Tuesday, December 29, 2009

contracts - attorney fees - reasonableness

McMullen v. Kutz - Supreme Court - December 28, 2009
The parties entered into a marriage and property settlement agreement that provided for the payment of attorney fees and costs incurred by one party in enforcing the contract against the breaching party. The agreement did not specify that the fees had to be reasonable.
The dispute in this case concerns the trial court’s authority to address the reasonableness of the attorney fees claimed. Wife, and a minority of courts across the country, would read the plain language of the contract to require any and all fees incurred by the non-breaching party to be payable by the breaching party. We cannot accept this reading, however, because the potential for abuse is too high. If we were to forbid a reasonableness inquiry by a trial court, there would be no safety valve and courts would be required to award attorney fees even when such fees are clearly excessive.
Instead, we join the majority of our sister states n.3 in finding that parties may contract to provide for the breaching party to pay the attorney fees of the prevailing party in a breach of contract case, but that the trial court may consider whether the fees claimed to have been incurred are reasonable, and to reduce the fees claimed if appropriate. We hold that the trial court had the authority to consider the reasonableness of the attorney fees claimed. Accordingly, we affirm the decisions of the Superior Court and the trial court.
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Footnote 3 - See, e.g., Alabama Educ. Ass’n v. Black, 752 So.2d 514, 519 (Ala. Civ. App. 1999) (“In Alabama, where there is an agreement to pay an attorney fee and the agreement does not speak specifically to the reasonableness of the fee, a “reasonable” fee will be inferred.”); McDowell Mountain Ranch Community Ass'n, Inc. v. Simons, 165 P.3d 667, 671 (Ariz. Ct. App. 2007) (collecting cases and stating: “Notwithstanding the general rule that attorneys' fees are enforced in accordance with the terms of a contract, a contractual provision providing for an award of unreasonable attorneys' fees will not be enforced.”); Griffin v. First Nat. Bank of Crossett, 888 S.W.2d 306, 311 (Ark. 1994) (“Implicit in our holding is a requirement that any attorney's fees awarded should be reasonable.”); Crest Plumbing and Heating Co. v. DiLoreto, 531 A.2d 177, 183 (Conn. App. Ct. 1987) (“We construe the term ‘attorney's fees’ as an award for ‘reasonable attorney's fees’ in this case because the term ‘reasonable’ is implied by law even when it is absent in the contractual provision.”) (emphasis in original); Mahani v. Edix Media Group, Inc., 935 A.2d 242, 245 - 246 (Del. 2007) (“Delaware law dictates that, in fee shifting cases, a judge determine[s] whether the fees requested are reasonable.”); Concord Enterprises, Inc. v. Binder, 710 A.2d 219, 225 (D.C. 1998) (“[W]here a contractual agreement expressly provides for the payment of attorney's fees, the trial court's discretion is limited to ascertaining what amount constitutes a ‘reasonable’ fee award.”); Dunn v. Sentry Ins., 462 So.2d 107, 108 (Fla. Dist. Ct. App. 1985) (holding that a prevailing party is not entitled to recover the total amount which it has paid or agreed to pay if that amount is excessive or unreasonable); Lettunich v. Lettunich, 111 P.3d 110, 120 (Idaho 2005) (providing for trial courts to consider several factors in arriving at a reasonable attorney fee calculation); Heller Financial, Inc. v. Johns- Byrne Co., 637 N.E.2d 1085, 1092 (Ill. App. Ct. 1994) (“While the parties may, by a private agreement, override the “American Rule” which holds that each will be responsible for any legal fees they incur in a civil litigation, such contractually-provided fees will be approved by the court only if they are reasonable.”); Walton v. Claybridge Homeowners Ass'n, Inc., 825 N.E.2d 818, 826 (Ind. Ct. App. 2005) (“Attorney fees awarded under a contract must be reasonable.”); Ales v. Anderson, Gabelmann, Lower & Whitlow, P.C., 728 N.W.2d 832, 842 (Iowa 2007) (“When a written contract allows for the recovery of attorney's fees, the award must be for reasonable attorney's fees.”); Hollenbach v. Holden, 728 So.2d 544, 551 (La. Ct. App.1999) (“[I]mplied within the attorney's fee provision of the contract is that the amount of attorney's fees to be determined to be due either party will be reasonable.”); Yim K. Cheung v. Wing Ki Wu, 919 A.2d 619, 625 (Me. 2007) (“As a general rule, courts must enforce contract provisions that require the payment of attorney fees, so long as they are reasonable.”); Myers v. Kayhoe, 892 A.2d 520, 532 (Md. 2006) (“Even in the absence of a contract term limiting recovery to reasonable fees, trial courts are required to read such a term into the contract and examine the prevailing party's fee request for reasonableness.”); Zeeland Farm Services, Inc. v. JBL Enterprises, Inc., 555 N.W.2d 733, 736 (Mich. Ct. App. 1996) (“[R]ecovery is limited to reasonable attorney fees.”); State Bank of Cokato v. Ziehwein, 510 N.W.2d 268, 270 (Minn. Ct. App. 1994) (“Where loan documents authorize a lender to recover legal expenses associated with collection, however, Minnesota courts will enforce the provision as long as the fees are reasonable.”); Belfer v. Merling, 730 A.2d 434, 443 (N.J. Super. Ct. App. Div. 1999) (“[A]ny fee arrangement is subject to judicial review as to its reasonableness.”); Robison v. Katz, 610 P.2d 201, 209 (N.M. Ct. App. 1980) (“It is clearly within the equitable power of the court to consider and reduce excessive fees.”); SO/Bluestar, LLC v. Canarsie Hotel Corp., 825 N.Y.S.2d 80, 81 - 82 (N.Y. App. Div. 2006) (“While the plaintiff was entitled to attorneys' fees pursuant to the Note, [a]n award of attorneys' fees pursuant to such a contractual provision may only be enforced to the extent that the amount is reasonable and warranted for the services actually rendered.”) (internal quotations omitted); Northwoods Condominium Owners' Ass’n v. Arnold, 770 N.E.2d 627, 630 - 631 (Ohio Ct. App. 2002) (“Under Ohio law, contractual provisions awarding attorney fees are enforceable and not void as against public policy so long as the fees awarded are fair, just, and reasonable as determined by the trial court upon full consideration of all the circumstances of the case.”); Benchmark Northwest, Inc. v. Sambhi, 83 P.3d 348, 349 (Or. Ct. App. 2004) (“The award is mandatory; the trial court has no discretion to deny it, although it does have discretion as to what amount is ‘reasonable.’”); South Carolina Elec. & Gas Co. v. Hartough, 654 S.E.2d 87, 91 (S.C. Ct. App. 2007) ( “When an award of attorney's fees is based upon a contract between the parties, the determination of the fees is left to the discretion of the trial court and will not be disturbed absent an abuse of discretion.”); Trayner v. Cushing, 688 P.2d 856, 858 (Utah 1984) (“Where the parties have agreed by contract to the payment of attorney fees, the court may award reasonable fees in accordance with the terms of the parties' agreement.”); Dewey v. Wentland, 38 P.3d 402, 420 (Wyo. 2002) (“Even in the face of a valid contractual provision for attorney's fees, we have clearly stated that a trial court has the discretion to exercise its equitable control to allow only such sum as is reasonable or the court may properly disallow attorney's fees altogether on the basis that such recovery would be inequitable.”

disability - obesity - evaluation of effect in combination with other impairments

Simmons v. Astrue - ED Pa. - December 28, 2009


http://www.paed.uscourts.gov/documents/opinions/09D1507P.pdf


The court ordered the case to be remanded (again) because of the ALJ's faiulure to provide a thorough explanation of the effects of the combination of plaintiff’s obesity with her other impairments.


SSR 02-1p (Titles II and XVI: Evaluation of Obesity) states that while the SSA deleted obesity from its listing of impairments in 1999, the SSA continued to ensure that obesity is addressed in the listings: “[W]e consider obesity to be a medically determinable impairment and remind adjudicators to consider its effects when evaluating disability. . . . [T]he combined effects of obesity with other impairments can be greater than the effects of each of the impairments considered separately.”

SSR 02-1p further states that “[t]he effects of obesity may not be obvious. For example, some people with obesity also have sleep apnea. This can lead to drowsiness and lack of mental clarity.” SSR 02-1p makes clear that obesity is to be considered at steps 3, 4, and 5 of the sequential evaluation.

In the present case, the ALJ received specific instructions from the Appeals Council to provide an evaluation of the impact of Plaintiff’s obesity in accordance with SSR 02-1p. Thus, the ALJ was required to provide an explanation of how she considered Plaintiff’s obesity in combination with Plaintiff’s other severe impairments. Yet, the ALJ’s remand decision fails to do so. Indeed, all the ALJ did with respect to the Appeals Council’s instruction was provide a one-sentence conclusion stating her ultimate decision on the matter. The ALJ’s decision provides no reasoning, analysis, or explanation as to why Plaintiff’s obesity “does not increase the severity of claimant’s existing impairments.” Instead, the ALJ disposes of the obesity issue without providing any explanation. Therefore, the Court believes that the ALJ’s remand decision fails to follow the Appeals Council’s order to consider Plaintiff’s obesity in accordance with SSR 02-1p.

The ALJ’s use of one conclusory sentence to evaluate and analyze Plaintiff’s obesity in the written decision falls far short of the further evaluation required by the Appeals Council. Such a holding is in accordance with established case law from this district.

In Elam v. Astrue, 2009 WL 2779135 (E.D. Pa. Sept. 2, 2009), the court stated: “The ALJ must . . . engage in and document his or her analysis of the obesity in step three of the sequential analysis forward. This is especially imperative when assessing the impact of obesity on musculoskeletal, respiratory, and cardiovascular impairments like those at issue in this case.” Similarly, in Morris v. Barnhart, 2004 WL 1238397 (E.D. Pa. May 10, 2004), the court required a remand for essentially the same reason.

Similarly here, the ALJ failed to provide any analysis – thorough or otherwise – regarding the effect of the combination of Plaintiff’s obesity on her other impairments, as was specifically required by the Appeals Council when ordering remand. In the absence of any such analysis, the Court is unable to determine whether the ALJ’s decision is supported by substantial evidence. Therefore, as in both Elam and Morris, this case must be remanded to the ALJ.

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