RONCO Consulting Corporation v. Leading Edge Ventures, LLC

Filing 42

MEMORANDUM OPINION AND ORDER granting 37 Motion for Attorney Fees as modified; JUDGMENT on Attorney Fees - Defendant is awarded $47,387.20 in attorneys' fees. Signed by Judge Paul W. Grimm on 8/27/2018. (kns, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division
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RONCO CONSULTING CORPORATION,
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Plaintiff,
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v.

Case No.: PWG-17-305
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LEADING EDGE VENTURES, LLC,
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Defendant.
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MEMORANDUM OPINION AND ORDER

Plaintiff RONCO Consulting Corporation (“RONCO”) and Leading Edge Ventures, LLC
(“Leading Edge”) entered into an agreement that contained an arbitration clause on February 1,
2013. Agreement, ECF No. 1-2. When RONCO terminated the agreement, Leading Edge
sought to arbitrate the termination, and the arbitrator ruled in Leading Edge’s Favor. Mem. Op.
& Op. 2, ECF No. 31. RONCO then filed a complaint in this Court to vacate the arbitration
award. Compl., ECF No. 1. I granted Leading Edge’s Motion to Dismiss RONCO’s Complaint
and its Petition to Confirm Arbitration Award, and denied as moot RONCO’s Motion for
Summary Judgment. Mem. Op. & Or. I informed the parties that briefing would be required to
determine whether attorneys’ fees could be awarded. Id. at 17. Leading Edge seeks attorneys’
fees limited to this action and not those related to the arbitration. Def. Mot., ECF No. 37.1 The
parties disagree as to whether the Revised Florida Arbitration Code (“RFAC”), Fla. Stat.

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The parties fully briefed the motion. ECF Nos. 37-1, 40, 41. A hearing is not necessary. See
Loc. R. 105.6.

§ 682.15 (2013) governs their agreement to arbitrate, and therefore, whether Leading Edge is
entitled under it to recover attorneys’ fees. Finding that the RFAC is applicable and permits
awarding attorneys’ fees, I will award $47,387.20 to Leading Edge.
Discussion
Authority to Award Attorneys’ Fees
As an initial matter, this Court must determine under Florida law2 whether it can award
Leading Edge attorneys’ fees. Leading Edge argues that the parties’ February 2013 arbitration
agreement (“Agreement”) is governed by the RFAC, which was enacted in July 2013. Def.’s
Mem. 2.

RONCO counters that, because the Agreement was signed prior to the RFAC’s

enactment, it should not be applied retroactively and its predecessor statute, the Florida
Arbitration Code (“FAC”), should govern. Pl.’s Opp’n 4–6. Whether the RFAC is applicable to
the Agreement is dispositive, as the RFAC permits the awarding of attorneys’ fees in litigation to
confirm, modify, or vacate an arbitration award, but the FAC did not. Compare Fla. Stat.
§ 682.15 (2012) (“Upon the granting of an order confirming, modifying or correcting an award,
judgment or decree shall be entered in conformity therewith and be enforced as any other
judgment or decree. Costs of the application and of the proceedings subsequent thereto, and
disbursements may be awarded by the court.”) with id. § 682.15 (2013) (“On motion of a
prevailing party to a contested judicial proceeding . . . , the court may add reasonable attorney
fees and other reasonable expenses of litigation incurred in a judicial proceeding after the award
is made to a judgment confirming, vacating without directing a rehearing, modifying, or
correcting an award.”) (emphasis added).
Regarding the applicability of the RFAC, the Florida Code states:

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The parties agree that Florida law governs this case. See Def.’s Mot. 2; Pl.’s Opp’n 4–8.
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(1) The Revised Florida Arbitration Code governs an agreement to arbitrate made
on or after July 1, 2013.
(2) Until June 30, 2016, the Revised Florida Arbitration Code governs an
agreement to arbitrate made before July 1, 2013, if all the parties to the agreement
or to the arbitration proceeding so agree in a record. Otherwise, such agreements
shall be governed by the applicable law existing at the time the parties entered
into the agreement.
(3) The Revised Florida Arbitration Code does not affect an action or proceeding
commenced or right accrued before July 1, 2013.
(4) Beginning July 1, 2016, an agreement to arbitrate shall be subject to the
Revised Florida Arbitration Code.
Fla. Stat. § 682.013 (2013).
Subparagraphs (1) and (3) of § 682.013 are inapplicable because the Agreement was
entered into on February 1, 2013, Agreement 9, ECF No. 1-2, and neither party has argued that
the action at hand commenced or a right accrued before July 1, 2013. Subparagraph (2) of
§ 682.013 is inapplicable because June 30, 2016 has passed. Thus pursuant to the plain language
of § 682.013(4), the Agreement is governed by the RFAC. See Schoeff v. R.J. Reynolds Tobacco
Co., 232 So.3d 294, 301 (Fla. 2017) (“The goal of statutory interpretation is to identify the
Legislature’s intent. To do so, this Court first consults the plain meaning of the statute’s text.
‘When the statute is clear and unambiguous,’ we use the plain language of the statute and avoid
rules of statutory construction to determine the Legislature’s intent.’”) (internal citations
omitted); Koile v. State, 934 So. 2d 1226, 1230–31 (Fla. 2006) (quoting Daniels v. Florida Dept.
of Health, 898 So.2d 61, 64 (Fl. 2005)); BDO Seidman, LLP v. Banco Espirito Santo Int’l, Ltd.,
26 So.3d 1, 3 (Fla. Dist. Ct. App. 2009) (“Where, as here, a statute is free from ambiguity,
its plain meaning must be followed”). Therefore, Leading Edge is entitled to seek attorneys’
fees.3 See Fla. Stat. §§ 682.013(4); 682.15.

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I need not address the parties’ arguments on applying statutes retroactively or awarding
attorneys’ fees based on the Court’s inherent authority because the statutory language clearly
indicates the Agreement is governed by the RFAC and not the FAC.
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Attorneys’ Fees Are Appropriate
Awarding attorneys’ fees is a matter of the Court’s discretion.

Fl. Stat. § 682.15.

RONCO argues that this Court should exercise its discretion to deny them, Pl.’s Opp’n 6–8,
because the issues presented were “issues where reasonable parties differ[] as to the
appropriateness of the contested action.” While RONCO is correct that a challenge to an
arbitration award is permitted, it does not follow that having done so and lost, it should not be
required to pay the attorneys’ fees incurred by Leading Edge in successfully contesting that
challenge. Moreover, although, giving RONCO the benefit of the doubt that they challenged the
award in good faith, their challenge was not a strong one because it was untimely. Further, there
is nothing in the Florida Code that suggests that the party that lost during arbitration can avoid
paying attorneys’ fees so long as it challenges the arbitration results by raising an argument on
which reasonable persons can disagree. Reading such a limitation into the Florida statute would
substantially narrow it to a degree not supported by its straightforward language: “the court may
add reasonable attorney fees . . . incurred in a judicial proceeding after the award is made to a
judgment confirming, vacating without directing a rehearing, modifying, or correcting an
award.” Fl. Stat. § 682.15. Moreover, RONCO’s litigation undermined the very function of
arbitration (mainly the speedy and efficient resolution of disputes), see Royal Atl. Health Spa,
Inc. v. B.L.N., Inc., 677 So.2d 1385, 1387 (Fl. Dist. Ct. App. 1996), and needlessly and
expensively protracted the resolution of their dispute. As such, I will award fees to Leading
Edge.
Attorneys’ Fee Award Calculation
The Fourth Circuit recently explained the procedure by which attorneys’ fees are awarded
in Randolph v. Powercomm Constr. Inc., 715 F. App’x 227, 230 (4th Cir. 2017):

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First, “the court must determine the lodestar figure by multiplying the number of
reasonable hours expended times a reasonable rate.” Id. (internal quotation marks
omitted). “To ascertain what is reasonable in terms of hours expended and the rate
charged, the court is bound to apply the factors set forth in Johnson v. Georgia
Highway Express Inc., 488 F.2d 714, 717-19 (5th Cir. 1974).” McAfee, 738 F.3d
at 88. Second, “the court must subtract fees for hours spent on unsuccessful
claims unrelated to successful ones.” Id. (internal quotation marks omitted). When
“all claims involve a common core of facts much of counsel’s time will be
devoted generally to the litigation as a whole, making it difficult to divide the
hours expended on a claim-by-claim basis.” Brodziak v. Runyon, 145 F.3d 194,
197 (4th Cir. 1998) (alterations, ellipsis, and internal quotation marks omitted).
Third, “the court should award some percentage of the remaining amount,
depending on the degree of success enjoyed by the plaintiff.” McAfee, 738 F.3d at
88 (internal quotation marks omitted).
“In addition to the attorney’s own affidavits, the fee applicant must produce satisfactory
specific evidence of the prevailing market rates in the relevant community for the type of work
for which he seeks an award.” Plyler v. Evatt, 902 F.2d 273, 277 (4th Cir. 1990) (internal
citations omitted)). “[T]here is a ‘strong presumption’ that the lodestar figure is reasonable, but
that presumption may be overcome in those rare circumstances in which the lodestar does not
adequately take into account a factor that may properly be considered in determining a
reasonable fee.” Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 554 (2010). The twelve
Johnson factors to be evaluated are:
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3)
the skill requisite to properly perform the legal service; (4) the preclusion of other
employment by the attorney due to acceptance of the case; (5) the customary fee;
(6) whether the fee is fixed or contingent; (7) time limitations imposed by the
client or the circumstances; (8) the amount involved and the results obtained; (9)
the experience, reputation, and ability of the attorneys; (10) the “undesirability” of
the case; (11) the nature and length of the professional relationship with the client;
and (12) awards in similar cases.
Thompson, 2002 WL 31777631, at *6 n.19 (citing Johnson, 488 F.2d at 717–19). However, the
Supreme Court has noted (and experience awarding attorneys’ fees has confirmed) that the
subjective Johnson factors provide very little guidance and, in any event, that “‘the lodestar
figure includes most, if not all, of the relevant factors constituting a ‘reasonable attorney’s fee.’”
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Perdue, 559 U.S. at 551, 553 (quoting Pennsylvania v. Del. Valley Citizens’ Council for Clean
Air, 478 U.S. 549, 566 (1986)). Nonetheless, the Fourth Circuit has reaffirmed the applicability
of the Johnson factors even when they appear to be subsumed into the lodestar calculation,
McAfee v. Boczar, 738 F.3d 81, 89 (4th Cir. 2013).
In calculating the lodestar amount, the party seeking fees “must show that the number of
hours for which he seeks reimbursement is reasonable and does not include hours that are
excessive, redundant, or otherwise unnecessary.” Travis v. Prime Lending, No. 3:07cv00065,
2008 WL 2397330, at *4 (W.D. Va. June 12, 2008) (concluding, after an initial determination
that the attorney’s hourly rate was reasonable for the particular district, that attorney’s fees
requested by plaintiff were reasonable based on documentation of hours worked and tasks
completed); Flynn v. Jocanz, 480 F. Supp. 2d 218, 220–21 (D.D.C. 2007) (awarding requested
attorneys’ fees based on affidavits and the record).
Additionally, Appendix B to this Court’s Local Rules, Rules and Guidelines for
Determining Attorneys’ Fees in Certain Cases, provides that “Lawyers admitted to the bar for
twenty (20) years or more” may charge between $300 and $475 per hour. Loc. R. App’x B
¶ 3(e) (footnote omitted). However, these Guidelines are not definitive; they are “solely to
provide practical guidance to lawyers and judges when requesting, challenging and awarding
fees.” Loc. R. App’x B n.6. The Court may also consider “affidavits of lawyers in the [relevant]
legal community attesting to the customary rates charged for [similar matters].” Poole ex rel.
Elliott v. Textron, Inc., 192 F.R.D. 494, 509–10 (D. Md. 2000).
Here, Leading Edge seeks a total of $54,564.00 in attorneys’ fees for services provided
by two attorneys, John Bonello and Kenneth Brody of David Brody and Dondershine, LLP.
Def.’s Reply 2, 8. As required by this Court’s Local Rules, they have provided itemized billing

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entries, see, e.g., Billing Entries, ECF No. 37-2; Reply Expenses, ECF No. 41-1. Leading
Edge’s memorandum also sets forth the experience level of its counsel. Def.’s Mem. 8–9.
Leading Edge’s counsel have over 20 years of experience each and billed at a rate of $340.00 in
February 2017 and $350.00 beginning in March 2017. Id. RONCO does not dispute counsel’s
hourly rates or address the number of hours Leading Edge’s counsel spent on this matter. See
generally Pl.’s Opp’n 1–14 (arguing only whether attorneys’ fees should be awarded under the
Florida code or the Court’s inherent authority and if the Agreement permitted an award of
attorneys’ fees).
Leading Edge only is entitled to a “reasonable hourly rate multiplied by hours
reasonably expended.” Grissom, 549 F.3d at 320 (emphasis added); see also Hensley, 461 U.S.
at 433–34 (“The district court also should exclude from this initial fee calculation hours that
were not ‘reasonably expended.’”). RONCO does not oppose the hourly rates Leading Edge’s
counsel seek, and I find them reasonable, as they are within the guidelines set by this Court’s
Local Rules—especially as they are below the highest acceptable rate. Therefore, I will adopt
the rates proposed by Leading Edge: $340.00 per hour for both Mr. Bonello and Mr. Brody in
February 2017, and $350.00 per hour for both attorneys beginning in March 2017. Def.’s Mem.
9; Billing Entries 1–4; Reply Expenses 1.
Yet, in evaluating the Johnson factors, Leading Edge’s billing statements fail to
demonstrate that the full amount sought is warranted, particularly given the number of hours
spent, the claimed level of experience, and the complexity of the matter. There are a number of
instances where Leading Edge’s counsel spent an excessive amount of time when compared to
their cited experience. For example, both Mr. Bonello and Mr. Brody are highly experienced
attorneys who have over 20 years of relevant experience each; however, they billed almost 60

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hours for work (predominately research and drafting) on Leading Edge’s initial Motion to
Dismiss, ECF No. 16, the Petition to Confirm the Arbitration Award, ECF No. 21, and Amended
Motion to Dismiss, ECF No. 23 (collectively “Motion to Dismiss & Petition Hours”). See
Billing Entries 1–3.

In contemplating the Johnson factors, it is difficult to conclude that

attorneys with so much experience would need to spend approximately 60 hours on these
documents, particularly when Leading Edge’s Amended Motion to Dismiss incorporated almost
wholesale its original motion, compare ECF No. 21 with ECF No. 23. I find that a reasonable
amount of time to have spent on these documents would have been a total of 45 hours, which
counsel could have billed at $15,750. See Dause v. Broadway Servs., Inc., JKB-11-3136, 2012
WL 1131524, at *2 (D. Md. Apr. 3, 2012) (reducing and limiting attorneys’ fees to a collective
amount given the experience of the attorneys in the litigation and the complexity of the matter).
For the same reason, I will adjust the hours devoted to Leading Edge’s reply memorandum, ECF
No. 28 from 41.25 hours to 32 hours ($11,200) (“Reply Hours”).
Finally, Leading Edge seeks 21.95 hours devoted to incidentals related to motions
practice (e.g. emails and calls with opposing counsel and between Leading Edge and its counsel;
conference calls with the Court; planning meetings; and reviewing materials from opposing
counsel), totaling $8,491.70 (“Incidentals”). This does not require any reduction.
Therefore, after my deductions to Leading Edge’s request for its Motion to Dismiss and
Petition Hours, its Reply Hours, and its Incidentals, the adjusted hours for motions practice is
98.95 hours, which billed at counsel’s hourly rate is equivalent to $35,441.70.
reasonable lodestar calculation.

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This is a

Fee Petition & Reply
Leading Edge’s counsel billed 17.15 hours ($6,002.50) for the fee petition and 16.98
hours ($5,943.00) for the reply brief. As the fee petition and reply briefs required argument on
whether Leading Edge was permitted to recover attorneys’ fees and calculating the fee it should
receive, I do not believe a combined 34.13 hours was unreasonable. Therefore, I will not reduce
Leading Edge’s lodestar amount for the fee petition and reply brief at this stage. As such, I
conclude that a total of $11,945.50 was reasonable for preparing the fee petition and reply brief.
Therefore, Leading Edge’s requested hours and the Court’s adjusted hours are as follows:
Category
Motion to Dismiss &
Petition Hours
Reply Hours
Incidentals
Fee Petition
Reply Expenses
Total

Hours Billed

Adjusted Hours

Adjusted Amount

60.68

45

$15,750

41.25
21.95
17.15
16.98
158.01

32
21.95
17.15
16.98
133.08

$11,200
$8,491.70
$6,002.50
$5,943.00
$47,387.20

When factoring in my reductions, Leading Edge is left with an adjusted lodestar amount of
$47,387.20.
Success based on Claims
The second step in awarding attorneys’ fees is to “subtract fees for hours spent on
unsuccessful claims unrelated to successful ones.” McAfee, 738 F.3d at 88 (internal citations
omitted). But here, Leading Edge was successful on both its argument in favor of dismissal and
its argument for confirming arbitration. Therefore, no further subtractions are required.
Overall Success
The third step in awarding reasonable attorneys’ fees is to “award some percentage of the
remaining amount, depending on the degree of success enjoyed by the Plaintiff.” Randolph, 715
F. App’x at 227 (citing McAfee, 738 F.34 at 88). In typical attorneys’ fee requests, the Fourth
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Circuit has stated that “‘[w]hen considering the extent of the relief obtained, we must compare
the amount of damages sought to the amount awarded.’ If a [] plaintiff achieves only part of the
success []he sought, the lodestar amount may be excessive.” McAfee, 738 F.3d at 92–93 (citing
Mercer v. Duke Univ., 401 F.3d 199, 204 (4th Cir. 2005); Farrar v. Hobby, 506 U.S. 103, 114
(1992)).
Here, Leading Edge successfully defended against an untimely request to vacate an
arbitration award and prevailed on its motion to confirm the award. While I must prevent a
windfall for Leading Edge, see Butler v. DIRECSAT USA, LLC, No. DKC-10-2747, 2016 WL
1077158, at *6 (D. Md. Mar. 18, 2016), I do not believe that awarding Leading Edge the full
adjusted lodestar amount of $47,387.20 would be a windfall. In this matter, Leading Edge won
an arbitration award of $531,914.89 and RONCO had ample opportunity (three years) to bring its
challenge to the arbitration award. It would be inappropriate to penalize Leading Edge for
protecting its award by defending the lawsuit before this Court, especially when it was successful
on the motion and petition it submitted.

Further, Leading Edge was required to oppose

RONCO’s motion for summary judgment, which I denied as moot given Leading Edge’s other
success. Mem. Op. & Or. 13. As such, no further reductions are required.

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Conclusion
For the aforementioned reasons, it is this 27th day of August, 2018, ORDERED that
1. Defendant Leading Edge Venture, LLC’s Motion for Attorneys’ Fees, ECF No. 37, IS
GRANTED AS MODIFIED;
2. Defendant IS AWARDED $47,387.20 in attorneys’ fees; and
3. The Clerk of the Court shall CLOSE this case.

/S/
Paul W. Grimm
United States District Judge
jml

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