Court Holds That Policyholder Counsel’s Rate Of $1,000 Per Hour Is Reasonable

Addressing a policyholder’s right, under New York law, to recover legal fees to establish its entitlement to a defense, a Louisiana federal court had this to say: “ILU argues that the fees charged by Dickstein Shapiro are unreasonably high, specifically honing in on Heintz’s hourly rate of $1,000. After reviewing the documents provided by LaGen, including copies of the unredacted invoices, the Court concludes that the hourly rates of (1) Heintz for $,1000; (2) Kanemitsu for $630; and (3) the various associates for between $290–490 are reasonable. Though they are slightly higher than market rates found by other courts, see Bravia Capital Partners, Inc. v. Fike, 296 F.R.D. 136, 145 (S.D.N.Y.2013) (citing cases which found that an hourly rate of $550–425 for partners and $221–325 for associates was reasonable), the Court finds that the complexity of the issues presented; the skill required to perform the legal services properly; the high stakes of the underlying litigation and the favorable results obtained by Dickstein Shapiro; and the experience, reputation, and ability of the firm’s attorneys warrants an hourly rate slightly higher than what may be customary in the Southern District of New York.” Louisiana Generating LLC v. Illinois Union Ins. Co., No. 10-516 (M.D. La. Mar. 27, 2014).

More On The “Coconut Exclusion”

The March 19th issue of Coverage Opinions addressed the “Coconut Exclusion” that was at issue in Brooks v. Zulu Social Aid and Pleasure Club, No. 2012CA1307 (La. Ct. App. Mar. 6, 2013). At stake was coverage for injuries sustained by a parade spectator when a coconut, thrown by a rider in the Zulu parade, hit her in the face. The liability policy at issue contained a “Coconut Exclusion,” which provided: “[i]t is hereby agreed and understood that there will be no coverage for any coconut thrown in any fashion from anywhere on the float. Coconuts may be handed from the first layer of the float only.”

To me, the Coconut Exclusion seemed un-crackable as applied to the facts of the case. Not being one to run away from a tough issue, Josh Pollack, of Proskauer’s Los Angeles office and member of the Insurance Recovery & Counseling Group, sent in this effort to help the policyholder get coverage for the problems caused by an awry coconut toss.

“Alas, the poor coconut.  Much maligned, often the subject of jokes (I won’t milk this one), and frequently tossed at parade goers during Mardi Gras, it has now lost insurance coverage if thrown “in any fashion” from a float.  Talk about injustice.  It is bad enough that the lowly coconut is torn from its home in paradise and passed around like a trinket.  At least it was able to recover insurance if a float rider threw it at someone.  Now the coconut has lost even that last semblance of dignity.”

The Coconut Exclusion in Brooks v. Zulu Social Aid and Pleasure Club “clearly should be rejected as violating public policy.  How can anyone with common decency even suggest that a coconut should only have insurance coverage if “handed” from a float?  The real harm to the coconut comes from being tightly gripped and thrown like a baseball (the humiliation!).  Although the Louisiana Court of Appeals was correct in reversing the trial court’s grant of summary judgment to Lloyd’s, its reasoning was flawed.  The trial court should have stood up for the rights of coconuts and ruled that the ‘Coconut Exclusion’ is unenforceable as a matter of law.  Zulu was nuts to agree to the exclusion in the first place.”