Young Men's Christian Association of Honolulu v. Aloha Kai Development, LLC

Filing 27

ORDER Adopting In Part and Rejecting In Part The Magistrate Judge's Findings and Recommendation To Grant In Part and Deny In Part Petitioner's Motion For Attorneys' Fees and Costs re 24 . "For the foregoing reasons, the Court ADOPTS IN PART and REJECTS IN PART the Magistrate Judge's Findings and Recommendation to Grant in Part and Deny in Part Petitioner's Motion for Attorneys' Fees and Costs, and awards Petitioner a total of $17,149.21." Signed by JUDGE ALAN C. KAY on 9/19/2018. (cib, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
___________________________________
YOUNG MEN’S CHRISTIAN ASSOCIATION )
OF HONOLULU, a Hawaii Nonprofit
)
Corporation,
)
)
Petitioner,
)
)
v.
) Civ. No. 18-00086 ACK-RLP
)
ALOHA KAI DEVELOPMENT, LLC,
)
a Hawaii Limited Liability
)
Company,
)
)
)
Respondent.
)
___________________________________)
ORDER ADOPTING IN PART AND REJECTING IN PART THE MAGISTRATE
JUDGE’S FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN
PART PETITIONER’S MOTION FOR ATTORNEYS’ FEES AND COSTS
For the reasons set forth below, the Court adopts in
part and rejects in part the Magistrate Judge’s Findings and
Recommendation to Grant in Part and Deny in Part Petitioner
YMCA’s Motion for Attorneys’ Fees and Costs, ECF No. 24, issued
by Magistrate Judge Richard L. Puglisi on July 30, 2018.
BACKGROUND 1
Petitioner initiated this action on March 7, 2018, by
filing a Motion for Order Confirming Arbitration Award, seeking
confirmation of an arbitration award pursuant to Hawaii Revised
Statutes (“HRS”) Section 658A.

See ECF No. 1.

Respondent filed

its Countermotion to Vacate or Correct the Arbitration Award on
1

As the parties are familiar with the facts and procedural history of this
case, the Court will provide only a brief overview of the proceedings most
relevant to the issue of attorneys’ fees and costs.

1

May 1, 2018.

On June 5, 2018, this Court issued its Order

Granting Petitioner’s Motion for Order Confirming Arbitration
Award and Denying Respondent’s Countermotion to Vacate or
Correct the Arbitration Award.

ECF No. 14.

Judgment was

entered in Petitioner’s favor on June 5, 2018.

ECF No. 15.

Thereafter, on June 12, 2018, Petitioner filed a
Motion for Attorneys’ Fees and Costs.

ECF No. 16.

Respondent

filed its Opposition on July 10, 2018, ECF No. 21, and
Petitioner filed its Reply on July 24, 2018.

ECF No. 23.

On

July 30, 2018, the Magistrate Judge issued his Findings and
Recommendation to Grant in Part and Deny in Part YMCA’s Motion
for Attorneys’ Fees and Costs (the “F&R”).

ECF No. 24.

In the F&R, the Magistrate Judge recommended that this
Court grant Petitioner attorneys’ fees in the amount of
$13,978.53 and costs in the amount of $400.00 pursuant to HRS
Section 658A-25(c).

F&R at 7-8.

On August 13, 2018, Petitioner filed two objections
(“Petitioner’s Objections”) to the Magistrate Judge’s F&R.
No. 25.

ECF

First, Petitioner objected to the Magistrate Judge’s

recommended reduction of Mr. Nickolas A. Kacprowski’s requested
hourly rate of $375.00 per hour to $270.00 per hour.
Petitioner’s Objections at 1.

Second, Petitioner objected to

the Magistrate Judge’s recommended deduction of 1.4 hours from
the time requested for Mr. Kacprowski for having a second
2

attorney, Mr. Paul Alston, attend the hearing on Petitioner’s
Motion for Order Confirming the Arbitration Award and
Respondent’s Countermotion to Vacate or Correct the Arbitration
Award (the “Hearing”).

Id.

On August 27, 2018, Respondent

filed its response (“Respondent’s Response”) to Petitioner’s
objections.

ECF No. 26.
STANDARD OF REVIEW

The district court may accept those portions of a
magistrate judge’s findings and recommendation that are not
objected to if it is satisfied that there is no clear error on
the face of the record.

United States v. Bright, Civ. No. 07-

00311 ACK-KSC, 2009 WL 5064355, at *3 (D. Haw. Dec. 23, 2009);
Stow v. Murashige, 288 F. Supp. 2d 1122, 1127 (D. Haw. 2003).
When a party objects to a magistrate judge’s findings
and recommendation, the district court must review de novo those
portions to which the objections are made and “may accept,
reject, or modify, in whole or in part, the findings and
recommendations made by the magistrate judge.”
636(b)(1)(C); Fed. R. Civ. P. 72(a); L.R. 74.2.

28 U.S.C. §
Under a de novo

standard, a district court “review[s] the matter anew, the same
as if it had not been heard before, and as if no decision
previously had been rendered.”

Freeman v. DirecTV, Inc., 457

F.3d 1001, 1004 (9th Cir. 2006).

3

The district court has discretion, but is not
required, to consider evidence presented for the first time in a
party’s objection to a magistrate judge’s recommendation.
Akhtar v. Mesa, 698 F.3d 1202, 1208 (9th Cir. 2012).

The

district court may receive further evidence or recommit the
matter to the magistrate judge with instructions. 28 U.S.C. §
636(b)(1)(C); L.R. 74.2.

The district court may consider the

record developed before the magistrate judge, but the Court must
make its own determination on the basis of that record.

L.R.

74.2.
DISCUSSION
The parties have not objected to the Magistrate
Judge’s recommendation that this Court hold that Petitioner is
entitled to an award of reasonable attorneys’ fees, as a general
matter, and costs in the amount of $400.00 under HRS Section
658A-25.

See generally F&R.

The Court does not find clear

error in the F&R regarding this recommendation and adopts it for
the reasons stated therein.
In the F&R, the Magistrate Judge recommended that this
Court reduce Mr. Kacprowski’s requested hourly rate as well as
the total number of hours requested for Mr. Kacprowski’s
services due to duplicative billing.

F&R at 7.

To calculate

reasonable attorneys’ fees, the Magistrate Judge applied the
method used by Hawaii courts, which is nearly identical to the
4

traditional “lodestar” calculation set forth in Hensley v.
Eckerhart. 461 U.S. 424, 433 (1983); Gurrobat v. HTH Corp., 346
P.3d 197, 207 (Haw. 2015).

Because Hawaii state courts have

considered federal law in determining a reasonable hourly rate,
federal case law is instructive in this matter.

See, e.g.,

Cnty. of Haw. v. C & J Coupe Family Ltd. P’shp, 208 P.3d 713,
720 (Haw. 2009) (determining a reasonable hourly rate based on
the “prevailing market rates in the relevant community”)
(quoting Blum v. Stenson, 465 U.S. at 895 (1984)).
The lodestar method requires the Court to determine a
reasonable fee by multiplying an attorney’s reasonable hourly
rate by the reasonable number of hours worked.
U.S. at 433.

A strong presumption exists that the lodestar

amount is reasonable.
(Haw. 2013).

Hensley, 461

Kaleikini v. Yoshioka, 304 P.3d 252, 273

However, a court may adjust the lodestar figure

using various factors as “guides.”

Chun v. Bd. of Trs. of

Emps.’ Ret. Sys. of Haw., 106 P.3d 339, 358 (Haw. 2005).
Petitioner requested the following lodestar amount for
the work of its attorneys:
ATTORNEY
Paul Alston, Esq.
Nickolas A. Kacprowski, Esq.
Wendy F. Hanakahi, Esq.

HOURS
2.9
21.6
30.0

RATE
$395.00
$375.00
$225.00
SUBTOTAL
Hawaii General Excise Tax of 4.712%
TOTAL

5

TOTAL
$1,145.50
$8,100.00
$6,750.00
$15,995.50
$753.71
$16,749.21

See F&R at 4.

The Magistrate Judge analyzed Petitioner’s

request pursuant to the lodestar analysis, first considering the
reasonableness of the hourly rates, and subsequently analyzing
the hours reasonably expended.

Id. at 4-5.

The Magistrate Judge ultimately recommended a
reduction in Petitioner’s requested fee based on two findings:
(1) the requested hourly rate for Mr. Kacprowski was
unreasonable for an attorney with fourteen years of experience
based on the prevailing rates in the community and Mr.
Kacprowski’s role in the litigation; and (2) the time entry that
requested fees for two attorneys attending the Hearing was
impermissibly duplicative.

Id. at 5, 7.

The Magistrate Judge

recommended that this Court award Petitioner $400.00 in costs
and $13,978.53 in attorneys’ fees, as set forth below, for a
total award of $14,378.53.
ATTORNEY
Paul Alston, Esq.
Nickolas A. Kacprowski, Esq.
Wendy F. Hanakahi, Esq.

RATE
$395.00
$270.00
$225.00
SUBTOTAL
Hawaii General Excise Tax of 4.712%
TOTAL

Id. at 7.

HOURS
2.9
20.2
30.0

TOTAL
$1,145.50
$5,454.00
$6,750.00
$15,995.50
$629.03
$13,978.53

The Court will review de novo Petitioner’s objections

in turn.
I.

Reasonableness of Hourly Rates
Petitioner filed a limited objection to the Magistrate

Judge’s F&R to the extent that it found the billing rate
6

requested for Mr. Kacprowksi, $375.00 per hour, was unreasonable
and recommended that this Court reduce Mr. Kackprowski’s billing
rate to $270.00 per hour.

Petitioner’s Objections at 1.

Petitioner asserts that based on the outcome of the arbitration
proceedings, the fact that Respondent never objected to the
requested hourly rate, and the evidence submitted in support of
Mr. Kacprowski’s requested rate, the recommendation of a reduced
rate was unwarranted.

Id.

Petitioner further asserts that it

was improper for the Magistrate Judge to base its resasonablenss
determination primarily on the number of years that Mr.
Kacprowski has practiced law.

Id. at 2.

Petitioner argues that

the Magistrate Judge should have also considered the nature of
the litigation and Mr. Kacprowski’s skill, experience, and
reputation as an attorney in determining a reasonable billing
rate.

Id. at 2-3; see Hiken v. Dept. of Defense, 836 F.3d 1037,

1044 (9th Cir. 2016) (stating that the reasonable rate of an
attorney should be determined by the rate prevailing in the
community for similar work performed by attorneys of comparable
skill, experience, and reputation).
The fee applicant bears the burden of establishing
that the requested hourly rate reflects prevailing rates for
similar legal services in the community.

Liberty Mut. Ins. Co.

v. Sumo-Nan LLC, No. CV 14-00520 DKW-KSC, 2017 WL 810277, at *9
(D. Haw. Mar. 1, 2017); Smothers v. Renander, 2 Haw. App. 400,
7

633 P.2d 556, 563 (1981).

The party that opposes the fee

application bears the burden of submitting evidence in rebuttal
to challenge the reasonableness of the fees requested.

Hiken,

836 F.3d at 1045 (9th Cir. 2016) (citing Gates v. Deukmejian,
987 F.2d 1392, 1397-98 (9th Cir. 1992)).
The Court observes that during the arbitration
proceedings, the arbitrator determined that $375.00 per hour was
a reasonable billing rate for Mr. Kacprowski.
Objections at 7.

Petitioner’s

In fact, Respondent argued before the

arbitrator that a the billing rate of $395.00, which Petitioner
requested in those proceedings, was unreasonable, and that the
arbitrator should reduce Mr. Kacprowski’s rate to $375.00 per
hour.

ECF No. 7-7 at 13.

Subsequently, at no time during the

proceedings before the Magistrate Judge did Respondent object to
Petitioner’s requested billing rate of $375.00 per hour.

These

facts serve as compelling evidence that $375.00 per hour is a
reasonable billing rate.
Petitioner also provides evidence in its Motion for
Attorneys’ Fees and Costs that Mr. Kacprowski has over fourteen
years of experience in commercial complex litigation matters.
Kacprowski Decl., ECF No. 16 at ¶ 7.

Mr. Kacprowski has been a

shareholder and director at the law firm of Alston Hung Floyd &
Ing for four years, prior to which he was a partner at the law
firm of Kirkland & Ellis, LLP for four years.
8

Id. at ¶¶ 7, 9.

His current billing rate is $410.00 per hour.

Id. at ¶ 11.

At

the time this litigation commenced, Mr. Kacprowski’s standard
billing rate was $395.00 per hour, which the YMCA agreed to pay
when it retained Mr. Kacprowski.

Id. at ¶ 12.

For purposes of

the Motion for Attorneys’ Fees and Costs, Mr. Kacprowski reduced
his billing rate to $375.00 per hour at the request of the YMCA.
Id.
This Court is required to consider an attorney’s
experience, skill and reputation when calculating reasonable
hourly rates—not merely the number of years an attorney has
practiced law.

Welch v. Metro. Life Ins. Co., 480 F.3d 942, 946

(9th Cir. 2007); Jadwin v. Cty. of Kern 767 F. Supp. 2d 1069,
1130 (E. D. Cal. 2011) (emphasizing that an attorney’s
reasonable hourly rate is not determined solely by reference to
the number of years spent in practice).

The Ninth Circuit has

reversed district courts for simply relying on prior cases from
the same district when setting hourly rates in fee awards.
Hiken, 836 F.3d at 1045 (vacating an attorneys’ fees award that
was based on the district court’s reliance on two prior cases
rather than the evidence submitted by the fee applicant 2).

2

Although rate determinations in other cases may provide evidence of the
prevailing market rates, other factors, too, including affidavits of the
plaintiffs’ attorneys and other evidence submitted are also instructive in
arriving at a reasonable billing rate. Hiken, 836 F.3d at 1044.

9

In addition, Mr. Kacprowski’s requested rate of
$375.00 per hour is well below rates that courts in other
districts have approved for him. 3
The work underlying the motion to confirm the
arbitration award involved complex commercial litigation and the
Court is required to consider the prevailing rate in the
community for legal work of similar complexity.

Welch, 480 F.3d

942 at 946.
Respondent argued at arbitration in favor of a billing
rate of $375.00 per hour, which was awarded, failed to object to
that rate at the proceedings before the Magistrate Judge, and
has submitted no evidence challenging the reasonableness of Mr.
Kacprowski’s requested fee.

Accordingly, Respondent has failed

to rebut the reasonableness of the requested billing rate. 4
Given these circumstances, the complexity of the case, and the
evidence submitted by Petitioner, the Court finds that Mr.
Kacprowski’s requested rate of $375.00 per hour is reasonable.

3

Mr. Kacprowski states in his declaration that, while a partner at Kirkland
& Ellis, LLP, the United States Bankruptcy Court for the District of Delaware
approved a fee application with an hourly rate of $620.00 per hour for his
services. Kacprowski Decl., ECF No. 16 at ¶ 10. Although this fee award is
not indicative of reasonable rates in Honolulu, and a bankruptcy case is
quite dissimilar to the issues in this case, the Court nevertheless finds
that evidence of this fee award bears on Mr. Kacprowski’s skill and
experience as an attorney.
4
Indeed, the Court of Appeals for the Ninth Circuit has stated that the
losing party bears the burden of producing a “sufficiently cogent
explanation” of why a fee request is excessive, and that if “opposing counsel
cannot come up with specific reasons for reducing the fee request that the
district court finds persuasive, it should normally grant the award in full,
or with no more than a haircut.” Moreno v. Cty. of Sacramento, 534 F.3d
1106, 1116 (9th Cir. 2008).

10

Therefore, the Court concludes that a rate of $375.00 per hour
should be applied to determine the lodestar calculation for Mr.
Kacprowski’s attorneys’ fees with respect to this action.
II.

Reasonable Hours Spent
The Court now turns to Petitioner’s second limited

objection to the Magistrate Judge’s finding that fees requested
for two attorneys attending the Hearing were impermissibly
duplicative.

F&R at 7.

The Magistrate Judge correctly observed

that under Hawaii law, courts do not generally award fees for
duplicative efforts of counsel.

Id. at 6; Schefke v. Reliable

Collection Agency, Ltd., 32 P.3d 52, 102 (Haw. 2001) (stating
that courts should reduce an award of attorneys’ fees for
duplicative efforts by an attorney and paralegal).

For this

reason, the Magistrate Judge found that the time requested for
both Mr. Kacprowski and Mr. Alston to attend the Hearing was
duplicative and recommended deducting 1.4 hours from the time
requested for Mr. Kacprowski.

F&R at 7.

The Court notes that Respondent failed to set forth
any rationale in its Response as to why participation of both
attorneys in the aforementioned proceedings was unnecessarily
duplicative, other than stating that it was “not reasonable or
necessary.”

Respondent’s Response at 5.

In general, it is appropriate for two attorneys to
bill for their appearances at court proceedings when it is
11

“reasonable and necessary for a ‘second-chair’ to appear with
lead counsel.”

Nat’l Comm’n for Certification of Crane

Operators v. Ventula, No. CV 09-00104 SOM-LEK, 2010 WL 2179505,
at *5 (D. Haw. Apr. 30, 2010).

Furthermore, the Ninth Circuit

has held that the participation of multiple attorneys in a given
matter does not necessarily constitute unnecessary duplication
of effort, and that participation of multiple attorneys can be
appropriate depending on the complexity of the legal issues and
facts in a given case.

Kim v. Fujikawa, 871 F.2d 1427, 1435 n.

9 (9th Cir. 1989); see, e.g., Wyatt v. Ralphs Grocery Co. CV No.
02-01260 DOC, 2002 WL 32985841, at *4 (C. D. Cal. Apr. 1, 2002),
aff’d 65 Fed. Appx. 589 (9th Cir. 2003) (finding that it is
reasonable for lead counsel to have a “second chair” at trial
even when the “second chair” does not present any of the
plaintiff’s case); Arnett v. Hartford Life and Accident Ins.
Co., 558 F. Supp. 2d 975 (C. D. Cal. 2007) (finding that
attendance of two attorneys at hearings for a motion for summary
adjudication and motion for summary judgment is not
duplicative).
Petitioner explains in its Objections why the nature
of the case and the hearing on the motion to vacate necessitated
the presence of two attorneys at the hearing.
Objections at 9-10.

Petitioner’s

Specifically, Petitioner notes that the

arbitration award was nearly $2 million, which its client YMCA
12

incurred over $1 million in fees to obtain, and that property
that was the subject of the underlying arbitration was worth
over $20 million.

Id. at 10.

Both Mr. Kacprowski and Mr.

Alston litigated the arbitration proceedings.

Petitioner’s

Reply, ECF No. 23 at 6; Petitioner’s Objections at 9.
Accordingly, it appears essential that they both attended the
confirmation hearing especially regarding Respondent’s
Countermotion to Vacate or Correct the Arbitration Award.
Given the forgoing circumstances, the Court finds that
it was reasonable to have both attorneys attend the Hearing.
Accordingly, the Court awards Petitioner the full time requested
for both Mr. Kacprowski and Mr. Alston to attend the Hearing.
Consequently, the Court awards Petitioner $400.00 in
costs and $16,749.21 in attorneys’ fees as set forth below, for
a total award of $17,149.21.
ATTORNEY
Paul Alston, Esq.
Nickolas A. Kacprowski, Esq.
Wendy F. Hanakahi, Esq.

HOURS
2.9
21.6
30.0

RATE
$395.00
$375.00
$225.00
SUBTOTAL
Hawaii GET of 4.712%
TOTAL ATTORNEYS’ FEES
Costs
TOTAL

TOTAL
$1,145.50
$8,100.00
$6,750.00
$15,995.50
$753.71
$16,749.21
$400.00
$17,149.21

CONCLUSION
For the foregoing reasons, the Court ADOPTS IN PART
and REJECTS IN PART the Magistrate Judge’s Findings and
Recommendation to Grant in Part and Deny in Part Petitioner’s
13

Motion for Attorneys’ Fees and Costs, and awards Petitioner a
total of $17,149.21.

IT IS SO ORDERED.
DATED:

Honolulu, Hawaii, September 19, 2018.

________________________________
Alan C. Kay
Sr. United States District Judge

Young Men’s Christian Association of Honolulu v. Aloha Kai Development, LLC,
Civ. No. 18-00086 ACK-RLP, Order Adopting in Part and Rejecting in Part
Magistrate Judge’s Findings and Recommendation.

14