Denton et al v. Suter

Filing 170

MEMORANDUM OPINION AND ORDER AWARDING ATTORNEYS' FEES ON MOTION TO COMPEL: The Court ORDERS, pursuant to Federal Rules of Civil Procedure 37(a)(5)(A), that Defendant Rudolf Suter must pay Plaintiffs Peter Denton and Harvest Investors, L.P. the amount of $3,919.50 for payment of reasonable and necessary attorneys' fees in connection with Plaintiffs' Motion for Sanctions, Contempt and to Compel (Dkt. No. 149 ) by 3/21/2016. (Ordered by Magistrate Judge David L Horan on 1/19/2016) (bdb)

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
PETER DENTON, ET AL.,
Plaintiffs,
V.
RUDOLF SUTER,
Defendant.

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No. 3:11-cv-2559-N

MEMORANDUM OPINION AND ORDER AWARDING
ATTORNEYS’ FEES ON MOTION TO COMPEL1
Background
Plaintiffs Peter Denton and Harvest Investors, L.P. (“Plaintiffs”) filed a Motion
for Sanctions, Contempt and to Compel (the “First Contempt Motion”). See Dkt. No.
149. United States District Judge David C. Godbey has referred all post-judgment
discovery disputes in this case to the undersigned United States magistrate judge
pursuant to 28 U.S.C. § 636(b). See Dkt. No. 128.
Plaintiffs’ First Contempt Motion requested as relief that the Court enter an
order
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compelling Defendant Rudolf Suter [(“Defendant” or “Suter”)] to
pay the attorneys’ fees award, as set out in the December 24, 2014

Under § 205(a)(5) of the E-Government Act of 2002 and the definition of
“written opinion” adopted by the Judicial Conference of the United States, this is a
“written opinion[] issued by the court” because it “sets forth a reasoned explanation
for [the] court's decision.” It has been written, however, primarily for the parties, to
decide issues presented in this case, and not for publication in an official reporter,
and should be understood accordingly.
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2.

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Order Awarding Attorneys’ Fees on Motion to Compel [Dkt. No.
141], to Plaintiffs within 10 business days of entry of an order on
the First Contempt Motion, and, if Suter should fail to do so,
imposing monetary sanctions against Suter in the amount of $100
per day until Suter has fully complied with the December 24, 2014
Order Awarding Attorneys’ Fees on Motion to Compel;
compelling Suter to answer or supplement and verify his answers
to Interrogatory Nos. 10, 12, 14, 21, and 23 of Plaintiffs’ First Set
of Interrogatories and Interrogatory Nos. 34, 50, 51, 55, 68, 71, 72
and 78 of Plaintiffs’ Second Set of Interrogatories within ten
business days of entry of an order on the First Contempt Motion,
and, if Suter should fail to do so, imposing monetary sanctions
against Suter in the amount of $100 per day until Suter has fully
complied with answering or supplementation and verifying of his
Answers to Plaintiffs’ First and Second Sets of Interrogatories as
set out in the November 4, 2013 Order; and
awarding Plaintiffs their costs and reasonable and necessary
attorneys’ fees incurred in preparing and presenting their Motion
for Sanctions, Contempt and to Compel.

See Dkt. No. 149 at 6-7.
The Court held a hearing and oral argument on Plaintiffs’ First Contempt
Motion on October 19, 2015, and Plaintiffs’ counsel and Defendant personally
appeared. See Dkt. No. 155.
At the hearing, Defendant did not contest that he had not fully answered or
supplemented, and verified his answers under oath, to Interrogatory Nos. 10, 12, 14,
21, and 23 of Plaintiffs’ First Set of Interrogatories and Interrogatory Nos. 34, 50, 51,
55, 68, 71, 72 and 78 of Plaintiffs’ Second Set of Interrogatories, as the Court’s
November 4, 2013 Order required. And Defendant represented to the Court that he
could and would do so within 10 business days of the date of an order granting
Plaintiffs’ Motion. Accordingly, in an October 19, 2015 Order Granting Motion to
Compel [Dkt. No. 158], the Court granted Plaintiffs’ First Contempt Motion insofar as
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Defendant was ordered to fully answer or supplement his answers, and verify his
answers under oath, to Interrogatory Nos. 10, 12, 14, 21, and 23 of Plaintiffs’ First Set
of Interrogatories and Interrogatory Nos. 34, 50, 51, 55, 68, 71, 72 and 78 of Plaintiffs’
Second Set of Interrogatories, as required by the Court’s November 4, 2013 Order [Dkt.
No. 94], by November 2, 2015. See Dkt. No. 158 at 2-3. Further, at the October 19, 2015
hearing, Defendant did not contest that he had not paid Plaintiffs $27,605.00 under
Federal Rule of Civil Procedure 37(a)(5)(A) as required by the Court’s December 24,
2014 Order Awarding Attorneys’ Fees on Motion to Compel. Accordingly, the Court
granted Plaintiffs’ First Contempt Motion insofar as Defendant was ordered to pay, as
required by the Court’s December 24, 2014 Order Awarding Attorneys’ Fees on Motion
to Compel [Dkt. No. 141], Plaintiffs Peter Denton and Harvest Investors, L.P. the
amount of $27,605.00 for payment of reasonable and necessary attorneys’ fees under
Rule 37(a)(5)(A) by November 9, 2015. See Dkt. No. 158 at 3.
The Court’s October 19, 2015 Order Granting Motion to Compel noted that
Plaintiffs also seek through their First Contempt Motion recovery of their costs and
reasonable and necessary attorneys’ fees incurred in preparing and presenting their
First Contempt Motion in the amount of $3,919.50 and that Federal Rule of Civil
Procedure 37(a)(5)(A) provides that, if a motion to compel is granted “or if the ...
requested discovery is provided after the motion was filed,” “the court must, after
giving an opportunity to be heard, require the party ... whose conduct necessitated the
motion, the party or attorney advising that conduct, or both to pay the movant’s
reasonable expenses incurred in making the motion, including attorney’s fees,” except
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that “the court must not order this payment if: (i) the movant filed the motion before
attempting in good faith to obtain the disclosure or discovery without court action; (ii)
the opposing party’s nondisclosure, response, or objection was substantially justified;
or (iii) other circumstances make an award of expenses unjust.” Id. The Court granted
Defendant until November 9, 2015 “to file a response to Plaintiffs’ request for an order
requiring Defendant counsel to pay Plaintiffs, as required by Rule 37(a)(5), the
expenses, including attorneys’ fees, that Plaintiffs incurred in making their” First
Contempt Motion [Dkt. No. 149] and explained that, “[i]n his response, Defendant
should fully explain whether he contends that Plaintiffs filed their Motion for
Sanctions, Contempt and to Compel before attempting in good faith to obtain the
discovery and compliance with prior court orders without court action, whether
Defendant’s nondisclosures or failures to act or comply at issue were ‘substantially
justified,’ or whether other circumstances make an award of expenses under Rule
37(a)(5) unjust” and “should further respond to Plaintiffs’ requested amount of fees and
make objections that he may have, if any, to the rates and reported hours by which
Plaintiffs’ counsel calculated the requested fee award.” Id. at 4-5.
The Court further ordered that Plaintiffs may file a reply in support of their
request for an award of expenses under Rule 37(a)(5) by November 23, 2015 and
deferred “ruling on Plaintiffs’ request for an award of expenses under Rule 37(a)(5) as
to their Motion for Sanctions, Contempt and to Compel [Dkt. No. 149] pending this
additional briefing.” Id. at 5.
After Plaintiffs filed a Second Motion for Sanctions, Contempt and to Compel
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[Dkt. No. 160], Defendant belatedly filed what may be construed as a response to the
Court’s October 19, 2015 Order Granting Motion to Compel as to a Rule 37(a)(5) award
of expenses. See Dkt. No. 162.
In this response, Defendant contended that he “has done everything in his power
to comply with the Court’s orders and his discovery obligations in this matter”; that he
“has expended considerable time and money collecting and producing the required
documents and providing the answers”; and that he “has also tried very hard to comply
with [the] Court’s orders relating to prior sanctions awards, paying a total of
$27,605.00 in sanctions to pay legal fees to Peter Denton and Harvest Investors, LP,”
and “has tried to get loans and offered Peter Denton and Harvest Investors L.P. to pay
over time with funds owned by his employer to Suter for deferred pay.” Dkt. No. 162
at 1.
Defendant further asserts that, in his “Chapter 7 case and the Rule 2004
Examination, Peter Denton and Harvest Investors L.P. asked the same questions and
asked for the same documents as they do in the First and second motion[s] for
sanctions,” and Defendant “now requests that the Court waive the additional
sanctions.” Id. Defendant’s response further describes the history of his compliance
with discovery obligations in his bankruptcy case and appears to take issue with
continued enforcement of certain Bankruptcy Court orders that are not before the
Court in this case. See id. at 2-4. Finally, Defendant contends that Plaintiffs “have
been copied with all the documents during the [Rule] 2004 Examination, all the
documents and questions requested by [Plaintiffs] during this order were the same”
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and that “[i]t is unreasonable, excessive and a harassment to ask in a different court
again for the same discovery.” Id. at 4.
In reply, Plaintiffs contend that Defendant does not contest their request for
“summited fees” in the amount of $3,919.50 in connection with their First Contempt
Motion and note that Defendant’s response “does not address, let alone oppose, the
latest fees sought by” Plaintiffs. Dkt. No. 163 at 4, 6.
Legal Standards
The undersigned has authority to enter a nondispositive order granting
attorneys’ fees as a sanction under Federal Rule of Civil Procedure 37. See Dkt. No. 27;
28 U.S.C. § 636(b); Merritt v. Int’l Bhd. of Boilermakers, 649 F.2d 1013, 1016-17 (5th
Cir. Unit A 1981) (per curiam).
“This Court uses the ‘lodestar’ method to calculate attorney’s fees.” Heidtman
v. Cnty. of El Paso, 171 F.3d 1038, 1043 (5th Cir. 1999) (citing Fender v. Zapata
Partnership, Ltd., 12 F.3d 480, 487 (5th Cir.1994); Saizan v. Delta Concrete Prods.,
Inc., 448 F.3d 795, 800 (5th Cir. 2006). The lodestar is calculated by multiplying the
number of hours an attorney reasonably spent on the case by an appropriate hourly
rate, which is the market rate in the community for this work. See Smith & Fuller,
P.A. v. Cooper Tire & Rubber Co., 685 F.3d 486, 490 (5th Cir. 2012). “A reasonable
hourly rate is the prevailing market rate in the relevant legal community for similar
services by lawyers of reasonably comparable skills, experience, and reputation.”
Norman v. Hous. Auth. of City of Montgomery, 836 F.2d 1292, 1299 (11th Cir. 1988)
(citing Blum v. Stenson, 465 U.S. 886, 895-96 n. 11 (1984)). The relevant legal
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community is the community in which the district court sits. See Tollett v. City of
Kemah, 285 F.3d 357, 368 (5th Cir. 2002).
The party seeking reimbursement of attorneys’ fees bears the burden of
establishing the number of hours expended through the presentation of adequately
recorded time records as evidence. See Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir.
1993). The Court should use this time as a benchmark and then exclude any time that
is excessive, duplicative, unnecessary, or inadequately documented. See id. The hours
remaining are those reasonably expended. See id. There is a strong presumption of the
reasonableness of the lodestar amount. See Perdue v. Kenny A., 559 U.S. 542, 552
(2010); Saizan, 448 F.3d at 800.
After calculating the lodestar, the Court may either (1) accept the lodestar figure
or (2) decrease or enhance it based on the circumstances of the case, taking into
account what are referred to as the Johnson factors. See La. Power & Light Co. v.
Kellstrom, 50 F.3d 319, 324, 329 (5th Cir. 1995); Johnson v. Ga. Highway Express, Inc.,
488 F.2d 714, 717-19 (5th Cir. 1974), overruled on other grounds by Blanchard v.
Bergeron, 489 U.S. 87, 90 (1989). The Johnson factors are: (1) the time and labor
required; (2) the novelty and difficulty of the legal issues; (3) the skill required to
perform the legal service properly; (4) the preclusion of other employment by the
attorney as a result of taking the case; (5) the customary fee; (6) whether the fee is
fixed or contingent; (7) time limitations imposed by the client or other circumstances;
(8) the monetary amount involved and the results obtained; (9) the experience,
reputation, and ability of the attorneys; (10) whether the case is undesirable; (11) the
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nature and duration of the professional relationship with the client; and (12) awards
in similar cases. See Johnson, 448 F.2d at 717-19; see also Saizan, 448 F.3d at 800.
Because the lodestar is presumed to be reasonable, it should be modified only in
exceptional cases. See Watkins, 7 F.3d at 457.
Additionally, a party seeking attorneys’ fees may only recover for time spent in
preparing the actual discovery motion – that is, the “reasonable expenses incurred in
making the motion, including attorney’s fees.” FED. R. CIV. P. 37(a)(5)(A).
The undersigned recognizes that the analysis set forth above, and particularly
the interplay of the lodestar analysis and the Johnson factors, has recently been called
into question. See Perdue, 559 U.S. at 552-53; S&H Indus., Inc. v. Selander, No. 3:11cv-2988-M-BH, 2013 WL 6332993, at *2-*3 (N.D. Tex. Dec. 5, 2013). But in a recent
opinion, the United States Court of Appeals for the Fifth Circuit, without comment or
reference to the United States Supreme Court’s decision in Perdue, continued to utilize
the approach laid out by this Court. See Black v. SettlePou, P.C., 732 F.3d 492, 502-03
(5th Cir. 2013). But see In re Pilgrim’s Pride Corp., 690 F.3d 650, 663-64 (5th Cir. 2012)
(analyzing whether any changes brought about by Perdue apply to bankruptcy
attorneys’ fees calculations); but see also In re ASARCO, L.L.C., 751 F.3d 291, 296 (5th
Cir. 2014) (following Pilgrim’s Pride).
In Perdue, the Supreme Court was ultimately considering the appropriateness
of an enhancement of an award of attorneys’ fees, and Defendants here have not
requested such an enhancement. Other factors also distinguish this case from Perdue,
including the fact that Perdue involved a 42 U.S.C. § 1988 claim and the fees were
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therefore paid by state and local taxpayers. See Perdue, 559 U.S. at 558. Moreover,
after the lodestar amount is determined, it may not be adjusted due to a Johnson factor
that was already taken into account during the initial calculation of the lodestar, see
Saizen, 448 F.3d at 800, and the lodestar calculation may take into account several
Johnson factors, see Black, 732 F.3d at 503 n.8.
In light of the circumstances in this case – where there is no request for
enhancement and no Section 1988 claim – the Court will not address whether Perdue
changed the landscape of calculating attorneys’ fees awards in the Fifth Circuit.
Rather, it will take into account the necessary factors when determining the
appropriate amount of attorneys’ fees.
Analysis
Based on the record in this case, the Court finds that Plaintiffs filed their First
Contempt Motion only after attempting in good faith to obtain the discovery and
compliance with prior court orders without court action, that Defendant’s
nondisclosures or failures to act or comply at issue were not substantially justified, and
that no other circumstances make an award of expenses under Rule 37(a)(5) unjust.
Further, Defendant has not filed a response containing any objections to the rates and
reported hours by which Plaintiffs’ counsel calculated the requested fee award.
Plaintiffs seek recovery of their costs and reasonable and necessary attorneys’
fees incurred in preparing and presenting their First Contempt Motion in the amount
of $3,919.50. See Dkt. No. 149 at 7; Dkt. No. 149-1 at 9-10 of 10. This amount is made
up of 16.1 hours at $225 an hour ($3,622.50) for the work performed by attorney Robert
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D. Allen and 3.3 hours at $90 an hour ($297.00) for the work performed by legal
assistant Lori A. Black. See Dkt. No. 149-1 at 9-10 of 10. Plaintiffs seek no other award
of expenses in connection with the work on their First Contempt Motion.
Plaintiffs’ request is supported by the Affidavit of Robert D. Allen in Support of
Attorneys Fees Incurred in Connection with Plaintiffs’ Motion for Sanctions, Contempt
and to Compel [Dkt. No. 149-1]. Mr. Allen declares that he is an experienced attorney
primarily engaged in litigation matters who has handled many cases in both state and
federal court in Texas. He declares that the work that he and Ms. Black performed for
which Plaintiffs seek an award of attorneys’ fees is limited to work performed on behalf
of Plaintiffs in connection with their First Contempt Motion, and the Court finds that
that is the appropriate universe of billing entries for this Rule 37(a)(5) award. The
billing records submitted by Mr. Allen reflect the work performed by Mr. Allen and Ms.
Black with a narrative description of the work done and the number of hours that it
took to complete the work. See Dkt. No. 149-1. Mr. Allen further declares, and the
Court finds, that the attorney and legal assistant performing this work possessed the
requisite skill and experience to properly perform the legal services rendered.
Mr. Allen declares that the rates charged by Mr. Allen and Ms. Black are
consistent with, if not lower than, rates customarily charged in Dallas for similar legal
services. See Dkt. No. 149-1. The Court finds that the prevailing rate in Dallas County
for attorneys and legal assistants with the experience, skill, and ability of Defendants’
attorney and legal assistant is, if anything, higher than the rates and fees charged by
these timekeepers. The Court finds, based on the information and record before the
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Court, including Mr. Allen’s affidavit, that the requested hourly rates in this case are
reasonable and are within the market rate for attorneys and paralegals handling this
type of litigation in the Dallas area. See generally Vanliner Ins. Co. v. DerMargosian,
No. 3:12-cv-5074-D, 2014 WL 1632181, at *2 (N.D. Tex. Apr. 24, 2014) (noting that the
Court is an expert on the reasonableness of attorneys’ fees).
The Court finds the appropriate lodestar here to be calculated as 16.1 hours at
$225 an hour ($3,622.50) for the work performed by attorney Robert D. Allen and 3.3
hours at $90 an hour ($297.00) for the work performed by legal assistant Lori A. Black,
for a total of $3,919.50. The Court has considered the Johnson factors but notes that
the lodestar is presumed to be reasonable and should only be modified in exceptional
cases. Here, Plaintiffs do not seek an enhancement of their attorneys’ fees, Defendant
did not file a substantive response to the request for attorneys’ fees, and there are no
other exceptional circumstances.
Conclusion
The Court ORDERS, pursuant to Federal Rules of Civil Procedure 37(a)(5)(A),
that Defendant Rudolf Suter must pay Plaintiffs Peter Denton and Harvest Investors,
L.P. the amount of $3,919.50 for payment of reasonable and necessary attorneys’ fees
in connection with Plaintiffs’ Motion for Sanctions, Contempt and to Compel [Dkt. No.
149] by March 21, 2016. This award of reasonable expenses is imposed in addition to
the $27,605.00 that Defendant has been ordered to pay by the Court’s December 24,
2014 Order Awarding Attorneys’ Fees on Motion to Compel [Dkt. No. 141] and October
19, 2015 Order Granting Motion to Compel [Dkt. No. 158], and this order does address
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Plaintiffs’ request for an award of their costs and reasonable and necessary attorneys’
fees incurred in preparing and presenting their Second Motion for Sanctions, Contempt
and to Compel [Dkt. No. 160].
SO ORDERED.
DATED: January 19, 2016

_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE

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