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Four points in Friolo’s favor on attorneys’ fees

Joy Friolo’s latest appeal on attorneys’ fees did more than just establish a formula for determining her degree of success.

In its Sept. 7 decision, the Court of Special Appeals said the Montgomery County Circuit Court made four mistakes last year that shortchanged Friolo’s attorney, Leizer Z. Goldsmith, of nearly $38,000 in attorney’s fees.

The court erred in:

– Setting the rates of compensation for Goldsmith when the rate was uncontested;

– Considering what a hypothetical plaintiff would have paid to litigate the case;

– Considering Friolo’s liability to her attorney under their fee agreement; and

– Finding that Goldsmith acted in bad faith by demanding an unreasonable fee award, the court added.

Judge Joseph A. Dugan Jr. had awarded Friolo $7,277 in the wake of her lawsuit against former employers Maryland/Virginia Medical Trauma Group and Dr. Douglas Frankel, of Rockville, for whom she had worked in billing and collecting.

Dugan, in awarding the fees, said he was “extremely distressed by what has been at the very least an over-gilding by the plaintiff of their lily.” Dugan said the 10-year litigation would have ended much sooner had Goldsmith requested a fee award more “in line” with the jury’s award.

But the Court of Special Appeal said Dugan abused his discretion by straying from the attorney rate scale stipulated to by the defendants. Dugan found that hourly rate scale, which included $351 for Goldsmith and $238 for his associates, to be too high and he lowered it to $295 and $200, respectively.

“[T]he parties in this case stipulated to a fee schedule that represented Friolo’s attorneys’ opportunity cost of time based on their experience and abilities, and neither the record nor the parties arguments provide a reason to depart from those rates,” the Court of Special Appeals stated.

Dugan also improperly considered “what a hypothetical plaintiff would willingly pay to recover the judgment in this case, which was antithetical to legislative intent and an error of law,” the Court of Special Appeals said. Fee determinations should be made on the realistic circumstances of each individual case, the court added.

The appellate court said Dugan should not have taken into consideration the hourly fee arrangement between Friolo and Goldsmith in setting the fee award. The payment schedule an attorneys set with their clients, whether a fee or contingency agreement, has no bearing on an award of attorneys’ fees under Maryland’s fee-shifting laws, the court said.

The Court of Special Appeals also rejected Dugan’s reduction of the fee request due to what he characterized as Goldsmith’s bad faith in unreasonably pursuing the attorney’s fee claim.

The court said the attorney had not acted in bad faith, to the delight of Goldsmith.

“That was very problematic and that has been washed away here,” said Goldsmith, of The Goldsmith Law Firm in Washington, D.C. “It’s my job to make sure that the demand [for fees] was not unreasonable”