KeyBank, National Association v. Clarke County Healthcare LLC et al
Order re: 40 Supplemental MOTION for Attorney Fees Against Defendant Clarke County Healthcare LLC, 34 MOTION for Default Judgment as to Clarke County Healthcare LLC and 37 Supplemental MOTION for Attorney Fees to Motio n for Default Judgment. DEFAULT JUDGMENT is hereby entered in favor of Plaintiff and against Clarke County Healthcare, LLC for its breach of the Master Lease Agreement, in the amount of $105,301.83 (comprised of $98,487.08 (the amounts due and owing under the Guarantys terms), $5,857.00 in attorneys fees, and $957.75 in costs).. Signed by Judge Kristi K. DuBose on 1/21/2016. (cmj)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
KEY BANK, NATIONAL ASSOCIATION,
CLARKE COUNTY HEALTHCARE, LLC, )
CIVIL ACTION 15-00151-KD-B
This matter is before the Court on Plaintiff’s Motion for Default Judgment against Defendant
Clarke County Healthcare, LLC (Doc. 34), Plaintiff’s Supplement seeking an award of reasonable
attorneys’ fees and costs (Doc. 37), and the Supplemental Declaration (Doc. 42).
On June 5, 2006, Resurgence Health Group, LLC (a Georgia LLC) (Resurgence) executed a
Guaranty, covering a Master Lease Agreement (agreement) simultaneously executed between
General Electric Capital Corporation (GE) and Clarke County Hospital (Clarke) for the lease of a
Philips 16-slice CT Scanner with Bone Density Package and Medrad Injector (equipment). (Doc. 1-1;
Doc. 34-1 (Aff. Barnes)1).
On August 16, 2006, the equipment was accepted by Clarke and
certified as properly delivered and installed.
Pursuant to the agreement, Clarke agreed to make monthly payments of $9,538.92 for 60
months, starting on May 15, 2006.
Additionally, GE could assign the Guaranty
without the Guarantor’s consent as well as proceed against the Guarantor by suit or otherwise collect
monies due/guaranteed with or without notice/demand, with or without joinder of Clarke.
On February 1, 2009, Clarke defaulted on the Agreement by failing to make payments as required
1 Barnes is the Litigation Coordinator for Plaintiff.
and further failed to make payments as scheduled on January 1, 2010, May 1, 2010, June 1, 2010 and
July 1, 2010.
(Doc. 1-4 at 2).
On July 27, 2010 GE assigned its interest in the agreement to Plaintiff.
(Doc. 34-1 (Aff.
On July 29, 2010, Plaintiff sent Clarke a Notice of Right to Cure Default by paying the
amount due of $37,821.48 within 21 days, or all remaining payments would be accelerated and the
process of repossession of the equipment may be initiated.
Plaintiff also informed Clarke
that it would be responsible for any collection fee costs, repossession fees, costs and reasonable
Clarke did not cure the default within the timeframe allotted.
September 21, 2010, Plaintiff accelerated the debt, declared the agreement to be in default, and
demanded $237,784.94 as due and owing within 10 days.
repossessed the equipment.
(Doc. 34-1 (Aff. Barnes)).
(Id.; Doc. 1-5).
On April 8, 2011, Plaintiff sent Clarke
notice of intent to sell the equipment it had repossessed, by private sale, notifying Clarke of a right to
redeem via payment of $211,885.94 plus costs.
redeem the equipment before it was sold.
(Id.; Doc. 1-6).
Clarke did not exercise its right to
(Doc. 34-1 (Aff. Barnes)).
On January 8, 2015, Plaintiff
issued a Notice of Deficiency to Clarke, demanding payment of $98,487.08 within ten days (the
amounts due after the equipment had been sold – an offset).
Clarke made no
(Doc. 34-1 (Aff. Barnes)).
Under the terms of the Guaranty associated with the agreement, Plaintiff (as GE’s assignee)
may proceed against the Guarantor – Resurgence – to collect the amounts due from Clarke.
34-1 (Aff. Barnes); Doc. 34-2).
As such, Plaintiff demanded payment of Clarke’s debt as
guaranteed by Resurgence; Resurgence refused to pay.
(Doc. 34-1 (Aff. Barnes)).
On March 20,
2015, Plaintiff sued Clarke for breach of contract (the agreement). (Doc. 1). Plaintiff seeks
recovery of $98,487.08 plus accruing interest.
Clarke was served on July 28, 2015 via service on Anne Thompson, its registered agent.
(Docs. 31, 31-1).
Plaintiff asserts that Clarke has failed to timely plead or otherwise defend.
(Docs. 31-1 (Decltn. Fleming)).
On August 24, 2015, Plaintiff requested entry of a Clerk’s default
against Clarke for its failure to plead or defend.
a Rule 55(a) Default against Clarke.
default judgment against Clarke.
On August 25, 2015, the Clerk entered
On September 11, 2015, Plaintiff moved for a
On December 10, 2015, the Court entered a default judgment in favor of Plaintiff and
against Clarke finding as follows, in relevant part (Doc. 36):
The Court is satisfied that Clarke has notice of the default proceedings against it.
Additionally, a Clerk’s entry of default was issued against Clarke in accordance with
Rule 55(a) for failure to plead, answer or otherwise defend this case. Moreover, there is
a sum certain which can be made ascertainable before the Court, from which a default
judgment can be entered without a hearing….Further, … [t]he Court is satisfied that the
well-pleaded allegations of the Complaint state a basis for relief as to the claims asserted
and that there is a substantive, sufficient basis for the relief Plaintiff seeks.
Specifically, Plaintiff asserts a breach of contract claim against Clarke, for its failure to
comply with the terms of the Lease (i.e. non-payment). The Lease is governed by the
laws of the State of Wisconsin. (Doc. 1-1 at 7 at Section 23(e); Doc. 1-8). Upon
consideration of the evidence submitted by Plaintiff and the well-pleaded allegations of
the Complaint, default judgment is due to be entered against Clarke for breach of
contract…..As to the elements for breach of contract, the Court finds that the
well-pleaded allegations and evidence submitted establish: 1) the existence of a contract
creating obligations flowing from Clarke to Plaintiff (the Lease); 2) a breach of those
obligations (Clarke’s failure to pay amounts due and owing under the Lease); and 3)
damages from the breach (including non-payment of the amounts due under the Lease,
accruing interest, remarketing expenses (after repossession and resale of equipment) etc.).
Specifically, the evidence shows execution of the Lease by Clarke. The Lease explains,
in definite terms, Clarke’s principal obligation and terms of the Lease itself. Plaintiff
relied on the Lease. The evidence indicates that Clarke defaulted under the Lease due to
its failure to pay the sums due and owing under the Lease. Upon Plaintiff’s written
demand for payment, Clarke failed to pay the sums due and owing under the Lease.
Moreover, Plaintiff’s reliance on the Lease is expressed in the document itself. As such,
upon consideration, the Court finds that Plaintiff is entitled to default judgment against
Clarke, for breach of the Lease, as a matter of Wisconsin law.
Plaintiff requests entry of a default judgment against Clarke in the amount of $98,487.08
plus accruing interest. Upon review of the Lease, invoices, notices submitted, Affidavit
and Declaration filed in support, the Court is satisfied that the amounts requested are due
and owing to Plaintiff by Clarke. As such, that portion of Plaintiff’s motion for default
judgment damages, addressing the breach of contract claim against Clarke, is
GRANTED in part such that Plaintiff is awarded $98,487.08. However, Plaintiff also
seeks an unspecified amount of accrued late charges.…The Court is unable to assess fees
and costs/expenses at this juncture and thus is not presented with a “sum certain” from
which to resolve the motion for default judgment. Plaintiff has not provided any
supporting documentation regarding its request for attorneys’ fees and costs/expenses, or
referenced that portion of either the Lease which provide for recovery of same. Plaintiff
has not briefed the propriety for recovery of such fees and costs under Wisconsin law.
Likewise, Plaintiff has not provided any attorneys’ billing records, invoices and/or
itemized statements, complete information about all of the individuals who billed for
legal services or their qualifications/years of experience, and/or whether the fees and
costs were reasonably incurred under the relevant state’s law (Wisconsin) governing such
awards. As such, Plaintiff shall Supplement its motion, with the requisite support….
Plaintiff is ORDERED to file, on or before December 31, 2015, a Supplement to its
motion addressing the specific amount of accrued costs sought as well as attorneys’ fees
and costs/expenses, and further: 1) citing those specific provisions in the relevant
agreements which provide for recovery of fees and costs/expenses, and assessing the
propriety of recovery of same under Wisconsin law; and 2) attaching whatever materials
it deems necessary and appropriate to support its claim for fees and costs/expenses in
conjunction with Wisconsin law…
…Additionally, Plaintiff cannot recover the attorneys’ fees and costs sought against
Clarke and then also recover that same sum against Resurgence, as such would be yet
another double recovery. As such, Plaintiff is ORDERED to specify and delineate in
the December 31, 2015 Supplement, those fees and costs incurred relative to Resurgence,
versus those incurred relative to Clarke.
On December 31, 2015, Plaintiff submitted its Supplement but failed to differentiate
between those fees and costs incurred for Clarke versus those incurred for Resurgence, as
Instead, Plaintiff submitted fees and costs “jointly and severally” for
both Clarke and Resurgence even though they are two (2) different defendants.
The Court was
thus not able to assess the propriety of fees and costs for each distinct defendant and ordered
Plaintiff to supplement its request in a matter which complies with the Court’s prior instruction
and delineates those fees and costs for the attorney work associated with Clarke, from those for
the attorney work associated with Resurgence.
Plaintiff has now so supplemented.
Plaintiff requests – via the Affidavit of Litigation Coordinator Barnes and Declaration of
Fleming (as Supplemented) -- $5,747.90 in reasonable attorneys’ fees and $957.75 in
costs/expenses for the work performed by attorneys and paralegals at the law firm of Wong
(Doc. 34-1 (Aff. Barnes); Doc. 40 (Decltn. Fleming) (Supp)).
Plaintiff seeks recovery of attorneys’ fees and costs pursuant to the contracts executed
between it and Clarke.
Namely, the Master Lease Agreement, which Clarke signed, provides
for the recovery of attorneys’ fees and costs pursuant to Paragraph 10(d): “Lessee shall pay
Lessor’s actual attorneys’ fees, agency fees, collection costs and expenses and any other costs
and expenses incurred in connection with the enforcement, assertion, defense or preservation of
Lessor’s rights and remedies under this Agreement, or if prohibited by law, such lesser sum as
may be permitted.” (Doc. 1-1 at 4).
The Agreement was formed pursuant to the laws of
Wisconsin (Doc. 1-1 at 7 at Paragraph 23(e); Doc. 1-8), and under that State’s law, contract
clauses that unambiguously provide for pay attorneys’ fees stemming from costs of collection,
repossession, etc., are valid and enforceable.
4578903, *7 (Ct. App. Wis. Jul. 31, 2015).
See, e.g., Riverside Fin. Inc. v. Rogers, 2015 WL
Additionally, while the applicable contract provides
for recovery of “actual attorneys’ fees…[and] costs[,]” under Wisconsin law, such fees are
reviewed by courts for reasonableness.
Bobrow Palumbo Sales, Inc. v. Broan-Nutone, LLC,
549 F.Supp.2d 274, 277-279 (E.D.N.Y. 2008) (“it appears that under Wisconsin law, although
the…agreement provides for the recovery of actual attorneys' fees, such fees are also reviewed
by the Court for reasonableness”).
Courts have found an implicit requirement that attorneys’
fees awarded must be reasonable, regardless of what the pertinent contractual clause says.
Baylake Bank v. Village of Hobart, 2009 WL 151497, *1 (E.D. Wis. Jan. 21, 2009) (“[i]t seems
clear that even a contract awarding ‘actual’ fees must in some way recognize that the fees
incurred must reasonably be necessary to the litigation in question”).
Thus, even when a
contract states “actual fees/costs,” Wisconsin requires a reasonableness inquiry.
The starting point for any award of attorney fees by a federal court is the calculation of
Hensley v. Eckerhart, 461 U.S. 424, 433 (1983).
same lodestar analysis.
Wisconsin courts follow the
Kolupar v. Wilde Pontiac Cadillac, Inc., 2004 WI 112 (Wis. 2004)
As set forth in Wisconsin Compressed Air Corp. v. Gardner Denver, Inc.,
2008 WL 4379227, *2 (W.D. Wis. Sept. 22, 2008):
The lodestar figure represents “the number of hours reasonably expended on the litigation
multiplied by a reasonable hourly rate.” Hensley v. Eckerhart, 461 U.S. at 433.
Determination of the number of hours reasonably expended and the reasonable hourly
rate is a matter within the district court's sound discretion. Gekas v. Attorney Registration
and Disciplinary Commission of Supreme Court of Illinois, 793 F.2d 846 (7th Cir.1986);
Tomazzoli v. Sheedy, 804 F.2d 93, 97 (7th Cir.1986)(“district court's calculation is
anything but an arithmetical exercise”).
Once the court calculates the lodestar, it may make appropriate adjustments to increase or
decrease the award in light of a number of considerations, including “the amount
involved and the results obtained.” Lynch v. City of Milwaukee, 747 F.2d 423, 426 (7th
Cir.1984)(citing Hensley, 461 U.S. at 429-30 n. 3); see also Spellan v. Board of Education
for District 11, 59 F.3d 642, 645 (7th Cir.1995). The court may consider this factor in
making the initial lodestar calculation or in determining whether to modify the lodestar
figure. Lynch, 747 F.2d at 426.
Moreover, “[o]nce a trial court makes the lodestar assessment it may adjust that number up or
down to account for matters beyond those already encompassed by the lodestar analysis….The
factors the court may consider include those set forth in Wisconsin Supreme Court Rule
20:1.5(a)… The court's ultimate goal is to “determine what the lawyer would receive if he were
selling his services in the market rather than being paid by court order….” James Michael
Leasing Co., LLC v. Paccar Inc., 2013 WL 5771156 (E.D. Wis. Oct. 24, 2013).
Supreme Court Rule 20:1.5 provides as follows, with regard to reasonableness of fees:
(a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or
an unreasonable amount for expenses. The factors to be considered in determining the
reasonableness of a fee include the following:
(1) the time and labor required, the novelty and difficulty of the questions involved, and
the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular
employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the
(8) whether the fee is fixed or contingent.
The rates requested by Plaintiff include rates for associates (from $210.00/hour to
$235.00/hour) as well as paralegals ($100/hour) expended, for a total of 28.49 hours litigating
this case against Defendant Clarke.
(Doc. 40 at 4-5 (Decltn. Fleming (Supp.)).
Plaintiff seeks $235/hour for 1.6 hours incurred by Senior Associate Clement (19 years
experience); $210/hour for 24.39 hours incurred by Associate Jefferson (10 years experience);
and $100/hour for 2.5 hours incurred by Paralegals Oliveri and O’Brien (no information as to
years of experience).
As the party requesting fees, Plaintiff has the burden of supplying the Court with specific
and detailed evidence from which the Court can determine the reasonable hourly rate for the
work performed by its attorneys and paralegals.
Am. Civil Liberties Union of Ga. v. Barnes,
168 F.3d 423, 427 (11th Cir. 1999).
The Eleventh Circuit has instructed that a reasonable
hourly rate is “the prevailing market rate in the relevant legal community for similar services by
lawyers of reasonably comparable skills, experience, and reputation.”
Auth. of City of Montg., 836 F.2d 1292, 1299 (11th Cir. 1988).
community is that of Mobile, Alabama.
Norman v. Housing
In this case, the relevant legal
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)).
However, Plaintiff's revised fee application
fails to provide evidence addressing the fundamental question of whether the hourly rates
charged by its attorneys are reasonable in the Mobile market.
Neither of Fleming’s
Declarations attest to his familiarity with the customary rates charged by the Mobile legal
community; rather, the Declarations state that Fleming is “[t[he fees for the services provided by
Wong Fleming are reasonable and consistent with the fees customarily charged in Wisconsin for
similar legal services.” (Doc. 40 at 4 (Decltn. Fleming at ¶15) (Supp.)).
Court, which is familiar with the prevailing rates in the local market (Mobile, Alabama), may act
as its own expert and rely on its “knowledge and experience” to determine the reasonableness
and propriety of the requested fees.
Loranger v. Stierheim, 10 F.3d 776, 781 (11th Cir. 1994).
Senior Associate & Associate
Regarding the requested rates of $235/hour for Senior Associate Clement and $210/hour
for Associate Jefferson, the Court finds as follows.
Given the experience of Senior Associate Clement (19 years of practice), the Court finds
that the requested $235/hour is a reasonable rate.
See, e.g., Dempsey v. Palisades Collection,
Inc., 2010 WL 923473,*3 (S.D. Ala. Mar. 11, 2010) (awarding $250/hour to an attorney with
over 19 years of experience); Wells Fargo Bank, N.A. v. Friday Const. Co., Inc., 2012 WL
5381558, *5 (S.D. Ala. Oct. 31, 2012) (awarding $225/hour to an attorney with 10 years of
experience); Wells Fargo Bank, N.A. v. Williamson, 2011 WL 382799, *4 (S.D. Ala. Jan. 3,
Plaintiff seeks to recover 1.6 hours of work by Clement as to Defendant Clarke.
Thus, as to Senior Associate Clement, with 19 years of experience, the Court finds that an award
of $235/hour totaling $376.00 for 1.6 hours of work, is appropriate.
With regard to Associate Jefferson (10 years of practice), the Court finds that the
requested $210/hour is a reasonable rate.
See, e.g., Wells Fargo Bank, 2012 WL 5381558, *5
(awarding $225/hour to an attorney with 10 years of experience).
work by Jefferson.
Plaintiff seeks 24.39 hours of
A review of the record however reveals 26.10 hours billed by Jefferson as
Thus, as to Associate Jefferson, the Court finds that an award of $210/hour totaling
$5,481.00 for 26.10 hours of work, is appropriate.
Plaintiff seeks recovery of fees for 2.5 hours of collective work of two (2) paralegals
Oliveri and O’Brien (with unknown years of experience) at the rate of $100/hour.
market, this Court regularly approves rates of $75/hour for paralegals.
See, e.g., SE Property
Holdings, LLC v. Green, 2013 WL 790902, *6 (S.D. Ala. Mar. 1, 2013); Zuffa, LLC v. Al–
Shaikh, 2011 WL 1539878, at *9 (S.D. Ala. Apr. 21, 2011); Williamson, 2011 WL 382799 at *5;
Adams v. Austal, U.S.A., L.L.C., 2009 WL 3261955, *2 (S.D. Ala. Oct. 7, 2009); Lanier
Construction Inc. v. Carbone Properties of Mobile, LLC, CV 06–0070–CB–B (S.D. Ala. Feb. 12,
The Court finds that an award at the hourly rate of $75/hour for work performed by
these two (2) paralegals (1 hour for Oliveri and 1.5 hours for O’Brien) for 2.5 hours for a total of
$187.50, is appropriate.
In determining whether the number of hours expended are reasonable, the Court should
not include any hours which are “excessive, redundant, or otherwise unnecessary.” Norman, 836
F.2d at 1301. 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. The Court will not permit a party to recover fees for hours that are excessive, redundant, or
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 experience of counsel.” Norman, 836 F.2d at
1301 (emphasis omitted).
While there is no per se rule of proportionality, City of Riverside v.
Rivera, 477 U.S. 561, 574 (1986), the Supreme Court has made clear that such could still be
considered a factor in determining the reasonableness of a fee request.
“The amount of
damages a plaintiff recovers is certainly relevant to the amount of attorney's fees to be awarded
under § 1988.... It is, however, only one of many factors that a court should consider in
calculating an award of attorney's fees.” Id. (citation omitted). In sum, “[i]f fee applicants do not
exercise billing judgment, courts are obligated to do it for them, to cut the amount of hours for
which payment is sought, pruning out those that are excessive, redundant, or otherwise
unnecessary. Courts are not authorized to be generous with the money of others.” Barnes, 168
F.3d at 428.
Plaintiff’s counsel’s billing records indicate that the individuals working on this case
billed a total of 30.20 hours from January-September 2015.
As noted supra, counsel also set
forth each billing individual’s hourly rate indicating counsel’s respective years of experience.
(Doc. 40 at 4-5 (Decltn. Fleming) (Supp.)).
expended in this case was reasonable.
Counsel for Plaintiff asserts further, that the time
(Doc. 40 (Decltn. Fleming)).
As such, the Court finds
that the 30.20 hours billed by Jefferson, Clement, Oliveri and O’Brien are reasonable and
As noted supra, the lodestar represents the number of hours reasonably expended on the
litigation multiplied by a reasonable hourly rate, which is a matter of the Court’s sound
Hensley, 461 U.S. at 433.
Upon consideration of the applicable Master Lease and
Guaranty, the attorneys’ fees and costs motions (with supporting Affidavit and Declarations) and
Wisconsin Supreme Court Rule 20:1.5, the Court finds that there is no need to reduce the
attorneys’ fees requested.
Thus, the lodestar is calculated as 30.20 hours billed at the rates of
$235/hour (Senior Associate), $210/hour (Associate), and $75/hour (Paralegals), as detailed
herein, for a total of $5,857.00 in attorneys’ fees.
Plaintiff seeks to recover $957.75 in costs against Defendant Clarke, comprised of
one-half of the complaint filing fee ($200.00) and $757.75 for process server fees (many
attempts to serve from March 25-August 7, 2015).
Doc. 40-1 at 20).
(Doc. 40 at 6 (Decltn. Fleming (Supp.));
Based on the terms of the Master Lease Agreement, Clarke is responsible for
payment of costs, and along with the Affidavit and Declaration, the Court finds that Plaintiff is
entitled to recover the costs requested. See, e.g., Peppertree Apts., 631 So.2d at 878 (providing
that “[t]he intention of the parties controls when a court construes the terms of a promissory note,
and that intention is to be derived from the provisions of the contract, if the language is plain and
Moreover, the Affidavit and Declaration attest that the costs incurred are
reasonable for the services rendered in this matter. (Doc. 34-1 (Aff. Barnes); Doc. 40 (Decltn.
Accordingly, Plaintiff’s request of $957.75 for costs reasonably incurred in
this case, is GRANTED.
Accordingly, it is ORDERED that Plaintiff’s motion for default judgment against Clarke
County Healthcare, LLC is GRANTED in part and DENIED in part as follows: 1)
GRANTED as to its claim for breach of the Master Lease Agreement and 2) GRANTED in
part and DENIED in part as to its request for attorneys’ fees and costs as detailed herein.
Thus, it is ORDERED that a DEFAULT JUDGMENT is hereby entered in favor of
Plaintiff and against Clarke County Healthcare, LLC for its breach of the Master Lease
Agreement, in the amount of $105,301.83 (comprised of $98,487.08 (the amounts due and owing
under the Guaranty’s terms),2 $5,857.00 in attorneys’ fees, and $957.75 in costs).3
The Clerk is DIRECTED to provide a copy of this Order, via certified mail, to
Defendant Clarke County Healthcare, LLC, c/o 2916 Mountain Brook Parkway, Birmingham,
AL, 35223 (the address where service was previously accomplished).
DONE and ORDERED this 21st day of January 2016.
/s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE
2 Due by defendants jointly and severally as between Clarke and Resurgence (i.e., Plaintiff cannot recover
$98,487.08 from Clarke and also recover another $98,487.08 from Resurgence).
3 It appears that Plaintiff has abandoned its prior request for “late charges.”
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