Victor Stanley, Inc. v. Creative Pipe, Inc. et al

Filing 944

MEMORANDUM AND ORDER granting in part 943 Plaintiff's Supplemental Motion for Attorneys' Fees. Signed by Judge Richard D. Bennett on 8/10/2021. (bmhs, Deputy Clerk)

Case 8:06-cv-02662-RDB Document 944 Filed 08/10/21 Page 1 of 11

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
VICTOR STANLEY, INC.,

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Plaintiff,

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v.

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SCH ENTERPRISES, LLC, et al. ,
Defendants.
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Civil Action No. RDB-06-2662

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MEMORANDUM ORDER

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Plaintiff Victor Stanley, Inc. (“VSI”) has been seeking to collect on its judgment and
on sanctions that have been awarded against Defendants SCH Enterprises LLC and Mark T.
Pappas (“Defendants”) since November 2010. Of relevance here, over the past five years,
Plaintiff has sought to collect on sanctions awarded on April 20, 2016 for Defendants’ failures
to comply with the Court’s Orders. (ECF Nos. 721, 722.) On August 14, 2019, Plaintiff was
awarded $143,087.62 in attorneys’ fees and costs relating to those failures from April 21, 2016
to November 20, 2018. (ECF Nos. 890, 891.) Presently pending before the Court is Plaintiff’s
Supplemental Motion for Attorneys’ Fees, seeking $62,226.00 in attorneys’ fees for the period
from November 20, 2018 to the present. (ECF No. 943.) A hearing was held on August 2,
2021. See Loc. R. 105.6 (D. Md. 2021). For the reasons stated on the record at the hearing
and for the following reasons, Plaintiff’s Supplemental Motion for Attorneys’ Fees (ECF No.
943) shall be GRANTED IN PART and Defendants shall pay $56,193.00 in attorneys’ fees
to Plaintiff within 90 days of this Memorandum Order, i.e. no later than November 8, 2021.

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BACKGROUND
Inasmuch as the parties are fully familiar with the pertinent background, it suffices to
state that currently, the status of this litigation is that Plaintiff, Victor Stanley, Inc. (“VSI”) is
seeking to collect on its judgment and on sanctions that have been awarded. 1 In April 2016,
Plaintiff was awarded $1,281,315.91 in sanctions. (ECF No. 722.) On August 14, 2019,
Plaintiff was awarded $143,087.62 in attorneys’ fees and costs relating to those failures from
April 21, 2016 to November 20, 2018. (ECF Nos. 890, 891.) In January 2020, the case was
referred to Magistrate Judge Sullivan for post-judgment proceedings in accordance with
Maryland Rule of Procedure 2-633, governing discovery requests in aid of enforcement of a
money judgment. (ECF No. 899.) On January 15, 2020, Plaintiff VSI requested a hearing on
the failure of Defendants “to make any voluntarily payments towards the [2016] Sanctions
Award (ECF No. 722).” (ECF No. 900.) Magistrate Judge Sullivan held a hearing on February
27, 2020, where, in addition to witness testimony by Defendant Mr. Pappas and Plaintiff VSI’s
Vice President, Gerald Skalka (“Mr. Skalka”), exhibits were admitted into evidence by both
sides. (ECF No. 911.)
On August 14, 2020, Judge Sullivan issued a Certification of Civil Contempt,
recommending, inter alia, that Defendants shall pay $100,000 to Plaintiff VSI by a date certain,
such as within 30 days of the Court’s Order adjudicating the recommendations within the
Certification of Civil Contempt, and should Defendants fail to fully comply, this Court shall
take appropriate action that may include an arrest warrant for Mr. Pappas. (ECF No. 918 at

This case was initially assigned to the Honorable Marvin J. Garbis, who has since retired, and the case
was reassigned to the undersigned on September 27, 2018.
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25-26.) In addition, Judge Sullivan recommended that this Court direct that the Defendants
appear before this Court to show cause why they should not be found in contempt of Court
for failing to comply with this Court’s order of April 20, 2016. Defendants timely filed
Objections on August 28, 2020. (ECF No. 920.) VSI filed a response (ECF No. 921) to
Defendants’ objections, Defendants filed a Reply thereto (ECF No. 923). In addition, since
August of 2020, Plaintiff VSI has filed monthly status reports indicating that there have been
no payments by the Defendants towards the Sanctions Award. (See ECF Nos. 919, 922, 924,
925, 926, 927, 928, 929, 930, 931, 932.)
On June 29, 2021, this Court entered a Memorandum and Order to Appear, scheduling
a contempt hearing for July 20, 2021, and ordering Mark Pappas and SCH Enterprises LLC
to appear before this Court to show cause why they should not be found in contempt of Court
for failing to comply with this Court’s order of April 20, 2016. (ECF No. 933.) On July 1,
2021, Defendants filed a Request for Confirmation of Sanctions Award and Termination of
Contempt Proceedings upon Payment. (ECF NO. 934.) This request sought confirmation
that once Plaintiff received $395,691.67, the amount that Judge Sullivan found to be the
remaining balance owed on the Sanctions Award, then the contempt hearing could be
terminated, and the sanctions award had been satisfied. On July 1, 2021, the Court rescheduled
the show cause hearing to August 2, 2021 at 2 pm. (ECF No. 935.) On July 2, 2021, the Court
entered a marginal order approving Defendants’ request for confirmation of sanctions award.
(ECF No. 936.)
On July 7, 2021, Plaintiffs filed a letter opposing the sanctions award amount of
$395,691.67 and requesting that the Court issue a separate order relating to interest and
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attorneys’ fees for the sanctions award. (ECF No. 937.) On July 9, 2021, the Defendants filed
a response, providing confirmation of its payment to Plaintiffs of $395,691.67 and arguing
that the Court’s Order of July 2, 2021 precluded the need for any contempt hearing. (ECF
No. 938.) On July 13, 2021, counsel was advised that the hearing scheduled for August 2,
2021 would proceed as ordered and that all parties, including Mr. Pappas, were to be in
attendance. The parties were also directed to file status reports in advance of the hearing,
outlining the parties’ respective positions on any remaining balances still at issue, including
attorneys’ fees.
On August 2, 2021, this Court held a show cause hearing. (ECF No. 941.) At the
hearing, the parties agreed that $22,877.00 was the appropriate interest amount on the recently
paid sanctions award of $395,691.67. The parties also agreed that Defendant still owed the
balance of the August 14, 2019 attorneys’ fee award of $143,087.62 for Plaintiff’s efforts in
collecting on the 2016 Sanctions Award from April 21, 2016 to November 20, 2018. (ECF
Nos. 890, 891.) Consequently, this Court awarded Plaintiff $22,877.00 in sanctions and
directed Plaintiff’s attorney to submit a supplemental request for attorneys’ fees from
November 20, 2018 to the present. (ECF No. 942.) On August 3, 2021, Plaintiff filed the
pending Supplemental Motion for Attorneys’ Fees, seeking $62,226.00 in attorneys’ fees.
(ECF No. 943.)
ANALYSIS
“[F]ederal courts have inherent authority to sanction.” Six v. Generations Federal Credit
Union, 891 F.3d 508, 519 (4th Cir. 2018). Such authority derives from “‘inherent powers,’ not
conferred by rule or statute, ‘to manage their own affairs so as to achieve the orderly and
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expeditious disposition of cases.’” Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178, 1186
(2017) (quoting Link v. Wabash R.R. Co., 370 U.S. 626, 630-31 (1962)). Courts are empowered
“to fashion an appropriate sanction for conduct which abuses the judicial process,” such as
“an order . . . instructing a party that has acted in bad faith to reimburse legal fees and costs
incurred by the other side.” Six, 891 F.3d at 519 (citing Goodyear Tire, 137 S. Ct. at 1186)
(internal citations omitted)). This Court has previously determined that Defendants failed to
comply with this Court’s Sanctions Award (ECF Nos. 722, 747, 890). Indeed, Defendants
failed to pay the remaining balance on the 2016 Sanctions Award for over five years until
threatened by this Court with civil contempt, including possible incarceration. (See Show
Cause Order, ECF No. 933.)
With respect to attorneys’ fees, this Court has previously explained the calculation of a
reasonable fee award, often referred to as the “lodestar award,” as follows:
A court’s award of reasonable attorneys’ fees is the product of the reasonable
hours expended multiplied by a reasonable hourly rate. In assessing the
reasonableness of the hours and rate claimed, the court considers the following
twelve factors elucidated in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714
(5th Cir. 1974) and adopted by the Fourth Circuit in Barber v. Kimbrell's, Inc., 577
F.2d 216, 226 n.28 (4th Cir. 1978): “(1) the time and labor expended; (2) the
novelty and difficulty of the questions raised; (3) the skill required to properly
perform the legal services rendered; (4) the attorney's opportunity costs in
pressing the instant litigation; (5) the customary fee for like work; (6) the
attorney's expectations at the outset of the litigation; (7) the time limitations
imposed by the client or circumstances; (8) the amount in controversy and the
results obtained; (9) the experience, reputation and ability of the attorney; (10)
the undesirability of the case within the legal community in which the suit arose;
(11) the nature and length of the professional relationship between attorney and
client; and (12) attorneys’ fees awards in similar cases.”
Diegert v. Baker, No. RDB-09-0392, 2010 WL 3860639, at *5 (D. Md. Sept. 30, 2010) (quoting
Xiao-Yue Gu v. Hughes STX Corp., 127 F. Supp. 2d 751, 764 (D. Md. 2001) (citing EEOC v.
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Service News Co., 898 F.2d 958, 965 (4th Cir. 1990) and, inter alia, Hensley v. Eckerhart, 461 U.S.
424 (1983))). “‘When . . . the applicant for a fee has carried his burden of showing that the
claimed rate and number of hours are reasonable, the resulting product is presumed to be the
reasonable fee’ to which counsel is entitled.’” Id. (quoting Pennsylvania v. Delaware Valley
Citizens’ Council for Clean Air, 478 U.S. 546, 565 (1986) (internal citations omitted)).
In examining these factors, this Court finds that Plaintiff’s requested award of
$62,226.00 in attorneys’ fees for November 20, 2018 to the present 2 is unreasonably high.
Plaintiff has provided this Court with detailed information regarding the hours expended by
two individuals involved in connection with Plaintiff’s efforts to obtain Defendants’
compliance with the 2016 Sanctions Award. (ECF No. 943.) This effort included the filing
of multiple motions by Plaintiff, preparing for and attending four hearings before both the
undersigned and Judge Sullivan, filing responses to Defendants’ objections to Judge Sullivan’s
findings, and seeking minimal discovery of Defendants’ underlying financial conditions. (Id.)
In total, Plaintiff asserts that one attorney and one paralegal spent 219.7 hours on these efforts.
(Id.) Specifically, Plaintiff reports that attorney Randell C. Ogg spent 146.4 hours and his
paralegal spent 73.3 hours on these efforts. This Court, having conducted a review of
Plaintiff’s itemized billing invoices, shall reduce attorney Ogg’s hours from 146.4 to 135 and
his paralegal’s hours from 73.3 to 47.8. This reduction is the result of the Court’s reducing
the amount of certain billing entries as follows:

Plaintiff has already been awarded $143,087.62 for the efforts in collecting on the 2016 Sanctions
Award from April 21, 2016 to November 20, 2018. (ECF Nos. 890, 891.)
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December 1, 2018 through December 31, 2018
Date

12/4/18

By

Services

Time Billed

Work on draft of Motion for Contempt/Show Cause;
RCO research as to factual background; review of relevant 1.1
exhibits; review of prior orders and content of
transcripts

Work on draft of Motion for Contempt/Show Cause;
RCO continued research as to factual background; review
of relevant exhibits; review of prior orders and 1.2
evidence at hearing of April 4, 2018
Drafting and editing of Motion for Contempt;
research re: legal issues; research history and exhibits;
12/10/18 RCO review prior testimony of Pappas on relationship of 2.8
accounts; review email claims of Pappas and Selba as
to grounds for refusal; research re: meaning of terms;
edit initial draft of affidavit by Jerry Skalka
12/5/18

12/11/18 PL

12/11/18 RCO

Work on Motion for Contempt; assemble exhibits;
edits and proofing; consult with Mr. Ogg re: Motion
5.0
contents and exhibits
Edits to Motion for Contempt; edits to Declaration of
Jerry Skalka; work re: exhibit review and assembly;
2.9
multiple communications with Jerry Skalka

Time Adjusted

0.6

0.7

2.0

2.0

1.5

January 1, 2019 through January 31, 2019
Time
Billed

Date

By

Services

1/3

PL

Work on Reply; research on prior testimony at trial
re: valuation

1/4

RCO

Multiple conversations with Jerry Skalka re: Skalka
Affidavit and contents/arguments for Reply Brief

1/5

RCO

Extended conversation with Jerry Skalka re: edits to
Affidavit and Reply Brief; make edits to affidavit
and brief

1/7

RCO

Edits to Reply Brief and Affidavit; communications
re: contents with Jerry Skalka.

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Time Adjusted

4.0

2.0

1.5

1.0

1.0
3.1

0.5
2.0

Case 8:06-cv-02662-RDB Document 944 Filed 08/10/21 Page 8 of 11

1/8

1/8

1/15

PL

RCO

RCO

Work on Reply Brief and Gerald Skalka Affidavit;
research background to documents and dates of
filings; collect attached exhibits; organize exhibits;
prepare documents for ECF filing; file documents

5.0

2.5

Further drafting of Reply and Skalka Affidavit;
extensive review of exhibits for possible use in
Affidavit or Reply; review of SCH expense and sales
data; multiple email and phone conversations with
Jerry Skalka re: contents of Reply and his Affidavit;
email communications with Mr. Selba re: contents
of Joint Status Report

4.1

2.0

Review of email from Selba re: edits to Joint Report;
telephone conversation with Jerry Skalka re: two
additional edits and Pappas position and exhibits;
draft counter-edits; multiple email communications
to/from Mr. Selba; review of prior referrals for
scope of MJ Sullivan’s authority

1.5

1.0

February 1, 2019 through March 31, 2019
Date
3-12

By

Services

PL

Initial research on cases in district courts relating to
proper methods of valuation of intellectual property;
cross-check cites and Shepardize;

3-18

RCO

3-21

PL

Multiple communications with Judge Bennett’s office
and Jerry Skalka re: scheduling issues; draft CounterStatus Report to Judge Bennett on compliance;
telephone conference and email communication with
Jerry Skalka re: Counter Status Report; review Selba
letter to Judge Sullivan;
Legal research - - cases by Judge Bennett on ability to
pay/burden of proof

Time
Billed

Time
Adjusted

2.5

1.0

2.1

1.5

1.5

1.0

Time
Billed

Time
Adjusted

5.2

3.0

April 1, 2019 through April 30, 2019
Date
4-2

By

Services

PL

Work on comparing various forms of the assignments
submitted to Mr. Pappas with versions he signed or
proposed; creation of exhibits for hearing; review of
prior Pappas testimony
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Case 8:06-cv-02662-RDB Document 944 Filed 08/10/21 Page 9 of 11

4-10

RCO

4-10

PL

4-16

PL

4-27

RCO

Preparation for Show Cause Hearing; attend Hearing in
Baltimore; consultations with Jerry Skalka re: hearing
and strategy going forward
Attend Contempt Hearing in Baltimore; work on
exhibits; assist Mr. Ogg at hearing
Follow up, draft, and send out follow up letters/emails
regarding VSI Assignment; update Accounts Receivable
list for the VSI Assignment; research on potential
further account claims;
Review draft of Witherspoon Report for sanctions
motion and disclosures; check against orders and
deposition testimony; Multiple telephone calls with Jerry
Skalka and David Witherspoon re: Expert Report;
review suggested edits; collect additional information
and data for Witherspoon for his inclusion into Report;
review emails from Jerry Skalka re: deposition testimony
of Mark Pappas; make edits to Jerry Skalka Disclosure;
calculate amounts due on Sanctions Award and
Judgment

7.0

6.0

7.0

4.0

4.5

2.0

3.9

3.5

Time
Billed

Time
Adjusted

6.3

4.0

May 1, 2019 through May 31, 2019
Date
5-17

By

Services

PL

Salem Property Calculations; Compilation of Exhibits;
Correspondence to Mr. Skalka Re: Salem Property
Calculations

5-24

PL

5-31

PL

Preparation for Valuation Hearing; Compilation of
Exhibits; Mark exhibits; arrange and make copies; Create
7.0
cover for exhibits; Organize files and binders for Mr.
Ogg
Hearing before Judge Sullivan; Work on exhibits and
electronic connections; Work with Mr. Ogg at hearing
3.0
and operation of electronic exhibits

5.0

1.0

June 1, 2019 through June 30, 2019
Date
6-20

By

Services

PL

Work on assembling exhibits for opposition brief; proof
reading of brief; create .pdf exhibits; do final citechecking; create copy for chambers with exhibits; file
Opposition brief

9

Time
Billed

Time
Adjusted

5.0

3.0

Case 8:06-cv-02662-RDB Document 944 Filed 08/10/21 Page 10 of 11

September 1 through September 30, 2020
Date

9/9

9/10

By

Services

RCO

Draft of outline for Opposition; further legal research;
review of principal points made by Defendants; draft
and revise first sections of Opposition; review materials
and emails from Jerry Skalka; respond to emails; review
of hearing transcript for evidence to cite;

RCO

Multiple communications with Jerry Skalka; review of
new materials from Jerry Skalka; further review of
hearing transcript for supporting points; make revisions
and edits to draft Opposition; add new section to
Opposition; review of past payments to Pappas and
Jeanette Torres and calculation of available funds

Time
Billed

Time
Adjusted

3.6

3.0

2.9

2.0

(See ECF No. 943.)
Finally, the rates claimed by Plaintiff’s counsel are reasonable.

Plaintiff seeks

reimbursement at rates within the advisory range set forth by this Court’s Local Rules. See
Local Rules, App’x. B (D. Md. 2021). The Local Rules establish the following “presumptively
reasonable,” Ledo Pizza Sys., Inc. v. Singh, No. WDQ-13-2365, 2014 WL 1347113, at *5 (D. Md.
Apr. 3, 2014), hourly fee ranges:
a. Lawyers admitted to the bar for less than five (5) years: $150-225.
b. Lawyers admitted to the bar for five (5) to eight (8) years: $165-300.
c. Lawyers admitted to the bar for nine (9) to fourteen (14) years: $225-350.
d. Lawyers admitted to the bar for fifteen (15) to nineteen (19) years: $275-425.
e. Lawyers admitted to the bar for twenty (20) or more: $300-475.
f. Paralegals and law clerks: $95-150.
Local Rules, App’x. B.3 (D. Md. 2021). As detailed in Plaintiff’s filing, attorney Randell C.
Ogg is an experienced attorney, having graduated from law school in 1977 and having served
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as the counsel of record in this case for 13 years. (ECF No. 943.) Plaintiff asks this Court to
award attorneys’ fees at the following rates: $395 for Mr. Ogg and $60 for his paralegal. (Id.)
These rates are within the ranges set forth in Appendix B, and this Court is entirely satisfied
that the requested rates are reasonable in this case. Indeed, Judge Sullivan has previously
found Mr. Ogg’s hourly rate to be reasonable in this case. (See ECF No. 890.)
Accordingly, accounting for the adjustment of the total hours expended by attorney
Ogg to 135 hours and his paralegal to 47.8 hours, and applying the respective requested hourly
rates of $395 and $60, the adjusted attorneys’ fees calculation is as follows:
Randell C. Ogg:

135 hours at $395 per hour = $53,325.00

Paralegal:

47.8 hours at $60 per hour = $2,868.00
$56,193.00

Consequently, this Court finds that Plaintiff is entitled to attorneys’ fees in the total amount
of $56,193.00.
CONCLUSION
For the reasons stated on the record at the August 2, 2021 hearing and as set forth
above, it is this 10th Day of August, 2021, HEREBY ORDERED that Plaintiff’s
Supplemental Motion for Attorneys’ Fees (ECF No. 943) is GRANTED IN PART and
Defendants shall pay $56,193.00 in attorneys’ fees to Plaintiff within 90 days of this
Memorandum Order, i.e. no later than November 8, 2021. Defendants shall be jointly and
severally obligated to pay this sum to Plaintiff.
_____/s/_________________
Richard D. Bennett
United States District Judge
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