Branch Banking and Trust Company v. Eloy Business Park, LLC et al
Filing
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ORDER GRANTING ECF No. 97 Motion for Attorney Fees and Costs. Clerk of court shall enter judgment as specified herein. Signed by Judge Larry R. Hicks on 2/6/2017. (Copies have been distributed pursuant to the NEF - DRM)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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BRANCH BANKING AND TRUST
COMPANY,
Plaintiff,
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Case No. 2:12-cv-1679-LRH-PAL
v.
ORDER
ELOY BUSINESS PARK, LLC; et al.,
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Defendants.
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Before the court is plaintiff Branch Banking and Trust Company’s (“Branch Banking”)
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motion for attorney’s fees. ECF No. 97. Defendants Eloy Business Park, LLC; Yoel Iny,
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individually, and as trustee of the Y&T Iny Family Trust dated June 8, 1994; Noam Schwartz,
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individually, and as trustee of the Noam Schwartz Trust dated August 19, 1999; and D.M.S.I.,
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L.L.C. (collectively “defendants”) filed an opposition (ECF No. 102) to which Branch Banking
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replied (ECF No. 104).
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I.
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Facts and Procedural Background
This is a breach of contract action arising from a promissory note and personal guarantee.
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On September 20, 2007, defendant Eloy Business Park, LLC (“Eloy”) executed a promissory
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note secured by deed of trust to non-party Colonial Bank, N.A. (“Colonial Bank”) for a loan in
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the amount of $6,300,000.00. See ECF No. 52, Ex. 1. The note was secured by a deed of trust
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encumbering certain real property in Pinal County, Arizona. ECF No. 52, Ex. 2; ECF No. 53,
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Ex. 3. The promissory note was also subject to a guarantee in which defendants guaranteed the
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payment of all indebtedness under the loan. Id.
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On August 14, 2009, the Federal Deposit Insurance Corporation (“FDIC”) was named as
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receiver for Colonial Bank. ECF No. 52, Ex. 4; ECF No. 53, Ex. 5. On September 28, 2011, the
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FDIC assigned all rights, title, and interest in the promissory note and guarantee to Branch
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Banking. Id.
Defendant Eloy failed to pay the outstanding principal balance of the loan by the required
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due date. On December 16, 2011, Branch Banking commenced a judicial foreclosure action in
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the Superior Court of the County of Pinal, Arizona. ECF No. 52, Ex. 5. On March 19, 2012, a
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judicial foreclosure of the property was entered and the property was sold at public auction for
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$580,000.00 in partial satisfaction of the loan. ECF No. 52, Ex. 7 & 8; ECF No. 53, Ex. 8 & 9.
On September 24, 2012, after the property was sold at auction, Branch Banking filed the
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underlying complaint for deficiency, breach of guarantee, and breach of the covenant of good
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faith and fair dealing. ECF No. 1. On June 23, 2015, the court granted Branch Banking’s motion
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for summary judgment and denied defendants’ motion for summary judgment. ECF No. 77. The
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court then directed the parties to file briefs pursuant to NRS § 40.457(1) for a deficiency hearing.
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Id. On May 16, 2016, the parties stipulated that the fair market value of the property on July 19,
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2012 was $600,000. ECF No. 94. Subsequently, on July 11, 2016, the court entered an order
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awarding Branch Banking a deficiency judgment against defendants in the amount of
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$2,912,895.72. ECF No. 95; ECF No. 96. Thereafter, Branch Banking filed the present motion
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for attorney’s fees. ECF No. 97.
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II.
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Discussion
In its motion, Branch Banking seeks an award of attorney’s fees in the amount of
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$145,442.19 and non-taxable costs in the amount of $6,551.10. ECF No. 97. The court shall
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address both requests below.
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A. Attorney’s Fees
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This is diversity action between Branch Banking, a North Carolina banking corporation,
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and defendants. Because this action is founded on diversity jurisdiction, Nevada state law applies
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to Branch Banking’s request for fees. Kona Enterprises, Inc. v. Estate of Bishop, 299 F.3d 877,
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883 (9th Cir. 2000); see also, In re: USA Commer. Mortg. Co., 802 F. Supp. 2d 1147, 1178 (D.
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Nev. 2011) (holding that Nevada law applies to a determination of whether to award fees on
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claims based on Nevada law). Under Nevada law, a court may award attorney’s fees when such
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fees are authorized pursuant to a state statute, rule, or a contract between the parties. See Albios
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v. Horizon Communities, Inc., 132 P.3d 1022, 1027-28 (Nev. 2006); Horgan v. Felton, 170 P.3d
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982, 986 (Nev. 2007).
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In this action Branch Banking contends that it is entitled to seek an award of fees because
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both the promissory note and personal guarantee authorizes such an award. See ECF No. 97. The
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court agrees. Here, the parties entered into a promissory note which specifically provides for an
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award of fees. See ECF No. 53, Exhibit 2 at 3 (“Should the indebtedness represented by the Note
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. . . be collected at law, . . . Borrower agrees to pay, in addition to the principal and interest due
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hereon, all reasonable attorneys’ fees, plus all other costs and expenses of collection and
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enforcement[.]”). Similarly, the guarantee signed by the individual defendants also provides for
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an award of attorney’s fees for any action to collect on the underlying indebtedness. See ECF
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No. 53, Exhibit 4 at 10 (“Guarantor agrees to pay all costs, including, without limitation,
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reasonable attorney fees and expenses, incurred by Bank in enforcing the terms of this
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Guaranty[.]”). Therefore, the court finds that Branch Banking is entitled to seek an award of
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attorney’s fees in this action.
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Once a party has established its entitlement to an award of attorney’s fees the court must
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then determine the reasonableness of such an award. In re: USA Commer. Mortg. Co., 802 F.
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Supp. 2d at 1178. See ECF No. 97. In Nevada, when determining whether to award attorney’s
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fees, the court analyses four factors: (1) the reputation and skill of counsel; (2) the nature and
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character of the litigation; (3) the nature and extent of the work performed by counsel; and
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(4) the results obtained in the litigation. See Brunzell v. Golden Gate Nat. Bank, 455 P.2d 31, 33
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(Nev. 1969). The court has reviewed Branch Banking’s request for attorney’s fees and finds that
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the requested fees are reasonable. First, Branch Banking’s counsel, Holland & Hart LLP, is a
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national AV-rated law firm with extensive experience in commercial litigation which charges
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rates commensurate with the fees charged in this district. Second, this litigation presented several
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novel defenses in response to new Nevada statutes that had recently gone into effect when the
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action was filed. Thus, the time spent on this action was reasonable for the particular novel
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defenses raised by defendants and for the motions filed by the parties. Third, counsels’ skill and
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experience was integral to Branch Banking’s success in this action as counsel presented the case
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to the court in a manner that helpfully explained the complex matters of law presented to the
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court for the first time. Further, the skill of counsel is highlighted by Branch Banking’s success
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in this action which resulted in a deficiency judgment of over $2,900,000.00. Finally, the court
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notes that the present motion for attorney’s fees complies with LR 54-16 and contains a
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“reasonable itemization and description of the work performed.” See ECF No. 97, Ex. 1.
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In opposition, defendants contend that the request for attorney’s fees should be denied, or
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at least reduced, because of improper billing entries. See, e.g., Huhmann v. FedEx Corp., 2015
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WL 6127198, at *8 (S.D. Cal. Oct. 16, 2015) (30% reduction for improper billing entries);
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eMove, Inc. v. SMD Software, Inc., 2012 WL 4856276, at *7 (D. Ariz. Oct. 11, 2012) (20%
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reduction for improper billing entries); Gunderson v. Mauna Kea Prop., Inc., 2011 WL 9754085,
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at *10 (D. Haw. May 9, 2011) (20% reduction for improper billing entries). In particular,
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defendants argue that counsels’ proffered billing records contain numerous entries that are either
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duplicative, excessive, vague, or otherwise constitutes improper block billing and should be
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excluded.
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The court has reviewed the billing records and finds that counsel has proffered sufficient
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evidence for the court to find that the time billed was reasonable for this litigation. The few
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examples provided by defendant are not a substantial or excessive amount of the billing records
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and are not significant enough to warrant either a general reduction in fees or exclusion of the
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specific entries identified by defendant. Although counsels’ billing records do include a few
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inconsistencies like vague entries and block billing, the court does not find the billing records as
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nearly replete with errors as defendants contend, and the few identified entries are not the kind of
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entries which consciously violate regular billing practices and guidelines. Therefore, the court
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shall grant the motion and award Branch Banking $145,442.19 in attorney’s fees.
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B. Costs
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As part of its motion for attorney’s fees, Branch Banking seeks recovery of $6,551.10 in
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non-taxable costs. See ECF No. 97. In this action, the parties entered into a promissory note and
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guarantee which specifically provides for an award of all costs related to collecting on the
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underlying indebtedness. See ECF No. 53, Exhibit 2 at 3 (“Should the indebtedness represented
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by the Note . . . be collected at law, . . . Borrower agrees to pay, in addition to the principal and
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interest due hereon, all reasonable attorneys’ fees, plus all other costs and expenses of collection
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and enforcement[.]”); ECF No. 53, Exhibit 4 at 10 (“Guarantor agrees to pay all costs, including,
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without limitation, reasonable attorney fees and expenses, incurred by Bank in enforcing the
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terms of this Guaranty[.]”). The court has reviewed Branch Banking’s request for non-taxable
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costs and finds that they are both recoverable and reasonable for this litigation. Therefore, the
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court shall award Branch Banking $6,551.10 in non-taxable costs.
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IT IS THEREFORE ORDERED that plaintiff’s motion for attorney’s fees and costs
(ECF No. 97) is GRANTED.
IT IS FURTHER ORDERED that the clerk of court shall enter an award of attorney’s
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fees in favor of plaintiff Branch Banking and Trust Company and against defendants Eloy
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Business Park, LLC; Yoel Iny, individually, and as trustee of the Y&T Iny Family Trust dated
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June 8, 1994; Noam Schwartz, individually, and as trustee of the Noam Schwartz Trust dated
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August 19, 1999; and D.M.S.I., L.L.C. in the amount of $145,442.19. The clerk of court shall
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also enter an award of non-taxable costs in favor of plaintiff and against defendants in the
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amount of $6,551.10.
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IT IS SO ORDERED.
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DATED this 6th day of February, 2017.
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LARRY R. HICKS
UNITED STATES DISTRICT JUDGE
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