He et al v. Rom et al

Filing 311

Opinion & Order signed by Judge James S. Gwin on 12/20/18. The Court, for the reasons set forth in this order, grants plaintiffs' motion for attorney's fees and costs. The Court orders defendants to pay $57,271.00 in attorney's fees and $911.76 in costs. (Related Doc. 307 ) (D,MA)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
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Re Hui, et al.,
Plaintiffs,
vs.
Davor Rom, et al.,
Defendants.

CASE NO. 1:15-CV-1869
OPINION & ORDER
[Resolving Doc. 307]

----------------------------------------------------------------------JAMES S. GWIN, UNITED STATES DISTRICT JUDGE:
Plaintiffs Rui He, Xiaoguang Zheng, and Zhenfen Huang sued real estate businessman David
Rom and his various real estate companies. On November 16, 2016, a jury found Defendants liable
for violating the Ohio Deceptive Trade Practices Act (“ODTPA”), fraudulent inducement, and negligent
misrepresentation.1 The jury awarded Plaintiffs compensatory damages, punitive damages, attorney’s
fees, and costs. Defendants appealed the judgment, and the Sixth Circuit affirmed. Plaintiffs now
move the Court for appellate attorney’s fees and costs.
For the following reasons, the Court GRANTS Plaintiffs’ motion for Attorney’s fees and costs.
The Court ORDERS defendants to pay $57,271.00 in attorney’s fees and $911.76 in costs.
I.

Background

Between 2013 and 2015, Defendants—Davor Rom and various LLCs under his control—sold
distressed real estate properties to Plaintiffs. Defendants marketed these properties as Defendantmanaged “hands-off” real estate investments that would give a 10 to 20 percent return on investment.

1

Doc. 239.

Case No. 1:15-CV-1869
Gwin, J.
After the promised returns failed to materialize, Plaintiffs sued Defendants for fraudulent
inducement, negligent misrepresentation, securities fraud, unlicensed sale of securities, breach of
fiduciary duty, violations of ODTPA, and conversion.2
A jury returned a verdict for Plaintiffs on their claims for fraudulent inducement, negligent
misrepresentation and ODTPA violations. The jury also awarded Plaintiffs attorney’s fees and costs.3
The Court subsequently granted in part and denied in part Plaintiffs’ motion for attorney’s fees and
costs.4
Defendants appealed,5 and the Sixth Circuit affirmed the judgment on September 26, 2018.6
On October 10, 2018—fourteen days later—Plaintiffs moved the Sixth Circuit for appellate attorney’s
fees and costs.7 On October 30, 2018, the Sixth Circuit denied the motion, indicating that the Plaintiffs
should first seek fees in the district court.8 On November 27, 2018, the Sixth Circuit issued its
mandate.9
Plaintiffs now move the Court for attorney’s fees and costs.
II.

Discussion

A. Plaintiffs Are Entitled to Attorney’s Fees
Plaintiffs argue that they are entitled to appellate fees under the Ohio Deceptive Trade Practices
Act, which provides that “[t]he court may award . . . reasonable attorney’s fees . . . if the court finds that
the defendant has willfully engaged in a trade practice listed in division (A) of section 4165.02 of the

2

Plaintiffs later withdrew the breach of fiduciary duty claim. Doc. 222. The Court dismissed Plaintiffs’
conversion, securities fraud, and unlicensed sale of securities claims before the jury deliberated.
3
Doc. 241.
4
Doc. 265.
5
Doc. 268.
6
Doc. 306.
7
No. 17-3411, Dkt. No. 49. Plaintiffs also moved for sanctions.
8
No. 17-3411 (6th Cir. Oct. 30, 2018), Dkt. No. 57. The court denied Plaintiffs’ motion for sanctions.
9
Doc. 308.

2

Case No. 1:15-CV-1869
Gwin, J.
Revised Code knowing it to be deceptive.”10 The jury found that Defendants had willfully engaged in
deceptive trade practices,11 and the Court awarded Plaintiffs attorney’s fees and costs.12
Defendants oppose an appellate fee award on two grounds. Defendants’ first argument is that
the Plaintiffs waived their rights to fees and costs under Federal Rule of Appellate Procedure 39
because they failed to file within fourteen days of judgment an itemized and verified bill of costs.13
This argument is wrong on two fronts. First, Appellate Rule 39 “costs” do not include attorney’s
fees. 14 Accordingly, the fourteen-day deadline and other Appellate Rule 39 procedural requirements
do not apply to attorney’s fees. Secondly, Plaintiffs did apply for attorney’s fees within fourteen days of
the judgment.15
Defendants’ second argument is that Plaintiffs are only entitled to fees for attorney time spent
defending their ODPTA claim.
This argument is also wrong. While Plaintiffs only cite ODPTA’s fee-shifting provision as the
basis for their motion, Plaintiffs are eligible for fees on the basis of their successful fraudulent
inducement and negligent misrepresentation claims as well.16 Under Ohio law, a jury may award
attorney’s fees as damages in a tort action sounding in fraud.17 For this reason, the trial jury form

10

O.R.C. § 4165.03(B).
Doc. 239.
12
Doc. 265.
13
See Fed. R. App. P. 39(d)(1) (“A party who want costs taxed must—within 14 days after entry of judgment—file
with the circuit clerk, with proof of service, an itemized and verified bill of costs.”).
14
See Kelley v. Metro. Cty. Bd. of Educ., 773 F.2d 677, 681 (6th Cir. 1985) (en banc) (“[T]his court concludes that
an award of costs pursuant to Fed.R.App.P. 39(a) is separate and distinct from and totally unrelated to an award of
attorney's fees pursuant to [a fee-shifting statute].” (footnote omitted)), disapproved of on other grounds by
Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 483 U.S. 711 (1987). There is an unresolved circuit
split on this issue, with the Sixth Circuit following the majority approach. See Hines v. City of Albany, 862 F.3d
215, 222 (2d Cir. 2017) (collecting cases).
15
Defendants never explain whether they consider the Plaintiffs’ motion untimely or merely improperly
formatted. Perhaps Defendants mean to argue that Plaintiffs’ attorney’s fee application was not an “itemized and
verified bill of costs.” At any rate, the attorney’s fee motion would have been timely if the 14-day deadline did
apply.
16
Plaintiffs made their trial fee application on this basis. See Doc. 244 at 4.
17
See Roberts v. Mason, 10 Ohio St. 277, 279 (1859) (holding that attorney’s fees are recoverable as damages
“for a tort which involves the ingredients of fraud, malice or insult”).
11

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Case No. 1:15-CV-1869
Gwin, J.
indicated that it could award attorney’s fees if it awarded punitive damages to the Plaintiffs on any of
the three claims, which it did.18
Even if the Plaintiffs were not entitled to fees on all three of their claims, none of the cases cited
by Defendants support the proposition that appellate fee awards are limited to only those hours spent
defending claims subject to statutory fee-shifting.19
B. Plaintiffs’ Hourly Rate and Billed Time Are Reasonable
Having determined that an award of attorney’s fees is proper, the Court turns to the amount. In
calculating reasonable attorney’s fees, the Court employs the lodestar method.20 Under this approach,
it calculates the fee by multiplying the number of reasonable hours by the attorneys’ hourly rate.21 The
“appropriate rate . . . is not necessarily the exact value sought by a particular firm, but is rather the
market rate in the venue.”22
Plaintiffs’ attorney Jiang requests fees for 166.13 attorney hours billed at $200 an hour. Jiang
has practiced law since 2009,23 and the 2013 median billing rate for an Ohio attorney with 6-10 years
of experience was $200.24 In 2017, the Court previously approved trial fees for Jiang’s firm at an
hourly rate of $150.25 The Court finds that an hourly rate of $200 is reasonable in light of Jiang’s

Doc 239-4 at 8. See also Braun v. Ultimate Jetcharters, LLC, 828 F.3d 501, 515 (6th Cir. 2016) (“If punitive
damages are proper, the aggrieved party may also recover attorney fees.”).
19
In Balsey v. LFP, Inc., the first case cited by Defendants, the Sixth Circuit simply affirmed the district court’s
judgment that the Defendants had not met O.R.C. § 4165.03(B)’s requirements. 691 F.3d 747, 774 (6th Cir.
2012). Imwalle v. Reliance Medical Products, Inc. is similarly unavailing. 515 F.3d 531, 554 (6th Cir. 2008).
Imwalle merely emphasizes the need for detailed time records—not the need to identify hours spent on claims
subject to fee-shifting. This decision actually cuts against the Defendants’ argument, as it emphasizes that “[w]hen
claims are based on a common core of facts or are based on related legal theories, for the purpose of calculating
attorneys fees they should not be treated as distinct claims, and the cost of litigating the related claims should not
be reduced.” Id.
20
See Wasniewski v. Grzelak-Johannsen, 549 F. Supp. 2d 965, 972 (N.D. Ohio 2008).
18

Id.
B & G Mining, Inc. v. Dir., Office of Workers Comp. Programs, 522 F.3d 657, 663 (6th Cir. 2008).
23
See Doc. 307-2.
21
22

24
25

Doc. 307-1 at 39.
See Doc. 265 at 29. (awarding fees for Jiang LLC at $150 an hour).

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Case No. 1:15-CV-1869
Gwin, J.
additional experience since trial, the complexity of appellate work, and its conformity with prevailing
market rates.
Plaintiffs’ attorney Kovach requests fees for 68.7 attorney hours26 billed at $350 an hour.
Kovach has practiced law since 1978,27 and Ohio attorneys with 36 or more years of experience charge
up to $400 an hour.28 The Court has previously found that Kovach’s $350 hourly rate is reasonable,29
and it does the same here.
Defendants argue that Plaintiffs’ billing entries are vague, “lumped together,” and duplicative.30
These arguments are unpersuasive, as the Plaintiffs’ time entries are quite detailed and are sufficient to
determine that the hours “actually and reasonably expended in the prosecution of the litigation.” 31
Defendants’ claims that Plaintiffs “padded” entries or duplicated work are also unpersuasive. For
example, the Court notes that while both attorneys travelled back and forth from Cincinnati for oral
argument, Plaintiffs only billed at Jiang’s lesser rate for this time.32
The Court awards Plaintiffs $57,271.00 in attorney’s fees.33
C. Plaintiffs Are Entitled to $911.76 in Costs
Plaintiffs also move for costs. Under Appellate Rule 39(a)(2), costs are taxed against the
appellant if a judgment is affirmed. Because the judgment was affirmed on appeal, the Court taxes
costs against Defendants. Plaintiffs submit records documenting a total of $911.76 for acquiring and
printing the trial transcript, printing briefs, travel, and lodging.

26

Kovach billed 72.2 hours but did not charge for 3.5 of them.
See Doc. 244-5.
28
Doc. 307-1 at 39. While the median rate for an attorney with Mr. Kovach’s experience is $250, a higher rate
(in the 75th percentile) is justified by his expertise and experience.
29
See Doc. 265 at 29. (awarding fees for Mr. Kovach at the rate of $350 an hour).
30
See Doc. 309-1. (listing disputed time entries).
31
Imwalle, 515 F.3d at 553 (quoting United Slate, Local 307 v. G & M Roofing & Sheet Metal Co., 732 F.2d 495,
502 n.2 (6th Cir. 1984)).
32
See Doc. 307-7.
33
Jiang’s fees are $33,226 (166.13 x $200) and Kovach’s fees are $24,045 (68.7 x $350).
27

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Case No. 1:15-CV-1869
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Defendants argue that the costs of obtaining and printing the trial transcript are not recoverable.
This, too, is incorrect. Federal Rule of Appellate Procedure 39 explicitly provides that the cost of a
reporter’s transcript is taxable.34
III.

Conclusion

For the foregoing reasons, the Court GRANTS Plaintiffs’ motion for attorney’s fees and costs.
The Court ORDERS Defendants to pay $57,271.00 in attorney’s fees and ORDERS Defendants to pay
$911.76 in costs.
IT IS SO ORDERED.

s/

Dated: December 20, 2018

James S. Gwin

JAMES S. GWIN
UNITED STATES DISTRICT JUDGE

34

Fed. R. App. P. 29(e)(2) (listing the cost of “the reporter’s transcript” as a cost taxable in the District Court).

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