Private Investigators: Deposition Witness Fees Paid as Experts or Fact Witnesses?

By John Merriam

The whopping amount of $363.00 was involved in a recent King County Superior Court case to determine the status of a private investigator for purposes of fees when appearing at discovery depositions noted by opposing counsel.

The dispute over fees for the private investigator arose out of a case tried to a jury in October, 1994, involving injury to a fisherman aboard a factory trawler, Miller v Arctic Alaska, King County Superior Court cause number 93-2-07209-1. Plaintiff in the Miller case was represented by the undersigned, who retained Leland Phelps to help him interview witnesses in preparation for trial. Mr. Phelps did ultimately testify at trial that one of the witnesses, a former employee of Arctic Alaska, changed her testimony under oath from what she had previously told him in an interview.

Lee Phelps was subpoenaed by the attorney for Arctic Alaska to appear for a discovery deposition on August 1, 1994. No witness fee accompanied the subpoena. Mr. Phelps assumed he was to be paid his normal rate for trial and deposition testimony, $95.00 per hour. Once in the office of defense counsel, Mr. Phelps noted that counsel for the plaintiff was not present, and later indicated that he had never been notified of the Phelps deposition. Mr. Phelps stated that personnel in the employ of defense counsel requested that he leave his file containing notes from his interviews. In the absence of counsel for plaintiff, he refused.

A second deposition was noted for August 16, 1994, this time with notice to counsel for the plaintiff. Again, no witness fee accompanied the subpoena served on Mr. Phelps. The deposition went forward on that date.

In neither of the depositions for Mr. Phelps was any discussion had over his rate of compensation. Mr. Phelps assumed he was to be paid at his normal hourly rate, as he had in every similar deposition attended in the thirty-five years of his career previous to the Miller case. Mr. Phelps seasonably sent a bill for $221.20 for the August 16 deposition. However, he neglected to send a second bill, $141.80 for the first, aborted deposition for over a year. Defense counsel refused any payment whatsoever for either of the depositions.

Lee Phelps brought the matter to the attention of counsel for the plaintiff. The undersigned demanded payment from defense counsel on behalf of Mr. Phelps. Payment in any amount was again refused. Counsel for the plaintiff filed suit on behalf of Mr. Phelps for $363.00. Concerned about the shapes of things to come, the undersigned represented Mr. Phelps pro bono.

The case was assigned to Judge Pechman. Defendants, including defense counsel, his firm and the fishing company client moved for dismissal for failure to state a claim pursuant to CR 12(b)(6), along with a motion to transfer the case to the trial judge in the Miller action, Charles Mertel. Defendants claimed that Mr. Phelps was listed as a fact witness at trial; that Phelps was not entitled to a $10.00 witness fee for either of the two depositions he was subpoenaed for since he had not demanded one at the time; and that the lawsuit was frivolous, claiming punitive damages and fees under CR 11 and RCW 4. 84.185.

The defendants did not cite any authority in their CR 12(b)(6) motion that a private investigator was not entitled to expert witness fees under CR 26(b) (4) and (5). Rather, defense counsel--a different attorney in the firm of defense counsel for the underlying Miller case--made the bald assertion that the claim was frivolous, to support a demand for his attorney fees since, apparently, no one else was going to pay him for defending this case.

Mr. Phelps could likewise find no authority for his claim that he should have been compensated at discovery depositions as an expert, rather than receiving a mere $10.00--which he never received--as a fact witness. Plaintiff argued instead that it should be the opposing party who pays for discovery from persons hired in anticipation of litigation. This argument was more compelling based upon the fact that no notice was given to plaintiff's counsel for the first discovery deposition noted by defendants.

Although neither side could locate cases exactly on point, Mr. Phelps took the position that the key is whether or not a professional person was retained "in anticipation of litigation'. See Paiya v. Durham Construction Co., 69 Wash. App. 578 (1993) (Treating chiropractor held to be fact witness. ). See also, Baird v Larson, 59 Wash. App 715 (1990) (CPA held to be a fact witness rather than hired in anticipation of litigation. ). In a recent decision for which the justices were hopelessly split on discovery issues, the words "anticipation of litigation" seemed to be the test used by almost all of the various, separate opinions published for the case. In re Firestorm 1991, 129 Win. 2d 130 (1996).

Mr. Phelps also argued that public policy factors prohibited that he assist the judicial process for the same $10.00 per day rate of compensation paid to jurors and fact witnesses performing their civic duty. He stated he could not stay in business, assisting the adversary system, if he was not paid a reasonable fee for his time, and that limiting private investigators to $10.00 per day would result in the elimination of that group of professionals from litigation. He also argued that the party retaining the investigator should not be required to pay for depositions noted by opposing counsel, when it is opposing counsel who controls the time expended and is able to impose undue expenses on the hiring party. A good example of burdensome expense occurred in the underlying Miller case, where Mr. Phelps was subpoenaed to appear at a deposition that didn't happen.

The fallback argument used by Mr. Phelps was estoppel. Since he was never informed by any of the defendants that they did not intend to pay his reasonable hourly fee, thereby depriving him of an opportunity to move for a protective order or seek other relief, he was entitled to rely on payment at his standard hourly rate. It was not until more than a year after trial of the Miller case that defendants informed Mr. Phelps of their position that he was not entitled to his reasonable fee, even though they had never paid him a statutory witness fee. Mr. Phelps took no position on which judge should decide the case.

Shortly after filing their motion for dismissal under CR 12 (b) (6)--which perhaps should have been denominated as one for summary judgment--the defendants made a statutory offer of settlement pursuant to RCW 4.84.250 et seq. in the amount of $1.00. Mr. Phelps refused the offer.

Shannon Stafford volunteered to mediate this dispute without charge. He attempted to cut the baby in half during telephone calls to respective counsel, but was not successful.

Judge Mertel granted defendants' motion to transfer the case to his court. He denied defendants' CR 12 (b)(6) motion without prejudice and set trial by affidavit for less than a month after that ruling, for early July 1996. The parties jointly requested that Judge Mertel summarily decide the issue after hearing oral argument, which he agreed to do on July 1, 1996. The judge did not appear pleased that his courtroom was tied up in a dispute over $363.00. The motion was treated as one for summary judgment.

Defense counsel for the underlying Miller case and his law firm, but not the fishing company client was found liable for two witness fees, one for each deposition, in the total amount of $20.00. Costs were not taxed against either side. Judge Mertel held that the court would leave the parties as he found them. He noted the absence of an agreement on payment of fees in advance of the depositions at issue.

How a private investigator should be paid for discovery depositions noted by opposing counsel seems to be a close call. It cannot be denied that private investigators typically testify about factual matters, but they use their professional expertise when unearthing those facts. The strong public policy to support the fact finding function of the judicial system would seem to militate in favor of payment to private investigators at reasonable hourly fees as professionals, when those investigators are hired in anticipation of litigation. However, until such time as precedent is more clear, readers of this publication are advised that their private investigators need to discuss fee arrangements with opposing counsel in advance of discovery depositions. If no agreement is reached, the private investigator would have opportunity to move for a protective order. Perhaps guidance from a published decision will be forthcoming when the ruling on one or more of such protective orders is appealed.

The case is Leland Phelps dba Northwest Casualty Claims Service v Dennis Moran, LeGros, Buchanan & Paul and Tyson Seafood Group fka Arctic Alaska Fisheries Corporation, King Co. No. 96-2-12341-1. Lee Phelps was represented by John Merriam. The defendants were represented by David Bratz of LeGros, Buchanan & Paul. The underlying case of Miller v Arctic Alaska, is awaiting decision in the court of appeals, Division One No. 35817-1-I.

John Merriam is a sole practitioner in Seattle primarily involved in maritime injury and wage claims for plaintiffs.