United States District Court, D. Hawaii
STATE FARM FIRE AND CASUALTY COMPANY, an Illinois corporation, Plaintiff,
NOLAN HANOHANO Defendant.
FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY
IN PART DEFENDANT/COUNTERCLAIMANT NOLAN HANOHANO'S MOTION
FOR ATTORNEYS' FEES
KENNETH J. MANSFIELD, Magistrate Judge.
Nolan Hanohano ("Hanohano") filed a Motion for
Attorneys' Fees ("Motion") on February 12,
2016. See ECF No. 47. Hanohano also filed a Statement of
Consultation that same day. See ECF No. 49. On March 24,
2016, Plaintiff State Farm Fire And Casualty Company
("State Farm") filed an Opposition. See ECF No. 52.
Plaintiff filed a Reply on April 8, 2016. See ECF No. 54.
Court finds this matter suitable for disposition without a
hearing pursuant to Rule 7.2(d) of the Local Rules of
Practice of the United States District Court for the District
of Hawaii ("Local Rules"). After reviewing the
parties' submissions, and based on the relevant case law,
the Court FINDS that Hanohano is entitled to attorneys'
fees, but that the amount submitted warrants reduction.
Accordingly, the Court RECOMMENDS that Hanohano's Motion
be GRANTED IN PART and DENIED IN PART for the reasons set
November 24, 2014, State Farm filed a Complaint
("Complaint") seeking a Declaratory Judgment that
it had no obligation to defend or indemnify Hanohano against
claims asserted in Dinnan v. City and County of Honolulu, et
al., Civil No. 14-00286 DKW-RLP (the "Underlying
Lawsuit"), in which Hanohano is named as a defendant.
See ECF No. 1.
filed a Counterclaim for Declaratory Judgment on March 18,
2015 ("Counterclaim"). See ECF No. 15. State Farm
filed a Motion for Summary Judgment on its Complaint for
Declaratory Judgment and Hanohano's Counterclaim on July
28, 2015. See ECF No. 29. State Farm sought a Court
declaration that it had no obligation to defend or indemnify
Hanohano in the Underlying Lawsuit. Id . On October
20, 2015, Hanohano filed a Countermotion for Summary
Judgment. See ECF No. 35. Hanohano sought a Court declaration
that State Farm was required to defend him in the Underlying
Lawsuit. Id . Hanohano also sought an award of
attorneys' fees pursuant to Hawaii Revised Statutes
("HRS") section 431:10-242. Id.
January 25, 2016, the Court issued an Order Granting in Part
and Denying in Part: (1) State Farm's Motion for Summary
Judgment and (2) Hanohano's Countermotion for Summary
Judgment ("Order"), wherein the Court held that
State Farm (i) had a duty to defend Hanohano in the
Underlying Lawsuit, but (ii) was not required to indemnify
Hanohano for any punitive damages in the Underlying Lawsuit.
See ECF. No. 46. The Court denied without prejudice
Hanohano's request for attorneys' fees, deferring any
ruling pending the submission of an attorney's fees
motion complying with Local Rule 54.3. Id . The
Court set a filing deadline of February 12, 2016, ruling that
it would enter judgment following resolution of the
attorney's fees issue. Id.
primary issues before the court are: (1) whether Hanohano is
entitled to attorneys' fees prior to the resolution of
the Underlying Lawsuit; and (2) whether the amount of
requested attorneys' fees is reasonable.
determine whether Hanohano is entitled to fees, the Court
must analyze whether an order that State Farm has a duty to
defend amounts to an order to pay benefits under HRS section
431:10-242; whether the outstanding indemnity determination
prevents resolution of the current fee dispute; and whether
the federal or local rules prevent a court from ruling on
attorney's fees prior to an entry of final judgment.
Finally, in considering whether the total fees requested are
reasonable, the Court must assess the relevant factors
against the figure that results from multiplying the
requested hourly rate by the total hours billed.
Hanohano is Entitled to an Award of Reasonable Attorneys'
seeks $57, 249.19 in attorneys' fees pursuant to HRS
section 431:10-242. That provision states that "where an
insurer has contested its liability under a policy and is
ordered by the courts to pay benefits under the policy, the
policyholder... shall be awarded reasonable attorney's
fees and the costs of suit, in addition to the benefits under
the policy." State Farm argues that Hanohano's
Motion is premature and not ripe for review because: (1) the
Court has not yet entered judgment in this case; and (2) the
Order did not resolve the question of whether State Farm has
a duty to indemnify Hanohano for the claims asserted in the
Underlying Lawsuit. For the reasons set forth below, this
Court finds that Hanohano's request is ripe for review
and that Hanohano is entitled to an award of reasonable
attorneys' fees under HRS section 431:10-242.
Order to Defend Amounts to an Order to Pay Benefits under HRS
a diversity action. See ECF No. 1. Federal courts
entertaining state diversity actions are required to
interpret and apply governing state law, including statutes.
Farmers Ins. Exch. v. Law Offices of Conrado Joe Sayas,
Jr., 250 F.3d 1234, 1236 (9th Cir. 2001). With respect
to the payment of attorney's fees, Hawaii courts follow
the "American Rule" which provides that, in the
absence of a contract or statute, each party is responsible
for paying his or her attorney's fees. Schefke v.
Reliable Collection Agency, Ltd., 96 Haw. 408, 444, 32
P.3d 52, 88 (2001). Because HRS section 431:10-242 expressly
provides for the award of attorney's fees in contested
insurance coverage cases, that statute controls here. Thus,
as a threshold matter, this Court must determine whether the
order that State Farm must defend Hanohano in the Underlying
Lawsuit amounts to an order "to pay benefits"
requiring an award of reasonable attorney's fees under
Hawaii Supreme Court in Commerce & Indus. Ins. Co. v.
Bank of Hawaii, 73 Haw. 322, 328, 832 P.2d 733, 737
(1992) interpreted HRS section 431:10-242 as requiring an
insurer to pay its insured's reasonable attorney's
fees and costs after the insurer unsuccessfully contested its
duty to defend. In affirming the Circuit Court's judgment
in favor of the insured, the Hawaii Supreme Court held that
because the insurer contested its duty to defend and lost,
the insured "was also entitled to reasonable
attorney's fees and costs" under HRS section
431:10-242. Commerce, 73 Haw. at 329, 832 P.2d at
737; see also, Allstate Ins. Co. v. Leong, No. Civ. 09-00217
SOM/KSC, 2010 WL 3210753, at *2 (D. Haw. Aug. 13, 2010)
(noting that when a trial court orders an insurer to continue
to pay the costs of defending an insured in a suit, the trial
court is ordering the insurer to pay policy benefits).
Insofar as the Court ordered that State Farm has a duty to
defend Hanohano against all claims in the Underlying Lawsuit,
HRS section 431:10-242 entitles Hanohano to recover
reasonable attorney's fees.
Outstanding Indemnity Determination Does Not Prevent
Resolution of the Motion
Court disagrees with State Farm's claim that the Motion
is premature because the issue of indemnity is still
outstanding. Under the specific circumstances of this case,
State Farm's reliance on Gemini Ins. Co. v. Kukuiula
Development Co. (Hawaii), LLC., Inc., 2013 WL 1103338, at *1
(D. Haw. 2013) ("Gemini") is misplaced. In Gemini,
the Court denied as premature a motion for attorney's
fees and costs where the underlying suits were fully settled
and summary judgment was scheduled on the only remaining
issue of indemnity. Id . The Court emphasized both
the pending adjudication on indemnity, and Local Rule
54.3(a), in finding the motion premature. Id . Here,
by contrast, the Underlying Lawsuit has not yet been resolved
and is not set for trial until December 5, 2016. See Dinnan
v. Hanohano, CV 14-00286 DKW-RLP (ECF. No. 46); see also,
Reply Mem. in Supp. of Hanohano's Mot., at 3 (April 8,
2016) (ECF. No. 54). Consequently, unlike Gemini, where there
was no more factual development necessary for the Court to
resolve the insurer's duty to indemnify, here the issue
of indemnity cannot be decided until judgment is finally
entered in the Underlying Lawsuit. With trial of the
Underlying Lawsuit so far off (not including appeals), the
potential for delay in resolving this Motion is far greater
than in Gemini. The Court is persuaded that this matter is
closer to the situation in Weight v. USAA Cas. Ins.
Co., 782 F.Supp.2d 1114 (D. Haw. 2011), cited by
Hanohano in his Reply. See ECF No. 54 at 4. In Weight, as
with the present case, the Court found a duty to ...