Wyles v. Aluminaid International, A.G. et al

Filing 33

ORDER granting in part and denying in part 19 Motion for Attorney Fees, by Judge Christine M. Arguello on 1/25/2016.(vbarn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 15-cv-00393-CMA-KMT
TERRENCE M. WYLES,
Plaintiff,
v.
ALUMINAID INTERNATIONAL, A.G.,
WEST HILLS RESEARCH & DEVELOPMENT, INC., formerly known as Aluminaid, Inc.,
ALUMINAID PTE, LTD., a/k/a Advanced First Aid Research PTE Limited,
ZUPERFOODS, INC.,
CARL J. FREER,
ERICKA FREER, a/k/a Ericka Lapresle,
JAMES HUNT,
ALLEN Z. SUSSMAN,
LOEB & LOEB LLP,
ADAM FREER, a/k/a Adam Agerstam,
JULIA FREER, a/k/a Julia Agerstam,
DAVID WARNOCK,
ALEX ARENDT,
Defendants.
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS’ MOTION FOR ATTORNEY FEES
This matter is before the Court on Defendants Allen Z. Sussman and Loeb &
Loeb, LLP’s (collectively, “the Loeb Defendants”) Motion for Attorney Fees. (Doc. # 19.)
Because the Court finds that the Loeb Defendants are entitled to attorney fees under
Colo. Rev. Stat. § 13-17-201 (2015), but that the requested award must be reduced, the
Court grants in part and denies in part the Loeb Defendants’ motion.

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I. BACKGROUND
The factual and procedural history of this case is fully set forth in the Court’s
Order granting the Loeb Defendants’ Motion to Dismiss. (Doc. # 17.) In that Order,
entered on June 30, 2015, the Court dismissed Plaintiff Terrence M. Wyles’ complaint
under Fed. R. Civ. P. 12(b)(6) on the grounds of claim-splitting and res judicata because
Mr. Wyles had previously filed a nearly identical complaint involving the same causes of
action and defendants in State Court. (Id. at 5.) On July 1, 2015, the Court entered
judgment against Mr. Wyles and granted costs to Defendants. (Doc. # 18.)
On July 13, 2015, the Loeb Defendants filed the instant motion, requesting
attorney fees under Colo. Rev. Stat. § 13-17-201 for work expended defending this suit.
(Doc. # 19.) Pursuant to D.C.COLO.LCivR 54.3, the Loeb Defendants’ attorney
Katherine A. Jensen attached to the motion an affidavit concerning the reasonableness
of her requested fees and a comprehensive billing statement. (Doc. # 19-1.) On
August 8, 2015, Mr. Wyles responded to the Loeb Defendants’ motion. (Doc. # 27.)
The Loeb Defendants did not file a reply.
II. DISCUSSION
A. WHETHER DEFENDANTS MAY RECOVER ATTORNEY FEES
The Loeb Defendants argue that they are entitled to attorney fees under Colo.
Rev. Stat. § 13-17-201 because the Court dismissed all of Mr. Wyles’ claims pursuant to
Fed. R. Civ. P. 12(b)(6), and attorney fees are mandated by the statute in those
circumstances. (Doc. # 19 at 3.) In response, Mr. Wyles contends that the Court’s
dismissal was akin to a summary judgment motion and, thus, the statute does not apply.
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(Doc. # 27 at 1–2.) The Court finds that Colo. Rev. Stat. § 13-17-201 is applicable, and
that the Loeb Defendants are entitled to attorney fees under the statute.
In this diversity action, the Court applies the substantive law of the forum state.
Jones v. Denver Post Corp., 203 F.3d 748, 757 (10th Cir. 2000) (citing Boyd Rosene &
Assocs. v. Kan. Mun. Gas Agency, 174 F.3d 1115, 1118 (10th Cir. 1999) (attorney fees
are substantive for diversity purposes)). Colo. Rev. Stat. § 13-17-201 provides that:
In all actions brought as a result of . . . an injury to person or property
occasioned by the tort of any other person, where any such action is
dismissed on motion of the defendant prior to trial under rule 12(b) of the
Colorado rules of civil procedure, such defendant shall have judgment for
his reasonable attorney fees in defending the action.
Though the statute makes specific reference to dismissal under Colo. R. Civ. P. 12(b), it
is equally applicable to dismissal under Fed. R. Civ. P. 12(b)(6). Jones, 203 F.3d at 757
n.6.
The purpose of this statute is to prevent claimants from bringing insubstantial tort
claims. Smith v. Town of Snowmass Vill., 919 P.2d 868, 872 (Colo. App. 1996). To
ensure this deterrent effect, the fee award is mandatory whenever a defendant
“succeeds in dismissing a complaint under Rule 12(b)[,] . . . even if the complaint
included a mix of tort and non-tort claims.” Infant Swimming Research, Inc. v. Faegre &
Benson, LLP, 335 F. App’x 707, 715–16 (10th Cir. 2009). However, attorney fees are
not awarded “if a motion [to dismiss] under rule 12(b) . . . is treated as a motion for
summary judgment and disposed of as provided in rule 56” because, if a court needs to
consider matters beyond the pleadings in rendering its decision, the claim cannot be

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said to be “insubstantial” as required by the statute. Colo. Rev. Stat. § 13-17-201;
Krystkowiak v. W.O. Brisben Cos., Inc., 90 P.3d 859, 869–70 (Colo. 2004).
“Ordinarily, consideration of material attached to a Defendants’ answer or motion
to dismiss requires the court to convert the motion into one for summary judgment.” Tal
v. Hogan, 453 F.3d 1244, 1265 n.24 (10th Cir. 2006) (internal citations omitted).
However, in a motion to dismiss, a court may consider “facts subject to judicial
notice . . . such as . . . facts which are a matter of public record” without having the
effect of converting the motion to a motion for summary judgment. Id. This includes
filings in related court proceedings, even those in state court. St. Louis Baptist Temple,
Inc. v. Fed. Deposit Ins. Corp., 605 F.2d 1169, 1172 (10th Cir. 1979) (noting that
“federal courts . . . may take [judicial] notice of proceedings in other courts, both within
and without the federal judicial system, if those proceedings have a direct relation to
matters at issue”). In particular, the Tenth Circuit has held that conversion does not
occur when a court considers related court filings in making a res judicata
determination. See Rose v. Utah State Bar, 471 F. App’x 818, 820 (10th Cir. 2012)
(district court was not required to convert a motion to dismiss to a motion for summary
judgment where it considered filings in prior state and federal court cases in determining
that issue preclusion warranted dismissal).
In their Motion to Dismiss, the Loeb Defendants attached the State Court
complaint (Doc. # 7-1) and two orders issued by the State Court (Docs. ## 7-2; 7-3).
The Court incorporated these three exhibits into its Order Granting Defendants’ Motion
to Dismiss, citing the exhibits in its description of the procedural history of the State
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Court case. (Doc. # 17 at 2–3.) Mr. Wyles did not dispute the existence of the State
Court case; he only disputed that the State Court case had the effect of precluding the
instant lawsuit. The Court took judicial notice of only the prior State Court case exhibits
and did not consider any other matters beyond the pleadings in making its
determination. As such, the Court’s dismissal under Fed. R. Civ. P. 12(b)(6) was not
converted to a summary judgment decision.
Further, Mr. Wyles contests the Loeb Defendants’ entitlement to fees on the
ground that the Loeb Defendants’ motion “is the subject of this Court’s July 14, 2015
notice of noncompliance 1 . . . [and] the defect has not been corrected.” (Doc. # 27.)
The Court finds this argument to be without merit. Mr. Wyles cites no authority for the
proposition that non-compliance with a technical filing requirement has a dispositive
effect on the underlying substantive matter before the Court. Additionally, the Order of
Non-Compliance was a response to the Loeb Defendants’ Proposed Bill for Costs, not
the instant motion, and the Court issued a notice of noncompliance against Mr. Wyles’
attorney for similar technical defects. Thus, the Court declines to deny attorney fees to
the Loeb Defendants based on their failure to comply with procedural rules. See Reed
v. Bennett, 312 F.3d 1190, 1195 (10th Cir. 2002) (“[a] district court undoubtedly has
discretion to sanction a party for . . . failing to comply with local or federal procedural
rules”) (emphasis added).

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The Notice of Non-Compliance directed counsel for the Loeb Defendants to correct defects in
a filing, which improperly contained a scanned PDF, and stated that “[f]ailure in the future to
follow these procedures may lead to mandatory CM/ECF training.” (Doc. # 21.)
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Accordingly, the Loeb Defendants are entitled to attorney fees under Colo. Rev.
Stat. § 13-17-201.
B. WHETHER DEFENDANTS’ REQUESTED FEES ARE REASONABLE
In the instant motion, counsel for the Loeb Defendants requests $5,880.50 in
attorney fees for work expended in defense of this action. Mr. Wyles contests the Loeb
Defendants’ entitlement to attorney fees in general, but not the reasonableness of the
hourly rate or the number of hours expended. Nonetheless, the Court has a duty to
ensure that the request for attorney fees is reasonable. See Ramos v. Lamm, 713 F.2d
546, 553–54 (10th Cir. 1983) (noting that a district court “must carefully scrutinize the
total number of hours reported to arrive at the number of hours that can reasonably be
charged to the losing party”), overruled on other grounds by Pa. v. Del. Valley Citizens’
Council for Clean Air, 483 U.S. 711 (1987). The Court finds that the majority of the
requested fees are reasonable. However, because the Loeb Defendants are not
entitled to fees for time spent on the instant motion, the Court reduces the fee award to
$5,023.00.
When evaluating a motion for attorney fees, the Court follows the three-step
process set forth in Ramos. 713 F.2d 546. The first step is to determine the number of
hours reasonably spent by counsel for the prevailing party. Malloy v. Monahan, 73 F.3d
1012, 1017 (10th Cir. 1996); Ramos, 713 F.2d at 553. Factors considered in a
reasonableness determination include: (1) whether the amount of time spent on a
particular task appears reasonable in light of the complexity of the case, the strategies
pursued, and the responses necessitated by an opponent’s maneuvering; (2) whether
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the amount of time spent is reasonable in relation to counsel’s experience; and
(3) whether the billing entries are sufficiently detailed, showing how much time was
allotted to a specific task. Rocky Mountain Christian Church v. Bd. of Cnty. Comm’rs of
Boulder Cnty., No. 06-cv-00554, 2010 WL 3703224, at *2–3 (D. Colo. Sept. 13, 2010).
“Counsel for the prevailing party should make a good faith effort to exclude from a fee
request hours that are excessive, redundant, or otherwise unnecessary.” Hensley v.
Eckerhart, 461 U.S. 424, 434 (1983). Despite this, courts need not “identify and justify
every hour allowed or disallowed, as doing so would run counter to the Supreme Court’s
warning that a ‘request for attorney fees should not result in a second major litigation.’”
Malloy, 73 F.3d at 1018 (quoting Hensley, 461 U.S. at 437).
Once the Court has determined the number of hours reasonably spent, it must
then determine a reasonable hourly rate of compensation. Ramos, 713 F.2d at 555.
The party seeking the award has the burden of persuading the court that the hours
expended and the hourly rate are both reasonable. Id. The third step consists of
multiplying the reasonable hourly rate by the number of hours reasonably expended to
determine the “lodestar” amount. Hensley, 461 U.S. at 433.
1. Reasonable Hours
The Loeb Defendants’ counsel has submitted detailed billing records, stating the
nature of each task, the date the task was performed, the amount of time spent on the
task, and who performed the task. (Doc. # 19-1.) The records indicate the following
hours expended by the attorneys and the paralegal in this case: Managing Partner

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Thomas A. Alfrey expended 5.8 hours; Associate Attorney Katherine A. Jensen
expended 21.3 hours; and Paralegal Alison Treece expended 2 hours. (Id.)
The Court reviewed the billing records and finds that the time devoted to discrete
tasks does not appear unreasonable, nor are the hours disproportionate to the
experience of the attorneys and the paralegal that billed hours in this case. 2 The bulk of
the work was allocated to the associate, Ms. Jensen, rather than the partner, Mr. Alfrey,
with the effect of keeping costs comparatively lower. The hours billed by the attorneys
were for tasks that could not be delegated to a non-professional, including legal
research, communications with the client and with opposing counsel, and drafting and
editing briefings. Soto v. Jurado, No. 97-2231, 1998 WL 911693137, at *6 (10th Cir.
Dec. 31, 1998) (“A party may not recover attorney fees for tasks easily delegated to a
nonprofessional assistant.”). Additionally, the work performed by the paralegal,
Ms. Treece, was tasks traditionally done by an attorney. Silver v. Primero Reorganized
Sch. Dist. No. 2, No. 06–cv–02088, 2008 WL 280847, at *3 (D. Colo. Jan. 30, 2008)
(internal citation omitted).
However, in their Motion, the Loeb Defendants request $857.50 in fees
associated with drafting their Motion for Attorney Fees. (Doc. # 19-1 at 6–7.) Because
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The Court notes that Mr. Alfrey has an entry for “Review[ing] court order denying motion to
permit substituted service” on May 26, 2015. (Doc. # 19-1 at 5.) On this date, the Court had
not yet ruled on this motion. The Court issued a Minute Order on this motion the following day,
May 27, 2015. (Doc. # 10.) Because Mr. Alfrey does not bill any other time for reviewing this
motion, the court assumes this entry was dated incorrectly. Though Mr. Alfrey lists 0.3 hours
spent reviewing this Minute Order, the court finds that this is not unreasonable because the
order cites Colo. R. Civ. P. 5(f), which Mr. Alfrey likely reviewed. It appears that Magistrate
Judge Kathleen M. Tafoya inadvertently cited Colo. R. Civ. P. 5(f) instead of Colo. R. Civ. P.
4(f). Colo. R. Civ. P. 4(f) governs Substituted Service and indeed, is longer than Colo. R. Civ.
P. 5(f) and would take more time to review.
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Colo. Rev. Stat. § 13-17-201 provides for the recovery of attorney fees expended in
defending against a tort action, fees for work associated with the motion for fees itself
are recoverable only where the trial court finds that the opposition to the motion lacked
substantial justification. See Monell v. Cherokee River, Inc., 347 P.3d 1179, 1184–85
(Colo. App. 2015); Foxley v. Foxley, 939 P.2d 455, 460 (Colo. App. 1996) (stating that
the “substantial justification” analysis is “necessarily applicable to fees requested under
§ 13-17-201”). Accordingly, “a defendant is not entitled to fees for litigating a section
13[-]17-201 motion for fees unless the plaintiff’s defense to the motion is substantially
frivolous, substantially groundless, or substantially vexatious pursuant to . . . [Colo. Rev.
Stat § ] 13-17-101.” Monell, 347 P.3d at 1185. Even if the proponent is ultimately
unsuccessful in his argument, this does not render his claim frivolous where he put forth
a “good faith presentation of a legal theory which [i]s arguably meritorious.” SaBell’s,
Inc. v. City of Golden, 832 P.2d 974, 978 (Colo. App. 1991).
The Court finds that Mr. Wyles’ opposition to the motion for fees was
substantially justified, even though it was unsuccessful. Accordingly, the Court will not
award fees for work dedicated to the motion for attorney fees, and reduces the fee
award by $857.50.
2. Reasonable Billing Rates
A reasonable hourly rate for attorney fees is based on the “prevailing market
rates in the relevant community.” Malloy, 73 F.3d at 1018. The Supreme Court has
stated that the party seeking attorney fees bears the burden of producing “satisfactory
evidence—in addition to the attorney’s own affidavits—that the requested rates are
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in line with those prevailing in the community for similar services by lawyers of
reasonably comparable skill, experience, and reputation.” Blum v. Stenson, 465 U.S.
886, 896 n.11 (1984) (emphasis added). Where, as here, “a district court does not have
before it adequate evidence of prevailing market rates, the court may use other relevant
factors, including its own knowledge, to establish the rate.” Guides, Ltd. v. Yarmouth
Grp. Prop. Mgmt., Inc., 295 F.3d 1065, 1079 (10th Cir. 2002).
In determining reasonable attorney fees, this Court has previously relied on the
Colorado Bar Association’s “2012 Economic Survey Snapshot” (“2012 CBA Survey”). 3
See, e.g., Home Loan Inv. Co. v. St. Paul Mercury Ins. Co., 78 F. Supp. 3d 1307, 1318
(D. Colo. 2014) (noting that “because the 2012 CBA survey provides the most recent
data and is specific to Colorado, it provides the best indication of the current reasonable
hourly rate in the Denver area”). The 2012 CBA Survey provides average hourly billing
rates for lawyers practicing in Colorado based on firm size and specialization and on the
years of experience of the attorney.
Ms. Jensen requests that the following hourly rates be paid in this matter:
Mr. Alfrey, $265 per hour; Ms. Jensen, $195 per hour; and Ms. Treece, $95 per hour.
(Doc. # 19-1 at 1–2.) She asserts by affidavit that the requested fees are reasonable.
Ms. Jensen further states that she is knowledgeable about the fees charged by other
civil litigation defense firms in the community, and that the hourly rates of Mr. Alfrey,
Ms. Treece, and herself are comparable to those of similarly situated attorneys and

3

See The Colorado Bar Association: 2012 Economic Survey Snapshot,
http://www.cobar.org/repository/LPM%20Dept/Economic%20Survey/Snapshot%20Final%20Re
port.pdf (last visited Dec. 11, 2015).
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paralegals in the legal community. (Id. at 2.) For the reasons discussed below, the
Court finds that these hourly rates are reasonable.
The 2012 CBA Survey indicates that the median hourly rate for a civil litigation
attorney was $243, with $295 representing the 75th percentile. Mr. Alfrey’s requested
rate falls within that range, and within the range of the hourly rates for partners in the
2012 CBA Survey. Depending on the size of the firm, the median hourly rate for
partners is between $250 per hour and $400 per hour, with the 75th percentile set at
between $300 and $450. Mr. Alfrey’s 44 years as an attorney and role as managing
partner in the firm justify a $265 hourly rate; indeed, this is lower than the rates often
billed by longtime partners. See MemoryTen, Inc. v. LV Admin. Servs., Inc., No. 12–cv–
00993, 2013 WL 1154492, at *3 (D. Colo. March 19, 2013) (approving hourly rates of
$465–$495 for a member of a firm who had over 25 years of experience); Payan v.
Nash Finch Co., 310 P.3d 212, 222 (Colo. App. 2012) (approving hourly rate of $350 for
a senior partner).
Similarly, Ms. Jensen’s requested rate of $195 is supported. The 2012 CBA
Survey states that associates with one to three years of experience charge a median of
$175, with $200 per hour representing the 75th percentile. Because Ms. Jensen is a
third-year associate, the upward deviation from the median is supported. See Ryals v.
City of Englewood, No. 12-cv-02178, 2014 WL 2566288, at *9 (D. Colo. June 6, 2014)
($225 hourly rate for second-year associate); Payan, 310 P.3d at 222 ($200 for “junior
associate”).

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Finally, the rate requested for Ms. Treece of $95 per hour is reasonable in light of
her 17 years of experience as a paralegal. See Hitchens v. Thompson Nat’l Properties,
LLC, No. 12–cv–02367, 2014 WL 2218094, at *3 (D. Colo. May 29, 2014) (calling $110
per hour a reasonable paralegal rate); Salinier v. Moore, No. 10-cv-00080, 2010 WL
3515699, at *3 (D. Colo. Sept. 1, 2010) (approving of $100 per hour paralegal rate).
Accordingly, the Court awards the Loeb Defendants attorney fees in the amount
of $5,023.00.
III. CONCLUSION
For the forgoing reasons, it is ORDERED that Defendants’ Motion for Attorney
Fees (Doc. # 19) is GRANTED IN PART and DENIED IN PART. Consistent with the
above analysis, it is
FURTHER ORDERED that the Loeb Defendants are entitled to attorney fees in
the amount of $5,023, for which judgment should be entered in favor of Allen Z.
Sussman and Loeb & Loeb, LLP and against Terrence M. Wyles.
DATED: January 25, 2016.
BY THE COURT:

_______________________________
CHRISTINE M. ARGUELLO
United States District Judge

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