I. STATEMENT OF FACTS

On May 6, 1994, nine-year-old Plaintiff, (hereinafter "Plaintiff"), was one of four passengers who allegedly was injured while in the vehicle of her father, the plaintiff herein. The plaintiff's vehicle sustained approximately $800.00 damage to the front hood and grill area. The defendant insured the plaintiff's vehicle.

Four days after the accident, the plaintiff received medical treatment from Lee Chiro, D.C., (hereinafter "Chiro"). Chiro treated the plaintiff from May 10, 1994 through August 23, 1994 for a total of 32 visits. The plaintiff had been treated previously by Chiro for injuries sustained as a result of a 1990 motor vehicle accident, in which she was also represented by Attorney Francis Doe.

Attorney Doe sought, on the plaintiff's behalf, Personal Injury Protection (hereinafter "PIP") benefits from the defendant for injuries allegedly sustained in the May 6, 1994 accident. At that time, Attorney Doe promoted his law practice in Lawyers' Weekly with the following advertisement:

PERSONAL INJURY
PROTECTION LITIGATION

“Attorney experienced and successful in litigation of G.L. c.90, sec. 34M (PIP) claims available for consultation/evaluation/litigation of PIP denial and delay cases (large and small) on a "fees-paid-by-insurer" basis. Can recover remuneration for referring counsel's pre-litigation collection efforts.

“Appellate experience in PIP/auto insurance law areas. 14 years tort/litigation experience. References available.”

(Appendix, p ).

On June 17,1994, the defendant received bills from Chiro totaling $1,297.60. Also on June 17, 1994, the defendant sent a so-called "ten day letter" (Appendix, p. 815) requesting treatment records. On October 5, 1994, the defendant paid $1,297.60.

On October 14, 1994, the defendant received a completed PIP application, medical bills from Dr. Chiro in the amount of $2,302.60, and an interim report from Dr. Chiro indicating the length of Plaintiff's disability (Appendix, pgs. 816-825). On October 20, 1994, the defendant sent another ten day letter indicating that progress notes were needed (Appendix, p. 826). On January 16, 1995, the defendant sent another ten day letter indicating that the defendant was seeking an independent medical review of the claim, as permitted by M.G.L. c. 90 §34M (Appendix, p 838). An independent medical review from Intracorp was requested by the defendant on January 18, 1995.

On February 14, 1995, the defendant received a report from Intracorp indicating that portions of Dr. Chiro's charges were not reasonable or necessary and recommended a reduction of $866.00 (Appendix, pgs. 839-840). It was later determined that a mathematical error of $1.00 had been made, and the correct amount of the recommended reduction was $865.00. On February 14, 1995, an additional $139.00 was paid on the total bill leaving an unpaid balance of $865.00 (Appendix, p. 843).

II. STATEMENT OF THE CASE

On April 13, 1995, a complaint was filed on the plaintiff's behalf against the defendant in the Anywhere District Court via a Complaint seeking damages in the amount of $865.00 (Appendix, pgs. 1-2). At the same time, counsel for the plaintiff filed Interrogatories, Requests for Production of Documents and Requests for Admissions of Facts to the insurance company (Appendix, pgs. 4-28). The only ground for recovery alleged in the Complaint was the insurance company's alleged failure to "give written notice of its intent not to make medical payments within ten (10) days of receipt of the PIP application and notification of disability as required by M.G.L. c. 90, §34M." The issue for resolution was the adequacy of the defendant's ten day letters of June 17, 1994, October 20, 1994 and January 16, 1995 in response to the plaintiff's/Atty. Doe's/Dr. Chiro's requests for PIP payments.

The litigation proceeded as set forth on the docket until August 8, 1996 when the defendant filed an Offer of Judgment in the amount of $870.00, which offer was to be in effect for ten (10) days (Appendix, p. 223). On August 9, 1996, Attorney Doe filed a Motion for the Entry of Judgment in the amount of $865.00, which he marked for hearing on August 20, 1996, (Appendix, pgs. 225-226). Prior to the hearing on the plaintiff's Motion for the Entry of Judgment, the defendant filed a Certificate of No Opposition to the Plaintiff's Motion, which was "approved" by the Court (Appendix, p.227) on August 20, 1996. The docket sheet indicates that, on August 20, 1996, "Pltff's. motion for entry of judgment allowed in the amt. of $865.00 - Jones, J. - ..." (Appendix, p. 756). The amount of the Judgment entered by the Court was $5.00 less than the insurance company's Offer of Judgment. There is no acceptance to the Defendant's Offer of Judgment on the docket.

On July 23, 1996, Attorney Doe presented an affidavit in support of his claim for attorney's fees in the amount of $5,232.00 (Appendix, pgs. 217-221). Thereafter, all proceedings related to Attorney Doe's request for attorney's fees. On February 7, 1997, a subsequent Affidavit was filed seeking attorney's fees in the amount of $19,122.00, (Appendix, p. 363) and on March 13, 1997, a third affidavit indicated that Attorney Doe was seeking $23,508.00 in fees (Appendix, pgs. 384-391). In paragraph 7 of the March 13, 1997 affidavit, Attorney Doe requested the court award him an "enhanced fee" of $35,000 because of his novel approach to this case. Notwithstanding this request, on May 5, 1997, a Supplemental Affidavit of Attorney's Fees was filed seeking $26,424.00 (Appendix, p. 466-467). In summary, Atty. Doe is seeking $5,232.00 in attorney's fees for proceedings testing the validity of the defendant's ten day letters in response to requests for payment, is seeking an additional $21,192.00 in pursuing and defending the $5,232.00 claim and is seeking an enhancement of $8,576.00 for his efforts on this $865.00 claim.

On January 15, 1999, Judgment entered in favor of the Plaintiff and awarded attorney's fees in the total amount of $8,816.00 (Appendix, p. 529). On January 22, 1999, the Plaintiff filed a Motion to Alter or Amend the Judgment or to Correct Clerical Errors which was allowed by the Court on March 9, 1999 (Appendix, pgs. 531-533). The Amended Judgment awarded interest in the amount of $614.49 and $146.45 in costs (Appendix, p. 544). On March 10, 1999, the defendant filed a Notice of Appeal in the Anywhere District Court (Appendix, p. 545).

III. ARGUMENT

A. NO ATTORNEY'S FEES SHOULD BE AWARDED TO A PLAINTIFF WHOSE CLAIM FALLS WITHIN THE JURISDICTION OF SMALL CLAIMS COURT, BUT FAILS TO UTILIZE THE SMALL CLAIMS PROCEDURE

As a general rule in Massachusetts, a litigant must bear his or her own expenses. Commissioner of Insurance v. Mass. Accident Co., 318 Mass. 238, 61 N.E. 2d 137 (1945).

The Supreme Judicial Court has held that the only measure of attorney's fees normally recoverable to a prevailing party are those including his or her "taxable costs." Commissioner of Ins., 318 Mass at 241, 61 N. E. 2d at 139; Goldberg v. Curhan, 332 Mass. 310, 124 N. E. 2d 926 ( 1955). In light of M.G.L. c. 261, counsel fees would be routinely denied inasmuch as they are not included in the taxable costs to be awarded. Items of costs allowed in a civil action in a district court are defined in M.G.L. c. 261, §26. While the statute does allow for attorney's fees in limited circumstances, it limits the award to $2.50, in addition to other disbursements allowed by law.

The rule expressed in the Mass. Accident Co. decision became known as the American Rule in the wake of the United States Supreme Court decision in Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 95 St. Ct. 1612 (1975). Over the years, Massachusetts Courts have refined the rule to permit actual fees in excess of those awardable as taxable costs in four limited exceptions: (1) as costs, in accordance with specific statutory provisions or court rules, Boynton v. Tarbell, 272 Mass. 142, 172 N.E. 340 (1930); (2) as damages in certain circumstances, Hartford Accident & Indem. Co. v. Casassa, 301 Mass. 246, 16 N.E.2d 860 (1938); (3) in accordance with statutory provisions, some of which may not be clearly categorized or be categorized at all, Commissioner of Ins. v. Mass. Accident Co., 318 Mass. 238, 61 N.E.2d 137 (1945); or (4) pursuant to a valid contractual provision or stipulation.

An example of exception (1) has been incorporated by the Massachusetts Legislature within M.G.L. c. 90, §34M, which provides in pertinent part:

In any case, where benefits due and payable remain unpaid for more than 30 days, any unpaid party shall be deemed a party to the contract with the insurer responsible for payment and shall therefore have a right to commence an action in contract for payment of amounts therein determined to be due in accordance with the provisions of this chapter. In any such action commenced in the district court in the judicial district in which the unpaid party resides, the court shall, upon the filing of an answer by the insurer, and upon the motion of the unpaid party, advance the action for speedy trial. If the unpaid party recovers a judgment for any amount due and payable by the insurer, the court shall assess against the insurer in addition thereto costs and reasonable attorney's fees." M.G.L. c. 90 § 34M.

The rationale behind such statutory awards is to encourage litigants to fulfill the purposes of the statute by reimbursing their costs of litigation. Pearson v. Board of Health of Chicopee, 402 Mass. 797, n.4, 525 N.E.2d 400 (1988) (discussing the purposes of fee shifting provisions in the context of civil rights, deceptive business practice and restraint of trade statutes). However, the courts still retain discretion in the award of fees under these statutes. Linthicum v. Archambault, 379 Mass. 381, 398 N.E.2d 482 (1979) (discretion exercised under Consumer Protection Act's statutory award of fees). The Personal Injury Protection Statute also qualifies the term "attorney's fees" with the limitation that the fees awarded be "reasonable." Thus, attorney's fees statutes, such as M.G.L. c. 90, §34M are not "carte blanche" to litigants and counsel to incur expenses without a check. Reasonable is defined in the Second Edition of Webster's New Twentieth Century Unabridged Dictionary as " . . . (3) not immoderate; not excessive; not unjust; tolerable; moderate; sensible; sane . . . " Therefore, under the terms of M.G.L. c. 90, §34M, an attorney is entitled to attorney's fees which are not immoderate, not excessive, not unjust, and which are tolerable, moderate, sensible, and sane.

An important example of judicially and legislatively sanctioned control on incurring fees is contained in the Small Claims Procedure Statute, M.G.L. c. 218, §21 et. seq. Section 21 provides that:

[t]here shall be within the district court department and the Boston Municipal Court department a simple, informal and inexpensive procedure for the determination, according to the rules of substantive law, of claims in the nature of contract or tort, other than slander and libel, in which the plaintiff does not claim as debt or damages more than two thousand dollars;. . . The procedure shall not be exclusive but shall be alternative to the formal procedure for civil actions begun by summons and complaint . . . In the hearing and disposition of any claim for money damages within the jurisdiction of such procedure, the Boston Municipal and district court departments shall have all equity powers and jurisdiction conferred by sections one, one A, and two, and clause (1) of section three of chapter two hundred and fourteen.

The purpose of the Small Claim procedure is to provide a simple, prompt and informal means, at a small expense, for the adjudication of small claims. McLaughlin v. Municipal Court of Roxbury, 308 Mass 397, 32 N.E.2d 266 (1941). Such a procedure provides meaningful access to the court system for litigants who, due to financial constraints or lack of familiarity with the legal process, might not otherwise be in a position to vindicate their legal rights. Travis v. McDonald, 397 Mass. 230, 490 N.E. 2d 1169 (1986). In addition, the Small Claim procedure alleviates a significant burden on the District Courts which would have to preside over a more formal civil proceeding where, at most, the ultimate recovery is less than $2,000. Even though a statute might provide for attorney's fees to a prevailing party or treble damages, which may ultimately exceed the jurisdictional limit, the courts recognize the desirability of access to the small claims process and encourage its use. "[A]llowing c. 93A claimants to appear in small claims session will ensure greater access for aggrieved individuals, and promote the enforcement of our consumer protection laws." Id. at 1171.

In order to encourage the use of the Small Claims procedure for the use of all claims including PIP cases, the Massachusetts legislature has permitted the District Courts to enact rules disallowing costs to the prevailing party if the claim fell within the jurisdiction of the Small Claims procedure, but was not brought under the Small Claims procedure. M.G.L. c. 218, §25 provides that the rules for the procedure may provide or the court may, by special order, direct that the costs to the prevailing party shall be eliminated, in whole or in part. Pursuant to this authority, the District Courts did, in fact, enact Supplemental Rule 115 of Civil Procedure for the District and Municipal Courts, which states:

[i]n a civil action begun pursuant to the District/Municipal Courts Rules of Civil Procedure in which the finding of debt or damages does not exceed the statutory limit for small claims proceedings in effect at the commencement of such civil action, no costs, other than taxable cash disbursements shall be recovered by the plaintiff, except by special order of the court for cause shown.

Reading this Rule in conjunction with M.G.L. c.90 §34M leads to the conclusion that attorney's fees and expenses will not be granted to claimants seeking recovery of less that $2,000 who fail to utilize the Small Claims procedure. While the Small Claims Procedure does not prohibit a party from retaining counsel to represent his or her interests, the streamlined process eliminates much of the cost associated with a full District Court proceeding. A plaintiff is not required to use the Small Claims procedure for all claims within the jurisdictional amount; however, the failure to use the procedure also bears a price - the unavailability of reimbursement of costs and, if dealing with a statute that so specifies (such as M.G.L. c.90 §34M) the unavailability of attorney's fees.

Most importantly, Supplemental Rule 115 restricts overreaching by counsel who view such attorney's fee statutes as an opportunity to over-litigate matters and pad their coffers at the expense of the opposing party. The possibility of such abuse is no more clearly presented than in the instant matter where Attorney Doe is seeking a $35,000.00 fee in a matter where the amount in dispute is $865.00. Also this was a case that Atty. Doe admitted was not unusual (Appendix, pgs. 606-608), where the only issue was the alleged failure of the defendant to notify the plaintiff of non-payment of the PIP bill and the reasons therefor within the statutory ten day period (Appendix, p. 615) and was one of approximately two thousand automobile cases that Atty. Doe had handled that had a PIP component to it (Appendix, p. 596). In point of fact, the Court made a specific finding, " ... that the issues that were the subject of the litigation were not difficult" (Appendix, p. 538). This background lead the Court to state, "I was a practicing attorney for twenty-five years. If my client came in and said I'm owed this money, it would have been a small claims action" (Appendix, p. 612). In summary, the defendant urges this Court to agree with the observation of Judge Jones and award the plaintiff only those reasonable fees that would have necessarily been incurred in bringing this matter through the Small Claims procedure. The Court went on to comment that it was certainly possible that in a Small Claims session the claim would have been summarily allowed (Appendix, p. 617), which fact was specifically acknowledged by Atty. Doe (" ... maybe if Your Honor was sitting as th small claims judge, you would have done that." Appendix, p. 617). Of course, in such an instance, there would be no opportunity to construct and submit a $35,000.00 fee request and such a course was not taken.

Since there is no attorney/client relationship between the defendant and Doe and no incentive for the plaintiff to challenge Doe's fees, there is no inherent protection against overreaching. Furthermore, in light of the fee arrangement, the purpose behind fee shifting statutes, i.e., encouragement of litigants to further the goals of the statute, is absent. The plaintiff is not obligated to reimburse Doe his fees, regardless of the outcome of the litigation (Appendix, pgs. 643-644).

It is certain that the Legislature did not intend this result in enacting the PIP statute. It is within the power of the District Court to frustrate such overreaching through the application of Supplemental Rule 115. In a case before the Supreme Judicial Court the court did, in fact, exercise this power, and its disallowance of the plaintiff's costs was upheld on appeal. Shaheen v. Hershfield, 247 Mass. 543, 143 N.E. 761 (1924). In that case, the plaintiff opted to commence the action in the District Court, rather than by the Small Claim procedure, even though the requested damages were within the jurisdictional amount of small claims. Through protracted proceedings, the District Court entered a judgment for the plaintiff with no costs. On appeal, the Superior Court ruled that the District Court's refusal to award costs was a matter of properly exercised discretion. The Supreme Judicial Court affirmed the District Court's failure to award costs in that the plaintiff could have brought the claim under the Small Claims procedure, but failed to do so. Id., at 545, 762 N E at 762. The Shaheen case confirms the District Court's power to refuse costs, including attorney's fees (if the matter deals with a statute that so provides such as M.G.L. c.90 §34M), to a party who fails to invoke the Small Claims procedure, when available. As such, defendant proposes that it was an abuse of discretion for the Court not to have allowed Defendant's Request for Ruling No. 2 (Appendix, p. 516).

B. THE REASONABLENESS STANDARD FOR ATTORNEY'S FEES IN MASSACHUSETTS

Attorney Doe is limited, at most, to "REASONABLE attorney's fees." (Emphasis added). Furthermore, the Massachusetts courts have consistently indicated that a heightened degree of caution and close scrutiny is warranted in awarding fees where the claim presented is against an adversary, rather than the attorney's own client. Robbins v. Robbins, 19 Mass. App. 538, 476 N.E. 2d 230 (1985); Grimes v. Perkins School for the Blind, 22 Mass. App. 439, 494 N.E. 2d 406 (1986); Strand v.Hubbard, 31 Mass. App. 914, 576 N.E. 2d 688 (1991); First National Bank of Boston v. Brink, 372 Mass. 257, 361 N.E. 2d 406 (1977); Hayden v. Hayden, 326 Mass. 587, 96 N.E. 2d 136 (1950); Lewis v. National Shawmut Bank of Boston, 303 Mass. 187, 21 N.E. 2d 254 (1939); and Pemberton v. Pemberton, 9 Mass. App. 9, 411 N.E. 2d 1305 (1980). Massachusetts courts will adopt a conservative approach to charging counsel fees to a party who has in no manner consented. "[W]hen fee awards appear excessive and the public hears what has been called the soft thud of mutual back patting, respect for the administration must suffer." Id. at 234 (citations omitted).

Furthermore, where the lawyer becomes his own client, such as is evident in this action where Attorney Doe has put himself forward as an expert witness on behalf of his client in regard to attorney's fees, " the fees charged require the most careful scrutiny." Grimes, 494 N.E.2d at 407, (citations omitted). Fees, which reasonably have been charged by Doe to the plaintiff for like services, must be "checked against an independent, 'objective' valuation of the services . . . rendered in fact . . . This suggests some reference to 'generally prevailing norms' … or 'market rates in the relevant community.' " Robins, 476 N.E. 2d at 233 (citations omitted). In considering a fee award, the court is not bound by the attorney's testimony concerning the value of his own services. LaPorte v. Royal Indemnity Company, 369 Mass. 970, 343 N.E. 2d 365 (1976).

1. Criteria Employed to Determine the Reasonable of Attorneys Fees

The objective criteria employed in the Massachusetts courts have been outlined in the case law, and no one factor has been emphasized. The worth of services is determined by reviewing: (1) the nature of the case and the amount and importance of the matter involved; (2) the time and labor required; (3) the amount of damages involved; (4) the amount of money or the value of the property affected by the controversy and the result obtained; (5) the experience and reputation of the attorney; (6) the usual price charged by other attorneys for similar work; (7) the demand for his services by others; and, (8) the amount of awards granted in other cases. Cummings v. National Shawmut Bank, 284 Mass.563, 569, 188 N.E. 2d 489 (1934); See Linthicum v. Archambault, 379 Mass. 381, 388-389, 398 N.E. 2d 482 (1979); See also Supreme Judicial Court Rule 3:07, Disciplinary Rule 2-106(B), as amended, 382 Mass. 694, 772 (1981) (the factors listed are substantially identical to the standard set forth in the Cummings decision).

Disciplinary Rule 2-106(B) states that "a fee is clearly excessive when, after a review of the facts, a lawyer of ordinary prudence, experienced in the area of the law involved, would be left with a definite and firm conviction that the fee is substantially in excess of a reasonable fee." This objective test is arrived at by review of the following factors:

1. The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal services properly.
2. The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.
3. The fee customarily charged in the locality for similar legal services.
4. The amount involved and the results obtained.
5. The time limitations imposed by the client or by the circumstances.
6. The nature and length of the professional relationship with the client.
7. The experience, reputation and ability of the lawyer or lawyers performing the services.
8. Whether the fee is fixed or contingent. DR 2-106 (B).

The Massachusetts Supreme Judicial Court has stated that the analysis under DR 2-106(B) is substantially identical to the analysis in other Massachusetts cases addressing unreasonable attorney's fees. In re Fordham, 423 Mass. 481, 668 N.E. 2d 816 (1996). In Fordham, a case under DR 2-106(B), the Supreme Judicial Court sanctioned the attorney who was involved for charging a clearly excessive fee. Attorney Fordham was retained to represent the defendant in an Operating Under the Influence of Alcohol ("OUI") case. Attorney Fordham, an experienced and able trial attorney, had never represented a client in an "OUI" case, and had never tried a case in the District Court. Fordham advised the client ("Clark") of these facts, and Clark agreed that Fordham should represent him, and that Fordham would charge an hourly rate of $200.00 per hour, with monthly billings.

After very able and diligent representation, the defendant Clark was found not guilty at a bench trial. Fordham sent bills totaling in excess of $50,000, and a grievance was filed with the Board of Bar Overseers alleging that Fordham was charging an excessive fee. After several rounds of proceedings at the administrative level, the matter was eventually appealed to the Supreme Judicial Court. The Court considered each of the eight factors contained in DR 2-106(B) in reaching the conclusion that the fee was excessive and applied an objective standard to attorney's fees, even when no evidence of bad faith on the part of the attorney was present.

2. Application of the Factors to Attorney Doe's Motion for Attorney's Fees.

The first factor involves the time and labor required for the legal service, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly. In the instant matter, a Complaint was filed seeking $865.00 in unpaid PIP benefits. The sole legal issue in the case as alleged in Paragraph 5 of the Complaint was that the defendant had failed to send "10 day letters." The Small Claims procedure was available for this matter. It is evident that the legal issues involved are simple, i.e. did the defendant timely send adequate ten day letters in response to requests for payment and that the handling of the case should have been routine. It is inconceivable that this routine PIP case, which could and should have been brought under the Small Claims procedure, warranted a heightened degree of skill and a legal bill by Attorney Doe of over $5,000.00, before the defendant abandoned an honest, sincere and valid defense for the sole purpose of attempting to limit Attorney Doe's rapidly increasing attorney's fees. This proved singularly unsuccessful as Attorney Doe is now claiming an additional $30,000.00 in legal fees for pursuing his claim for legal fees AFTER judgment was confessed by the Defendant. The Court has not looked favorably on excessive fee awards where the case involves routine issues and minimal complexity. Grimes v. Perkins School for the Blind, 22 Mass. App. 439, 494 N.E. 2d 406 (1986).

With respect to the breakdown of the bill up to the time that the defendant confessed judgment on August 20, 1996, it is important to note that 16 hours were assigned to the drafting and review of pleadings, 7.6 hours were allocated to the drafting and review of correspondence, 4.5 hours were allotted for three court appearances, 1 hour was assigned for a client meeting, and .8 hours were assigned to telephone conferences. The minimum time entry was for .2 hours or 12 minutes. It is difficult to understand how this very simple, straightforward PIP case, concerning only one legal issue, required such extensive drafting of pleadings and correspondence. Nonetheless, such expenditure of time is not only totally unnecessary and unwarranted, but totally unfair, inequitable and unsupportable to the client who had no input into Attorney Doe's fee agreement, if there were a fee agreement in this case at all.

The Massachusetts Courts have indicated that they will deny compensation for work not reasonably required for the efficient handling of the matter. Edgerly v. Commonwealth, 379 Mass. 183, 396 N.E.2d 453 (1979). The Supreme Judicial Court has stated that:

[t]he first component of the basic measure amount is the amount of time reasonably expended on the case. The judge should begin his inquiry with the amount of time documented by the plaintiff's attorney." Stowe v. Bologna, 417 Mass. 169, 629 N.E. 2d 304 (1994) (citations omitted.)

The most efficient, beneficial and expeditious handling of the instant matter would have been by the Small Claims procedure. Any amount of time expended in excess of the time required to process the matter through the Small Claim procedure is not time "reasonably expended on the case." Therefore, if the fees are to be "reasonable," the fees should be limited to the amount of time required to pursue this matter through the Small Claims procedure.

The second factor involves the likelihood that the acceptance of this particular employment would preclude other employment by the lawyer. It cannot be argued that this routine PIP case could have precluded Attorney Doe from pursuing other employment, especially given his advertising his 14 years experience in the litigation of PIP cases.

The third factor contemplates the fee customarily charged in the locality for similar legal services. According to Attorney Doe's affidavit, his current hourly rate is $180.00 per hour (Appendix, p. 385 ). In Fordham, supra, p.12, the Supreme Judicial Court took issue with the $200 hourly rate charged by Fordham, a senior trial attorney of recognized capability in downtown Boston, even though Fordham put forth supporting expert testimony from two witnesses. There is certainly great issue to be taken with the theoretical $180.00 per hour fee that Attorney Doe never collected, or even charged his client (Appendix, pgs. 642-643), or any other client. To Atty. Doe, it is not even important to inform PIP related litigation clients of the progress of their fees on a monthly basis (Appendix, p. 645) because they have no obligation to pay, are not expecting to pay and don't care what the scope of services are that are being rendered, ostensibly, on their cases. He never collects the fee from anyone other than the insurer, for a routine PIP case, which could have and should have been brought under the Small Claim procedure. An attorney with 14 years experience in PIP litigation should have protected the interests of his client, foregone the time and expense of a District Court proceeding, and proceeded under the Small Claims procedure for a moderate hourly rate -- if the interests of the client were a consideration. There is no substantiation for Attorney Doe's hourly rate, and the courts have not looked very favorably on the arbitrary fixing of an hourly rate, particularly where it is unclear that counsel ever actually used hourly rates in fixing his fees vis-a-vis his client. Robbins v. Robbins, 19 Mass. App. 538, 476 N.E. 2d. 230, 233 n.8 (1985) (court reduced fee award where hourly rate proposed by counsel "left it unclear whether counsel had ever actually used hourly rates in fixing his fees; if so, what hourly rates he had charged in his practice in the field of domestic relations, as distinguished from other fields; and whether, in matrimonial matters, he had a marked difference between fees charged his own clients, and those he sought from opposing parties"). In the instant case, the only evidence introduced by Attorney Doe regarding the hourly rates in fixing his fees was his own self-serving testimony, without any foundation or corroboration. It is quite clear, however, that Attorney Doe never charged his client any fee, at an hourly rate or otherwise, for his work in the area of PIP litigation. The hourly rate of $180.00 per hour is the rate which he uses when all of his fees are being paid by the PIP carrier, who has no method of limiting Attorney Doe's unreasonable hourly rate.

The fourth factor considers the amount involved in the controversy and the results obtained. While no one factor is to be given any greater emphasis than the others, the factor has been considered very seriously by the Massachusetts courts. In the case of Bertassi v. Allstate Insurance Company, 402 Mass. 366, 522 N.E.2d 949 (1988), the Supreme Judicial Court remanded an award of attorney's fees under the Consumer Protection Act, when it reduced the damage award on appeal. The Court said:

[W]e recognize that, ordinarily, one of the factors to be considered in an award of attorney's fees is the amount of the over-all recovery. As a result of our decision, the amount of the plaintiff's damages has been substantially reduced…"
Id. at 953 (citations omitted).

In the instant case, Attorney Doe requested $866.00 in his Statement of Damages, and received that amount pursuant to his Request for Entry of Judgment. No one can disagree that Attorney Doe obtained a positive result. However, when the amount involved is weighed against the final tally of attorney's fees, especially when the same amount could have been obtained for substantially less through the Small Claims procedure, the value of the result is diminished, and the fee award is clearly excessive. Stone v. Bologna, 417 Mass. 199, 629 N.E. 2d 304 (1994) (Single justice's determination that $81,332.75 fee for a $35,991 judgment was excessive was upheld).

The fifth factor, any time limitations imposed by the client or by the circumstances, does not appear to be at issue here. Clearly, if time were a factor, a result could have been obtained under the Small Claim procedure in substantially less time than that which was expended in the District Court.

The nature and length of the professional relationship with the client is the sixth factor to be considered. Unless all the members of the Plaintiff family are unfortunate enough to be injured in a third automobile accident, the instant litigation is likely to be their second and last affiliation with Attorney Doe. There is certainly no evidence presented in this case that there exists the context of a long standing relationship between Attorney Doe and the plaintiff which would make the fee charged here reasonable.

The seventh factor is the experience, reputation and ability of the lawyer or lawyers performing the services. There appear to be no grounds to challenge Attorney Doe's ability with respect to the litigation of PIP claims.

The eighth and final factor is whether the fee is fixed or contingent. This factor bears some discussion in light of the highly unusual fee arrangement between Attorney Doe and the Plaintiff. It appears that the agreement provides for neither a fixed nor a contingent fee, but instead on a "fees paid by the insurer" basis. This means that the plaintiff is not obligated to pay Attorney Doe any fees regardless of the outcome of this litigation. If Attorney Doe does not prevail, he takes no fee for the representation of the Plaintiff. However, if Attorney Doe is successful, he agrees to only seek fees against the insurer pursuant to the statute (Appendix, p. 642). As a result, the Plaintiff has no incentive to scrutinize Attorney Doe's fees, and the insurer has no standing to challenge the fees under the Disciplinary Rules since it has no attorney-client relationship with Attorney Doe. "Where the award is provided for by statute and is assessed against the party having no contractual relationship with the attorney involved, the standard of reasonableness depends not on what the attorney usually charges, but rather, on what his services were objectively worth." Heller v. Silverbranch Const. Corp., 376 Mass 621, 382 N.E.2d 1065, 1071 (1978). This arrangement creates a precarious situation whereby Attorney Doe may over-litigate matters in order to create a windfall at the insurer's expense.

The United States Supreme Court has stated in the context of a fee award in a civil rights case that "[t]he fee quoted to the client or the percentage of the recovery agreed to is helpful in demonstrating attorney's fees expectations when [the attorney] accepted the case." Pennsylvania v. Delaware Valley Citizen's Council for Clean Air, 483 U.S. 711, 723, 107 S. Ct. 3078, 3085 (1987). Where there is no obligation or expectation, there is no inherent check on the attorney's efforts and actions. As stated by the First Circuit Court of Appeal:

[t]he court's role as the guarantor of fairness obligates it not to accept uncritically what lawyers self-servingly suggest is reasonable compensation for their services. Rather, the court should scrutinize fee applications carefully. Such persecution [sic] is particularly necessary where a clear sailing agreement strips away any true market-based check upon the scope and cost of counsel's efforts. After all... the fee charged a client by its attorneys is a private matter in which the court, barring unusual circumstances, will not get involved. When, however, a court is compelled by the nature of the case or statutory mandate to award attorney fees to a party, the determination of such award is not only a matter of public record, it becomes part of the great body of our law. A court would be shirking its responsibility to render a principled decision were it to accept without scrutiny and close examination the fees agreed upon by client and counsel. Weinberger v. Great Northern Nekoosa Corp., 925 F.2d 518, 525 (1st Cir. 1983), cert. den. 466 U.S. 931 (1984).

In the instant case, there is no good faith agreement or financial obligation with the client. There is only Attorney Doe's self-serving affidavit to serve as a guide. With no agreement, there is absolutely no incentive for Attorney Doe to pursue this matter in an expeditious, efficient, economical, and effective matter. There was no incentive to litigate the matter in the Small Claims Session of the District Court where this $865.00 collection matter should have been brought. The very highly unusual circumstances of this case clearly demand that this Court, at the very least, only allow for those attorney's fees that would have been incurred had the matter been brought appropriately under the Small Claims Procedure.

Further, the prevailing party on the underlying action has the burden of showing that the claimed rate and number of hours billed is reasonable. Society of Jesus v. Landmark Commission, 411 Mass. 754, 585 N.E.2d 754 (1991). There was no evidence presented by Attorney Doe that the claimed hourly rate of $180 was reasonable. No expert testified in that regard and further, during Attorney Doe's testimony, he summarily referred to a range of hourly rates charged in the community, but gave no specific evidence concerning the reasonableness of his hourly rate. Therefore, the burden as outlined in Society of Jesus v. Landmark Commission, was not met. Also, this Court should carefully scrutinize the whole scenario of an attorney, testifying as an expert witness, ostensibly on behalf of his client, but actually on behalf of his own pocketbook given the arrangement that all fees awarded will go directly to the testifying attorney.

C. THE PLAINTIFF'S FAILURE TO ACCEPT THE OFFER OF JUDGMENT UNDER RULE 68 PRECLUDES ANY ATTORNEY'S FEES AFTER THE FILING OF THE OFFER OF JUDGMENT OR POTENTIALLY OBLIGATES THE PLAINTIFF FOR THE DEFENDANT'S COSTS AND FEES FROM AUGUST 20, 1996 TO DATE.

The provisions of Rule 68 are clear and unambiguous. The Defendant served an Offer of Judgment in the amount of $870.00 which was not accepted within ten (10) days. The judgment was entered in the amount of $865.00, which is less than the amount of the Offer of Judgment. In that instance, "... the offeree must pay the costs incurred after the making of the offer." It is not logical to say that, notwithstanding such a provision, the offeree, who would be responsible for prolonging the litigation, should be able to collect attorney's fees, but pay the opposing party's costs.

M.G.L. c. 90, §34M provides, in part, that,

If the unpaid party recovers a judgment for any amount due and payable by the insurer, the Court shall assess against the insurer in addition thereto costs and reasonable attorney's fees.

It is under that substantive statute that the plaintiff seeks an award of attorney's fees. The Supreme Court has specifically held, in the context of denying a claim for attorneys fees where a plaintiff rejected a Rule 68 offer that was more favorable than the ultimate judgment, that ". . . the term 'costs' in Rule 68 was intended to refer to all costs properly awardable under the relevant substantive statute..." Marek v. Chesny, 473 U.S. 1 (1985) [ majority opinion only]. Moreover, ". . . [p]laintiffs who reject an offer more favorable than that which is thereafter recoverable at trial will NOT recover attorney's fees for services performed after the offer is rejected (emphasis added)." Id., 473 U.S. 10.

There can be no clearer statement of the law on this matter. The plaintiff is not entitled to any amount of attorney's fees for any services rendered after August 20, 1996, based on the clear and explicit language of Marek v. Chesny, supra. As such, it is the defendant's position that it was an error of law for the Court to have denied (Appendix, p. 528) Defendant's Request for Ruling No. 11 (Appendix, p. 518.)

D. INASMUCH AS AN AWARD OF ATTORNEY'S FEES IS AN ADDITIONAL ELEMENT OF DAMAGES WHICH IS ALLOWED TO ONE WHO HAS SUSTAINED PROVABLE LOSSES, IN THE ABSENCE OF SUCH PROOF, NO AWARD FOR ATTORNEY'S FEES MAY BE MADE.

The United States District Court for the District of Massachusetts, in the context of a request for attorney's fees under 15 USC 15, (15 USC 15 is the civil anti-trust statute on which M.G.L. c. 93A, §11 was based) held that a plaintiff's " . . . claim for an attorneys fee sounds in tort and is an additional element of damages allowable to a person who has sustained provable losses." Union Leader Corporation v. Newspapers of New England, Inc., 218 F.Supp. 490, 493 (1963). Not only did the plaintiff not put forth any proof that would indicate he suffered any losses in the amount of the attorney's fees claimed, but the evidence presented compels the opposite conclusion. That is, there was never any debt or financial obligation incurred by the plaintiff to Attorney Doe for the services rendered, that Attorney Doe never intended that his client be obligated to him, and that Attorney Doe never intended to collect any monies from his client for attorney's fees, regardless of the outcome of the case. Therefore, there has been a complete failure of proof as to any attorney's fees whatsoever incurred by the plaintiff. Additional proof of this fact can be had by referring to Attorney Doe's advertisement in Massachusetts Lawyers Weekly which is set forth above, in which Attorney Doe refers to " . . a 'fees-paid-by insurer basis'." As such, it is defendant's position that in the absence of actual payment by the plaintiff of attorney's fees incurred, or, at the very least a good faith obligation of the plaintiff to be responsible for attorney's fees, no attorney's fees have been incurred by the plaintiff and there are, therefore, no attorney's fees to reimburse. Had the Legislature intended for a person in Atty. Doe's position to recover the fair value of legal services rendered in a PIP matter regardless of whether or not the plaintiff had incurred attorney's fees, it would have so stated in the statute. Such is clearly not the case.

According to Attorney Doe, his fee agreement with the plaintiff was based on an hourly rate, but Attorney Doe would be accepting as his fee the amount awarded by the Court, and would not pursue the plaintiff if there was a deficiency. The plaintiff's presence in this matter is of no consequence, other than to provide a vehicle for Atty. Doe unnecessary services so as to support a claim for attorney's fees that is more akin to bounty hunting than pursuing the rights of a client who was never even apprised of the cost of the legal services for which Atty. Doe is now seeks reimbursement. Case law specifically holds that an award of attorneys fees is made to an unpaid party, and not its counsel. "The statute, ..., provides not for the recovery by counsel of their fees and disbursements, but for recovery of a 'reasonable attorney's fee' by an unpaid party who recovers a judgment, and NO PART OF THAT SUM IS A DIRECT AWARD TO ANY ATTORNEY". (Emphasis added). Union Leader Corporation v. Newspapers of New England, Inc., 218 F. Supp. 490, 494 (D. Mass. 1963). In re Refuse & Environmental Systems, Inc. v. Industrial Services of America, 732 F. Supp. 1209, 1215, at fn. 7 ( D. Mass. 1990) is even more explicit, "NOTE THAT THE AWARD IS MADE TO PLAINTIFF, NOT TO PLAINTIFF'S COUNSEL". (Emphasis added). While those cases construed other statutes, M.G.L. c. 90, §34M contains the same reference to the recovery of a judgment by an unpaid party. Therefore, there is no provision in the statute that allows counsel to recover directly from the defendant for costs and reasonable attorney's fees.

IV. CONCLUSION

For the foregoing reasons, the defendant respectfully requests that the Judgment of the Anywhere District Court awarding Attorney's Fees to Attorney Doe be reversed; or, in the alternative, that this matter be remanded to the Anywhere District Court to determine 1) a reasonable hourly rate for 2) the time that would have been necessary for pursuing the within matter through the Small Claims procedure; or, in the alternative, remand the matter to the Anywhere District Court to determine 1) a reasonable hourly rate for 2) necessary work for 3) the period prior to August 20, 1996, which was the date on which the Court entered Judgment for the Plaintiff in an amount less than the Defendant's Offer of Judgment.