Decker Construction Co. v. Wesex Corporation et al

Filing 122

OPINION AND ORDER - re 121 Notice (Other) filed by CCL Label, Inc. This Court enters JUDGMENT for CCL, which is entitled to recover from Defendants, jointly and severally. Defendants Wesex Corporation and Gregory Koledin are ORDERED to pay to CCL $422,865 in damages, $773.72 in post-judgment interest,$217,903.64 in attorneys fees, and $12,047.26 in costs for a total award of $653,589.62. Signed by Chief Judge Algenon L. Marbley on 5/19/2023. (cw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
DECKER CONSTRUCTION CO.,
Plaintiff,
v.
WESEX CORPORATION, et al.,
Defendants,
v.
GREGORY KOLEDIN, et al.,
Third-Party Defendants.

:
:
:
: Case No. 2:18-cv-00727
:
:
:
: Chief Judge Algenon L. Marbley
:
:
:
: Magistrate Judge Elizabeth P. Deavers
:
:
:

OPINION & ORDER
This matter is before this Court on Third-Party Plaintiff CCL Label, Inc.’s (“CCL”) Notice
of Filing Affidavits in Support of Damages. (ECF No. 121). For the reasons stated below, this
Court enters JUDGMENT for CCL, which is entitled to recover from Defendants, jointly and
severally. Defendants Wesex Corporation and Gregory Koledin are ORDERED to pay to CCL
$422,865 in damages, $217,903.64 in attorneys’ fees, and $12,047.26 in costs. This award is
subject to post-judgment interest at the federal statutory rate.
I.

BACKGROUND

Third-Party Plaintiff CCL hired Wesex Corporation (“Wesex”), whose President and CEO
was Gregory Koledin, to perform design and construction services of a new production and office
facility in New Albany, Ohio (“the project”). (ECF No. 9, ¶ 11). Wesex was obligated to “perform
all design and construction services, and provide all material, equipment, tools and labor”
necessary for the completion of the facility, per the parties’ Design-Builder Agreement

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(“Agreement”). (Id. ¶¶ 11–12). Importantly, the Agreement required Wesex to submit to CCL fully
executed lien waivers from Wesex and all subcontractors, sub-subcontractors, laborers, and
material suppliers, which covered all work paid as a result for the previous month’s application for
payment. (Id. ¶ 15; ECF No. 9-3 ¶ 6.1.2). Wesex also was required to represent with each
Application for Payment that the title to all work would pass to the owner free and clear of all
claims, liens, encumbrances, and security interests upon Wesex’s receipt of payment. (Id. ¶ 16;
ECF No. 9-3 ¶ 6.1.4). Accordingly, Wesex was obligated to complete its work for CCL in a way
that would not exceed the agreed contract price and would be free and clear of mechanics’ liens
by Wesex, as well as its subcontractors, sub-subcontractors, laborers, and material suppliers. (ECF
No. 9, ¶ 17). The Agreement also obligated Wesex to defend and indemnify CCL against any
claims or mechanics’ liens brought against CCL or the project, including to obtain a release of any
such claims or mechanics’ liens within three days. (Id. ¶ 18). If Wesex failed to comply, the
Agreement gave CCL the right to discharge the lien or claim and hold Wesex liable for the costs
and expenses incurred. (Id.).
Each month, Wesex submitted an Application for Payment, which represented that it had
covered the work performed by its subcontractors and the like. (Id. ¶¶ 22, 25). Wesex, however,
was not paying its subcontractors, sub-subcontractors, laborers, and material suppliers with CCL’s
funds, but instead, paid itself nearly $1,000,000 in excessive, submitted affidavits falsely stating
that Wesex had paid all of its subcontractors accordingly and that CCL was not exposed to any
risk of claims, lawsuits, or liens. (Id. ¶¶ 26, 28–29, 40).
Numerous subcontractors and the like asserted claims against the CCL and recorded
mechanics’ liens. (Id. ¶ 39). Wesex also filed a mechanics’ lien against the facility in July 2018.
(Id. ¶ 41). That same month, Plaintiff Decker Construction Co., a subcontractor on the project,

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filed a lawsuit, alleging a claim of unjust enrichment against CCL. (Id. ¶ 39; ECF No. 1). CCL
filed its answer to the complaint and simultaneously filed a Third-Party Complaint against the
Individual Defendants and a Crossclaim against Wesex. (ECF No. 9). CCL requested an entry of
default on September 9, 2018 against Wesex and Mr. Koledin. (ECF Nos. 25–26). Default was
promptly entered by the Clerk. (ECF No. 29). During the course of this litigation, mail to Mr.
Koledin has been returned as undeliverable. (ECF Nos. 89, 91, 98–100, 103).
CCL sought a default judgment against Wesex and Mr. Koledin pursuant to Rule 55 of the
Federal Rules of Civil Procedure for: (1) breach of contract; (2) fraud; (3) the remedy of piercing
the corporate veil against Defendants; (4) slander of title; and (5) declaratory relief in the form of
a judgment as it related to the mechanics’ lien filed by Wesex against CCL. (ECF No. 116). This
Court granted default judgment against Defendants for all counts on September 8, 2021. (ECF
Nos. 117; 118). Initially, CCL requested a damages hearing, but following CCL’s request to vacate
the hearing and submit affidavits in support of damages instead, this Court vacated the hearing and
CCL submitted a notice and affidavits in support of the damages sought. (ECF Nos. 119; 120;
121). Therefore, the issue of CCL’s damages is ripe for review.
II.

STANDARD OF REVIEW

Having found default judgment proper, this Court must determine the appropriate measure
of damages. Rule 55(b)(2) permits a court to conduct an evidentiary hearing to determine damages
but does not require one. See Vesligaj v. Peterson, 331 Fed. App’x 351, 354–55 (6th Cir. 2009).
A court’s determination of damages in a default judgment depends on whether the damages
are calculable or liquidated. If the damages are calculable or liquidated, then the court will award
the calculable damages to the plaintiff without an evidentiary hearing because the facts establishing
the damage are not distinct from the facts establishing liability. See United States v. Di Mucci, 879

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F.2d 1488, 1497-98 (7th Cir. 1989) (stating that an evidentiary hearing is not required if the
damages are liquidated or can be definitively calculated from evidence and that in such cases the
same facts establish the need for liability as well as damages); Barnes v. Abraham, Inc., No. 2:17CV-279, 2017 WL 5714091 at *2 (S.D. Ohio Nov. 28, 2017) (quoting United States v. ParkerBillingsley, No. 3:14-CV-307, 2015 WL 4539843, at *1 (S.D. Ohio Feb. 10, 2015)) (“A court may
determine damages without holding an evidentiary hearing if the damages are ‘capable of
ascertainment from definite figures contained in the documentary evidence or in detailed
affidavits.’”). However, if the damages are unliquidated, the default judgment establishes only that
the defendant is liable, and the plaintiff must prove damages. See Antoine v. Atlas Turner, Inc., 66
F.3d 105, 110 (6th Cir. 1995) (quoting Fehlhaber v. Fehlhaber, 681 F.2d 1015, 1026 (5th Cir.
1982)). Typically, such cases will necessitate the court holding an evidentiary hearing where the
court can evaluate the plaintiff’s claims for damages, and the defendant can respond to such claims.
See Id. at 110-11 (citing Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155,
158 (2d. Cir. 1992)).
III.

ANALYSIS

Plaintiffs seek four types of monetary compensation: (1) compensatory damages; (2)
attorneys’ fees; (3) costs incurred as a result of Wesex’s and Koledin’s fraud and breach of
contractual duty to indemnify CCL; and (4) post-judgment interest. (ECF No. 121 at 3). Plaintiffs
have provided evidence establishing the calculability of their damages, and thus this Court can
determine the appropriate damages without an evidentiary hearing. See Ironworkers Dist. Council
of Southern Ohio v. Reinforcing Servs. Co., LLC, No. 3:09–CV–067, 2009 WL 4154905, at *3
(S.D. Ohio Nov. 20, 2009) (finding that “the amount of unpaid employer contributions, interest

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and liquidated damages are sums certain that can be calculated from the terms of the Trust
Agreements.”).
A. Compensatory Damages
As a result of Wesex and Koledin’s misconduct, fifteen subcontractors asserted claims
against CCL seeking payment for work that CCL had already paid Wesex for and exceeded $1.5
million. (ECF No. 121-1 at 3–4). In addition to the claims, fourteen of the subcontractors recorded
mechanics’ liens against CCL’s project. (Id. at 4). As a result, CCL secured surety bonds totaling
$7,465 as substituted collateral to protect CCL’s property. (Id.). Additionally, CCL settled all
fifteen claims through confidential agreements for a total of $415,400. (Id.). Because the resolution
of the claims and the surety bonds were for a lump sum or fixed costs, CCL incurred a total of
$422,865 in damages for CCL’s costs to settle the claims and bond off the subcontractors’ lien.
(Id. at 5). Therefore, CCL is entitled to $422,865 in damages.
B. Attorneys’ Fees and Costs
Ohio has long adhered to the “American rule” for recovery of attorneys’ fees, which bars
a prevailing party in a civil action from recovering attorneys’ fees for litigation costs. Wilborn v.
Bank One Corp., 906 N.E.2d 396, 400 (Ohio 2009). Specifically, parties typically cannot recover
attorney’s fees: (1) in fraud cases where punitive damages are not awarded, see WWSD, LLC v.
Woods, 188 N.E.3d 244, 268 (Ohio Ct. App. 10th Dist. 2022); nor (2) in slander of title actions
where the fees were not necessary to counteract a disparaging publication, but only to prosecute
the claim. See Cupside Properties, Ltd. v. Earl Mechanical Servs., 53 N.E.3d 818, 828–29 (Ohio
Ct. App. 6th Dist. 2015). Attorneys’ fees can be recovered for breach of contract claims, however,
where the parties bargained for a particular result and the breaching party’s wrongful conduct led
to legal fees being incurred—the situation present here. Stonehenge Land Co. v. Beazer Homes

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Invests., L.L.C., 893 N.E.2d 855, 869–70 (Ohio Ct. App. 10th Dist. 2008). As such, CCL can
recover the proposed attorneys’ fees from the breach of contract claim alone, because all claims
stem from Wesex and Mr. Koledin’s failure to comply with the parties’ contractual agreement.
A district court has “broad discretion to determine what constitutes a reasonable hourly
rate for an attorney.” Wayne v. Village of Sebring, 36 F.3d 517, 531–32 (6th Cir. 1994), cert.
denied, 514 U.S. 1127 (1995). A “reasonable fee is one that is ‘adequately compensatory to attract
competent counsel yet which avoids producing a windfall for lawyers.’” Dowling v. Litton Loan
Servicing LP, 320 Fed. App’x 442, 446 (6th Cir. 2009) (citing Geier v. Sundquist, 372 F.3d 784,
791 (6th Cir. 2004)). When determining reasonable attorney fees, the court employs the “lodestar”
method. Building Serv. Local 47 Cleaning Contractors Pension Plan v. Grandview Raceway, 46
F.3d 1392, 1401 (6th Cir. 1995). The lodestar calculation begins with “the number of hours
reasonably expended on the litigation multiplied by a reasonable hourly rate.” Hensley v.
Eckerhart, 461 U.S. 424, 433 (1983). To determine a reasonable hourly rate, this Court begins
with the “prevailing market rate in the relevant community” which is defined as “that rate which
lawyers of comparable skill and experience can reasonably expect to command.” Adcock-Ladd v.
Sec. of Treasury, 227 F.3d 343, 350 (6th Cir. 2000) (quoting Blum v. Stenson, 465 U.S. 886, 893
(1984)). Courts may determine prevailing market rate by reference to several sources “including
affidavit[s], fee award studies, citations to prior precedent regarding reasonable rate adjudications,
and the court’s own expertise in recognizing reasonable applicable prevailing rates.” Ohio &
Vicinity Carpenters’ Fringe Ben. Funds, Inc. v. BCS Contractors, Inc., No. 5:12-cv-1565, 2015
WL 710955, at *2 (N.D. Ohio Feb. 18, 2015); See also Bds. of Trustees of Ohio Laborers’ Fringe
Benefits Programs v. LA Williams Construction, LLC, No. 2:16-CV-00304, 2017 WL 2858277, at
*3 (S.D. Ohio July 5, 2017) (Marbley, J.). A court also may consider an attorney’s own normal

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billing rates to help calculate a reasonable fee. Cincinnati Child. Hosp. Ret. Plan v. Wall, No. 1:19cv-831, 2020 WL 5797916, at *3 (citing Hadix v. Johnson, 65 F.3d 532, 536 (6th Cir. 1995)).
CCL seeks a total of $222,770.04 in attorney’s fees and $15,568.30 in costs. (ECF No.
121-2, ¶ 24). CCL submitted 121 pages of billing statements from June 2018 through October
2021 detailing the number of hours worked on this case and an accompanying affidavit by a partner
at Benesch, Friedlander, Coplan & Aronoff LLP (“Benesch”), attesting to the reasonableness of
the billing rate and hours worked. (ECF No. 121-2). Jonathan Korinko, a partner at Benesch with
about eleven years of experience as a litigator, appeared as counsel of record on CCL’s behalf
across three different cases brought against CCL by subcontractors and the like associated with
Wesex’s misconduct. (Id.; ¶ 12). The affidavit explains that Mr. Korinko expended over 508 hours
of service across all three cases on behalf of CCL. (Id.). Mr. Korinko entered into an agreement
with CCL that Benesch would charge a reduced rate of $316 per hour for the duration of the
litigation. (Id.). That rate was subsequently increased to $365 per hour in May 2021, which was
still a reduced amount compared to Mr. Korinko’s standard rate of $465 an hour. (Id.).
Additionally, CCL represents to this Court that four other Benesch attorneys and one litigation
manager also performed discrete tasks making up 10% of the total billable time to CCL, which
was billed at their customary billing rates. (Id., ¶14).
This Court finds the attorneys’ fees and costs fair and reasonable given the complexity of
the litigation, representation across three separate cases, years of experience and credentials of the
attorneys, and that the hourly rates are comparable to those charged by other law firms in Ohio
conducting similar work. (ECF No. 121-2; ¶ 23); see also Cincinnati Child. Hosp., 2020 WL
5797916, at *4 (finding reasonable $545/hour in attorney’s fees for law partner specializing in
employee benefits); Tarrier Steel Co. v. Wesex Corp., No. 1:18-cv-0528, 2020 WL 2838607, at *2

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(S.D. Ohio Jun.1, 2020) (finding reasonable and awarding attorneys’ fees of $316/hour in a related
action in which Mr. Korinko represented CCL against a different subcontractor as a result of
Wesex’s misconduct). Further, the itemized billing records provided are detailed sufficiently to
assess their reasonableness, in that they “specify, for each entry, the date that the time was billed,
the individual who billed the time, the fractional hours billed (in tenths of an hour), and the specific
task completed.” Imwalle v. Reliance Med. Prods. Inc., 515 F.3d 531, 553 (6th Cir. 2008). Each
counsel’s entries are listed separately and not lumped together and appear to be maintained
contemporaneously with the work completed. Id. at 554. Additionally, the billing statements for
the three different cases in which Benesch represented CCL are separated out and not combined.
Therefore, CCL has provided sufficient information for this Court to conclude that the number of
hours expended on these cases were reasonable and necessary to investigate the claims, file the
claims, and obtain default judgment.
A thorough review and summation of the billing statements submitted as Exhibit A to
CCL’s notice (ECF No. 121), however, results in a total of $217,903.64 in attorneys’ fees and
$12,047.26 in costs. (ECF No. 121-2). This is less than the $222,770.04 in attorney’s fees and
$15,568.30 in costs CCL seeks pursuant to their notice and accompanying affidavits. (ECF No.
121-2, ¶ 24). Therefore, based on the evidence provided to this Court, CCL is entitled to
$217,903.64 in attorneys’ fees and $12,047.26 in costs.
C. Post-Judgment Interest
CCL also requests post-judgment interest. In diversity cases, “federal law controls postjudgment interest” pursuant to 28 U.S.C. § 1961. Estate of Riddle ex rel. Riddle v. Southern Farm
Bureau Life Ins. Co., 421 F. 3d 400, 409 (6th Cir. 2005). Post-judgment interest applies to the
entire award, including attorneys’ fees and costs. See Associated Gen. Contractors of Ohio, Inc. v.

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Drabik, 250 F.3d 482, 492 (6th Cir. 2001) (“There exists no reason, in either the language or
history of § 1961, nor in binding precedent, that prevents this Court from holding that interest
accrues on an attorney fee award from the judgment which unconditionally entitles the prevailing
party to such fees.”) and Caffey v. Unum Life Ins. Co., 302 F.3d 576, 590 (holding that the post
judgment interest statute requires payment of post judgment interest on an award of legal
expenses). Therefore, this award is subject to post-judgment interest at the federal statutory rate.
Default Judgment was entered in favor of CCL on September 8, 2021. (ECF No. 118). The
federal post-judgment interest rate for civil judgments entered September 6–12, 2021 was 0.07%.
Post Judgment Interest Rates, JNET – Accounting, UNITED STATES COURTS (May 2022).
Therefore, the post-judgment interest for the total award is $773.72 as 618 days have elapsed since
judgement was entered in favor of CCL.
D. CONCLUSION
For the reasons set forth above, this Court enters JUDGMENT for CCL, which is entitled
to recover from Defendants, jointly and severally. Defendants Wesex Corporation and Gregory
Koledin are ORDERED to pay to CCL $422,865 in damages, $773.72 in post-judgment interest,
$217,903.64 in attorneys’ fees, and $12,047.26 in costs for a total award of $653,589.62.
IT IS SO ORDERED.

ALGENON L. MARBLEY
CHIEF UNITED STATES DISTRICT JUDGE
DATED: May 19, 2023

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