Judge slashes Mountain State Justice's fees request

CHARLESTON – Mountain State Justice, the nonprofit law firm that helps low-income individuals, will recover only 69 percent of what it was requesting for helping a Beckley woman sue Wells Fargo.

U.S. District Judge Thomas Johnston ruled March 29 that Mountain State Justice is entitled to $24,784.32 in attorneys fees and $3,349.60 in costs and expenses incurred during Ann Koontz’s lawsuit against Wells Fargo. He cited hourly rates that were too high and vague timesheets.

Koontz accused Wells Fargo of engaging in unconscionable conduct concerning the origination and servicing of her home mortgage loan.

Using a lodestar analysis, Johnston determined Mountain State Justice was entitled to $20,653.60 for its work, but he increased the amount by 20 percent. Wells Fargo did not disagree.

“In light of (a March decision by the state Supreme Court), the particular facts of this case and the absence of any opposition by Defendant, the court is inclined to agree that the lodestar analysis in this case does not adequately measure the true market value of Plaintiff’s uniquely situated counsel,” Johnston wrote.

In the March decision by the Supreme Court, a Harrison County woman was awarded $32,000 after being foreclosed on. A $30,000 award of attorneys fees to Mountain State Justice was affirmed in the decision.

Harrison County Circuit Court Judge Thomas A. Bedell had ruled that Mountain State Justice survives on fees collected in “undesirable” cases.

In Koontz’s case, she alleged Wells Fargo told her that her mortgage payment would be $614, but her closing was rushed and hurried without a sufficient explanation of the loan documents and loan terms. At closing, she says she was told her payment would be more than $700 per month.

“Ms. Koontz continued with the loan closing because it was too late to back out,” the complaint says.

By 2008, the payment had increased to $980, she says.

On Feb. 28, 2012, the case was dismissed after Koontz and Wells Fargo reached a settlement. However, three months later, Koontz filed a motion to re-open the case.

The two sides had reached an agreement on everything except the amount of attorneys fees. Mountain State Justice sought $40,484.60 as compensation for the work of attorneys Jennifer Wagner, Sara Bird and Dan Hedges.

That figure represented hourly rates of $275 for Wagner and Bird, $425 for Hedges and $100 for paralegal work.

Wells Fargo argued the hourly rates were unreasonable and unsupported by evidence of area market rates and that billing records offered little detail of the work provided.

In support of their requests, the three Mountain State Justice attorneys filed affidavits, but none of them include the names of the attorneys with whom they spoke about the going hourly rate for the services they provided.

When Wells Fargo challenged their requests, they filed affidavits from peer attorneys John Poffenbarger, Benjamin Bailey, Anthony Majestro and David Grubb.

Johnston said only Grubb specializes in consumer law and the other three affidavits were too brief. He also noted an identical statement – “I believe these rates are reasonable, and within the range of hourly rates charged for attorneys of their experience and background in this community” – within each of the four affidavits.

Johnston said the affidavits were deficient for the following reasons:

-Poffenbarger’s and Majestro’s affidavits contain no representations that they know the reputations, skills and training of the three attorneys;

-Bailey’s affidavit “fails to characterize Mr. Hedges’ work one way or another”;

-Grubb’s affidavit has statements attesting to the reputation and skill of only Hedges and not the other two; and

-The affidavits do not provide evidence of “the prevailing market rates in the relevant community for the type of work” for which Plaintiff seeks an award.

Wagner performed most of the work on the case, charging $30,085 for 109.4 hours. Hedges charged $5,100 for 12 hours.

Johnston found that a reasonable hourly rate for Wagner is $160, noting her federal clerkship term, lectures on consumer law issues and some appellate experience. He added that she was a “very inexperienced” attorney at the time the case was filed.

“In selecting this rate the Court also considered the fact that Plaintiff tendered an affidavit by Ms. Wagner, lead counsel in the case, that inexplicably fails to set forth fundamental, simple and essential facts: when she graduated from law school, the length of her clerkship term, and the type of legal practice prior to joining Mountain State Justice,” Johnston wrote.

Hedges’ appropriate hourly rate, Johnston wrote, is $375. He called him a “preeminent consumer law attorney who has devoted his lengthy career to this highly specialized area of public interest law.”

Johnston then wrote about deficiencies in Wagner’s timesheets. They failed to describe with any specificity the tasks she was performing, he said.

Some of her entries simply said “legal research,” “revise,” “draft,” “discovery,” “email,” and “preparation.”

“Ms. Wagner’s time entries became somewhat more detailed as the case went on, presumably because she gained more experience as a lawyer,” he wrote.

A 10 percent reduction of the hours billed remedied the vague entries, leaving Wagner’s amount of hours she could charge for at 98.46.

From the West Virginia Record: Reach John O’Brien at jobrienwv@gmail.com.