St. Jude Medical S. C., Inc. v. Tormey
Filing
273
ORDER. IT IS HEREBY ORDERED that Plaintiff St. Jude Medical S.C., Inc.'s Motion for Attorneys' Fees and Costs 243 is GRANTED. Plaintiff St. Jude Medical S.C., Inc. is hereby awarded reasonable attorneys' fees in the amount of $520,511, and reasonable costs in the amount of $95,235.77, for a total award of $615,746.77.LET JUDGMENT BE ENTERED ACCORDINGLY.(Written Opinion). Signed by Chief Judge Michael J. Davis on 5/29/14. (GRR)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
St. Jude Medical S.C., Inc., a
Minnesota corporation,
Plaintiff and
Counterclaim Defendant,
v.
ORDER
Civil No. 11‐327 (MJD/TNL)
Thomas M. Tormey, Jr.,
Defendant and
Counterclaim Plaintiff,
and
Tormedco, Inc.,
Counterclaim Plaintiff.
___________________________________________________________________
This matter is before the Court on Plaintiff’s motion for attorney’s fees and
costs. [Doc. No. 243]
I.
Background
Plaintiff St. Jude Medical S.C., Inc. (“St. Jude”) brought this action against
Defendant Thomas M. Tormey, Jr. (“Tormey”) to seek repayment on a business
loan. Thereafter, Tormey and Tormedco, Inc. asserted a number of counterclaims
against St. Jude. The matter went to trial, and the jury was unable to reach a
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unanimous verdict. Thereafter, St. Jude moved for judgment as a matter of law
as to its contract claim and all counterclaims. The motion was granted, and
judgment was entered in favor of St. Jude in the amount of $650,000 plus
statutory interest in the amount of $192,543.70, with interest accruing in the
amount of $106.85 per day. [Doc. Nos. 240 and 241]
St. Jude brings this motion for costs and attorneys’ fees pursuant to Fed. R.
Civ. P. 54(d)(1) and (2). St. Jude further asserts that under Minnesota law,
attorneys’ fees are recoverable where there is a specific contract permitting such
recovery. Dunn v. Natl’l Bev. Corp., 745 N.W.2d 549, 554 (Minn. 2008). In this
case, there are two contracts between the parties that provide in the event of
default, both reasonable attorneys’ fees and costs incurred in enforcing rights
arising thereunder are recoverable. (Pl. Tr. Ex. 1 (Loan Agreement at ¶ 3); Pl. Tr.
Ex. 3 (Representative Agreement at ¶ 21.5).)
As the prevailing party, St. Jude asserts it is entitled to its reasonable
attorneys’ fees in the amount of $520,511 and to its nontaxable costs in the
amount of $95,235.77, for a total award of $615,746.77.
Tormey requests the Court deny St. Jude’s motion, or in the alternative,
substantially reduce the requested award of fees and costs.
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II.
Analysis
A.
Prevailing Party
Tormey argues that he never disputed the valid creation of the loan and
promissory note. Instead, this lawsuit was about whether the counterclaims
asserted under the Representative Agreement would prevail so as to bar
collection on the note or offset the loan amount by a damage award. Tormey
argues that St. Jude cannot establish that it is the prevailing party under the
Representative Agreement as this Court ultimately dismissed his counterclaims
as time‐barred, without ruling on the merits of such claims. The Court disagrees.
In determining whether a party is a prevailing party, the Court looks to the
general result of the action, and who, “in the view of the law, succeeded in the
action. The prevailing party in any action is one in whose favor the decision or
verdict is rendered and judgment entered.” Riser v. Minneapolis Pub. Hous.
Auth., No. A04‐11, 2004 WL 2050550 at *2 (Minn. Ct. App. 2004) (quoting
Borchert v. Maloney, 581 N.W.2d 838, 840 (Minn. 1998)). Here, St. Jude is the
prevailing party as judgment has been entered in St. Jude’s favor. Accordingly,
St. Jude is entitled to reasonable attorneys’ fees and costs pursuant to the terms of
the Loan Agreement.
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B.
Reasonable Attorneys’ Fees
A proper method for determining a reasonable attorneys’ fee award is
referred to as the lodestar method. Fish v. St. Cloud State Univ., 295 F.3d 849, 851
(8th Cir. 2012). This method requires the Court to multiply the reasonable
amount of hours spent on the case by a reasonable hourly amount. Id. The
resulting figure may be adjusted at the discretion of the Court after considering
factors relevant to the case, including:
the experience and ability of the attorney, the time and labor required to
perform the legal service properly, the amount involved in the case and the
results obtained, the novelty and difficulty of the issues involved, the fee
customarily charged in the locality for similar legal services, whether the
fee is fixed or contingent, the time limitations imposed upon the client or
by the circumstances, and the likelihood, if apparent to the client, that the
acceptance of the particular employment will preclude other employment
by the lawyer.
All‐Ways Logistics, Inc. v. USA Truck, Inc., 583 F.3d 511, 520‐21 (8th Cir. 2009).
To determine a reasonable hourly rate, the Court should consider the
prevailing rate for similar services in the community where the litigation took
place when performed by lawyers with similar skills, experience and reputation.
McDonald v. Armontrout, 860 F.2d 1456,1458‐59 (8th Cir. 1988). In this case, lead
counsel has billed his services at $375 per hour from January 2011 to July 2013,
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and from July 2013 to present, his rate increased to $395 per hour. Co‐counsel
working with lead counsel billed at rates between $250 per hour to $150 per hour.
Tormey does not challenge the hourly rates billed, in light of the prevailing
rates for comparably qualified counsel in Minnesota. The Court thus finds the
hourly rates billed are reasonable.
Tormey does challenge the number of hours billed, asserting St. Jude has
not demonstrated that the number of hours billed or that the fees and costs were
incurred in connection with those activities actually tied to St. Jude’s eventual
success.1 Tormey argues that St. Jude’s award for fees and costs must take into
consideration its lack of success in motion practice.
The Loan Agreement specifically provides that “[Tormey] agrees to pay all
costs and expenses of [St. Jude] including reasonable attorneys’ fees, in the
collection of any of the Notes or the enforcement of any of [St. Jude’s] rights.”
(Pl. Tr. Ex. 1 at ¶ 3) (emphasis added). St. Jude is thus entitled to recover all
reasonable attorneys’ fees and costs expended to collect on the promissory note,
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Tormey originally argued that St. Jude had not submitted sufficient documentation to
support its request. The Court agreed, and ordered St. Jude to submit detailed billing
statements and supporting documentation as to costs. St. Jude has complied, and the Court has
reviewed these supplemental submissions and finds that St. Jude has submitted sufficient
documentation for the Court to make a reasoned decision as to the claim for attorneys’ fees and
costs.
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including such fees and costs expended to defend the counterclaims asserted by
Tormey and Tormedco. See Potter v. Am. Bean & Grain Corp., 388 N.W.2d 22, 25
(Minn. Ct. App. 1986) (finding that a prevailing party in action to enforce a
promissory note is entitled to fees and costs for defending counterclaims, which
if successful, would have reduced amount party received on the note).
Accordingly, the Court will not reduce the fee award based on a lack of success
in motion practice concerning counterclaims asserted by Tormey and Tormedco.
As to the number of hours billed, the Court notes that this began as a
simple case; the only claim asserted by St. Jude was for repayment of the $650,000
loan. The case became more complex when Tormey/Tormedco filed a number of
counterclaims, seeking between $10 million and $20 million in damages from St.
Jude. Under these circumstances, and based on its review of the detailed billing
statements submitted by St. Jude, the Court finds that the hours billed, 1,983.20, is
reasonable for this case.
C.
Reasonable Costs
St. Jude also seeks to recover $95,235.77 in nontaxable costs, most of which
are attributable to fees charged by expert witnesses that St. Jude retained as
consultants and trial witnesses. The Court has reviewed the submissions
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supporting the request for costs, and finds such costs are reasonable.
IT IS HEREBY ORDERED that Plaintiff St. Jude Medical S.C., Inc.’s
Motion for Attorneys’ Fees and Costs [Doc. No. 243] is GRANTED. Plaintiff St.
Jude Medical S.C., Inc. is hereby awarded reasonable attorneys’ fees in the
amount of $520,511, and reasonable costs in the amount of $95,235.77, for a total
award of $615,746.77.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Date: May 29, 2014
s/ Michael J. Davis
Chief Judge Michael J. Davis
United States District Court
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