Wells Fargo Bank, N.A. v. Enviromate, LLC et al
MEMORANDUM OPINION AND ORDER that the court will allow pla to file additional evidence in support of the reasonable expenses and fees incurred and due under Notes; evidence to be filed by 5/25/12; Signed by Judge James H Hancock on 5/9/2012. (BST, )
2012 May-09 AM 11:51
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
WELLS FARGO BANK,
successor by merger to
Wachovia Bank National
ENVIROMATE, LLC; and
MEMORANDUM OPINION AND ORDER
The court has before it the March 30, 2012 Motion (Doc. #23) for Summary
Judgment of Wells Fargo Bank, N.A., successor-by-merger to Wachovia Bank,
National Association (“Wells Fargo”) against Defendant Enviromate, LLC. All
proceedings against Defendant Philip Geddes are currently stayed (Doc. # 22)
because of bankruptcy proceedings.
I. Procedural History
Plaintiff Wells Fargo commenced this action by filing a Complaint in this court
on May 19, 2011 alleging: (1) breach of contract against Enviromate under Notes 1,
2 and 3 (Count I); (2) breach of contract against Geddes under Notes 1, 2 and 3
(Count II); and (3) a claim for unjust enrichment against both Enviromate and Geddes
(Count III). (Compl. ¶¶ 23-35.) Defendants Enviromate and Geddes filed an Answer
and Counterclaim (Doc. $6) against Plaintiff on June 20, 2011. Plaintiff’s moved
to dismiss (Doc. # 8) the counterclaim on July 11, 2011. On August 31, 2011, the
court denied (Doc. # 14) without prejudice the motion to dismiss the counterclaim
and gave Defendants the opportunity to amend their pleadings to correct some
identified deficiencies. No amended counterclaim was ever filed, but instead
Defendant filed its own motion to dismiss (Doc. #15), which was granted on
September 27, 2011. (See Doc. # 16.)
On March 14, 2012. Defendant Geddes filed a Suggestion of Bankruptcy (Doc.
# 21) with the court. As a result, the court stayed the proceedings pursuant to 11
U.S.C. § 362(a) against Defendant Geddes only. (Doc. # 22.) The case continued as
to Defendant Enviromate.
On March 30, 2012, Plaintiff Wells Fargo filed its Motion (Doc. #23) for
Summary Judgment against Defendant Enviromate. The Motion included a brief and
evidence1 in support of the Motion. (Id.) Despite having the opportunity to do so,
(see doc. # 24), Defendant Enviromate did not file any brief or evidence in opposition
to Plaintiff’s Motion for Summary Judgment. In accordance with the court’s April
2, 2012 order (Doc. #24), the Motion (Doc. #23) for Summary Judgment came under
submission on May 7, 2012, and is now ripe for decision.
The court has reviewed the Motion for Summary Judgment (Doc. #23), the
brief in support of the Motion for Summary Judgment, and the referenced portions
of the evidentiary material filed in support of the Motion for Summary Judgment.
The court finds that the statement of facts as set forth in paragraphs 1 through 19 of
the brief (Doc. #23) is amply supported by the record evidence, and Plaintiff Wells
Fargo has carried its burden of demonstrating the absence of any material factual
dispute and that it is entitled to judgment as a matter of law as to the claims asserted
in the Complaint against Enviromate, LLC.
A. Damages Under the Notes
As for damages, it is undisputed that Wells Fargo is entitled to recover from
Enviromate at total of $888,179.80, consisting of the following owed under Notes 1,
Plaintiff Wells Fargo submitted: the affidavit of Robert M. Terway of Wells Fargo with
exhibits (Exhibit A) and the affidavit of Glenn E. Glover of Bradley Arant Boult Cummings LLP
2 and 3: (1) $389,720.54 on the first Note (which includes unpaid principal in the
amount of $311,849.60, accrued unpaid interest as of March 30, 2012 in the amount
of $66,497.88, and late charges owing in the amount of $11,373.06) with interest
accruing from March 30, 2012 to the date of entry of judgment at a rate of $69.30 per
day; (2) $388,510.46 on the second Note (which includes unpaid principal in the
amount of $318,048.24 accrued unpaid interest as of March 30, 2012 in the amount
of $66,032.38, and late charges owing in the amount of $4,429.84) with interest
accruing from March 30, 2012 to the date of entry of judgment at a rate of $69.79 per
day; and (3) 109, 948.80 on the third Note (which includes unpaid principal in the
amount of $86,968.46, accrued unpaid interest as of March 30, 2012 in the amount
of $18,097.85, and late charges owing in the amount of $4,882.49) with interest
accruing from March 30, 2012 to the date of entry of judgment at a rate of $19.01 per
B. Reasonable Fees and Expenses
There is also the issue of reasonable fees and expenses under each Note. The
three Notes at issue each contain a provision through which Defendant agreed to “pay
all of Bank’s reasonable expenses actually incurred to enforce or collect any of the
Obligations including, . . . reasonable . . . paralegals’, attorneys’ and expert fees and
expenses. . . .” (Terway Aff. ¶ 20; Exhs. A-C to Terway Aff.) Under this provision,
Plaintiff claims two types of fees and expenses: (1) fees of $4,600.00 and $14,456.00
for appraisals and environmental reports obtained with respect to real property
collateral pledged by Enviromate as security for the indebtedness; and (2) $83,700.88
in legal fees and expenses.
As to the first type of expense or fee, Plaintiff does not provide any explanation
or statement regarding the reasonableness of the charges incurred for the appraisals
and environmental reports. Without such evidence, the court is completely unable to
gauge whether those expenses were reasonable and, therefore, owed by Enviromate
under the Notes.
At to the second type of fees and expenses, Plaintiff’s only evidence of its
reasonable costs and attorneys’ fees are conclusory statements by attorney Glenn D.
Glover that “[a]s of March 30, 2012, the fees incurred by Wells Fargo for legal
services performed by Bradley Arant Boult Cummings, LLP in connection with the
above captioned matter totals $81,022.00 and the expenses incurred total $2,678.88.”
(Exh. 2 to Doc. #23, GLover Aff. ¶ 8.) He further states that, in his opinion, “the time
expended, expertise required, amount of indebtedness being collected and rates
customarily charged by other firms in Alabama for similar collection efforts . . . were
actual, reasonable, and necessary.” (Id. ¶ 9.) He opines that “the work performed in
this case has been handled with economy and efficiency” and that “an attorneys’ fee
award in the amount of $83,700.88 . . . would be just, reasonable and customary
under the circumstances of this case.” (Id. ¶ 10.)
These statements are insufficient for the court to determine whether the legal
fees and expenses are reasonable. Without itemization or specific explanation2 of
what these attorneys’ fees and costs represent or how they were incurred, the court
cannot satisfy its obligations to ascertain the reasonableness of the charges. See
generally, PNCEF, LLC v. Hendricks Bldg. Supply LLC, et al., 740 F. Supp.2d 1287,
1293 (S.D. Ala. 2010) (“The Court’s task . . . is instead to determine [plaintiff]’s
actual attorney’s fee incurred in enforcing its rights . . . in this matter, and to ascertain
whether that actual figure . . . is a ‘reasonable attorney’s fee’ within the ambit of” the
agreement) (in the context of default judgment). Morever, the legal fees are over ten
and a half percent (10.5%) of the outstanding debt.3 On its face, this percentage
seems high to the court, especially considering that this case is not complicated and
has not required extensive briefing or discovery.
In light of the above, the court will allow Plaintiff to file additional evidence
The court is aware that Glover’s affidavit listed a myriad of legal services performed in
connection with this case. However, that listing was not specific; it does not inform the court
who did the work (i.e. paralegal, associate, or partner) and at what rate. It also does not inform
the court of the number of hours spent on each service.
The court notes that it just awarded an attorneys’ fee to this same Plaintiff (using the
same law firm) that represented about five percent (5%) of the outstanding debt in a case that was
seemingly more complicated than the one at issue here.
in support of the reasonable expenses and fees incurred and due under the Notes.
Such evidence should be filed no later than May 25, 2012.
DONE this the 9th
day of May, 2012.
SENIOR UNITED STATES DISTRICT JUDGE
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