VLM Food Trading International, Inc. v. Illinois Trading Company et al

Filing 112

MEMORANDUM Opinion and Order Signed by the Honorable Harry D. Leinenweber on 7/11/2013:Mailed notice(wp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

VLM FOOD TRADING INTERNATIONAL,
INC.,
Plaintiff,
v.

Case No. 12 C 8154
Hon. Harry D. Leinenweber

ILLINOIS TRADING CO., et al.,
Defendants.

MEMORANDUM OPINION AND ORDER
Before

the

Court

is

Plaintiff

VLM

Food

International’s (hereinafter, “VLM”) fee petition.

Trading
For the

reasons stated herein, the Court awards a total of $94,934.27 in
fees.
I.

BACKGROUND

The Court presumes familiarity with its March 5, 2013
opinion and therefore declines to provide an extensive factual
background of the case.

Instead, the Court only provides those

facts relevant for the instant fee petition.
On October 12, 2012, VLM filed suit against Defendants
Illinois Trading Company (“ITC”), ITC’s President Lawrence N.
Oberman (“Oberman”), and The Obee Family Partnership (an Illinois
entity which was in the position to control ITC).
Complaint,

VLM

alleged

two

claims

under

In its initial
the

Perishable

Agricultural Commodities Act, 7 U.S.C. § 499a et seq. (the
“PACA”) and two state law claims for breach of contract and
breach of fiduciary duty.

On October 22, 2012, VLM filed an

Amended Complaint, adding Defendant FJ Management (d/b/a TAB
Bank), and adding a fifth claim against all Defendants for
unlawful retention and conversion of PACA trust assets.
After a merits hearing and post-trial briefing, the Court
found in favor of VLM on Counts I-IV and found in Defendants’
favor on Count V.

In its ruling, the Court determined VLM was

entitled to attorneys’ fees, and directed VLM to submit a fee
petition. The Court then granted Defendants twenty-eight days to
object to the reasonableness of those fees.

See, VLM Food

Trading Int'l, Inc. v. Illinois Trading Co., No. 12 C 8154, 2013
U.S. Dist. LEXIS 29791 at *21 (N.D. Ill. Mar. 5, 2013).

While

VLM filed a timely fee petition, Defendants failed to file any
objections within the allotted time.
Court

granted

objections.

Defendants

ECF No. 90.

an

Despite this failure, the

additional

two

weeks

to

file

Pursuant to this Order, Defendants

filed their objections on May 13, 2013.

VLM filed its reply on

May 20, 2013.
On July 5, 2013, Defendants filed a Motion requesting that
the Court determine the amount of attorneys’ fees.

Incredibly,

when Defendants presented their Motion on July 10, 2013, they
informed the Court that they needed a ruling on the issue the
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very next day because Defendant Oberman was trying to close on
the sale of his residence.

While the Court has granted this

request, it is baffling to think why an attorney would wait until
the eleventh hour to demand that the Court issue a ruling the
very next day.

Conduct of this nature demonstrates a complete

lack of respect regarding this Court’s schedule and docket.
While Defendants may believe this case is the only case or the
most important case before the Court, these assumptions are
simply inaccurate. Accordingly, while the Court will now proceed
with the reasonableness of VLM’s fees and costs, it notes that
future requests of this nature will not be accommodated.
II.
PACA

mandates

that

LEGAL STANDARD
perishable

agricultural

commodities

received by a merchant, dealer, or broker as well as the sales
proceeds from such commodities, be held in trust for the benefit
of unpaid suppliers “until full payment of the sums owing in
connection with such transactions has been received.”
§ 499e(c)(2).

7 U.S.C.

With respect to whether a prevailing party is

entitled to attorneys’ fees under PACA, courts have held that
“where the parties’ contracts include a right to attorneys’ fees,
they can be awarded as sums owing in connection with perishable
commodities transactions under PACA.”

C.H. Robinson Worldwide,

Inc. v. Auster Acquisitions, No. 11-C-105, 2011 U.S. Dist. LEXIS
4808174 at *6 (N.D. Ill. Oct. 11, 2011) (citations omitted).
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The Seventh Circuit distinguishes contractual-fee shifting
provisions from statutory fee-shifting provisions.

See, e.g.,

Matthews v. Wisconsin Energy Corp., 642 F.3d 565, 572 (7th Cir.
2011).

The standard on whether to award fees in a contractual

fee-shifting case is a “commercially-reasonable standard and does
not require courts to engage in detailed, hour-by-hour review of
a prevailing party’s billing records.”

III.

Id. (citations omitted).

ANALYSIS

VLM’s Petition seeks $108,954.87 in attorneys’ fees, costs,
and

witness

travel

expenses.

Defendants

object

to

the

reasonableness of a substantial portion of the entire Petition.
They do not dispute the reasonableness of VLM’s counsel’s hourly
rate, and instead argue that the number of hours claimed are
“unreasonable,
documented.”

unnecessary,

excessive,

and

inadequately

Defs.’ Opp. and Objection to Pl.’s Fee Pet. at 8.

While Defendants neglect to apply the applicable commercial
reasonableness standard in raising these objections, the Court
will nevertheless address each in turn.

See Matthews, 642 F.3d

at 572.
A.

Unnecessary Hours

Defendants claim a number of hours in VLM’s Petition should
be struck because such hours were unnecessary in the instant

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suit.

Specifically, they argue the hours relating to VLM’s (1)

planned intervention in the Endico action; (2) application for a
temporary restraining order; and (3) PACA claims procedure were
unnecessary.

The Court will address each in turn.
1.

Endico Action

VLM seeks $2,469.50 for the 10.8 hours it spent reviewing
the docket of another PACA case filed against Defendant ITC in
the Southern District of New York.

See Endico Potatoes, Inc. v.

Illinois Trading, Co., et al., No. 12-C-7090 (S.D.N.Y. Sept. 20,
2012).

Eventually, this case settled on October 10, 2012.

VLM

claims it spent that time researching and preparing a motion to
intervene and preparing a letter to the court in New York.
However, it is undisputed that VLM never intervened in the New
York case.

As a result, the Court finds these 10.8 hours

unnecessary and subtracts $2,469.50 from the fee award.
2.

VLM’s Application for a TRO

Next, Defendants object to the 29.3 hours VLM spent in
researching and preparing the temporary restraining order (“TRO”)
issued

in

this

case.

Defendants

contend

that

because

a

preliminary injunction was entered in the Endico action on
October 11, 2012 there was no reason for VLM to file a TRO in
this action.

VLM responds that the court in the New York

terminated the case (and thus terminated the injunction) on

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October 11, 2012.

It provided the New York court’s order

“discontinuing the case.”
2, Page ID# 1101.
hours

VLM

spent

Pl.’s Reply, Ex. B at 3, ECF No. 102-

In light of this, the Court finds the 29.3
on

preparing

the

TRO

and

its

Defendants’ Motion to Vacate the TRO reasonable.

response

to

As such, the

Court declines to subtract this amount from the fee award.
3.

PACA Claims Procedure

Defendants also argue that VLM’s time relating to the
preparation of it PACA claims procedure motion.

It argues that

since a PACA claims procedure was never effectuated VLM should
not

be

able

to

recover

any

time

dedicated

to

this

task.

Alternatively, Defendants also contend that these hours were not
necessary because they submitted Defendant ITC’s accounts payable
to VLM.
First,

the

Court

disagrees

with

Defendants’ assertions

regarding the fact that a claims procedure was unnecessary since
ITC turned over its accounts payable.

The function of a PACA

claims procedure is not merely to identify creditors – it is also
to provide notice and deadlines to unpaid creditors who seek to
recover funds.

See, generally, Sato & Co., LLC v. S&M Produce,

Inc., No. 2010 U.S. Dist. LEXIS 8775 (N.D. Ill. Feb. 2, 2010).
Moreover, it is undisputed that VLM presented its Motion for the
PACA claims procedure on November 27, 2012.

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See ECF No. 31.

While the procedure was never instituted, the Court does not find
VLM’s motion entirely unnecessary.
That
excessive.

said,

the

Court

finds

VLM’s

14.7

claimed

hours

VLM asserts that it spent 4.1 hours on October 30,

2012 preparing the claims procedure motion and claims it spent an
additional 5.4 hours revising the motion on November 9, 2012.
This

time

is

all

in

addition

to

the

8.3

“conferencing with co-counsel” on the matter.

hours

VLM

spent

In light of the

fact that VLM’s counsel, Michael Keaton, has extensive experience
with PACA claims, the Court finds 14.7 hours on such a task
excessive.

Accordingly, the Court reduces the number of hours

billed related to the drafting, reviewing, and revising the
claims procedure motion to 7 hours and subtracts $1,198.50 from
the fee award.

See Sato & Co., LLC, v. S&M Produce, Inc., No.

08-C-7352, 2010 U.S. Dist. LEXIS 85142, at *16-17 (N.D. Ill.
Aug. 16, 2010) (reducing the 13.3 hours counsel claimed to have
spent on a PACA claims procedure order to 8 hours because the
firm had significant PACA experience and standard PACA claims
procedure documents).
B.

Clerical Hours

Defendants next argue that an additional $9,395.00 should be
reduced from VLM’s fee petition because the time entries indicate
that these were for tasks that were “clerical in nature” and
“easily delegable to non-professional assistance.”
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Defs.’ Opp.

and Objection to Pl.’s Fee Pet. at 12.

VLM concedes that some of

Defendants’ objections have merit and agrees to reduce this
amount by $1,518.00.

However, VLM argues that the remaining

$7,877.00 is appropriate because the entries that correspond with
this amount could not have been performed by a non-attorney.
First, Seventh Circuit precedent is clear in disallowing
hours expended by counsel on clerical or non-legal work that is
“delegable to non-professional assistance.”

Spegon v. Catholic

Bishop of Chicago, 175 F.3d 544, 554-55 (7th Cir. 1999).

After

reviewing the entries Defendants have objected to as clerical,
the Court finds 20.7 hours uncompensable.

Such hours were spent

conferencing with service processors, communicating with the
Court’s staff, preparing summons, and filing documents.
spent on these tasks is not appropriate in a fee petition.
Sato

&

Co.,

LLC,

2010

U.S.

Dist.

LEXIS

85142

at

Time
See

*13-14.

Accordingly, the Court reduces VLM’s fee award by an additional
$4,604.50.
C.

Excessive or Duplicative Hours

Defendants claim an additional 57.5 hours should be removed
from VLM’s fee award because these hours are for entries that are
excessive or redundant.

Specifically, Defendants argue that all

of VLM’s entries relating to amending, correcting, or revising
documents should be struck.

VLM disagrees.

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After

reviewing

the

relevant

entries

Defendants

objected to, the Court finds 19.9 hours duplicative.

have

As such,

the Court subtracts these hours from the fee award.
As an example, VLM has three separate entries relating to
the preparation of a two paragraph compliance letter to TAB Bank.
Three entries for such a small task are both duplicative and
excessive.

As such, the Court reduces the time spent on this

task from 2.1 hours to .7 hours.

As another example, VLM claimed

it spent nearly three hours reviewing and amending its Complaint.
The Amended Complaint added only one count.

See ECF No. 22.

As

such, the Court finds the entries for this task redundant and
reduces VLM’s hours accordingly.
The Court also refuses to award VLM money for the time it
spent correcting a pleading error where they listed the wrong
party.

This leads to an additional deduction of 2.5 hours.

Aside

from

the

aforementioned

19.9

hours,

the

Court

disagrees with the remainder of Defendants’ objections. The time
VLM

spent

reviewing

USDA

records

and

conducting

an

onsite

inspection of Defendant ITC’s warehouse is neither redundant nor
duplicative.

These hours are compensable.

The Court also finds

Defendants’ objections regarding the time VLM spent researching
a case that Defendant cited in his post-trial brief completely
meritless.

To refresh Defendants’ recollection, it cited a

bankruptcy case, G&G Peppers, LLC. v. Ebro Foods, Inc., 424 B.R.
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420 (Bankr. N.D. Ill. 2010) for a proposition that was reversed
by the district court on appeal.
its March 5, 2013 opinion.

The Court pointed this out in

To now argue that VLM’s time spent

researching Ebro Foods was unreasonable is ludicrous.

Indeed,

Defendants would have been better served spending some time
researching that case themselves.
After reviewing the relevant entries Defendants claim are
duplicative, the Court subtracts 19.9 of the 57.7 hours.

This

amounts to a reduction of $5,128.50.
D.

Internal Attorney Conferences

Defendants also object to the 18.7 hours billed for internal
conferences between VLM’s counsel. Defendants seem to argue that
these hours are unreasonable because they merely entail time
VLM’s lead counsel spent “supervising” his associate.
Opp. and Objections to Pl.’s Fee Pet. at 20.

Defs.’

VLM responds that

it has excluded “supervision” time and the hours objected to
constitute substantive discussions regarding how the legal work
for the case would be divided.
affidavit averring the same.

VLM’s counsel has provided an

See ECF No. 76-1.

The Court finds

this and the fact that VLM has produced an affidavit stating that
it has paid a substantial portion of the bills its counsel has
charged persuasive in determining the reasonableness of the fees
here.

See ECF No. 76-2; see also Matthews, 642 F.3d at 572

(stating in a contractual fee-shifting statute “a willingness to
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pay is an indication of commercial reasonableness”). Defendants’
unsupported general objections are insufficient to overcome this
evidence.

Therefore, the Court declines to strike these hours

from VLM’s fees.
E.

Inadequate Documentation

Finally, Defendants contend that 17.6 hours in the fee
petition

should

be

insufficient detail.

struck

because

the

entries

provide

However, as the Seventh Circuit instructs,

“fee-shifting contracts require reimbursement for commerciallyreasonable fees no matter how the bills are stated.”
642 F.3d at 572.

Matthews,

Indeed, in Matthews the Seventh Circuit

rejected a party’s argument that the district court erred in
awarding fees because the petition lacked any description for the
work

performed.

descriptions.

Id.

Here,

VLM

has

provided

adequate

As such, the Court declines to strike these hours

from the award.
After subtracting the unreasonable hours, the Court awards
$89,061.50 in fees.
F.

Witness Travel Expenses

In the fee petition, VLM also requests $4,485.27 in witness
travel expenses.

VLM has provided an affidavit from Witold

Filemonowicz, VLM’s Vice-President, swearing that the said amount
reflects the expenses he incurred in his two trips from Canada to

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Chicago.

See Pl.’s Fee Pet., Ex. 1, ECF No. 76-1.

not object to such expenses.

Defendants do

Accordingly, the Court awards

$4,485.27 in witness travel expenses.
G.

Costs

Defendants also object to VLM’s costs.

Defendants argue

that such costs should not be awarded because they are not
documented adequately.

At the time Defendants filed their

objections, they were correct – the costs were not supported with
documentation.

However, in response to Defendants’ objections,

counsel for VLM submitted partial documentation. Therefore, many
of the claimed costs are documented, and in this Court’s judgment
are reasonable.

Those claimed costs which are not are addressed

below.
1.

Copy Expenses

Counsel for VLM seeks $1,472.30 in copy expenses.

However,

VLM has failed to submit an invoice or bill for these charges.
Moreover, VLM fails to identify what documents were copied, thus
making

it

impossible

reasonably necessary.

to

discern

whether

these

costs

were

As such, the Court denies these costs for

inadequate documentation.

See Sato & Co., 2010 U.S. Dist. LEXIS

85142 *22-24 (denying copy costs in a PACA case due to inadequate
documentation).

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2.

Fax Expenses

VLM also seeks to recover $51.00 in fax expenses. VLM avers
that it charges $1.00 per page to send an outgoing fax.

However,

VLM fails to provide any documentation regarding what 51 pages
were faxed and to whom they were faxed to.
Court refuses to award these expenses.
3.

Accordingly, the

See id.

Research

VLM also seeks to recover $51.00 for research. However, VLM
has failed to provide any supporting documentation for this
expense.

While the Court finds it entirely plausible that VLM

expended such sums on research, the ease with which it could have
produced a bill from WestLaw or any other legal research company
causes the Court to reduce VLM’s costs for such expenses.
4.

Other Costs

The Court notes that even though VLM failed to provide
detailed documentation of its travel expenses, the Court finds
$568.99 reasonable. The Court finds this particularly true given
that counsel for VLM appeared in Court on at least seven separate
dates and travels to the Dirksen Federal Building from the
Chicagoland suburbs.

The Court finds these costs reasonable

given that the contract provision at issue here states “[b]uyer
agrees to pay all costs of collection. . . .”

See Pl.’s Reply to

Defs.’

No.

Opp.

and

Objection,

Ex.

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A,

ECF

102-1

at

1.

Additionally, the Court awards the $95.75 incurred for long
distance phone charges despite the lack of documentation.
undisputed that VLM is located in Canada.
assume

that

VLM’s

counsel

incurred

It is

It is reasonable to

$95.75

in

international

telephone charges when communicating with his client over the
past eight months.
After reducing the aforementioned amounts, the Court awards
$1,387.75

in

determination

costs.
regarding

Adding

this

attorneys’

total
fees

with
and

the

witness

Court’s
travel

expenses total $94,934.27.
IV.

CONCLUSION

For the reasons stated herein, the Court grants in part and
denies in part VLM’s Petition for Attorneys’ Fees and Awards.
VLM is awarded the following amounts: (1) $89,061.50 in
attorneys’ fees; (2) $4,485.27 in witness travel expenses; and
(3) $1,387.50 in costs for a total award in the amount of
$94,934.27.
IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
Date:

7/11/2013

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