OFC Capital v AT Publishing, Inc.

Filing 243

Order on Motion for Attorney Fees

UNITED STATES DISTRICT COURT
DISTRICT OF ALASKA

OFC CAPITAL, a division of
ALFA FINANCIAL CORPORATION,
Plaintiff,
vs.
AT PUBLISHING, INC.,
Defendant.

)
)
)
)
)
)
)
)
)
)
)

Case No. 3:04-cv-00011-JWS

ORDER AND OPINION
[Re:

Motion at docket 198 and
220]

I. MOTION PRESENTED
At dockets 198 and 220, plaintiff OFC Capital (“OFC”) moves for an award of
attorneys’ fees. Defendant AT Publishing, Inc. (“ATP”) opposes the motion. The motion
has been fully briefed. But, after submitting their original arguments on the matter, the
Georgia Supreme Court issued an order which addressed the issue of the applicability of
Georgia law to attorneys' fees in situations involving leases,1 appearing to reach a different

1

See Radioshack, Corp. v. Cascade Crossing II, LLC, S.E.2d 2007 WL 3129954
(Ga. Oct. 29, 2007) (The Eleventh Circuit Court of Appeals certified the question of “[w]hether
OCGA § 13-1-11 applies to and limits the award of attorneys' fees and costs in this particular
case – where the landlord under a commercial lease agreement filed suit against a tenant
seeking the collection of past due rent as well as a declaration of other contractual rights of the
parties – and, therefore, precludes an award of full attorneys' fees and costs as provided in the
lease agreement,” to the Georgia Supreme Court.); Cascade Crossing II v. RadioShack Corp.,
480 F.3d 1228, 1232 (11th Cir. 2007).

result than did the United States District Court, in a case cited by OFC.2 The parties were,
therefore, requested to address that case, and they have done so.
Oral argument was not requested and would not assist the court.
II. DISCUSSION
This case was tried to a jury which returned a verdict for plaintiff. Judgment has
been entered awarding plaintiff damages in the amount of $418,273.91. The parties’
dispute is subject to a leasing contract, the “Master Lease,” which includes provisions
purporting to require the equipment lessee, ATP, to pay the finance lessor, OFC,
reasonable attorneys’ fees and costs connected with litigation arising under the lease.3
Plaintiff seeks to recover a total of $372,031.34 in attorneys’ fees and $18,886.90 in costs.4
Costs taxable by statute have already been awarded to plaintiff in the amount of
$5,317.30.5
ATP claims that Georgia law governs the award of attorneys’ fees, and that under
Georgia law, OFC cannot recover attorneys’ fees at all, because it failed to prove the
attorneys’ fees component of its damages claim at trial. Furthermore, ATC claims that if

2

See Docket No. 215 at 3, citing Cascade Crossing II, LLC v. Radioshack Corp., 446
F.Supp.2d 1348, 1349-50 (N.D. Ga. 2006).
3

Paragraph 16 of the Master Lease provides: “Lessee shall reimburse Lessor for all
charges, costs, expenses and attorneys’ fees, incurred by Lessor: (a) in defending or protecting
its interests in the Equipment; (b) in the execution, delivery, administration, amendment and
enforcement of this Lease or the collection of any Lease Payment under this Lease; and © in
any lawsuit or other legal proceeding to which this Lease gives rise, including, but not limited to,
actions in tort.” Docket No. 18, Exhibit B, page 7.
4

See Docket No. 220.

5

See Docket No. 213.

-2-

attorneys’ fees are allowed at all under Georgia law, they are limited to 10% of the amount
of the judgment.6
The parties’ joint statement of issues, however, provides that “the parties accept that
local rule 54(3) controls the application for and award of attorney fees in this case [and that
f]or this reason the parties assume that the issue of attorney fees will not be presented to
the jury, but taken up by the court.”7 Local Rule 54(3) provides as follows:
(a) A motion for attorney’s fees under Rule 54(d)(2) of the Federal Rules of
Civil Procedure, must
(1) state the amount requested;
(2) set forth the authority for the award, whether Rule 82, Alaska Rules of Civil
Procedure, a federal statute, contractual provision, or other grounds entitling the
moving party to the award; and
(3) be accompanied by an affidavit that provides-[A] total number of hours worked and billing rate for each lawyer and paraprofessional,
[B] the amount charged to the client, if any, and
[C] has attached as exhibits bills sent or other detailed itemization as may be
appropriate.
The joint statement of issues shows the parties’ intent that attorneys’ fees would be
determined by the Court after trial as provided in the Local and Federal Rules. Georgia law
is nowhere mentioned in that joint statement.
Moreover, the Court agrees with the plaintiff that, even in light of the Radioshack
case, Georgia Code § 13-1-11 does not apply to this case. That section was designed to
put a debtor on notice, when the indebtedness “is collected by or through an attorney after
maturity,”8 that the creditor intends to collect on the full amount, plus attorneys’ fees. The
6

See Docket No. 210; see also Georgia Statutes § 13-1-11(a)(2) & (3); Radioshack,
2007 WL 3129954, supra.
7

Docket No. 117 at 3.

8

OCGA § 13-1-11(a)(3) (emphasis added).

-3-

statute, “as analyzed by the Supreme Court, ‘is clearly intended to require the creditor to
give the debtor an opportunity to meet his obligation without incurring additional expenses
of litigation in the nature of attorney fees.’”9 This is clearly not the case here, where the
now-defendant, A.T. Publishing, initially brought the action, creating the need for attorneys’
fees to begin with, and the now-plaintiff counterclaimed. This statute was intended to apply
only in default situations where "an indebtedness is collected by or through an attorney
after maturity."10 And in Georgia, “[o]f course the parties may always contractually agree
to terms which are not illegal, immoral, or against public policy,”11 as was done in this case.
The defendant’s reading of the Radioshack case is simplistic, and does not take into
consideration the facts of the present case.

As pointed out by OFC, the Court in

Radioshack cited in support of its decision, Demere v. Germania Bank, 42 S.E. 488 (Ga.
1902). In Demere, the Court explains that the purpose of the law (enacted in 1891), was
“to relieve the debtor from the payment of attorneys fees except when he litigated with the
creditor and resisted the suit on grounds which were not in any part upheld, – except where
a ‘plea [was] filed by the defendant and not sustained.’”12
Primarily, the Georgia Supreme Court’s holding in Radioshack “encompasses
commercial leases as well as residential and other non-commercial leases. Nothing in the

9

Boddy Enterprises, Inc. v. City of Atlanta, 320 S.E.2d 374, 375 (Ga.App. 1984)
(citations omitted).
10

Id.

11

Id. at 376.

12

Demere, 42 S.E. at 489.

-4-

language of OCGA 13-1-1 limits its benefits to non-commercial debtors.”13 However, this
is not the case of an “ordinary business debtor” having “unequal bargaining power and a
need for the protections of OCGA § 13-1-11.”14 Instead, OFC simply requests that it
receive the “benefit of its bargain” with the defendant.15
Further, the Georgia Court of Appeals held, in Insurance Industry Consultants, Inc.
v. Essex Inv., Inc., 549 S.E.2d 788 (Ga.App. 2001),16 that “although OCGA § 13-1-11 is
applicable to some actions involving leases, it is not applicable to all claims for attorney
fees based on a lease provision.”17 In this case, the Court instead followed the “plain terms
of the lease [which] authorizes the award of attorneys fees, expenses, and costs.”18
Likewise, this Court will follow the plain terms of the parties’ agreements.19
Last, the issue of notice is a red herring, since A.T. Publishing initiated this lawsuit,
and has been aware, since the filing of the counterclaim, that OFC sought attorneys’ fees
under the lease agreement.
13

Radioshack at *5.

14

Id.

15

Docket No. 239 at 8. Unlike the parties in Radioshack, where the lessee
acknowledged the validity of the lease, and continued to make payments, here, “A.T. Publishing
sued OFC Capital to declare there was no enforceable lease, and OFC Capital counterclaimed
that there was indeed an enforceable lease and demanded the benefit of its bargain. Id.
16

Cited with approval by the Court in Radioshack.

17

Insurance Industry Consultants, 549 S.E.2d at 794, citing Boddy, supra.

18

Id.

19

The Court looks to both the Master Lease Agreement, and the Joint Statement of
Issues, at which point the defendant could have expressed its current position, but instead
agreed that “local rule 54(3) controls the application for an award of attorney fees in this case
[and that f]or this reason the parties assume that the issue of attorney fees will not be presented
to the jury, but taken up by the court.” Docket No. 117 at 3 (joint statement of issues).

-5-

III. CONCLUSION
Because the Court agrees with the plaintiff that reasonable attorneys’ fees are due,
and the defendant does not dispute the accuracy or reasonableness of the amount of
attorneys’ fees incurred, but argues only that such fees are not allowed at all, or are limited
to 10% of the judgment,20 the Court finds that the plaintiff’s well-documented motion for
attorneys’ fees is reasonable.
Therefore, the plaintiff’s motion for attorneys’ fees, at docket numbers 198 and 220,
is hereby GRANTED.
DATED this 20th day of December, 2007, at Anchorage, Alaska.

/s/JOHN W. SEDWICK
United States District Judge

20

See Docket No. 210.

-6-