LEAMAN v. WOLFE
MEMORANDUM AND/OR OPINION. SIGNED BY CHIEF JUDGE JOY FLOWERS CONTI ON 2/9/17. 2/9/17 ENTERED AND COPIES E-MAILED.(kw, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
JANICE M. LEAMAN,
GREGG B. WOLFE,
) CIVIL ACTION NO. 2:13-CV-00975
Conti, Chief District Judge for the Western District of Pennsylvania.
This case arises from the breach of a settlement agreement between two former business
partners. The case has a lengthy procedural history in the United States District Court for the
Eastern District of Pennsylvania and the United States Court of Appeals for the Third Circuit.
In a nonprecedential opinion dated October 6, 2015, the court of appeals remanded the case to
the district court to calculate the damages and reasonable attorneys’ fees to which plaintiff Janice
M. Leaman (“Plaintiff” or “Leaman”) is entitled. On January 4, 2017, the case was reassigned to
the undersigned judge pursuant to 28 U.S.C. § 292(b). (ECF No. 80).1
Cross-motions for summary judgment were filed after the remand (ECF Nos. 75, 76).
The parties fully briefed the issues and submitted numerous documents in support of their
respective positions, including a joint appendix (“J.A.,” ECF Nos. 75-4 to 75-11).2 After
The electronic filings are available on the CM/ECF system for the United States District Court
for the Eastern District of Pennsylvania, https://ecf.paed.uscourts.gov/cgi-bin/login.pl
For clarity, the court will cite to specific pages of the joint appendix as “J.A. at __.”
thorough consideration, the court will grant Plaintiff’s motion in part and will deny the motion
filed by Defendant Gregg B. Wolfe (“Defendant” or “Wolfe”), for the following reasons.
II. MOTIONS FOR SUMMARY JUDGMENT
The Federal Rules of Civil Procedure provide that summary judgment shall be granted “if
the movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Summary judgment may be
granted against a party who fails to adduce facts sufficient to establish the existence of any
element essential to that party’s case, and for which that party will bear the burden of proof at
trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The moving party bears the initial burden of identifying evidence that demonstrates the
absence of a genuine issue of material fact. Id. at 323; Aman v. Cort Furniture Rental Corp., 85
F.3d 1074, 1080 (3d Cir. 1996). Once that burden has been met, the nonmoving party must
identify “specific facts showing that there is a genuine issue for trial,” or the factual record will
be taken as presented by the moving party, and judgment will be entered as a matter of law.
Matsushita Elec. Indus. Corp. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). An issue is
“genuine” only if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). In assessing the
record, a court must view all facts in the light most favorable to the nonmoving party, and must
draw all reasonable inferences and resolve all doubts in that party’s favor. Hugh v. Butler
County Family YMCA, 418 F.3d 265, 266 (3d Cir. 2005). The parties agree that the relevant,
material facts of this litigation are undisputed.
III. FACTUAL AND PROCEDURAL HISTORY
Leaman and Wolfe were long-time business partners and operated a court reporting
agency, Kaplan Leaman & Wolfe (“KLW”). In 2010, Leaman filed a state court action against
Wolfe arising out of the breakup of that business. On January 11, 2012, after mediation, the
parties entered into a settlement agreement (J.A. at 9-15) and judgment note (J.A. at 16) to
resolve their disputes.
Wolfe agreed to make a series of thirty-one installment payments amounting to $475,000
over four years. (Settlement Agreement ¶ 1, J.A. at 9-10). If Wolfe missed a payment, he had a
ten-day cure period. The agreement provided: “Any failure to cure such failure to pay shall
constitute a default of this Agreement and render null and void all of its terms, agreements and
conditions, except for the Confession of and Consent to Judgment by Wolfe, set forth below.”
(Settlement Agreement ¶ 1, J.A. at 10). The confession of judgment clause stated that in the
event of an uncured default, Lehman was authorized to file a judgment note for $100,000 in
liquidated damages, “plus the entirety of the then unpaid balance of the Settlement Amount and
Leaman’s attorneys’ fees and costs for the filing and enforcement of the Judgment Note.”
(Settlement Agreement ¶ 4, J.A. at 11). The clause further provided that “if either Party is in
default and litigation is filed, the defaulting party shall be liable for the reasonable attorneys’ fees
and costs of the non-defaulting party.” Id. In exchange, Leaman promised “not to perform any
stenographic services competitive with KLW” during the payment period. (Settlement
Agreement ¶ 6, J.A. at 13). The agreement provided that if any default occurred, Leaman’s noncompete provision “shall become immediately null, void and of no force and effect.” Id. The
agreement contained a severability clause, which provided that if any provision shall be declared
void or invalid, the remaining provisions “shall remain and in all other respects be deemed valid
and enforceable.” (Settlement Agreement ¶ 9, J.A. at 13).3
From the first payment in April 2012, the parties fell into a predictable pattern: Wolfe
would fail to make a timely payment; Leaman would send notice of default; and Wolfe would
cure the default by paying on the last possible day. In December 2012 and February 2013,
Wolfe failed to cure his defaults within the ten-day cure period.4 Leaman agreed to accept the
December 2012 payment out-of-time.
It is the February 2013 payment that precipitated this litigation. The February 2013
payment of $12,500 was due on February 11, 2013. Leaman notified Wolfe of the default by
letter dated the same day, which was received by Wolfe on February 13, 2013. (J.A. at 18-19).
UPS lost the February 2013 payment, which Wolfe had sent within the cure period. On February
25, 2013, when payment was not received, Leaman initiated this lawsuit by filing a Complaint in
Confession of Judgment for Money Damages in the United States District Court for the Eastern
District of Pennsylvania. In the complaint, Leaman sought judgment in the amount of
$390,350.00 (which consisted of the unpaid principal balance, $100,000 in liquidated damages, a
20% attorneys’ fee of $65,000 and the $350 court filing fee), plus costs and interest. The court
promptly entered judgment in favor of Leaman.
Upon learning of the judgment and undelivered check, Wolfe promptly delivered a new
check to Leaman by hand. Wolfe filed a motion to strike or to reopen the confessed judgment,
which the court granted to permit a trial on the pertinent issues. (ECF No. 9). Wolfe filed an
The settlement agreement does not contain a choice of law provision. The parties did not
dispute that Pennsylvania law applies. The court has subject-matter jurisdiction based upon
diversity of citizenship because the amount in controversy was over $75,000 and Wolfe is a
citizen of New Jersey and Leaman is a citizen of Pennsylvania.
Wolfe’s son died suddenly on December 19, 2012.
answer, affirmative defenses and a counterclaim against Leaman for breach of the settlement
agreement. The parties stipulated that Plaintiff’s complaint stated two independent claims: (1)
confession of judgment; and (2) breach of contract. After apparently contentious discovery, the
parties filed cross-motions for summary judgment.
On July 10, 2014, the district court issued a memorandum opinion and order. The court
granted summary judgment in favor of Wolfe on the complaint, and to Leaman on the
counterclaim. (ECF Nos. 51, 52). The court reasoned that although Wolfe had technically
defaulted, his default was excused by the equitable doctrine of substantial performance. The
court observed that both parties had acted with ill will toward each other: Wolfe by delaying his
installment payments until the last possible moment and Leaman by seizing on the opportunity to
confess judgment and refusing to withdraw it after learning about the mistake made by UPS.
The court concluded that the most equitable resolution was to reopen the confession of judgment,
dismiss all claims, and leave the parties to perform the remainder of their settlement agreement.
Leaman appealed. Throughout the time period of the litigation, Wolfe made monthly
payments on the unpaid principal balance. (J.A. at 31). Wolfe paid the entire principal balance
prior to resolution of the appeal. (J.A. at 31). On October 6, 2015, the United States Court of
Appeals for the Third Circuit vacated the district court’s decision in a nonprecedential opinion.
(J.A. 24-30, also filed at ECF No. 56). The court of appeals held that the doctrine of “substantial
performance is not a valid defense in a suit against a party for damages.” (J.A. at 27).
court of appeals concluded that the $100,000 liquidated damages provision was a penalty and
unenforceable, but recognized that Leaman is entitled to damages. (J.A. at 29). The court stated:
“Leaman is entitled to those damages that will put her in the position she would have been in but
for the breach.” (J.A. at 30). On remand, the district court was instructed to “calculate a
reasonable estimate of damages based on the applicable interest rate.” Id. The court of appeals
also held that, as contemplated by the settlement agreement, “Leaman is also entitled to what the
District Court deems to be a reasonable attorneys’ fee.” Id. The case was remanded for the
district court to consider the appropriate measure of damages.
Leaman contends that judgment for $81,029.89 should be entered in her favor. This
amount consists of: (1) interest of $10,523.97; and (2) attorney fees and costs of $70,505.92.
Leaman also seeks the opportunity to prove at trial “lost opportunity” damages of $230,000 and
to recover the additional attorneys’ fees she will incur in that endeavor. The joint appendix
contains an interest calculation (J.A. at 31-32), attorney time records (J.A. 33-93), and
declarations from Leaman and attorneys William Einhorn and Benjamin Anderson (J.A. 94-100).
Defendant presents a vastly different proposal -- that judgment for $641.78 be entered in
favor of Leaman. This amount consists of: (1) interest of $26.65; (2) attorney fees of $265.13;
and (3) the $350 court filing fee. Defendant argues that: (1) during the time period of the
litigation Leaman received and accepted all remaining installment payments due under the
settlement agreement within each month’s cure period; (2) Leaman’s attempt to recover
$100,000 in liquidated damages was rejected by the courts; (3) Leaman’s first attorney, William
Einhorn, was also her husband, and his itemization (J.A. at 33-35) does not include an hourly
rate or actual charges; and (4) Leaman never previously claimed accelerated interest or “lost
opportunity” damages. In response, Leaman points out that she had no reason to seek those
damages until the court of appeals denied her claim for $100,000 in liquidated damages.
The court must perform the task assigned to it by the court of appeals and effectuate the
intent of the parties, as reflected in the terms of the settlement agreement. The legal principles
governing enforcement of settlement agreements were succinctly summarized in Dugan v.
O’Hara, 125 F. Supp. 3d 527, 535–36 (E.D. Pa. 2015):
“The validity and enforceability of settlement agreements is governed by state
contract law.” Shell’s Disposal & Recycling, Inc. v. City of Lancaster, 504 Fed.
Appx. 194, 200 (3d Cir. 2012). “It is by now axiomatic under Pennsylvania law
that ‘the test for enforceability of [a settlement] agreement is whether both parties
have manifested an intention to be bound by its terms and whether the terms are
sufficiently definite to be specifically enforced.’” Calif. Sun Tanning USA, Inc. v.
Elec. Beach, Inc., 369 Fed. Appx. 340, 346 (3d Cir. 2010) (quoting Channel
Home Ctrs. v. Grossman, 795 F.2d 291, 298–99 (3d Cir. 1986)). “In ascertaining
the intent of the parties to a contract, it is their outward and objective
manifestations of assent, as opposed to their undisclosed and subjective
intentions, that matter.” Espenshade v. Espenshade, 729 A.2d 1239, 1243 (Pa.
Super. Ct. 1999).
The court must determine the damages and counsel fees to which Plaintiff is entitled.
Other than the lost opportunity damages, the main dispute with respect to damages
involves prejudgment interest. Leaman seeks to enforce the settlement agreement’s acceleration
clause. Leaman reasons that because Wolfe defaulted under the agreement, the entire unpaid
balance became immediately due. She argues that interest accrued on that unpaid balance. The
complaint in this case reflects that she was asserting an immediate right to the unpaid principal
balance. (Complaint ¶ 14, J.A. at 4). While Wolfe’s payments continued over the next twenty
months, Leaman argues that her acceptance of the subsequent monthly payments constituted
reasonable mitigation of her damages and she did not waive her right to acceleration. Wolfe
contends that the only interest due is on the February 2013 payment that was lost by UPS
(thirteen days at six percent interest on the late payment of $12,500). Wolfe focuses on the court
of appeals’ instruction to put Leaman “in the position she would have been in but for the
breach.” (J.A. at 30). Wolfe reasons that without the breach, Leaman would have been entitled
to twenty monthly installment payments, which is exactly what she received. Wolfe also argues
that Leaman waived her claim to interest on accelerated principal because she did not previously
raise this argument. Leaman responds that this theory became ripe only after the court of appeals
denied her claim for $100,000 in liquidated damages.
Wolfe makes compelling equitable arguments for his position. It is clear that after
February 2013 Leaman received actual payments from Wolfe within the cure periods anticipated
under the original schedule set forth in the settlement agreement. The court of appeals, however,
rejected Wolfe’s equitable defense of substantial performance. Thus, this court must determine
the legal rights of the parties, as set forth in their settlement agreement.
In Benefit Trust Life Insurance Co. v. Union National Bank of Pittsburgh, 776 F.2d 1174
(3d Cir. 1985), the court of appeals explained: “when a defendant breaches a contract to pay a
definite sum of money, interest is payable ‘from the time performance was due.’” Id. at 1178
(quoting Penneys v. Penn. R.R. Co., 183 A.2d 544, 546 (Pa. 1962)). “Assessment of such
interest does not depend upon discretion but is a legal right.” Id. The award of prejudgment
interest for breach of contract is not punitive, but instead is intended to compensate the nonbreaching party for the loss of use of the money. Atlin v. Security-Connecticut Life Ins. Co., 788
F.2d 139, 141 (3d Cir. 1986).
In February 2013, Wolfe defaulted on his obligations under the settlement agreement and
failed to timely cure that default. The settlement agreement contains unambiguous language that
governs the consequences. Upon a failure to timely cure a default, the entire unpaid balance
could be accelerated and become immediately due. Paragraph 4 of the settlement agreement
provides that Leaman is authorized to confess judgment for $100,000, “plus the entirety of the
then unpaid balance of the Settlement Amount.” (J.A. at 11). Although the court of appeals held
that the $100,000 liquidated damages provision was unenforceable, the settlement agreement
contains a severability provision which reflects that if any provision is found to be invalid, the
remaining parts or provisions remain valid and enforceable. (J.A. at 13). Acceleration clauses
are valid and enforceable under Pennsylvania law. Royal Bank of Pa. v. 1600 Walnut St. Assocs.,
No. CIV. A. 91-0969, 1991 WL 78189, at *2 (E.D. Pa. May 7, 1991) (“Acceleration clauses are
common elements of business loans and are enforceable under Pennsylvania law so long as a
stated default exists and the option to accelerate is exercised by the mortgagee....”). In Deek
Investments, L.P., v. Murray, No. 91-09071, 2005 WL 4979922 (Pa. Ct. Com. Pl., June 20, 2005)
(cited by the court of appeals’ opinion in this case, J.A. at 30), the court explained that the
plaintiff was entitled to recover interest from the date all payments should have been made until
the date of payment.
By letter dated February 11, 2013, (J.A. at 18), Leaman gave Wolfe proper notice that he
was in default and she intended to strictly enforce the confession of judgment provisions of the
settlement agreement. Because the acceleration clause is valid, the total unpaid balance became
immediately payable on February 25, 2013, the date the complaint was filed in this case and
Leaman accelerated the unpaid principal balance. Under those circumstances, Leaman is entitled
to prejudgment interest because Wolfe did not immediately pay the principal balance; rather,
Wolfe made payments over twenty months.
The parties agree that the applicable interest rate is six percent. The court accepts the
calculation of interest submitted by Leaman, which is based on six percent interest on the
accelerated unpaid balance beginning on February 25, 2013 (the date on which payments were
accelerated). As Wolfe paid off the principal over the next twenty months, the balance on which
interest was calculated decreased. (J.A. at 31). Although Wolfe objects, generally, that the
calculation is “undecipherable and unsupported,” he pointed to no specific error and did not
provide an alternative calculation. Leaman’s calculation is reasonable and consistent with the
acceleration clause in the settlement agreement. Under its terms, once the unpaid principal
balance was accelerated on February 25, 2013, Wolfe was required to pay the entire unpaid
balance of $212,500.00. Because the actual payments were made over twenty months, Leaman
is entitled to interest for the time value of the delayed principal payments. In sum, Leaman is
entitled to recover $ 10,523.97 in interest.
B. Counsel Fees
The court of appeals held that Leaman is “entitled to what the District Court deems to be
a reasonable attorneys’ fee.” (J.A. at 30). Paragraph 4 of the settlement agreement provides that
“if either Party is in default and litigation is filed, the defaulting party shall be liable for the
reasonable attorneys’ fees and costs of the non-defaulting party.” (J.A. at 11). Thus, since
Wolfe was in default, he must pay Leaman her “reasonable” attorneys’ fees. The parties
vigorously dispute what fees are “reasonable.” Leaman argues that she is entitled to $70,505.92,
the full amount of her counsel fees as calculated under the lodestar method. She contends that all
work performed in this litigation was necessary to obtain relief. Wolfe argues that Leaman is
only entitled to attorney fees of $265.13 (1.3 hours to prepare the initial Complaint in Confession
of Judgment at a rate of $203.95/hour). He contends that the only necessary legal action was the
filing of the initial complaint, and that the remainder of Leaman’s efforts have been fruitless.
In McKenna v. City of Philadelphia, 582 F.3d 447 (3d Cir. 2009), the court summarized
the legal principles which guide the calculation of reasonable counsel fees:
The starting point for determining the amount of a reasonable fee is the lodestar,
which courts determine by calculating the “number of hours reasonably expended
on the litigation multiplied by a reasonable hourly rate.” Hensley v. Eckerhart,
461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983). Hensley instructs
that courts are to exclude from the determination of the lodestar any hours not
reasonably expended. Hours subject to exclusion under Hensley include those
deemed “excessive, redundant, or otherwise unnecessary.” Id. at 434, 103 S.Ct. at
1939–40. A court’s calculation of the lodestar, however, does not end its inquiry
on a fee application. A district court can adjust a fee award upward or downward
based upon the results obtained in a case. Id. at 434, 103 S.Ct. at 1940. In
addition, an attorney’s work on unsuccessful claims not related to the claims on
which the attorney succeeded is not compensable, because such work “cannot be
deemed to have been expended in pursuit of the ultimate result achieved.” See id.
at 434–35, 103 S.Ct. at 1940 (internal quotation marks omitted). Moreover, as we
have held, “the District Court has a positive and affirmative function in the fee
fixing process, not merely a passive role” and “should reduce the hours claimed
by the number of hours spent litigating claims on which the party did not succeed,
that were distinct from the claims on which the party did succeed, and for which
the fee petition inadequately documents the hours claimed.” Loughner v. Univ. of
Pittsburgh, 260 F.3d 173, 178 (3d Cir. 2001).
Id. at 455.
The court rejects Wolfe’s argument that no counsel fees incurred during the litigation can
be recovered by Leaman. The court of appeals has explained: “A plaintiff is a ‘prevailing party’
for the purposes of an attorney’s fee award if she succeeds ‘on any significant issue in litigation
which achieves some of the benefit the parties sought in bringing suit.’” Mancini v. Northampton
Cty., 836 F.3d 308, 321 (3d Cir. 2016) (citations omitted). In this case, Leaman succeeded on
significant issues and must be regarded as a “prevailing party.” “[C]ourts should not reduce fees
simply because some of a prevailing party’s related claims are unsuccessful.” McKenna, 582
F.3d at 457. The mere failure to be successful on certain motions is also insufficient to warrant a
fee reduction under Hensley. Blum v. Witco Chem. Corp., 829 F.2d 367, 378 (3d Cir. 1987). In
remanding this case, the court of appeals cited Deek, 2005 WL at 4979922, for the proposition
that Leaman is entitled to recover “attorneys’ fees incurred by plaintiff in pursuit of [her]
payment.” (J.A. at 30). Leaman’s entitlement to counsel fees throughout the litigation is
particularly appropriate in this case, in which she lost in the district court but prevailed (in part)
1. Lodestar Calculation
Wolfe makes only one specific criticism of the lodestar calculation submitted by
Leaman. With respect to the hourly rate, he points out that Leaman’s first attorney, William
Einhorn, was also her husband, and Einhorn’s itemization does not include an hourly rate or
actual charges. Wolfe contends that Einhorn’s claimed hourly rate of $ 400 per hour is
excessive, and suggests a rate of $203.95, which is the average hourly rate charged on this case
by Leaman’s second law firm, Powell, Trachtman, Logan, Carrle & Lombardo (“PTLCL”).
The court agrees with Wolfe that the blended hourly rate actually charged by Leaman’s
second law firm on this same case is a better reflection of the prevailing rate for the services
Einhorn provided. Einhorn did not aver that $400 per hour is his standard rate (he stated only
that it was a “reasonable market rate”) and, in any event, that rate would not necessarily be
appropriate for all the tasks he performed in this case. See, e.g., Ursic v. Bethlehem Mines, 719
F.2d 670, 677 (3d Cir. 1983) (“Michelangelo should not charge Sistine Chapel rates for painting
a farmer’s barn”). Thus, the court will apply an hourly rate of $203.95 for Einhorn’s time spent
on this litigation. Wolfe did not challenge the hourly rates of any of the PTLCL lawyers or the
amount of hours claimed by any of Leaman’s attorneys as excessive.5
There is one minor dispute. Wolfe asserts that Einhorn spent 1.3 hours to prepare and file the
complaint. Leaman claims 1.8 hours related to such activities. The parties’ positions are easily
harmonized – the first 1.3 hours occurred on 2/24/13 and 2/27/13; the additional 0.5 hours
occurred on 2/28/13. (J.A. at 33). Thus, the correct amount of time is 1.8 hours.
The court’s lodestar calculation is as follows:
50.3 hours @ $203.95/hour
$ 10, 258.69
78.5 hours @ $225/hour
136.7 hours @ $200/hour
0.4 hours @ $175/hour
Henry (clerk): 7.5 hours @ $75/hour
4.6 hours @ $175/hour
See Chart, ECF No. 75-2 at 7.
2. Adjustment of Lodestar
If a plaintiff has achieved only partial or limited success, the lodestar calculation may be
excessive. Hensley, 461 U.S. at 436. “How to measure the degree of success is left to the district
court’s discretion.” Mancini, 836 F.3d at 321. However, “the Supreme Court has rejected a fee
calculation approach that compares the total number of issues in the case with the number of
issues on which the plaintiff prevailed.” Id. “When the prevailing party has only succeeded on
some claims, the court must address (1) whether the unsuccessful claims were unrelated to the
successful claims; and (2) whether the plaintiff achieved a level of success that makes the hours
reasonably expended a satisfactory basis for making a fee award.” Blakey v. Cont’l Airlines, Inc.,
2 F. Supp. 2d 598, 605 (D.N.J. 1998). The court concludes that Leaman’s claims in this
litigation are intertwined because they arise out of the same settlement agreement, which makes
it difficult to separate time spent on each claim. The court is not able to identify any fees as
relating solely to distinct, unsuccessful claims.
The analysis, however, is not over. The court of appeals has instructed that where claims
are interrelated, the district court should not attempt to identify specific hours spent on the
unsuccessful claims to exclude them from the lodestar. Johnson v. Orr, 897 F.2d 128, 132 (3d
Cir. 1990) (Becker, J., concurring). Instead, the court should focus on the significance of the
overall relief obtained by the plaintiff in relation to the hours reasonably expended on the
litigation. Hensley, 461 U.S. at 435. The fee award should be reduced if the relief obtained is
limited in comparison to the scope of litigation as a whole. Id. at 440; see generally Blakey, 2 F.
Supp. 2d at 606–07.
In Blakey, the plaintiff was successful on only one of several discrimination claims and
was unsuccessful on a distinct defamation claim. The court denied fees related to the distinct,
unsuccessful defamation claim. With respect to the fees related to the discrimination claims, the
court was unable to parse out services related to the successful claim from the services related to
the unsuccessful claims. The court reduced the overall lodestar calculation by thirty percent to
account for the services for the unsuccessful claims. In Shelton v. Restaurant.com Inc., No.
CV10824, 2016 WL 7394025, at *17 (D.N.J. Dec. 21, 2016), the court of appeals remanded the
case for a determination of counsel fees after a lengthy, partially-successful litigation. On
remand, the district court determined when comparing the overall relief obtained by the plaintiff
to the hours reasonably expended on the litigation, the lodestar calculation was “grossly
excessive” and reduced the fees and costs by thirty-five percent. In Gadley v. Ellis, Civ. NO.
3:13-17, 2016 WL 1090654 (W.D. Pa. Mar. 18, 2016), the court reduced counsel fees by half, to
reflect work done on unsuccessful claims. In Souryavong v. Lackawanna Cty., 159 F. Supp. 3d
514, 540-42 (M.D. Pa. 2016), the court departed downward from the lodestar by more than twothirds, citing numerous decisions where the courts made similar or larger reductions.
The assessment of success is complicated in this case because both sides achieved some
success in the litigation. Wolfe was able to open the original confessed judgment of $390,350.00
and defeated Leaman’s claim for $100,000 in liquidated damages. His obligation to pay the
remaining $212,500 was never in dispute. In fact, Wolfe continued to make the monthly
payments throughout the litigation. Leaman, however, also was successful, in part, in this
litigation. She obtained a finding on appeal that Wolfe defaulted under the agreement, and she
overcame his “substantial performance” defense. Wolfe’s counterclaim was dismissed. Wolfe
never paid interest on the accelerated balance, which as explained above, Leaman is entitled to
recover. Ongoing litigation has been necessary for Leaman to obtain the interest and reasonable
Because Wolfe is the defaulting party, Leaman is entitled to reasonable counsel fees.
Wolfe prevailed on the largest sum in dispute, the $100,000 liquidated damages. Leaman
prevailed on her entitlement to interest in the amount of $10,523.97on the accelerated unpaid
balance. Both parties contributed to the contentious and extensive litigation in this case. After
balancing these factors, the court concludes that the lodestar amount is excessive in comparison
to the results achieved and must be decreased by fifty percent. Leaman may recover as
reasonable counsel fees one half of the lodestar (0.5 x $56,698.69), which equals $28,349.35.
C. “Lost Opportunity” Damages
Finally, Leaman contends that she is entitled to “lost opportunity” damages to put her in
the position she would have been in but for the breach. She calculates that she would have
earned revenue of $230,000 as a court reporter in the twenty months remaining on the
contractual term following Wolfe’s breach. ECF No. 75-10. Leaman recognizes that a trial on
the amount of those damages would be necessary. Wolfe vigorously argues that Leaman is not
entitled to “lost opportunity” damages.
The court is not persuaded by Leaman’s argument. The settlement agreement did not
provide for the recovery of “lost opportunity” damages. Instead, the parties’ agreement provided
a different remedy. If any default occurred, Leaman’s noncompete provision “shall become
immediately null, void and of no force and effect.” Agreement ¶ 6. In fact, Leaman’s Notice of
Default letter dated February 11, 2013, explicitly warned Wolfe that his default would render her
noncompete promise null and void. (J.A. at 18). Upon Wolfe’s breach, Leaman was entitled
immediately to perform competitive court reporting services. That Leaman failed to exercise this
right does not entitle her to collect “lost opportunity” damages now. The court must reject
Leaman’s claim for “lost opportunity” damages.
Both parties referred to “costs” in their proposed orders. Leaman did not provide a
separate itemization of the costs.6 Wolfe contends that the only recoverable cost is the $350
filing fee. In Harris v. Paige, No. CIV.A. 08-2126, 2013 WL 4718949 (E.D. Pa. Sept. 3, 2013),
the court refused a similar request for a court to award costs and explained: “Under the
procedures outlined in Fed. R. Civ. P. 54(d)(1), the Clerk taxes costs, and then, if there is an
objection to the Clerk’s action, the District Court reviews the Clerk’s award.” Id. at *9 n.18
(citing McKenna, 582 F.3d at 454, and Reger v. The Nemours Found. Inc., 599 F.3d 285, 287 (3d
Cir. 2010)). Accordingly, this court declines to award costs. Leaman must first submit a bill of
costs to the clerk of court in accordance with Local Rule 54.1 of the United States District Court
for the Eastern District of Pennsylvania.
Einhorn’s time entries reflect the $350 filing fee (J.A. at 35), and costs are scattered throughout
the PTLCL records.
For the reasons set forth above, Leaman’s motion for summary judgment (ECF No. 75)
will be granted in part and denied in part and Wolfe’s motion for summary judgment (ECF No.
76) will be denied. Leaman is entitled to recover damages for interest in the amount of
$10,523.97 and reasonable attorneys’ fees of $28,349.35. Leaman is not entitled to recover “lost
opportunity” damages. Judgment will be entered in favor of Leaman and against Wolfe in the
total amount of $38,873.32.
An appropriate order and judgment will be entered.
Dated: February 9, 2017
/s/ Joy Flowers Conti
Joy Flowers Conti
Chief Judge, U.S. District Court
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