Branch Banking and Trust Company v. Regena Homes, LLC et al

Filing 195

ORDER Granting in part and Denying in part 180 Motion for Attorney Fees. IT IS FURTHER ORDERED that the clerk of court shall enter judgment in favor of the plaintiffs and against the defendants for attorney's fees in the amount of $216,204.26. Signed by Judge Andrew P. Gordon on 9/6/16. (Copies have been distributed pursuant to the NEF - ADR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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BRANCH BANKING AND TRUST
COMPANY,

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Plaintiff,

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v.
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REGENA HOMES, LLC, et al.,

Case No. 2:12-cv-00451-APG-GWF
ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFF’S
MOTION FOR ATTORNEY’S FEES
AND NONTAXABLE COSTS
ECF No. 180

Defendants.

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Plaintiff Branch Banking and Trust Company has moved for an award of its attorney’s

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fees and nontaxable costs incurred in connection with this matter. BB&T brought this action in

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March 2012, alleging that the defendants had failed to repay a loan. It sought judgment for the

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unpaid principal due on the loan, plus fees, costs, and interest. ECF No. 1. On July 23, 2014, my

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predecessor on this case, Judge Jones, granted summary judgment in BB&T’s favor on the

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defendants’ liability for their respective breaches of the loan’s promissory note (the “Promissory

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Note”) and commercial guaranty (the “Commercial Guaranty”). ECF No. 110. Following a trial

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to determine damages, a judgment was subsequently entered in favor of BB&T and against the

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defendants, jointly and severally, in the amount of $1,975,766.24. ECF No. 178. BB&T now

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seeks attorney’s fees in the amount of $217,159.26 and nontaxable costs and expenses in the

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amount of $11,022.22.

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The defendants oppose the motion, arguing that BB&T has failed to comply with Local

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Rule 54-16 and therefore the motion should be denied in its entirety. They also contend that

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BB&T’s fee request is unreasonable for various reasons. They argue that BB&T’s request for

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nontaxable costs should also be denied because the loan documents do not permit recovery of

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such costs.

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I.

LEGAL STANDARD
“If state substantive law governs a case, then an award of attorney fees is also governed by

state law.” Muniz v. United Parcel Serv., Inc., 738 F.3d 214, 218 (9th Cir. 2013). Federal courts

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in diversity cases follow the law of the state in which the district court sits, including with respect

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to issues of conflict of laws. Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). “Nevada tends to

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follow the Restatement (Second) of Conflict of Laws (1971) in determining choice-of law

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questions involving contracts.” Progressive Gulf Ins. Co. v. Faehnrich, 752 F.3d 746, 750 (9th

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Cir. 2014) (citation omitted). “The law of the state chosen by the parties to govern their

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contractual rights and duties will be applied.” Restatement (Second) of Conflict of Laws § 187(1)

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(1971). Regarding the right to attorney’s fees, Nevada law “ha[s] consistently held that attorney’s

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fees are only available when authorized by a rule, statute, or contract.” Flamingo Realty, Inc. v.

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Midwest Dev., Inc., 879 P.2d 69, 73 (Nev. 1994) (citations and quotation omitted).

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The reasonableness of an attorney’s fee award is also determined by state law when a

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federal court is sitting in diversity. Mangold v. Cal. Pub. Util. Comm’n, 67 F.3d 1470, 1478 (9th

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Cir. 1995). In Nevada, “the method upon which a reasonable fee is determined is subject to the

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discretion of the court,” which “is tempered only by reason and fairness.” Shuette v. Beazer

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Homes Holdings Corp., 124 P.3d 530, 548-49 (Nev. 2005) (quoting Univ. of Nev. v. Tarkanian,

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879 P.2d 1180, 1188, 1186 (Nev. 1994)). One permissible method of calculation is the lodestar

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approach, which involves multiplying “the number of hours reasonably spent on the case by a

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reasonable hourly rate.” See id. at 549 & n.98 (quoting Herbst v. Humana Health Ins. of Nev., 781

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P.2d 762, 764 (Nev. 1989)); see also Sobel v. Hertz Corp., 53 F. Supp. 3d 1319, 1325-26 (D.

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Nev. 2014). In most cases, the lodestar figure is a presumptively reasonable fee award. Camacho

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v. Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir. 2008).

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In determining the reasonableness of a fee request, I am guided by the factors listed in
Brunzell v. Golden Gate National Bank:
(1) the qualities of the advocate: his ability, his training, education,
experience, professional standing and skill; (2) the character of the work to
be done: its difficulty, its intricacy, its importance, time and skill required,
the responsibility imposed and the prominence and character of the parties
where they affect the importance of the litigation; (3) the work actually
performed by the lawyer: the skill, time and attention given to the work; (4)
the result: whether the attorney was successful and what benefits were
derived.
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455 P.2d 31, 33 (Nev. 1969); see also Haley v. Dist. Ct., 273 P.3d 855, 860 (Nev. 2012) (“[i]n

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determining the amount of fees to award, the court is not limited to one specific approach; its

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analysis may begin with any method rationally designed to calculate a reasonable amount, so long

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as the requested amount is reviewed in light of the factors set forth in Brunzell” (quotation and

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citation omitted)). I also am guided by the factors set forth in Local Rule 54-16(b). See Schneider

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v. Elko Cty. Sheriff’s Dep’t, 17 F. Supp. 2d 1162, 1166 (D. Nev. 1998). That rule provides that

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the motion must include the following:

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(1) A reasonable itemization and description of the work performed;
(2) An itemization of all costs sought to be charged as part of the fee
award and not otherwise taxable pursuant to LR 54-1 through 54-15;
(3) A brief summary of:
(A) The results obtained and the amount involved;
(B) The time and labor required;
(C) The novelty and difficulty of the questions involved;
(D) The skill requisite to perform the legal service properly;
(E) The preclusion of other employment by the attorney due to
acceptance of the case;
(F) The customary fee;
(G) Whether the fee is fixed or contingent;
(H) The time limitations imposed by the client or the
circumstances;
(I) The experience, reputation, and ability of the attorney(s);
(J) The undesirability of the case, if any;
(K) The nature and length of the professional relationship with the
client;
(L) Awards in similar cases; and,
(4) Such other information as the Court may direct.

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LR 54-16(b).
Although state law governs whether a party is entitled to attorney’s fees, federal law
dictates the procedure for requesting attorney’s fees. Carnes v. Zamani, 488 F.3d 1057, 1059 (9th
Cir. 2007). A motion for attorney’s fees and related nontaxable costs must be filed no later than
14 days after the entry of judgment. Fed. R. Civ. P. 54(d)(2)(B)(i). The motion must state the
amount sought or provide a fair estimate. Fed. R. Civ. P. 54(d)(2)(B)(iii). The motion must be
accompanied by an affidavit from the attorney responsible for the billings in the case to
authenticate the information contained in the motion and to confirm that the bill has been
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reviewed and edited and that the fees and costs charged are reasonable. LR 54-16(c). “Failure to

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provide the information required by LR 54–16(b) and (c) in a motion for attorneys’ fees

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constitutes a consent to the denial of the motion.” LR 54-16(d). The Local Rules also permit an

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award of attorney’s fees to include costs and expenses that are not otherwise taxable pursuant to

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Rule 54(d)(2) (i.e., nontaxable costs). See LR 54-16(b)(2).

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II.

ANALYSIS
A. Attorney’s Fees
BB&T requests an attorney’s fee award of $217,159.26. In support, it attaches the

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affidavit of Jeremy J. Nork, Esq., lead counsel for BB&T, and a table detailing the requested

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attorney’s fees. BB&T argues that the Promissory Note and Commercial Guaranty authorize

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such an award. The Promissory Note is governed by Nevada law and, with respect to attorney’s

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fees and costs, states:

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In the event that suit be brought hereon, or any attorney be employed or
expenses be incurred to compel payment of this Note or any portion of the
indebtedness evidenced hereby, whether or not any suit, proceeding or any
judicial or non-judicial foreclosure proceeding be commenced, Borrower
promises to pay all such expenses and reasonable attorney’s fees, including,
without limitation, any attorneys’ fees incurred in any bankruptcy proceeding.

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ECF No. 78-1 at 10. The Commercial Guaranty is also governed by Nevada law and contains
similar language. See ECF No. 78-1 at 43-44, 46. The parties do not dispute that the provisions in
the Promissory Note and Commercial Guaranty entitle BB&T to some amount of attorney’s fees
related to this litigation. Because Nevada law states that attorney’s fees are available when
authorized by a contract, BB&T is entitled to attorney’s fees and costs based on the Promissory
Note and Commercial Guaranty.
It appears that BB&T’s proposed attorney’s fee award was calculated by multiplying the
number of hours spent on the case by the hourly rate of each associate or employee. This is the
basic formation of the lodestar method and is presumed reasonable unless the factors listed in
Brunzell or Local Rule 54-16 dictate a different result.
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i. Failure to Comply with Local Rule 54-16

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The defendants argue that BB&T has failed to comply with Local Rule 54-16(b)(3)

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because it has failed to address each of the twelve factors individually and in depth, which has

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resulted in prejudice to the defendants’ ability to oppose the fees requested. They argue that

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failure to comply with Local Rule 54-16 is sufficient grounds to deny a motion for attorney’s fees

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in its entirety. BB&T replies that there is no set form to satisfying the twelve factors and that

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Local Rule 54-16(b)(3) only requires a “brief summary” of each. BB&T argues that it has

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sufficiently addressed each of the twelve factors and that where its summaries are short, it is

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because the factor in question does not apply or does not warrant a longer summary.

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There is no set form to satisfying the factors listed in Local Rule 54-16. Depending on the

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facts of a particular case, some factors may require more detailed analysis while others may be

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satisfied in a single sentence.1 BB&T’s motion analyzes the Brunzell factors, noting in footnotes

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when the facts outlined in the motion address the factors listed in Local Rule 54-16(b)(3). The

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motion sufficiently addresses all but one of the twelve factors listed in Local Rule 54-16.

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Nevertheless, the one factor left unaddressed does not change the analysis of BB&T’s proposed

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fee award.2 While the defendants argue that BB&T’s alleged noncompliance with Local Rule 54-

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16 demonstrates that its requested attorney’s fee award and associated billing rates are “high, void

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For example, Local Rule 54-16(b)(3)(G) requires a party to state whether the attorney’s
fees are fixed or contingent.
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BB&T’s motion does not provide examples of awards in similar cases as listed in Local
Rule 54-16(b)(3)(L). In its reply, BB&T states that this a general commercial case and therefore
“the awards fall in line with the standards set forth in Local Rule 54-16 and the Brunzell factors.”
ECF No. 190 at 4 n.2. While this response does not specifically satisfy the requirement of Local
Rule 54-16(b)(3)(L), Mr. Nork swears under oath in his affidavit that he has reviewed the fees
related to this litigation and states they were reasonable and necessary. The defendants do not
offer any evidence or argument on why this factor is specifically important to this case, nor do
they argue that the fee awards in similar cases are different from the one proposed here.
Therefore, this deficiency does not change my analysis of the proposed award.

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of economies of scale,” they cite no evidence to support this argument. I find that BB&T’s

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motion complies with Local Rule 54-16’s requirements.
ii. Reasonableness of Attorney’s Fees

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The defendants argue that the attorney’s fees BB&T requests are unreasonable for various

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reasons.
1. Utilization of Numerous Personnel

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The defendants argue that “[o]n its face, utilizing eleven different people for one case is

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unreasonable.” ECF No. 184 at 5. They cite no case law in support of this argument. BB&T

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responds that the lead partner and lead associate on the case have never changed, but that at times

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it utilized other associates and employees for various assignments to be cost-effective. It also

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contends that the litigation has been ongoing for several years and therefore various associates

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who have worked on the matter needed to be replaced over time if they left the firm or took leave.

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The use of different associates at various times throughout a case is not per se unreasonable and

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the defendants have given no explanation why BB&T’s use of different associates during the

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course of this case was unreasonable.
2. The Fees are Excessive in Light of the Nature of the Litigation

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The defendants next argue that the requested fee award is excessive because the matter

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only went to trial on damages, and yet Mr. Nork’s fees account for 55% of the total attorney’s fee

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request. They argue that because Mr. Nork is a “trial attorney,” and because “the bulk of the

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Action was resolved on pre-trial motions and partial summary judgment,” his fees account for a

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disproportionate amount of the total award. Id. BB&T responds that Mr. Nork was lead counsel

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in this matter and that a jury trial took place which required Mr. Nork’s experience.
The defendants cite no case law or evidence to support their contention that a trial attorney

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who is lead counsel on a case should not be involved in a case until trial is set to begin. Nor do

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they offer any evidence or case law to support their argument that Mr. Nork’s specific billing

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rates or percentages are unreasonable.

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3. Work Not Reasonably Related to the Litigation

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The defendants argue that BB&T’s requested attorney’s fees include items not related to

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this litigation. Specifically, they argue that certain work by Stephen Novaceck related to the

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FDIC was not done for BB&T in this litigation. They also argue that the same entries exist in the

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proposed fee awards submitted by BB&T in its motions for attorney’s fees in two other matters.

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BB&T responds that Mr. Novaceck is a real-estate transaction specialist and the work in

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question related to his drafting of the assignment and various other loan documents related to the

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loan at issue in this case. It argues it was done to ensure there was sufficient evidence that BB&T

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had the right to enforce the loan. It contends that this work was done for BB&T and is

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recoverable. It does not respond to the argument that the exact same entries by Mr. Novaceck

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were submitted in two other matters.

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On the same day that BB&T filed this motion for attorney’s fees and costs, it also filed

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nearly identical motions in two other matters before me. See Branch Banking and Tr. Co. v.

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D.M.S.I., LLC, No. 2:11-cv-01778-APG-VCF, ECF No. 141 (Sept. 10, 2015) and Branch

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Banking and Tr. Co. v. Smoke Ranch Dev., LLC, No. 2:12-cv-00453-APG-NJK, ECF No. 183

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(Sept. 10, 2015). The tables of fees submitted in those two cases also included the exact same

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four billing entries of Mr. Novaceck. See D.M.S.I., LLC, No. 2:11-cv-01778-APG-VCF, ECF No.

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141-1 at 9; Smoke Ranch Dev., LLC, No. 2:12-cv-00453-APG-NJK, ECF No. 183-1 at 9.

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Because it is impossible to determine to which matter these entries rightly belong—and against

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which defendant they should be awarded—I deny BB&T’s motion as it relates to these fees,

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totaling $640.00.

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4. Work Not Sufficiently Described, or Repetitive, or Block Billed
The defendants argue that several entries in the fee table are not sufficiently described and

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are block-billed, specifically, work by various paralegals. For example, they highlight various

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entries by paralegal Brenda Toriyama that relate to deposition summaries and entries by paralegal

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Ebony Hardy related to discovery responses. BB&T responds that all of the work performed was

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sufficiently and accurately described and is reasonable.

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Upon review of the entries highlighted by the defendants, the vast majority sufficiently

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detail the character of the work done and are presumptively reasonable. “[B]lock-billed time

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entries are generally amenable to consideration under the Brunzell factors.” In re Margaret Mary

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Adams 2006 Trust, No. 61710, 2015 WL 1423378, at *2 (Nev. Mar. 26, 2015) (citing Mendez v.

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Cnty. of San Bernardino, 540 F.3d 1109, 1129 (9th Cir. 2008), overruled on other grounds by

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Arizona v. ASARCO LLC, 773 F.3d 1050 (9th Cir. 2014)); see also Fischer v. SJP-P.D. Inc., 214

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F.3d 1115, 1121 (9th Cir. 2000) (block billing is not inappropriate per se when the party seeking

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fees meets the basic requirements of “listing his hours and identifying the general subject matter

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of his time expenditures” (internal quotations omitted)); Hensley v. Eckerhart, 461 U.S. 424, 433

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(1983) (noting that although the fee applicant bears the burden of submitting “evidence

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supporting the hours worked and rates claimed,” an applicant is “not required to record in great

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detail how each minute of his time was expended”).

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Regarding the work of Ms. Toriyama, she spent a total of 65.3 hours working on seven

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different deposition summaries, averaging approximately nine hours per deposition. The

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summaries were prepared for trial and were done by a paralegal with a lower billable rate. The

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fees were not unnecessary or unreasonably excessive. Ms. Hardy’s entries regarding discovery

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responses are also reasonable. However, there are two entries in July 2014 by Ms. Toriyama for

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“work on spreadsheet of expenses.” BB&T does not address these entries in its reply and they are

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not sufficiently descriptive for me to determine what the entries relate to and if they are

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reasonable. Therefore, these fees, totaling $315, will not be awarded.

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5. Work Performed on Unsuccessful Motions

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The defendants argue that BB&T is not entitled to fees related to unnecessary and

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unsuccessful work. They cite to work on an opposition to the defendants’ motion to stay, which

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was granted. Additionally, they contend that the stay was in place from January 31, 2013 to

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September 3, 2013, yet there are numerous billing entries during that time. BB&T responds that

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the work during the stay was minimal and mostly related to responses it needed to draft when

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various extensions of the stay were requested. It also contends that it was appropriate and

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reasonable to oppose the defendants’ motion to stay.

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I agree. The fees related to opposing the stay, and those incurred during the stay, were

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reasonable. BB&T reasonably opposed the defendants’ motion to stay. The work that occurred

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during the stay totaled a little over 20 hours, took place over several months, and most appear

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related to responding to extensions of the stay. These fees are reasonable.

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B. Nontaxable Costs
BB&T also requests nontaxable costs in the amount of $11,022.22. It argues that it is

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entitled to costs under the loan documents and that both Rule 54(d)(1) and Local Rule 54-1 allow

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a prevailing party to recover nontaxable costs. The defendants argue that BB&T fails to identify

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the contractual language that entitles it to nontaxable costs. They further argue that the itemized

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table of costs includes both taxable and nontaxable costs, lacks the appropriate descriptions, and

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that BB&T has failed to provide backup receipts.

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Rule 54(d) contains two separate provisions for costs. To request taxable costs, the

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prevailing party must file a bill of costs with the clerk. LR 54-1. Taxable costs are taxed by the

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clerk rather than the Court. Fed. R. Civ. Proc. 54(d)(1); LR 54-1. The categories of taxable costs

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are circumscribed by 28 U.S.C. § 1920. See also LR 54-1. For example, filing fees and service of

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process expenses are taxable costs. See 28 U.S.C. § 1920(1).

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By contrast, nontaxable costs are recoverable on a motion to the court under Rule 54(d)(2)

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along with attorney’s fees. Fed. R. Civ. Proc. 54(d)(2) (“claim for attorney’s fees and related

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nontaxable expenses”) & Advisory Comm. Note to 1993 Am. (“This new paragraph establishes a

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procedure for presenting claims for attorneys’ fees, whether or not denominated as ‘costs.’ It

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applies also to requests for reimbursement of expenses, not taxable as costs, when recoverable

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under governing law incident to the award of fees.”); see also LR 54-16(b)(2) (a motion for

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attorney’s fees must include “[a]n itemization of all costs sought to be charged as part of the fee

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award and not otherwise taxable pursuant to LR 54-1 through 54-15”). For example, copy,

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postage, travel, research, and Pacer expenses are nontaxable costs.

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An award of costs involves a two-step inquiry. I must first determine who is a “prevailing

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party” under Rule 54, and then I must determine “how much (if any) costs should be awarded to

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the prevailing party.” Shum v. Intel Corp., 629 F .3d 1360, 1366 (Fed. Cir. 2010); Ass’n of Mex.-

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Am. Educators v. Cal., 231 F.3d 572, 593 (9th Cir. 2000) (noting that district courts have

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discretion in choosing to award costs under Rule 54(d)). In the Ninth Circuit, there is a

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presumption in favor of awarding costs to the prevailing party. Dawson v. City of Seattle, 435

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F.3d 1054, 1070 (9th Cir. 2006). To overcome this presumption, the losing party must establish a

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reason to deny costs. Id.

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The Promissory Note states: “In the event that suit be brought hereon, . . . Borrower

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promises to pay all such expenses and reasonable attorney’s fees.” ECF No. 78-1 at 10. The

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Commercial Guaranty contains similar language. See id. at 43-44. Additionally, Rule 54 and

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Local Rule 54-1 allow a prevailing party3 to recover nontaxable costs. Therefore, BB&T is

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entitled to some award of nontaxable costs based on the federal and local rules and the

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Promissory Note and the Commercial Guaranty.

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However, it is unclear from the motion and exhibits what costs BB&T is seeking in its

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request. The motion cites Rule 54(d)(1) for its request for nontaxable costs, but that subsection

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relates to taxable costs. BB&T provides a table outlining various costs presumably associated

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with this case, but the table includes both taxable and nontaxable expenses. See ECF No. 180-1 at

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31-33. Additionally, the bottom of the table includes a total of $12,959.80 in costs, yet BB&T

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requests only $11,022.22. Thus, even if I assume BB&T mistakenly cited to the wrong

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subsection of Rule 54 in its request for nontaxable costs, it is still unclear how BB&T calculated

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the $11,022.22 it requests. It is therefore also impossible to determine if that amount is accurate

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or if the costs listed are the types covered under Rule 54(d)(2). I therefore deny BB&T’s request

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for nontaxable costs without prejudice. BB&T has 14 days from the date of this Order to file a

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Neither party disputes that BB&T is a prevailing party for purposes of awarding costs.
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new motion for nontaxable costs consistent with this Order, Federal Rule of Civil Procedure

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54(d)(2), and Local Rule 54-16(b)(2).4

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III.

CONCLUSION

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IT IS THEREFORE ORDERED that plaintiff Branch Banking and Trust Company’s

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motion for attorney’s fees and nontaxable costs (ECF No. #180) is GRANTED in part and

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DENIED in part. It is denied as to the $640 in fees associated with the FDIC assignment, and

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the $315 in fees associated with the spreadsheets of expenses. It is also denied without prejudice

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as to nontaxable costs. Branch Banking and Trust Company has 14 days from the date of this

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order to file an updated motion for nontaxable costs.

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IT IS FURTHER ORDERED that the clerk of court shall enter judgment in favor of the
plaintiffs and against the defendants for attorney’s fees in the amount of $216,204.26.
DATED this 6th day of September, 2016.

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ANDREW P. GORDON
UNITED STATES DISTRICT JUDGE

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The defendants also argue that BB&T did not submit receipts for its nontaxable costs,
yet they cite no case law, statute or local rule which requires this. Local Rule 54-16(b) requires
“[a]n itemization of all costs sought to be charged as part of the fee award and not otherwise
taxable.” If there are specific itemized costs which the defendants wish to dispute because they
believe them to be unreasonable, they are free to highlight those specific entries in their
opposition to any renewed motion for nontaxable costs BB&T may file.
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