CT&T EV Sales Inc v. 2AM Group LLC et al
Filing
154
ORDER granting 150 Motion for Attorney Fees in the amount of $56,105.00, plus costs of $4,627.73, for a total award of attorney fees and costs in theamount of $60,732.73. Signed by Honorable Timothy M Cain on 7/13/2012.(gpre, )
IN THE DISTRICT COURT OF THE UNITED STATES
FOR THE DISTRICT OF SOUTH CAROLINA
GREENVILLE DIVISION
CT&T EV Sales, Inc.,
Plaintiff,
v.
2AM Group, LLC;
2AM Group Manufacturing, LLC;
and Current Electric Vehicles,
Defendants.
2AM Group, LLC;
2AM Group Manufacturing, LLC,
Counter Claimants
v.
CT&T EV Sales, Inc.,
Counter Defendant.
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C/A No. 7:11-1532-TMC
ORDER
This matter is before the court on a motion for attorney’s fees and costs filed by
Defendants/Counter Claimants, 2AM Group, LLC, and 2AM Group Manufacturing, LLC,
(collectively referred to herein as the “2AM Defendants”). (Dkt. # 150).
BACKGROUND
On January 27, 2012, the 2AM Defendants filed a Motion to Dismiss Plaintiff CT&T EV
Sales’ claims for failure to prosecute and sought an order of judgment in favor of the 2AM
Defendants on the issue of the parties’ legal rights in certain low speed vehicles ( LSVs). On March
7, 2012, pursuant to Rule 41(b), Fed. R. Civ. P., the court dismissed with prejudice for failure to
prosecute Plaintiff CT&T EV Sales‘ claims. In an order filed May 2, 2012, the court, in part,
granted the 2AM Defendants’ Motion for Default Judgment against the Plaintiff CT&T EV Sales
and awarded the 2AM Defendants damages in the amount of $671,483.12. Although the 2AM
Defendants sought an attorney fee award in the amount of $49,991.25, the 2AM Defendants
had not submitted a proper fee petition. Therefore, the court ordered the 2AM Defendants to
file a petition for the requested attorney's fees in compliance with the Local Rules. Thereafter,
the 2AM Defendants have filed the instant motion seeking $98,603.33 in attorney’s fees and
$4,627.73 in costs.
DISCUSSION
Although no party appeared to challenge the attorney fees sought by 2AM Defendants,
the court is charged with determining the reasonable amount of fees to award the petitioning
party. In making this determination, the court must consider the following factors: (1) the time
and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required
to properly perform the legal services rendered; (4) the attorney's opportunity costs in
pressing the instant litigation; (5) the customary fee for like work; (6) the attorney's
expectations at the outset of the litigation; (7) the time limitations imposed by the client or
circumstances; (8) the amount in controversy and the results obtained; (9) the experience,
reputation and ability of the attorney; (10) the undesirability of the case within the legal
community in which the suit arose; (11) the nature and length of the professional relationship
between attorney and client; and (12) attorney fees awarded in similar cases. Barber v.
Kimbrell's, Inc., 577 F.2d 216, 226 (4th Cir.1978). While the court must consider all twelve of
the factors, the court is not required to rigidly apply these factors, as not all may affect the fee
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in a given case. “[T]hese factors should be considered in determining the reasonable rate
and the reasonable hours, which are then multiplied to determine the lodestar figure which
will normally reflect a reasonable fee.” E.E.O.C. v. Servo News Co., 898 F.2d 958, 965 (4th
Cir.1990). In determining whether a rate is reasonable, the court is to consider “prevailing
market rates in the relevant community.” Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d
169, 175 (4th Cir.1994) (quoting Blum v. Stenson, 465 U.S. 886, 895, 104 S.Ct. 1541, 79
L.Ed.2d 891 (1984)).
In diversity cases, the right to an award of attorney fees is controlled by state law,
Ranger Cons.Co. v. Prince William Cnty. Sch. Bd., 605 F.2d 1298, 1301 (4th Cir.1979), as
is the method for determining the amount. Roger E. Herst Revocable Trust v. Blinds to Go
Inc., No. 10–3226, 2011 WL 6444980, at *1 (D.Md. Dec.20, 2011); Sauders v. S.C. Pub.
Serv. Auth., No. 93–3077, 2011 WL 1236163, at *1 (D.S.C. Mar. 30, 2011). In South
Carolina, in the absence of contractual or statutory liability therefor, attorneys fees are not
recoverable as an item of damages. U.S. Rubber Co. v. White Tire Co., 231 S.C. 84, 97
S.E.2d 403 (S.C.1956). South Carolina courts apply the “lodestar” analysis for determining
an award of “reasonable” attorneys' fees required by statute or contract. Layman v. State, 376
S.C. 434, 658 S.E.2d 320, 332 (S.C.2008). Here, the Settlement Agreement and Promissory
Note contained provisions for recovery of attorney fees.
Additionally, in determining the reasonable time expended and a reasonable hourly
rate for purposes of calculating attorneys' fees, South Carolina courts have historically relied
on six common law factors of reasonableness: (1) the nature, extent, and difficulty of the
case; (2) the time necessarily devoted to the case; (3) the professional standing of counsel;
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(4) the contingency of compensation; (5) the beneficial results obtained; and (6) the
customary legal fees for similar services. Id. at 333; see also Jackson v. Speed, 326 S.C.
289, 486 S.E.2d 750, 760 (S.C.1997).
Accordingly, the court has considered the following in making a determination as to the
appropriate amount of fees to award in this case.
1. Time and Labor Expended; Time Necessarily Devoted to the Case. 2AM
Defendants seek an award of fees for 299 hours of attorney time in the instant litigation, to
include 188.5 hours by attorney Walter Harris; 89.7 hours by attorney Federick Jekel; 14
hours by attorney Ted Huge; and 7.15 hours by attorney Doug Fraser. 2AM Defendants seek
reimbursement at the rate of Three Hundred Dollars ($300.00) per hour for those attorneys
with more than fifteen years of experience and Two Hundred Dollars ($200.00) per hour for
other attorney time.
A review of the fee petition submitted to the court reflects the following:
A.
4.45 hours were expended by attorney Jekel prior to the filing of the litigation;
B.
The court is unable to determine, based upon the information submitted with
the petition, how several entries on the attorney time sheets are related to the
instant litigation. For example, an entry on the Jekel time sheet dated March
30, 2012 reflects “Whitaker changes”. Another entry dated April 17, 2012
reflects 0.75 hours for “FRCR 70 -Sue-Kim California counsel”, and an entry
dated April 25, 2012 reflects .40 hours billed for “Voluntary Assumption of
obligation”. These entries do not explain what work was performed or how it is
related to this action.
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C.
2AM Defendants seek fees for work performed by attorney Walter F. Harris
totaling 188.5 hours at the rate of $300.00 per hour. Mr. Harris serves as inhouse corporate counsel for 2AM Manufacturing, LLC and 2AM Group, LLC.
The court notes that a significant portion of the time billed by Mr. Harris involved
drafting the Settlement Agreement and Promissory Note which took place prior
to the default by Plaintiff and the filing of the Complaint in this action.
Additionally, Mr. Harris was not added as counsel of record until March 21,
2012 (Dkt. # 94), the day of the default hearing.
2. Novelty and Difficulty of the Questions Presented by the Lawsuit; Nature,
Extent and Difficulty of the Case. The primary issues involved in this case related to
disputes arising from a promissory note and settlement agreement entered into between the
parties. The court notes that the 2AM Defendants have expended significant time and
resources in defending the lawsuit brought by the Plaintiff, and pursuing the default action
after Plaintiff abandoned its action.
3. Skill Required to Properly Perform the Legal Service. The court finds that the
2AM Defendants were justified in retaining experienced legal counsel to defend the lawsuit
and pursue its claims.
4. Preclusion of Other Employment Opportunities. In representing the 2AM
Defendants, counsel for 2AM expended time and effort which could have been dedicated to
other clients and endeavors other than defending the lawsuit brought by the Plaintiff and
pursuing the default judgment. The court is also aware that the in-house counsel for 2AM
could have devoted his time and efforts to other matters on behalf of the companies but for
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this litigation.
5. Customary Fee and Nature of the Fee. The hourly rates sought by Defendants
2AM appear to be reasonable based upon the information provided to the court. Further, no
one has disputed the hourly rates charged by counsel for 2AM.
6. Attorney’s Expectations at the Outset of the Litigation; The Contingency of
Compensation. The promissory note provides for the recovery of attorney fees in the event
of a default. Counsel for Defendants 2AM have represented that it was their expectation that
attorney fees would be separately awarded by the court.
7. The Time Limitation Imposed by the Client or Circumstances. According to the
fee petition filed in this case, the 2AM Defendants imposed significant time limitations by
reason of the expenses associated with the storage and maintenance of the LSV inventory
under the control of said Defendants.
8. The Amount in Controversy and Beneficial Results Obtained. After the pleadings
were joined, the Plaintiff abandoned its action, resulting in the entry of default and judgment
by default referenced above. In their counterclaims, 2AM Defendants sought judgment on
several causes of action, to include Civil Conspiracy, Violation of the South Carolina Unfair
Trade Practices Act , violation of the South Carolina Frivolous Proceedings Sanctions Act,
Breach of Promissory Note and Breach of Settlement Agreement. After two hearings, the
court granted judgment in favor of 2AM Defendants on two of these causes of action, to wit:
Breach of the Promissory Note and Breach of the Settlement Agreement.
9. The Experience, Reputation and Ability of Counsel; Professional Standing of
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Counsel. Again, no party has disputed the experience, reputation and ability of counsel for
Defendants 2AM. The court notes the qualifications of such counsel as more fully set forth
in the fee petition and attachments, which are a part of the record (Dkt. # 150).
10. The Undesirability of the Case Within the Legal Community. The court finds
that this is not a significant factor with respect to an award of fees in this case.
11. Nature and Extent of the Attorney’s Professional Relationship with the Client.
As set forth in the fee petition, 2AM Defendants have utilized the services of attorney Jekel
since 2009, and those of attorney Harris, who now serves as in-house corporate counsel,
since 2008.
12. Fee Awards in Similar Cases. According to the affidavit submitted by Mr. Jekel,
investigation of firms performing similar work as that involved in this case in the Charleston,
South Carolina area revealed hourly rates consistent with those charged herein. The court
finds, particularly in the absence of any response or objection, that the hourly fees charged
by counsel for Defendants 2AM are not unreasonable for the work provided in this case.
CONCLUSION
Based upon the factors set forth above as applied to the facts of this case, the court finds
that the 2AM Defendants are entitled to attorney fees of $56,105.00 based upon 85.25 hours for
attorney Jekel at the rate of $300.00 per hour; 83 hours for attorney Harris at the rate of $300.00
per hour; 14.00 hours for attorneys Harris and Huge at the rate of $300.00 per hour; and 7.15
hours for attorney Fraser at the rate of $200.00 per hour; and costs in the amount of $4,627.73.
Accordingly, the court grants the petition for attorney fees and costs (Dkt. # 150) of 2AM
Defendants. The court finds that said Defendants are entitled to an award of attorney fees in the
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amount of $56,105.00, plus costs of $4,627.73, for a total award of attorney fees and costs in the
amount of $60,732.73.
IT IS SO ORDERED.
s/Timothy M. Cain
United States District Judge
July 13, 2012
Anderson, South Carolina
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