The Hanover Insurance Company et al v. Anova Food, LLC et al

Filing 253

ORDER OVERRULING ANOVA FOOD, LLC'S OBJECTION TO FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART ANOVA FOOD, LLC'S MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS (ECF NO. 248 ) AND ADOPTING THE MAGISTRATE JUDGE'S SEP TEMBER 29, 2017 FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART ANOVA FOOD, LLC'S MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS (ECF NO. 247 ) - Signed by JUDGE HELEN GILLMOR on 1/24/2018. "Plaintiff's Objections to the Magistrate Judge's Findings and Recommendation (ECF No. 248) are OVERRULED. Pursuant to 28 U.S.C. § 636(b) (1)(C) and Local Rule 74.2, the "FINDINGS AND RECOMMENDATION TO GRANT IN PA RT AND DENY IN PART ANOVA FOOD, LLC'S MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS" (ECF No. 247) is ADOPTED AS THE OPINION AND ORDER OF THIS COURT." (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
)
)
)
)
Plaintiffs,
)
)
vs.
)
)
ANOVA FOOD, LLC; ANOVA FOOD, )
INC.,
)
)
Defendants.
)
)
)
________________________________ )
ANOVA FOOD, INC.; ANOVA FOOD, )
LLC,
)
)
Counter-Claimants, )
)
vs.
)
)
THE HANOVER INSURANCE
)
COMPANY; MASSACHUSETTS BAY
)
INSURANCE COMPANY,
)
)
Counter-Defendants. )
_________________________________)

Civil No. 14-00281 HG-RLP

THE HANOVER INSURANCE
COMPANY; MASSACHUSETTS BAY
INSURANCE COMPANY,

ORDER OVERRULING ANOVA FOOD, LLC’S OBJECTION TO FINDINGS AND
RECOMMENDATION TO GRANT IN PART AND DENY IN PART ANOVA FOOD,
LLC’S MOTION FOR AWARD OF ATTORNEYS’ FEES AND COSTS (ECF No. 248)
and
ADOPTING THE MAGISTRATE JUDGE’S SEPTEMBER 29, 2017 FINDINGS AND
RECOMMENDATION TO GRANT IN PART AND DENY IN PART ANOVA FOOD,
LLC’S MOTION FOR AWARD OF ATTORNEYS’ FEES AND COSTS (ECF No. 247)
On September 29, 2017, the Magistrate Judge issued a
Findings and Recommendation to Grant In Part and Deny In Part
Anova Food, LLC’s Motion for Award of Attorneys’ Fees and Costs.

1

(ECF No. 247).

The Magistrate Judge recommended that Anova Food,

LLC be awarded $126,321.59 in attorneys’ fees and $9,930.49 in
costs.
Anova Food, LLC filed an Objection to the Magistrate Judge’s
Findings and Recommendation and it seeks a total of $539,077.78
in fees and costs.
The Hanover Insurance Company and Massachusetts Bay
Insurance Company (“the Hanover Companies”) filed an Opposition
to Anova Food, LLC’s Objection.
The Court OVERRULES Anova Food, LLC’s Objection (ECF No.
248) and ADOPTS the Magistrate Judge’s Findings and
Recommendation (ECF No. 247).
PROCEDURAL HISTORY
On June 19, 2014, the Hanover Companies filed a Complaint.
(ECF No. 1).
On May 29, 2015, the Hanover Insurance Companies filed a
First Amended Complaint.

(ECF No. 39).

On June 12, 2015, Anova Food, LLC filed a Counterclaim.
(ECF No. 40).
On March 24, 2016, the Court issued an ORDER GRANTING, IN
PART, AND DENYING, IN PART, DEFENDANT/COUNTERCLAIMANT ANOVA FOOD,
LLC’S MOTION FOR PARTIAL SUMMARY JUDGMENT.

(ECF No. 113).

On June 29, 2016, the Court issued an ORDER DISMISSING ALL
CLAIMS AGAINST DEFENDANT ANOVA FOOD, INC. AND DENYING PLAINTIFFS
THE HANOVER INSURANCE COMPANY AND MASSACHUSETTS BAY INSURANCE
2

COMPANY’S MOTION FOR SUMMARY JUDGMENT AND GRANTING, IN PART, AND
DENYING, IN PART, DEFENDANT ANOVA FOOD LLC’S MOTION FOR PARTIAL
SUMMARY JUDGMENT.

(ECF No. 151).

On October 21, 2016, the Court issued an ORDER DENYING
COUNTER-CLAIMANT ANOVA FOOD, LLC’S BAD FAITH CLAIM.

(ECF No.

188).
On October 24, 2016, the Court issued an ORDER ON REMAINING
ISSUES REGARDING THE ZOBRIST LAW FIRM’S ATTORNEYS’ FEES.

(ECF

No. 189).
On June 9, 2017, the Court issued an ORDER AWARDING
ATTORNEYS’ FEES INCURRED IN DEFENSE OF ANOVA FOOD, LLC.

(ECF No.

219).
On the same date, Judgment was entered.

(ECF No. 220).

On June 23, 2017, Anova Food, LLC filed a Motion for Award
of Attorney Fees and Costs along with Declarations in support of
the Motion.

(ECF Nos. 224-28).

On September 29, 2017, the Magistrate Judge issued a
FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART
ANOVA FOOD, LLC’S MOTION FOR AWARD OF ATTORNEYS’ FEES AND COSTS.
(ECF No. 247).
On October 13, 2017, Anova Food, LLC filed OBJECTION TO
FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART
ANOVA FOOD, LLC’S MOTION FOR AWARD OF ATTORNEYS’ FEES AND COSTS.
(ECF No. 248).
On November 6, 2017, the Hanover Companies filed THE HANOVER
INSURANCE COMPANY AND MASSACHUSETTS BAY INSURANCE COMPANY’S MEMO
3

IN RESPONSE TO ANOVA FOOD, LLC’S OBJECTION TO FINDINGS AND
RECOMMENDATION TO GRANT IN PART AND DENY IN PART ANOVA FOOD,
LLC’S MOTION FOR AWARD OF ATTORNEY FEES AND COSTS.

(ECF No.

251).
On November 27, 2017, Anova Food, LLC filed its Reply.

(ECF

No. 252).
STANDARD OF REVIEW

Any party may object to a magistrate judge’s findings and
recommendation pursuant to District of Hawaii Local Rule 74.2.
The district court judge shall make a de novo determination
of those portions of the findings and recommendation to which a
party properly objects and may accept, reject, or modify, in
whole or in part, the findings and recommendation made by the
magistrate judge.

28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b);

Dawson v. Marshall, 561 F.3d 930, 933 (9th Cir. 2009).
De novo review means the district court must consider the
matter anew, as if it had not been heard before and as if no
decision previously had been rendered.

Id.

The district court

must arrive at its own independent conclusion about those
portions to which objections are made, but a de novo hearing is
not required.

United States v. Remsing, 874 F.2d 614, 617-18

(9th Cir. 1989).
ANALYSIS
Anova Food, LLC filed a Motion for Award of Attorneys’ Fees
and Costs pursuant to Florida Statute § 627.428 (2017).
4

Fla. Stat. § 627.428(1), provides:
Upon the rendition of a judgment or decree by any of
the courts of this state against an insurer and in
favor of any named or omnibus insured or the named
beneficiary under a policy or contract executed by the
insurer, the trial court or, in the event of an appeal
in which the insured or beneficiary prevails, the
appellate court shall adjudge or decree against the
insurer and in favor of the insured or beneficiary a
reasonable sum as fees or compensation for the
insured’s or beneficiary’s attorney prosecuting the
suit in which the recovery is had.
The purpose of the statute is to discourage insurance
companies from contesting valid coverage claims against it and to
reimburse successful insureds for their attorneys’ fees when they
are compelled to defend or sue to enforce their insurance
contracts.

Trans Coastal Roofing Co., Inc. v. David Boland,

Inc., 309 F.3d 758, 760-61 (11th Cir. 2002).
The Florida Supreme Court has stated that Fla. Stat. §
627.428 must be strictly construed.

Pepper’s Steel & Alloys,

Inc. v. United States, 850 So.2d 462, 465 (Fla. 2003) (per
curiam).
Anova Food, LLC asserts that it is entitled to attorneys’
fees and costs pursuant to the Florida statute as the prevailing
party in an action brought against it by the insurers The Hanover
Insurance Company and Massachusetts Bay Insurance Company (“the
Hanover Companies”).
The District Court ruled partially in favor of Anova Food,
LLC in the declaratory action.

The District Court found that the

Hanover Companies had a duty to defend Anova Food, LLC in the
Underlying Lawsuit in Kowalski v. Anova Food, LLC, Civ. No. 115

00795 HG-RLP.

(ECF Nos. 113, 151).

The District Court held that

neither the Hanover Companies nor Anova Food, LLC were entitled
to recover money they contributed to the March 2015 Settlement
Agreement for the Underlying Lawsuit.

(ECF Nos. 151, 187).

The District Court granted, in part, and denied, in part,
Anova Food, LLC’s counterclaim against the Hanover Companies for
breach of contract.

(ECF Nos. 151, 189, 219).

The District Court denied Anova Food, LLC’s counterclaim for
bad faith.

(ECF No. 188).

Pursuant to the District Court’s rulings, the Magistrate
Judge recommended Anova Food, LLC be considered the prevailing
party for purposes of awarding attorneys’ fees and costs pursuant
to Fla. Stat. § 627.428(1).
Anova Food, LLC sought a total award of $539.077.78 in
attorneys’ fees and costs.

(Anova Memo at p. 24, ECF No. 225).

The Magistrate Judge recommended an award of $126,321.59 in
attorneys’ fees and $9,930.49 in costs.
Anova Food, LLC objects to the Magistrate Judge’s Findings
and Recommendation on four bases:
(1)

Anova Food, LLC argues that it should be entitled to
attorneys’ fees incurred before the current lawsuit was
filed against it by the Hanover Companies;

(2)

Anova Food, LLC argues that its attorneys’ fees should
not be substantially reduced for its limited success;

(3)

Anova Food, LLC argues that its counsel should receive
higher hourly rates than awarded by the Magistrate
Judge; and,

(4)

Anova Food, LLC argues that local counsel from Deeley
King Pang & Van Etten should be awarded additional fees
6

because it had “inadvertently omitted some invoices.”
(Objections at pp. 2-15, ECF No. 248).
1.

Pre-Suit Fees

An insured may recover fees for pre-lawsuit work if the work
was “necessitated by the insurer’s unreasonable conduct.”

U.S.

Fid. & Guar. Co. v. Rosado, 606 So.2d 628, 629 (Fla. Dist. Ct.
App. 1992) (per curiam) (citing Wollard v. Lloyd’s & Cos. Of
Lloyd’s, 439 So.2d 217, 219 n.2 (Fla. 1983)).
Anova Food, LLC asserts that it should be awarded fees for
work performed from September 2012 to March 2015 related to the
Underlying Lawsuit in Kowalski v. Anova Food, LLC, Civil No. 1100795 HG-RLP.
Anova Food, LLC is not entitled to pre-suit fees in this
case.

The District Court already rejected Anova Food, LLC’s

argument that the Hanover Companies acted unreasonably in the
settlement of the Underlying Lawsuit.

(Order Denying Counter-

Claimant Anova Food, LLC’s Bad Faith Claim at pp. 12-13, ECF No.
188; Order Granting, In Part, and Denying, In Part, Defendant
Anova Food LLC’s Motion for Partial Summary Judgment, ECF No.
151).
Anova Food, LLC has not demonstrated that the Hanover
Companies engaged in unreasonable conduct prior to the filing of
the lawsuit that would entitle it to additional attorneys’ fees.
Banta Properties, Inc. v. Arch Specialty Ins. Co., 2012 WL
12835884, *2 (S.D. Fla. Dec. 5, 2012), vacated on other grounds
7

551 Fed. Appx. 564 (11th Cir. 2014) (per curiam); Storfer v.
Guar. Trust Life Ins. Co., 2011 WL 213461, *4 (S.D. Fla. Jan 21,
2011); see Kearney v. Auto-Owners Ins. Co., 2010 WL 3119380, *8*9 (M.D. Fla. Aug. 4, 2010) (declining to award pre-suit fees
under Fla. Stat. § 627.428).
The District Court already determined all of the attorneys’
fees to which Anova Food, LLC was entitled in the Underlying
Lawsuit.

(ORDER AWARDING ATTORNEYS’ FEES INCURRED IN DEFENSE OF

ANOVA FOOD, LLC dated June 9, 2017, ECF No. 219).
Anova Food, LLC is not entitled to pre-suit attorneys’ fees.
2.

Reduction For Limited Success

Florida law provides that the attorneys’ fees awarded to the
prevailing party shall be reduced if its success was limited.
Fla. Patient’s Comp. Fund v. Rowe, 472 So.2d 1145, 1151 (Fla.
1985).

The Florida Supreme Court explained in Rowe:

When a party prevails on only a portion of the claims
made in the litigation, the trial judge must evaluate
the relationship between the successful and
unsuccessful claims and determine whether the
investigation and prosecution of the successful claims
can be separated from the unsuccessful claims. In
adjusting the fee based upon the success of the
litigation, the court should indicate that it has
considered the relationship between the amount of the
fee awarded and the extent of success.
Id.
Anova Food, LLC had limited success in this case.

Anova

Food, LLC prevailed on the issue of whether the Hanover Companies
had a duty to defend it in the Underlying Lawsuit.

8

The District

Court ruled, however, that the period of time for which Anova
Food, LLC was entitled to defense fees was limited.

(Order

Granting, In Part, and Denying, In Part, Defendant/
Counterclaimant Anova Food, LLC’s Motion for Partial Summary
Judgment, ECF No. 113).
Anova Food, LLC did not prevail on its request for pretender attorneys’ fees related to the Underlying Lawsuit.

(Order

Granting, In Part, and Denying, In Part, Defendant/CounterClaimant Anova Food, LLC’s Motion for Partial Summary Judgment at
pp. 30-37, ECF No. 113).

Anova Food, LLC was not awarded a

substantial portion of the attorneys’ fees it sought for the
Underlying Lawsuit.

(Order Awarding Attorneys’ Fees Incurred In

Defense of Anova Food, LLC, ECF No. 219).
Anova Food, LLC did not prevail on the most substantial
claim in the case.

It was unsuccessful on its claims seeking to

recoup the money it contributed to the settlement of the
Underlying Lawsuit.

(Order Granting, In Part, and Denying, In

Part, Defendant Anova Food LLC’s Motion for Partial Summary
Judgment at pp. 42-48, ECF No. 151).

Anova Food, LLC also did

not prevail on its counter-claim for bad faith.

(Order Denying

Counter-Claimant Anova Food, LLC’s Bad Faith Claim, ECF No. 188).
As identified in the Findings and Recommendation, Anova
Food, LLC was responsible for increasing its own attorneys’ fees.
Anova Food, LLC devoted numerous hours to repeating unsuccessful
arguments and seeking reconsideration of issues after the
District Court had ruled.

(Findings and Recommendation at p. 13,
9

ECF No. 247; Minute Order Denying Anova LLC’s Motion for
Reconsideration dated August 31, 2016, ECF No. 187).

The

District Court had to request briefing on three separate
occasions with respect to the outstanding attorneys’ fees from
the Zobrist Law Firm because Anova Food, LLC did not properly
submit its billing records.

(Order at p. 2, ECF No. 219).

The District Court agrees with the Findings and
Recommendation that the lodestar amount be reduced by 50%
considering the relationship between the fees requested and the
extent of Anova Food, LLC’s success in the action.

Rowe, 472

So.2d at 1151.
3.

Reasonable Hourly Rate

A reasonable hourly rate is the prevailing market rate in
the relevant legal community for similar services by lawyers of
reasonably comparable skills, experience, and reputation.

Norman

v. The Housing Authority of the City of Montgomery, 836 F.2d
1292, 1299 (11th Cir. 1988).

The fee applicant bears the burden

of supplying the court with specific and detailed evidence from
which the court can determine the reasonable hourly rate.

Id.

The general rule is that the relevant market for purposes of
determining the reasonable hourly rate for attorney’s services is
the place where the case is filed.

Holman v. Student Loan

Xpress, Inc., 778 F.Supp.2d 1306, 1316 (M.D. Fla. 2011).

The

court is itself an expert on the question of attorneys’ fees in
its district and may consider its own knowledge and experience
10

concerning reasonable and proper fees.

Id. at 1316.

The Magistrate Judge appropriately determined that $350 per
hour is a reasonable rate for Mr. Neeleman, who has 31 years of
experience.

Tylor v. RealVoice LLC, Civ. No. 17-00293DWK-RLP,

2017 WL 5179796, *5 (D. Haw. Oct. 20, 2017) (finding $350 per
hour was a reasonable rate for an attorney with 42 years
experience); Honolulu Acad. of Arts v. Green, Civ. No. 15-00355
DKW-KSC, 2017 WL 1086224, *8 (D. Haw. Feb. 28, 2017) (finding a
partner in a San Francisco law firm with 25 years experience was
entitled to a reasonable rate of $325 per hour); Pelayo v.
Platinum Limousine Srvs, Inc., Civ. No. 15-00023DKW-KJM, 2016 WL
5402185, *5 (D. Haw. Sept. 27, 2016) (finding $310 per hour was a
reasonable rate for an attorney with 27 years experience).
4.

Additional Fees for Deeley King Pang & Van Etten

On June 23, 2017, Anova Food, LLC filed its Motion for
Attorneys’ Fees and Costs.

(ECF No. 224).

Anova Food, LLC

stated that the Hawaii law firm of Deeley King Pang & Van Etten
worked as local counsel for a short period of time on the case.
(Memo. In Support at pp. 12-13, ECF No. 225).

Anova Food, LLC

attached invoices for the firm of Deeley King Pang & Van Etten in
the amount of $58,821.33.

(Deeley King invoice total attached at

p. 11, ECF No. 226-2).
Anova Food, LLC explained in its June 2017 Motion that
Deeley King Pang & Van Etten agreed to reduce their $58,821.33 in
billings by $33,821.33 for a total of $25,000 in total fees owed.
11

(Memo. In Support at p. 13, ECF No. 225; see Declaration of John
Neeleman at ¶ 19, dated June 23, 2017, ECF No. 226).
Anova Food, LLC attached the “Final Invoice” from Deeley
King Pang & Van Etten dated June 21, 2017 to its Motion.

The

Final Invoice states that the total legal fees payable to Deeley
King Pang & Van Etten is $25,000.00.

(Final Invoice at pp. 20-

21, attached as Ex. B to Neeleman Decl., ECF No. 226-2).
Anova Food, LLC also attached the Declaration of lead
attorney John Neeleman and the Declaration of Darren Zobrist, the
President of Anova Food, LLC attesting that true and accurate
copies of the invoices from Deeley King Pang & Van Etten were
attached, which reflected a Final Invoice in the amount of
$25,000.

(Declaration of John Neeleman at ¶ 4, dated June 23,

2017, ECF No. 226; Declaration of Darren Zobrist at ¶¶ 7-8, dated
June 23, 2017, ECF No. 228).
The Magistrate Judge recommended that Anova Food, LLC be
awarded the $25,000 reflected on the Final Invoice for Deeley
King Pang & Van Etten.

The Magistrate Judge recommended awarding

the fees despite the fact that “there are significant
inconsistencies regarding the amount of fees requested in Anova
LLC’s filings for the work performed by Deeley King Pang & Van
Etten.”

(Findings and Recommendation at p. 7, ECF No. 247).

The

Magistrate Judge recommended awarding fees to Deeley King Pang &
Van Etten given that the firm agreed to reduce its fees.

(Id. at

pp. 7-8).
On October 13, 2017, nearly four months after it filed its
12

June 23, 2017 Motion for Attorneys’ Fees, Anova Food, LLC changed
its position.

In its October 13, 2017 Objection, Anova Food, LLC

asserts that a number of billing invoices from Deeley King Pang &
Van Etten “were inadvertently omitted” from its June 23, 2017
Motion for Attorneys’ Fees.
Anova Food, LLC’s Objection takes a wholly different
position from its Motion.

It no longer asserts that Deeley King

Pang & Van Etten is owed a total of $25,000 in fees as it
previously requested.

Now, Anova Food, LLC asks the Court to

award an additional $24,964.58 in fees for Deeley King Pang & Van
Etten in addition to the $25,000 recommended by the Magistrate
Judge.

(Objections at pp. 14-15, ECF No. 248).

Anova Food, LLC provides no explanation for its conflicting
positions.

The invoices attached to the October 13, 2017 filings

are dated between December 2014 and August 2015.

It is

undisputed that these invoices were previously available and
never submitted to the Court in Anova Food, LLC’s June 23, 2017
Motion for Attorneys’ Fees.
The submission of the additional billing invoices in October
2017 does not comply with the District of Hawaii Local Rules.
District of Hawaii Local Rule 54.3 sets forth the basis by which
the court reviews requests for attorneys’ fees.

A motion must be

filed within 14 days of judgment being entered that includes an
affidavit of counsel and an itemization of work performed and a
description of services rendered.
54.3(a), (d)(1)-(2), (e).

District of Hawaii Local Rule

Anova Food, LLC’s submission of
13

additional invoices is untimely.

There is no explanation why

invoices were “inadvertently omitted.”

The invoices could have

been discovered and filed with reasonable diligence.

Winterrowd

v. Nelson, 480 F.3d 1181, 1183 n.5 (9th Cir. 2007) (declining to
consider previously available evidence on appeal); Brodheim v.
Cry, 2008 WL 339710, *1 (E.D. Cal. Feb. 5, 2008) (explaining that
a district court cannot adduce new evidence on appeal from a
magistrate judge’s order).
Contrary to Anova Food, LLC’s new position, the record
demonstrates that the firm of Deeley King Pang & Van Etten agreed
to submit reduced billing requests with a final total invoice of
$25,000. (Reply to Motion for Attorney Fees at p. 14, ECF No.
246; Final Invoice at pp. 20-21, attached as Ex. B to Neeleman
Decl., ECF No. 226-2).
Plaintiff’s Objections do not contain any information that
requires a change in the Findings and Recommendation of the
Magistrate Judge.
CONCLUSION
Plaintiff’s Objections to the Magistrate Judge’s Findings
and Recommendation (ECF No. 248) are OVERRULED.
Pursuant to 28 U.S.C. § 636(b)(1)(C) and Local Rule 74.2,
the “FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN
PART ANOVA FOOD, LLC’S MOTION FOR AWARD OF ATTORNEYS’ FEES AND
COSTS” (ECF No. 247) is ADOPTED AS THE OPINION AND ORDER OF THIS

14

COURT.
IT IS SO ORDERED.

DATED: January 24, 2018, Honolulu, Hawaii.

The Hanover Insurance Company; Massachusetts Bay Insurance
Company v. Anova Food, LLC; Counterclaimant Anova Food, LLC v.
Counter-Defendants The Hanover Insurance Company; Massachusetts
Bay Insurance Company; Civ. No. 14-00281HG-RLP; ORDER OVERRULING
ANOVA FOOD, LLC’S OBJECTION TO FINDINGS AND RECOMMENDATION TO
GRANT IN PART AND DENY IN PART ANOVA FOOD, LLC’S MOTION FOR AWARD
OF ATTORNEYS’ FEES AND COSTS (ECF No. 248) and ADOPTING THE
MAGISTRATE JUDGE’S SEPTEMBER 29, 2017 FINDINGS AND RECOMMENDATION
TO GRANT IN PART AND DENY IN PART ANOVA FOOD, LLC’S MOTION FOR
AWARD OF ATTORNEYS’ FEES AND COSTS (ECF No. 247)
15