USA Ex Rel. Wilson, et al v. Graham Co Soil & Wat, et al
Filing
437
ORDER granting Relator Wilson's 434 Motion for Attorney's Fees and Nontaxable Litigation Expenses against Deft William Timpson, and denying Deft William Timpson's pro se 436 Motion for Hearing on th e default judgment entered against him. FURTHER ORDERED that the Relator, on behalf of the United States, shall have and recover of Deft Timpson attorney's fees in the amount of $12,558.00 and nontaxable litigation expenses in the amount of $484.22. Signed by District Judge Martin Reidinger on 7/8/16. (Pro se litigant served by US Mail.)(ejb)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
BRYSON CITY DIVISION
CIVIL CASE NO. 2:01-cv-00019-MR
UNITED STATES OF AMERICA EX REL.
KAREN T. WILSON
Plaintiffs,
v.
GRAHAM COUNTY SOIL & WATER
CONSERVATION DISTRICT, GRAHAM
COUNTY, CHEROKEE COUNTY SOIL &
WATER CONSERVATION DISTRICT,
RICHARD GREENE, in his individual
capacity, WILLIAM TIMPSON, in his
individual capacity, KEITH ORR and
GERALD PHILLIPS, in their individual and
official capacities, RAYMOND WILLIAMS,
in his official capacity, DALE WIGGINS, in
his official capacity, ALLEN DEHART, in
his official capacity, LLOYD MILLSAPS, in
his official capacity, JERRY WILLIAMS, in
his individual capacity, BILLY BROWN, in
his individual capacity, LYNN CODY, in
his official capacity, BILL TIPTON, in his
official capacity, C.B. NEWTON, in his
official capacity, and EDDIE WOOD, in his
official capacity.
Defendants.
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ORDER
THIS MATTER is before the Court on “Relator Wilson’s Motion For
Attorney’s Fees and Nontaxable Litigation Expenses” as to Defendant
William Timpson [Doc. 434], and independent of that motion, Defendant
Timpson’s pro se request for a hearing on the default judgment entered
against him. [Doc. 436].
I.
PROCEDURAL BACKGROUND
The Relator filed a Complaint1 on January 25, 2001, alleging that the
Soil and Water Conservation Districts of Graham County and Cherokee
County, and a number of local and federal officials, including Defendant
William Timpson (Defendant or Timpson), violated the False Claims Act by
knowingly submitting and conspiring to submit false claims for payment
pursuant to government contracts awarded in 1995. [Doc. 1].
On November 21, 2001, a Return of Service was filed indicating that
Defendant was personally served by delivery of the summons and Complaint
to his wife at his home address, and that Defendant’s Answer was due on
December 6, 2001. [Doc. 9]. On December 10, 2001, the Defendant filed a
pro se motion to extend the time to answer Relator’s Complaint [Doc. 51],
and an Order was issued granting the Defendant an additional twenty days
within which to file his Answer. [Doc. 56]. The record reflects, however, that
1
Relator twice amended her Complaint. [Docs. 99, 184]. The latest revision is captioned
“Third Amended Complaint” and is hereinafter referred to as Relator’s “Complaint.” [Doc.
184].
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the Defendant did not file an Answer, nor make any other filing or
appearance for the remainder of the litigation.
On October 22, 2015, upon Motion by the Relator, the Clerk entered
default against the Defendant.
[Doc. 409].
The Relator subsequently
resolved the case against all the defendants except for Timpson, and filed
two Settlement Agreements [Docs. 428-1, 428-2], and a Stipulation of
Dismissal [Doc. 431] in conformity therewith. On December 1, 2015, the
Relator filed a motion seeking a default judgment awarding her damages and
penalties in the amount of $64,734.00 against Timpson. [Docs. 429, 429-1].
Specifically, the Relator asked this Court to (1) find that the Defendant
committed six FCA violations, (2) award the $5,000 minimum statutory
penalty for each violation, and (3) award treble damages as to the actual
damages incurred. [Doc. 429-1]. Defendant Timpson filed no response to
said motion. The Court entered a judgment by default against Defendant on
March 9, 2016, in the amount of $64,734. [Doc. 432].
In Relator’s present motion, she is requesting that the Court award her
attorney’s fees of $53,794 and nontaxable litigation expenses of $3,857
against Timpson pursuant to 31 U.S.C. § 3730(d)(2) and Federal Rule of
Civil Procedure 54(d)(2). [Doc. 434].
Defendant’s pro se motion, filed
approximately one month after Relator’s present motion, does not mention
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her motion. [Doc. 436] Instead, Defendant’s motion seeks a “hearing on the
Default Judgment entered on me 3-9-16.”
[Id.].
As requested by the
Defendant, the Court convened a hearing on June 16, 2016, at which time
Timpson appeared pro se and Relator appeared through counsel. Also
present was counsel for the United States. Following that hearing, the Court
took this matter under advisement. It now issues this Order.
II.
DISCUSSION
Before reaching Relator’s motion, the Court will first address the
Defendant’s pro se filing. The Court takes this approach because, should
the Court conclude that judgment by default was improperly entered against
Timpson, it need not reach Relator’s request to recover attorney’s fees and
litigation expenses from him.
Previously, the Court found the Defendant in default and awarded
Relator damages pursuant to a default judgment. [Doc. 432]. Though not
styled a motion to set aside the default judgment, Defendant’s motion did
request a “hearing on the Default Judgment[.]” [Doc. 436]. Giving the
Defendant the benefit of any doubt underlying his motion, as well as giving
him greater leeway than afforded licensed counsel appearing in this matter,
the Court treats Defendant’s motion as one directed at setting aside the
default judgment.
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A person asking that his default be set aside, pursuant to Fed R. Civ.
P. 55(c), and the default judgment be vacated pursuant to Rule 60(b), must
show good cause. The Fourth Circuit has set forth several factors for district
courts to consider when evaluating this standard. United States v. Moradi,
673 F.2d 725, 727 (4th Cir. 1982); Lolatchy v. Arthur Murray, Inc., 816 F.2d
951, 953 (4th Cir. 1987). “[W]e we have held that relief from a judgment of
default should be granted where the defaulting party acts with reasonable
diligence in seeking to set aside the default and tenders a meritorious
defense.” Further, the Fourth Circuit requires the district courts to take into
consideration “the personal responsibility of the party, the prejudice to the
party, whether there is a history of dilatory action, and the availability of
sanctions less drastic.” Moradi, 673 F.2d at 728.
Addressing these factors, the Court finds that Timpson did act with
relative diligence in filing his pro se motion to set aside the default judgment.
The Court’s Order entering judgment by default against him was docketed
March 9, 2016 [Doc. 432] and the Defendant filed his motion the following
month. [Doc. 436]. The Defendant’s diligence post-judgment, however,
stands in stark contrast to the manner in which he conducted his affairs from
the outset of this case.
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The Defendant was served with process in November of 2001. Four
days after the Defendant’s Answer was due to be filed, he requested an
extension of time. Despite Timpson’s tardy request, the Court granted him
a 20-day extension to file an Answer or other pleading. [Doc. 56]. From that
point in 2001 until 2015 – some fourteen years – Timpson utterly disregarded
the action Relator brought against him. Unlike the circumstances present in
Moradi, where the defendant hired counsel who, through a series of errors,
failed to prevent the entry of a default judgment, Timpson bears personal
responsibility for the default judgment obtained against him. Timpson’s
indifference to this action began at the beginning, after his receipt of the
Relator’s Complaint. It was only after his initial answering deadline had
passed that Timpson sought an extension of time to respond to the
Complaint.
Once in receipt of the Court’s Order granting him such an
extension, however, Timpson proceeded to ignore this case for nearly a
decade and a half.
Only after receiving a copy of the Court’s default
judgment awarding Relator a substantial sum did Timpson become attentive
to this lawsuit. These facts present clear evidence of dilatory action on his
part.
Turning to the other considerations of prejudice to Timpson and the
availability of sanctions less drastic, these considerations are informed by
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the Court’s colloquy with Timpson during the June 16, 2016, hearing.
Specifically, the Court asked the Defendant on several occasions whether
he could proffer any evidence that, if believed, would establish a meritorious
defense:
One of the -- and I'll be very candid with you, the main thing
that I want to hear from you about is as to why the amount of the
judgment should be something different from what was entered
by the Court. Because one of the things you'll have to show for
me to set this aside is that you have some legal argument on
which the judgment is erroneous, that I've entered a judgment
against you for more than it should have been. And if you can't
demonstrate that, then it's sort of a waste of everybody's time for
me to set the judgment aside. So, but I don't want to limit you to
that. If you have other arguments as well, I will hear from you. I
want to be completely fair to you on all counts regarding your
motion. So anything else that you have to say, let me hear from
you.
[Transcript of 6/16/16 Hrg at 12]. In response, Timpson said he simply did
not remember seeking the extension of time after receiving the Complaint,
and that he felt it unfair for Relator to obtain a judgment against him when “I
mean I really done nothing wrong.” [Id. at 13]. Timpson offered no excuse
for failing to file an Answer, and further, offered no defense – let alone a
meritorious defense – to the allegations leveled against him by Relator.
Returning to the Fourth Circuit’s considerations, while the default judgment
against Timpson may be financially prejudicial to him, no lesser sanctions
are available to the Court. This is especially so given the Defendant’s failure
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to proffer any meritorious defense which would warrant vacating the default
judgment and permitting a jury to consider his version of events. Over the
past several years the Court has addressed the evidence in this case on
numerous occasions. The facts are complex. The claim is not frivolous. The
other Defendants have settled in the face of the Plaintiff’s evidence. The
Defendant has offered nothing to show that the claim against him is any
different or that the amount of the default judgment is something different
from what he would otherwise be adjudicated to owe. For all of these
reasons, the Defendant has failed to show good cause for setting aside his
default and the default judgment. Accordingly, the Defendant’s motion will be
denied.
The Court now turns to the Relator’s motion for attorneys’ fees and
expenses. A relator who prevails in a False Claims Act action against a
defendant “shall also receive an amount for reasonable expenses which the
court finds to have been necessarily incurred, plus reasonable attorney’s
fees and costs. All such expenses, fees, and costs shall be awarded against
the defendant.” 31 U.S.C. § 3730(d)(2) (emphasis added). While the statute
is clear that the Court must award fees and expenses against Timpson, the
statute is silent as to the method for doing so. In light of this, the Relator
suggests, and the Court agrees, that apportioning Relator’s fees and
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expenses among the defendants, based upon work performed pertinent to
any such defendant, is appropriate. The Court disagrees, however, with the
apportioning method employed by Relator.
In this matter, Relator’s fees and expenses should be broken down in
the following manner: (1) where Relator expended time in prosecuting her
case against all defendants, her fees and expenses resulting therefrom must
be apportioned equally among them; (2) Relator’s expenditures that pertain
to a defendant or defendants other than Timpson should not be taxed to
Timpson; and (3) Timpson should be solely liable for any work performed by
Relator pertaining solely to him.
Relator is seeking attorney’s fees in the amount of $53,794 which
results from 206.9 hours of work at a billing rate of $260 per hour. The Court
finds the number of hours worked to reflect a reasonably efficient expenditure
of time in performing the legal services necessary, and that counsel’s $260
per hour rate to be reasonable compared to the prevailing hourly rates in this
jurisdiction.
As disclosed in Relator’s itemized billing, however, these 206.9 hours
of work are not solely attributable to Timpson. [Doc. 434-1 at 3-4]. The Court
must therefore determine Timpson’s proper share. Relator’s itemization
billing discloses that the total amount of attorney time attributable to this case
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was 404.4 hours (206.9 + 197.5 hours worked on tasks not related to the
claims against Defendant Timpson). [Id. at 4; 10]. Of this total, 181.3 hours
can be attributable to work on claims against the eight individual defendants2
collectively (which includes Timpson), and 25.6 hours can be attributed to
the claim against only Timpson. Relator settled this matter with the other
defendants who agreed to pay attorney’s fees in the total amount of $43,000
(significantly below the value of the total time expended). [Doc. 434 at 3 n.1].
Considering that the claim against Defendant Timpson is such a small
portion of the overall group of claims presented in this matter, the Court will
allow the Relator to recover from Defendant Timpson a pro rata share of the
fees that arose from the claims against all of the Defendants. Since counsel
expended a total of 181.3 hours on those combined claims, allocating a pro
rata share to Defendant Timpson holds him responsible for 22.7 hours of
those services (1/8 of 181.3 hours). In addition, Defendant Timpson is
responsible for all the fees attributable to the hours spent working exclusively
on the claims against him. Therefore, an additional 25.6 hours of Relator’s
counsel’s time is attributable to Defendant Timpson. Therefore, the Court
2
The Court does not count the official capacity claims separate from the claim against
the entity for whom such official was the responsible party.
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will award attorney’s fees against Defendant Timpson in the amount of
$12,558.00 ((22.7+25.6) x $260/hour = $12,558.00)
Further, the Court will apply this same method to Relator’s request for
non-taxable litigation expenses. Relator is seeking expenses in the amount
of $3,857.73. [Doc 434-1 at 4]. This figure divided by eight equals $484.22.
The Court will award this lesser amount.
ORDER
IT IS, THEREFORE, ORDERED that Relator Wilson’s Motion for
Attorney’s Fees and Nontaxable Litigation Expenses against Defendant
William Timpson [Doc. 434] is hereby GRANTED, and Defendant William
Timpson’s pro se motion [Doc. 436] is hereby DENIED.
IT IS FURTHER ORDERED that the Relator, on behalf of the United
States, shall have and recover of Defendant Timpson attorney’s fees in the
amount of $12,558.00 and nontaxable litigation expenses in the amount of
$484.22.
IT IS SO ORDERED.
Signed: July 8, 2016
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