QFA Royalties LLC et al v. Q of O, LLC et al
Filing
78
ORDER granting in part and denying in part 64 Motion for Fees and Costs. Plaintiffs' counsel is entitled to attorney fees in the amount of $20,790.00 and costs in the amount of $1,154.68. By Judge Christine M. Arguello on 03/10/2016. (athom, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 15-cv-00461-CMA-MJW
QFA ROYALTIES LLC, and
QUIZNO’S MASTER LLC, THE
Plaintiffs,
v.
Q OF O, LLC,
KIMBRE L. ANDERSON,
DONNA J. JOHNSON,
PHILLIP S. JOHNSON,
DALE A. THOMAS, JR.,
DALE A THOMAS, SR., and
P & D SUBS, INC.
Defendants.
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR
FEES AND COSTS
This matter is before the Court on Plaintiffs’ Motion for Fees and Costs. (Doc. #
64.) For reasons described below, the Motion is granted in part and denied in part.
Specifically, the Court awards attorney fees in the amount of $20,790.00 and costs in
the amount of $1,154.68.
I.
BACKGROUND
Plaintiffs QFA Royalties LLC and The Quizno’s Master LLC (“Plaintiffs”) originally
filed this lawsuit against seven defendants for their alleged violation of noncompetition
covenants with Plaintiffs and their use of Plaintiffs’ trademarks and trade dress. On July
29, 2015, this Court entered default judgment against two of seven defendants to the
original action, Q of O and P&D Subs (“Defendants”). Plaintiffs filed their Motion for
Fees and Costs on August 12, 2015. (Doc. # 64.) Defendants filed no response.
II.
DISCUSSION
Colorado follows the traditional “American rule” that, absent statutory authority,
an express contractual provision, or a court rule, the parties in a lawsuit are required to
bear the costs of their own legal expenses. Moore v. Edwards, 111 P.3d 572, 573
(Colo. App. 2005). Plaintiffs seek costs and attorney fees pursuant to Fed. R. Civ. P.
54, D.C.COLO.LCivR 54.3, and their franchise agreements with Defendants. (Doc. # 64
at 1, 3.) Those agreements, made enforceable through the default judgment entered by
this Court on July 29, 2015, provide that “the non-prevailing party in any legal action will
pay to the prevailing party ‘all damages, costs, and expenses, including reasonable
attorneys’ fees, incurred by the prevailing party.’” (Doc. # 64 at 3.) This Court
concludes that the franchise agreements permit Plaintiffs to recover reasonable attorney
fees and costs requested in the instant Motion.
A.
ATTORNEY FEES
In accordance with Fed. R. Civ. P. 54 and D.C.COLO.LCivR 54.3, Plaintiffs
request attorney fees in the amount of $23,298.00. (Doc. # 64 at 4.) Specifically,
Plaintiffs request an award for hours expended by senior attorney Fredric Cohen, who
has more than 25 years of experience, attorney Allison Grow, who has five years of
experience, and two paralegals, Adrienne Saltz and Emily Flores. (Doc. # 64-1 at 1-2.)
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All hours were expended in 2015. (Doc. # 64-2.) The expended hours, hourly rates,
and total requested reimbursements are as follows:
•
•
•
•
Senior attorney Fredric Cohen—12.1 hours at $450 per hour, for a total of
$5,445.
Attorney Allison Grow—50.1 hours at $275 per hour, for a total of
$13,777.50.
Paralegal Adrienne Saltz—1 hour at $195 per hour, for a total of $195.
Paralegal Emily Flores—19.9 hours at $195 per hour, for a total of
$3880.50.
(Doc. # 64-2.) In total, Plaintiffs request $23,298 for 83.1 expended hours.
Because Defendants have failed to respond to the instant Motion, this Court
lacks the benefit of scrutiny and analysis by the opposing party. 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), rev’d in part on other grounds,
Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 483 U .S. 711, 725 (1987)
(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,
much as a senior partner in a private firm would review the reports of subordinate
attorneys when billing clients whose fee arrangement requires a detailed report of hours
expended and work done.”)
The first step in determining reasonable attorney fees requires a calculation of
the “lodestar amount”—i.e., the reasonable hourly rate multiplied by the number of
hours reasonably expended. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Malloy v.
Monahan, 73 F.3d 1012, 1017–18 (10th Cir. 1996). The party requesting fees has the
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burden of persuading the Court that both the hourly rate and the hours expended are
reasonable. Malloy, 73 F.3d at 1018.
To determine what constitutes a reasonable rate, the district court considers the
“prevailing market rate in the relevant community.” Id. Plaintiffs should provide
evidence of the prevailing market rate for similar services by “lawyers of reasonably
comparable skill, experience, and reputation.” Blum v. Stenson, 465 U.S. 886, 895 n.11
(1984). If the district court does not have adequate evidence of prevailing market rates,
it may, in its discretion, use other relevant factors, including its own knowledge of
prevailing market rates, to establish a reasonable hourly rate. Lippoldt v. Cole, 468
F.3d 1204, 1225 (10th Cir. 2006).
In determining the reasonableness of hours expended, the Court considers (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 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 each specific task. See Ramos, 713 F.2d at
553–54. Counsel for the party claiming fees has the burden of substantiating the hours
it spent through “meticulous, contemporaneous time records that reveal, for each lawyer
for whom fees are sought, all hours for which compensation is requested and how those
hours were allotted to specific tasks.” Case v. Unified Sch. Dist. No. 233, 157 F.3d
1243, 1250 (10th Cir. 1998). The Court must ensure that the attorney has exercised the
same “billing judgment” as would be appropriate in billing his or her own client. Id.; see
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also Hensley, 461 U.S. at 434 (“Hours that are not properly billed to one’s client also are
not properly billed to one’s adversary pursuant to statutory authority.”) (internal
quotation marks omitted). However, this Court is not bound to assess the propriety of
every time entry. Fox v. Vice, 131 S. Ct. 2205, 2217 (2011) (“[T]rial courts need not,
and indeed should not, become green-eyeshade accountants. The essential goal in
shifting fees is to do rough justice, not to achieve auditing perfection. So trial courts
may take into account their overall sense of a suit, and may use estimates in calculating
and allocating an attorney's time.”) Counsel should “make a good faith effort to exclude
from a fee request hours that are excessive, redundant, or otherwise unnecessary.”
Hensley, 461 U.S. at 434
Once the Court determines the lodestar, it may adjust it “upward or downward to
account for the particularities” of the work performed. Phelps v. Hamilton, 120 F.3d
1126, 1131 (10th Cir. 1997). The Court exercises its “discretion in making this equitable
judgment” and does not “apportion the fee award mechanically” by considering each
claimed expense and determining its reasonableness overall. Hensley, 461 U.S. at
436–40 (holding that the Court “should make clear that it has considered the
relationship between the amount of the fee awarded and the results obtained”); see also
White v. GMC, Inc., 908 F.2d 675, 684–85 (10th Cir. 1990) (noting that the amount of
fees accumulated to secure the desired result must be reasonably related to the type
and significance of issue in dispute).
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a) Reasonableness of Hourly Rate
Plaintiffs supply no evidence concerning the reasonableness of the hourly rates
listed in their Motion. Instead, Plaintiffs submit an affidavit that merely recites the
number of years’ experience for each attorney and the rate each person typically bills.
(Doc. # 64-1.) A party seeking attorney fees bears the burden of producing “satisfactory
evidence—in addition to the attorney's own affidavits—that the requested rates are
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 in the instant case, “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). Although the
affidavit alone is insufficient evidence to demonstrate the reasonableness of the hourly
rates, the Court is familiar with rates charged by attorneys in the Denver metropolitan
area. The Court concludes the rates charged by Plaintiffs’ counsel are reasonable, but
the rates charged for the work of paralegals Ms. Saltz and Ms. Flores are excessive.
Ms. Grow indicates that she has five years’ experience as an attorney and that
Mr. Cohen has more than 25 years’ experience in litigation involving franchise
companies. (Doc. # 64-1.) In the past, this Court has found $425 to be a reasonable
hourly rate for an experienced senior attorney and $285 to be a reasonable hourly rate
for an associate attorney. See Shrader v. Beann, 2012 WL 527480, at *3 (D. Colo. Feb.
12, 2012); Broker's Choice of Am., Inc. v. NBC Universal, Inc., 2011 WL 3568165, at
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*7–9 (D. Colo. Aug. 15, 2011) (finding $425 was an appropriate rate for a senior
attorney and $285 appropriate for an associate attorney with less than 5 years’
experience). In light of this Court’s prior decisions and the prevailing rates for legal
work in the Denver area, hourly rates of $450 and $275 for attorneys with, respectively,
25 and 5 years of experience are reasonable. However, this Court has not adjudicated
as reasonable hourly rates for paralegal work in excess of $75, even where the work
equaled that traditionally done by an attorney. Parker v. Milyard, No. 12-CV-00448WYD-MJW, 2013 WL 5200965, at *5 (D. Colo. Sept. 16, 2013) (reducing hourly rates of
two paralegals from $120 and $90 to $75). Accordingly, the court reduces the rates of
both Ms. Saltz and Ms. Flores to $75.
b) Reasonableness of Hours Expended
The Court reviewed the Transactions Listing Report (Doc. # 64-2) submitted by
Plaintiffs and finds the number of hours expended reasonable. The billing entries are
sufficiently detailed, showing how much time was allotted to the various tasks. The
itemized tasks are limited to those needed to secure judgment against the Defendants
and exclude tasks unrelated to that effort. Plaintiffs expended a reasonable quantity of
hours given the minimal volume of filing in this case. In addition, the time expended
was reasonable in relation to counsels' experience. Any redacted entries included
sufficient information to allow the Court to determine the fees were reasonably incurred.
Finally, upon review of the billing entries, the Court finds that defendant is entitled to
recover fees for the itemized work of each of the paralegals because that work was
equal to that traditionally done by an attorney, including such tasks as document review
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and updating electronic files. See Silver v. Primero Reorganized Sch. Dist. No. 2, No.
06–cv–02088, 2008 WL 280847, at *3 (D. Colo. Jan. 30, 2008).
B.
COSTS
Federal Rule of Civil Procedure 54 authorizes a Clerk to tax costs owed to the
prevailing party in a civil action. Fed. R. Civ. P. 54(d)(1). Section 1920 in Chapter 28 of
the United States Code enumerates which litigation expenses are taxable. 28 U.S.C. §
1920 (2012). On August 12, 2015, Plaintiffs submitted their Proposed Bill of Costs.
(Doc. # 63.) On August 27, 2015, the Clerk of the Court taxed costs totaling $655.75
against Defendants, including fees of the clerk, fees for service of summons and the
complaint, and fees and disbursements for printing. (Doc. # 65.)
Plaintiffs now request reimbursement for additional nontaxable litigation costs
totaling $1,154.68, pursuant to their franchise agreements with Defendants. (Doc. # 642 at 19-20; Doc. # 64 at 3.) The costs include Lexis/Nexis research fees of $374.96 and
a private investigator fee of $779.72. (Doc. # 64-2 at 19.) Whether Plaintiffs are entitled
to these nontaxable costs is a matter of contract interpretation. The “Attorneys’ Fees”
provision in the franchise agreements reads:
In the event of any default on the part of either party to this Agreement, in
addition to all other remedies, the party in default will pay the prevailing
party . . . all amounts due and all damages, costs, and expenses, including
reasonable attorneys' fees, incurred by the prevailing party in any legal action or
other proceeding as a result of such default . . . .
(Doc. # 64-3 at 4,7). The essential question before this Court is whether the language
“all damages, costs, and expenses” contemplates costs that are not taxable under 28
U.S.C. § 1920. Several courts have concluded fee-shifting agreements with similar
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language include nontaxable costs. See, e.g., Connell Bros. Ltd., v. Gannon
International, Ltd., 4:10CV1795 JAR, 2013 WL 508658 (E.D. Miss. Feb. 12, 2013)
(finding language “costs of collection” entitled Plaintiff to nontaxable expenses even
though the Guaranty at issue did not distinguish between taxable and nontaxable
costs); Ward v. Siebel, No. 06-cv-00036-WYD-MJW, 2012 WL 2196054, at *6 (D. Colo.
2012) (language “costs and reasonable attorney fees” permitted, among other things,
Westlaw legal research fees of $2,898.14); Matthews v. Wisconsin Energy Corp., No.
05-CV-537, 2010 WL 3910298 (E.D. Wis. Oct. 4, 2010), aff'd, 642 F.3d 565 (7th Cir.
2011) (although the central issue in Matthews was the appropriate amount of attorney
fees, neither the lower court nor the Seventh Circuit questioned whether the contract
language “costs, damages or expenses, including reasonable attorney's fees,”
encompassed nontaxable expenses). Even in the absence of these holdings, a plain
reading of Plaintiffs’ franchise agreements with Defendants suggests the parties
intended to include nontaxable costs. First, the phrase “all damages, costs, and
expenses” necessarily includes nontaxable costs. Relatedly, it is redundant to contract
for taxable costs when Rule 54 already awards those fees.
Accordingly, Plaintiffs’ request for nontaxable litigation costs totaling $1,154.68 is
granted.
III.
CONCLUSION
Based on the foregoing, it is ORDERED that Plaintiff's Motion for Fees and Costs
(Doc. # 64) be GRANTED IN PART and DENIED IN PART. Consistent with the
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foregoing analysis, it is ORDERED that Plaintiffs’ counsel is entitled to attorney fees in
the amount of $20,790.00 and costs in the amount of $1,154.68.
Timekeeper
Fredric Cohen
Allison Grow
Adrienne Saltz
Emily Flores
Proposed Adjusted
Hourly
Hourly
Rate
Rate
$450
$450
$275
$275
$195
$75
$195
$75
Total Adjusted Proposed
Hours
Hours
Lodestar
12.1
12.1
$5,445
50.1
50.1
$13,777.50
1
1
$195
19.9
19.9
$3,880.50
TOTAL ADJUSTED LODESTAR
Adjusted
Lodestar
$5,445
$13,777.50
$75
$1,492.50
$20,790.00
DATED: March 10, 2016
BY THE COURT:
________________________________
CHRISTINE M. ARGUELLO
United States District Judge
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