facts of this case. There is no evidence that Primerica interpleads as a regular course of doing business and thus should not be granted attorneys' fees. See Travelers Indem. Co. v. Israel, 354 F.2d 488 (2d Cir. 1965); Underhill v. Travelers Insurance Co., 1991 U.S. Dist. LEXIS at *13 (adopting the Second Circuit's "ordinary course of business" exception). Therefore, Primerica's request for attorneys' fees is GRANTED.
III.
Plaintiff Lettace Lindsey has requested that the Court make findings of fact and conclusions of law regarding the reasonableness of the fees pursuant to Rule 54(d)(2)(C) of the Federal Rules of Civil Procedure. The Court will make such findings based on the information provided by the parties.
Primerica has presented the affidavit of Cynthia Wittmer, Esq. showing that the fees and expenses related to the matter of interpleader amount to $9,771 for a total of 55 hours, plus $358.79 in expenses. Ms. Wittmer later notified the Court that the fee amount should be revised to $9,204.50, plus $358.79 in expenses, and provided further information about the billing practices of her law firm and comparable rates in the area. Upon review of Ms. Wittmer's affidavit and other statements submitted by Lettace Lindsey, the Court finds:
The Court contacted Ms. Wittmer and requested more information about her rates, including the normal rates for attorneys at her firm, how long such rates have been charged, whether these rates are different from rates charged for other types of work, and the normal rate for other attorneys with similar experience for similar work. In reviewing her records, Ms. Wittmer found that she had inadvertently charged Primerica at her billing rate for 2001, which was $250 per hour, when the work had been done in 2000, when her billing rate was only $195 per hour. The other parties were given an opportunity to respond. Lettace Lindsey responded and Ms. Wittmer replied to the response.
Ms. Wittmer is a partner with the law firm of Parker, Poe, Adams and Bernstein and has been primarily responsible for the representation of Primerica Life Insurance Company in this action. Marka Fleming and Patti Bartis are also attorneys for Parker, Poe, Adams and Bernstein who worked on the case. Priscilla Deluca is a paralegal at Parker, Poe who also billed hours for this matter.
Ms. Wittmer was admitted to the bar in 1981 and charged $250 per hour for her work during all of 2001; in 1999 and 2000 she charged a lower rate of $195 per hour.
Marka Fleming was admitted to the bar in 1996 and her rate during 2000 and 2001 was $115 per hour.
Patti Bartis was admitted to the bar in 1994 and only worked on this case in 2001, when her rate was $175 per hour.
Priscilla Deluca is a paralegal whose rate was $85.00 per hour during this matter.
A total of fifty-five hours were spent by the billing attorneys and paralegal in the filing of this interpleader action. This includes time spent researching the issue of interpleader, contacting the necessary parties, attending pretrial conferences, and drafting the relevant motions.
In support of the rates for each billing attorney and paralegal, Ms. Wittmer submitted information stating that these rates were the normal rates charged by the listed attorneys and paralegal during the year; that these rates had been charged consistently throughout representation of Primerica except for Ms. Wittmer's rates, which increased from $195 per hour to $250 per hour from 2000 to 2001; that the entries identified were related to preparation of the interpleader counterclaims and crossclaims, attendance at the pretrial hearing, and moving for discharge of Primerica; that the rates are the normal rates charged by Parker, Poe for representation of a client such as Primerica Life Insurance Company; and that she has no reason to believe that other attorneys with similar experience doing similar work have not charged their standard rate for such work and their rates are equal to or above the amount charge by Ms. Wittmer.
Lettace Lindsey has not provided any persuasive evidence that the fees charged in this matter are unreasonable. Lettace Lindsey has also not disputed the number of hours spent on this matter, asking only that the Court not award fees for matters the Court finds unnecessary to bring the interpleader action.
Based upon the submissions by the parties, this Court finds that the hours spent as indicated and the fees requested by Primerica in association with the interpleader action are reasonable. Therefore, Primerica is discharged and the request for attorneys' fees out of the fund paid into this Court by Primerica on October 12, 2000 is GRANTED in the amount of $9,563.29. Pursuant to the Settlement Agreement, this amount should be paid from the Court to Primerica, and the remaining $45,337.01 will be paid to Lettace Lindsey in settlement of this matter.