Terry Sanderson could be the hook to cover Actress and businesswoman Gwyneth Paltrow’s legal fees After she won a court battle against him over a 2016 skiing accident.
A The jury was in Paltrow’s favor last week, he awarded him a symbolic $1 in a countersuit against Sanderson, who claimed the Goop founder ran into him on a Utah ski slope. The retired ophthalmologist, who sued Paltrow for $300,000, could now receive up to $1 million in legal fees if the judge presiding over the case finds him responsible for covering Paltrow’s defense costs, according to legal experts.
Sanderson’s liability for Paltrow’s attorney fees depends on whether he brought the suit against Paltrow “in good faith.” Under Utah law, attorney fees are only awarded to the prevailing party if a case is found to be without merit, which is up to a judge to determine.
Jessica Corpuz, a shareholder in the litigation department at Weintraub Tobin in Los Angeles, California, told CBS MoneyWatch, “Utah differs from other jurisdictions in that the prevailing party pays certain costs incurred by the other party, but not their attorney fees.” “If you win a case, you will be reimbursed for certain statutory fees, but generally you will have to pay your own attorney fees.”
A judge in the case, not a jury, will decide whether Sanderson’s lawsuit was filed in bad faith and is therefore responsible for covering Paltrow’s legal fees, which are likely to be extensive.
Good faith or bad?
“The jury determined that he won the case, but that doesn’t mean he necessarily filed in bad faith,” Corpuz said. “He now has the burden of proving that he filed it in bad faith — that he knew he had no basis, which is frivolous.”
Corpuz suspects that Sanderson initially sued Paltrow in the expectation that she would quickly surrender. “He saw a high-value dollar sign and filed the lawsuit thinking he would pay to have it removed,” Corpuz added.
Paltrow, in a statement after the verdict in her favor, said she went to trial because “I felt that admitting to a false claim compromised my integrity.”
Paltrow’s legal fees are likely to be extensive
Paltrow’s defense could cost tens of thousands of dollars, according to legal experts.
Corpuz pegged his attorney fees in the $500,000 to $1 million range.
Later, Paltrow’s legal team will submit a breakdown of the time spent on the case to determine the total cost of her defense.
Don’t be surprised if Salt Lake City, Utah, attorney David Cutt, Kendall & Olson spends $1 million on his defense.
“Paltrow’s attorneys probably billed $800,000 to $1,000,000 in fees, but that’s purely my guess,” he told CBS MoneyWatch. “So, Sanderson could be looking at a very important verdict. The jury clearly understood that the whole thing was a sham.”
RICK BOWMER/POOL/AFP via Getty Images
Liability protection
If he is found liable, some of Sanderson’s legal fees — including his own — may be covered by his homeowners insurance policy, if he has one.
This type of insurance follows people around and provides financial protection beyond their home. According to the Insurance Information Institute, or III, liability protection, a key component of homeowners’ policies, means individuals are covered against “lawsuits for bodily injury or property damage that you or family members cause to other people.”
The personal liability portion of a policy pays for the costs of your legal defense in court, as well as any court awards – up to the limits specified in your policy. Limits of liability generally start at about $100,000 per III.
“My expectation is that Sanderson’s homeowners coverage will pay the fee up to the policy limit,” Katt said. “He would personally be on the hook for any amount above his coverage limit.”
Court costs and contingency fees
Roger Cohn of Cohn Roth Law in Vermont said that typically, in such cases, Sanderson would hire his attorneys on a contingency fee basis, meaning he would only have to pay his attorneys if he successfully sued Paltrow.
“I would be very surprised if his attorney is not paid on a contingency-fee basis, meaning his attorney is not paid if he loses the case,” Cohn said.
He is also likely liable for court costs, which in this case can be substantial, given the length of the trial and the number of witnesses called.
“Court costs can be expensive when there are many depositions and an extended trial,” Cohn added. A submission can cost around $1,000, while other fees include filing and transcription fees.
“This case was very complex and could cause substantial court costs,” he added.
Paltrow’s attorneys declined to comment on the cost of her defense. Sanderson could not immediately be reached for comment.