Kirzhner v. Silverstein et al

Filing 306

ORDER denying 172 Plaintiff's First Fee Application; granting 173 Plaintiff's Second Fee Application; denying 174 Plaintiffs Third Fee Application; granting 184 Plaintiffs Fourth Fee Application, by Magistrate Judge Boyd N. Boland on 1/17/12.(lsw, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Boyd N. Boland
Civil Action No. 09-cv-02858-RBJ-BNB
ILONA KIRZHNER,
Plaintiff,
v.
DAVID SILVERSTEIN,
EVERGREEN INDUSTRIES, INC., a Colorado corporation, f/k/a Breakthrough Management
Group International, Inc., f/k/a Breakthrough Management Group, Inc.,
DAVID SILVERSTEIN INVESTMENTS, LLC, a Colorado limited liability company,
DSI INVESTMENTS, LLC, a Colorado limited liability company,
BMGI CORPORATION, a Delaware corporation, and
BMGI HOLDINGS, LLC, a Delaware limited liability company,
Defendants.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This matter arises on the following:
(1)

Plaintiff’s Application for Fees Incurred Regarding Response to BMGI,

Inc.’s Motion to Compel Production of Documents Responsive to Subpoena Or, In the
Alternative, For In Camera Review [Doc. # 172, filed 4/12/2011] (“Plaintiff’s First Fee
Application”);
(2)

Plaintiff’s Application for Fees Incurred Regarding Response to Motion for

In Camera Review and to Compel Production of Documents Produced as KIRZ 151-160
[Doc. # 173, filed 4/12/2011] (“Plaintiff’s Second Fee Application”);
(3)

Plaintiff’s Application for Fees Incurred Regarding Defendant BMGI, Inc.’s

Motion to Compel Concerning Schafer Subpoena [Doc. # 174, filed 4/12/2011] (“Plaintiff’s

Third Fee Application”); and
(4)

Plaintiff’s Application for Fees Incurred Regarding Motion for Protective

Order Concerning Sweetbaum, Levin & Sands Subpoena [Doc. # 184, filed 4/27/2011]
(“Plaintiff’s Fourth Fee Application”).
The defendants filed a Joint Response to Fee Applications Submitted In Connection With
Court’s Order Dated March 5, 2011 [Doc. # 203, filed 5/10/2011] (the “Response”).
This case has been marred by the acrimonious conduct of counsel.1 As an initial response
to my growing concern that counsel were engaging in unnecessary and abusive conduct, at the
conclusion of a hearing on November 18, 2010, I admonished the lawyers as follows:
There also appears to be--and it’s been apparent to me before in
this case--a failure of the lawyers to assume their truly professional
position of being intermediaries and that carries with it an
obligation to remain in some ways above the fray, while at the
same time zealously representing your client. I expect you to show
respect to one another. I expect that not because of who the other
people are but because of who you are.
Transcript of Proceedings 11/18/2010 [Doc. # 111] at p. 47 lines 14-24. Subsequently, following
a hearing on December 16, 2010, I reiterated my warning:
I am persuaded that Mr. Riggs [counsel for a non-party witness] is
right, the center of gravity of this case has moved away from the
merits, and I warn counsel that I lack tolerance for that. And
because that has occurred, I will require that the resumed
deposition of Mr. Schafer occur in my jury room at a time when I
am immediately available to address any issues.
Transcript of Proceedings 12/16/2010 [Doc. # 118] at p. 58 lines 11-16.

1

In a recent order by the district judge, he noted that “the acrimony and incivility between
counsel has been a continual blight on what should have been a zealously contested but
professionally litigated case.” Order [Doc. # 305, filed 1/12/2012] at p. 7.
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Finally, on April 1, 2011, I held a hearing on the following discovery-related motions:
(1) Plaintiff’s Motion for Protective Order Concerning Subpoena to Plaintiff’s Counsel [Doc. #
135] (“Plaintiff’s Motion for Protective Order”); (2) Plaintiff’s Motion to Compel Relevant
Financial Documents [Doc. # 136] (“Plaintiff’s Motion to Compel”); (3) BMGI’s Motion to
Compel Production of Documents Responsive to Subpoena Or, In the Alternative, For In Camera
Review [Doc. # 143] (“BMGI’s Motion to Compel”); (4) Defendants’ Joint Motion for In
Camera Review and to Compel Production of Documents Produced As Kirz 151-160 [Doc. #
151] (“Defendants’ Motion to Compel”); and (5) Defendants’ Joint Motion for Designation of
Confidential Restricted Information Pursuant to Protective Order [Doc. # 154] (“Defendants’
Motion for Designation”).
Plaintiff’s Motion for Protective Order [Doc. # 135]
At the April 1 hearing, I granted Plaintiff’s Motion for Protective Order [Doc. # 135],
finding that the subpoena issued by defense counsel was “most unusual” and “highly
disfavored.” I stated:
Here, I find that this was an improper use of the subpoena power in
derogation of the general practice of discovery in a manner
intended and which actually has [] harassed counsel and plaintiff.
* * *
A response to this subpoena and the preparation of a privilege log
by trial counsel would be an enormous and an unnecessary. . .
undertaking and one which I think would find its root in
harassment.
Transcript of Proceedings 4/1/2011 [Doc. # 176] at p. 13 line 16 through p. 14 line 3. The
district judge affirmed my ruling, stating that “[g]iven the minimal showing, essentially little
more than a fishing expedition, and the context of discovery of an opposing trial counsel’s files, I
am not persuaded that even an in camera review of plaintiff’s trial counsel’s files was called
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for.” Order [Doc. # 305] at pp. 6-7.

Plaintiff’s Motion to Compel [Doc. # 136]
On April 1, I denied Plaintiff’s Motion to Compel [Doc. # 136], finding that the
requested production had not been sought through a formal discovery request; the plaintiff was
asking me to enforce a private agreement to produce documents; and it was unreasonable in the
context of this case, where the lawyers had conducted themselves with so much acrimony, for
the plaintiff’s lawyer to rely on a private agreement with defense counsel rather than to proceed
formally by the Federal Rules of Civil Procedure. The district judge upheld my ruling, stating:
In my review of the transcript I did not find an indication that
defendants denied that they had agreed to produce the disputed
records. . . .
The magistrate [judge] implicitly found that it was naive for
plaintiff’s counsel to think that, given the acrimonious history of
this case, he could resolve matters of this nature informally. He
was not willing to permit plaintiff to bypass formal discovery
procedures before entertaining a motion to compel. However, in
the circumstances, he found that it would be unjust to award fees.
I do not doubt that his decision was influenced by his overall
assessment of the conduct of defense counsel. . . . This Court
concludes that that finding was not clearly erroneous.
Order [Doc. # 305] at pp. 8-9.
BMGI’s Motion to Compel [Doc. # 143]
On April 1, I also denied defendant BMGI’s Motion to Compel [Doc. # 143]. I found
that no in camera review was necessary, stating:
[W]ith respect to the documents in general, a person asserting the
attorney-client privilege or the work product immunity must assert
it promptly and specifically, and establish its applicability in the
federal system under the Peat, Marwick, Mitchell case. That
normally is accomplished by a detailed privilege log which
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identifies the document, its nature, its author, its recipients, . . . its
dates, its general topic without disclosing the substance which is
privileged, and the privilege asserted. That ordinarily is sufficient
to establish the privilege absent something extraordinary [and]
which otherwise causes doubt.
I find that the amended privilege log which is--has been provided
by Mr. Schafer and his firm meets the requirements of the Peat,
Marwick, Mitchell case and adequately establishes the existence of
the applicable privilege.
Transcript of Proceedings 4/1/2011 [Doc. # 176] at p. 67 line 21 through p. 68 line 8. As to a
portion of this ruling, the district judge sustained BMGI’s objection to my order, finding:
The rest of defendants’ argument amounts to counsel’s implied
suggestion that plaintiff’s counsel’s determination of what portions
of documents should be redacted based upon a claim of privilege
cannot be trusted, and therefore, that the magistrate judge should
have reviewed the redactions in camera. A mere suspicion is not
enough, or judges would have to, if asked, examine in camera
every document ever withheld on privilege grounds. Here, two
different lawyers described the lengthy and expensive process that
they undertook to screen documents for privilege and to prepare a
privilege log. . . . Ordinarily that would and should be enough.
However, plaintiff’s counsel acknowledged that at least some of
the redaction was done by Mr. Schafer. . . . I am certainly not
prepared to assume that Mr. Schafer’s review was conducted in
bad faith. My assumption is the opposite. I note as well, . . . that
when the magistrate judge did, at defendants’ urging, review in
camera a redacted witness statement, he found that the redactions
were precisely as described by plaintiff’s counsel and were entirely
appropriate. Nevertheless, there is at least some evidence in the
file that Mr. Schafer misrepresented himself in his conversation
with Mr. Silverstein at the September 2004 purported auction. In
that circumstance, I reluctantly find that it was clearly erroneous
not to have accepted plaintiff’s offer to review the documents
redacted by Mr. Schafer and the corresponding originals in
camera, and I remand the case to the magistrate judge to conduct
that specific in camera review.
Order [Doc. # 305] at pp. 10-11.

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Defendants’ Motion to Compel [Doc. # 151]
At the April 1 hearing, I reviewed in camera one document and found that it was
precisely as represented by plaintiff’s counsel. Order [Doc. # 164] at p. 14. Based on that, I
denied that remainder of Defendants’ Motion to Compel [Doc. # 151]. In my oral ruling, I
stated:
To the extent that I reviewed the Menghenie witness statement, the
motion for in-camera review is granted. The remainder of the
motion is denied.
* * *
I don’t feel the need on the representation of Mr. DeVine, which
we ordinarily find sufficient and rely on and on no greater showing
than has been made here, to review the remainder of the
documents and, particularly, given the clarity of the Menghenie
statement, and what was redacted being obviously and clearly
within the scope of the work product [immunity] or [an] attorneyclient communication.
Transcript of Proceedings 4/1/2011 [Doc. # 176] at p. 88 line 25 through p. 89 line 18. The
district judge affirmed my ruling, stating that he was “surprised that defendants have included
this issue in their objection” and that their arguments amounted to “little more than a bald
suspicion that plaintiff’s lawyers (not even involving Mr. Schafer in this instance) are
untrustworthy.” Order [Doc. # 305] at p. 11.
Defendants’ Motion for Designation [Doc. # 154]
Finally, on April 1 I denied the Defendants’ Motion for Designation [Doc. # 154] finding
that the evidence offered in support of the defendants’ designation of the information as
requiring a limitation to review by attorneys only was purely conclusory and insufficient.
Transcript of Proceedings 4/1/2011 [Doc. # 176] at p. 108 line 4 through p. 109 line 2. The
district judge sustained my ruling. Order [Doc. # 305] at pp. 12-13.

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Award of Attorneys Fees
At the conclusion of the April 1 hearing, I awarded the plaintiff her attorneys fees, as
follows:
The flurry of motions, discovery-related motions which brought us
all here today, I think shows a continued tendency of the lawyers,
and particularly the lawyers for the defense, to take on the causes
of their clients personally, and not to act in a professional way as
an intermediary and to properly and critically analyze motions and
positions before taking those positions and ultimately bringing
motions.
* * *
With a single exception, that being the plaintiff’s motion to compel
compliance with a voluntary agreement, I have ruled consistently
against the defendants. And in two instances I have found that the
defendants’ conduct either appears to be vexatious and harassing
or is obviously and clearly wrong.
Based upon that I will award the defendants and Mr. Schafer their
costs and attorney’s fees in bringing and defending these motions,
except for the plaintiff’s attorney’s fees in connection with the
motion to compel compliance with the voluntary agreement. In
doing that, I find that the defendants’ positions were not
substantially justified and there’s no reason an award of expenses
is unjust. I find that there has been adequate compliance with the
rule requiring a meet-and-confer, so I’m going to award those fees.
There are more motions, or at least another motion pending. There
are threats of still other motions to be brought. In 11 years time
this is the worst I’ve seen. You have filed motion, after motion,
after motion or required the filing of motion, after motion, after
motion. You have failed to act as professionals and intermediaries
and, instead, have taken the cause up as if it were your own. . . .
So, while I think that up until now the defendants have been
engaged on several occasions, and particularly in connection with
these motions, in abusive conduct it won’t be tolerated any further.
I will look at motions . . . by the defendants, and motions which
the defendants’ conduct requires, with an especially careful eye
[perceiving] now that the defendants are, in fact, engaged in
abusive discovery and litigation conduct. So, exercise especially
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acute . . . professional judgment as you go forward.
Transcript of Proceedings 4/1/2011 [Doc. # 176] at p. 110 line 7 through p.112 line 20.
Subsequently, in my written Order [Doc. # 164], I found that the award of attorneys fees
in connection with BMGI’s Motion to Compel [Doc. # 143] and Defendants’ Motion to Compel
[Doc. # 151] was improper because the defendants had not been afforded an opportunity to
respond to the request for fees. In addition, I found that the plaintiff had not sought an award of
fees in connection with resisting Defendants’ Motion for Designation [Doc. # 154]. I withdrew
so much of my oral ruling as awarded fees in connection with those motions and allowed the
plaintiff and Mr. Schafer to file fee applications in connection with BMGI’s Motion to Compel
[Doc. # 143] and Defendants’ Motion to Compel [Doc. # 151] if they wanted to persist in their
request for fees.
Plaintiff’s First Fee Application [Doc. # 172] and
Plaintiff’s Third Fee Application [Doc. # 174]
Plaintiff’s First Fee Application [Doc. # 172] seeks an award of attorneys fees in
connection with fees incurred by plaintiff’s trial counsel (Sweetbaum, Levin & Sands, P.C.) in
responding to BMGI’s Motion to Compel [Doc. # 143]. Plaintiff’s Third Fee Application [Doc.
# 174] seeks the attorneys fees incurred by plaintiff’s non-litigation counsel (Schafer Thomas,
P.C.) in responding to BMGI’s Motion to Compel.
In connection with BMGI’s Motion to Compel [Doc. # 143], I refused to conduct an in
camera review of documents withheld or redacted by plaintiff’s counsel, including Timothy J.
Schafer and Schafer Thomas, P.C. The district judge has sustained BMGI’s objection to a
substantial portion of my ruling and determined that it was clearly erroneous. Order [Doc. #
305] at pp. 10-11. Under these circumstances, an award fees to the plaintiff in connection with
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her opposition to BMGI’s Motion to Compel would be unjust. Plaintiff’s First Fee Application
[Doc. # 172] and Plaintiff’s Third Fee Application [Doc. # 174] are DENIED.
Plaintiff’s Second Fee Application [Doc. # 173]
Plaintiff’s Second Fee Application [Doc. # 173] seeks an award of attorneys fees in
connection with her opposition to Defendants’ Motion to Compel [Doc. # 151], which sought an
order compelling production of the unredacted witness interviews prepared by the plaintiff’s trial
counsel. After reviewing one document in camera, I denied Defendants’ Motion to Compel,
finding that the plaintiff’s redactions were exactly as represented by the plaintiff and were
composed entirely of plaintiff’s counsel’s attorney opinion work product. Order [Doc. # 164] at
p. 14.
As the district judge has ruled in rejecting the defendants’ objection to my order denying
Defendants’ Motion to Compel [Doc. # 151], their arguments amounted to “little more than a
bald suspicion that plaintiff’s lawyers . . . are untrustworthy.” Order [Doc. # 305] at p. 11.
The plaintiff prevailed in opposing the Defendants’ Motion to Compel [Doc. # 151].
Pursuant to Rule 37(a)(5)(B), Fed. R. Civ. P., I “must, after giving an opportunity to be heard,
require the movant, the attorney filing the motion, or both to pay the party or deponent who
opposed the motion its reasonable expenses incurred in opposing the motion, including
attorney’s fees,” unless I find that the motion was “substantially justified or other circumstances
make an award of expenses unjust.”
I have found that defense counsel was engaged in abusive discovery and litigation
conduct in connection with the motions addressed at the April 1 hearing. Transcript of
Proceedings 4/1/2011 [Doc. # 176] at p. 110 line 7 through p. 112 line 20. Nothing contained in

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Defendants’ Joint Response [Doc. # 203] persuades me to the contrary. The plaintiff is entitled
to an award of her fees and costs incurred in defending against Defendants’ Motion to Compel
[Doc. # 151].
Plaintiff’s Second Fee Application [Doc. # 173] is supported by the affidavit of plaintiff’s
counsel, Thomas L. DeVine, Jr., and includes a detailed description of the services rendered,
amount of time spent, hourly rate charged, total amount claimed, and Mr. DeVine’s
qualifications and experience, all as required by D.C.COLO.LCivR 54.3
In calculating a reasonable attorneys fee, I apply the lodestar principles stated in
Robinson v. City of Edmond, 160 F.3d 1275, 1281 (10th Cir. 1998). “The lodestar calculation is
the product of the number of attorney hours reasonably expended and a reasonable hourly rate.”
Id. (internal quotations and citation omitted).
I find that the number of hours claimed (13.46) are reasonable and were necessarily
expended in connection with responding to Defendants’ Motion to Compel [Doc. # 151].
Mr. DeVine claims an hourly rate of $205.00. The plaintiff bears the burden of
establishing that the rate is reasonable. Guides, Ltd. v. Yarmouth Group Property Mgmt., Inc.,
295 F.3d 1065, 1078 (10th Cir. 2002). “A reasonable rate is the prevailing market rate in the
relevant community.” Id. A court may use its own knowledge of the prevailing market rate to
determine whether the claimed rate is reasonable. Id. at 1079; Praseuth v. Rubbermaid, Inc., 406
F.3d 1245, 1259 (10th Cir. 2005).
Mr. DeVine has been licensed to practice law in Colorado since October 2004, and his
practice includes general civil litigation. I have observed Mr. DeVine in court in connection
with his representation of the plaintiff in this case. In addition, I am familiar with the rates

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charged by lawyers in the metropolitan Denver area. In my experience, the rate charged by Mr.
DeVine is consistent with or below the rates charged by lawyers with comparable skill and
experience practicing in this market, and is reasonable.
The plaintiff does not request a lodestar adjustment, and I am aware of no reason to make
such an adjustment.
Multiplying the number of hours reasonably incurred to resist Defendants’ Motion to
Compel [Doc. # 151] by the reasonable hourly rate charged by Mr. DeVine results in the
following calculation:
13.46 hours x $205.00 per hour = $2,759.30.
I find that a fee of $2,759.30, the amount claimed by the plaintiff, is reasonable and
appropriate. Because I have found that defense counsel was engaged in abusive discovery and
litigation conduct in connection with the motions addressed at the April 1 hearing, the award is
made against defendants’ counsel and not defendants.
Plaintiff’s Fourth Fee Application [Doc. # 184]
Plaintiff’s Fourth Fee Application [Doc. # 184] seeks an award of attorneys fees in
connection with Plaintiff’s Motion for Protective Order [Doc. # 135].
I have found that the plaintiff is entitled to an award of attorneys fees in connection with
her Motion for Protective Order [Doc. # 135]. Order [Doc. # 164] at pp.15-16. See Fed. R. Civ.
P. 26(c)(3) (allowing the award of attorneys fees to the prevailing party in connection with a
disputed motion for protective order). The district judge affirmed that determination. Order
[Doc. # 305] at p. 7. Only the amount of the award remains to be determined.
Plaintiff’s Fourth Fee Application [Doc. # 184] is supported by the affidavit of Mr.

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DeVine and includes all of the information required by D.C.COLO.LCivR 54.3.
The plaintiff makes a claim for 8.86 hours in connection with making her Motion for
Protective Order, which I find was reasonably and necessarily expended. Mr. DeVine’s hourly
rate of $205.00 is reasonable.
The plaintiff does not request a lodestar adjustment, and I am aware of no reason to make
such an adjustment.
Multiplying the number of hours reasonably incurred in connection with Plaintiff’s
Motion for Protective Order [Doc. # 135] by the reasonable hourly rate charged by Mr. DeVine
results in the following calculation:
8.86 hours x $205.00 per hour = $1,816.30.
I find that a fee of $1,816.30, the amount claimed by the plaintiff, is reasonable and
appropriate. The award is made against defendants’ counsel and not defendants.
IT IS ORDERED:
(1)

Plaintiff’s First Fee Application [Doc. # 172] DENIED;

(2)

Plaintiff’s Second Fee Application [Doc. # 173] is GRANTED in the amount of

$2,759.30;
(3)

Plaintiff’s Third Fee Application [Doc. # 174] is DENIED;

(4)

Plaintiff’s Fourth Fee Application [Doc. # 184] is GRANTED in the amount of

$1,816.30; and
(5)

Total fees and costs in the amount of $4,575.60 are awarded in favor of the

plaintiff and against defense counsel. Defense counsel shall tender payment of the fee award to
plaintiff’s counsel no later than January 31, 2012.

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Dated January 17, 2012.
BY THE COURT:
s/ Boyd N. Boland
United States Magistrate Judge

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