Weinberg, Wheeler, Hudgins, Gunn & Dial LLC v. Teledyne Technologies, Inc. et al
Filing
150
ORDER AND OPINION granting as unopposed 136 Plaintiff's Motion to Amend; denying 137 Plaintiff's Motion for Attorney Fees; granting 135 plaintiffs request for summary judgment on its open account claim, and denying 146 defendants Mo tion for Leave. In accordance with this Order, the clerk should enter judgment in favor of plaintiff in the amount of $946,267.34. The judgment includes $642,665.72 in unpaid legal fees, $218,030.52 in prejudgment interest through September 30, 2013, and $85,571.10 in prejudgment interest from October 1, 2013 through June 27, 2014. Signed by Judge Julie E. Carnes on 6/27/14. (ddm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
WEINBERG, WHEELER, HUDGINS,
GUNN & DIAL, LLC,
Plaintiff,
CIVIL ACTION NO.
v.
1:12-cv-0686-JEC
TELEDYNE TECHNOLOGIES, INC.,
CONTINENTAL MOTORS, INC. and
JOHN DOES 1-5,
Defendants.
ORDER & OPINION
This case is before the Court on plaintiff’s Motion to Amend the
Court’s Briefing Schedule [136], plaintiff’s Motion for Attorney’s
Fees [137], plaintiff’s Supplemental Brief in Support of Summary
Judgment on its Open Account Claim [135], and defendants’ Motion for
Leave to File a Motion to Set Aside the Court’s Summary Judgment
Order [146].
The Court has reviewed the record and the arguments of
the parties and, for the reasons set out below, concludes that
plaintiff’s Motion to Amend [136] should be GRANTED as unopposed,
plaintiff’s Motion for Attorney’s Fees [137] should be DENIED,
plaintiff’s request for summary judgment on its open account claim
[135] should be GRANTED, and defendants’ Motion for Leave [146]
should be DENIED.
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BACKGROUND
The Court described the facts underlying this case in detail in
its previous summary judgment order.
(Order [133].)
Briefly, the
case involves a dispute over unpaid attorney’s fees incurred in
connection
with
plaintiff’s
representation
of
defendants
wrongful death suit in Bibb County Superior Court.
in
(Id. at 2.)
a
The
suit arose out of a plane crash in January 2007, in which Dr. Miles
McDonald was killed.
(Id.)
The plaintiffs in the McDonald suit
alleged that a latent defect in a product supplied by defendants
caused the crash.
(Id.)
Plaintiff’s representation of defendants was memorialized in a
February
2009
letter
from
attorney
Tom
Continental’s general counsel Steve Ginger.
Strueber
(Id.)
to
defendant
In the letter,
Mr. Strueber acknowledged plaintiff’s assumption of the defense in
the suit and set forth hourly billing rates for the professionals who
would be working on the case.
(Order [133] at 3.)
Plaintiff
subsequently performed substantial work on the McDonald case over the
next two and a half years.
(Id.)
Defendants paid for plaintiff’s
work on the case through June 29, 2011 based on the hourly rates set
forth in the representation letter.
In
early
September
2011,
(Id.)
defendants
retained
third-party
attorney Walter DeForest to depose one of the experts hired by the
McDonald plaintiffs.
(Id.)
Thereafter, defendants decided that Mr.
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DeForest should serve as lead counsel in the McDonald trial.
(Id.)
However, defendants agreed to keep plaintiff as part of the trial
team.
(Order [133] at 4.)
With the consent and knowledge of
defendants, plaintiff continued to work on the case during the next
month and throughout the trial.
(Id.)
Plaintiff’s work during this
time included drafting and arguing motions, preparing the pretrial
order, examining witnesses at trial, assisting with jury selection
and charges, arguing objections, drafting the verdict form, and
researching various legal issues that arose during the trial.
(Id.)
Defendants acknowledge that plaintiff performed numerous hours
of work on the McDonald case between June 29, 2011 and October 2011.
(Id.)
Defendants further concede that they obtained a favorable
result at trial.
(Id.)
Nevertheless, defendants refused to pay the
attorney’s fees billed by plaintiffs for any work performed after
June 29, 2011.
(Order [133] at 4.)
The outstanding fees for this
time period amount to $642,665.72, exclusive of interest.
(Id.)
Plaintiff filed this action to recover those fees on a breach of
contract and “open account” theory.
(Id.)
In its previous order, the Court granted summary judgment to
plaintiff on its breach of contract claim.
(Id. at 27.)
However,
the Court asked for additional briefing on the open account claim.
(Id. at 29.)
Plaintiff has provided the requested supplemental
briefing and now asks for summary judgment on the open account claim.
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(Pl.’s Supplemental Br. in Supp. of Summ. J. [135].)
Plaintiff has
also filed a motion to recover the attorney’s fees and expenses it
has incurred in connection with this action.
Attorney’s Fees [137].)
(Pl.’s Mot. for
In addition to these motions, defendants
have recently filed a motion seeking permission to submit an untimely
motion to reconsider and set aside the Court’s previous summary
judgment order.
(Defs.’ Mot. for Leave [146].)
DISCUSSION
I.
PLAINTIFF’S OPEN ACCOUNT CLAIM AND PREJUDGMENT INTEREST
As mentioned, the Court has already determined that plaintiff is
entitled to recover $642,665.72 in unpaid attorney’s fees.
(Order
[133] at 29.) The only uncertainty that remains concerns the rate of
prejudgment interest that should be applied to the unpaid fees.
Georgia law provides for prejudgment interest at the legal rate of 7%
per year on a breach of contract claim for liquidated damages.
O.C.G.A. §§ 7-4-2 and 7-4-15.1
However, an open account claim that
meets certain conditions accrues prejudgment interest at the higher
rate of 18% per year.
O.C.G.A. § 7-4-16.
1
In its supplemental brief,
This is a diversity case, governed by Georgia law. (Order
[133] at 18.) The prejudgment interest issue is thus also controlled
by Georgia law. SEB S.A. v. Sunbeam Corp., 476 F.3d 1317, 1320 (11th
Cir. 2007). Under Georgia law, all liquidated demands bear interest
from the time a party is “liable and bound to pay them.” Hendricks
v. Blake & Pendleton, Inc., 221 Ga. App. 651, 652 (1996). See also
Discrete Wireless, Inc. v. Coleman Tech., Inc., 422 Fed. App’x 777,
780-81 (11th Cir. 2011)(citing O.C.G.A. § 7-4-15).
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plaintiff contends that the undisputed facts in the record justify
summary judgment on its open account claim and the accrual of
prejudgment interest at the 18% rate.
(Pl.’s Supplemental Br. [135]
at 2-14.)
An open account claim is a simplified procedure to recover money
owed for goods or services that have been provided on credit.
Am.
Arbitration Ass’n v. Bowen, 322 Ga. App. 51, 52-53 (2013). The claim
is available “‘where the price of such goods or services has been
agreed upon and where it appears that the [provider] has fully
performed its part of the agreement and nothing remains to be done
except for the other party to make payment.’”
Id. (quoting Five Star
Steel Constr., Inc. v. Klockner Namasco Corp., 240 Ga. App. 736,
738–739 (1999)).
A plaintiff can establish a prima facie case to
recover amounts due on an open account by submitting an authenticated
invoice along with testimony that the invoice remains unpaid. Id. at
53. The defendant must then offer specific factual evidence refuting
the plaintiff’s proof to avoid judgment on the claim.
Id.
The undisputed facts in the record support plaintiff’s claim to
recover amounts due on an open account.
motion
for
summary
judgment,
plaintiff
In conjunction with its
submitted
evidence
that
defendants failed to pay invoiced legal bills in the amount of
$642,665.72.
(Pl.’s Statement of Material Facts [77] at ¶ 30 and
Pl.’s Exhibits [88] at Exs. G and H.)
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Defendants concede that
plaintiff performed the work that was invoiced, and that the hours
expended by plaintiff were necessary and the rates charged by
plaintiff’s attorneys reasonable. (Order [133] at 27.) The Court in
its
previous
order
rejected
the
various
reasons
asserted
by
defendants for non-payment, all of which inappropriately relied on
subjective
and
after-the-fact
assessments
of
Mr.
competency and skill in handling the McDonald case.
Accordingly,
summary
account claim.
judgment
is
warranted
on
Strueber’s
(Id. at 21-27.)
plaintiff’s
open
See Patton v. Turnage, 260 Ga. App. 744, 749 (2003)
(authorizing the recovery of unpaid attorney’s fees on an open
account theory where the client’s grievance against his former
attorney did not concern the amount of fees due but rather the
attorney’s handling of the case).
To obtain the 18% prejudgment interest rate that applies to
certain open account claims, plaintiff must, in addition to the above
show that: (1) the invoices constitute a commercial account, (2) the
amounts reflected on the invoices are liquidated, and (3) plaintiff
made a pre-trial demand for the 18% interest rate available under
O.C.G.A. § 7-4-16.
See O.C.G.A. § 7-4-16 and Hampshire Homes, Inc.
v. Espinosa Const. Serv., Inc., 288 Ga. App. 718, 722-23 (2007).
discussed
below,
plaintiff
easily
satisfies
all
of
As
these
requirements.
With regard to the first requirement, § 7-4-16 defines a
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“commercial account” as “an obligation for the payment of money
arising out of a transaction to sell or furnish, or the sale of, or
furnishing of, goods or services.”
O.C.G.A. § 7-4-16.
The legal
fees at issue here satisfy the plain language of this definition.
See Patton, 260 Ga. App. at 749 (a client’s obligation to pay for
legal services constitutes a commercial account) and Lipton v.
Warner, Mayoue & Bates, P.C., 228 Ga. App. 516, 517 (1997)(treating
unpaid attorney’s fees as a commercial account).
As to the second requirement, a debt is liquidated when the
amount of the debt is “agreed on by the parties, or fixed . . . by
the operation of law.”
Hampshire Homes, 288 Ga. App. at 722.
In the
February 2009 representation letter, plaintiff agreed to provide
legal services in exchange for payment at specified hourly rates.
(Order [133] at 19.)
Defendants do not dispute that plaintiff
performed the services that are set out in the invoices and that the
services were billed at the rates listed in the representation
letter.
(Id. at 27.)
The invoiced amounts are thus liquidated.
Id.
and Patton, 260 Ga. App. at 749 (unpaid attorney’s fees invoiced at
agreed upon rates constitute a liquidated debt).
Finally, plaintiff has submitted evidence of the necessary pretrial invocation of O.C.G.A. § 7-4-16 and the interest available
under that statute.
February
2012,
prior
(Pl.’s Supplemental Br. [135] at 12-14.)
to
filing
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the
complaint
in
this
In
action,
plaintiff sent defendants a demand letter citing § 7-4-16 and
indicating plaintiff’s right and intention to seek interest at the
18% per annum rate on all of the outstanding fees.
(Id. at Ex. B.)
In the demand letter, plaintiff offered to waive the interest if
payment was made by February 29, 2012.
(Id.)
The demand letter
satisfies the pre-trial invocation requirement described in Hampshire
Homes, 288 Ga. App. at 722-23.
Compare Spears v. Allied Eng’g
Assoc., Inc., 186 Ga. App. 878, 879 (1988)(finding plaintiff’s
invocation insufficient because it did not specify the “exact rate at
which interest was to accrue”).
As plaintiff has prevailed on its open account claim and all of
the additional requirements are met, the Court finds that prejudgment
interest should accrue on the unpaid legal fees at the 18% per annum
rate provided by O.C.G.A. § 7-4-16.
Under § 7-4-16, prejudgment
interest begins to accrue “on the amount owed from the date upon
which it became due and payable.”
O.C.G.A. § 7-4-16.
Using this
accrual date, plaintiff has calculated prejudgment interest on the
unpaid fees in the amount of $218,030.52 as of September 30, 2013 and
increasing by $316.93 per day.
calculations.2
Defendants do not contest these
Accordingly, the final judgment in this case will
2
Indeed, and remarkably given the amount of money involved,
defendants do not specifically contest or provide evidence to refute
any aspect of plaintiff’s open account claim.
In response to
plaintiff’s supplemental brief, defendants refer the Court to their
response to plaintiff’s initial motion for summary judgment [114].
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include an award of prejudgment interest pursuant to the calculations
provided by plaintiff.
II.
ATTORNEY’S FEES
In addition to its claims to recover unpaid legal fees and
prejudgment interest, plaintiff asserts in the complaint a claim
under O.C.G.A. § 13-6-11.
(Compl. [1] at 12.)
That statute permits
a plaintiff to recover attorney’s fees and expenses “where the
defendant has acted in bad faith, has been stubbornly litigious, or
has caused the plaintiff unnecessary trouble and expense.”
§ 13-6-11.
O.C.G.A.
Plaintiff apparently has chosen not to pursue its claim
under § 13-6-11.
Nevertheless, plaintiff has filed a motion asking
the Court to use its inherent power and discretion to award fees and
expenses based on the alleged bad faith and vexatious refusal of
defendants to pay their legal fees.
(Pl.’s Mot. for Fees and
Expenses [137].)
Under
typically
the
bear
American
Rule,
responsibility
litigants
for
their
in
own
Chambers v. NASCO, Inc., 501 U.S. 32, 45 (1991).
the
United
attorney’s
States
fees.
See also Pedraza v.
United Guar. Corp., 313 F.3d 1323, 1331 (11th Cir. 2002)(citing
However, that document does not mention the open account claim.
Neither do defendants’ other filings present evidence on the open
account claim or address the claim in any detail. (See Defs.’ Br. in
Supp. of Summ. J. [85] at 5 and Defs.’ Resp. Br. [112] at 24.)
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Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 257
(1975)).
Federal courts are authorized to assess attorney’s fees in
certain “narrowly defined” circumstances, including cases where “a
party
has
acted
in
bad
faith,
vexatiously,
wantonly,
or
for
oppressive reasons.” Chambers, 501 U.S. at 45-46 (internal quotation
marks
omitted).
However,
as
the
Supreme
Court
instructed
in
Chambers, inherent powers must be invoked with caution and “exercised
with restraint and discretion.”
Id. at 44, 50.
Pursuant to the Supreme Court’s directive in Chambers, federal
courts typically only engage in fee-shifting in exceptional cases
that involve clearly frivolous claims or particularly egregious
conduct during the litigation.
See Pedraza, 313 F.3d at 1336 (“[a]n
action is brought in bad faith when the claim is entirely without
color and has been asserted wantonly, for purposes of harassment or
delay, or for other improper reasons”).
Although defendants did not
ultimately prevail on their defenses and counterclaims, their legal
positions
were
conducted
the
not
“clearly
litigation
in
frivolous.”
an
egregious
Nor
or
have
defendants
vexatious
manner.
Compare Chambers, 501 U.S. at 32, 57 (upholding the decision to
assess fees against a party who had: (1) attempted to deprive the
court of jurisdiction by acts of fraud, (2) filed false and frivolous
pleadings, and (3) attempted by other tactics of delay, oppression,
harassment, and massive expense to reduce his opponent to “exhausted
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compliance”).
Accordingly, the Court DENIES plaintiff’s motion for
attorney’s fees and expenses [137].
III. DEFENDANTS’ MOTION FOR LEAVE
In their motion for leave, defendants seek permission to file a
motion for reconsideration of the Court’s previous summary judgment
order.
(Defs.’ Mot. for Leave [146] at 1.)
Defendants acknowledge
that leave is required because the request for reconsideration is
untimely.
(Id.)
Local Rule 7.2 requires that such motions be filed
“within twenty-eight (28) days after entry of the order” at issue.
LR 7.2(E), NDGa.
The Court entered its summary judgment order on
September 9, 2013. (Order [133].) Defendants filed their motion for
leave and attached motion for reconsideration nearly nine months
later, on June 3, 2014.
(Defs.’ Mot. for Leave [146].)
However,
defendants argue that the delay is justified because the basis for
reconsideration was not apparent until the Supreme Court issued its
decision in Tolan v. Cotton, 134 S. Ct. 1861 (2014).
The Court is not persuaded.
Contrary to defendants’ argument,
Tolan does not announce a change in the law that would justify a
nine-month delay in seeking reconsideration of the Court’s ruling.
The Tolan decision simply emphasizes that in the qualified immunity
context, as is true generally, courts may not resolve genuine
disputes of fact in favor of the party seeking summary judgment.
at 1866.
This Court recognized and applied that long-standing
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Id.
principle in its summary judgment order.
The
Court
also
notes
that
the
(Order [133] at 17-18.)
underlying
motion
for
reconsideration is meritless. Local Rule 7.2(E) only authorizes such
motions when “absolutely necessary” to address (1) an intervening
change in the law, (2) newly discovered evidence or (3) a need to
correct clear error or prevent manifest injustice.
LR 7.2(E), NDGa
and Delaware Valley Floral Grp., Inc. v. Shaw Rose Nets, LLC, 597
F.3d 1374, 1383 (11th Cir. 2010).
Citing Tolan, defendants rely on
the “intervening change” prong as a basis for reconsideration.
(Defs.’ Mot. for Leave [146] at Ex. 1.)
Again, Tolan does not
constitute a change in the law, but rather an application of the same
well-established summary judgment standard that the Court relied upon
in its previous ruling.
As defendants do not present any other
potential grounds for reconsideration, the Court DENIES their motion
for leave [146].
CONCLUSION
For
the
foregoing
reasons,
the
Court
GRANTS
as
unopposed
plaintiff’s Motion to Amend [136], DENIES plaintiff’s Motion for
Attorney’s
Fees
[137],
GRANTS
plaintiff’s
request
for
summary
judgment on its open account claim [135], and DENIES defendants’
Motion for Leave [146].
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In accordance with this Order, the clerk should enter judgment
in favor of plaintiff in the amount of $946,267.34.
The judgment
includes $642,665.72 in unpaid legal fees, $218,030.52 in prejudgment
interest through September 30, 2013, and $85,571.10 in prejudgment
interest from October 1, 2013 through June 27, 2014.
SO ORDERED, this 27th day of JUNE, 2014.
/s/ Julie E. Carnes
JULIE E. CARNES
CHIEF UNITED STATES DISTRICT JUDGE
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