Pennsylvania Federal Court Awards Attorneys’ Fees Of $358,666.39 To Plaintiffs Under The Commonwealth’s Consumer Protection Law, Even Though The Defendant Caused Only $146,462.40 In Actual Damages
March 21, 2023
By: Carl L. Engel
On March 20, 2023, the U.S. District Court for the Western District of Pennsylvania, in the case Catena v. NVR, Inc., awarded a family their attorneys’ fees and costs in the amount of $358,666.39 after they had prevailed at a trial against a homebuilder who had sold them a house with construction defects in violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”). The court justified the high attorneys’ fee award, even though the damages awarded by the jury were only $146,462.40, because the plaintiffs were presented with no other choice but to spend that amount if they wanted to recover on their claim at all. The case highlights the risks in aggressively defending against UTPCPL claims, as even a small claim can yield a lopsided fee award if the plaintiff ultimately prevails.
On September 10, 2017, Laura Catena and Gregory Novotny signed a contract with NVR, Inc., for the purchase of a property, and the construction of a house thereon, in Mars, Pennsylvania. NVR completed construction of the house on March 30, 2018, at which point it was sold to Mr. Catena and Mr. Novotny. The couple soon thereafter filed a lawsuit against NVR based on construction defects in the house, asserting claims for breach of express warranty and violations of the UTPCPL.
On September 22, 2022, a jury returned a trial verdict in favor of the plaintiffs in the amount of $146,462.40. Specifically, the jury awarded $23,877.20 for breach of warranty, and $122,585.20 for violations of the UTPCPL. In a post-trial motion, the plaintiffs asked the Court to award them an additional $358,666.39 for their attorneys’ fees and costs as follows: $318,131.00 for attorneys’ fees, $12,894.53 for costs, and $27,640.86 for expert-witness fees.
In support of their motion, the plaintiffs argued that the UTPCPL allows prevailing plaintiffs to collect “reasonable” attorneys’ fees and costs. In their favor, the court observed that “[t]he general purpose of the UTPCPL is to protect the public from fraud and unfair or deceptive business practices.” The court noted that, although it is not required to award plaintiffs their fees and costs, “the fee-shifting statutory provision of the UTPCPL is designed to promote its purpose of punishing and deterring unfair and deceptive business practices and to encourage experienced attorneys to litigate such cases, even where recovery is uncertain.” NVR challenged the requested amount, arguing that it was unreasonably out of proportion with the awarded damages.
When deciding whether requested attorneys’ fees are “reasonable,” the court must consider (i) the time and labor required by the case, (ii) the customary fees charged by other attorneys in the area for the same service, (iii) the amount involved in the controversy, such that there is proportionality between the award of damages and the award of attorneys’ fees, and (iv) the certainty or contingency of the compensation. Where the plaintiffs have also brought non-UTPCPL claims where attorneys’ fees are not recoverable (such as the warranty claims presented in this case), “it is difficult to parse out the time between the UTPCPL claim and other causes of action, [because] much of the time spent in pre-trial litigation would relate to both UTPCPL and common law causes of action.” Accordingly, the court held that the existence of multiple claims does not necessarily preclude or limit the recovery of attorneys’ fees available under the UTPCPL.
On March 20, 2023, the court awarded the entirety of the $358,666.39 requested for attorneys’ fees and costs. The court reasoned the NVR was aware of the risk that they would be required to pay a high fee award, because the plaintiffs initially had asked for attorneys’ fees at the beginning of the lawsuit in their complaint. It further observed that “the complex nature of the construction and engineering aspects, plus the multitude of defects involved in this case,” justified the amount of fees. The court found that NVR was not entitled to a discount, because “the plaintiffs had little choice but to fully litigate their claims in order to secure their damages award,” and the warranty claims were so intertwined with the UTPCPL claims that it is impossible to split the attorneys’ fees between the claims.
This case illustrates the risks for defendants who are faced with allegations that they have violated the UTPCPL. A small damages claim can balloon into a massive award for the plaintiff’s attorneys’ fees if the case is allowed to proceed all the way to trial and the plaintiff prevails. Accordingly, when forming a strategy for defending against UTPCPL claims, defendants must consider the possibility that they will have to pay the entirety of the plaintiff’s attorneys fees if they are unsuccessful at trial, even if the actual damages are far less than the fees accrued.