Stake Center Locating v. Logix Communications
MEMORANDUM DECISION AND ORDER denying Defendant's 207 Motion for Attorney Fees, Court Costs, and Litigation Expenses. Signed by Judge Jill N. Parrish on 3/31/2017. (eat)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
STAKE CENTER LOCATING,
MEMORANDUM DECISION AND
ORDER DENYING LOGIX’S MOTION
FOR ATTORNEY FEES, COURT COSTS,
AND LITIGATION EXPENSES
LOGIX COMMUNICATIONS, L.P.,
Case No. 2:13-cv-1090-JNP-DBP
District Judge Jill N. Parrish
Before the court is a motion brought by Logix Communications, L.P. requesting an award
of attorney fees, court costs, and litigation expenses pursuant to a contractual provision. [Docket
207]. The court DENIES the motion for fees.
Logix entered into a service agreement contract with Stake Center Locating, Inc. Under
the contract, Stake Center would locate underground utility lines for Logix for a set fee. Stake
Center was required to provide monthly invoices for the services it provided. The contract
contained an attorney fee provision, which stated: “In the event of any litigation or other
proceedings between the parties concerning this Agreement, the prevailing party shall be entitled
to the payment by the non-prevailing party of all its reasonable attorneys’ fees, court costs, and
Stake Center provided the agreed upon services for a period of sixteen months, but failed
to submit the required monthly invoices. Upon discovering its error, Stake Center submitted a
single invoice for the entire period. Logix refused to pay.
Stake Center sued Logix for breach of contract and, alternatively, for restitution for the
uncompensated services as unjust enrichment. Logix asserted various defenses in its answer,
including that Stake Center’s material breach of the contract excused its obligation to pay for the
services provided. It also asserted a counterclaim for breach of contract based upon Stake
Center’s failure to submit monthly invoices. As damages, Logix asserted that it was entitled to
the difference between the amount billed and the cost of the same services if they had been billed
at a more reasonable, high-volume rate.
This court concluded as a matter of law that Stake Center breached the contract by failing
to submit monthly invoices. The court further ruled that the question of whether the breach was
material was for the jury to decide.
At trial, the jury found that Stake Center’s breach was material, excusing Logix’s
contractual obligation to pay for the services Stake Center provided. Logix, therefore, prevailed
on its material breach affirmative defense to Stake Center’s breach of contract claim. But the jury
also found that Stake Center was entitled to relief on its unjust enrichment claim and awarded it
$700,000 as the reasonable value of the utility line location services that it provided. Thus, Stake
Center prevailed on its restitution claim.
Logix filed a motion for attorney fees, court costs, and litigation expenses pursuant to the
attorney fee provision of the contract. It argued that since it succeeded on its material breach
defense to Stake Center’s breach of contract claim, it was the prevailing party under the attorney
fee provision. Logix claimed that it was entitled to $1,014,937.80—the entire amount of its
attorney fees and expenses for this litigation. The attorney fee motion was accompanied by two
relevant exhibits: (1) the affidavit of John L. Grayson accompanied by approximately 600 pages
of billing records documenting $952,092.42 in attorney fees, court costs, and litigation expenses
and (2) the affidavit of Rodney R. Parker accompanied by billing records documenting
$62,845.38 in attorney fees, court costs, and litigation expenses. The billing records attached to
the Grayson affidavit are so heavily redacted that it is impossible to tell which time entries are
associated with work on particular claims, counterclaims, or defenses in the suit.
Stake Center opposed the fee motion. It argued that this court should not award fees or
costs because: (1) Logix failed to allocate its fees and costs between the successful contract
claim, the unsuccessful contract claim, and the unjust enrichment claim; (2) Logix is not a
prevailing party under the attorney fee provision; and (3) Logix sought and obtained rescission of
the service contract, negating the attorney fee provision. Stake Center also argued that
“reasonable attorneys’ fees” would be no fee or a substantially reduced fee.
In reply, Logix argued that it had no obligation to allocate fees because it was entitled to
all of its fees. In the alternative, it attached a second affidavit of John L. Grayson that allocated
$827,205.50 of the attorney fees to the successful breach of contract claim and $35,011.50 of the
attorney fees to the unjust enrichment claim and work done pursuing a claim that Stake Center
had filed a fraudulent lien. This second affidavit allocated all of the $89,874.42 in claimed costs
to the successful contract claim. Thus, the affidavit attached to the reply brief allocated over 96%
of the requested fees and costs to Logix’s successful affirmative defense.
Stake Center objected to the introduction of new evidence in the affidavit attached to the
reply brief, arguing that any allocation should have been included with the motion for fees so
that it would have had an opportunity to respond.
Stake Center first argues that the court should deny the motion for fees due to Logix’s
failure to allocate its fees and costs between recoverable claims and nonrecoverable claims. The
court agrees, and therefore does not reach Stake Center’s other arguments.1
Because the court does not address Stake Center’s other arguments, it assumes for the purposes
of this order that Logix was the “prevailing party” on its material breach affirmative defense
“One who seeks an award of attorney fees . . . has the burden of producing evidence to
buttress the requested award. When the evidence presented is insufficient, an award of attorney
fees cannot stand.” Foote v. Clark, 962 P.2d 52, 55 (Utah 1998) (citation omitted). This initial
burden of producing evidence in support of a fee award includes an obligation to allocate a “fee
request according to [the moving party’s] underlying claims.” Id.; accord Valcarce v. Fitzgerald,
961 P.2d 305, 317 (Utah 1998) (the evidence submitted by the party requesting fees “must
distinguish between those fees incurred in connection with successful and unsuccessful claims”).
The moving party must “categorize the time and fees expended for (1) successful claims for
which there may be an entitlement to attorney fees, (2) unsuccessful claims for which there
would have been an entitlement to attorney fees had the claims been successful, and (3) claims
for which there is no entitlement to attorney fees.” Reighard v. Yates, 285 P.3d 1168, 1182 (Utah
2012) (citation omitted).
A failure to satisfy this obligation to allocate between compensable and noncompensable
fees “makes it difficult, if not impossible, for the trial court to award the moving party fees
because there is insufficient evidence to support the award.” Jensen v. Sawyers, 130 P.3d 325,
349 (Utah 2005). Therefore, “[a] court cannot award all attorney fees requested if they have not
been allocated as to separate claims, but may deny attorney fees altogether for failure to
under the attorney fee clause and could have made a legitimate claim to part of the fees expended
in this litigation. But a reasonable argument can be made that Logix did not qualify for a fee
award under the terms of the relevant contractual language. The attorney fee clause provides: “In
the event of any litigation or other proceedings between the parties concerning this Agreement,
the prevailing party shall be entitled to the payment by the non-prevailing party of all its
reasonable attorneys’ fees, court costs, and litigation expenses.” Logix argues that it is the
“prevailing party” in a “litigation . . . concerning this Agreement” because it prevailed on one of
the contract claims at issue in this case. This language, however, can also be read more broadly
to mean that only the prevailing party in the entire litigation, which may contain only some
claims concerning the contract, can make a claim for attorney fees. Under this interpretation,
Logix was not the prevailing party in the litigation as a whole because Stake Center obtained a
$700,000 judgment against it.
allocate.” Reighard, 285 P.3d at 1183 (emphasis added); accord Foote, 962 P.2d at 57 (“[A] trial
court may, in its discretion, deny fees altogether for [the requesting party’s] failure to
allocate . . . .” (second alteration in original) (quoting Valcarce, 961 P.2d at 318.)).
Logix was not the overall prevailing party in this litigation. Stake Center won this case by
receiving a $700,000 judgment in its favor. Thus Logix’s claim for fees and costs is necessarily
premised on the assumption that the question of which party is entitled to fees under the contract
should be analyzed on a claim-by-claim basis. In other words, Logix’s argument that it is entitled
to a fee award presumes the need to allocate between fees incurred on recoverable and
Logix prevailed on only one claim “for which there may be an entitlement to attorney
fees.” See Reighard, 285 P.3d at 1182. Logix won on its material breach affirmative defense
against Stake Center’s breach of contract claim. Under Logix’s reading of the attorney fee
provision, it was the prevailing party on this claim concerning the contract. The other claims
cannot support a fee award in its favor. Stake Centers’ unjust enrichment claim, by definition,
was not a claim concerning the contract. And although Logix’s breach of contract claim
concerned the contract, Logix did not prevail on this claim. Because Logix’s performance under
the contract was excused, the jury did not address its claim that Stake Center’s breach damaged
Logix by causing it to be overbilled for the utility line location services. Finally, Logix’s
fraudulent lien claim appears to involve an entirely separate litigation in Texas.
Because Logix was not entitled to fees for a number of the claims that were litigated in
this case, it had an obligation to allocate its fees between compensable and noncompensable
claims. Logix, however, neglected this obligation. It made no attempt to allocate its fees and
costs and requested the entire amount it was billed for this litigation. Moreover, the 600 pages of
billing records attached to the Grayson affidavit—which documented the great bulk of the fees
and costs requested—are so thoroughly redacted that any independent attempt to allocate these
fees would be futile.2 Because Logix failed to shoulder its “burden of producing evidence to
buttress the requested award. . . . an award of attorney fees cannot stand.” See Foote, 962 P.2d at
The Grayson affidavit attached to the reply brief did not cure this defect. First, by not
allocating the fees until the reply brief, Logix deprived Stake Center of an opportunity to
respond. The court, therefore, declines to entertain this new issue raised in the reply brief. See
New Mexico v. Trujillo, 813 F.3d 1308, 1317 n.3 (10th Cir. 2016) (new arguments raised in a
reply brief are generally waived); Bennett v. Sprint Nextel Corp., No. 09-2122-EFM, 2013 WL
1197124, at *2 (D. Kan. Mar. 25, 2013) (“Courts in this circuit generally refuse to consider new
evidence offered for the first time in a reply brief.”). Second the reply affidavit is still inadequate
and does not allow the court to evaluate the allocation issue. The affidavit contains a number of
unredacted time entries that Logix concedes are attributable in full or in part to unrecoverable
claims. But it is still impossible to review the vast majority of the time entries contained in the
600 pages of billing documents attached to the original Grayson affidavit to determine whether
other time entries could plausibly be allocated to nonrecoverable claims. Third, although much
of the work and expenses in this matter may be relevant to more than one claim, the reply
affidavit allocated 100% of these fees and costs to the claim on which it was successful with no
principled basis for doing so.
In a footnote to the Grayson affidavit, he offers to “hand-deliver unreacted versions [of the
billing records] to the Court immediately upon request.” [Docket 207-1, p. 3]. But the onus is not
on this court to request the production of adequate evidence to support an attorney fee award. It
is the requesting party’s obligation to submit it.
Finally, having ruled on many of the pretrial motions and presided over the trial, the court
finds the belated allocation of over 96% of the fees and costs to the recoverable claim—and less
than 4% to the claim on which Stake Center prevailed and recovered $700,000—to be patently
unreasonable. For example, the extent of the services rendered by Stake Center, the associated
cost and value of these services, and whether Logix was aware that the services were being
rendered were central issues litigated in this matter and were not relevant to Logix’s successful
Because Logix neglected its obligation to allocate its fees and costs, the court DENIES its
motion for attorney fees. [Docket 207].
Signed March 31, 2017.
BY THE COURT
Jill N. Parrish
United States District Court Judge
Even if Logix had properly allocated its fees and costs, a reasonable fee would be substantially
less than what Logix has requested. The court notes Logix was represented by four attorneys
during the four-day trial, two of whom never presented argument or examined a witness. This
surplusage of legal representation for the contract dispute at issue here unreasonably augmented
the fees billed in this case. Additionally, Logix expended a significant amount of attorney time to
file multiple motions to exclude business records that documented the work performed by Stake
Center. The court allowed Stake Center additional time to authenticate these documents and
denied the motions to exclude. Stake Center, however, neglected to enter the records into
evidence during its case in chief. Snatching defeat from the jaws of victory, Logix’s attorney
later entered into evidence the very records it had fought to keep out. Attorney time expended on
these motions to exclude is likewise unreasonable.
Some of the billed costs are also suspect. The court has not combed the more than 600 pages of
billing records, but notes that one of the expenses billed to Logix was an iPad purchased for the
trial. [Docket 207-1. p. 242/611].
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