USA Gymnastics v. Liberty Insurance Underwriters, Inc.

Dist. Ct. did not err in awarding plaintiff $1,889,278.26 in attorney’s fees plus pretrial interest, when evaluating propriety of Bankruptcy Ct. award of $1,944,354,26 in attorney’s fess arising out of plaintiff paying for its own defense in underlying lawsuits filed by female athletes who claimed that Larry Nasser, who was affiliated with plaintiff, had sexually abused them. Prior to calculation of attorney’s fees, plaintiff had prevailed in action alleging that defendant had duty to defend plaintiff in said female athletes’ lawsuits, and instant request by plaintiff for attorney’s fees represented its costs in defending itself in underlying lawsuits. Bankruptcy Ct. and Dist. Ct could properly find that plaintiff was entitled to presumption that plaintiff’s requested fees were reasonable and necessary, where defendant had breached duty to defend plaintiff in said lawsuit, and where plaintiff had paid 70 percent of requested fees. Ct. rejected defendant’s contention that presumption did not apply because plaintiff: (1) did not request write-offs of billed fees and rarely asked questions about fees in invoices that it had received; (2) did not pay fees in full; and (3) had received grant money from other organizations during litigation period, which removed any incentive to drive down legal costs. Also, Bankruptcy Ct. could properly use “total value” approach, as opposed to “task approach,” when determining whether fees were reasonable and necessary.