Memoryten, Inc. v. LV Administrative Services, Inc. et al

Filing 136

ORDER The Motion for Attorneys Fees Doc. # 122 is GRANTED; The LV Defendants are awarded their reasonable expenses in connection with their Motion to Compel and the Renewed Motion for Sanctions in the amount of $10,949.00; The award is made solely against the plaintiff, MemoryTen, and not against its counsel; and The plaintiff shall satisfy the award in full on or before April 5, 2013, by Magistrate Judge Boyd N. Boland on 3/19/2013.(ervsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Boyd N. Boland
Civil Action No. 12-cv-00993-WJM-BNB
MEMORYTEN, INC., a California corporation,
Plaintiff,
v.
LV ADMINISTRATIVE SERVICES, INC., a Delaware corporation;
LAURUS MASTER FUND, LTD., a Cayman Islands corporation;
LAURUS CAPITAL MANAGEMENT, LLC, a Delaware limited liability company;
VALENS CAPITAL MANAGEMENT, LLC, a New York limited liability company;
VALENS INVESTMENT ADVISORS, L.P., a Delaware limited partnership;
WAY TECH, LLC, a Missouri limited liability company;
SILICON MOUNTAIN HOLDINGS, INC., a Colorado corporation; and
SILICON MOUNTAIN MEMORY,
Defendants.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This matter arises on the LV Defendants’ Notice of Filing of Fee Application [Doc. #
122, filed 2/26/2013](the “Motion for Attorneys Fees”), to which the plaintiff has responded.
Response [Doc. # 127, filed 3/11/2013]. The Motion for Attorneys Fees is GRANTED, and the
LV Defendants are awarded reasonable expenses in the amount of $10,949.00.
This action involves claims surrounding a Subscription Agreement. The plaintiff asserts
claims against the LV Defendants for breach of the Subscription Agreement; unfair competition;
unjust enrichment; and a declaration that the LV Defendants have “waived their rights to obtain
and acquire collateral” pursuant to certain loan documents. Second Amended Complaint [Doc. #
125]. The LV Defendants have counterclaimed for abuse of process; fraud; breach of fiduciary
duty; and violation of the Colorado Uniform Fraudulent Transfer Act. First Amended

Counterclaims [Doc. # 135].
On November 24, 2012, I entered an Order [Doc. # 74] (the “First Order”) compelling
the plaintiff to produce documents responsive to the LV Defendants’ First Set of Written
Discovery. In doing so, I found:
The plaintiff and Mr. Olsen have failed to meet even the most
basic obligations in responding to the LV Defendants’ First Set of
Written Discovery. No reasonable inquiry or search for responsive
documents was conducted and obviously responsive documents
were not produced.
First Order [Doc. # 74] at p. 1. All responsive documents were required to be produced to the
LV Defendants on or before December 3, 2012. Id. at pp. 1-2.
I denied without prejudice the LV Defendants’ request for reasonable expenses incurred
in bringing their motion to compel, noting that it “may be renewed, if necessary, after the
plaintiff’s compliance with the requirements of this Order and in view of any additional expenses
which the LV Defendants may incur in curing the plaintiff’s failure to comply with its discovery
obligations.” Id. at p. 2.
Notwithstanding the requirements of my First Order, the plaintiff did not produce
responsive documents until December 18, 2013, and then only after the LV Defendants filed
their Renewed Motion for Sanctions [Doc. # 114].
In my Order [Doc. # 114] (the “Second Order”) addressing the Renewed Motion for
Sanctions, I ruled:
Rule 37(a)(5)(A), Fed. R. Civ. P., provides that if a motion to
compel discovery is granted--or the discovery is produced after the
motion to compel was filed--“the court must, after giving an
opportunity to be heard, require the party . . . whose conduct
necessitated the motion . . . to pay the movant’s reasonable
expenses incurred in making the motion, including attorney’s
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fees,” unless the motion to compel was brought without first
attempting in good faith to resolve the dispute, the opposing
party’s conduct was substantially justified, or the award of
expenses would be unjust. Here, I find that the motion to compel
was granted and, even in the face of my order compelling
discovery, the LV Defendants still had to bring the Motion for
Sanctions before many responsive documents were produced. The
LV Defendants attempted in good faith but without success to
resolve the discovery dispute without judicial involvement.
MemoryTen’s improper failure to comply with its discovery
obligations was not substantially justified. And the award of
reasonable expenses against MemoryTen would not be unjust.
Second Order [Doc. # 114]. I ordered the parties to attempt to reach agreement on the amount of
expenses to be awarded. They could not agree, and the LV Defendants brought this Motion for
Attorneys Fees as allowed under the Second Order. Id. at p. 6.
The Motion for Attorneys Fees [Doc. # 122] is supported by the Affidavit of Peter G.
Koclanes [Doc. # 155-1] (the “Koclanes Aff.”), which includes a detailed description of the
services rendered, the amount of time spent, the hourly rate, the total amount claimed, and
plaintiffs’ counsel’s qualifications and experience, all as required by D.C.COLO.LCivR 54.3.
In calculating a reasonable attorney’s 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 reasonably hourly rate.”
Id.(internal quotations and citation omitted).
1.

Reasonable Time Expended
The first step in calculating a fee award is to determine the number of hours reasonably

spent by counsel for the party seeking the fees. The burden of proof lies with the prevailing

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party seeking fees. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983).1
The Koclanes Affidavit includes itemized time entries of the tasks performed and the
time required for those tasks. The itemization reflects that fees are claimed for three
timekeepers, as follows:
Peter Koclanes (member of the firm):

14.4 hours

Lynda Atkins (associate):

12.7 hours

Caley Dias (paralegal):

2.4 hours.

The plaintiff disputes the reasonableness of the time claimed.
I have reviewed the time records for the LV Defendants’ counsel and find that the time
claimed was reasonable and necessarily expended to obtain the discovery orders and the
production of documents from the plaintiff. In addition, the work was appropriately divided
between Mr. Koclanes and Ms. Atkins based on their varying levels of experience. I will award
the entire 29.5 hours claimed.
2.

Reasonable Hourly Rate
The LV Defendants claim attorney fees at rates of $465 and $495 per hour for Mr.

Koclanes; $275 per hour for Ms. Atkins; and $145 per hour for Ms. Dias.
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 trial court may use its own

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As the Supreme Court instructed in Fox v. Vice, 131 S. Ct. 2205, 2216 (2011), “trial
courts need not, and indeed should not become green-eyeshade accountants” when determining a
fee application. “The essential goal in shifting fees (to either party) is to do rough justice, not to
achieve auditing perfection.” Id.
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knowledge in determining a reasonable rate. Id. at 1079. See Praseuth v. Rubbermaid, Inc., 406
F.3d 1245, 1259 (10th Cir. 2005)(approving the district court’s determination of the applicable
hourly rate by “relying on its knowledge of rates of lawyers with comparable skill and
experience” practicing in the relevant market).
The plaintiff argues that “Mr. Koclanes’ hourly rate . . . is well above the prevailing
market rates charged by lawyers of equivalent experience in the metropolitan Denver market.”
Response [Doc. # 127] at p. 3. It is not.
Mr. Koclanes is a 1987 graduate of the George Washington University School of Law.
He has more than 25 years experience in complex commercial litigation, including securities
fraud, business torts, corporate governance disputes, and the like. I find that rates ranging from
$465 to $495 for a lawyer of Mr. Koclanes’ skill and experience are reasonable in this market
and in a case of this nature.
Ms. Atkins is a 2007 graduate of the University of Denver Sturm College of Law. She
has more than five years of experience. A billing rate of $275 per hour is reasonable in this
market given her skill and experience.
A rate of $145 per hour for paralegal assistance is common and reasonable in this market.
Multiplying the number of hours reasonably incurred by the reasonable hourly rates
charged by the LV Defendants’ counsel results in an award of fees of $10,758.50.
In addition, the LV Defendants are awarded costs incurred in bringing their discovery
motions of $190.50, expended to obtain a transcript of the hearing which resulted in the First
Order.
I award the LV Defendants their reasonable expenses in bringing the Motion to Compel

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and the Renewed Motion for Sanctions in the amount of $10,949.00, which are reasonable and
were necessarily incurred.
IT IS ORDERED:
(1)

The Motion for Attorneys Fees [Doc. # 122] is GRANTED;

(2)

The LV Defendants are awarded their reasonable expenses in connection with

their Motion to Compel and the Renewed Motion for Sanctions in the amount of $10,949.00;
(3)

The award is made solely against the plaintiff, MemoryTen, and not against its

counsel; and
(4)

The plaintiff shall satisfy the award in full on or before April 5, 2013.

Dated March 19, 2013.
BY THE COURT:
s/ Boyd N. Boland
United States Magistrate Judge

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