Ensign Yachts Inc. v. Arrigoni v. Ross
A court can award punitive damages that include attorneys' fees and costs to defend and to prosecute. After a yacht became dislodged from a trailer and struck a road, the plaintiff, Ensign Yachts, sued Jon Arrigoni and his insurance company, Lloyd's of London. Lloyd's filed a third-party complaint against Ensign Yachts Inc., alleging that Ensign and Ross presented a false contract for sale of the yacht for $1.2 million by a buyer who alleged canceled, because the yacht was damaged. The jury granted judgment to third-party plaintiff Lloyd's on the fraud count and awarded compensatory damages of $13,683, plus punitive damages. Lloyd's filed a motion for punitive damages. The court found that Lloyd's was not entitled to attorneys' fees on every count litigated, because Ensign Yachts raised a valid Carmack claim, on which it prevailed. The court granted punitive damages in the form of attorneys' fees and costs to defend and to prosecute fraud counts. When computing the "presumptively reasonable fee," courts may consider: 1.) the reasonable hourly rate; 2.) hours reasonably expended; 3.) the reasonable hourly rate multiplied by the amount of hours reasonably expended; and 4.) appropriate adjustments. The court approved Lloyd's request of $275 per hour, which was commensurate with prevailing attorney rates. Attorney invoices indicated that Attorney Woodard spent 2.3 hours to draft the third-party complaint and 15 hours to research and draft an objection to a motion for summary judgment. The court found that the attorney invoices were detailed and did not appear to include excessive, redundant or unnecessary work. The court denied Lloyd's request for attorneys' fees in connection with the plaintiff's motion for a new trial, which was not related to the fraud count. The court approved 315 hours of attorneys' fees in the amount of $86,693. The court granted punitive damages of $87,763, which included $86,693 in attorneys' fees and $1,069 in litigation expenses, which included travel costs for a deposition, meals, parking and international phone calls in connection with the fraud count. Lloyd's qualified as a prevailing party under Rule 54(d)(1), and the court also awarded statutory costs of $4,265.