United States District Court, D. Maryland
Court has reviewed the parties' recent filings, ECF 28,
29, in response to its October 4, 2019 Order requesting
additional information about WMR's claim for
attorney's fees. ECF 27. As described in the October 4,
2019 Order, Defendant Scottsdale Insurance Co.
(“Scottsdale”) bears the burden to establish that
the total amount in controversy, including a reasonable
estimate of the fees that Plaintiff WMR Real Estate Holding,
LLC (“WMR”) will incur in this litigation,
exceeds the $75, 000 threshold for diversity jurisdiction.
See McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th
Cir. 2010); Robb Evans & Assocs., LLC v.
Holibaugh, 609 F.3d 359, 362 (4th Cir. 2010).
Complaint provides that it seeks $57, 707.50 “plus
costs, interest, and reasonable attorney fees.” ECF
1-3, Exh. B at 5. Critically, if a complaint does not allege
a specific amount of damages, the removing defendant must
prove by a preponderance of the evidence that the
amount in controversy exceeds [$75, 000].” Francis
v. Allstate Ins. Co., 709 F.3d 362, 367 (4th Cir. 2013)
(emphasis added); see also Williams v. Bank of N.Y.
Mellon, 2013 WL 2422895, at *2 (D. Md. June 3, 2013)
(applying preponderance standard in “hybrid
situation” where damages are partially specified and
partially unspecified); Momin v. Maggiemoo's
Int'l, 205 F.Supp.2d 506, 510 (D. Md. 2002) (same).
Because the amount of damages WMR seeks to recover totals
$57, 707.50, Scottdale meets its burden if it can establish,
by a preponderance of the evidence, that a reasonable
estimate of WMR's attorney's fees exceeds $17,
response to discovery requests propounded by Scottsdale, WMR
provided an agreement demonstrating that its counsel is
entitled to a contingency fee of one-third of all sums
recovered in the litigation. ECF 28-1 at 4. If WMR prevails
in its claim in its entirety, then, the contingent fee owed
to its counsel would be $19, 235.83. Because Maryland law
allows an insured to recover its attorney's fees from the
insurer if the insurer breached a duty to defend, WMR would
be entitled to pursue those fees from Scottsdale, in addition
to the $57, 707.50 it recovers in damages. See Francis v.
Allstate Ins. Co., 709 F.3d 362, 368 (4th Cir. 2013);
Mesmer v. Md. Auto. Ins. Fund, 725 A.2d 1053, 1064
(Md. 1999) (allowing an insured to recover “expenses
and attorney fees in a separate contract or declaratory
judgment action if such action is filed to establish that
there exists a duty to defend.”); Giorgillli v.
Goldstein, 2014 WL 794363, at *3 (D. Md. Feb. 26, 2014)
(“[I]n a diversity of citizenship case, federal courts
must look to state law to determine the nature and extent of
the right the Plaintiff is seeking to have enforced or
made inconsistent arguments in support of its position that
the total amount in controversy is below the $75, 000
threshold. In its motion, WMR contends that the case is
straightforward and will not involve litigation of complex
issues. ECF 17. However, WMR did not proffer information
about the number of hours its attorney had worked to date, or
information about his hourly rate. Id. In its
supplemental filing, in contrast, WMR argues that under the
terms of its fee agreement, if it were to recover $57, 707.50
from Scottsdale, it would owe 33% to its counsel, leaving WMR
with just $38, 471.67. ECF 29 ¶ 3. Although contingency
fees are most often deducted from a plaintiff s recovery,
WMR's contention ignores that Maryland law expressly
permits WMR to seek reimbursement of its fees from
Scottsdale. Indeed, in the parties' “Joint
Memorandum Regarding Attorneys' Fees, ” WMR
appeared to acknowledge that attorney's fees are not
calculated as part of the damages award itself. See
ECF 26 at 3 (“While the parties agree regarding
WMR's potential entitlement to attorneys' fees, each
party continues to believe in the merits of their respective
positions as to whether WMR will likely spend more than $17,
292.50 to fully litigate this case.”).
so, the contingency fee agreement does not conclusively
determine a reasonable estimate of WMR's fees. If this
Court were to award fees to WMR as the prevailing party, it
would undertake a traditional lodestar analysis to determine
the reasonableness of the fee sought. The existence of the
contingency fee agreement, setting the attorney's
expectations at the outset of the litigation, would be only
one of many factors to be considered. See Barber v. Kimbrell
's, Inc.¸ 577 F.2d 216, 226 (4th Cir. 1978)
(adopting the twelve factor test described in Johnson v.
Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th
Cir. 1974)). In considering the lodestar calculation, the
Court notes that according to its records, WMR's counsel
has been licensed to practice law for more than 30 years. The
guidelines in Appendix B of this Court's Local Rules
provide that a reasonable fee for an attorney licensed more
than 20 years is $300 to $475 per hour. Assuming a
conservative rate of $350 per hour, counsel would only need
to work about 50 hours on the case to exceed $17, 292.50.
Given that the case already involves a counterclaim and
discovery disputes, and will require a series of depositions,
in addition to the instant briefing and supplemental briefing
on the motion to remand, a reasonable estimate of the hours
an attorney will likely spend on the litigation would exceed
50 hours. Furthermore, even if counsel does not expend more
than 50 hours on this case, a court is likely to afford
significant weight to the contingency fee arrangement to
determine the appropriate fee.
under either the contingency fee agreement or a more
traditional lodestar calculation, it is more likely than not
that a reasonable estimate of WMR's fees exceeds $17,
292.50.Accordingly, WMR's Motion to Remand,
ECF 17, is DENIED. Despite the informal nature of this
letter, it should be flagged as an opinion and docketed as an
Order of the Court.
STEPHANIE A. GALLAGHER UNITED STATES DISTRICT JUDGE
 This court notes that removal statutes
are strictly construed, with all doubts resolved in favor of
remanding the case to state court. Md. Stadium Auth. v.
Ellerbe Becket, Inc., 407 F.3d 255, 260 (4th Cir.
 The twelve factors are:
(1) The time and labor expended; (2) the novelty and
difficulty of the questions raised; (3) the skill required to
properly perform the legal services rendered; (4) the
attorney's opportunity costs in pressing the instant
litigation; (5) the customary fee for like work; (6) the
attorney's expectations at the outset of the litigation;
(7) the time limitations imposed by the client or
circumstances; (8) the amount in controversy and the results
obtained; (9) the experience, reputation, and ability of the
attorney; (10) the undesirability of the case with in the
legal community in which the suit arose; (11) ...