The Union Labor Life Insurance Company v. O'Neill

Filing 94

MEMORANDUM AND ORDER granting 73 Motion to Withdraw as Attorney; Attorney Stephen A. Izzi terminated; granting 75 Motion for Attorney Fees; granting 82 Motion for Final Judgment for ULLICO in the amount of $3,942,602.15. So Ordered by Chief Judge William E. Smith on 10/29/2018. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
THE UNION LABOR LIFE INSURANCE
)
COMPANY,
)
)
C.A. No. 15–152 WES
Plaintiff,
)
)
v.
)
)
J. BRIAN O’NEILL,
)
)
Defendant.
)
___________________________________)
MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
On July 24, 2018, the Court granted plaintiff Union Labor Life
Insurance Company (“ULLICO”) summary judgment on damages in the amount
of

$2,698,266.45

plus

reasonable

“costs,

fees,

required by the parties’ Forbearance Agreement.
No. 72.)

and

expenses”

as

(Mem. & Order 10, ECF

ULLICO has since filed a motion specifying $113,247.50 as

the total of these “costs, fees, and expenses,” and asks the Court for
that sum.

(Pl.’s Mot. for Suppl. “Costs, Fees and Expenses” 1, ECF

No. 75.)

Defendant J. Brian O’Neill does not contest the motion.

(Def.’s Mem. of Law in Opp. to Pl.’s Mot. (“Def.’s Opp.”) 1–2, ECF No.
85.)

So the Court – itself having no issue with ULLICO’s request –

GRANTS it.
ULLICO has also moved for an award of prejudgment interest (Pl.’s
Mot. for Entry of Final J. and Prejudgment Interest (“Pl.’s Mot.”) 1,
ECF No. 82) pursuant to R.I. Gen. Laws Section 9-21-10(a), which
instructs the clerk to add interest at the rate of 12 percent per year

to any award of “pecuniary damages.”
interest,” the

Rhode

Island

“The dual purpose of prejudgment

Supreme

Court

has

explained,

“is

to

encourage early settlement of claims and to compensate an injured
plaintiff for delay in receiving compensation to which he or she may
be entitled.”

Metro. Prop. & Cas. Ins. Co. v. Barry, 892 A.2d 915,

919 (R.I. 2006).
ULLICO calculates that it is due $1,078,794.30 in prejudgment
interest as of August 27, 2018, plus $843.45 per day thereafter until
judgment enters.

(Pl.’s Mot. 1.)

O’Neill argues that ULLICO is not

due a cent of prejudgment interest, and that even if interest is in
order, it should not be applied to ULLICO’s attorneys’ fees.
Opp. 2–7.)

(Def.’s

The Court retires each of O’Neill’s contentions in turn.

O’Neill’s argument for why there should be no prejudgment interest
whatever awarded rests on an exception in Section 9-21-10(a) that the
statute “shall not apply . . . to any contractual obligation where
interest is already provided.”

R.I. Gen. Laws § 9-21-10(a).

He

maintains that because the parties’ agreements provide for interest in
the case of a “Full Recourse Event,” but not for the lesser forms of
breach found here, interest has been implicitly provided for the latter
– at a rate of zero.

(See Pl.’s Statement of Undisputed Facts (“PSUF”)

Ex. 2 at 3, ECF No. 56-2 (defining “Full Recourse Event” to encompass,
inter

alia,

an

misrepresentation

instance
made

by

of

“fraud

[O’Neill

controlled]”).)

2

and

or
the

intentional
various

material

entities

he

The problem for O’Neill is that the expressio unius canon –
“expressing one item of an associated group or series excludes another
left unmentioned” – he uses as the main support for his argument
applies only when “circumstances support a sensible inference that the
term left out must have been meant to be excluded.”

N.L.R.B. v. SW

Gen., Inc., 137 S. Ct. 929, 940 (2017) (alteration and quotation marks
omitted).

His argument fails, then, because the inference O’Neill

draws – from the fact that interest is provided in the case of a Full
Recourse Event – that when, as here, a non-Full-Recourse-Event breach
occurs, the parties meant to preclude the normal operations of Section
9-21-10(a)

is

not

sensible:

it

is,

in

effect,

asking

for

a

determination that the parties “already provided” for interest by not
providing for

interest.

The

exception

to

Section

9-21-10(a) is

inapplicable; ULLICO is owed prejudgment interest.
Including on its attorneys’ fees.

Section 9-21-10(a) requires –

“there shall be added” – that prejudgment interest accrue to any award
of “pecuniary damages” resulting from “a verdict . . . or a decision
made” “in any civil action.” 1

R.I. Gen. Laws § 9-21-10(a) (emphasis

added); cf. Dairyland Ins. Co. v. Douthat, 449 S.E.2d 799, 801 (Va.
1994) (finding that the analogous statute in Virginia makes prejudgment
interest discretionary).

1

And in fact a decision was made by the Court

So while “prejudgment interest on attorneys’ fees is clearly
not the norm” in other contexts, Sherwood Brands of R.I., Inc. v. Smith
Enters., No. Civ.A. 00–287T., 2003 WL 22061871, at *2 (D.R.I. Mar. 31,
2003) (quotation marks omitted), Section 9-21-10(a) makes such
interest not only typical but almost without exception in Rhode Island,
when, as here, the fees are an element of damages.
3

to award ULLICO attorneys’ fees as part of the damages award on summary
judgment. (Mem. & Order 5 n.2); cf. Compania Sud Americana de Vapores
S.A. v. Glob. Terminal & Container Servs., LLC, No. 09 Civ. 7890(PAC).,
2013 WL 5754391, at *2 (S.D.N.Y. Oct. 23, 2013) (“In granting summary
judgment, this Court determined that there existed no genuine dispute
of material fact that [plaintiff] was entitled to damages, including
reasonable attorney’s fees.”).
This decision was the result of the requirement – repeated in the
parties’ agreements – that O’Neill pay the attorneys’ fees ULLICO
expended

in

enforcing

its

contractual

rights.

For

example,

the

Forbearance Agreement breached by O’Neill stipulated that he agreed
“to pay all costs, fees and expenses of [ULLICO] (including attorneys’
fees) . . . expended . . . by [ULLICO] in connection with . . .
enforcement of this Agreement” and others the parties had entered.
(PSUF Ex. 3 at 20.)

Moreover, that these attorneys’ fees could be

part of ULLICO’s damages – as opposed to something mechanically tacked
on post-judgment – is countenanced by Rhode Island Law.
Guarantee

&

Title

Co.

v.

Cunha,

745

A.2d

156,

160

See Mortg.
(R.I.

2000)

(acknowledging claim “for attorneys’ fees as part of the claim for
damages”); Scully v. Matarese, 422 A.2d 740, 741 (R.I. 1980) (“[I]t is
well settled that attorney’s fees may not be awarded as a separate
item

of

damages

in

the

absence

of

contractual

or

statutory

authorization.” (emphasis added)).
This

Court,

incidentally,

made

a

similar

decision

in

Pride

Hyundai, Inc. v. Chrysler Fin. Co., 355 F. Supp. 2d 600 (D.R.I. 2005).
4

There, the parties’ agreement said that the counterclaim party – who
ended up prevailing – was entitled to “all expenses . . . including
reasonable attorneys’ fees . . . in connection with [its] exercise of
any of its rights . . . under [the parties’] Agreement.” Pride Hyundai,
355 F. Supp. 2d at 604.
attorneys’

fees

an

The Court found that this provision made

element

of

damages,

in

other

words,

that

counterclaimant “had the burden of proving at trial that it was
contractually entitled to those fees it sought in its counterclaim.”
Id. at 605–06; see also Rockland Tr. Co. v. Comput. Associated Int’l,
Inc., No. 95–11683–DPW., 2008 WL 3824791, at *5 (D. Mass. Aug. 1, 2008)
(“[W]hen a party seeks attorney’s fees stemming from a breach of
contract, courts have found the issue of attorney’s fees to be an
element of damages.”).

Because the counterclaimant failed to carry

this burden, however, the Court denied it an opportunity to move for
attorneys’ fees after judgment, as a “collateral matter,” under Federal
Rule of Civil Procedure 54.
606–07;

compare

Fed.

R.

Pride Hyundai, 355 F. Supp. 2d at 603,

Civ.

P.

54(d)(2)(A)–(B)

(“A

claim

for

attorney’s fees . . . must be made by motion . . . no later than 14
days after the entry of judgment”), with Fed. R. Civ. P. 54, Advisory
Committees Notes, 1993 Amendment (“[Rule 54(d)(2)(A)] does not . . .
apply to fees recoverable as an element of damages, as when sought
under the terms of a contract; such damages typically are to be claimed
in a pleading and may involve issues to be resolved by a jury.”
(emphasis added)).

5

ULLICO – unlike the counterclaimant in Pride – met its burden of
proving attorneys’ fees as an element of its contract damages.
Mem. & Order 5 n.2.)

(See

Section 9-21-10(a) attaches interest to these

damages, as it does to every component of ULLICO’s award.

O’Neill has

not disputed – and the Court sees no reason to gainsay – ULLICO’s
interest calculation, which adds $1,078,794.30 to the $2,811,513.952
already awarded, plus $843.45 per day from August 27, 2018, to today’s
date.

(Pl.’s Mot. 1.)

Therefore, final judgment shall enter for

ULLICO pursuant to Federal Rule of Civil Procedure 58, in the amount
of $3,942,602.15. 3

But not before the Motion to Withdraw (ECF No. 73)

filed by O’Neill’s counsel is GRANTED.
IT IS SO ORDERED.

William E. Smith
Chief Judge
Date: October 29, 2018

2

That is, the $2,698,266.45 awarded on summary judgment plus the
$113,247.50 granted above.
3

The sum of $1,078,794.30, $2,811,513.95, and $52,293.90 ($843.45
multiplied by 62).
6