All Secure Guard & Patrol Services, Inc. et al v. Federal Home Loan Mortgage Corporation et al

Filing 53

ORDER granting 41 Motion for Attorney Fees; denying 43 Motion to Set Aside Judgment. Signed by Judge S. Thomas Anderson on 11/18/15. (Anderson, S.)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
______________________________________________________________________________
ALL SECURE GUARD & PATROL
SERVICES, INC., and GUYLON GREER,
as an individual principal shareholder,

)
)
)
)
Plaintiffs,
)
and
)
)
NATIONAL BANKERS TRUST
)
CORPORATION,
)
)
Plaintiff in Intervention,
)
No. 14-2575-STA-tmp
v.
)
)
FEDERAL HOME LOAN MORTGAGE
)
CORPORATION and MAKOWSKY
)
RINGEL GREENBERG, LLC,
)
)
Defendants.
)
)
CONSOLIDATED WITH
)
)
NATIONAL BANKERS TRUST
)
CORPORATION,
)
)
Plaintiff,
)
v.
)
)
ALL SECURE GUARD & PATROL
)
SERVICE, INC.; GUYLON GREER;
)
and TARRIS GREER,
)
)
Defendants.
)
______________________________________________________________________________
ORDER GRANTING DEFENDANTS’ MOTION FOR ATTORNEY’S FEES
ORDER DENYING THE ALL SECURE PARTIES’ MOTION TO SET ASIDE
JUDGMENT
______________________________________________________________________________
1

Before the Court is Defendants Federal Home Loan Mortgage Corporation (“Freddie
Mac”) and Makowsky Ringel Greenberg, LLC (“MRG”)’s Motion for Attorney’s Fees (ECF No.
41) filed on September 9, 2015. Also before the Court is All Secure Guard & Patrol Service, Inc.
(“All Secure”) and Guylon Greer’s Motion to Set Aside Judgment (ECF No. 43) filed on
September 18, 2015. For the reasons set forth below, Defendants’ Motion for Attorney’s Fees is
GRANTED, and the All Secure parties’ Motion to Set Aside Judgment is DENIED.
BACKGROUND
The Court has set out the full procedural history of this action in a previous order and
need not review the entire history of the case here. Briefly, National Bankers Trust’s (“NBT”)
alleges that it acquired a security interest in All Secure’s accounts receivables under the terms of
a December 2007 factoring agreement between the parties. NBT claims that Freddie Mac and
MRG are liable for the conversion of $21,976.38 in funds Freddie Mac and MRG paid directly to
All Secure for security services provided by All Secure at apartment complexes in Memphis,
Tennessee, owned by Freddie Mac and managed by MRG.

For their part, All Secure and Greer

(“the All Secure parties”) alleged claims of their own against Freddie Mac and MRG for
additional unpaid sums owed for security services at Freddie Mac apartment complexes.
On August 19, 2015, the Court entered an order adopting a recommendation from the
United States Magistrate Judge and dismissed the claims of the All Secure parties as a discovery
sanction under Federal Rule of Civil Procedure 37(b). The Court analyzed the relevant factors
under Rule 37(b) and concluded that all of them weighed in favor of dismissal. First and
foremost, the Court found that the All Secure parties’ failure to provide timely responses to
Defendants’ discovery requests was due to willfulness and fault. The Court considered the
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reasons given by counsel for the All Secure parties Mr. Paul Springer, Esq. accounting for the
delay in producing discovery. Mr. Springer explained that he had relocated his law office in late
February and early March 2015, experienced the disruption of his regular mail, and changed his
telephone and email service. The Court did not delve into the specifics given by Mr. Springer
but instead “accept[ed] counsel’s explanation about moving offices and changing telephone
numbers and email addresses.” Even at that, the Court found that Mr. Springer was aware his
client’s discovery responses were due and that Mr. Springer failed to stay abreast of subsequent
developments in the case during his move and the interruption in his communication services.
The Court concluded that Mr. Springer had at all times “an affirmative duty to monitor the
dockets to keep apprised” of activity in the case. As such, the All Secure parties’ failure to
participate in discovery was a result of willfulness and fault.
The Court went on to find that the All Secure parties’ conduct had prejudiced Defendants
and that the All Secure parties had engaged in discovery abuse despite previous warnings from
the Court and the imposition of lesser sanctions. Therefore, the sanction of dismissal was
warranted under all of the circumstances. The Court also awarded Defendants their reasonable
expenses as a sanction for the All Secure parties’ failure to satisfy their discovery obligations.
The Court instructed counsel for Defendants to file a fee petition and affidavit setting forth
Defendants’ reasonable attorney’s fees associated with the filing and briefing of the Motion to
Compel and other costs incurred as a result of the postponed discovery depositions.
Defendants responded by filing the Motion for Attorney’s Fees (ECF No. 41) now before
the Court. In their Motion, Defendants argue that the All Secure parties’ failure to produce
timely discovery responses resulted in the last-minute postponement of depositions properly
3

noticed and set for Guylon Greer and Tarris Greer on February 23, 2015. When the parties
postponed the depositions, Michael J. Stauber, associate general counsel for Freddie Mac, was
forced to cancel a non-refundable airline ticket for travel from Washington, D.C. to Memphis,
Tennessee, to attend the depositions as well as a hotel reservation for his stay. Defendants have
attached an affidavit from Mr. Stauber in which he affirms that he had non-refundable airfare in
the amount of $431.70 and a non-refundable hotel fee of $259.85. Mr. Stauber’s affidavit
includes a copy of his travel itinerary and receipts for his travel expenses.
Defendants have also produced an affidavit from counsel of record Paul A. Matthews,
Esq. Mr. Matthews lists in his affidavit the expenses Defendants incurred as a result of the All
Secure parties’ failure to provide discovery, including the preparation and filing of Defendants’
motion to compel and for sanctions. Mr. Matthews’s affidavit states that his hourly rate for work
performed through March 27, 2015 was $300.00 and $335.00 for all work performed after that
date. Mr. Matthews’s affidavit also shows that the preparation of Defendants’ motion to compel
and for sanctions and the briefing on objections to the Magistrate Judge’s report and
recommendation required 22.6 hours of counsel’s time.

As a result, Defendants incurred

$7,315.50 in attorney’s fees related to the motion to compel and for sanctions. Together with
Mr. Stauber’s travel costs, Defendants seek a total award of expenses of $8,007.05 as a sanction
for discovery abuse.
The All Secure parties have responded in opposition (ECF No. 48) to Defendants’
Motion for Attorney’s Fees. The All Secure parties assert that Mr. Springer has satisfied the
sanction the Court previously imposed on him, the payment of Defendants’ reasonable attorney’s
fees in the amount of $1,560.00. The All Secure parties argue then that the Court should deny
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Defendants’ request for additional sanctions.
The All Secure parties filed their own Motion to Set Aside Judgment (ECF No. 43). The
All Secure parties seek the revision of the Court’s August 19, 2015 order dismissing their claims
as a discovery sanction. Although the All Secure parties did not file a separate memorandum of
law to support their Motion, the Motion itself contains the following additional information
about Mr. Springer’s interruption of communications earlier this year. According to the Motion,
Mr. Springer contacted the Court’s electronic case filing (ECF) helpdesk to seek assistance with
changing his registered email address in the Court’s ECF system. The Motion states that Mr.
Springer did not receive the Magistrate Judge’s show cause order dated March 27, 2015,
presumably because of his email issues, and that the All Secure parties would have responded to
the show cause order and provided discovery, but for Mr. Springer’s communications problems.
The All Secure parties have attached additional exhibits to their Motion, including April 6, 2015
and May 2015 emails between Mr. Springer and Clerk’s Office staff about changing Mr.
Springer’s email address in the ECF system (ECF No. 43-1); a February 24, 2015 mail to Mr.
Springer about “space being available” to him on Friday and attributing the delay to weather
(ECF No. 43-2), presumably a reference to Mr. Springer’s office move; Mr. Springer’s service
paperwork from Comcast (ECF No. 43-3); March 9, 2015 emails concerning a quote for the
installation of cable and telephone systems (ECF No. 43-4); and copies of April 2015
correspondence addressed to Mr. Springer from opposing counsel (ECF No. 43-5). The All
Secure parties conclude by asserting that “justice demands that this case move forward on the
merits.”
Defendants have responded in opposition (ECF No. 46) to the Motion to Set Aside
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Judgment. Defendants argue that the All Secure parties’ Motion suffers from a number of
defects. The Motion is not accompanied by a memorandum of law and includes no citation or
discussion of legal authority. Furthermore, any request for relief under Rule 60(b) is not welltaken because the Court has not entered a final judgment and the All Secure parties have not
briefed any of the factors justifying relief under Rule 60(b). Likewise, the All Secure parties
have not shown why revision of the Court’s dismissal of their claims is warranted under Rule 54
or Local Rule 7.3. The All Secure parties’ Motion should be denied for these reasons alone.
On the merits Defendants argue that the All Secure parties’ request is simply a rehash of
arguments and claims the Court has already considered and decided. As for the exhibits attached
to the Motion, the proof is not authenticated and does not actually clarify what happened to Mr.
Springer’s office phones and email and do not show why he did not respond to opposing
counsel’s correspondence or the orders of the Court.

Defendants further point out that the

Court’s order imposing sanctions and dismissing the claims of the All Secure parties actually
accepted Mr. Springer’s explanation about his communications problems. Despite these issues
the Court concluded that Mr. Springer had an affirmative duty to keep himself and his clients
informed about the progress of the case. Defendants finally note that the All Secure parties have
not requested relief from the other sanctions imposed by the Court, specifically, the payment of
Defendants’ reasonable attorney’s fees and costs associated with their motion to compel and for
sanctions. Therefore, Defendants believe the Motion to Set Aside Judgment should be denied.
STANDARD OF REVIEW
The All Secure parties have styled their request for relief as a Motion to Set Aside
Judgment and mention Rule 60 of the Federal Rules of Civil Procedure. Rule 60(a) allows a
6

district court to “correct a clerical mistake or mistake arising from oversight or omission” in a
“judgment, order, or other part of the record.”1 Rule 60(b) permits a district court to grant relief
from a judgment, order, or proceeding for reasons specified in the rule, including “Mistake,
inadvertence, surprise, or excusable neglect” or “newly discovered evidence that, with
reasonable diligence, could not have been discovered in time to move for a new trial under Rule
59(b).”2 As Defendants noted in their brief, the Court has not entered a final judgment in this
matter, and its order dismissing the claims of the All Secure parties is interlocutory in nature.
The Court concludes then that Rule 60 affords the All Secure parties no relief at this stage of the
proceedings.
Rule 54(b) provides that an order “that adjudicates fewer than all the claims . . . of fewer
than all the parties does not end the action as to any of the claims or parties and may be revised
at any time before entry of a judgment adjudicating all the claims and all the parties’ rights and
liabilities.”3 Local Rule of Court 7.3 provides for motions for revision of interlocutory orders and
states that “any party may move pursuant to Fed. R. Civ. P. 54(b), for the revision of any
interlocutory order” before the entry of judgment.4 Local Rule 7.3(b) enumerates the only
grounds for revision and requires the moving party to specifically show

1

Fed. R. Civ. P. 60(a).

2

Fed. R. Civ. P. 60(b)(1) & (2).

3

Fed. R. Civ. P. 54(b).

4

L.R. 7.3(a); see also Rodriguez v. Tenn. Laborers Health & Welfare Fund, 89 F. App’x
949, 959 (6th Cir. 2004) (“District courts have authority both under common law and Rule 54(b)
to reconsider interlocutory orders and to reopen any part of a case before entry of final
judgment.”).
7

(1) a material difference in fact or law from that which was presented to the Court
before entry of the interlocutory order for which revision is sought, and that in the
exercise of reasonable diligence the party applying for revision did not know such
fact or law at the time of the interlocutory order; or (2) the occurrence of new material
facts or a change of law occurring after the time of such order; or (3) a manifest
failure by the Court to consider material facts or dispositive legal arguments that were
presented to the Court before such interlocutory order.5
Local Rule 7.3(c) prohibits the repetition of any argument the party moving for revision made
during the initial consideration of the issues.6 “Any party or counsel who violates this restriction
shall be subject to appropriate sanctions, including, but not limited to, striking the filing.” 7 In
their Motion to Set Aside Judgment, the All Secure parties seek the revision or reconsideration of
the Court’s order granting Defendants’ motion for sanctions and dismissing the claims of the All
Secure parties.

Under the circumstances, the Motion to Set Aside Judgment is properly

construed as a Motion under Federal Rule of Civil Procedure 54(b) and Local Rule 7.3.
ANALYSIS
I. Motion to Set Aside Judgment
The issue presented in the All Secure parties’ Motion to Set Aside Judgment is whether
the Court should revisit its decision to dismiss their claims as a sanction for discovery abuse
under Rule 37 of the Federal Rules of Civil Procedure. The Court holds that the All Secure

5

L.R. 7.3(b).

6

L.R. 7.3(c); see also Helton v. ACS Grp., 964 F. Supp. 1175, 1182 (E.D. Tenn. 1997)
(“[W]here the movant is attempting to obtain a complete reversal of the court’s judgment by
offering essentially the same arguments presented on the original motion, the proper vehicle for
relief is an appeal.”) (quotation omitted).
7

L.R. 7.3(c).
8

parties have not satisfied any of Local Rule 7.3(b)’s grounds for revision of the order. The All
Secure parties essentially ask the Court to reconsider its findings about the All Secure parties’
fault in failing to cooperate in discovery and respond to motions and court orders. Mr. Springer
has presented additional evidence to support his explanation about an interruption in his
telephone and email service during the relocation of his law practice to a new office. However,
the new evidence all predates the parties’ briefing on the Magistrate Judge’s report and
recommendation and the Court’s order on the sanctions issue. The All Secure parties have not
shown why they could not have presented the evidence before now. In order to seek revision of
a previously-entered order based on new evidence, a party moving for relief under Local Rule
7.3 must show “that in the exercise of reasonable diligence the [moving] party . . . did not know
such fact[s] . . . at the time of the interlocutory order.” The All Secure parties’ attempt to obtain
reconsideration of the Court’s order with information they could have raised previously is not
well-taken.
Even if the Court took the new evidence into account, the Court still finds no basis for
revision of its order dismissing the All Secure parties’ claims as a discovery sanction. The
information presented in the Motion to Set Aside Judgment appears to be the All Secure parties’
attempt to corroborate or buttress Mr. Springer’s previous account of his office relocation and
the problems he encountered with his telephone and email service.8 However, these facts have

8

The All Secure parties subsequently filed a Motion to File Witness Affidavits (ECF No.
47) on October 13, 2015. There the All Secure parties request a one-week extension to produce
additional witness affidavits to support Mr. Springer’s claims about his communications
problems. Defendants have responded in opposition to the Motion. The Court finds it
unnecessary to reach the merits of the Motion because the introduction of additional proof about
9

no impact on the Court’s order on sanctions. The Court’s order actually credited as true Mr.
Springer’s explanation of his office move and disruption in communication with opposing
counsel and the Court. The Court, nevertheless, remarked that “[r]egardless then of how Mr.
Springer’s mail was mishandled or his email service interrupted, there is simply no justification
for Mr. Springer’s failure to remain uninformed for several weeks about the progress of the case
and no justification for the All Secure parties’ failure to respond to a motion to compel and then
a show cause order from the Magistrate Judge.” The point of the Court’s discussion was simply
that even under the circumstances Mr. Springer confronted, he had an ongoing duty to ensure
that he stayed up to speed on the developments in this case, including maintaining contact with
opposing counsel and monitoring the Court’s docket for case activity. No additional proof about
his move or his new telephone and email service would alter this conclusion. Therefore, the
Motion to Set Aside Judgment must be DENIED.
II. Motion for Attorney’s Fees
Pursuant to the Court’s order on sanctions, Defendants have filed a fee petition requesting
expenses related to the filing of their motion to compel and for sanctions. The All Secure parties
have responded in opposition, stating that the Court should not award “additional” sanctions.
The All Secure parties state that Mr. Springer has already satisfied a previous award of sanctions
in the amount of $1,560.00. In point of fact, Defendants are not making a new motion for
additional sanctions against the All Secure parties and their attorney, and the Court is not
awarding additional sanctions against the All Secure parties and their attorney. In its August 19,

Mr. Springer’s communications issues would not alter the Court’s analysis of the Motion to Set
Aside Judgment. Therefore, the Motion to File Witness Affidavits is DENIED as moot.
10

2015, the Court concluded that an award of attorney’s fees and costs in connection with the
motion to compel and for sanctions was mandatory under Rule 37(b)(2)(C).9 The All Secure
parties’ Motion to Set Aside Judgment has not sought the reconsideration of this conclusion.
And Mr. Springer’s sanction of $1,560.00 originated in a court order (ECF No. 25) dated January
7, 2015, which related to the All Secure parties’ failure to produce initial disclosures. Therefore,
the Court finds the All Secure parties’ opposition to Defendants’ fee petition to be without merit.
Based on the Court’s consideration of Defendants’ fee petition and the accompanying
affidavits, the Court will grant Defendants their attorney’s fees and costs associated with the
filing of the motion to compel and for sanctions. In a diversity case such as the one at bar, state
law governs the issue of attorney’s fees.10 Reasonable attorney’s fee awards are determined by
the fee applicant’s lodestar amount, which is calculated by multiplying the proven number of
hours worked by a court-ascertained reasonable hourly rate.11

The attorney’s fee must be

sufficiently documented for the Court to be able to adequately evaluate it.12 Whether a fee is
reasonable turns on the Court’s evaluation of a myriad of factors, including:
(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
9

Order Adopting Mag. J.’s Rep. and Granting Defs.’ Mot. to Compel & for Sanctions 17,
Aug. 19, 2015 (ECF No. 40).
10

Hometown Folks, LLC v. S & B Wilson, Inc., 643 F.3d 520, 533 (6th Cir. 2011)
(applying Tennessee law).
11

Ellison v. Balinski, 625 F.3d 953, 960 (6th Cir. 2010) (citing Hensley v. Eckerhart, 461
U.S. 424, 433 (1983)).
12

United Slate, Tile & Composition Roofers, Damp & Waterproof Workers Ass’n, Local
307 v. G&M Roofing & Sheet Metal Co., Inc., 732 F.2d 495, 502 (6th Cir. 1984).
11

the client, that the acceptance of a 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 the 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 contingent; (9) prior
advertisements or statements by the lawyer with respect to the fees the lawyer charges;
and (10) whether the fee arrangement is in writing.13
The Court finds that Defendants’ attorney has adequately documented his time, as each
time entry in the affidavit contains a description of the work performed and charges time to the
nearest tenth of an hour.14 The descriptions accompanying each time entry relate to work
performed by counsel for Defendants related to the motion to compel and for sanctions. 15
Defendant’s attorney’s fees have been calculated at an hourly rate of $300.00 for work
performed before March 27, 2015, and $335.00 for work performed after that date.
Defendants’ attorney Mr. Matthews asserts that these rates are discounted from his standard
hourly rate and are in accordance with the prevailing market rates of lawyers of comparable skill
and experience.16 Defendants seek $7,315.50 in attorney’s fees and $691.55 in expenses.
After reviewing the fee affidavit, the Court finds that the hourly rate charged by Mr.
Matthews and the majority of the documented time is reasonable.
reducing the overall attorney’s fees in two respects.

However, the Court is

First, Mr. Matthews spent 1.4 hours on

April 15, 2015, preparing Defendants’ notice (ECF No. 33) of the All Secure parties’ failure to
respond to a show cause order issued by the Magistrate Judge. The notice consisted of scarcely

13

Wright ex rel. Wright v. Wright, 337 S.W.3d 166, 176 (Tenn. 2011) (citing Tenn. R.
Prof. Resp. 1.5).
14

See Matthews Aff., ECF No. 41-2.

15

Id.
12

more than two pages of written briefing. While certainly not improper, the filing of the notice
was not required under the Federal Rules of Civil Procedure or the Local Rules. Defendants
prepared the notice apparently for the purpose of drawing the Magistrate Judge’s attention to the
fact that the All Secure parties had not responded to the show cause order within the time
allowed by the Magistrate Judge. The Court finds that the filing was not reasonably incurred as a
result of the All Secure parties’ discovery abuse.
Second, Mr. Matthews spent 4.3 hours drafting Defendants’ objections to the Magistrate
Judge’s report and recommendation on the sanctions issue (ECF No. 35), which Defendants filed
In their objections, Defendants argued that the Magistrate Judge’s

on May 19, 2015.

recommendation did not go far enough because the Magistrate Judge did not address the
dismissal of NBT’s claims against Defendants. The Court ultimately overruled this objection in
its order adopting the Magistrate Judge’s report and recommendation, noting that the motion to
compel was addressed only to the All Secure parties’ discovery abuses and in no way concerned
the conduct of NBT.

The Court cannot say that the All Secure parties’ discovery abuse

reasonably necessitated the filing of Defendants’ objections about NBT.
The Court will reduce the fee award by the amount of expense Defendants incurred for
the notice filed on April 15, 2015, and for the objections to the report and recommendation filed
on May 19, 2015.

The preparation of these two filings accounted for 5.7 hours of Mr.

Matthews’s time at $335.00 per hour for a total expense of $1,909.50. The total award then will
be reduced by this amount. The Court awards Defendants their reasonable attorney’s fees in the
amount of $5,406.00. In addition to the attorney’s fees, the Court grants Defendants’ request for

16

Id.
13

$691.55 for travel expenses incurred as a result of the postponement of the depositions.
Therefore, Defendants are awarded expenses in the total of amount of $6,097.55 as a sanction.
CONCLUSION
The All Secure parties’ Motion to Set Aside Judgment is DENIED. The All Secure
parties’ have not shown an entitlement to any relief under Rule 54(b) and Local Rule 7.3.
Defendants’ Motion for Attorney’s Fees is GRANTED. The Court awards Defendants their
expenses in the amount of $6,097.55 as a sanction against the All Secure parties and their
attorney Mr. Paul Springer, Esq. pursuant to Rule 37(b)(2)(C). The All Secure parties and Mr.
Springer are ordered to satisfy their monetary sanctions within 30 days of the entry of this order.
IT IS SO ORDERED.
s/ S. Thomas Anderson
S. THOMAS ANDERSON
UNITED STATES DISTRICT JUDGE
Date: November 18, 2015.

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