Friolo v. Frankel, 2011 Md. App. LEXIS 123 (Md. Ct. Spec. App. Sept. 7, 2011) (See Leizer Goldsmith’s summary above).
Joy Friolo filed a complaint against her former employers, a doctor and his medical practice, including claims for violation of the Maryland Wage Payment and Collection Law and the Maryland Wage and Hour Law. After a jury awarded Friolo damages, Friolo sought her counsel fees and costs pursuant to Maryland wage law, which awards fees only to a prevailing party. The Montgomery County Circuit Court awarded Friolo her attorney’s fees and costs and ordered her to pay one-half of the special master’s fee. Friolo appealed these orders. The Court of Special Appeals found that the trial court erred in computing the fee award by straying from the parties’ stipulated rate schedule; by basing the fees on what a hypothetical plaintiff would willingly pay to recover the judgment obtained; by reducing the fees claimed to align with those in cases with judgment of similar amounts; and by demanding proof of appellant’s liability to counsel. Instead, Maryland’s Court of Special Appeals adopted the lodestar analysis. COSA held that the lodestar approach, with its adjustments, is the presumptive methodology to be used where an award of attorney’s fees is warranted under Maryland wage law. COSA then held that where a plaintiff obtains relief under Maryland wage law and then obtains an award for attorney’s fees which is later successfully increased on appeal, then the attorneys’ fees incurred during the appeal should be considered as a part of the lodestar analysis. COSA then stressed that Maryland wage law conditions fee awards on recovery, but it does not require a fee award wherever the plaintiff recovers. COSA went on to say that “it would be unreasonable to award fees where the defendant tenders the plaintiff’s entitlement but the plaintiff refuses to accept that offer and seeks and unjustified amount.” COSA went on to explain that “a defendant’s failure to offer settlement can be in full or in part. In the simple case, a defendant may offer $0 only to have a verdict entered in favor of the plaintiff for the entirety of the claims. If, however, a plaintiff demands $100,000 and obtains a judgment of $50,000 against a defendant who never offered any settlement - - which is to say the defendant ‘offered’ $0 - - both parties will have contributed equally to litigation costs.” After considering Friolo’s degree of success in the case, her relative contribution to causing unnecessary litigation, her overstatement of damages, the former employers’ settlement offer, and the amount of the verdict, COSA held that her degree of success was 88% and reduced her award of counsel fees and costs accordingly. Finally, COSA held that the employers failed in their Answer to deny Friolo’s allegation in her complaint that they withheld her pay “not as a result of a bona fide dispute,” and accordingly the employers admitted the issue as a matter of law.