Lock Realty Corporation IX v. Americare Living Centers LLP et al
OPINION AND ORDER granting in part and denying in part 13 MOTION for Attorney Fees filed by Rebecca J Bartle, US Health LP, Americare Living Centers LLP, Larry M New, John W Bartle. Signed by Judge William C Lee on 5/14/2014. (see order for additional details)(kds)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
LOCK REALTY CORPORATION, IX,
U.S. HEALTH, LP, et al.,
CIVIL NO. 3:13cv994
OPINION AND ORDER
This matter is before the court on a motion for attorney fees, filed by the defendants, U.S.
Health LP, Americare Living Centers LLP, Larry M. New, John W. Bartle, and Rebecca J. Bartle
on January 27, 2014. The plaintiff, Lock Realty Corporation IX (“Lock”), filed its response on
February 13, 2014, to which Defendants replied on February 21, 2014. Lock filed a surreply on
March 25, 2014.
Lock’s complaint in this case was based on an alleged breach of lease between the parties.
Breaches of the same lease were previously litigated by the same parties in two separate federal
lawsuits. In the present lawsuit, Defendants filed a motion to dismiss based primarily on the
doctrine of res judicata. This Court granted the motion, and thus the Defendants were the
The lease agreement contains a provision in Paragraph 17 governing the award of
attorney’s fees to the prevailing party and provides that “the prevailing party in such action shall
be entitled to recover the court costs and reasonable attorney’s fees in the judgment....” Based on
this provision, Defendants request an award of $17,703.00. Defendant’s request is supported by
the affidavit of Robert J. Palmer, one of the attorney’s representing the Defendants.
Lock, in opposition to the motion for fees, argues that the parties to the lease were Lock
and Defendant US Health LP, and that the other defendants (John Bartle, Rebecca Bartle, Larry
New, and Americare Living Centers, LLP) were not parties to the lease. Lock contends that
since US Health LP represents twenty percent of the Defendants, then US Health’s portion of the
fees incurred should be pro-rated to twenty percent of the total time expended in the matter.
The Defendants, however, point out that even if each Defendant was not a party to the
lease, they were a party to the lawsuit and each party agreed to be liable for the attorneys’ fees.
Defendants state that the parties did not agree only to be liable for their proportionate share, and
that each party is jointly and severally liable for attorneys’ fees.Clearly, the Defendants have the
better position. It is undisputed that at least one party in the present action was a party to the
lease. It is also undisputed that the lease provides for recovery of attorney fees to the prevailing
party, and that the Defendants (including the party to the lease, US Health LP) were the
prevailing parties. Moreover, defendants Larry New, John Bartle and Rebecca Bartle were
guarantors of the lease and therefore are entitled to the benefits of the attorney fee provision.
Therefore, the court will not deny any fees on this basis.
Next, Lock argues that the rates charged by Defendants’ counsel are unreasonable. In his
affidavit in support of fees, Attorney Robert Palmer states that “Each of the attorneys working on
this case is a partner in the law firm of May Oberfell Lorber. Their time was billed at their usual
and customary rate for commercial litigation cases at $315.00 per hour.” This affidavit is dated
January 27, 2014. Lock points out that on March 19, 2013, Defendants’ counsel submitted a fee
petition in Lock II for their appellate fees. The affidavit of Attorney Robert Palmer submitted in
that action stated:
Mr. Johnson’s time was billed at usual and customary rate for these types of
matters at $290.00 per hour until 2012 at which time his rate increased to $305.00
per hour. Mr. Palmer’s time was billed at his usual and customary rate for these
types of appellate matters at $250.00 per hour until 2012 at which time his fees
increased to $260.00 per hour. Mr. Lebbin’s time was billed at his usual and
customary rate for these types of clients and matters at $210.00 per hour until
March, 2012, at which time his fees increased to $225.00 per hour.
Moreover, Lock argues, time entries for February 2013 which were included in the Defendants’
prior fee request show that by February 2013, Mr. Johnson’s rate was $315.00 and Mr. Palmer’s
rate was $260.00. Lock contends that this “drastic rate increase” in six months for the same client
for the same case is unreasonable.
This court finds that the rate increase is not, without evidence to the contrary,
unreasonable. A review of the rates charged in the various Lock cases that have been litigated
the past few years shows a steady increase in the billing rates for all attorneys involved. As long
as the rates themselves, regardless of when set, are reasonable, the court finds no reason to
inquire into the details of the rate increases. On this point, as the Defendants have pointed out,
the affidavits of Lock’s attorneys submitted in prior Lock litigation show that Lock’s attorneys
have also increased their rates over time, and that the rates ranged upwards to $505.00 per hour.
As Lock does not contend that its attorney’s fees are unreasonable, it cannot be heard to
complain that the Defendants’ attorney fees (which are lower) are unreasonable. It is simply
absurd for Lock to object to fees in the $225 to $305 hourly range when its own attorneys were
billing at $505 per hour.
Lock has also objected to various categories of charges which it claims are unreasonable.
Lock objects to the time spent researching and drafting a motion for sanctions. The Defendants
explain that they were considering filing a motion for sanctions against Lock pursuant to 28
U.S.C. § 1927, and researched and drafted a motion, but then decided that the best option was to
send Lock’s counsel a letter pursuant to Rule 11 of the Federal Rules of Civil Procedure. The
court finds that Lock has the better position on this point, as courts have found that it is
unreasonable to include fee requests for documents which were never filed with the court. See
Worth v. Tyer, 2001 WL 1659156 (N.D. Ill. 2001); Avila v. Van Ru Credit Corp., 1995 WL
683775, *7 (N.D. Ill. 1995). Therefore, the attorney fees spent researching and drafting the
motion for sanctions, which was never filed, will be denied.
Lock also contends that the time spent drafting client fee agreements is unreasonable.
Lock cites no support for its argument and this court agrees with the Defendants that there is
nothing unreasonable in charging for the time spent preparing fee agreements.
Next, Lock argues that fees for preparing various “vague” emails are not reasonable.
Lock cites three specific entries, including two emails to Attorney Shipley and an email to Gerri
Long. The Defendants have stated that Attorney Shipley has represented Defendants in other
matters and offered advice to Defendants’ counsel in the present case. The Defendants further
clarify that Gerri Long is an administrative assistant working at Americare Partners in
Indianapolis, Indiana. She contacted Defendants’ counsel at the direction of John Bartle
regarding the fee agreement. Lock also objects to entries relating to emails between Defendants’
counsel and the Court on October 18, 2013, and implies that the emails were inappropriate ex
parte communications. Defendants have included the emails in their exhibits and explain that
the email exchange was between this Court’s Case Management/Court Room Deputy and
Defendants’ counsel regarding whether Defendants would be filing a reply to Lock’s motion to
dismiss. The court finds all of the emails to be reasonable billable items.
Lastly, Lock argues that although its complaint contained one claim arising under the
lease, it also contained a separate claim regarding unpaid Medicare charges, and that attorney
fees relating to that claim are not recoverable as they did not arise under the lease. The
Defendants point out, however, that they had taken assignment of Lock’s Medicare provider
number during the term of the lease, and when Lock attempted to recover alleged damages
relating to the Medicare claims submitted by the Defendants, the alleged damages fell within
Paragraph 24.5(C)(3) of the lease. Paragraph 24.5(C)(3) provides that “tenant shall remain liable
to landlord for all damages provided in law and under this lease resulting from tenant’s
breach....” Clearly, the claim in Lock’s complaint regarding the Medicare claims arose through
the lease and breach of the lease. Thus, Defendants are entitled to their attorney fees for this
The Defendants have attached a summary of time records to the affidavit of Attorney
Robert Palmer in support of their motion for fees. The Defendants’ method of presenting their
time records, a form of “block billing”, does not enable the court to distinguish between allowed
and disallowed work (i.e. work on the motion for sanctions). Thus, the court will leave it to the
attorneys to work out a determination of which specific hours are disallowed. If the attorneys are
unable to reach an agreement they may file a supplemental motion with court to that effect.
On the basis of the foregoing, Defendants’ motion for attorney fees [DE 13] is hereby
GRANTED IN PART AND DENIED IN PART.
Entered: May 14, 2014.
s/ William C. Lee
William C. Lee, Judge
United States District Court
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