Edwards Moving & Rigging, Inc. v. Josh Lack
Filing
111
OPINION AND ORDER FOLLOWING NON-JURY TRIAL. Signed by Judge Jon Phipps McCalla on 11/25/2015. (McCalla, Jon)
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION AT MEMPHIS
________________________________________________________________
)
EDWARDS MOVING & RIGGING, INC.,
)
)
Plaintiff,
)
)
v.
)
No. 2:14-cv-02100-JPM-tmp
)
BARNHART CRANE AND RIGGING CO.,
)
)
Defendant.
)
________________________________________________________________
OPINION AND ORDER FOLLOWING NON-JURY TRIAL
________________________________________________________________
Plaintiff Edwards Moving & Rigging, Inc. (“Plaintiff” or
“Edwards”) initiated this action against Defendant Josh Lack
(“Lack”) for breach of contract and against Defendant Barnhart
Crane and Rigging Co. (“Barnhart”) for tortious interference
with a contractual relationship against Barnhart.
The one-day
bench trial pertained only to the issue of damages for Edwards’
tortious interference claim against Barnhart.
I.
BACKGROUND
A.
Factual Background
Edwards “specializ[es] in the transportation and lifting of
heavy and oversized equipment in the power generation, petro
chemical, automotive, manufacturing, nuclear, and construction
markets throughout [the] United States.”
No. 57.)
(Am. Compl. ¶ 6, ECF
Edwards hired Lack on or about September 16, 2009.
(Id. ¶ 8.)
Also on or about September 16, 2009, Lack and
Edwards entered into an agreement that included non-competition,
non-solicitation, and non-disclosure clauses.
(Id. ¶ 11.)
Lack
turned in his notice of resignation of employment from Edwards
on November 6, 2013.
(Id. ¶ 24.)
with Edwards was November 13, 2013.
His final day of employment
(Pl.’s Statement of
Undisputed Facts ¶ 15, ECF No. 62; Def.’s Response to Pl.’s
Statement of Undisputed Facts ¶ 15, ECF No. 67-1.)
In August 2013, Lack notified Barnhart by email that he had
signed a non-compete agreement with Edwards, and sent Barnhart a
copy of another employee’s non-compete agreement that he
believed to be similar to his own.
Undisputed Facts ¶ 8.)
(Pl.’s Statement of
On or about November 15, 2013, Edwards,
through counsel, notified Barnhart of the non-compete clause in
Lack’s contract, “and informed Barnhart that Edwards fully
intend[ed] to pursue all its rights under the agreement
including interference with a contractual relationship.”
Compl. ¶ 30.)
Lack began working for Barnhart on or about
December 16, 2013.
B.
(Am.
(Id. ¶ 31.)
Procedural History
Edwards filed its Complaint on February 10, 2014 (ECF No.
1), and filed a Motion for Temporary Restraining Order (“TRO”)
and Preliminary Injunction on February 28, 2014 (ECF No. 11).
The Court granted the TRO on March 5, 2014.
2
(ECF No. 20.)
The
Court enjoined Lack from continuing employment at Barnhart until
a determination in this case was ultimately made.
(Id. at 8.)
Lack and Barnhart filed their respective Answers to the
Complaint on March 25, 2014.
(ECF Nos. 27, 28.)
Following two extensions of the TRO (ECF Nos. 30, 37), the
Court entered an agreed Permanent Injunction as between Edwards
and Lack on May 7, 2014.
(ECF No. 50.)
The agreed injunction
restrains Lack from working on any “rigging and/or heavy hauling
projects/assignments that are in the bidding or pre-award
phases” until March 5, 2016.
(Id.)
Edwards filed an Amended Complaint on July 18, 2014 (Am.
Compl.), and Barnhart answered on August 14, 2014 (Answer to Am.
Compl., ECF No. 58).
Edwards filed its Motion for Summary Judgment on January
12, 2015.
2015.
(ECF No. 60.)
(ECF No. 67.)
27, 2015.
Barnhart responded on February 12,
Edwards filed a reply brief on February
(ECF No. 79.)
Barnhart filed its Motion for Summary Judgment on January
16, 2015.
(ECF No. 64.)
2015.
(ECF No. 72.)
2015.
Edwards responded on February 16,
Barnhart filed its reply brief on March 4,
(ECF No. 81.)
The Court held a hearing on the motions for summary
judgment on April 3, 2015.
(Min. Entry, ECF No. 90.)
With
leave of Court, Edwards filed a Supplemental Brief Regarding
3
Consequential Damages on April 8, 2015.
responded on April 10, 2015.
reply on April 27, 2015.
(ECF No. 86.)
(ECF No. 87.)
(ECF No. 92.)
Barnhart
Edwards filed a
On June 24, 2015, the
Court granted Plaintiff’s motion for summary judgment and denied
Defendant Barnhart’s motion, but found “that the record [was]
not clear as to the particular amount of damages the Plaintiff
has suffered.”
(ECF No. 94 at 20.)
The Court held a bench trial on the issue of damages on
September 9, 2015.
(Min. Entry, ECF No. 109.)
Edwards was
represented by Jennifer Hatcher and James L. Holt, Jr.
was represented by Scott Frick.
Barnhart
Edwards presented one witness,
Billy Watts, Jr., vice president of operations of Edwards Moving
& Rigging.
(See ECF No. 109; ECF NO. 110.)
Edwards also
offered two exhibits, one of which the Court received and
entered into evidence and the other of which was marked for
identification only.
(See ECF No. 110.)
Barnhart called no
witnesses and offered one exhibit, which the Court received and
entered into evidence.
(ECF Nos. 109, 110.)
For the reasons set forth below, the Court finds that
Edwards is entitled to $75,177.00 in total damages based on the
$25,059.00 in attorneys’ fees Edwards incurred in bringing the
action against Lack, trebled pursuant to section 47-50-109 of
the Tennessee Code.
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II.
FINDINGS OF FACT
A.
Uncontested Facts
Below are the uncontested facts from the parties’ Joint
Pretrial Order:
1.
Edwards incurred attorney’s fees and expenses in
connection with the prosecution of its noncompetition
agreement between Plaintiff and Defendant Lack.
2.
Edwards brought claims against Lack and Barnhart
in the same action.
(ECF No. 107 at 5.)
B.
Testimony and Evidence Introduced at Trial
1.
Evidence
Edwards offered two exhibits, one of which the Court marked
and entered into evidence:
Exhibit 1, Invoices Submitted to
Edwards Moving (Collective).
Edwards’ Exhibit 2, Modified
Invoices Submitted to Edwards Moving (Collective), was marked
for identification only.
Barnhart offered one exhibit, which
the Court marked and entered into evidence: Exhibit 3: Invoices
Submitted to Edwards Moving (Collective).
2.
Billy Watts, Jr.
Plaintiff called one witness, Billy Watts, Jr. (“Watts”).
Ennis testified that he is the vice president of operations of
Edwards and has worked for Edwards for seven years.
He
explained that he is involved in the day-to-day operations of
the company.
Watts testified that, although he is not the final
5
authority on approving attorneys’ fees, he is part of the
conversation regarding fees and reviews the invoices to make
sure the charges are legitimate.
Watts explained that he
reviewed the invoices in this case, as well as a similar case
based out of Virginia for which Edwards also employed the firm
Ackerson & Yann.
The invoices provided to him in the instant
matter appeared to be very similar to those provided in the
Virginia case.
He further testified that the bills in the
instant matter were appropriate and consistent with what Edwards
has paid to Ackerson & Yann for the seven years Watts has been
with Edwards.
With respect to the payment to local counsel, Watts
testified that Ackerson & Yann paid local counsel’s bills and
then billed Edwards for the appropriate amount.
Watts testified
that his understanding was that the bills at issue related to
legal services for enforcing the non-competition agreement
against Lack.
According to Watts, Edwards’ focus from January
20, 2014, through May 7, 2014, was the claim against Lack.
Watts testified that he was not involved in conversations about
the tortious interference claim against Barnhart.
On cross-examination, Watts acknowledged that he does not
remember whether the individual time entries were on the
original bill he received.
When Barnhart presented him with
Exhibit 3, Watts could not recall whether the bills contained in
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that exhibit were the ones received by Edwards.
Watts testified
that, nevertheless, he could determine whether a bill is
reasonable, even without time entries, by comparing it to other
bills received from Ackerson & Yann.
Watts also acknowledged
that the bill does not identify who was working on the file, but
Watts explained that he knew who was working on the file.
Watts
testified that, because he did not see the invoices from local
counsel, he could say that those bills were reasonable only to
the extent that he discussed them with John Vaughan, the
financial administrator for Edwards, and compared them to past
fees.
Watts again testified that between January 2014 and May
8, 2014, the majority of the conversations were about the claims
against Lack, and if there were conversations about the claims
against Barnhart, they were limited.
Watts could not say for
sure, however, that no one at Edwards ever spoke with the
attorneys about settling the claims with Barnhart.
On re-direct, Watts testified that he reviewed the
Complaint before it was filed.
According to Watts, the majority
of the Complaint related to Lack, his position in the company,
and his involvement in various projects.
Watts testified that
he was not aware of any unique facts relating only to the claim
against Barnhart.
According to Watts, Edwards received the
value of the legal services it paid for in this matter.
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III. CONCLUSIONS OF LAW
The Court has already determined that Edwards is entitled
to damages related to Barnhart’s tortious interference with
contract.
(See ECF No. 94 at 20.)
The Court now considers the
appropriate amount of damages.
Edwards argues that it is entitled to $60,100.21 in
attorneys’ fees, $3,684.00 for loss of time by its
employees/officers, and $324.29 in travel expenses.
101 at 3-4.)
(ECF No.
Edwards also seeks an additional $192,325.23 for
treble damages pursuant to Tenn. Code Ann. § 47-50-109.
(Id. at
4-5.)
A.
Attorneys’ Fees and Other Expenditures
Under Tennessee law, “[o]ne who through the tort of another
has been required to act in the protection of his interests by
bringing or defending an action against a third person is
entitled to recover reasonable compensation for loss of time,
attorney fees and other expenditures thereby suffered or
incurred in the earlier action.”
Engstrom v. Mayfield, 195 F.
App’x 444, 451 (6th Cir. 2006) (quoting Pullman Standard, Inc.
v. Abex Corp., 693 S.W.2d 336, 340 (Tenn. 1985)).
Thus, in an
action for tortious interference with contract, a plaintiff is
entitled to expenditures, including attorneys’ fees, that (1)
were incurred in the related breach of contract action and (2)
are reasonable.
8
1.
Incurred in the Earlier Action
The Tennessee Supreme Court has not clearly defined when an
attorney’s fee or other expenditure is considered to have been
“incurred in the earlier action” in this context.
Lower courts
in Tennessee have looked to the United States Supreme Court’s
decision in Hensley v. Eckerhart, 461 U.S. 424 (1983) for
guidance.
In Hensley v. Eckerhart, the United States Supreme Court
developed a framework for evaluating attorneys’ fees in the
context of claims pursuant to 42 U.S.C. § 1988.
The Court
held:
In some cases a plaintiff may present in one
lawsuit distinctly different claims for relief that
are based on different facts and legal theories.
In
such a suit, even where the claims are brought against
the same defendants—often an institution and its
officers, as in this case—counsel’s work on one claim
will be unrelated to his work on another claim.
Accordingly, work on an unsuccessful claim cannot be
deemed to have been “expended in pursuit of the
ultimate result achieved.” . . .
. . .
In other cases the plaintiff’s claims for
relief will involve a common core of facts or will be
based on related legal theories.
Much of counsel’s
time will be devoted generally to the litigation as a
whole, making it difficult to divide the hours
expended on a claim-by-claim basis.
Such a lawsuit
cannot be viewed as a series of discrete claims.
Instead the district court should focus on the
significance of the overall relief obtained by the
plaintiff in relation to the hours reasonably expended
on the litigation.
Where a plaintiff has obtained excellent results,
his attorney should recover a fully compensatory fee.
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. . . In these circumstances the fee award should not
be reduced simply because the plaintiff failed to
prevail on every contention raised in the lawsuit.
Id. at 434-35; see also Imwalle v. Reliance Med. Prods., Inc.,
515 F.3d 531, 554 (6th Cir. 2008).
Tennessee courts have adopted this framework for claims for
attorneys’ fees brought under the Tennessee Human Rights Act and
Tennessee Consumer Protection Act.
See Keith v. Howerton, 165
S.W.3d 248, 251-52 (Tenn. Ct. App. 2004); Lowe v. Johnson Cnty.,
No. 03A01-9309-CH-00321, 1995 WL 306166, at *7-8 (Tenn. Ct. App.
May 19, 1995).
In Brunsting, the Court of Appeals of Tennessee
adopted this framework in the context of a contract provision
that provided for attorneys’ fees incurred in enforcing the
contract.
The court concluded that “when a case consists of
distinct and severable claims[,] the Courts must apply a
proportionality approach” and should separate out attorneys’
fees as to each claim.
Brunsting v. Brown, No. M2000-00888-COA-
R3-CV, 2001 WL 1168186, at *8 (Tenn. Ct. App. Oct. 4, 2001)
(quoting JDFJ Corp. v. Int’l Racing, Inc., 970 P.2d 343, 347
(Wash. Ct. App. 1999)).
When there is “a common core of facts
involved,” however, the case cannot be evaluated “as a series of
discrete claims.”
Id.
In this event, a court may award
attorneys’ fees by looking at the case as a whole, rather than
breaking it down into segments.
Id. (affirming award of all
attorneys’ fees incurred in enforcing a contract, as provided in
10
the contract provision, although plaintiff prevailed on only
some of his claims).
The contract provision in Brunsting provided for “all costs
and expenses incurred by the other party in enforcing or
establishing its rights hereunder, including, without
limitation, court costs and reasonable attorneys’ fees.”
*6.
Id. at
In the instant matter, Edwards is analogously entitled to
“reasonable compensation for loss of time, attorney fees and
other expenditures thereby suffered or incurred in the earlier
action.”
Engstrom, 195 F. App’x at 451 (quoting Pullman, 693
S.W.2d at 340).
As the above-mentioned courts have recognized,
it is not feasible to separate out attorneys’ fees incurred in
pursuit of two claims where the claims are based on a “common
core” of facts and related legal theories.
Where claims are so
intertwined, a court should award attorneys’ fees by looking at
the case as a whole.
See Hensley, 461 U.S. at 434-35;
Brunsting, 2001 WL 1168186, at *8.
Edwards’ claims for breach of contract and tortious
interference with contract are based on a “common core” of facts
and related legal theories.
The claim that Barnhart wrongfully
interfered with the contract between Edwards and Lack is
fundamentally premised on the facts that (1) Edwards and Lack
had a non-competition agreement and (2) Lack breached that
agreement by working for Barnhart.
11
Before the entry of a
permanent injunction against Lack on May 7, 2014, these claims
were inextricable, and accordingly, much of the services
rendered by Edwards’ attorneys for the claim against Barnhart
cannot be separated from the services rendered for the claim
against Lack.
To the extent that Edwards’ attorneys rendered
services related to the common core of facts and related legal
theories of the two claims, the Court concludes that these
services were rendered in pursuit of the action against Lack.
There are, however, several time entries where Ackerson &
Yann was able to, and did, separate out its services rendered
for the claims against Barnhart and Lack.
Specifically, on
February 12, 2014, Edwards’ counsel discussed Barnhart’s
interest in settlement (Ex. 1 at 1); on February 19, 2014,
Edwards’ counsel reviewed a letter from Barnhart’s counsel (Ex.
1 at 2); on February 21, 2014, Edwards’ counsel emailed Jim Holt
regarding the letter from Barnhart’s counsel (Ex. 1 at 2); on
May 5, 2014, Edwards’ counsel reviewed an offer from Barnhart
(Ex. 1 at 12); and on May 7, 2014, Edwards’ counsel conferred
regarding research and researched and drafted a memorandum on
tortious interference (Ex. 1 at 13) (“the Barnhart time
entries”).
The Court concludes that these tasks were performed
solely to advance the claim against Barnhart, and accordingly,
Edwards did not incur the related attorneys’ fees in pursuit of
its claim against Lack.
12
Several of the Barnhart time entries include multiple
tasks, including tasks pertaining to the claim against Lack.
To
the extent that the entries relate to the claim against Lack,
however, they are unreasonable because the stated number of
hours spent is excessive, see infra Part III.B.
The Barnhart
time entries relate to 10.5 hours of work performed by Jennifer
Hatcher and 5.5 hours of work performed by JJB, in total,
$3,865.00 in attorneys’ fees.
Edwards is not entitled to
compensation for these attorneys’ fees.
Based on the evidence presented at trial, including the
specific tasks stated in the time entries, the Court concludes
that all other services rendered by Ackerson & Yann, PLLC
between January 20, 2014, and May 7, 2014, were performed in
pursuit of the claim against Lack. 1
Additionally, Edwards asserts that it incurred $3,684.00
for the loss of time by its employees/officers and $324.29 in
gas, food, and hotel expenses associated with employee Danny
Cain’s travel to Memphis related to the enforcement action
against Lack.
(ECF No. 101 at 4.)
Edwards did not, however,
present proof of the loss of time or other expenditures or their
relation to the claim against Lack at trial.
1
Accordingly, the
Edwards did not introduce the time entries for services rendered by
Jackson, Shields, Yeiser & Holt (“JSYH” or “local counsel”). The Court need
not determine whether the attorneys’ fees paid to JSYH were incurred in the
action against Lack, however, because Edwards failed to demonstrate that
these fees were reasonable, see infra Part III.B.
13
Court cannot discern that these costs were incurred in pursuit
of the claim against Lack.
Edwards is not entitled to
compensation for the loss of time by its employees or other
expenditures.
2.
Reasonableness
After adjusting Edwards’ request for damages, the Court
considers whether the remaining $56,235.21 sought by Edwards is
reasonable.
“There is no fixed mathematical rule” for determining a
reasonable attorney’s fee in Tennessee.
at *2.
Lowe, 1995 WL 306166,
The Supreme Court of Tennessee has held that the
appropriate factors in determining the reasonableness of an
attorney’s fee include:
(1) the time devoted to performing the legal services;
(2) the time limitations imposed by the circumstances;
(3) the novelty and difficulty of the legal issues and
the skill required to perform the service; (4) the fee
customarily charged in the locality for similar
services; (5) the amount involved and the results
obtained; and (6) the experience, reputation, and
ability of the attorney.
Hometown Folks, LLC v. S & B Wilson, Inc., 643 F.3d 520, 535
(6th Cir. 2011) (citing Connors v. Connors, 594 S.W.2d 672, 676
(Tenn. 1980)); see also Tenn. Sup. Ct. R. 8 (setting forth
substantially similar guidelines).
As an initial matter, the Court is unable to discern
whether the fees paid to JSYH were reasonable.
14
Edwards
presented no evidence as to what tasks were performed by JSYH.
Watts did not see the bills from JSYH and, therefore, was not
qualified to testify as to their reasonableness.
Edwards
presented only the invoices of Ackerson & Yann, which included a
monthly line item for services rendered by JSYH.
This monthly
line item does not provide any insight into the type of services
rendered, whether the work was duplicative of that done by
Ackerson & Yann, or whether the time spent or amount charged per
task was appropriate.
Because Edwards failed to present proof
as to the reasonableness of these fees, Edwards is not entitled
to compensation for the fees paid to JSYH.
After deducting the fees paid to JSYH, Edwards is left with
a claim for $25,059.00 2 in attorneys’ fees incurred in the claim
against Lack.
Watts testified that he had experience reviewing
bills submitted by Edwards’ attorneys, and the Court concludes
that he is qualified to evaluate the reasonableness of the fees
charged by Ackerson & Yann.
Watt testified that the fees
charged to by Ackerson & Yann were comparable to those charged
to Edwards in similar cases and were reasonable.
In pursuit of
the action against Lack, Ackerson & Yann devoted 103.8 total
hours, filed several motions to compel discovery, obtained a
2
This amount is based on a total of 103.8 hours of work by Ackerson &
Yann between January 20, 2014 and May 7, 2014. This comprises 84 hours of
work by Jennifer Hatcher at a rate of $245.00 per hour, 8.4 hours of work by
WJC at a rate of $350.00 per hour, and 11.4 hours of work by CLB at $135.00
per hour. (See Ex. 1.)
15
temporary restraining order, and ultimately negotiated a
settlement and permanent injunction against Lack.
Additionally,
Ackerson & Yann faced moderate time pressure related to Edwards’
need to enforce the non-competition agreement against Lack.
Considering these factors, the Court concludes that $25,059.00
in attorneys’ fees is very reasonable.
Accordingly, Edwards demonstrated that it incurred
$25,059.00 in reasonable attorneys’ fees in bringing the action
against Lack.
B.
Treble Damages
In its First Amended Complaint, Edwards sought an award of
“[p]unitive and/or treble damages pursuant to Tenn. Code Ann.
[§] 47-50-109.”
(Am. Compl. at 8.)
“In the event that a
plaintiff successfully asserts a cause of action under Tennessee
Code Annotated section 47-50-109 as well as a punitive damages
claim in the common law action for tortious interference with
contract, plaintiff is required to elect between remedies.”
Buddy Lee Attractions, Inc. v. William Morris Agency, Inc., 13
S.W.3d 343, 355 (Tenn. Ct. App. 1999).
At trial, Edwards
abandoned its punitive damages claim and argued only for treble
damages pursuant to section 47-50-109.
Accordingly, Edwards has
successfully asserted only a claim for treble damages and is not
entitled to elect between remedies.
Section 47-50-109 of the Tennessee Code provides:
16
It is unlawful for any person, by inducement,
persuasion, misrepresentation, or other means, to
induce or procure the breach or violation, refusal or
failure to perform any lawful contract by any party
thereto; and, in every case where a breach or
violation of such contract is so procured, the person
so procuring or inducing the same shall be liable in
treble the amount of damages resulting from or
incident to the breach of the contract. The party
injured by such breach may bring suit for the breach
and for such damages.
Tenn. Code Ann. § 47-50-109.
The Court has already determined that Barnhart tortiously
interfered with Edwards’ contract with Lack.
(See ECF No. 94.)
Accordingly, Edwards is entitled to treble damages under section
47-50-109.
Edwards contends that it is entitled to treble damages in
addition to the attorneys’ fees incurred in the action against
Lack.
(See ECF No. 101 at 4-5.)
The statute provides, however,
that the person procuring the breach “be liable in treble.”
Tenn. Code Ann. § 47-50-109; see also B & L Corp. v. Thomas &
Thorngren, Inc., 162 S.W.3d 189, 221 (Tenn. Ct. App. 2004) (“B &
L is entitled to recover $25,131.28 . . . . Pursuant to T.C.A.
§ 47-50-109 (2001), this amount must be trebled for a total
award of $75,393.84.”).
The Court finds that Edwards incurred
$25,059.00 in bringing the action against Lack.
Pursuant to
Tenn. Code Ann. § 47-50-109, this amount must be trebled for a
total award of $75,177.00.
17
IV.
CONCLUSION
For the foregoing reasons, the Court finds that Edwards is
entitled to $75,177.00 in total damages based on the $25,059.00
in attorneys’ fees Edwards incurred in bringing the action
against Lack, trebled pursuant to section 47-50-109 of the
Tennessee Code.
IT IS SO ORDERED, this 25th day of November, 2015.
/s/ Jon P. McCalla
JON P. McCALLA
U.S. DISTRICT COURT JUDGE
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