Attorney’s fees. Who prevailed? "Buckhannon" test rejected; “catalyst” theory applied.

 Bonanno v. Verizon Business Network Systems 2014 VT 24 (28-Feb-2014)

REIBER, C.J. Plaintiff appeals from the superior court’s grant of summary judgment against him and in favor of his employer on claims stemming from an alleged breach of a settlement agreement with employer regarding his workers’ compensation claim. On appeal, plaintiff contends that the trial court abused its discretion by awarding inadequate attorneys’ fees. Employer cross-appeals and argues that the trial court abused in its discretion by awarding any attorneys’ fees. We affirm the trial court in all respects.

Here, the relevant statutory provision is 21 V.S.A. § 675(a). The key question faced by the trial court was whether plaintiff “prevail[ed]” on his claim for purposes of the statute. The court found that plaintiff did prevail on his claim that defendants had improperly failed to pay plaintiff’s medical bill because defendants “ultimately agreed to pay the medical bill while the litigation was pending.”

Defendants argue that plaintiff did not obtain judicial relief from the court and thus was not entitled to any fees or costs. Defendants argue that this Court should adopt the U.S. Supreme Court’s holding in Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598 (2001), that eligibility for attorneys’ fees requires a “material alteration of the legal relationship of the parties” effectuated by court action, such as an enforceable judgment on the merits. Id. at 604-05 (quotation omitted). The U.S. Supreme Court rejected the “catalyst theory,” holding that a “defendant’s voluntary change in conduct, although perhaps accomplishing what the plaintiff sought to achieve by the lawsuit, lacks the necessary judicial imprimatur on the change.” Id. Defendants argue that plaintiff did not bring about an alteration of the legal relationship between the parties sufficient to prevail under Buckhannon,

Here, defendants’ decision to pay plaintiff’s medical bill was not brought about by judicial order or other action bearing “judicial imprimatur.” Id. Plaintiff cannot prevail under the Supreme Court’s reasoning in Buckhannon; thus, we are squarely faced with the decision of whether to apply Buckhannon in our interpretation of § 675(a).

In Merriam v. AIG Claims Services, Inc., 2008 VT 8, ¶¶ 16, 22, 183 Vt. 568, 945 A.2d 882 (mem.), we expressly declined the opportunity to overrule our prior case law endorsing the catalyst theory. We take this opportunity to extend our holding in Merriam and explicitly preserve the catalyst theory as a possible route to attorneys’ fees under § 675(a).

To prevail for purposes of the catalyst theory, a party must demonstrate: (1) that the filing of the lawsuit was a “necessary and important factor in achieving” the other party’s change in conduct, and (2) a “colorable or reasonable likelihood of success on the merits.” Here, we agree with the trial court that defendants paid plaintiff’s medical bill as a direct result of plaintiff’s lawsuit to enforce the terms of the settlement agreement pursuant to 21 V.S.A. § 675(a). There is little doubt that plaintiff’s lawsuit was the catalyst for defendants’ action. As to the second factor,plaintiff’s claim was not “frivolous, unreasonable, or groundless” as a matter of law.

Plaintiff contends that the trial court’s grant of $1000 in attorneys’ fees and $250 in costs for prevailing on the medical bill issue was unreasonable, given the “time and effort” that counsel expended on the litigation. Trial courts have ample discretion in determining the amount of attorneys’ fees to award, and we will not disturb the court’s decision unless it has abused this discretion. Here, the trial court reduced the award from plaintiff’s requested $17,932.50 to $1000 in fees and $250 in costs. The court noted that the unpaid medical bill was a peripheral issue compared to the rest of the litigation, and that plaintiff did not provide the discovery supporting payment until compelled by the court. we hold that the peripheral nature of the medical bill issue and plaintiff’s unnecessary delay in providing discovery provide ample reason to affirm the court’s decision.


Affirmed.

 How cited