Coltin Electric, Inc. v. Continental Casualty Company

Filing 218

ORDER granting in part 195 Motion for Attorney Fees and the Commissioner is awarded attorney's fees in the amount of $110,124.13. Signed by Judge Kristi K. DuBose on 1/15/2015. (cmj)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
KAREN WELDIN STEWART, CIR-MI,
)
INSURANCE COMMISSIONER OF THE )
STATE OF DELAWARE,
)
)
Plaintiff,
)
)
v.
)
)
CONTINENTAL CASUALTY
)
COMPANY,
)
)
Defendant and
)
Third-Party Plaintiff,
)
)
v.
)
)
COLTIN ELECTRIC, INC.,
)
)
Third-Party Defendant.
)

CIVIL ACTION NO. 12-0532-KD-B

ORDER
This action is before the Court on the motion for award of statutory award of attorney’s fees
filed by Plaintiff Karen Weldin Stewart, Cir-Mi, Insurance Commissioner of the State of Delaware
(the Commissioner) (doc. 195), the evidentiary submission in support of the motion (doc 205) and
the response in opposition filed by Continental Casualty Company (doc. 207). Upon consideration,
and for the reasons set forth herein, the motion is GRANTED in part and the Commissioner is
awarded attorney’s fees in the amount of $110,124.13.
A. Statement of the law
This Court’s jurisdiction is based on diversity and Alabama is the forum state; therefore, the
court applies the law of the State of Alabama to determine whether a party is entitled to fees and to
resolve disputes as to the reasonableness of fees. Kearney v. Auto-Owners Ins. Co., 713 F. Supp. 2d
1369, 1373 (M.D. Fla. 2010) (citing Coastal Roofing Co., Inc. v. David Boland, Inc., 309 F.3d 758,

760 (11th Cir. 2002) (“Since Boland's claim for attorneys' fees sounds in state law and reaches us by
way of federal diversity jurisdiction, we apply the substantive law of Florida, the forum state.”
(citing Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938))). “It is clear that statutes allowing for
recovery of attorney’s fees are substantive for Erie purposes.” McMahan v. Toto, 256 F.3d 1120,
1132 (11th Cir. 2001) (citation omitted). “As the Supreme Court has stated:
[I]n an ordinary diversity case where the state law does not run counter to a valid
federal statute or rule of court, and usually it will not, state law denying the right
to attorney's fees or giving a right thereto, which reflects a substantial policy of
the state, should be followed.”
McMahan, 256 F. 3d at 1133 (quoting Alyeska Pipeline Serv. Co. v. Wilderness Society, 421 U.S.
240, 259 n. 31, 95 S. Ct. 1612, 1622 n. 31, 44 L.Ed.2d 141 (1975) (citation and quotation omitted)).
“Alabama follows the American rule, whereby attorney fees may be recovered if they are
provided for by statute or by contract” or “special equity”. Jones v. Regions Bank, 25 So.3d 427,
441 (Ala. 2009) (citations omitted); Hartford Acc. & Indem. Co. v. Cochran Plastering Co., Inc.,
935 So.2d 462, 472 (Ala. Civ. App. 2006) (citations omitted) (same). In this case, Ala. Code § 39–
1–1(b) provides as follows:
(b) Any person that has furnished labor, materials, or supplies for or in the
prosecution of a public work and payment has not been made may institute a civil
action upon the payment bond and have their rights and claims adjudicated in a
civil action and judgment entered thereon. Notwithstanding the foregoing, a civil
action shall not be instituted on the bond until 45 days after written notice to the
surety of the amount claimed to be due and the nature of the claim. The civil
action shall be commenced not later than one year from the date of final
settlement of the contract. The giving of notice by registered or certified mail,
postage prepaid, addressed to the surety at any of its places of business or offices
shall be deemed sufficient under this section. In the event the surety or contractor
fails to pay the claim in full within 45 days from the mailing of the notice, then
the person or persons may recover from the contractor and surety, in addition to
the amount of the claim, a reasonable attorney's fee based on the result, together
with interest on the claim from the date of the notice.
Ala. Code § 39-1-1(b).
There is no dispute that Elkins Constructors, Inc. did not pay the claim submitted by Coltin
2

Electric, Inc. in May 2012. The operative part of the statute provides that in an action against a
surety, the party suing may seek “in addition to the amount of the claim, a reasonable attorney's fee
based on the result, together with interest on the claim from the date of the notice.” Id.
“The determination of whether an attorney fee is reasonable is within the sound discretion of
the trial court.” Kiker v. Probate Court of Mobile County, 67 So.3d 865, 867 (Ala.2010) (citations
omitted). To reach a decision as to the reasonableness of the attorney’s fees requested, Alabama
courts consider non-exclusive list of criteria, including: “(1) [T]he nature and value of the subject
matter of the employment; (2) the learning, skill, and labor requisite to its proper discharge; (3) the
time consumed; (4) the professional experience and reputation of the attorney; (5) the weight of his
responsibilities; (6) the measure of success achieved; (7) the reasonable expenses incurred; (8)
whether a fee is fixed or contingent; (9) the nature and length of a professional relationship; (10) the
fee customarily charged in the locality for similar legal services; (11) the likelihood that a particular
employment may preclude other employment; and (12) the time limitations imposed by the client or
by the circumstances.” Pharmacia Corp. v. McGowan, 915 So.2d 549, 552–53 (Ala. 2004) (citation
omitted).
“These criteria are for purposes of evaluating whether an attorney fee is reasonable; they are
not an exhaustive list of specific criteria that must all be met.” Id. The Alabama courts “do not
suggest that all of these criteria must be met.” Graddick v. First Farmers and Merchants Nat. Bank
of Troy, 453 So.2d 1305, 1311 (Ala. 1984). Instead, the Supreme Court of Alabama explained that
“there would hardly ever be a case where the application of attorney's fees brought into play every
criterion. But they are available for the trial judge to use in connection with each claim for
attorney's fees.” Id.
The trial court may consider both expert opinion and its own judgment in determining the
reasonableness of requested fees. See, e.g., Beal Bank, SSB v. Schilleci, 896 So. 2d 395, 404 (Ala.
3

2004) (“ ‘The trial court, in connection with a consideration of the opinion evidence proffered by
qualified experts, may call to his aid his own estimate of the value of such legal services after
considering the aforementioned elements and, generally speaking, the allowance rests within the
sound judicial discretion of the trial court.’ ”) (quoting Ingalls v. Hare, 96 So. 2d 266, 274 (Ala.
1957)). Overall, “a fee is clearly excessive when after a review of the facts, a lawyer of ordinary
prudence would be left with a definite and firm conviction that the fee is in excess of a reasonable
fee.” Peebles v. Miley, 439 So.2d 137, 143 (Ala.1983).
“The starting point for determining the amount of a reasonable fee is the number of hours
reasonably expended on the litigation multiplied by a reasonable hourly rate.... The product of these
two figures is the lodestar and there is a strong presumption that the lodestar is the reasonable sum
the attorneys deserve.” Bivins v. Wrap It Up, Inc., 548 F.3d 1348, 1350 (11th Cir. 2008) (internal
citations and quotation marks omitted); Beal Bank, SSB, 896 So. 2d at 408 (“When an applicant for
attorney fees has carried his burden of showing that the claimed rate and number of hours are
reasonable, the resulting product is presumed to be the reasonable fee to which counsel is entitled.”)
(internal quotations omitted)
The reasonable hourly rate is generally “the prevailing market rate in the legal community
for similar services by lawyers of reasonably comparable skills, experience, and reputation.” Blum
v. Stenson, 465 U.S. 886, 895–896 n. 11, 104 S.Ct. 1541 (1984); Norman v. Housing Authority of
the City of Montgomery, 836 F.2d 1292, 1299 (11th Cir.1988). The “relevant market” is the “place
where the case is filed.” American Civil Liberties Union of Ga. v. Barnes, 168 F.3d 423, 437 (11th
Cir.1999) (citation and internal quotation marks omitted).
In determining whether the time expended is reasonable, the Court should not include any
hours which are “excessive, redundant, or otherwise unnecessary” i.e., hours “that would be
unreasonable to bill to a client and therefore to one's adversary irrespective of the skill, reputation or
4

experience of counsel.” Norman, 836 F.2d at 1301 (emphasis omitted). Where records show
unreasonable hours billed, the Court “has two choices: it may conduct an hour-by-hour analysis or it
may reduce the requested hours with an across-the-board cut” but not both. Bivins, 548 F. 3d at
1350, 1351-1352 (concluding that the district court erred “in arriving at the lodestar” because it
“conducted both an hour-by-hour analysis and applied an across-the-board reduction of the
requested compensable hours.”)
After calculating the lodestar, “[t]he court may then adjust the lodestar to reach a more
appropriate attorney's fee, based on a variety of factors, including the degree of the plaintiff's
success in the suit.” Association of Disabled Americans v. Neptune Designs, Inc., 469 F.3d 1357,
1359 (11th Cir. 2006); Bivins, 548 F. 3d at 1352 (finding that a downward adjustment to the
lodestar by 50% was “warranted only if the plaintiff was partially successful in his claims” and that
the “Johnson factors are to be considered in determining the lodestar figure” but “should not be
reconsidered in making either an upward or downward adjustment to the lodestar—doing so
amounts to double-counting.”)
B. Analysis
The Commissioner moves the Court for an award of a reasonable attorney’s fee pursuant to
Ala. Code § 39-1-1(b). The Commissioner argues that she has complied with the conditions set
forth in the statute and is entitled to an award of $281,154.66, as summarized below:
1. Attorneys’ fees charged by Burns, Cunningham & Mackey

$140,787.501

2. Litigation expenses (costs) by Burns, Cunningham & Mackey

$47,802.14

3. Attorney fees charged by Black & Gerngross, P.C.

$61,710.70

4. Litigation expenses (costs) by Black & Gerngross

$4,690.70

1

Peter S. Mackey and Clay T. Rossi represented the Commissioner. Mackey seeks fees in the
amount of $103,565.00 and Rossi seeks fees in the amount of $37,222.50 for a total of $140,787.50.

2

Cargill Ltd. v. Jennings, 308 Fed.Appx. 385, 388 (11th Cir. 2009) (“Cargill submitted affidavits
5

5. Attorneys’ fees charged by Clifford C. Sharpe
6. Attorneys’ fees charged by Emmanuel, Sheppard & Condon
7. Litigation expenses (costs) by Emmanuel, Sheppard & Condon
8. Attorneys’ fees charged by Faughnan Mendicino
Total

$5,780.00
$11,197.50
$580.62
$8,605.50
$281,154.66

(Docs. 195, 205)
In support the Commissioner has provided the Court with the affidavits of her counsel2
(docs. 205-1 through 7), the affidavits of two local attorneys, Reggie Copeland, Jr. and Gregory
Vaughan, in support of the reasonableness of the hourly rate and hours expended (docs. 205-13;
205-14).3 The Commissioner also provided the billing statements from counsel wherein they
submit their hourly rates, work performed, and hours expended in this action (docs. 205-8 through
12).
1. Whether the Commissioner has met the statutory requisites for recovery of an attorney’s
fee under Ala. Code § 39-1-1(b)
Continental argues that the Commissioner does not meet the statutory requisites for an
award of attorney’s fees under Alabama Code § 39-1-1(b) and is not entitled to any attorney fees
because of the disparity between the “the results ultimately obtained . . . in light of the value of the
claim asserted in [the Commissioner’s] statutory notice and lawsuit.” (Doc. 205, p. 4) Continental
argues that the statute contemplates attorney’s fees “in addition to the amount of the claim” and
“based on the result” but since $150,000 is approximately 19% of the amount claimed, $804,827.63,
2

Cargill Ltd. v. Jennings, 308 Fed.Appx. 385, 388 (11th Cir. 2009) (“Cargill submitted affidavits
that detailed the time expended for specific tasks undertaken by its legal counsel from which the
district court could determine if the time allotted and charges incurred were reasonable. The court
was entitled to award attorney's fees based on the information in those affidavits.”)

3

Duckworth v. Whisenant, 97 F.3d 1393, 1396–97 (11th Cir. 1996) (“Contrary to Defendant's
supposition, this circuit has recognized that a movant may meet his burden by producing either
direct evidence of rates charged under similar circumstances or opinion evidence of reasonable
rates.”) (italics in original).
6

attorney’s fees cannot be in “addition” to the claim; and therefore, “based on the results” - a
recovery of only 19% - the Commissioner is not entitled to any attorney’s fees. (Doc. 207, p. 5)
By affidavit, counsel for the Commissioner state that the “results obtained …were wholly
satisfactory given the . . . novel questions of law and difficulties involved in prosecuting this case.”
(doc. 205-1, p. 9, Affidavit of Peter Mackey); doc. 205-3, p. 6, Affidavit of Clay Rossi) Counsel
also stated that
The results obtained for the plaintiff were wholly satisfactory given the . . . novel
questions of law and difficulties involved in prosecuting this case. In light of the
ruling of the Court precluding presentation of labor costs at the agreed upon rate
of $45 per hour, the results obtained are satisfactory to the Estate [the
Commissioner], which has offered to settle[] the matter in full for the payment by
[Continental] of the sum of $200,000.00 before the firm of Burns Cunningham &
Mackey was engaged by [the Commissioner] in the Fall of 2013.
(Doc. 205-2, p. 8, Affidavit of Frederick Gerngross) (bracketed text added).
The controlling statute provides that an award of attorney’s fees is discretionary, i.e., “may
recover . . . a reasonable attorney’s fee”, and “based on the result.” Ala. Code 39-1-1(b). Thus, the
sixth criteria identified in Pharamacia - “the measure of success achieved” - is brought into play.
Continental relies upon the decision in Columbus Rock Co. v. Alabama General Ins. Co.,
153 F. Supp. 827 (M.D. Ala. 1957) to argue that the Commissioner is not entitled to an award
because the recovery was for substantially less than the amount demanded in the statutory notice
and the amount alleged in the complaint. However, nothing in the statute indicates that the
Commissioner is not entitled to any attorney’s fees because she did not recover the entire amount
for which she had sued. Moreover, if, after review of the relevant criteria, the court finds that the
attorney’s fees are unreasonable, “the appropriate action is not to deny the claim altogether but to
enter a judgment for a reasonable amount of attorney’s fees.” Willow Lake Residential Ass'n v.
Juliano, 80 So.3d 226, 240 (Ala. Civ. App. 2010).
2. Whether the fee request is unreasonable
7

Continental argues that should the Court find that the Commissioner has met the statutory
requisites and is entitled to an award of attorney’s fees, the fee request is unreasonable.
a. Contingency fee agreement
Continental argues that the attorney’s fee requested for Burns Cunningham and Mackey is
unreasonable because it is limited by their 30% contingency agreement. Continental argues that the
award should be limited to $43,500 - 30% of $145,000, the net judgment, and that the amount
should be further reduced “based on the result” as provided in Ala. Code § 39-1-1(b) to an award of
$7,830.00, which represents 18% of the maximum recovery of $43,500. Continental cites to several
decisions applying Florida law and argues that where there is a contingency fee agreement, the
amount due under that agreement becomes the maximum that the Court can award (doc. 207, p. 8).
However, under Alabama law, whether the fee agreement was fixed or contingent is one
factor among others for the Court to consider in determining a reasonable attorney’s fee. See
Hartford Acc. & Indem. Co., 935 So.2d at 474. The Supreme Court of Alabama explained that “[i]f
someone is willing to take the great risk of giving up the sure quantity for the uncertain, and wins,
then the uncertain prize should be worth more than the certain one.” Peebles v. Miley, 439 So.2d at
142. The risk must be considered when determining the reasonableness of a fee, but the fact that
BCM had a contingent fee agreement with the Commissioner does not bind the Court to find that a
reasonable attorney’s fee is the amount that BCM would have obtained under the contingency fee
agreement. Therefore, this argument lacks legal support under Alabama law.
b. Whether the fees are justified
Continental also argues that the attorney’s fees are unreasonable because they are
unjustified, constitute economic waste, and could have been avoided. Continental points out that the
fees began to accrue in a “meaningful way” after BCM appeared in September 2013 and that if the
Commissioner had accepted Continental’s offer of judgment in the amount of $150,000 made soon
8

after BCM’s appearance, “all those fees could have been avoided.” (Doc. 207, p. 10) Continental
asserts that awarding attorney’s fees that were incurred to obtain a result no greater than the offer of
judgment would encourage parties to pursue claims and unnecessarily incur expenses when a
reasonable settlement offer has been made.
The Commissioner’s decision to go to trial instead of accepting an offer of judgment does
not appear to fall within the criteria identified in Pharmacia Corp. The Court acknowledges that
the list of criteria is not exhaustive and that other criteria may be considered. The little Miller Act
sets forth specific instructions for making an offer of judgment. Ala. Code 39-1-1(d) provides as
follows:
(d) In the event a civil action is instituted on the payment bond, at any time more
than 15 days before the trial begins, any party may serve upon the adverse party
an offer to accept judgment in favor of the offeror or to allow judgment to be
entered in favor of the offeree for the money or as otherwise specified in the offer.
If within 10 days after the service of the offer, the adverse party serves written
notice that the offer is accepted, either party may then file the offer and notice of
acceptance together with proof of service and the clerk of the court shall enter
judgment. An offer not accepted shall be deemed withdrawn and evidence of the
offer shall not be admissible. If the judgment finally obtained by the offeree is
less favorable than the offer, the offeree shall pay the reasonable attorney's fees
and costs incurred by the offeror after the making of the offer. An offer that is
made but not accepted does not preclude a subsequent offer. When the liability of
one party to another party has been determined by verdict, order, or judgment, but
the amount or extent of the liability remains to be determined by further
proceedings, any party may make an offer of judgment, which shall have the same
effect as an offer made before trial if the offer is made no less than 10 days prior
to the commencement of hearings to determine the amount or extent of liability.
Ala. Code 39-1-1(d).
In relevant part, the statute provides that “[i]f the judgment finally obtained by the offeree is
less favorable than the offer, the offeree shall pay the reasonable attorney's fees and costs incurred
by the offeror after the making of the offer.” Id. The statute makes clear that the Commissioner
would be responsible for Continental’s attorney’s fees incurred after the offer, should the judgment
finally obtained be less than the offer. Nowhere does the statute indicate that the Commissioner has
9

lost her entitlement to a reasonable attorney’s fee because she did not accept the offer of judgment.
The purpose of the little Miller Act is to provide security to the suppliers and
subcontractors on public works project in lieu of lien rights available on private projects. Johnson
Controls, Inc. v. Liberty Mut. Ins. Co., - - - So. 3d - - -, 2014 WL 1874599, *10 (Ala. 2014) (not yet
released for publication) (internal quotation marks and citations omitted) (bracketed texts in
original). To preclude a plaintiff from obtaining the reasonable attorney’s fees provided by the
statute, on basis that the plaintiff decided to go to trial rather than accept an offer of judgment that
the defendant considers reasonable, would run contrary to the purpose of the statute and the security
provided thereunder.
The Court, which is familiar with the prevailing rates in the local market, may also act as its
own expert and rely on its knowledge and experience to determine the reasonableness and propriety
of the requested fees. See Beal Bank, SSB, 896 So. 2d at 404; Loranger v. Stierheim, 10 F.3d 776,
781 (11th Cir.1994). The Court finds that the hourly rates requested for BCM attorneys Mackey
and Rossi are reasonable. BCM requested $275.00 per hour for Mackey who has thirty years of
experience and specialized experience in construction litigation, and $175.00 per hour for Rossi, an
associate with nine years of experience including four years in insurance defense.4 Continental has
not objected to the hourly rates. Goldsby v. Renosol Seating, LLC, 2013 WL 6535253, at *9 (S.D.
Ala. Dec. 13, 2013) (“[T]his Court's customary hourly rates for attorneys. . . ranges from $250.00
4

The Commissioner provided the affidavit of Gregory Vaughan a local attorney with ten years
experience in civil practice with the majority involving collection matters including construction
collection claims. Vaughan states that his hourly rate ranges from $165.00 to $195.00 per hour
(doc. 205-14). The Commissioner also provided the affidavit of Reggie Copeland, Jr., a local
attorney with approximately 35 years experience in civil litigation in state and federal courts
including personal injury, products liability, commercial and governmental liability. Copeland
stated that he reviewed the billing records provided by BCM and after consideration of the Johnson
factors, offered his opinion that the hours expended were reasonable and that a reasonable hourly
rate for Mr. Mackey was $275.00 per hour and a reasonable hourly rate for Mr. Rossi was $175.00
per hour (doc. 205-13).
10

to $300.00 for more experienced and qualified attorneys[ and]$150.00 to $225.00 for less
experienced attorneys and associates with few years of practice. . .”); Mitchell Co., Inc. v. Campus,
slip op., 2009 WL 2567889 at *1 & *17-18 (S.D. Ala. Aug. 18, 2009) (finding $275.00 was a
reasonable rate for an attorney with approximately 34 years of experience); Rhodes v. Davis, 2010
WL 4260048, *6 (S.D. Ala. Oct. 25, 2010) (finding that $300.00 was a reasonable hourly rate for
Mackey’s partner William Cunningham and $175.00 was a reasonable hourly rate for Rossi).
The Court further finds that the work performed and the hours expended as documented by
BCM and supported by the affidavits of disinterested attorneys appear to be reasonably incurred in
this action. (Doc. 205-8-12, affidavits Doc. 205-13 and 205-14) However, upon consideration of
the factors identified in Pharmacia, 915 So.2d at 552–53, primarily the measure of success achieved
and the contingent fee agreement, and balancing the factors against the purpose of the little Miller
Act, the Court finds that an across the board cut of twenty-five (25%) is reasonable in this action,
which results in an award of $105,590.63. ($140,787.50 x .25% = $35,196.87)
Mackey stated in his affidavit that when BCM was originally retained by Coltin, a $5,000
retainer was paid to BCM, and that the retainer was exhausted on the Commissioner’s motion to
intervene, thus, any award of fees should be reduced by that amount or that Coltin should be
reimbursed (doc. 205-1, p. 4). Accordingly, the Commissioner’s request for an award of a
reasonable attorney’s fee is granted in part and the Commissioner is awarded $100,590.63 as a
reasonable attorney’s fee for the work performed by BCM.
c. Whether the Commissioner’s request for fees from multiple firms is unreasonable
Continental argues that the Commissioner’s request is unreasonable because she failed to
meet her burden of demonstrating that the time spent by the attorneys reflects the distinct
contribution of each lawyer and law firm to the case and the customary practice of multiple-lawyer
litigation. Continental argues that the Commissioner is only entitled to recover fees for multiple
11

attorneys if she shows makes this showing.
In Norman, the circuit court explained that “[r]edundant hours generally occur where more
than one attorney represents a client. There is nothing inherently unreasonable about a client having
multiple attorneys, and they may all be compensated if they are not unreasonably doing the same
work and are being compensated for the distinct contribution of each lawyer.” 836 F.2d at 1301–
1302. In that regard, this Court has stated that
“[T]here is nothing inherently unreasonable about a client having multiple
attorneys. For that reason, a reduction for redundant hours is warranted only if
the attorneys are unreasonably doing the same work. An award for time spent by
two or more attorneys is proper as long as it reflects the distinct contribution of
each lawyer to the case and the customary practice of multiple-lawyer litigation.
Thus, a fee applicant is entitled to recover for the hours of multiple attorneys if
he satisfies his burden of showing that the time spent by those attorneys reflects
the distinct contribution of each lawyer to the case and is the customary practice
of multiple-lawyer litigation. But the fee applicant has the burden of showing
that, and where there is an objection raising the point, it is not a make-believe
burden.” Barnes, 168 F.3d at 432 (internal citations and quotations omitted). See
also Johnson v. Univ. Coll. of Univ. of Ala. in Birmingham, 706 F.2d 1205, 1208
(11th Cir.1983), holding modified on other grounds, Gaines v. Dougherty Cnty.
Bd. of Educ, 775 F.2d 1565 (11th Cir.1985) (“While Johnson recognizes the
possibility of unnecessary duplication for which double compensation should not
be t, 488 F.2d at 717, a reduction is warranted only if the attorneys are
unreasonably doing the same work.”).
Oden v. Vilsack, 2013 WL 4046456, *9 (S.D. Ala. Aug. 9, 2013 (slip copy)
i. Black and Gerngross, P.C.
Continental argues that the Commissioner has not met her burden to show that she is entitled
to recover the $61,710.70 charged for the time spent by Frederick Gerngross. Continental argues
that Gerngross’ participation was that of a liaison or client representative who filed no documents
other than a motion for pro hac vice admission, did not participate in trial except for jury selection,
and was the only client representative in the courtroom during trial. Continental points out that in
Gerngross’ affidavit he states that he was compelled to participate in and monitor the pre-trial
matters and to attend trial to represent the Commissioner’s interests. Continental also argues that
12

Gerngross’ billing statements are heavily redacted such that the Court cannot ascertain the work
performed, and therefore, the Commissioner has not met her burden to document the work
performed and hours.
The billing statements appear to have been redacted to exclude work performed for other
clients. Thus, the descriptions of the work performed and time expended as to this action are
reasonably ascertainable from the statements.5 In that regard, the majority of the time entries are for
review and analysis and follow-up regarding work performed by Faughnan Mendicino, PLLC,
BCM, or Clifford C. Sharpe and emails, telephone conferences, and follow-up conversations
regarding the work performed. 6 Although Gerngross states that in his opinion, there was no
unnecessary duplication of effort between him and other counsel (doc. 205-2, p. 5, affidavit),
nothing in the descriptions of the work performed indicates any distinct contribution by Gerngross
but instead his work appears to be redundant of that performed by other counsel. When awarding
an attorney's fee, the “[c]ourts are not authorized to be generous with the money of others, and it is
as much the duty of courts to see that excessive fees and expenses are not awarded as it is to see that
an adequate amount is awarded.” Barnes, 168 F.3d at 428. Accordingly, the Commissioner’s
request for attorney’s fees as to Black and Gerngross is denied.
ii. Clifford C. Sharpe
Continental argues that the Commissioner has not met her burden to show that she is entitled
to recover the $5,780.00 charged for the time spent by attorney Clifford C. Sharpe. Continental
argues that the Commissioner failed to show the distinct contributions of Sharpe to her action
5

The Court notes that several time entries appear to have been reduced by hand-written notations
of lesser numbers of hours than the printed time entry. (Doc. 205-9, p. 93-97)

6

For example, one entry reads – “Review and analysis of Claims Summary of Fred Mendicino;
review and analysis of Court Order re: Expert Deposition; follow up with P. Mackey re: Staak
analysis and agreement for settlement, extent of claim and damages; conference with Staak re:
same; follow up with Staak re: request for production, Rodgers input to claim; conference with P.
Mackey, discovery order and sanctions.” (Doc. 205-9, p. 80)
13

against Continental. First, Continental argues that Sharpe represented the Commissioner on her
motion for substitution, which was opposed by Coltin, and thus his substantive efforts were related
to a dispute between Coltin and the Commissioner as to the proper claimant. Second, Continental
argues that after the motion for substitution was granted and BCM appeared on behalf of the
Commissioner, the time entries indicate that Sharpe reviewed court filings that were otherwise
reviewed by BCM. Thus, as to the latter, there is no evidence that he performed any work to
advance the Commissioner’s claims that was not already performed by BCM attorneys.
As with Gerngross, Sharpe offers his opinion that the work he performed was not an
unnecessary duplication of the work performed by BCM or Gerngross. However, the majority of
Sharpe’s time entries after the motion for substitution was granted indicate that he reviewed court
filings such as orders, motions and briefs; reviewed other documents such as the jury instructions,
interrogatories, discovery responses, and the offer of judgment; reviewed and replied to emails; and
participated in telephone conferences. (Doc. 205-10, p. 1, 5-11) Nothing in the descriptions of the
work performed indicates any distinct contribution by Sharpe but instead his work appears to be
redundant of that performed by other counsel, specifically BCM. When awarding an attorney's fee,
the “[c]ourts are not authorized to be generous with the money of others, and it is as much the duty
of courts to see that excessive fees and expenses are not awarded as it is to see that an adequate
amount is awarded.” Barnes, 168 F.3d at 428. Accordingly, the Commissioner’s request for an
award of Sharpe’s attorney’s fees for work performed after the Commissioner was substituted as the
plaintiff is denied.
However, Sharpe’s work performed on the motion for substitution is not redundant to the
work performed by BCM.7 At that time, Sharpe and Gerngross represented the Commissioner.
7

BCM filed a notice of appearance on behalf of the Commissioner on September 13, 2013 (docs.
73,74).
14

Sharpe’s time entries indicate that he researched, drafted and briefed the motion for substitution,
reviewed the responsive briefs, field a reply, communicated with opposing counsel, and maintained
contact with Gerngross. Sharpe expended 19.1 hours. (Doc. 205-10, p. 2-4). By affidavit, Sharpe
asserts that $175.00 is a reasonable hourly rate for his services under the particular circumstances of
this action and that this rate is consistent with the prevailing market rate for an attorney in this
district, with his experience, skill, and almost 30 years of general civil practice.
The Court finds that Sharpe’s hourly rate of $175.00 is reasonable for an attorney of his
skill, experience, reputation, and years of practice. The rate is in line with the rate customarily
charged in this district for similar legal services. See Barnes, 168 F.3d at 437 (providing that “the
‘relevant market’ for purposes of determining the reasonable hourly rate for an attorney's services is
the place where the case is filed.” (citation omitted)).
The Court further finds that the work performed and the 19.1 hours expensed are reasonable.
Sharpe was employed to represent the Commissioner in her motion for substitution, which
contained an alternative motion to intervene (doc. 44, 49). Sharpe was successful in obtaining
substitution for the Commissioner. Coltin opposed the motion for substitution unless certain
conditions were met, but did not oppose the motion to intervene (doc. 50). Continental opposed the
motion and filed a response, a supplemental response, and a second supplemental response.
Continental argued primarily that the Commissioner should be substituted under Rule 17 instead of
Rule 25(c) or Rule 24 (docs. 51, 56, 60; doc. 116, motion for reconsideration). The motion for
substitution required review of several complex documents executed between ULLICO Casualty
Company and Coltin as well as the Rehabilitation and Injunction Order wherein the Commissioner
became the Receiver for ULLICO, and consideration of the complicated relationships between
Continental and its insured Elkins Constructors, Inc., and between Coltin and ULLICO regarding
several construction projects including the University of South Alabama project with Elkins.
15

In addition to consideration of the relevant criteria set forth by the Alabama courts, see
Graddick, 453 So.2d at 1311 (explaining that “there would hardly ever be a case where the
application of attorney's fees brought into play every criterion.”), the court may consider its own
judgment in determining the reasonableness of requested fees. Beal Bank, SSB, 896 So. 2d at 404 (“
‘The trial court, in connection with a consideration of the opinion evidence proffered by qualified
experts, may call to his aid his own estimate of the value of such legal services after considering the
aforementioned elements . . .”and, generally speaking, the allowance rests within the sound judicial
discretion of the trial court.’ ”); Loranger, 10 F.3d at 781. Accordingly, upon consideration of the
relevant factors, the Commissioner’s request for an award of attorney’s fees in the amount of
$3,342.508 for the work performed by Sharpe as to the motion for substitution is granted.
(d) Whether the Commissioner is entitled to attorney’s fees incurred while Coltin was the
plaintiff
Continental argues that the Commissioner is not entitled to any attorney’s fees incurred for
work performed prior to BCM’s appearance as counsel for the Commissioner because those fees
were for work performed for Coltin instead of the Commissioner. Continental argues that the
Commissioner and Coltin pursued separate claims and actions on the payment bond and that only
the Commissioner successfully pursued her action; therefore, the attorney’s fees requested for
Emmanuel, Sheppard and Condon ($11,197.50) and for Faughnan Mendicino ($8,605.50) who
represented Coltin before the Commissioner was substituted as the plaintiff, should not be awarded.
The Court finds Continental’s motion to be without merit. The Commissioner was substituted for
Coltin as the plaintiff in this action. As such, the action continued unabated and the Commissioner
pursued Coltin’s claims against the surety bond.
i. Faughnan Mendicino, PLLC.
In support of her motion, the Commissioner submitted the affidavit of Fred A. Mendicino
8

The fee is calculated as follows: 19.1 hours x $175.00 = $3,342.50.
16

wherein he states that the firm of Faughnan Mendicino, PLLC, expended a total of 44.3 hours. In
support of his requested hourly rate of $235.00, he states that he is admitted to practice in numerous
state and federal courts; has practiced law since 1992 (approximately 22 years); that his firm has
substantial experience in surety, construction and employment/education law; and he is head of the
construction and surety practice (doc. 205-6). As previously stated, the Court, which is familiar
with the prevailing rates in the local market, may also act as its own expert and rely on its
knowledge and experience to determine the reasonableness and propriety of the requested fees. See
Beal Bank, SSB, 896 So. 2d at 404; Loranger, 10 F.3d at 781. The Court finds that the $235.00
hourly rate requested for Mendicino, an attorney with twenty-two years of practice and expertise in
construction and surety practice is reasonable.
Mendicino also offers his opinion that the same hourly rate should be awarded for the work
performed by his partner James F. Faughnan. Mendicino did not provide the Court with any
information as to the year of practice, skill, experience, or areas of expertise as to Faughnan. Thus,
the Court is faced with an “indeterminate experience” situation for a partner. In such
"indeterminate experiences” concerning law firm partners, this Court has awarded a rate of $225.00
per hour. See, e.g., Wells Fargo Bank, N.A. v. Williamson, 2011 WL 382799, *4 (S.D. Ala. Feb. 3,
2011). Therefore, the Court finds that an hourly rate of $225.00 is reasonable for Faughnan.
Mendicino asserts that $185.00 is a reasonable hourly rate for the “other attorneys” who
worked on the case: Thomas M. O’Connell, Wayne D. Garris, and Dylan M. Marck. (Doc. 205-6, p.
2) However, there is no information in his affidavit as to their years of practice, experience, special
skills, expertise, or other information from which the Court may determine a reasonable hourly rate
for the work performed. In this district, the Court has awarded an hourly rate of $150.00 where the
associates’ years of practice, experience, skill, and expertise were indeterminate. Vision Bank v.
Anderson, 2011 WL 2142786 (S.D. Ala. May 31, 2011); SE Property Holdings, LLC v. 145, LLC,
17

2012 WL 6681784, 4 (S.D. Ala. Dec. 21, 2012) (awarding $150.00 per hour for associates where
there was “no evidence of these associates’ expertise and experience”.)
The Court next looks to the reasonableness of the hours expended by the firm. The invoice
indicates that time was spent drafting the complaint; researching Alabama law; research and
preparation of an agreement between ULLICO and Coltin; correspondence, discovery, privilege
review of documents, reviewing pleadings, and research and preparing the answer to Continental’s
counterclaim; research regarding assignments, real parties in interest, and indispensible parties;9 and
preparing the motion to withdraw (doc. 205-12).
Mendicino invoiced a total of 7.60 hours for work performed. The Court finds that 5.60
hours represents work and time that was reasonably incurred in furtherance of the claim against
Continental. Mendicino finalized the complaint, communicated with counsel, and worked on the
answer to the counterclaim and the report of parties’ planning meeting (doc. 205-12). However,
the Court declines to award an attorney’s fee for the time spent preparing the motion to withdraw,
2.00 hours, since this did not advance the claim. See Oden, 2013 WL 4046456, at *23 (disallowing
time spent responding to an objection to the motion to withdraw as not for the plaintiff Oden’s
benefit). Accordingly, the Commissioner’s request is granted in part and the Commissioner is
awarded $1,316.00 for 5.60 hours of work performed by Mendicino at the hourly rate of $235.00.
Faughnan invoiced a total of 1.60 hours for work performed. Faughnan reviewed
Continental’s answer to Coltin’s discovery requests and drafted Coltin’s responses to Continental’s
discovery. The Court finds that this work and time was reasonably incurred in furtherance of the
claim and does not appear redundant to that of other attorneys in the firm. Accordingly, the
Commissioner’s request is granted in part and the Commissioner is awarded $360.00 for 1.60 hours
of work performed by Faughnan at the hourly rate of $225.00.
9

Continental asserted a defense that Coltin had failed to join an indispensible party – Elkins
Constructors, Inc., the general contractor. (Doc. 8, Answer and Counterclaim).
18

O’Connell invoiced a total of 21.8 hours for work performed. O’Connell prepared the
complaint, researched causes of actions against sureties in Alabama, prepared an agreement,
prepared written discovery, reviewed and prepared an answer to the counterclaim, attended the
parties’ planning meeting, reviewed the proposed Rule 26 report, and communicated with other
counsel. O’Connell also prepared his motion to withdraw and motions to appear pro hac for
Mendicino and Faughnan. The Court finds that the majority of the work performed was reasonably
incurred. However, the Court declines to award an attorney’s fee for the time spent preparing the
motion to withdraw, 1.20 hours, since this did not advance the claim. See Oden, 2013 WL
4046456, at *23. The Court also declines an award for the .40 hours spent preparing the motions to
appear pro hac vice. The motions consist of two sentences and the attached applications are fill-inthe-blank forms. Thus, this appears largely a clerical task. The Court also declines an award for
O’Connell’s time spent in conference, preparation, or review regarding the parties’ Rule 26(f) report
– 2.70 hours. Both Mendicino and O’Connell conferenced with opposing counsel and with local
counsel in preparation of the parties’ Rule 26(f) report and Mendicino entered time for preparation
of the draft for circulation. O’Connell’s time is redundant and does not indicate any distinct
contribution on his part. Accordingly, the Commissioner’s request is granted in part and the
Commissioner is awarded $2,625.00 for 17.5 hours of work performed by O’Connell at the hourly
rate of $150.00.
Marck invoiced a total of 5.40 hours for work performed. Marck primarily researched
questions regarding sureties and contract and assignments and issues regarding the real party in
interest and indispensible parties. The Court finds that the 5 hours spent on this research is
reasonable. However, the Court declines an award for time spent preparing and organizing
documents for substantive review - .40 hours. Garris’ time entries indicate that he conducted a
privilege review of Coltin’s documents as part of preparing the documents for production. Thus,
19

Marck’s time is redundant to that of Garris and does not indicate a distinct contribution.
Accordingly, the Commissioner’s request is granted in part and the Commissioner is awarded
$750.00 for 5 hours of work performed by Marck at the hourly rate of $150.00.
Garris invoiced a total of 8.90 hours for work performed. He drafted objections and
responses to the requests for production of documents, reviewed Coltin’s documents for privilege,10
and prepared the documents for production. However, Garris’ hours are reduced by 1.30 because
these hours are redundant. Faughnan expended 1.30 hours to draft, edit and finalize objections and
responses to requests for production of documents. The remainder of Garris’ time is compensable.
Reviewing documents for privilege shows Garris’ distinct contribution to the litigation.
Accordingly, the Commissioner’s request is granted in part and the Commissioner is awarded
$1,140.00 for 7.60 hours of work performed by Garris at the hourly rate of $150.00.
In addition to consideration of the relevant criteria set forth by the Alabama courts, see
Graddick, 453 So.2d at 1311 (explaining that “there would hardly ever be a case where the
application of attorney's fees brought into play every criterion.”), the court may consider its own
judgment in determining the reasonableness of requested fees. Beal Bank, SSB, 896 So. 2d at 404 (“
‘The trial court, in connection with a consideration of the opinion evidence proffered by qualified
experts, may call to his aid his own estimate of the value of such legal services after considering the
aforementioned elements . . .”and, generally speaking, the allowance rests within the sound judicial
discretion of the trial court.’ ”); Loranger, 10 F.3d at 781. Accordingly, upon consideration of the
relevant factors, and as set forth above, the Commissioner is awarded attorney’s fees in the total
amount of $6,191.00 for the work performed by Faughnan Mendicino.
ii. Emmanuel Sheppard and Condon
In support of her motion, the Commissioner submitted the affidavits of Andrea Lyons and
10

The Court is aware of the volume of documents produced during discovery in this action.
20

H. Wesley Reeder, attorneys with Emmanuel Sheppard and Condon, which served as local counsel
for Faughnan Mendicino. Both Reeder and Lyons state that they have attached an exhibit which
contains descriptions of the time expended in connection with their representation. The Court has
reviewed the Time Sheet provided by Emmanuel Sheppard (doc. 205-11).
Lyons states that she spent 1.3 hours, billed at $155.00 to $175.00 hourly, and that $175.00
is a reasonable hourly rate. Lyons is an associate with 6 years of practice who has worked in
commercial litigation at Emmanuel Sheppard since 2010 (doc. 205-5, Lyons Affidavit). Lyons’
time entry for .50 hours on October 11, 2012, reads “Read Complaint. Review Answers by Ullico,
Benchmark and Coltin. Receipt and review of e-mail from Tom [O’Connell]” (doc. 205-11, p. 5).
However, this work does not appear related to this litigation. In another time entry that same day,
Reeder entered: “Cursory review of complaint, draft answers in state court action, . . . review
answers (x3) . . . preparation and filing of answers . . .” (Id.). Thus, it appears that the complaint
and the three answers were filed in a state court action. In this court, Coltin filed the complaint and
Ullico and Benchmark are not parties. Continental did file a counterclaim against Coltin on
October 15, 2012, which Coltin answered on November 5, 2012; almost a month after Lyon’s time
entry. Thus, it appears that Lyons was not referring to Coltin’s answer to Continental’s
counterclaim.
Lyons also entered a total of .40 hours for sending or receiving emails of unidentified
content to or from the client and communicating with Mendicino’s office and locating documents
they requested. The Court finds that this time is not compensable because the Court cannot
ascertain what legal work was performed for Coltin in this action. Lyons also entered .40 hours on
August 23, 2012, for “various intra-office emails regarding proceeding with suit. Discuss same
with Wes Reeder. Work with Sherry regarding complaint” (doc. 205-11, p. 3). The complaint in
this action was filed on August 22, 2012. Thus, this work appears related to this action. However,
21

the time spent is redundant to that of Reeder who communicated with O’Connell at Faughnan
Mendicino and with paralegals in his own office regarding drafting and filing the complaint.
Accordingly, the Commissioner is not entitled to an award for the work performed by Lyons and the
request is denied.
Reeder states that he has spent a total of 34 hours in this action, billed at $250.00 to $285.00
per hour during the time frame (he now bills $295.00), and asserts that $285.00 is a reasonable
hourly rate (doc. 205-4). He has practiced in Florida since 2000 and since 2001, at Emmanuel
Sheppard in construction law, civil litigation, and eminent domain (doc. 205-4). Reeder asserts that
he is proficient in conflict of laws issues, which was a skill required in this action because of
Continental’s attempt to assert the applicability of Florida law. (Id.) The Court finds that in this
district, $225.00 per hour is a reasonable hourly rate for an attorney with his skill, experience,
reputation, and years of practice who is serving as local counsel. The rate is in line with the rate
customarily charged in this district for similar legal services. See Barnes, 168 F.3d at 437
(providing that “the ‘relevant market’ for purposes of determining the reasonable hourly rate for an
attorney's services is the place where the case is filed.” (citation omitted)).
Reeder’s time entries indicate that he primarily received and reviewed emails, pleadings,
discovery, motions and responses, and other documents from Faughnan Mendicino, opposing
counsel, and the court, and then communicated with his staff, Faughnan Mendicino, and opposing
counsel in regard to same.11 Other than reviewing documents and emails, Reeder entered 4.60
11

For example, Reeder entered: “Receipt and review of court email re: Continental answer due
date; email to attorney O’Connell, Sherry Ware re: Continental answer” (doc. 205-11, p. 5);
“Receipt and review of Coltin’s answer to counterclaim; email to staff re: preparing answer to
counterclaim for filing. . . . Conference with Sherry Ware re: filing answer to counterclaim; review
answer to counterclaim’ review court email re: confirmation of filing answer to counterclaim. . . .
Review email from Sherry Ware to O’Connell re: filing answer to counterclaim.” (Id., p. 6);
“Review email from Tom O’Connell re: protective order: email to Nicole Ransom and attorney
Staak re: filing protective order: review final protective order; conference with Nicole Ransom re:
filing; review email from attorney Staak re: final approval of protective order.” (Id., p. 9); “Receipt
22

hours to communicate with counsel and staff to prepare for and schedule the parties’ planning
meeting, participate in the meeting, review the draft report received from Mendicino, revise the
report before filing, communicate with his staff regarding the revisions and filing the report. (Doc.
205-11, p. 7) Reeder also documented time spent on the state court action (Id., p. 4). However, the
descriptions indicate that Reeder’s work was redundant to that of Faughnan Mendicino and not a
distinct contribution. Accordingly, the Commissioner is not entitled to an award for the work
performed by Reeder and the request is denied.
The Commissioner also seeks an award for the work performed by the paralegals at
Emmanuel Sheppard. Reeder states that his paralegals worked 18.6 hours on this matter at a rate
between $90 and $115.00 an hour (doc. 205-4). Reeder does not indicate the names of the
paralegals, but Sherry Ware and Nicole Ransom are specifically mentioned in Reeder’s time entries
and they appear to have recorded time entries (doc. 205-11). However, as with Reeder, the bulk of
the paralegal time entries do not indicate any distinct contribution to the action but instead again
consist of receiving and reviewing emails, documents, and pleadings; frequently mirroring the time
entries by Reeder.12 Also, several entries indicate clerical work as opposed to work customarily
performed by an attorney. Johnson v. TMI Management Systems, Inc., 2012 WL 4435304, *5-6
(S.D. Ala., Sept. 26, 2012) (“The law is quite clear that ‘purely clerical or secretarial tasks should
and review of memo in opposition to motion to intervene; phone call with attorney Garris re:
revision to opposition; receipt and review of email from attorney Garris re bond; conference with
Sherry Ware re: revision to opposition memo.” (Id. p 11).
12

For example, on September 24, 2012, Reeder recorded “Review email confirming service on
Continental” and Ransom recorded “E-mail regarding service of Continental Casualty.” (Doc. 20511, p. 4) On February 20, 2013, Reeder recorded “Receipt and review of Coltin’s objections to
Continental’s first request for production” and the day before, Ransom recorded “Receipt and
review of discovery document: Coltin’s responses to Continental’s first request for production.”
(Id., p. 13) On March 19, 2013, Reeder recorded “Receipt and review of order re: motion to
intervene” and Ransom recorded “Receipt and review of Court Document: Order denying motion to
intervene by Elkins.” (Id., p. 14)
23

not be billed at a paralegal rate, regardless of who performs them.’”) (quoting Missouri v. Jenkins ex
rel. Agyei, 491 U.S. 274, 288 n. 10, 109 S.Ct. 2463 (1989)).13 Accordingly, the Commissioner is
not entitled to an award for the work performed by the paralegals at Emmanuel Sheppard and the
request is denied.
Additionally, if the Court were inclined to an award, the requested hourly rate of $110.00
per hour for the paralegal work is not reasonable in this district. Reeder identifies the paralegal as a
“certified paralegal” (doc. 205-4). However, absent a showing that a paralegal possesses some
extraordinary qualification or expertise, this Court has routinely found a rate of $75.00 was
reasonable for work by paralegals. See Oden v. Vilsack, 2013 WL 4046456, at *7 (S.D. Ala. Aug.
9, 2013); SE Prop. Holdings, LLC v. 145, LLC, 2012 WL 6681784, at *4 (S.D. Ala. Dec. 21, 2012);
Johnson v. TMI Mgmt. Systems, Inc., 2012 WL 4435304, at *4 (S.D. Ala. Sept. 26, 2012).
3. Costs and expenses
The Commissioner seeks an award of $47,802.14 for expenses and costs incurred by BCM,
$4,690.70 for expenses and costs incurred by Black & Gerngross, and $580.62 for expenses and
costs incurred by Emmanuel Sheppard and Condon (docs. 195, 205).
(a) Costs
Continental argues that the Commissioner is not entitled to recover litigation costs because
the statute, Ala. Code § 39-1-1(b) does not provide for recovery of costs but instead is specifically
limited to an award of attorney’s fees. Continental compares this statute with Ala. Code § 39-11(d) which specifically provides for attorney’s fees and costs. Continental also argues that Local
Rule 54.1 requires the Commissioner as the prevailing party, to file a verified bill of costs within
fifteen days of the date of the judgment or other final order and that failure to comply constitutes a
13

For example, notifying the attorneys and other paralegals of forthcoming deadlines, conferences
with the court clerk regarding electronic filing, contacting the private process server, calendaring,
telephone conferences
24

waiver of costs. Continental asserts that the Commissioner did not file a verified bill of costs and
therefore, has waived her claim for costs.
Rule 54(d)(1) of the Federal Rules of Civil Procedure states as follows:
(1) Costs Other Than Attorney's Fees. Unless a federal statute, these rules, or a
court order provides otherwise, costs--other than attorney's fees--should be
allowed to the prevailing party.
Fed. R. Civ. P. 54(d)(1). Local Rule 54.1 provides for taxation of costs by the Clerk. The local rule
states that a “prevailing party who desires to tax costs must file with the court, within fifteen days of
the date of the judgment or other final order … a verified bill of costs” and upon receipt, the Clerk
should tax costs in conformity with 28 U.S.C. §§ 1920,14 1921,15 and 1923 (certain docket fees in
civil actions and costs of briefs for admiralty appeals) and other provisions of law that may apply.
S.D. Ala. L.R. 54.1(a) & (b).
Local Rule 54.1(d) also states that “[f]ailure to comply with the time limitations of this Rule
shall constitute a waiver of costs, unless otherwise ordered by the court.” S.D. Ala. L.R. 54.1(d).
The Court declines to order otherwise or to relieve the Commissioner of this waiver. Therefore, to
the extent that the Commissioner seeks costs pursuant to the statute or under Rule 54(d)(1), the
request is denied because the Commissioner did not file a verified bill of costs within the fifteenday time frame.

14

“A judge or clerk of any court of the United States may tax as costs the following: (1) Fees of the
clerk and marshal; (2) Fees for printed or electronically recorded transcripts necessarily obtained for
use in the case; (3) Fees and disbursements for printing and witnesses; (4) Fees for exemplification
and the costs of making copies of any materials where the copies are necessarily obtained for use in
the case; (5) Docket fees under section 1923 of this title; (6) Compensation of court appointed
experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation
services under section 1828 of this title.” 28 U.S.C. § 1920.

15

The fees that the United States’ marshals or deputies routinely collect for serving writs, serving
subpoenas or summons for witnesses, for maritime or civil executions, seizures or attachments,
copies, travel expenses, and overtime. 28 US.C. § 1921.
25

(b) Expenses
The Commissioner’s motion for award of statutory attorney’s fees includes a request for
litigation expenses (docs. 195, 205). In support of the expenses incurred, she provides copies of the
invoices from the respective law firms, declarations of counsel, and as to BCM, the declarations of
local attorneys Copeland and Vaughan16 (docs. 205-1 through 14).
Continental argues that the Commissioner is not entitled to an award for expenses because
the statute, Ala. Code § 39-1-1(b), does not provide for recovery of expenses, but instead is
specifically limited to an award of attorney’s fees. Continental compares this statute with Ala. Code
§ 39-1-1(d) which specifically provides for recovery of an attorney’s fees and costs, but also does
not provide for expenses.
As to related nontaxable expenses, Rule 54(d)(2) provides in relevant part as follows:
(A) Claim to Be by Motion. A claim for attorney's fees and related nontaxable
expenses must be made by motion unless the substantive law requires those fees
to be proved at trial as an element of damages.
(B) Timing and Contents of the Motion. Unless a statute or a court order provides
otherwise, the motion must: . . .
(ii) specify the judgment and the statute, rule, or other grounds entitling the
movant to the award;
(iii) state the amount sought or provide a fair estimate of it [.]
Fed. R. Civ. P. 54(d)(2)(A) & (B).
Local Rule 54.3 provides that if the final judgment “does not determine (or establish other
procedures for determining) the propriety of the amount of attorney’s fees authorized by statute or
the equitable or inherent powers of the court . . . [t]he award of such fees (and expenses incident
thereto not ordinarily allowable as taxable costs) shall be requested by special written motion
16

Vaughan stated that he had reviewed the expenses incurred by BCM and “[b]ased upon the
discovery conducted, retained expert, legal research services, and trial time”, it was his opinion that
the expenses claimed were fair and reasonable. (Doc. 205-14)
26

addressed to the court, and shall not be included in a cost bill or motion for taxation of costs[.]” S.D.
Ala. L.R. 54.3(a). “[E]xpense includes all the expenditures actually made by a litigant in
connection with the lawsuit.” Eagle Insurance Co. v. Johnson, 982 F. Supp 1456, 1458
(M.D.Ala.1997) (citations omitted). On the other hand, “costs that the district court may award
under Rule 54(d)(1) are listed in 28 U.S.C.A. § 1920, and a district court may not award other costs
or exceed the amounts provided in § 1920 without explicit authorization in another statutory
provision.” Id. (citations omitted).
The Commissioner has moved for expenses not ordinarily taxed as costs. Her itemization
includes travel and meal expenses for attorneys, expenses related to expert witnesses,17 and the
expenses of electronic legal research which are ordinarily not taxed as costs. The statute upon
which the Commissioner relies, Ala. Code §39-1-1(b), provides in relevant part, as follows:
(b) . . . In the event the surety or contractor fails to pay the claim in full within
45 days from the mailing of the notice, then the person or persons may recover
from the contractor and surety, in addition to the amount of the claim, a
reasonable attorney's fee based on the result, together with interest on the claim
from the date of the notice.
Ala. Code § 39-1-1(b). However, the statute is silent as to expenses.
“It is well settled that federal courts are bound by the interpretation of a state statute by state
courts.” Insurance Company of North America v. Lexow, 937 F.2d 569, 571 (11th Cir.1991);
National Union Fire Ins. Co. v. Cavins, 226 Fed Appx. 895, 899 (11th Cir. 2007). The Court has
not found an Alabama appellate court decision interpreting this statute to authorize an award of
litigation expenses as part of an award of a reasonable attorneys’ fee. In White-Spunner Const.,
Inc. v. Construction Completion Co., LLC, 103 So.3d 781 (Ala. 2012), the trial court entered
summary judgment in favor of sub-contractor Construction Completion and against general
17

Under 28 U.S.C. § 1920(3), “[f]ees and disbursements for . . . witnesses” is considered a cost
when the expert appears at trial. But, in that context, the costs are limited by 28 U.S.C. § 1821
which authorizes reimbursement for travel expenses and the $40.00 per diem.
27

contractor White-Spunner and its surety Hartford Fire Insurance Company. The trial court also
found that White-Spunner was liable for Construction Completion’s expenses, but not the surety
Hartford, “because § 39–1–1 contained no provision for recovering expenses from a surety.” Id. at
786. White-Spunner and Hartford appealed.
The Alabama Supreme Court reversed and remanded the trial court’s decision upon finding
that Construction Completion had illegally contracted with Buena Vista Construction, LLC, which
was not properly licensed to do business in Alabama. White-Spunner and Hartford argued that
Construction Completion was effectively suing them to recover money due as a result of work
performed by its sub-subcontractor Buena Vista, but because Buena Vista was an unlicensed
contractor, its contract with Construction Completion was illegal and void, and therefore,
Construction Completion could not prevail on its claim against White-Spunner and Hartford.
The Alabama Supreme Court found that Construction Completion’s contract with Buena
Vista was illegal and therefore it could not maintain a cause of action against White-Spunner and
Hartford because it relied in whole or in part upon an illegal transaction to which Construction
Completion was a party. Id. at 794. The Court reversed and remanded the case for further
proceedings consistent with the decision. However, the Court did not address or find unsupported
the trial court’s decision that Construction Completion could not recover expenses against the surety
Hartford because there was no provision for same in the statute, Ala. Code 39-1-1(b).
In Hartford Acc. & Indemnity Co. v. Cochran Plastering Co., Inc., the appellate court
addressed only Cochran Plastering’s claim for an attorney’s fee. The appellate court cited Ex parte
Klinefelter, Halsey, Jones & Cater, P.C., 674 So.2d 1287, 1290 (Ala.1995) for the premise that “
‘In Alabama and most other jurisdictions, the general rule is that attorney's fees and expenses of
litigation are not recoverable as damages, in [the] absence of a contractual or statutory duty, other
than [by] a few recognized ... equity principles.’ ” 935 So. 2d at 472 (citation omitted). And then
28

explained “[i]n this case, § 39–1–1(b), Ala. Code 1975, provides that in an action against a surety
for a company that has entered into a contract with a subdivision of the state, the party suing may
seek ‘in addition to the amount of the claim, a reasonable attorney's fee based on the result, together
with interest on the claim from the date of the notice.’” Id.
The appellate court then addressed Cochran Plastering’s claim for attorney’s fees without mention
of expenses or costs, and relying upon the attorney’s description of the hours expended and the
work performed. Id. at 474.
Based upon the limited cases that discuss or address Ala. Code § 39-1-1(b), the Court finds
that the Commissioner is not entitled to expenses because there is no statutory provision for
recovery of expenses as part of a reasonable attorney’s fees. Additionally, the Commissioner has
not provided any argument that any “contract” or “special equity” exists that could form the basis
for an award of expenses. See Jones v. Regions Bank, 25 So.3d at 441. Accordingly, the
Commissioner’s request for an award of litigation expenses is denied.
C. Conclusion
Previously, the Court reserved jurisdiction to address the Commissioner’s claim for interest
and reasonable attorneys’ fees pursuant to Ala. Code § 39-1-1(b) (doc. 190). The Court determined
that the Commissioner was entitled to pre-judgment interest in the amount of $19,405.48 (doc. 208).
The Court now awards $ 110,124.13 as a reasonable attorney’s fee. Therefore, an amended final
judgment shall be entered by separate document.
DONE and ORDERED this the 15th day of January 2015.

/s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE

29