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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BUTTE DIVISION

RICHARD R. LOHRKE,

Plaintiff,

AMERICAN FAMILY CONNECT
INSURANCE AGENCY , INC. and
AMERICAN FAMILY CONNECT
PROPERTY and CASUALTY
INSURANCE COMPANY , f/k/a/ IDS
PROPERTY CASUALTY
INSURANCE COMPANY,

Defendants.

CV-24-11-BU-BMM

ORDER ON MOTION FOR ATTORNEY
FEES AND BILL OF COSTS

INTRODUCTION
Plaintiff Richard Lohrke (“Lohrke”) filed a complaint against American
Family Connect Insurance Agency, Inc. (“Agency”) and American Family Connect
Property and Casualty Insurance Company, f/k/a IDS Property Casualty Insurance
Company (“Connect”) (collecti vely “Defendants”), alleging breach of contract,
violations of the Montana Unfair Trade Practices Act, constructive fraud, and breach
of the implied covenant of good faith and fair dealing. (Doc. 19 at 11-13.) The Court
held a four -day jury trial beginning on January 20, 2026. (Doc. 189.) The jury

returned a verdict in Lohrke’s favor on January 23, 2026. (Doc. 208.) The jury found
in favor of Lohrke on all accounts and awarded Lohrke $500,000 in compensatory
damages and $5 million in punitive damages. (Id.)
Lohrke filed an application for taxation of costs on February 2, 2026. (Doc.
217.) Lohrke filed a motion for attorney fees on February 9, 2026. (Doc. 221.) The
Court has addressed several other post-trial motions in the previous months and now
addresses Lohrke’s application for taxation of costs and motion for attorney fees.
Lohrke filed his contingent fee contract for review. (Doc. 263.) The Court held a
hearing on the issue on April 20, 2026. (Doc. 265.) The Court held another hearing
on the issue on June 8, 2026. (Doc. 278.)
BACKGROUND
The Court is familiar with the facts of this case. Lohrke purchased automobile
insurance from Connect through its insurance broker Agency. (Doc. 97 -2 at 4.)
Lohrke sustained injuries after an uninsured motorist rear-ended him on the highway.
(Doc. 19 at 3. ) Medical providers diagnosed Lohrke with corneal abrasion,
concussion, and body contusions. ( Id. at 4.) Lohrke experienced chronic pain and
diminished range of motion that led Lohrke to seek ongoing physical therapy. ( Id.)
Lohrke alleged that he will be p artially disabled for the rest of his life due to his
injures. (Id. at 5-6.) The extent and cause of Lohrke’s injuries remained in dispute at

trial. (Doc. 110 at 14 -16.) Finney, the driver who crashed into Lohrke, had no
automobile insurance. (Id.)
Lohrke filed claims with Connect for payment of medical costs incurred in
the accident and for other injuries sustained. (Doc. 19 ¶¶ 51, 68-69). Lohrke filed an
action against Connect and Agency to recover for these injuries in Montana state
court. Agency removed the action to federal court more than two years ago on
February 15, 2024. (Doc. 1.)
The Court will not recount the numerous motions, hearings, and pre -trial
conflicts in the matter. The Court held a four -day jury trial from January 20, 2026,
to January 23, 2026. (Doc. 189, Doc. 192, Doc. 193, Doc. 200.) The Court dismissed
the claims agai nst Agency before the case went to the jury. The jury returned a
verdict on January 23, 2026, finding for Lohrke on all counts against Connect. (Doc.
208.) The jury specifically found that Connect had violated three provisions of the
UTPA, had breached its insurance contract with Lohrke, had committed constructive
fraud, and had breached the implied covenant of good faith and fair dealing. ( Id.)
The jury awarded Lohrke $500,000 in compensatory damages. ( Id. at 4.) The jury
also found Connect liable for actual malice or actual fraud in its handling of Lohrke’s
insurance claims. ( Id.) The Court conducted a separate punitive damage hearing
pursuant to Montana law after which the jury awarded Lohrke $5,000,000 in punitive

damages. (Doc. 210.) Connect filed several motions for post -trial relief. (See Doc.
214, Doc. 229, and Doc. 231.)
Connect also filed a notice requesting that the Court review the jury’s punitive
damages award under Mont. Code Ann. § 27 -1-221. (Doc. 237.) Connect further
requested that the Court comply with several additional Montana statutory
requirements under Mont. Code Ann. § 27-1-221(9) for punitive damages. (Id. at 3-
4.) The Court reviewed the jury’s punitive damages award pursuant to Mont. Code
Ann. § 27-1-221. (See Doc. 246, Doc. 279.)
The Court deferred consideration of the issues under Mont. Code Ann. § 27 -
1-221(9) until the time for Lohrke to file a response to Connect’s motion had passed.
(Id.; see also Doc. 248.) Lohrke filed a response challenging the application of Mont.
Code Ann. § 27 -1-221(9) to the jury’s punitive damages award in this case. (Doc.
250.) Lohrke further challenged the constitutionality of Mont. Code Ann. § 27 -1-
221(9) pursuant to Fed . R. Civ. P. Rule 5.1. (Doc. 251.) The Court certified the
constitutional challeng e to the Montana Attorney General pursuant to 28 U.S.C.
§ 2403. (Doc. 252.) The Montana Attorney General failed to respond. The Court held
hearings on the issue on April 20, 2026, and June 8, 2026. (Doc. 265, Doc. 278.) The
Court determined that Mont. Code Ann. § 27 -1-221(9) does not apply to this case
because such action would constitute retroactive application and Montana statutes

and case law make clear that retroactive application proves proper only when the
relevant statute expressly declares such intent. (Doc. 279.)
LEGAL STANDARD
I. Attorney Fees
“[T]he law of the state in which the district court sits determines whether a
party is entitled to attorney fees, and the procedure for requesting an award of
attorney fees is governed by federal law.” Riordan v. State Farm Mut. Auto. Ins. Co.,
No. CV 07-38-M-DWM-JCL, 2008 WL 2512023, at *2 (D. Mont. June 20, 2008),
aff'd, 589 F.3d 999 (9th Cir. 2009). Montana law supplies the rule of decision
regarding whether a party has a substantive right to recover attorney fees in this
action. Id. Montana courts generally follow the American Rule “which prohibits fee-
shifting in most cases, absent statutory or contractual authority to the contrary.”
Abbey/Land LLC v. Glacier Const. Partners LLC, 433 P.3d 1230, 1247 (Mont. 2019).
II. Bill of Costs
Section 1920 of Title 28 of the U.S. Code recognizes that a court may tax costs
for the following categories: clerk and marshal fees, fees for printed or electronically
recorded transcripts necessarily obtained in the case, and fees for printing and
witnesses. Section 1821(b) of Title 28 of the U.S. Code provides that “a witness shall
be paid an attendance fee of $40 per day” for each day the witness appears in court
or in a deposition. However, “when a prevailing party seeks reimbursement for fees

paid to its own expert witnesses, a federal court is bound by the limit of § 1821(b),
absent contract or explicit statutory authority to the contrary.” Crawford Fitting Co.
v. J.T. Gibbons, Inc., 482 U.S. 437, 439 (1987). The Court’s power to award costs
proves discretionary. Taniguchi v. Kan Pac. Saipan, Ltd., 566 U.S. 560, 565 (2012).
DISCUSSION
I. Attorney Fees
The Montana Supreme Court recognizes an exception to the American Rule
that applies here—the insurance exception. “The Montana Supreme Court has long
recognized an insurance exception to the American Rule.” PacificSource Health
Plans v. Atl. Specialty Ins. Co., No. CV-21-064-BU-BMM, 2022 WL 1538673, at *3
(D. Mont. May 16, 2022). That exception entitles a first -party insured to recover
attorney fees “whenever an insurer forces its insured to assume the burden of
litigation to obtain what the insured is enti tled to under an insurance contract.”
Abbey/Land, 433 P.3d at 1247. Application and enforcement of the insurance
exception is not discretionary. Winter v. State Farm Mutual , 328 P.3d 665 (Mont.
2014).
“Brewer and its progeny make clear that the insurance exception to the
American Rule applies only when an insured is ‘compelled’ to litigate, or when they
‘ha[ve] to resort to litigation.’” Graham v. Farmers Ins. Exch. , No. CV-23-53-H-
BMM, 2026 WL 412467, at *6 (D. Mont. Feb. 13, 2026) (quoting Mountain W. Farm

Bureau Mut. Ins. Co. v. Brewer , 69 P.3d 652, 653 (Mont. 2003); citing Mlekush v.
Farmers Ins. Exch., 404 P.3d 704, 708 (Mont. 2017)). Although, “[t]o be clear, if a
first-party insured goes to trial and obtains a verdict in excess of the insurer ’s last
offer, this constitutes prima facie proof that the insured was forced to assume the
burden of legal action to obtain the full benefit of the policy, thus obviating the need
for an inquiry as to whether or not the insurance exception applies.” Mlekush, 404
P.3d at 708.
Connect provides several arguments to support its position that Lohrke is not
entitled to attorney fees in this case. (See Doc. 227.) The Court disagrees with each
of Connect’s arguments. The Court will address each issue in turn.
Connect first argues that Lohrke was not “compelled” to initiate litigation and
instead it was Lohrke’s “refusal to meet conditions precedent in the policy that
caused this litigation.” (Id. at 10.) Connect specifically argues that Lohrke failed to
meet “conditions precedent” by failing to sue the uninsured motorist before initiating
this matter, and by failing to “submit to the contractually required medical
examination[.]” ( Id. at 11.) The Court already repeatedly has addressed and has
rejected Connect’s arguments concerning legal entitlement and Lohrke’s alleged
inability to prove legal entitlement based on his failure to sue the uninsured motorist.
(See Doc. 143, Doc. 158, Doc. 246, and Doc. 247.)

The Court has determined that the controlling authority makes clear that legal
entitlement can be established through means beyond tort judgment, including
through settlement, or agreement of the parties, often within stipulated facts, and that
sufficient evidence existed in this case for a reasonable jury to determine that Lohrke
had demonstrated legal entitlement for the purposes of his UTPA claims. (See Doc.
427 at 6; see also Doc. 143, Doc. 158, and Doc. 246.) Connect’s claim that Lohrke
could establish legal entitlement only through tort judgment against the uninsured
motorist proves no more persuasive now than in the numerous times that the Court
has rejected it. Connect failed to tell Lohrke for years after the accident occurred that
it had concerns about his legal entitlement, or reasonably clear liability. Connect’s
assertions that Lohrke “ultimately compelled litigation” by breaching the contract
and breaching his duty to cooperate prove disingenuous.
The Court finds similarly uncompelling Connect’s assertions concerning
Lohrke’s alleged failure to “submit to the contractually required medical
examination[.]” (Doc. 227 at 16.) Connect argues that Lohrke was “contractually
obligated to submit to an IME if reasonably requested” because Connect offered
Lohrke $35,000 during settlement negotiations in 2023, but stated that “if the offer
was refused, Connect demanded an IME.” (Id.) It seems clear that Connect’s demand
never contractually obligated Lohrke to p articipate in an IME upon Connect’s
request. Connect’s argues that Lohrke violated his duty to “[c]ooperate with

[Connect] and help [Connect] in any matter concerning a claim or suit.” ( Id.) This
duty cannot include every request Connect proffers during a negotiation. Lohrke
submitted to an IME when directed by the Court. The Court finds unpersuasive
Connect’s arguments that Lohrke compelled litigation by failing to submit to each
of Connect’s demands.
Connect further argues that the amount of attorney fees claimed by Lohrke
proves unreasonable and should be reduced to an hourly rate. ( Id. at 18.) What
constitutes a reasonable fee “must be ascertained under the facts of each case.” Plath
v. Schonrock, 64 P.3d 984, 991 (Mont. 2003). District courts retain “a ‘great deal of
discretion in determining the reasonableness of the fee.’” Wooten v. BNSF Ry., 387
F. Supp. 3d 1078, 1108 (D. Mont. 2019) (quoting Gates v. Deukmejian , 987 F.2d
1392, 1398 (9th Cir. 1992)).
“Under Montana law, a contingency fee contract may be used to determine
the amount of attorney [] fees a successful litigant is entitled to recover.” Riordan,
2008 WL 2512023, at *7 (citing Morris v. Nationwide Ins. Co., 722 P.2d 628, 631
(Mont. 1986)). “A contingent fee contract, however, does not bind a court in
determining the proper amount of attorney[] fees to be awarded.” Riordan, 2008 WL
2512023, at *7 (citing West v. Club at Spanish Peaks, L.L.C.,186 P.3d 1228 (Mont.
2008) (internal citations omitted). “A district court can award the full amount under
a contingent fee agreement so long as the amount of attorney [] fees is reasonable.”

Riordan, 2008 WL 2512023, at *7 (citing Stimac v. State of Montana, 812 P.2d 1246
at 1249 (Mont. 1991)). “When assessing whether to award the full amount of a
contingent fee agreement as a reasonable attorney[] fee, [a] court should, as a check,
consider the eight factors identified in Stimac as:
1. The novelty and difficulty of the legal and factual issues involved;
2. The time and labor required to perform the legal service properly;
3. The character and importance of the litigation;
4. The result secured by the attorney;
5. The experience, skill, and reputation of the attorney;
6. The fees customarily charged for similar legal services at the time and place
where the services were rendered;
7. The ability of the client to pay for the legal services rendered; and
8. The risk of no recovery.”
Riordan, 2008 WL 2512023, at *7 (quoting Stimac, 812 P.2d at 1249).
The Montana Supreme Court also recognizes the lodestar method as a
mechanism to calculate reasonable attorney fees. See Gendron v. Montana Univ.
Sys., 461 P.3d 115, 120 (Mont. 2020). The Montana Supreme Court has “ never
endorsed the rule that a district court is required to employ one method of calculation
over the other in any particular case.” Id. The Court determines that both the Stimac
factors and the lodestar factors indicate that Lohrke’s contingency fee agreement

with his counsel proves reasonable and appropriate. The action required extensive
time, labor, and resources, although the issues were not particularly novel. The
lawyers involved were experienced and hard-working. The fees charged by Lohrke’s
counsel were typical and customary. A risk of no recovery existe d and the result
secured by Lohrke’s counsel proved significant. The Court does not know the exact
hours spent on the case by counsel but can assume that the hours proved significant
and thus warrant an equally significant award based on the lodestar method.
Connect also asserts that Lohrke did not entirely prevail at trial as the Court
dismissed Lohrke’s claims against Agency. (Id. at 23.) The U.S. Supreme Court has
determined that a plaintiff meets the definition of a prevailing party for the purposes
of awarding attorney fees “if they succeed on any significant issue in litigation which
achieves some of the benefit the parties sought in br inging suit.” Hensley v.
Eckerhart, 461 U.S. 424, 433 (1983); see also Davis, 976 F.2d at 1541 n.1. A party
need not prev ail on all claims to constitute a “prevailing party.” Passantino v.
Johnson & Johnson Consumer Prods., 212 F.3d 493, 517-18 (9th Cir. 2000). A court
may not award fees, however, for time spent on unrelated claims on which the party
failed to prevail. Hensley, 461 U.S. at 435.
The Court concludes that Lohrke constitutes a prevailing party for the
purposes of awarding attorney fees and that Lohrke’s claims against Agency prove
“related” and “inextricably intertwined” with his claims against Connect as his time

spent on the claims against Agency clearly contributed to success on his claims
against Connect. Staton v. City & Cnty. of Butte -Silver Bow , No. CV -20-60-BU-
BMM, 2024 WL 2819335, at *3 (D. Mont. June 3, 2024). Lohrke’s counsel’s time
spent on his claims against Agency proves reasonable and compensable according
to case law. Id., citing Rhoten v. Rocking J. Ranch, LLC , No. CV 21 -46-M-DLC,
2022 WL 17128639, at *4 (D. Mont. Nov. 22, 2022).
Connect lastly contends that any attorney fees award should be limited either
only to those fees attributable to Lohrke’s contract claims and not to his UTPA
claims, or only to the fees attributable to Lohrke’s compensatory damages and not
the punitive damages award . ( Id. at 28 -29.) The Montana Supreme already has
concluded that attorney fees can be awarded in UTPA actions. Est. of Gleason v.
Cent. United Life Ins. Co. , 350 P.3d 349, 362 (Mont. 2015). The Court declines
Connect’s invitation to abandon the majority’s holding in Gleason and instead adopt
the reasoning of the concurrence. (Doc. 227 at 28.) The Court determines that Lohrke
may recover attorney fees for both his common law claim and his UTPA claim.
“[P]unitive damages are merely a component of recovery of the underlying
civil cause of action.” Finstad v. W.R. Grace & Co., 8 P.3d 778, 782 (Mont. 2000)
(citing 22 Am.Jur.2d Damages § 741 (1988)). The jury’s punitive damages award
represents a component of the “gross proceeds of recovery in connection with the
claims asserted based on tort or contractual liability.” (Doc. 227 at 29, quoting 222

Ex. 2; see also Doc. 263 Ex. 1.) Lohrke’s fee agreement with his counsel fails to
limit his recovery of attorney fees on punitive damages. The Court already has
addressed similar argument s made by Connect regarding substantive due process
and limitations on punitive damages awards. Connect offers no authority to support
its argument that the Court should r estrict recovery of attorney fees only to
compensatory damages and not punitive damages. The Court further notes the
tenacity of the defense presented by Connect in this matter. As explained by Lohrke’s
witness at the hearing on attorney fees:
Connect’s counsel “are a formidable opponent, and they're going to make
you win your case. And they did that in this case. They fought you every
step of the way for years. They advanced creative legal theories. They
made arguments that they continued to make during this hearing
about underlying conduct of your client. This is a challenging lawsuit.”

(Doc. 277 at 29:14-20.) Lohrke’s counsel earned their fees in this case as the matter
proceeded through years of pre-trial litigation, including multiple motions hearings,
the week-long trial, and post-trial motions. The Stimac factors, including the result
secured and the risk of no recovery, support an award of substantial attorney fees.
Stimac, 812 P.2d at 1249.
The Court emphasizes that attorney fees provide a distinct component of
recovery and that a court analyzes the constitutionality of a punitive damages award
separately from any potential attorney fees award. The Court concludes that attorney
fees prove proper in this case and that Lohrke may recover attorney fees based on

his full recovery, including the jury’s punitive damages award, based on each of the
claims he asserted at trial. The Court deems it appropriate to exercise its discretion,
however, to limit the contingency fee award to some degree. Wooten, 387 F. Supp.
3d at 1108. This reduction reflects other Stimac factors, including the novelty and
difficulty of the issues involved. Stimac, 812 P.2d at 1249. Significant case law and
numerous Montana statutes dictate proper conduct by insurers in adjusting claims
under Montana law and also provide a roadmap for a party challenging the insurer’s
actions.
The contingency fee agreement calls for Lohrke’s counsel to receive 40
percent of any award less the $7,464.62 that Lohrke had received before the start of
trial. (Doc. 261, Ex. 1 at 1.) The Court reduces the amount to be received by Lohrke’s
counsel to 25 percent of the full recovery of $5.5 million , or $1,375,000, less the
$7,464.62 that Lohrke had received before the start of trial. The calculation results
in an attorney fee award of $1,367,535.38 to be paid by Connect.
II. Bill of Costs
Fed. R. Civ. P. 54(d)(1) permits a prevailing party to recover taxable costs.
Loc. R. 54.1 provides as follows:
Within 14 days after the entry of a judgment allowing costs, the prevailing
party may serve and file an application for the taxation of costs. The
application must be made on Form AO -133, Bill of Costs, available on the
court’s website and shall be limited to the costs permitted by 28 U.S.C. § 1920.
Sufficient documentation showing the amount of costs (including but not

limited to, copies of invoices, receipts, orders, vouchers, billing statements,
etc.) is required. Failure to attach sufficient documentation to support a
claimed cost is grounds for disallowance of that particular item.

The opposing party may object within 14 days after the prevailing party filed the
application. Any objection must specify the item and/or amount objected to and give
reasons for the objection.
The Court’s power to award costs proves discretionary. Taniguchi, 566 U.S.
at 565. A “district court need not give affirmative reasons for awarding costs; instead,
it need only find that the reasons for denying costs are not sufficiently persuasive to
overcome the presumption in favor of an award. The presumption itself provides all
the reason a court needs for awarding costs.” Save Our Valley v. Sound Transit, 335
F.3d 932, 945 (9th Cir. 2003). Section “1920 is narrow, limited, and modest in
scope.” Kalitta Air L.L.C. v. Cent. Texas Airborne Sys. Inc., 741 F.3d 955, 958 (9th
Cir. 2013). The Court will consider each of Connect’s objections independently, with
a total calculation for Lohrke’s bill of costs to follow.
A prevailing party may recover t ranscript fees only if the transcripts are
“necessarily obtained for use in the case.” 28 U.S.C. § 1920(2). The Local Rules
presume that transcripts are necessary if used “at trial, after trial, or in supporting or
opposing a motion for summary judgment.” L.R. 54.1(b)(1)(B)(ii); see also Wooten
v. BNSF Ry. Co., 387 F. Supp. 3d 1078, 1118 (D. Mont. 2019), aff'd, 819 F. App'x
483 (9th Cir. 2020).

Lohrke requests costs for $9,166.55 for “fees for printed or electronically
recorded transcripts necessarily obtained for use in the case.” (Doc. 217 at 1.)
Connect objects to Lohrke’s request and asserts that costs for video production and
Zoom conferencing are not recoverable as fees for printed or electronically recorded
transcripts necessarily obtained in the case. (Doc. 225 at 5 -7.) Connect specifically
objects to Lohrke listed costs for “CAL: Video Production” and “Video Conference
– Zoom” “Zoom Conne ction Half Day[/Full Day]” for Matt DeBaker, Jen Law,
Charlene Fransen, James Peterson, and Dale Cockrell . ( Id.) The Court agrees.
Lohrke did not use the video transcripts of the witnesses at trial as had the prevailing
party in Wooten, 387 F. Supp. 3d at 1118. Lohrke also fails to argue that he used it
before trial or in supporting or opposing a motion for summary judgment. See L.R.
54.1(b)(1)(B)(ii).
The Court shall award Lohrke $6,253.55 in taxable costs, based on the
following calculations:

ORDER
Accordingly, IT IS ORDERED:
1. Lohrke’s Motion for Attorney Fees (Doc. 221) is GRANTED in part and
DENIED in part.
a. The Court entered judgment for Lohrke in the amount of $5,500,000
million based on the jury verdict. (See Doc. 208, Doc. 280.) The Court
awards 25 percent of $5,500,000, or $1,375,000, less the $7,464.62
received by Lohrke before the start of trial, for a total of $1,367,535.38
in attorney fees to Lohrke to be paid by Connect.
2. Lohrke’s Application for Taxation of Costs (Doc. 217) is GRANTED in part.
The Court grants to Lohrke taxable costs totaling $6,253.55 based on the
calculations outlined in this order.

DATED this 12th day of June, 2026.

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