206 F.Supp.3d 378
D.D.C.2016Background
- Kenneth Feld, insured under a Fireman’s Fund homeowner’s “Prestige Home Premier” policy, was defended by FFIC under a reservation of rights in a personal-injury suit brought by his sister; Fulbright & Jaworski represented Feld and billed over $4.5 million.
- FFIC reimbursed a bit more than $2 million and refused the remainder, prompting Feld to sue for breach of contract and related claims.
- Central factual dispute: whether Feld (through his counsel Fulbright) agreed to reduced hourly rates ($250 partner / $225 associate / $100 paralegal), which FFIC says capped its payment obligations.
- Procedural posture: cross-motions for summary judgment on late-notice defense, existence/enforceability of a rates agreement, reasonableness of disputed expenses (~$100–$195k unclear), and a separate claim for breach of the implied covenant of good faith and fair dealing.
- Court found Maryland law governs notice issues, rejected FFIC’s late-notice defense for lack of proven prejudice, held that an agreement on reduced hourly rates was formed (by October 28, 2009, at the latest), and denied summary judgment on disputed expenses as factual issues remain.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law / late notice defense | Maryland law applies but Feld gave late notice; insurer must still prove actual prejudice | D.C. law applies; insurer need not show prejudice to deny coverage for late notice | Maryland law governs; FFIC failed to show actual prejudice, so late-notice defense fails |
| Existence of rates agreement | No enforceable agreement; FFIC never made a binding offer and Feld did not accept reduced rates | FFIC offered maximum payable rates; Fulbright accepted (by email, budget using those rates, and deposit of reduced payment) | Court finds objective offer and acceptance (by Oct. 28, 2009); Feld bound by counsel’s acceptance; FFIC wins on ~$2.224M tied to rates |
| Reasonableness of disputed expenses (~$100–$195k) | Expenses and time were reasonable and necessary; expert declines to parse each line item | Many expense items (research, copying, travel, administrative tasks, certain hours) were unreasonable; expert identifies examples | Genuine dispute of material fact exists; record insufficient for summary judgment — issue reserved for trial |
| Breach of implied covenant of good faith | FFIC’s reservation-of-rights defense and payment practices breached covenant; seeks punitive damages | Maryland law does not recognize an independent good-faith tort here | FFIC entitled to summary judgment on the covenant claim under Maryland law |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment and genuine-issue standard)
- Feld v. Feld, 688 F.3d 779 (D.C. Cir. 2012) (underlying appeal discussed by court)
- Minn. Lawyers Mut. Ins. Co. v. Baylor & Jackson, PLLC, [citation="531 F. App'x 312"] (4th Cir.) (late-notice/prejudice discussion)