MINT HILL/KERR/NASHVILLE, LLC. v. SPC ACQUISITION COMPANY LLC et al

Filing 27

MEMORANDUM AND ORDER ENTERING JUDGMENT in the sum of $14,362.87 in favor of Pltf, MINT HILL/KERR/NASHVILLE, LLC. against Deft, SPC ACQUISITION COMPANY LLC ***CIVIL CASE TERMINATED. Signed by Judge William H. Walls on 4/1/15. (sr, )

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UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

MINT HILL/KERR!NASHVILLE, LLC,
MEMORANDUM AND ORDER

Plaintiff,
V.

:

SPC ACQUISITION COMPANY LLC,
DONALD HANSON, STUART ALPERT,
and PETER HANSON,

Civ, No. 14-4401 (WHW)(CLW)

Defendants,

Walls, Senior District Judge
In accordance with the Court’s earlier opinion and order, ECF Nos. 20-21, Plaintiff Mint
Hill/Keff/Nashville, LLC (“Mint Hill”) applies for its litigation expenses in this matter. The
arguments of Defendant SPC Acquisition Company LLC (“SPC”) against awarding litigation
expenses to Mint Hill are unavailing. The Court enters judgment against SPC in favor of Mint
Hill in the amount of $14,362.87.
BACKGROUND
The background of this case is set forth at length in the Court’s opinion granting Mint
Hill’s motion for judgment on the pleadings. ECF No. 20. In that opinion, the Court found that
SPC contracted with Mint Hill to purchase real property in North Carolina (“the Agreement,” Ex.
I to Compl., ECF No. 1-1) and breached the Agreement. See Op. at 5-6. Section 16(e) of the
Agreement grants litigation expenses to the “prevailing party in any litigation arising out of [the
Agreement].” Agreement at 16. The Court found that Mint Hill’s recovery against SPC is limited

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to its litigation expenses. See Op. at 7-9. The Court dismissed the claims against the other
captioned defendants, who were not parties to the Agreement. Id. at 9.
The Agreement defines “Litigation Expenses” as including “reasonable attorneys’ fees,
accountant’s fees, disbursements, expert witness fees, paralegal fees, reporters’ fees, taxes,
rproduction and printing costs

. . .

which are incurred in connection with any.. . litigation.

.

Agreement § 8.3. Mint Hill now makes application for its litigation expenses. ECF No, 24. Mint
Hill’s counsel submits records documenting litigation expenses totaling $14,362.87, including
$13,260.50 in attorneys’ fees (representing 35.6 hours of attorney time) and $1,102.37 in costs.
Ex. A to Decl. of Christopher 3. Dalton, ECF No. 24. SPC does not contest the accuracy or
reasonableness of these figures.
DISCUSSION
First, SPC argues that North Carolina law bars Mint Hill from recovering its litigation
expenses, despite the Agreement’s terms. Def.’s Br. 1-2. Reiterating that North Carolina law
governs the case, Agreement

§ 21, Defendant points to the North Carolina Supreme Court’s

ruling that “a successful litigant may not recover attorneys’ fees, whether as costs or as an item
of damages, unless such a recovery is expressly authorized by statute,” See Stiliwell Enterprises,
Inc.

V.

Interstate Equip. Co., 266 S.E.2d 812, 814 (N.C. 1980). “Even in the face of a carefully

drafted contractual provision indemnifying a party for such attorneys’ fees as may be
necessitated by a successful action on the contract itself, our courts have consistently refused to
sustain such an award absent statutory authority therefor.” Id. at 814-15.
Plaintiff identifies this statutory authority: “Obligations to pay attorneys’ fees upon any
note, conditional sale contract or other evidence of indebtedness., shall be valid and
.

enforceable.

.

.“

N,C. GEN. STAT.

§ 6-21.2. This statute was the basis on which the Stiliwell

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court allowed the award of attorneys’ fees after an action for breach of a lease agreement. 266
S.E.2d at 817. Stiliwell held that the statute authorized “the contractual allocation of attorneys’
fees incurred in an action on the debt evidenced in the contract itself” Id. (emphasis added). It
interpreted “evidence of indebtedness” to reference any “printed or written instrument, signed or
otherwise executed by the obligor(s), which evidences on its face a legally enforceable obligation
to pay money.” Id. North Carolina courts routinely follow this interpretation. See, e.g., Lawrence
v. Werherington, 423 S.E.2d 829 (N.C. 1993) (finding a contract that specified the amount owed
to be sufficient “evidence of indebtedness”); WS. Clark & Sons, Inc. v. Ruiz, 360 S.E.2d 814
(N.C. 1987) (enforcing an attorneys’ fees provision in a credit application).
Here the Agreement is a “printed or written instrument, signed or otherwise executed by
the obligor(s), which evidences on its face a legally enforceable obligation to pay money.” See
Op.

at 2-4. It required SPC to pay Mint Hill certain sums at certain times, in exchange for real

property. Id. A representative of SPC signed the Agreement, Ex. 1 to Compi. at 23, and the
related amendment. Id. Ex. 5 at 4; see also Op. at 2-4. Because the Agreement is “other evidence
of indebtedness,” its provision awarding litigation expenses to a prevailing party is valid under
North Carolina law.
Second, SPC argues that Mint Hill should not recover its litigation expenses because it is
not a “prevailing party.” SPC denies that Mint Hill is entitled to be designated “prevailing,”
because Mint Hill did not obtain the full amount of damages it requested, and the Court
dismissed all other defendants from the case on SPC’s cross-motion. Def.’s Br. 2. This argument
is also unavailing. The Court’s order is clear: ‘/udgment is entered in favor ofPlaintiffon the
breach of contract claim against Defendant SPC Acquisition Company LLC, in the amount of
Plaintiffs litigation expenses in bringing this case.” ECF No. 21 (emphasis added). Although it

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did not obtain the amount of damages it sought. Mint Hill initiated the suit against SPC, alleged
that SPC breached the Agreement. and won judgment against SPC. Mint Hill prevailed. The
other captioned defendants were not parties to the Agreement, and the claims against them did
not arise under the Agreement—they are not “prevailing parties” under the Agreement and the
disposition of the claims against them has no hearing on the relief Mint Hill may obtain from
SPC.
CONCLL.SION AND ORDER
For the reasons above. IT IS HEREBY ORDERED that judgment is entered against
Defendant SPC Acquisition Company LLC in favor of Plaintiff Mint Hill/Kerr/Nashville, LLC
in the amount of $14,362.87.

DATE:

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Hon. flhiH. Wlls
Senior Uiifted States District Judge