Walnut Creek Manor, LLC v. Mayhew Center, LLC et al

Filing 350

ORDER by Judge Claudia Wilken GRANTING PLAINTIFFS ( 305 , 336 ) MOTIONS FOR CONTEMPT SANCTIONS AND ATTORNEYS FEES. (ndr, COURT STAFF) (Filed on 2/12/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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WALNUT CREEK MANOR, LLC,
Plaintiff,

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MAYHEW CENTER, LLC, and DEAN
DUNIVAN,
Defendants.
________________________________/

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United States District Court
For the Northern District of California

ORDER GRANTING
PLAINTIFF’S
MOTIONS FOR
CONTEMPT SANCTIONS
AND ATTORNEYS’
FEES (Docket Nos.
305, 336)

v.

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7

No. C 07-5664 CW

Plaintiff Walnut Creek Manor, LLC moves for contempt

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sanctions and attorneys’ fees against Defendants Dean Dunivan and

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Mayhew Center, LLC.

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considering the parties’ submissions and oral argument, the Court

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grants the motions.

Defendants oppose both motions.

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After

BACKGROUND

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The relevant facts and procedural history of this action are

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set forth at length in prior orders.

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315.

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background relevant to the instant motions.

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See Docket Nos. 287, 296,

Accordingly, this order provides only a brief summary of the

In October 2010, the parties settled this action by

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stipulating to the entry of an injunction requiring Defendants to

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remedy the tetrachloroethylene (PCE) contamination that they had

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caused on Plaintiff’s property.

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Proposed Injunction, at 1-3.

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and entered the parties’ proposed injunction on November 23, 2010.

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Docket No. 273, Order Granting Stipulation.

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that injunction, Defendants were required to complete cleanup and

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abatement of the PCE contamination within two years of the date

Docket No. 270, Stipulation &

The Court approved the stipulation

Under the terms of

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the injunction was entered.

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injunction specifically required Defendants to reduce the

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concentration of PCE in Plaintiff’s groundwater, soil, and soil

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vapor to certain “residential standards” set by the Regional Water

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Quality Control Board (RWQCB).

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these standards by the injunction’s November 2012 deadline,

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Plaintiff would be entitled to recover whatever funds remained in

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an escrow account that Defendants had created to fund their

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cleanup and abatement efforts.

United States District Court
For the Northern District of California

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Id., Injunction, at 3-6.

Id.

The

If they failed to achieve

Id. at 8.

Defendants failed to complete their cleanup and abatement

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obligations by the November 2012 deadline.

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set a new deadline of July 31, 2013 for Defendants to complete

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their cleanup and abatement obligations.

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2013 Order Denying Motion for Extension of Time, at 2.

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Plaintiff was entitled under the injunction to recover whatever

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funds remained in the escrow account as of November 2012, it

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agreed to give Defendants continued access to the account until

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the July 2013 deadline to fund their remediation efforts.

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The Court therefore

Docket No. 287, Feb. 1,
Although

Despite this extension, Defendants failed to complete cleanup

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and abatement by July 31, 2013.

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sanctions against them based on their failure to comply with the

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injunction.

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relief, including: (1) recovery of whatever funds remain in the

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escrow account; (2) an order of contempt directing Defendants to

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complete cleanup and abatement and to pay back all of the money

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they withdrew from the escrow account; (3) appointment of a

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special master to oversee Defendants’ ongoing cleanup and

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abatement efforts; and (4) reasonable attorneys’ fees and costs.

Plaintiff moved for contempt

In its motion, Plaintiff requested various forms of

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In December 2013, the Court issued an order resolving some of

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these issues and soliciting further briefing on others.

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Specifically, the Court found that Plaintiff was entitled to its

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reasonable attorneys’ fees and whatever funds remained in the

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escrow account because the injunction expressly provided for this

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relief.

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request for the appointment of a special master until the parties

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each had a chance to nominate specific candidates willing to play

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that role.

The Court deferred judgment, however, on Plaintiff’s

Docket No. 334, Order Setting Hearing on Plaintiff’s

United States District Court
For the Northern District of California

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Motion for Sanctions, at 13-14.

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on Plaintiff’s request for an order of contempt so that Defendants

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could have “one final opportunity to explain why they should not

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be held in contempt.”

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to submit “billing records, contractors’ receipts, and any other

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records documenting their expenditures and progress” in

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implementing their most recent remediation plan.

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hearing was held on these matters on January 23, 2014.

Id. at 11.

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The Court also deferred judgment

The Court directed Defendants

Id. at 12.

A

DISCUSSION
I.

Contempt Sanctions

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A.

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A district court has the inherent authority to enforce

Finding of Civil Contempt

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compliance with its orders through a civil contempt proceeding.

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Int’l Union, UMWA v. Bagwell, 512 U.S. 821, 827–28 (1994).

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standard for finding a party in civil contempt is well settled:

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The moving party has the burden of showing by clear and convincing

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evidence that the [non-moving party] violated a specific and

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definite order of the court.”

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F.3d 1228, 1239 (9th Cir. 1999) (quoting Stone v. City & County of

“The

FTC v. Affordable Media, LLC, 179

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San Francisco, 968 F.2d 850, 856 n.9 (9th Cir. 1992)).

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contempt “need not be willful, and there is no good faith

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exception to the requirement of obedience to a court order.”

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re Dual–Deck Video Cassette Recorder Antitrust Litig., 10 F.3d

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693, 695 (9th Cir. 1993).

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contempt if his action appears to be based on a good faith and

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reasonable interpretation of the court’s order.”

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formatting and quotations omitted).

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with the court order is a defense to civil contempt, and is not

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United States District Court
For the Northern District of California

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vitiated by ‘a few technical violations’ where every reasonable

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effort has been made to comply.”

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Inc. v. Falcon Foam Plastics, Inc., 689 F.2d 885, 891 (9th Cir.

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1982)).

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The

In

“But a person should not be held in

Id. (internal

“‘Substantial compliance’

Id. (citing Vertex Distrib.,

As explained in the December 2013 order, “Plaintiff has

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provided ample evidence here to show that Defendants failed to

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achieve the residential standards required by the [November 2010]

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injunction.”

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that they failed to achieve these standards by the injunction

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deadline nor do they dispute that they still have not achieved

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these standards more than a year later.

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that they have made “significant and substantial efforts and

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progress toward the remediation,” Docket No. 339, Defs.’ Supp.

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Mem., at 3, they have not shown that they made “every reasonable

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effort” to comply with the injunction, Dual–Deck Video, 10 F.3d at

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695.

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contractors’ receipts, and [] other records” documenting their

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progress that they were ordered to submit in the Court’s prior

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order.

Docket No. 334, at 8.

Defendants do not dispute

Although they contend

Defendants failed to submit any of the “billing records,

Docket No. 334, at 12.

Moreover, the evidence that they
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did submit -- namely, declarations from Defendant Dunivan and an

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environmental geologist named Dr. Mansour Sepehr -- focuses

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primarily on the reductions in PCE levels on their own property,

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not Plaintiff’s property.

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contradicts the Court’s earlier finding, in its February 2013

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order,1 that Defendants’ failure to complete timely cleanup and

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abatement was largely a product of their own carelessness and

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neglect.

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Most importantly, none of this evidence

Defendants’ latest excuse for noncompliance, like their prior

United States District Court
For the Northern District of California

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excuses, ignores their own culpability for delays in the

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remediation process.

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most recent remediation plan -- the October 2012 interim remedial

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action plan (IRAP) -- because it did not adequately address the

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groundwater contamination on Plaintiff’s property.

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ignore the fact that it was their own responsibility to develop an

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effective remediation plan with the RWQCB.

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Defendants had any concerns with the October 2012 IRAP, they

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should have resolved these issues more than a year ago rather than

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waiting until after they had missed their second cleanup and

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abatement deadline in July 2013.

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have explained these concerns to the Court in January 2013 when

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they requested additional time to complete cleanup and abatement.

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They did not do so and, in fact, specifically represented to the

Defendants assert that they abandoned their

But they

To the extent

In addition, Defendants should

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1

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See Docket No. 287, Order Denying Defendants’ Motion for an
Extension of Time, at 2 (“Defendants failed to provide mandatory
insurance forms for their contractors, which delayed work on Plaintiff’s
property for several months.”); id. at 3 (“Defendants also ignore the
fact that they failed to commence work on their own property -- to which
they had full and unrestricted access -- for more than a year after the
injunction issued, despite pleas from the Regional Water Board to begin
much sooner.”).

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Court that they were in the process of implementing the October

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2012 IRAP at that time.

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While Defendant Dunivan and Dr. Sepehr both allude in their

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declarations to the recent removal of a significant mass of

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subsurface PCE, both neglect to mention that this PCE was removed

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from Defendants’ property rather than Plaintiff’s property.

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Dunivan Decl. ¶¶ 23-24; Sepehr ¶¶ 22-25.

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removal had occurred on Plaintiff’s property, Defendants have not

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shown that it would have been significant enough to constitute

See

Further, even if this

United States District Court
For the Northern District of California

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“substantial compliance” with the November 2010 injunction.

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Dunivan Decl. ¶ 24 (estimating, without identifying the basis of

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the estimate, that “approximately 20% of the total mass of PCE in

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the subsurface” had been removed).

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failed to show that they substantially complied with the November

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2010 injunction, the Court holds them in contempt.

See

Thus, because Defendants have

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B.

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As explained in the December 2013 order, Plaintiff is

Sanctions

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entitled to recover whatever funds remained in the escrow account

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as of July 31, 2013.

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provides for this relief in the event that Defendants fail to

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complete timely cleanup and abatement.

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however, require that Defendants pay back all of the funds that

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they withdrew from the escrow account.

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seeks this relief as a sanction for civil contempt.

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The November 2010 injunction expressly

The injunction does not,

Accordingly, Plaintiff

Civil contempt sanctions are “characterized by the court’s

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desire to compel obedience to a court order, or to compensate the

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contemnor’s adversary for the injuries which result from the

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noncompliance.”

Falstaff Brewing Corp. v. Miller Brewing Co., 702
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F.2d 770, 778 (9th Cir. 1983) (citations omitted).

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sanctions are typically “designed to compel future compliance with

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a court order” and should be made “avoidable through obedience.”

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Int’l Union, 512 U.S. at 827.

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As such, these

Here, Plaintiff has not explained how an order directing

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Defendants to pay back all of the money they withdrew from the

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escrow account would compel Defendants to complete cleanup and

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abatement in the future.

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has been spent at this point and most of those expenditures were

Only a small portion of the escrow funds

United States District Court
For the Northern District of California

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approved by Plaintiff.

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pay back the spent escrow funds would be punitive rather than

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coercive or compensatory.

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contempt sanctions.

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Thus, any order directing Defendants to

This is not the purpose of civil

That said, the Court has the authority to compel Defendants

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to complete their original cleanup and abatement obligations.

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Int’l Union, 512 U.S. at 827 (recognizing that a court has the

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authority to enforce compliance with its orders).

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therefore ordered to reduce the concentration of PCE in

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Plaintiff’s groundwater, soil, and soil vapor to the residential

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standards set forth in the November 2010 injunction.

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to achieve these standards, Defendants must comply with any

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applicable rules or orders issued by the RWQCB.

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failure to satisfy their cleanup and abatement obligations or to

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comply timely with any RWQCB rules or orders will be considered

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further contempt of court and result in further sanctions.

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II.

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Defendants are

In seeking

Defendants’

Appointment of a Special Master
On January 8, 2014, Plaintiff withdrew its request for the

appointment of a special master, stating that “on reflection, it
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appears near certain that the appointment of a Special Master to

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oversee any work by Defendant is unlikely in itself to achieve

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compliance with the Injunction Order.”

Docket No. 346, Withdrawal

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of Request for Special Master, at 1-2.

In light of Plaintiff’s

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withdrawal of its request and both parties’ failure to identify

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any candidates willing to serve as special master, the Court shall

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not appoint a special master at this time.

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III. Attorneys’ Fees and Costs

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As explained in the December 2013 order, Defendants must

United States District Court
For the Northern District of California

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compensate Plaintiff for its reasonable attorneys’ fees and costs

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expended in responding to Defendants’ various motions to delay

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enforcement of the injunction over the past fourteen months.

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Specifically, “Plaintiff is entitled to recover its reasonable

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attorneys’ fees and costs expended in opposing (1) Defendants’

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motion for an extension of time to complete cleanup and abatement,

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Docket No. 279; (2) Dunivan’s motion to enforce the settlement

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agreement, Docket No. 288; (3) Dunivan’s motion for

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reconsideration, Docket No. 297; (4) Dunivan’s motion for an

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additional extension of time, Docket No. 304; and (5) Dunivan’s

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motion to vacate the injunction, Docket No. 321.”

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at 13.

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records and hourly rates with its original motion for contempt

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sanctions, the Court directed Plaintiff to submit these documents

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in a supplemental brief.

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brief, styled as a new motion for attorneys’ fees, in December

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2013.

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spent $99,551.83 in attorneys’ fees and costs in responding to the

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motions identified in the Court’s prior order.

Docket No. 334,

Because Plaintiff failed to submit its attorneys’ billing

Docket No. 336.

Plaintiff submitted its supplemental

In its motion, Plaintiff claims that it

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Defendants object to this request on several grounds.

They

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contend that Plaintiff’s counsel charged unreasonable hourly

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rates, failed to keep accurate billing records, and billed time

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for two motions which Plaintiff never opposed.

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objections is discussed separately below.

Each of these

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A.

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Plaintiff has submitted a declaration from the manager of

Hourly Rates

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Walnut Creek Manor, Milt Eberle, stating that he reviewed all of

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Plaintiff’s counsel’s invoices and believes that the hourly rates

United States District Court
For the Northern District of California

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charged in those invoices are reasonable.

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In addition, Plaintiff has submitted a declaration from Richard

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Pearl, an expert on local attorneys’ rates and fees, asserting

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that the rates charged by Plaintiff’s counsel are within the

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normal range charged by attorneys in environmental disputes such

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as this one.

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declaration compares Plaintiff’s counsel’s rates to rates that

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have been documented in attorney surveys and rates that have been

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upheld as reasonable by other courts.

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these metrics, the rates charged by Plaintiff’s counsel are

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reasonable.

Eberle Decl. ¶¶ 2-5.

Docket No. 347-1, Pearl Decl. ¶¶ 7-10.

Id. ¶¶ 11-13.

Pearl’s

By all of

Id.

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B.

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Defendants object to several specific billing entries as

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duplicative, unrelated to the relevant motions, or lacking in

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specificity.

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Defendants, the Court finds that all but two are non-

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objectionable.

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entries for December 4, 2012 (Invoice #1826939) and December 11,

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2012 (Invoice #1826939), both of which employ block-billing and

Specific Billing Entries

After reviewing the entries identified by

The two problematic entries are Brian Kelly’s

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1

appear to exceed the number of hours that should have been logged

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for the tasks identified.

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6.80 hours on activities that should have taken less time and

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should have been billed separately, including multiple conferences

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with co-counsel, reviewing work product, and communicating with

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client representatives.

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$4,488 for these services, or fifty percent of the $8,976 that

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Plaintiff’s counsel originally billed for this time.

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v. Cnty. of San Bernardino, 540 F.3d 1109, 1129 (9th Cir. 2008)

Each entry states that Mr. Kelly spent

The Court shall therefore award Plaintiff

See Mendez

United States District Court
For the Northern District of California

10

(stating that block-billing and excessive billing “are legitimate

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grounds for reducing or eliminating certain claimed hours, but not

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for denying all fees”).

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C.

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Plaintiff requests a total of $12,828 for fees expended in

Time Logged for Two Unopposed Motions

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responding to Dunivan’s motion to enforce the settlement

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agreement, Docket No. 288, and his subsequent motion for

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reconsideration, Docket No. 297.

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amount is excessive because Plaintiff never filed an opposition to

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either of these motions.

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Defendants contend that this

Plaintiff’s failure to file an opposition to either of these

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motions justifies reducing, but not eliminating, the fees it has

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requested regarding these motions.

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declined to file an opposition to either of Dunivan’s motions,

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Plaintiff’s counsel may nevertheless be compensated for the time

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they spent reviewing the motions, discussing them with their

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client, and considering whether or not to respond.

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should have consumed no more than six hours of counsel’s time.

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Accordingly, the fees awarded for these tasks shall be reduced to
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Even if Plaintiff ultimately

These tasks

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$3240.

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hours each on these tasks.

This figure assumes that Plaintiff’s attorneys spent three

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D.

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Based on the above reductions in Plaintiff’s requested fee

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Final Award of Attorneys’ Fees

award, Plaintiff is entitled to $85,105.83 in attorneys’ fees.

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2

CONCLUSION
For the reasons set forth above, Plaintiff’s motion for

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contempt sanctions (Docket No. 305) is GRANTED.

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holds Defendants in contempt for failing to comply with the

The Court hereby

United States District Court
For the Northern District of California

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November 2010 injunction and the February 2013 order denying their

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request for an extension of time.

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release all remaining escrow funds to Plaintiff immediately.

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Further, they must complete remediation of the PCE contamination

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on Plaintiff’s property, as set forth in the November 2010

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injunction, within six months of this order.

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will be considered further contempt and result in coercive

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sanctions.

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with this order, Defendants must comply timely with all orders of

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the RWQCB.

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Defendants are directed to

Failure to do so

In completing the cleanup and abatement in accordance

In addition, Plaintiff’s motion for attorneys’ fees (Docket

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No. 336) is GRANTED.

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$85,105.83 for its reasonable attorneys’ fees and costs.

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Defendants shall immediately pay Plaintiff

IT IS SO ORDERED.

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Dated:

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2/12/2014

CLAUDIA WILKEN
United States District Judge

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2

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The Court has reduced Plaintiff’s requested fee award of
$99,551.83 by a total of $14,446.

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