Team Systems International LLC v. Haozous et al

Filing 77

ORDER granting 62 Motion for Appeal-Related Attorney Fees. Signed by Honorable Timothy D. DeGiusti on 5/12/2017. (mb)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
TEAM SYSTEMS INTERNATIONAL,
LLC,
Plaintiff
v.
JEFF HAOZOUS, also known as Jeff
Houser, Individually, and as President of
Fort Sill Apache Industries and Chief
Executive Officer of Fort Sill Apache
Industries Board of Directors, et al.,
Defendants.

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Case No. CIV-14-1018-D

ORDER
Before the Court for decision is Defendants’ Motion for Appeal-Related Attorneys’
Fees [Doc. No. 62], filed by Jeff Haozous, Fort Sill Apache Industries Board of Directors,
and Fort Sill Apache Industries (hereafter, “Defendants”). The Motion was filed pursuant
to an order of the Tenth Circuit granting a motion for attorney fees filed in that court, and
directing this Court to determine a reasonable amount to be awarded to Defendants as
prevailing parties in Appeal No. 15-6101. In that appeal, the Tenth Circuit affirmed the
dismissal of this action under Fed. R. Civ. P. 12(b)(6).

See Team Sys. Int’l, LLC v.

Haozous, 656 Fed. App’x 907 (10th Cir. 2016).1 By the instant Motion, Defendants seek
an award of $28,331.00 as a reasonable amount of attorney fees incurred in the appeal.

In a second appeal, No. 16-6277, Plaintiff challenges this Court’s Order of August 19,
2016, and a judgment awarding Defendants an attorney fee of $29,234.47 as prevailing parties in
the original action. See Order 8/19/16 [Doc. No. 60]; J. Awarding Att’y Fees [Doc. No. 61].
1

Plaintiff Team Systems International, LLC opposes Defendants’ Motion on the
general ground that the amount sought for appeal-related fees is excessive and should be
reduced. Although not expressly stated in its brief, Plaintiff agrees with Defendants on a
number of key points, including the manner of calculating a fee award under Oklahoma
law, which governs the attorney fee issues.
First, the Court determines a lodestar amount “by multiplying the attorney’s hourly
rate by the number of hours expended” on the appeal. Spencer v. Okla. Gas & Elec. Co.,
171 P.3d 890, 895 (Okla. 2007); see Pl.’s Resp. Br. [Doc. No. 75] at 3. Plaintiff does not
challenge the reasonableness of the hourly rates charged by Defendants’ counsel, but
instead argues that the attorneys’ time records reflect an excessive number of hours spent
on Defendants’ appellate brief and are flawed in certain respects, including that the time
records lack sufficient detail and contain block billing.2
Second, the Court may consider whether to enhance the lodestar amount based on
the consideration of factors enumerated in Burk v. Oklahoma City, 598 P.2d 659 (Okla.
1979). See Spencer, 171 P.3d at 895. Here, Plaintiff contends a reduction should be
made based on certain Burk factors, such as the “‘time and labor required; novelty and
difficulty of the questions; and the amount involved and the results obtained.” See Pl.’s
Resp. Br. [Doc. No. 75] at 3 (citing Burk, 598 P.2d at 661).

2

“The term ‘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.’” Robinson v. City of Edmond, 160 F.3d 1275, 1284 n.9 (10th Cir.
1998) (quoting Harolds Stores, Inc. v. Dillard Dep’t Stores, Inc., 82 F.3d 1533, 1554 n.15 (10th
Cir. 1996)).
2

As an initial matter, Plaintiff renews an objection previously rejected by the Court.
Before filing its response, Plaintiff moved for a stay of these proceedings until the Tenth
Circuit decides a pending appeal in which Plaintiff challenges this Court’s prior award of
attorney fees to Defendants for their successful defense of the original action. See supra
note 1. The Court denied the motion because it found no merit in Plaintiff’s objection to
going forward during the appeal. See Order 11/1/16 [Doc. No. 73]. Plaintiff now reasserts its position that there may be an overlap between the work done at the district court
and appellate court levels but a duplication of services cannot be determined on the present
record.3 As before, the Court finds that no overlap is apparent, and the Court further finds
that any duplication is immaterial. Where, as here, the same attorneys represent a party
before both the trial and appellate courts and there is a time lag between the original and
the appellate briefing, some time may reasonably be spent reviewing and updating prior
work. This time would not be considered duplicative, any more than similar work by new
counsel hired for an appeal (as Plaintiff did here) would be so considered.4

3

In its response brief, like its brief regarding a stay, Plaintiff complains that it cannot
compare defense counsel’s original time records with their appeal-related ones because the Court
permitted Defendants to submit redacted time records in support of the original fee award and
determined the award based on an in camera review of unredacted, contemporaneous time records.
See Pl.’s Resp. Br. [Doc. No. 75] at 2-3; Pl.’s Reply Br. [Doc. No. 72] at 4.
4

New counsel entered an appearance for Plaintiff after the dismissal was ordered and
filed the notice of appeal and a motion for reconsideration; he did not enter an appearance in
Appeal No. 15-6101.
3

The Court also rejects Plaintiff’s contention that Defendants have failed to provide
sufficient support for their Motion.5 Plaintiff complains that the time records submitted
by Defendants’ attorneys contain block-billing entries. In making the original fee award,
the Court found that the use of block billing, among other things, warranted an examination
of the attorneys’ contemporaneous time records and itemized statements and, ultimately, a
reduction of the lodestar amount. See Order 3/11/16 [Doc. No. 55] at 7-8; Order 8/19/16
[Doc. No. 60] at 2-3.

Acknowledging this concern, Defendants’ attorneys have

supplemented their present billing statements by providing an exhibit that itemizes tasks in
block-billed entries based on additional information from contemporaneous time records.
See Whitmire Aff., Ex. 2 [Doc. No. 62-5] at 16-17 (ECF page numbering). Plaintiff also
complains that general billing entries, such as “work on appeal brief,” fail to describe
specific tasks performed and are insufficient.

See Pl.’s Resp. Br. [Doc. No. 75] at 7.

While more specific descriptions would be helpful, the Court finds that counsel’s billing
statements provide sufficient information to permit a determination of whether the amount
of time spent preparing Defendants’ appellate brief was excessive, as argued by Plaintiff.
The ultimate question is whether the amount sought by Defendants for legal services
related to the appeal is reasonable. Defendants’ attorneys billed their clients for a total of
120 hours of legal work.6 Contrary to Plaintiff’s arguments, not all of this time was spent
5

One alleged deficiency – that Defendants failed to provide this Court with a copy of
their appellate brief – was remedied by Defendants’ subsequent submission of copies of the
parties’ opening and answer briefs. See Defs.’ Reply Br., Exs. 1 & 2 [Doc. Nos. 76-1 and 76-2].
6

The supporting documentation shows that the attorneys exercised billing judgment and
did not bill for all of the time they spent working on the appeal.
4

working on the appellate brief, and not all of the appellate issues had been fully briefed in
the district court. Due to the litigation decisions made by Plaintiff, Defendants could not
simply repackage their original arguments on appeal.7 The Court also is not persuaded by
Plaintiff’s argument that 120 hours is unreasonable because it includes time spent by six
attorneys working on the appeal. This number of attorneys is not excessive in relation to
the issues presented in the merits appeal and the amount in controversy. Further, while
Plaintiff is correct that the billing records contain numerous entries for time spent by the
attorneys conferring with one another and working collaboratively on Defendants’ brief,
the Court finds no significant duplication of billing. With minor exceptions, the attorneys
involved in office conferences did not all bill Defendants for the conference, and a
significant amount of collaboration was accomplished by email.
Nevertheless, as with the original fee award, the Court’s examination of the time
records submitted by Defendants’ counsel reveals the existence of some unsupported
block-billing entries and some duplication of services by the multiple attorneys who
worked on the appeal.

The Court again finds that a minor adjustment of the lodestar

amount is warranted and that a ten-percent reduction is appropriate to yield a reasonable
fee award for legal services related to the appeal.

The amount of attorney fees to be

awarded for the appeal is calculated as follows: Phillips Murrah, P.C., $25,667.50, plus

7

Plaintiff appealed the dismissal of the action and then filed a district-court motion seeking
reconsideration of the dismissal. The Tenth Circuit abated the appeal pending a ruling on the
motion for reconsideration, and required the parties to file periodic status reports. After this
Court denied the motion, Plaintiff filed an amended notice of appeal. Plaintiff’s appellate brief
advanced additional arguments on appeal that had not originally been made to this Court.
5

Devol & Associates, $2,663.50, totals $28,331.00. Applying a 10% reduction to the total,
the amount of the award is $25,498.00.

Therefore, the Court finds that the sum of

$25,498.00 represents a reasonable fee award to Defendants for their successful defense of
Plaintiff’s merits appeal.
IT IS THEREFORE ORDERED that Defendants’ Motion for Appeal-Related
Attorneys’ Fees [Doc. No. 62] is GRANTED, as set forth herein. The Court approves an
award of attorney fees to Defendants Jeff Haozous, Fort Sill Apache Industries Board of
Directors, and Fort Sill Apache Industries in the amount of $25,498.00 as the prevailing
parties in Appeal No. 15-6101. A separate judgment for appeal-related attorney fees shall
be entered.
IT IS SO ORDERED this 12th day of May, 2017.

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