Pilkinton v. Hartsfield et al

Filing 32

MEMORANDUM AND ORDER: Based on the foregoing, the plaintiff is hereby AWARDED damages in the sum of $105,026.72. Entry of this order shall constitute the judgment in this case. It is so Ordered. Signed by District Judge Aleta A. Trauger on 7/2/13. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(tmw)

UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
COLUMBIA DIVISION
JOHN PILKINTON,
Plaintiff,

v.
DAVID M. HARTSFIELD; CONNIE THOMASON,
as personal representative of MORRIS E. EZELL,
deceased; and BRIDGNORTH PARTNERS,
Defendants.

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Case No. 1:12-cv-0026
Judge Trauger

MEMORANDUM AND ORDER
On June 3, 2013, the court issued a Memorandum Opinion granting the Plaintiff’s Motion
for Summary Judgment (Docket No. 14) on his claim to recover on a July 3, 2001 promissory
note (“the Note”) having a principal value of $100,000 and bearing interest at the rate of seven
percent each year.1 (Docket No. 27.) However, in doing so, it limited the plaintiff’s recovery to
six of the ten annual principal installment payments of $10,000 due under the Note. (Id. at 10.)
Specifically, it held that he could only recover those six installments that became due between
July 3, 2006 and July 3, 2011, as the due dates of the remaining installments fell outside the
applicable six year statute of limitations. (Id.) In light of this ruling, the court ordered the
plaintiff to file an affidavit setting forth a revised figure reflecting the total sum of principal and
interest due and recoverable under the Note. (Docket No. 28.)
On June 14, 2013, the plaintiff timely filed a declaration from his counsel, Steven A.

1

A more thorough recitation of the factual background underlying this case appears in
the court’s June 3, 2013 Memorandum Opinion.
1

Nieters of the law firm Leader, Bulso & Nolan PLC (“Nieters Declaration”), in support of his
damages claim. (Docket No. 29.) The declaration contains a revised calculation of $97,893.36 in
principal and interest recoverable under the Note through June 24, 2013. (Id. ¶ 3.) It also
requests reasonable attorney’s fees in the amount of $15,578.25 and costs of $3,151.75 pursuant
to the Note’s express provisions.2 (Docket No. 29-1.) Finally, the Nieters Declaration makes a
request for $15,000 in estimated costs to collect upon the judgment in this case. (Docket No. 29
¶ 10.) In sum, the plaintiff seeks a total damages award of $131,623.36, along with continuing
interest of $11.92 per day to begin after June 24, 20133 and run until the date that a judgment is
entered in this case.4 (Id. ¶ 11.) The defendants timely filed their objections to the declaration on
June 21, 2013. (Docket No. 30.)
I.

Principal and Interest
At the outset, the court notes that the defendants do not object to the calculation of

principal and interest shown in Exhibit 1 of the Nieters Declaration. Nonetheless, in performing
its own review of the calculations, the court has discovered a significant computational error
contained therein. This error involves the calculation of simple interest between July 3, 2006 and
2

Specifically, the Note states that the “[m]aker . . . agree[s] to pay reasonable attorney’s
fees and all court and other costs that Holder may incur in the course of efforts to collect the
debt.” (Docket No. 1-1.) In its June 3, 2013 Memorandum Opinion, the court noted that the
plaintiff was the Note’s holder and defendant Bridgnorth Partners was its maker. (Docket No.27
at 1.)
3

This date corresponds to the first business day following the deadline for the defendants
to file their objections to the damages sought by the plaintiff.
4

The per diem interest of $11.92 corresponds to the formula interest rate (7.25%),
applicable under the Note’s default provision and Tenn. Code Ann. § 47-14-105. As the plaintiff
notes, the formula rate announced by the Tennessee Department of Financial Institutions has
been 7.25% at all relevant times. See https://news.tn.gov/taxonomy/term/73 (last visited July 2,
2013).
2

July 3, 2011 attributable to the six annual installment payments totaling $60,000 that are
recoverable under the Note. As the court previously stated, the principal value of the Note is to
bear interest at the rate of seven percent each year. Seven percent of the $60,000 in principal that
is recoverable here equals $4,200. In Exhibit 1 of the Nieters Declaration, interest during the
aforementioned time period is calculated to be $29,400. (Docket No. 29-1.) However, that
figure reflects the amount of simple interest attributable to seven, rather than six annual
installment payments. A reduction of $4,200 from the $29,400 figure is thus warranted. With
this change, the court will award the plaintiff $93,693.36 in total principal and interest through
June 24, 2013. An additional $95.36 in interest will be awarded to reflect the eight days that
have run since June 24, 2013 to the date of this Memorandum and Order.5
II.

Attorney’s Fees and Incurred Costs
The defendants primarily direct their objections to the reasonableness of the attorney’s

fees sought by the plaintiff. (Docket No. 30 at 1.) Specifically, they object to the fact that the
plaintiff’s case was staffed with three attorneys from Leader, Bulso & Nolan. (Id.) Pointing to
the billing statements contained in Exhibit 2 of the Nieters Declaration, they argue that all three
attorneys performed similar tasks on multiple occasions, such as preparing for the Initial Case
Management Conference held on June 4, 2012 and having multiple internal discussions about
case developments. (Id. at 2.) They also contend that, because the plaintiff only recovered 60%
of the total principal value of the Note due to the applicable statute of limitations, the court

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To arrive at this figure, the court multiplied the $11.92 per diem figure corresponding to
the formula rate by eight, which represents the number of days that have elapsed since June 24,
2013.
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should impose a similar proportional adjustment on the request for reasonable attorney’s fees.
(Id. at 3-4.)
In diversity cases, the determination of attorney’s fees and costs are governed by state
law. Hometown Folks, LLC v. S & B Wilson, Inc., 643 F.3d 520, 533 (6th Cir. 2011). Where, as
here, a contract provides for reasonable attorney’s fees and costs, “[t]he parties are entitled to
have their contract enforced according to its express terms.” Wilson Mgmt. Co. v. Star Distrib.
Co., 745 S.W.2d 870, 873 (Tenn. 1988). The Tennessee Supreme Court has noted that the
appropriate factors to consider in determining a reasonable attorney’s fee include:

(1) The time and labor required, the novelty and difficulty of the
questions involved, and the skill requisite to perform the legal service
properly;
(2) The likelihood, if apparent to the client, that the acceptance of the
particular employment will preclude other employment by the
lawyer;
(3) The fee customarily charged in the locality for similar legal
services;
(4) The amount involved and the results obtained;
(5) The time limitations imposed by the client or by the
circumstances;
(6) The nature and length of the professional relationship with the
client;
(7) The experience, reputation, and ability of the lawyer or lawyers
performing the services;
(8) Whether the fee is fixed or contingent;
(9) Prior advertisements or statements by the lawyer with respect to
the fees the lawyer charges; and
(10) Whether the fee agreement is in writing.
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Wright ex. rel. Wright v. Wright, 337 S.W.3d 166, 176-77 (Tenn. 2011); see also Tennessee Rule
of Professional Conduct (“RPC”) 1.5(a). These factors are not exclusive and each factor may not
be relevant to every case. RPC 1.5, cmt. 1. Moreover, while a review of these factors should
guide a court’s analysis, “ultimately[,] the reasonableness of the fee must be based upon the
particular circumstances of the individual case.” White v. McBride, 937 S.W.2d 796, 800 (Tenn.
1996).
Before delving into an analysis of the relevant Wright factors, the court first addresses the
defendants’ objection concerning the staffing of this case by the plaintiff’s counsel. It is true, as
the defendants note, that the firm representing the plaintiff in this matter, Leader, Bulso & Nolan
PLC, staffed the case with three attorneys: Eugene N. Bulso, Jr., Steven A. Nieters, and Paul J.
Krog. However, the billing records attached to the Nieters Declaration demonstrate that the
attorney commanding the highest hourly rate of $350, Mr. Bulso, only devoted 4.5 hours to this
case, which constituted 5% of the firm’s 86.85 total billable hours on the matter. (Docket No.
29-2 at 1.) The attorney with the next highest hourly rate of $250, Mr. Nieters, worked 19.5
hours, which represented 23% of the hours billed. (Id.) Finally, the attorney with the lowest
hourly rate of $145, Mr. Krog, accounted for the lion’s share of the billable hours on this matter,
as he spent 62.85 hours or 72% of the hours billed. (Id.) Given this breakdown, the court fails to
see how the staffing of this case by the plaintiff’s counsel was unreasonable.
Nevertheless, having reviewed the billing records relating to the June 4, 2012 Initial Case
Management Conference, the court questions the reasonableness of the total number of hours
collectively billed by the plaintiff’s counsel in connection with this fairly routine event. The
Case Management Order issued by the court was brief (only three pages long) and did not

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reference any uniquely complex issues affecting the management of this case. However, in light
of its 40% reduction to the plaintiff’s fee request, see infra at p.7, the court need not make a
specific adjustment to the fees sought in connection with this event. As for the time billed by the
plaintiff’s counsel to discuss case developments and strategy, the court’s review of the billing
records has not revealed anything out of the ordinary. Nor have the defendants identified any
specific billing entries as being particularly egregious.
The court now turns its attention to consider those factors outlined in Wright that have
relevance to the instant case. While the defendants do not challenge the hourly rates charged by
the plaintiff’s law firm, the court finds, based on its experience with this firm and its familiarity
with the rates charged by other comparable firms within this judicial district, that the rates
charged in this matter were reasonable. Moreover, the court also acknowledges that the plaintiff
was counseled by experienced and reputable attorneys who diligently prosecuted this case
through the summary judgment stage and obtained a favorable ruling for their client.
Nonetheless, the court notes that this was not a terribly complex case. Indeed, as the
plaintiff proclaimed in the opening salvo of his summary judgment brief, “[t]his is a simple
action on a simple promissory note.” (See Docket No. 15 at 1.) The case did not present any
novel legal questions, but instead hinged on a straightforward application of Chapter 3 of the
Tennessee Uniform Commercial Code governing negotiable instruments and the well-settled
statute of limitations on actions to enforce an installment note. Nor did it involve complex and
wide-reaching discovery. Indeed, the defendants note that they did not serve written discovery
on the plaintiff and that neither party took any depositions. (Docket No. 30 at 2.) In addition,
when examining the results obtained in this litigation, the court observes that, while the plaintiff

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demanded payment of the Note’s total principal value of $100,000 plus interest, his recovery was
ultimately limited by the statute of limitations to $60,000 plus interest.
Focusing on the amount involved in this litigation and the results obtained, the defendants
urge the court to proportionally adjust any award of reasonable attorney’s fees to match the ratio
of the plaintiff’s success to what he actually demanded. (Docket No. 30 at 4.) Taking into
account all of the circumstances of this case, the court believes that such an adjustment is
warranted. Because the plaintiff recovered 60% of the total principal value of the Note, the court
will similarly award reasonable attorney’s fees equaling 60% of the requested $15,578.25, which
yields a revised sum of $9,346.95. The Sixth Circuit previously approved of a Tennessee district
court’s use of this methodology in fixing a reasonable attorney’s fee award in a case invoking
diversity jurisdiction. See Hometown Folks, LLC, 643 F.3d at 536 (noting that “the district court
did not err in placing primary reliance on the ratio of Hometown’s success to what it claimed in
calculating an attorneys’ fee award”). Moreover, the court believes that the adjusted fee award
strikes a reasonable balance in compensating the plaintiff’s counsel for its diligent prosecution of
this case to a favorable outcome, while also taking into account the less than full recovery
obtained in this fairly straightforward matter.
The plaintiff also seeks to recover the costs incurred by his counsel in prosecuting this
case thus far. While the defendants do not appear to directly challenge the reasonableness of the
incurred expenses sought, the court believes that, in light of the foregoing discussion, a similar
adjustment should be made. Therefore, the court will award 60% of the requested $3,151.75 in
incurred costs, which yields a revised sum of $1,891.05.
III.

Estimated Collection Costs

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Finally, the defendants have raised an objection to the $15,000 in estimated collection
costs sought by the plaintiff’s counsel. (Docket No. 30 at 4.) According to the Nieters
Declaration, this amount is a reasonable estimate of the costs necessary to collect upon the
judgment in this case, given the need for asset discovery and for working through the Tennessee
Probate Court.6 (Docket No. 29 ¶ 10.) The defendants object to this request as being speculative
and note that awarding estimated collection costs now may give the plaintiff’s counsel an
unearned windfall. (Docket No. 30 at 4.) This objection is persuasive. Indeed, the court is not
inclined to award such a large sum of estimated costs that have yet to be incurred. Accordingly,
this specific request will be denied at this time. Of course, nothing here precludes the plaintiff
from seeking, at a later time, recovery for the costs that were actually incurred in collecting upon
the judgment in this case.

6

Both of the individuals who executed the Note in question on behalf of Bridgnorth
Partners, David M. Hartsfield and Morris E. Ezell, are now deceased. (See Docket Nos. 10 and
31.) Mr. Ezell passed away on July 2, 2012 (Docket No. 10), while Mr. Hartsfield recently
passed away on June 21, 2013 (Docket No. 31).
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CONCLUSION
Based on the foregoing, the plaintiff is hereby AWARDED damages in the sum of
$105,026.72. This total damages award consists of the following components:
Principal and Interest Through 6/24/13:
$93,693.36
Per Diem Interest at $11.92 after 6/24/13: $95.36
Attorney’s Fees:
$9,346.95
Incurred Costs:
$1,891.05
______________________________________________
Total:
$105,026.72
Entry of this order shall constitute the judgment in this case.
It is so Ordered.
Enter this 2nd day of July 2013.
_______________________________
ALETA A. TRAUGER
United States District Judge

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