Swan Racing Company, LLC v. XXXtreme Motorsport, LLC et al
ORDER granting in part and deferring in part 52 Motion for Sanctions; denying as moot 54 Motion for Summary Judgment; denying as moot 55 Motion for Summary Judgment. Swan and Davis shall submit the requested memorandu m on interest and attorney's fees, as well as an affidavit from an independent attorney attesting to the reasonableness of the requested attorney's fees, no later than 10/26/2016. Signed by District Judge Richard Voorhees on 10/11/2016. (cbb)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CASE NO. 5:14-CV-00155-RLV-DCK
SWAN RACING COMPANY, LLC,
XXXTREME MOTORSPORT, LLC AND
THIS MATTER IS BEFORE THE COURT on a Motion for Sanctions by
Plaintiff/Counter Defendant Swan Racing Company (“Swan”) and Third-Party Defendant
Brandon Davis (Doc. 52) and Motions for Summary Judgment by Swan and Davis (Docs. 54, 55).
The time for Defendants to file responses, as extended by this Court’s orders of July 29, 2016 and
August 31, 2016, having elapsed, the motions are now ripe for disposition. For the reasons stated
below, the Motion for Sanctions (Doc. 52) is GRANTED IN PART AND DEFFERRED IN
PART and the Motions for Summary Judgment (Docs. 54, 55) are DENIED AS MOOT.
Swan is a limited liability company that owned and operated the #30 race team in the Sprint
Cup Series of NASCAR (“NASCAR”). (Doc. 1 at 1-2; Doc. 57 at 1). Brandon Davis was the
“managing member of and primary decision maker for” Swan at all times relevant to this litigation.
(Doc. 57 at 1). XXXtreme Motorsport, LLC (“XXXtreme”) is a limited liability company,
managed by Johnathan Cohen, that also operated racing teams in NASCAR. (Doc. 1 at 1; Doc. 19
In April 2014, Swan decided to discontinue its racing operations in NASCAR and
commenced liquidating its racing equipment. (Doc. 57 at 1). Swan alleges, and XXXtreme and
Cohen admit, that Swan agreed to sell the #30 race number to XXXtreme. (Doc. 1 at 2; Doc 19 at
3). Swan alleges that the sale agreement obligated XXXtreme to race the #30 car and created a
payment structure wherein XXXtreme would pay Swan ten percent of the #30 car’s race winnings
until it paid off the purchase price of $200,000. (Doc. 1 at 2; Doc. 57 at 2). Swan also orally
agreed to sublease commercial space and car equipment to XXXtreme. (Doc. 1 at 3-4; Doc. 19 at
5). Finally, Swan alleges that after the transfer of the #30 car to XXXtreme but prior to NASCAR
approving the sale of the #30 car number, Swan paid race entry fees for the car and that XXXtreme
agreed to reimburse Swan for those entry fees. (Doc. 1 at 3; Doc. 57 at 3-4). After the sale of the
#30 race number, XXXtreme raced the #30 car in one NASCAR race and then transferred the
points associated with the #30 race team to XXXtreme’s #44 race team. (Doc. 1 at 2-3; Doc. 19
at 4). Swan contends that XXXtreme, at the time it entered into the sale agreement for the #30
car, intended to race the #30 car only once and then transfer the points to the #44 race team, thus
acquiring and then devaluing the #30 car. (Doc. 1 at 10-11; Doc. 56 at 11-12; Doc. 57 at 3).
At the center of Swan’s complaint are disputes over the terms of payment under the sale
agreement and the oral sublease agreement, the reimbursement of race entry fees, and the
contractual obligations placed on XXXtreme to race the #30 car. (See Doc. 1 at 3-4; Doc. 19 at 47). As against XXXtreme, Swan’s complaint consists of (1) four breach of contract claims (sale
agreement of #30 car, sublease of commercial space, use of car equipment within commercial
space, and reimbursement of race entry fees) (Claims One through Four); (2) four alternative
claims sounding in quantum meruit for the items underlying the alleged agreements in the contract
claims (Claims Five through Eight); and (3) a claim alleging an Unfair and Deceptive Trade
Practice (UDTP) under N.C. Gen. Stat. § 75-1.1, et seq. (Claim Nine) (Doc. 1 at 5-12). Swan only
brings Claim Nine, the UDTP claim, against Cohen. Id. at 10-11.
As part of their amended answer to Swan’s complaint, XXXtreme and Cohen raise three
counterclaims/third-party claims against Swan and Davis respectively. (Doc. 19 at 20-22). The
first of the claims alleges that Swan and Davis breached the sublease agreement for the commercial
space by locking XXXtreme out of the space. Id. at 20. The second claim is for conversion and
alleges that, when Swan and Davis locked XXXtreme out of the commercial space, Swan and
Davis refused to permit XXXtreme to remove its equipment from the space and either used or sold
XXXtreme’s equipment. Id. at 20-21. In their third, and final, claim, XXXtreme and Cohen assert
that Swan and Davis’s breach of the sublease agreement constituted an UDTP. Id. at 21-22.
Swan commenced this action by filing its complaint on September 24, 2014. (Doc. 1). The
complaint was served on Defendants on September 26, 2014, making Defendants’ answers to the
complaint due on October 17, 2014. (See Doc.57); see also Fed. R. Civ. P. 12(a)(1)(A)(i) (allowing
21 days from service for filing of answer). On October 15, 2014, Cohen, appearing pro se, filed a
motion to extend the time to answer the complaint, asserting that he was still in the process of
finding legal counsel in North Carolina. (Doc. 6 at 1). This Court granted the motion to extend
and established a new deadline of November 14, 2014, for Defendants to file their answers to the
complaint. (Doc. 7). November 14, 2014, came and went without Defendants filing their answers
or otherwise communicating with the Court. On November 18, 2014, Cohen filed a letter asking
for a second thirty-day extension for Defendants to file answers to the complaint, citing his
continued difficulty in retaining legal counsel in North Carolina as the basis for the extension.
(Doc. 8). The Court granted, with modification, the motion for a second extension and gave
Defendants until December 5, 2014, to file their answers to the complaint. (Doc. 9). The Court’s
order also advised Defendants that “[f]urther extensions of this deadline are unlikely.”
December 5, 2014, came and went without Defendants filing their answers or otherwise
communicating with the Court.
On December 10, 2014, Drew Alan Richards entered an
appearance on behalf of Defendants and filed an answer to the complaint, which included
XXXtreme and Cohen’s counterclaim and third-party complaint.1 (Docs. 12, 14).
Swan and Davis filed motions to dismiss XXXtreme and Cohen’s counterclaim and thirdparty complaint respectively and XXXtreme and Cohen filed an amended answer, timely
responded to the motions to dismiss, and filed a motion to dismiss Swan’s UDTP claim. (Docs.
16-17, 19-20, 22, 25-26, 28). This Court denied the motions to dismiss and counsel for the parties
held an initial conference at which they formulated a discovery plan and pretrial schedule. (Doc.
34). This Court issued a pretrial order adopting the parties’ proposed pretrial deadlines and setting
a trial ready date of September 12, 2016. (Doc. 35). Under the order, the parties were to complete
discovery by February 29, 2016, and the filing of motions and mediation were to be completed by
Defendants never filed a motion seeking an extension of the December 5, 2014, deadline to file their answers. See
Fed. R. Civ. P. 6(b)(1)(B).
March 31, 2016. Id. at 2-4. The pretrial order warned the parties that “[f]ailure to comply with
any of the provisions of this Order which causes added delay or expense to the Court may result
in the imposition of sanctions as provided by the Federal Rules of Civil Procedure.” Id. at 8.
On February 12, 2016, with the close of discovery deadline looming, Swan and Davis filed
a consent motion to extend the pretrial deadlines. (Doc. 36). The motion indicated that disputes
existed regarding Defendants’ discovery responses and Swan and Davis “agreed to allow
Defendants until February 26, 2016 to supplement their responses in hopes of resolving the current
discovery dispute.” Id. at 2. This Court granted the motion to extend the pretrial deadlines, setting
a new discovery deadline of April 30, 2016, and a new motions and mediation deadline of May
31, 2016. (Doc. 37).
On March 18, 2016, the discovery dispute having not been resolved, Swan and Davis filed
a motion to compel. (Doc. 38). Responses from Defendants to the motion to compel were due on
April 4, 2016. (See Doc. 41). On March 28, 2016, Richards, citing Defendants’ failure to fully
compensate him and failure to provide him with a retainer to cover fees and expenses, moved to
withdraw as counsel for Defendants. (Doc. 40). Identifying procedural deficiencies in the motion
to withdraw, this Court denied the motion without prejudice. (Doc. 41). Attorney Richards filed
a renewed and amended motion to withdraw that reasserted his original basis for withdrawing and
represented that Defendants were “unwilling or unable” to provide him with the discovery
information sought by Swan and Davis. (Doc. 42 at 2). The Court issued a show cause order
giving Defendants until April 25, 2016, to demonstrate why Richards should not be permitted to
withdraw from representation and extending the deadline for Defendants to respond to the motion
to compel discovery to May 2, 2016. (Doc. 43). In the order, the Court noted that “Defendants’
alleged failure to participate in their defense or cooperate with their counsel appears to be causing
unnecessary delays in this litigation.” Id. at 2. The order further advised Defendants “that they
are required to cooperate in the discovery process” and warned Defendants that “failure to provide
or permit discovery may result in sanctions including the following: reasonable expenses caused
by the failure; default judgment against the disobedient party; or treating as contempt of court the
failure to obey any order.” Id. at 2-3 (citing Fed. R. Civ. P. 37(b)(2)(A), (d)). Defendants did not
submit any filings.2
On May 3, 2016, the Court issued an order granting Richards’s motion to withdraw and
granting Swan and Davis’s motion to compel. (Doc. 47). The order directed Defendants to (1)
supplement their discovery responses by May 17, 2016; (2) have new counsel file a notice of
appearance by May 17, 2016; and (3) pay the reasonable expenses incurred by Swan and Davis in
pursuing the motion to compel. Id. at 3-4. The order also labeled Defendants’ conduct as
“dilatory” and warned them that further failure to adhere to court orders will result in additional
sanctions. Id. at 3. The certified mailings to Defendants with the order granting the motion to
withdraw and the motion to compel were returned as unclaimed and undeliverable. (Doc. 48-51).
The deadlines in the Court’s May 3, 2016, order came and went without any contact from
or action by Defendants. Furthermore, Defendants did not attend depositions or mediation. (See
Doc. 52, Exs. 7, 8 (deposition transcripts); Doc. 59 at 2 (affidavit of counsel for Swan and Davis
attesting that Defendants did not attend mediation)). On June 24, 2016, Swan and Davis filed the
Swan and Davis filed a response to the renewed motion to withdraw, in which they indicated that they (1) did not
oppose the motion so long as granting the motion did not further delay proceedings; (2) served notices of depositions
on Defendants for April 27, 2016; and (3) believed “Defendants behavior in responding to discovery and participating
in this lawsuit reflects a consistent pattern of inaction and non-responsiveness designed to prolong or delay obligations
and outcomes both within and without th[e] litigation.” (Doc. 44 at 2-3). Richards, on behalf of Defendants, filed a
motion to extend the pretrial deadlines because Cohen was unavailable on the date identified in the notices of
depositions. (Doc. 45). The motion represented that Cohen requested that the deposition be moved to May 25, 2016,
and that Swan agreed to accommodate Cohen’s request. Id. at 2. This Court denied the motion to extend without
prejudice because Defendants had not responded to the motion to compel; however, the Court noted that the pretrial
order allowed the parties to consent to a deposition date beyond the discovery deadline. (Doc. 46).
pending motions for sanctions and for summary judgment. (Docs. 52, 54-55). In the motion for
sanctions, Swan seeks a default judgment in its favor on the claims raised in its complaint and
Swan and Davis seek dismissal of XXXtreme and Cohen’s counterclaim and third-party complaint,
as well as reasonable expenses, including attorney’s fees, stemming from Defendants’ failure to
comply with the order compelling discovery and failing to attend depositions and mediation. (Doc.
52 at 7-8).
A Court order established July 29, 2016, as the deadline for Defendants to respond to Swan
and Davis’s motions and advised Defendants that the “[f]ailure to file timely and persuasive
responses will likely lead to Plaintiff and Third-Party Defendant being granted the relief they
seek.” (Doc. 58). On July 29, 2016, this Court received two letters: a letter from Robert W. Piken,
an attorney from New York and not barred in North Carolina, representing that he was trying to
assist Cohen in obtaining new counsel and a letter form Cohen implicitly indicating that he was
unaware that Richards’s motion to withdraw was granted and asking for an extension until August
19, 2016, to respond to Swan and Davis’s motions. (Doc. 60, 62). This Court construed Cohen’s
letter as a motion for an extension of time and granted the motion with modification, giving
Defendants until August 15, 2016 to file their responses to Swan and Davis’s motions. (Doc. 63).
As with most every other deadline, August 15, 2016, came and went with no submissions
from Defendants. On August 19, 2016, the date to which Cohen unsuccessfully requested an
extension, Attorney Piken entered an appearance.3 (Doc. 66). On August 23, 2016, Attorney
David William Hands filed a notice of appearance as local counsel on behalf of Defendants. (Doc.
67). Also on August 23, 2016, Piken filed a letter requesting that the already once-extended
deadline for Defendants to respond to the motions be extended a second time, with a proposed new
Piken’s notice of appearance occurred two months after the Court-imposed deadline for Defendants to file a notice
of appearance of new counsel. (See Doc. 47 at 4).
deadline of September 26, 2016. (Doc. 69). This Court denied the request without prejudice
because the letter did not comply with the Local Rules governing motions for extensions. 4 (Doc.
71). On August 29, 2016, Defendants filed a new motion to extend that complied with the Local
Rules but did not identify a specific date through which the extension was sought. (Doc. 72). In
an effort to give Defendants one final opportunity to respond to the motion for sanctions and the
motions for summary judgment, the Court granted Defendants’ motion for an extension, extending
the deadline for responses to September 19, 2016. (Doc. 74). The order, however, warned that
“[f]urther extensions will not be allowed.” Id. As of the date of this order, Defendants have not
filed any responses.
In their motion for sanctions, Swan and Davis contend that Defendants’ general refusal to
participate in the litigation, including their failure to respond to discovery requests and the Court’s
order compelling discovery, justifies (1) striking Defendants’ amended answer, affirmative
defenses, counterclaim, and third-party complaint; (2) dismissing Defendants’ counterclaim and
third-party complaint; (3) entering a default judgment in favor of Swan on Swan’s complaint—
specifically with damages on Claims Two, Three, Four, and Nine; and (4) awarding reasonable
expenses, including attorney fees, related to Defendants’ failure to comply with the order
compelling discovery and their failures to attend depositions and mediation. (Doc. 52 at 7-8).
With respect to the entry of default judgment, Swan seeks a total principal judgment of
$688,519.20 against XXXtreme and a total principal judgment of $600,000.00 against Cohen, as
The Court also indicated a reluctance to grant the extension as requested, partially because the requested deadline
of September 26, 2016, would result in the motions becoming ripe very close to the already once-delayed trial ready
date of October 31, 2016. (Doc. 71 at 2).
well as applicable interest on all claims and reasonable attorney’s fees on its UDTP claim.5 (Doc.
1 at 5-12; Doc. 52 at 6-7).
Rule 37(b) of the Federal Rules of Civil Procedure provides, in relevant part, as follows:
If a party . . . fails to obey an order to provide or permit discovery, . . . the
court where the action is pending may issue further just orders. They may
include the following:
. . .
(iii) striking pleadings in whole or in part;
. . .
dismissing the action or proceeding in whole or in part; [or]
rendering a default judgment against the disobedient party[.]
Fed. R. Civ. Pro. 37(b)(2)(A). Rule 37 also provides that “the court must order the disobedient
party . . . to pay the reasonable expenses, including attorney’s fees, caused by the failure, unless
the failure was substantially justified or other circumstances make an award of expenses unjust.”
Fed. R. Civ. Pro. 37(b)(2)(C). Furthermore, where a party fails to attend its own deposition or
serve answers to interrogatories, the Court may impose any of the sanctions available under Fed.
R. Civ. P. 37(b)(2)(C) and the same requirement is placed on the court with respect to the award
of related reasonable expenses, including attorney’s fees. Fed. R. Civ. P. 37(d)(1).
The Court typically has broad discretion to impose sanctions on a party who fails to comply
with its discovery orders. Hathcock v. Navistar Int'l Transp. Corp., 53 F.3d 36, 40 (4th Cir. 1995).
However, “[w]hen the sanction involved is judgment by default, the district court’s range of
discretion is more narrow because the district court’s desire to enforce its discovery orders is
confronted head-on by the party’s rights to a trial by jury and a fair day in court.” Mut. Fed. Sav.
As to XXXtreme, Swan seeks $200,000.00 on the sale agreement for the #30 car, $27,052.20 on the commercial
sublease agreement, $51,827.00 for the car equipment, and $9640.00 for the race entry fees. (Doc. 1 at 5-8). Should
Swan prevail on its UDTP claim, Swan seeks $200,000.00, trebled to $600,000.00, in lieu of the $200,000.00 it seeks
on its breach of contract claim regarding the sale agreement for the #30 car. (Doc. 52 at 7); see N.C. Gen. Stat. § 7516 (permitting treble damages). As to Cohen, Swan seeks $200,000.00, trebled to $600,000.00, on its UDTP claim.
(Doc. 52 at 7).
& Loan Ass’n v. Richards & Assocs., Inc., 872 F.2d 88, 92 (4th Cir. 1989) (internal quotation
marks omitted) (citing Wilson v. Volkswagen of Am., Inc., 561 F.2d 494, 503-04 (4th Cir. 1977)).
The sanction of default judgment “should normally not be imposed so as to foreclose the merits of
controversies as punishment for general misbehavior save in that rare case where the conduct
represents such flagrant bad faith and callous disregard of the party’s obligation under the Rules
as to warrant the sanction not simply for the purpose of preventing prejudice to the discovering
party but as a necessary deterrent to others.” Wilson, 561 F.2d at 504 (citation and internal
quotation marks omitted). When considering whether to impose the sanction of default judgment
or dismissal, a court shall apply a four-part test that evaluates:
(1) whether the noncomplying party acted in bad faith; (2) the amount of prejudice
his noncompliance caused his adversary, which necessarily includes an inquiry into
the materiality of the evidence he failed to produce; (3) the need for deterrence of
the particular sort of noncompliance; and (4) the effectiveness of less drastic
Richards & Assocs., 872 F.2d at 92; see also Anderson v. Found. For Advancement, Educ. & Emp’t
of Am. Indians, 155 F.3d 500, 504 (4th Cir. 1998).
The Court concludes that the four-part test supports granting default judgment in favor of
Swan on its claims and dismissing XXXtreme and Cohen’s counterclaim and third-party
complaint. Looking at the first part of the test, “a pattern of indifference and disrespect to the
authority of the court” can support a finding of bad faith. Richards & Assocs., 872 F.2d at 93. As
detailed supra in the procedural history section, Defendants repeatedly missed deadlines,
submitted fillings on the schedule they preferred rather than the schedule adopted by the Court,
did not appear for depositions despite the depositions being scheduled on a date of Cohen’s
choosing, and appear unfazed by the Court’s warnings about sanctions. In the course of this
proceeding, Defendants have unilaterally sought and received five extensions, repeatedly allowed
deadlines to elapse without filing a required submission or seeking an extension of the deadline,
and failed to file responses to this Court’s show cause order and to Swan and Davis’s three most
recent motions. Of these extensions and elapsed deadlines, three of the extensions and two of the
elapsed deadlines pertain to matters tied to the discovery process and/or delayed the discovery
process. Further, the few fillings in response to discovery requests that Defendants provided were
wholly inadequate and Defendants failed to supplement their responses as required by this Court’s
order granting Swan and Davis’s motion to compel. (See Doc. 38, Exs. C-G); see, e.g., Anderson,
155 F.3d at 504 (default judgment appropriate where party “stonewalled on discovery from the
inception of the lawsuit” and continued to miss court-ordered deadlines); Water Out Drying Corp.
v. Allen, 2007 WL 2746889, at *1 (W.D.N.C. Sept. 19, 2007) (failing to provide answers to
discovery requests despite a clear court order constitutes “bad faith”); Green v. John Chatillon &
Sons, 188 F.R.D. 422, 424 (M.D.N.C. 1998) (“Noncompliance with discovery orders can serve as
a basis for a finding of bad faith.”). Finally, in the face of the Court’s patience and repeated efforts
to permit Defendants to oppose discovery efforts and sanctions, raise meritorious defenses, and
pursue their claims, Defendants, other than when filing motions for extensions, have remained
largely silent in what amounts to at least a pattern of indifference but may more appropriately be
viewed as representative of an effort to intentionally delay this proceeding. Accordingly, the first
part of the test favors granting a default judgment in favor of Swan and dismissing Defendants’
Looking at the second factor, the trial ready date in this over two-year-old case was
postponed from September 12, 2016 to October 31, 2016. As of the date of this order, trial was
scheduled to commence within twenty days. Yet, despite the age of this case, Defendants have
not provided Swan and Davis any meaningful discovery such that Swan and Davis would, absent
this Court granting their motion for sanctions, be forced to choose between guessing as to the
evidence Defendants might seek to present at trial and asking for a continuance of the trial date
with the hope, albeit extremely minimal, that Defendants might choose to adequately respond to
the discovery requests and motions before a later trial ready date. See Lynch v. Novant Med. Grp.,
Inc., 2009 WL 2915039, at *7 (W.D.N.C. Sept. 8, 2009) (finding the inability to obtain complete
discovery responses prejudicial). In light of the considerable delays and extensions of time already
granted in this case, almost all entirely at the hands of Defendants, any further delay in adjudication
would most certainly rise to the level of “justice delayed is justice denied.” Accordingly, the
second part of the test favors granting a default judgment in favor of Swan and dismissing
Turning to the third part of the test, a stiff sanction is necessary in this case to deter similar
conduct by other parties in other cases. As stated by the United States Court of Appeals for the
Fourth Circuit, “not only does the noncomplying party jeopardize his or her adversary’s case by
such indifference [to the court’s orders], but to ignore such bold challenges to the district court’s
power would encourage other litigants to flirt with similar misconduct.” Richards & Assocs., 872
F.2d at 92 (citing Nat'l Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639, 643, 96 S. Ct.
2778, 49 L. Ed. 2d 747 (1976)). The Defendants conduct has repeatedly impeded this Court’s
ability to manage the case, forcing the Court to alter the case management plan, push back the trial
ready date for this over two-year-old case, and rule on dispositive motions in close proximity to
the existing trial ready date. See e.g. Ellis v. Wal-Mart Distributions, 2011 WL 3804233, at *2
(W.D.N.C. Aug. 2, 2011) (magistrate judge R&R finding need to deter where party’s delay
undermined Court’s ability to manage the case) (adopted sub nom by Ellis v. Distrib. Tech., Inc.,
2011 WL 3804233 (W.D.N.C. Aug. 29, 2011). Therefore, the third part of the test favors granting
a default judgment in favor of Swan and dismissing Defendants’ claims.
Finally, with respect to the fourth part of the test, it is apparent that no sanction short of
default judgment on Swan’s claims and dismissal of Defendants’ claims will be effective. This
Court already imposed the lesser sanction of holding Defendants responsible for Swan and Davis’s
reasonable expenses, including attorney’s fees, for Defendants’ failure to comply with Swan and
Davis’s discovery requests. (Doc. 47). Furthermore, the Court has repetitively warned Defendants
that their failure to comply with the Court’s order would result in additional sanctions, including
the entry of a default judgment, yet Defendants have shown little or no intent of complying with
this Court’s orders. See Anderson, 155 F.3d at 505 (holding that where sanction of attorney fees
in combination with threat of default judgment does not deter party, default judgment is
appropriate “last-resort sanction”); Hathcock, 53 F.3d at 40 (requiring clear warning by court
before imposing default judgment sanction); see also Viswanathan v. Scotland Cty. Bd. of Educ.,
165 F.R.D. 50 (M.D.N.C. 1995) (case dismissed after explicit warning from court that further noncompliance would result in dismissal), aff'd by 76 F.3d 377 (table), 1996 WL 36916 (4th Cir. Jan.
31, 1996)); Green, 188 F.R.D. 422 (same).
For these reasons, the Court finds it appropriate to (1) STRIKE Defendants’ amended
answer to Swan’s complaint; (2) GRANT A DEFAULT JUDGMENT in favor of Swan, with an
award of damages on Claims Two, Three, Four, and Nine; (3) DISMISS XXXtreme and Cohen’s
counterclaim and third-party complaint; and (4) DEFER action on Swan and Davis’s requests for
interest on Claims Two, Three, Four, and Nine, request for attorney fees on Claim Nine, and
request for reasonable expenses, including attorney’s fees, under Fed. R. Civ. P. 37. The default
judgment against XXXtreme shall be based on a total principal judgment of $688,519.20, and the
default judgment against Cohen shall be based on a total principal judgment of $600,000.00. 6
Additionally, Defendants shall be responsible for Swan and Davis’s reasonable expenses,
including attorney’s fees, related to Defendants’ failure to comply with the order compelling
discovery and for Defendants’ failure to attend mediation and to attend depositions. Swan and
Davis shall submit a memorandum outlining Swan’s basis for entitlement to pre-judgment interest,
providing calculations regarding the rate and amount of interest Swan claims it is entitled to, and
outlining the attorney’s fees Swan may recover under Claim Nine and the reasonable expenses,
including attorney’s fees, Swan and Davis may recover under Fed. R. Civ. P. 37.7
IT IS, THEREFORE, ORDERED THAT
Swan and Davis’s motion for sanctions (Doc. 52) is GRANTED IN PART AND
DEFFERRED IN PART.
Swan and Davis’s motions for summary judgment (Docs. 54, 55) are DENIED AS
Granting a default judgment and dismissing XXXtreme and Cohen’s claims renders Swan and Davis’s motions for
summary judgment moot because Swan and Davis are unable to obtain further relief through those motions.
The Court notes that Swan and Davis’s attorney filed an affidavit indicating a total attorney fee of $77,226.00 for
the case, with $14,649.55 attributable to the motion to compel and motion for sanctions. (Doc. 59). The Court,
however, is unable to determine the reasonableness of the asserted fees where the affidavit does not provide any
information regarding the number of hours counsel, and his associates and staff, spent working on each aspect or
motion of the case or the hourly rate charged for the relevant legal services. Furthermore, the affidavit either does not
differentiate between expenses and attorney’s fees or does not include any figures regarding expenses, such that the
Court is presently unable to fashion a judgment fully encompassing Swan and Davis’s right to relief. Finally, Swan
and Davis have not submitted an affidavit from an independent attorney, who practices in the area, attesting to the
reasonableness of the requested attorney fees. See Howard’s Yellow Cabs, Inc. v. United States, 1998 WL 682485, at
*5 (W.D.N.C. Mar. 19, 1998); see also Joe Hand Promotions, Inc. v. KJ’z Wings & Ale, LLC, 2015 WL 1549105, at
*3 (D.S.C. Apr. 8, 2015); Hart’s Rocky Mountain Retreat, Inc. v. Gayhart, 2007 WL 2491856, at *3 (D. Colo. Aug.
Swan and Davis shall submit the requested memorandum on interest and attorney’s
fees, as well as an affidavit from an independent attorney attesting to the reasonableness of the
requested attorney’s fees, no later than October 26, 2016.
Signed: October 11, 2016
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