Dailey et al v. Alvarado et al

Filing 47

ORDER granting 30 Motion for Default Judgment in the amount of $39,074.35, as more fully set out. Signed by Honorable David L. Russell on 11/13/15. (jw)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
PATRICK DAILEY and HELEN
DAILEY,
Plaintiffs,
v.
MANUEL ALVARADO, et al.,
Defendants.

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Case No. CIV-14-417-R

ORDER
Before the Court is Plaintiffs’ Second Motion for Default Judgment Against
Defendant Manuel Alvarado, Doc. No. 30, (“Motion”), as supplemented by Plaintiffs’
First Motion to Supplement Second Motion for Default Judgment, Doc. No. 46,
(“Supplement”). For the reasons below, the Court GRANTS the Motion and enters a
judgment in favor of Plaintiffs and against Defendant Manuel Alvarado in the amount of
$39,074.35 in damages and $18,300.00 in attorneys’ fees.
I.

Background
This action involved, inter alia, Plaintiffs’ claims in contract and tort against

Defendant Manuel Alvarado related to his alleged breach a contract to perform certain
remodeling services for Plaintiffs. Doc. No. 1-2.1 This case was removed to this Court
from the District Court of Oklahoma County. Doc. No. 1.

1

Plaintiffs later amended their complaint to include claims against other parties under various federal and
state statutes. Doc. No. 1-2.

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At a hearing on April 29, 2015 (the “April 29 Hearing”), the undersigned indicated
that he would grant Plaintiffs’ Motion due to Defendant Alvarado’s repeated refusal to
respond to outstanding discovery. Doc. No. 33.2 Plaintiffs’ counsel submitted a request
for $67,260.00 in damages and $41,460.00 in attorneys’ fees. See Order, Doc. No. 38. At
a subsequent hearing on damages and attorneys’ fees, the undersigned directed Plaintiffs’
counsel to submit an affidavit justifying the damages sought, as well as citations to
Oklahoma law justifying an award of attorneys’ fees in this case. See Doc. No. 39.
Plaintiffs submitted an affidavit with a chart of damages totaling $87,665, which they
attested “were reasonably and necessarily incurred by [them] to replace, repair, correct,
and complete remodeling and related services.” See Doc. No. 40. Plaintiffs’ counsel also
provided a list of three Oklahoma statutes on attorneys’ fees, as well as the statute
governing the measure of damages in an action for breach of contract. Id. Because
Plaintiffs failed to substantiate how the damages listed in their chart were natural and
proximate consequences of Alvarado’s breach, the Court directed Plaintiffs to
supplement their Motion with such information. Id. The Court also ordered Plaintiffs to
justify their request for attorneys’ fees. Id. Pursuant to the Court’s order, Plaintiffs filed
the Supplement with additional documentation. Doc. No. 46.

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See Doc. Nos. 16, at 1-2; 30, at 1-2 (Plaintiffs’ first and second motions for default discussing Defendant
Alvarado’s conduct during discovery).

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II.

Default Judgment against Defendant Alvarado
As stated at the April 29 Hearing, the Court finds that Defendant Alvarado is in

default for his repeated and continued failure to respond to discovery. Judgment by
default is hereby entered in favor of Plaintiffs and against Defendant Alvarado.
III.

Damages
Under Oklahoma law, “[n]o damages can be recovered for a breach of contract,

which are not clearly ascertainable in both their nature and origin.” OKLA. STAT. tit. 23, §
21. To satisfy this standard, Plaintiffs must demonstrate that these damages “are the
natural and proximate consequence of the breach and not speculative and contingent.”
Sw. Stainless, LP v. Sappington, 582 F.3d 1176, 1184 (10th Cir. 2009) (quoting Florafax
Int’l, Inc. v. GTE Mkt. Res., Inc., 933 P.2d 282, 296 (Okla. 1997)).
The Court has given Plaintiffs several opportunities to meet this burden. See Doc.
Nos. 38-40. In their latest submission, Plaintiffs seek $76,012.48 in damages and have
provided an itemized list and documentation that purports to substantiate this amount.
Doc. No. 46. However, in many instances, Plaintiffs continue to fail to meet their burden
to show that the cost incurred arose from Defendant Alvarado’s breach, rather than a cost
they would have incurred regardless of the breach. Additionally, in a number of
instances, Plaintiffs submit “documentation” in support of their damages request but the
total amount documented falls short of the requested amount, includes handwritten
notations that appear to be from Plaintiffs, or otherwise fail to justify the amount
Plaintiffs seek.

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Specifically, Plaintiffs have not shown that the following costs were incurred as a
result of Defendant Alvarado’s breach, rather than costs for remodeling or renovating
their home: replacing cracked concrete in the driveway (Doc. No. 46-2, item 5),
correcting an slope on the porch and circle drive (id., item 6), the installation of insulation
(id., item 7), finishing carpentry (id., item 8), and yard repair (id., item 10).
Additionally, Plaintiffs contend that due to Defendant Alvarado’s breach, they
were forced to concurrently maintain residences in Atlanta and Oklahoma City, and seek
reimbursement of such costs. However, Plaintiffs fail to explain why the following costs
were necessary: the hotel stay for Plaintiff Helen Dailey in Oklahoma City from March
11, 2012 through May 17, 2012 (id., item 13);3 “living expenses” for Ms. Dailey for eight
months (id., item 14),4 travel to Oklahoma City for Plaintiff Patrick Dailey when Ms.
Dailey resided in Oklahoma City (id., item 15),5 and the costs for Plaintiffs’ utilities in
Atlanta, including Plaintiffs’ U-verse subscription (id., item 16).6
The Court finds, however, that Plaintiffs have met their burden on the following
costs: (1) $13,900 to repair the HVAC (item 3); $5,000 advance payment to Defendant

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Plaintiffs offer no explanation for why Ms. Dailey had to reside in Oklahoma City during these months,
why she could not remain in Atlanta with Mr. Dailey during this time, nor how her extended Oklahoma
City hotel stay otherwise was a natural and proximate result of Defendant Alvarado’s breach.
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Plaintiffs do not detail what these “living expenses” were, nor why Ms. Dailey incurred these living
expenses due to Defendant Alvarado’s breach. Rather, it appears that Ms. Dailey believes that because
she was in Oklahoma City when she incurred these expenses, they are recoverable from Defendant
Alvarado. Moreover, Plaintiffs’ request for eight months of Oklahoma City living expenses for Ms.
Dailey is difficult to reconcile with Ms. Dailey’s hotel records which indicate she only resided in
Oklahoma City for two months during the relevant period.
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Plaintiffs provide no explanation for why both Plaintiffs had to be physically present to monitor and
make decisions related to the project.
6
Regardless of Defendant Alvarado’s breach, Plaintiffs would have to pay utilities in either Oklahoma
City or Atlanta. Plaintiffs did not indicate that they were forced to pay double utilities during this time, or
provide any other reason to justify this cost.

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Alvarado (id., item 4 ); $502.75 for plumbing repair (id., item 9);7 $3,750 to repair
texture and re-paint walls and ceiling (id., item 11);8 $15,000 for temporary living rent in
Atlanta (id., item 12);9 $921.60 for Plaintiffs’ travel from Atlanta to Oklahoma City to
monitor the project, less Mr. Dailey’s flights in March, April, and May when Ms. Dailey
resided in Oklahoma City (id., item 15).10 Thus, the Court will enter an award of
$39,074.35 in damages as a proximate consequence of Defendant Alvarado’s breach.
IV.

Attorneys’ Fees
Plaintiffs also seek attorneys’ fees as the prevailing party under OKLAHOMA STAT.

tit. 12, §§ 936, 940.11 Section 936 provides in relevant part:
In any civil action to recover for labor or services rendered, or
on an open account, a statement of account, account stated,
note, bill, negotiable instrument, or contract relating to the
purchase or sale of goods, wares, or merchandise, unless
otherwise provided by law or the contract which is the subject
of the action, the prevailing party shall be allowed a
reasonable attorney fee to be set by the court, to be taxed and
collected as costs.

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Though Plaintiffs seek $6,025 for plumbing repairs (item 9), they only submit documentation totaling
$502.75. Doc. No. 46-9.
8
Plaintiffs seek $6,350 for this item, including $3,750 for retexturing and repainting, and $2,600 for restaining. However, Plaintiffs only submit documentation for $3,750. Doc. No. 46-11, at 1.
9
Though Plaintiffs seek $20,000 in reimbursement for eight months of rent, they only submit
documentation for six months.
10
Plaintiffs’ records do not support the $1,855.40 they seek. Even including the costs of Mr. Dailey’s
March, April, and May flights, Plaintiffs records indicate they spent $1750.40 on travel, which is $105
less than the $1,855.40 Plaintiffs seek. The discrepancy in amounts appears to be that Plaintiffs included
fees to a Georgia tennis club and a bill from the Home Depot. Accordingly, the Court’s award reflects
$1750.40, less the costs of Mr. Dailey’s flights in March, April, and May ($828.80). Doc. No. 46-15, at 57 (flights for March 10, April 5, and May 5).
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Plaintiffs also seek attorneys’ fees as discovery sanctions under OKLA. STAT. tit. 12, § 3237.B.2 and
Federal Rule of Civil Procedure 37. Because the Court awards Plaintiffs their fees as prevailing parties
against Defendant Alvarado, it need not address the discovery-related fees separately.

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Section 940(A) provides:
In any civil action to recover damages for the negligent or
willful injury to property and any other incidental costs
related to such action, the prevailing party shall be allowed
reasonable attorney's fees, court costs and interest to be set by
the court and to be taxed and collected as other costs of the
action.
Because Plaintiffs’ breach of contract and tort claims against Defendant Alvarado fall
within the purview of these statutes, they are entitled to reasonable attorneys’ fees.
Under Oklahoma law, the correct method for determining reasonable attorneys’
fees is to calculate the lodestar fee, then adjust the fee by considering the factors set forth
in State ex rel. Burk v. City of Oklahoma City, 598 P.2d 659 (Okla.1979).12 Spencer v.
Oklahoma Gas & Electric Co., 171 P.3d 890, 895 (Okla. 2007). The lodestar fee is the
base fee computed as the reasonable number of hours expended by the attorney
multiplied by the reasonable hourly rate. Atwood v. Atwood, 25 P.3d 936, 951 n. 21
(Okla.Civ.App.2001) (citing Burk, 598 P.2d at 660–661). “An attorneys’ fee applicant
bears the burden of proving that the time and labor for which he seeks compensation are
reasonable and that they relate to a claim for which fees are recoverable.” Harolds Stores,
Inc. v. Dillard Dep’t Stores, Inc., 82 F.3d 1533, 1553 (10th Cir.1996).
In support of their application for fees, Plaintiffs submitted an affidavit from their
counsel and his time records. Doc. Nos. 46-17, 46-18. According to these documents,
12

See Burk, 598 P.2d at 661 (listing 1) the time and labor required; 2) the novelty and difficulty of the
questions; 3) the skill required to perform the legal services properly; 4) the preclusion of other
employment by the attorney due to accepting the case; 5) the customary fee; 6) whether the fee is fixed or
contingent; 7) time limitations imposed by the client or the circumstances; 8) the amount involved and the
results obtained; 9) the experience, reputation, and ability of the attorney; 10) the undesirability of the
case; 11) the nature and length of the professional relationship with the client; and 12) awards made in
similar cases).

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counsel’s rate is $150 an hour and he expended 276.40 hours on this case, totaling
$41,460 in fees. Doc. Nos. 46, at 3-4; 46-17; 46-18.
While the Court finds counsel’s hourly rate reasonable, it finds that not all of
counsel’s expended time is compensable. “An attorney fee award is recoverable to a
prevailing party only for the work attributable to a claim for which such fees are
statutorily recoverable.” Lee v. Griffith, 990 P.2d 232, 233 (Okla.1999). Plaintiffs sought
and obtained a declaratory judgment against Defendant Alvarado. Doc. Nos. 16; 30.
There is no question that they are the “prevailing party” against him, and that counsel’s
time spent litigating this matter against Defendant Alvarado is “statutorily recoverable.”
However, counsel’s time entries also include time spent exploring causes of action
and litigating claims against other defendants and potential defendants. Doc. No. 46-18.
Plaintiffs are not, however, the prevailing parties as to claims against those defendants,
one of whom prevailed against Plaintiffs on a motion to dismiss. Doc. No. 12.
Consequently, the time Plaintiffs’ counsel expended on these claims is not compensable
under Sections 936 or 940 and must be deducted from the award of attorneys’ fees.
Because some of counsel’s time entries co-mingle compensable and non-compensable
work,13 the Court will reduce the hours in those entries to reflect a reasonable amount of
time spent on the compensable work. See BP Pipelines (N. Am.) Inc. v. C.D. Brown
Const., Inc., 473 F. App’x 818, 835-36 (10th Cir. 2012) (not unreasonable for district
court to compensate prevailing party for 60% of time represented by block billing);
13

This method is often referred to as “block billing.” Harolds Stores, Inc., 82 F.3d 1554 n. 15 (‘Block
billing’ refers to the time-keeping method by which each lawyer and legal assistant enters the total daily
time spent working on a case, rather than itemizing the time expended on specific tasks”).

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Sisney v. Smalley, 690 P.2d 1048, 1052 (Okla.1984) (court has “approved an
apportionment of attorney fees where the legal services were performed partly in an
action in which attorney fees were recoverable and partly in a matter in which such fees
are not allowable”).
Applying these principles to its review of Plaintiffs’ counsel’s time records, the
Court finds that 122 hours are compensable under the prevailing party statutes, for a total
of $18,300.00 in recoverable attorneys’ fees. This amount reflects the $4,900 the
Oklahoma state court awarded to Plaintiffs for Defendant Alvarado’s failure to comply
with his discovery obligations. Doc. No. 16-1.
V.

Conclusion
For the foregoing reasons, Plaintiffs’ Second Motion for Default Judgment

Against Defendant Manuel Alvarado is hereby GRANTED. Doc. No. 30. The Court
enters a judgment by default in favor of Plaintiffs and against Defendant Manuel
Alvarado in the amount of $39,074.35 in damages and $18,300.00 in attorneys’ fees.
IT IS SO ORDERED this 13th day of November, 2015.

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