Leon Malloy v. Officer William Monahan, Individually and in His Official Capacity as a Police Officer for the City and County of Denver, and Denver, City and County Of, Officer Mark F. Haney, Individually and in His Official Capacity as a Police Officer for the City and County of Denver, Leon Malloy, Plaintiff-Cross-Appellant v. William Monahan, Individually and in His Official Capacity as a Police Officer for the City and County of Denver, Defendant-Cross-Appellee. Leon Malloy v. Denver, City and County Of, William Monahan, Individually and in His Official Capacity as a Police Officer for the City and County of Denver, and Officer Mark F. Haney, Individually and in His Official Capacity as a Police Officer for the City and County of Denver
Docket: 94-1376
Court: Court of Appeals for the Tenth Circuit; January 4, 1996; Federal Appellate Court
Leon Malloy filed a lawsuit against Denver Police Officer William Monahan under 42 U.S.C. § 1983, claiming the deprivation of his constitutional rights. Following a jury verdict in favor of Malloy, Officer Monahan appealed the verdict and the district court's award of attorney's fees, arguing three main points: the improper admission of evidence regarding Malloy's lost future profits, the denial of a new trial or remittitur due to the verdict's excessiveness, and errors in calculating attorney's fees. Malloy cross-appealed, challenging the court's refusal to grant prejudgment interest. The case background reveals that on November 14, 1990, following a dispute with his estranged wife, Malloy was confronted by Officers Monahan and Mark Haney after she requested police assistance to enter his home. When Malloy resisted, officers forcibly entered, leading to a violent confrontation where Monahan used a baton and mace against Malloy. Despite Malloy's attempts to comply by offering his hands for handcuffing, he was physically assaulted. The incident escalated until additional police arrived, resulting in Malloy's arrest. The Tenth Circuit Court affirmed the district court's decisions.
Malloy filed claims for constitutional rights violations against two police officers and the City and County of Denver, later dismissing the claim against Denver. The jury ruled in favor of Officer Haney but found Officer Monahan liable, awarding Malloy $151,055.58. The district court awarded Malloy $76,320.25 in attorney's fees (later increased to $81,377.22), denied his request for prejudgment interest, and rejected Monahan's motion for a new trial or remittitur.
Malloy asserted that the police incident hindered his ability to engage in real estate activities, leading to lost profits. To substantiate this, he submitted Exhibit 15, which detailed potential profits from rehabilitating and selling two existing houses and four additional unidentified houses, estimating total profits at $374,760.00. Officer Monahan argued the exhibit should not have been admitted due to lack of foundation and speculation. The admissibility of evidence was reviewed for abuse of discretion, with the court acknowledging that Malloy's calculations for his owned properties were admissible based on his special knowledge. The key question remained whether the projections for the additional houses qualified as lay or expert opinion testimony. Citing precedent, the court noted that a witness's expertise and opportunity for cross-examination can validate the admission of projected future profits.
Malloy presented an exhibit projecting future lost profits due to an incident involving police. At the time, he owned multiple residential properties and had over fifteen years of experience in real estate, including property management training and hands-on renovation expertise. His qualifications allowed him to provide a credible opinion on the lost profits. Officer Monahan cross-examined Malloy about his experience, the basis for his projections, and the consideration of tax implications, establishing a proper foundation for Exhibit 15.
Federal standards dictate that damage awards for lost future profits must not be speculative, but reasonable estimates are acceptable if based on factual circumstances. Malloy's projections, informed by his extensive real estate knowledge and analysis of the Denver housing market, anticipated a revitalization of downtown due to new developments. His estimates were grounded in concrete examples, such as comparing property values in the area.
Although Exhibit 15 is not presented as a perfect calculation, it was deemed to comply with Federal Rules of Evidence 701 and 702. The jury was tasked with determining the weight of Malloy's figures, and the district court did not err in admitting the exhibit.
Officer Monahan also argued that the district court erred in denying his motion for a new trial or remittitur due to the perceived excessiveness of the jury's award. The court's review of such motions is based on whether there was a manifest abuse of discretion. It is noted that unless an award is extraordinarily excessive, indicating potential bias or misconduct, the jury's findings are generally upheld.
The jury awarded Malloy $151,055.58 in damages, supported by extensive evidence of his injuries and related expenses, including $3,398.51 for medical and psychological treatments (excluding nine recommended sessions), $3,230.77 in lost wages from 21 days of leave, and $375.00 for bail. Additionally, Malloy claimed $374,760.00 in lost future profits and was awarded damages for pain and suffering due to a beating at his home. The court found the jury's award to be justified based on the evidence presented and upheld the district court's refusal to grant Officer Monahan's motion for a new trial or remittitur.
Following the verdict, Malloy sought attorney's fees under 42 U.S.C. Sec. 1988, leading to a district court award of $81,377.22. Officer Monahan argued that the court incorrectly assessed both the hours worked and the billing rate. The standard of review for such awards is for clear abuse of discretion, requiring the district court to clearly explain its fee assessment. The calculation of reasonable attorney fees begins with determining the number of hours reasonably spent on the case, which is then multiplied by a reasonable hourly rate. The burden lies with the applicant to prove the reasonableness of these claims, and once established, the resultant fee is presumed reasonable. The Supreme Court emphasizes that not all hours are billable, and applicants should exercise 'billing judgment' to exclude excessive or unnecessary hours, which the district court must also consider in its review.
Officer Monahan asserts that the district court incorrectly assessed the number of hours billed by Malloy's attorneys, arguing that the court lacked sufficient documentation for some billing items and failed to exclude unreasonably long billed hours. The crux of the issue is whether the district court had a sound basis for determining the reasonableness of the claimed hours. The court is not required to justify each hour allowed or disallowed, per Supreme Court guidance against creating extensive litigation over attorney's fees.
The district court conducted a thorough review of Malloy's attorney fee request, disallowing hours related to claims against Denver and instances where both attorneys billed for the same depositions. Most of Monahan's objections were deemed without merit, and the court's determination regarding the number of hours was not an abuse of discretion.
Calculating a fee award involves multiplying the hours by a reasonable rate, which should reflect the prevailing market rate in the relevant community. The burden lies with the fee applicant to provide evidence supporting the requested rates, beyond just their attorneys' affidavits. In civil rights cases, the market rate is often difficult to ascertain, as many attorneys work on a contingency basis.
Monahan argues that the district court should have used the market rate for defense attorneys, approximately $100 per hour in Denver, due to the absence of a clear rate for plaintiff's civil rights work. However, the court noted significant differences between plaintiff and defendant civil rights work, particularly regarding payment structures. The district court correctly applied the legal analysis by evaluating evidence to determine reasonable hourly rates, ultimately rejecting Monahan's suggested rate and setting rates of $175 per hour for lead counsel and $110 for an associate, based on affidavits and expert testimony regarding prevailing fees in Denver.
The district court is recognized for its expertise in determining reasonable hourly rates for attorneys' fees, receiving significant deference in its factual findings. In this instance, the court's conclusions were informed by a thorough factual record reflecting prevailing market rates for civil rights work in Denver, and its rate determination was deemed not to constitute an abuse of discretion.
Regarding prejudgment interest, Malloy's cross-appeal against the denial of such interest is subject to an abuse of discretion standard. Although prejudgment interest is typically awarded in federal cases, it is not an automatic right. The determination involves a two-step analysis: first, assessing if the award would serve to compensate the injured party, and second, evaluating if equity considerations support or oppose the award. The district court found that while prejudgment interest could provide compensation, equity considerations, particularly the timing of Malloy's economic injuries, precluded its award. The court noted that many economic damages were incurred after the incident with the police, particularly profits from real estate ventures that would not materialize for years.
Ultimately, the district court's decisions regarding the admission of evidence, attorney's fees, and the denial of prejudgment interest were affirmed by the reviewing court.
