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Schnitzer Steel Industries, Inc. v. Continental Casualty Corporation

United States District Court, D. Oregon, Portland Division

November 12, 2014

SCHNITZER STEEL INDUSTRIES, INC., an Oregon corporation; and MMGL CORP., a Washington corporation, Plaintiffs,
v.
CONTINENTAL CASUALTY CORPORATION, an Illinois corporation; and TRANSPORTATION INSURANCE COMPANY, an Illinois corporation, Defendants.

OPINION AND ORDER

MICHAEL W. MOSMAN, District Judge.

Schnitzer Steel Industries, Inc. ("Schnitzer") was the prevailing party in the above captioned case. Under Oregon law, as the prevailing party, Schnitzer is entitled to its reasonable attorney fees. ORS § 742.061. Schnitzer's counsel seeks $3, 483, 878 in attorney fees for litigating the case on the merits, and $49, 681 for fees incurred in their preparation of their fee petition.

BACKGROUND

On September 28, 2010, Schnitzer filed its complaint seeking damages for breach of contract in excess of $3, 000, 000 plus interest, and declaratory relief to resolve disputes regarding the parties' relationship going forward. (Complaint [1].) The claims arose out of Schnitzer's Portland Harbor insurance claim that had been pending with Continental Casualty Corporation ("Continental") for an extended period of time. (Memo. in Support of Costs [448] at 1.) Schnitzer alleged that Continental refused to pay, underpaid, or paid only after a substantial delay Schnitzer's defense costs in the Portland Harbor matter. ( Id. ) Schnitzer retained two law firms to prosecute its claim: Jones Day and Stoel Rives.

After extensive discovery, numerous motions for summary judgment, and failed attempts at mediation and settlement, the parties ultimately tried the case in April 2014. The jury returned a verdict in favor of Schnitzer on every claim presented. The jury awarded Schnitzer the full amount of requested damages - $8, 601, 700. (Verdict [394].)

Continental filed post-trial motions regarding attorney fees, equitable estoppel, and laches. I denied each of Continental's motions, and entered judgment in favor of Schnitzer. (Order [419].) I confirmed the jury's damages award, awarded prejudgment interest of $2, 463, 867, and held that Schnitzer was entitled to recover its reasonable attorney fees and costs. Id.

LEGAL STANDARDS

In diversity cases, attorney fee awards are governed by state law. Schumacher v. City of Portland, 2008 WL 219603, at *2 (D. Or. Jan. 23, 2008). In this case, ORS § 742.061(1) provides the relevant rules regarding whether or not an award of attorney fees is appropriate. That statute states, in relevant part:

if settlement is not made within six months from the date proof of loss is filed with an insurer and an action is brought in any court of this state upon any policy of insurance of any kind or nature, and the plaintiff's recovery exceeds the amount of any tender made by the defendant in such action, a reasonable amount to be fixed by the court as attorney fees shall be taxed as part of the costs of the action and any appeal thereon.

ORS § 742.061(1). This statute is intended to "encourage the settlement" of insurance claims and to "reimburse successful plaintiffs reasonably for moneys expended for attorneys fees in suits to enforce insurance contracts." Chalmers v. Or. Auto. Ins. Co., 263 Or. 449, 452 (1972). When the conditions enumerated in ORS § 742.061(1) are met, attorney fees must be awarded. See Petersen v. Farmers Ins. Co. of Oregon, 162 Or.App. 462, 466 (1999).

Subsections (1) and (2) of ORS § 20.075 list the factors the Court must consider in determining the amount of an award of attorney fees. The factors listed in subsection (1) are:

(a) The conduct of the parties in the transactions or occurrences that gave rise to the litigation, including any conduct of a party that was reckless, willful, malicious, in bad faith or illegal.
(b) The objective reasonableness of the claims and defenses asserted by the parties.
(c) The extent to which an award of an attorney fee in the case would deter others from asserting good faith claims or defenses in similar cases.
(d) The extent to which an award of an attorney fee in the case would deter others from asserting meritless claims and defenses.
(e) The objective reasonableness of the parties and the diligence of the parties and their attorneys during the proceedings.
(f) The objective reasonableness of the parties and the diligence of the parties in pursuing settlement of the dispute.
(g) The amount that the court has awarded as a prevailing party fee under ORS 20.190.
(h) Such other factors as the court may consider appropriate under the circumstances of the case.

ORS § 20.075(1). The factors listed in subsection (2) are:

(a) The time and labor required in the proceeding, the novelty and difficulty of the questions involved in the proceeding and the skill needed to properly perform the legal services.
(b) The likelihood, if apparent to the client, that the acceptance of the particular employment by the attorney would preclude the attorney from taking other cases.
(c) The fee customarily charged in the locality for similar legal services.
(d) The amount involved in the controversy and the results obtained.
(e) The time limitations imposed by the client or the circumstances of the case.
(f) The nature and length of the attorney's professional ...

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