Textron Financial Corporation v. AIC of Manassas, Inc. et al

Filing 80

MEMORANDUM OPINION Re: Pltf Textron Financial Corporation's Motion for Attorneys' Fees and Costs. Signed by District Judge Gerald Bruce Lee on 07/23/10. (pmil)

IN THE
FOR THE

UNITED

STATES

DISTRICT COURT

EASTERN

DISTRICT OF VIRGINIA

ALEXANDRIA DIVISION

Textron Financial Plaintiff,

Corporation,

) )

v.
AIC of Manassas, AIC of Inc., Inc., Inc.,

)
) )

Case No.

l:09-cv-1202

(GBL)

Glen Burnie,

D.N.

Motors,

Inc.,
Center, LLC,

)
) )

American Import AIC Properties,

JNC Auto, Dornik,

LLC, LLC,

) ) )
)

LLC,

JAB 1 Enterprises,
Seyed Halatai,

Adel Tajdar, Nomie D.

and

) ) )

Bates, Defendants.

MEMORANDUM ORDER

THIS MATTER is before the Court on Plaintiff Textron Financial Corporation's and Costs. (Dkt. No. ("Textron") Motion for Attorneys' Fees

70.)

This case concerned Textron's claims Inc. ("AIC") and several

against Defendant AIC of Manassas,

Guarantors for AIC's failure to remit payment on vehicles sold

in accordance with the parties'
(the "Financing Agreement").

Credit and Security Agreement
30, 2010, the

By Order dated April

Court granted Textron's Motion for Summary Judgment on Counts
and III through XII and denied Defendants' Motion for Partial

I

Summary Judgment.

(Dkt.

No.

65.)

On May 5,

2010,

Textron

voluntarily dismissed Counts Order dated June
judgment

II and XIII.

(Dkt.

No.

66.)

By

7,

2010,

the Court directed the Clerk to enter
in the amount of

for Textron against Defendants

$364,777.02,
now moves the

plus prejudgment
Court

interest.
fees

(Dkt.

No.

78.)

Textron

for attorneys'

and other necessary

expenses pursuant to the Financing Agreement. There are three issues before the Court.
is whether the plaintiff's attorneys'
reasonable litigating number of this hours at

(Dkt. The

No.

70.) issue

first

claimed fees represent a
rate charged in Court

a reasonable second issue fee

action.

The

is whether the

should reduce

the proposed attorneys'

amount where Textron

includes

fees and expenses associated with unsuccessful or
The third issue is whether expenses for

unrelated claims.

document

reproduction,

document delivery,

travel,

Westlaw fees,

and pro hac vice filing fees are properly claimed as costs. The Court grants Textron's Motion for Attorneys' Fees and

Costs

in the total amount of $98,633.68, in costs, for three

representing $93,482.50 reasons. First, the

in fees and $5,151.18 Court finds

the number of hours claimed and the rate charged
the hours the expended were necessitated litigation, and because

reasonable because many of by Defendants' actions

throughout

Textron's attorneys billed at
the Court reduces the

reasonable

reduced rates.
from $97,268.50

Second,
to

claimed fee amount

$93,482.50 because Textron's calculation improperly includes fees and expenses associated with Textron's detinue and fraudulent conveyance claims. Finally, the Court awards Textron

costs in the amount of delivery,

$5,151.18,

which includes document travel, Westlaw usage, and pro

document reproduction,

hac vice filing fees,
the parties'

because such expenses are authorized by

Financing and Guaranty Agreements.

1^

BACKGROUND

This action arises

from AIC's and its Guarantors'

default

on their contractual obligations an auto dealer's
is a commercial

to Textron in connection with Textron

floor plan financing of automobiles.
financing company that provides

financing

programs Textron,

for products manufactured by its parent company, Inc., and other ventures. AIC is a Virginia-based to retail
the

automobile dealership which sells vehicles
On December 5, 2007, AIC entered into

customers.

Financing

Agreement with Textron to finance
The Financing Agreement

its acquisition of vehicles.
to remit payment to Textron

required AIC

for every vehicle through Textron's
provided that:

sold that had been initially purchased by AIC financing. The Financing Agreement also

Debtor
costs

[AIC]

is also responsible to pay all other
incurred by Secured Party fees and other legal [Textron] in including but not expenses

and expenses

in connection with this Agreement, limited to attorneys'

connection with or arising out of any deficiency suit,
collection actions
Default.

or otherwise following an Event of

(Financing Agreement U 11.)
On December 5, 2 007, Textron also entered into ten separate

agreements with AIC of Glen Burnie,

Inc.,

D.N.

Motors,

Inc.,

American Import Center,
LLC, Dornik, LLC,

Inc.,

AIC Properties,
LLC,

LLC,

JNC Auto,
Adel

JAB 1 Enterprises,

Seyed Halatai,

Tajdar, Textron

and Nomie D. (the

Bates,

as Guarantors of AIC's obligation to Each of the Guaranty

"Guaranty Agreements").

Agreements provided that

the Guarantors would pay Textron any {Guaranty Agreements f 1.)

amounts due and outstanding by AIC. The Guaranty Agreements shall be
expenses

further provided that each

"Guarantor

liable for all attorneys'

fees and other costs and

incurred by Textron in connection with Textron's

enforcement of th[e]
On August 27,

Guaranty."

(Guaranty Agreements HU 1,

6.)

2009,

Textron discovered that AIC had sold

twenty-four vehicles financed by Textron but had failed to remit
payment for all but one of
Mot. Summ. J. Ex. 1, Answer

those vehicles.
to Interrog. No.

(PL's Mem.
6.)

Supp.

Accordingly,

on November 2,

2009,

Textron filed its Amended Complaint against alleging breach

AIC and the ten Guarantors of AIC's obligation,
of

contract against all Defendants and action on account and

detinue against AIC.
attorneys

(Dkt.

No.

6.)

Although Textron's

contemplated and researched their ability to bring a

fraudulent Textron's

conveyance claim against AIC, attorneys, however, billed 14.9

they never did. hours for time spent

on the detinue,
claims.

action on account,
Supp. Mot.

and fraudulent conveyance
1).

{PL's Mem.

Att'ys Fees Ex.

During discovery, separate sets of
requests

Textron's attorneys requests

served eleven for admissions, and

interrogatories,

for production of in this case.

documents due (PL's Mem.

to the number of Mot. Att'ys Fees 2.)

Defendants

Supp.

Additionally,

because

the Defendants,

both corporate entities
jurisdictions,
service

and natural persons,
Textron's attorneys

resided in different
spent

time determining how to effect

of process
Mot. Att'ys

in each of
Fees 2-3.)

those

jurisdictions.

(PL's Mem.

Supp.

Although Textron and AIC attempted settlement

on numerous

occasions,

AIC

insisted that

its

Financing Agreement with (PL's Reply Mem. the parties were unable

Textron should and would be Supp. to Mot. Att'ys Fees 2.)

invalidated. Ultimately,

settle and proceeded to summary judgment.

On April

2,

2010,

the parties

filed cross-motions

for

summary judgment.

(Dkt.

Nos.

54

& 58.)

Textron moved for

summary judgment on its breach of contract claims against all
Defendants, jointly and severally, in the amount of $364,777.02.

(PL's Mem.
judgment

Supp.
its

Mot.

Summ.

J.

1.)

AIC moved for summary
terminated and thus

that

contract with Textron was

foreclosed Textron's ability to enforce the provision to collect
attorneys'
Summ. J.

fees and costs.

(Defs.'

Mem.

Supp.

Mot.

Partial

1-2.)

Throughout the litigation,
law would be made,"

Defendants'

attorney argued

"new

rendering Textron's agreements with it and
(PL's Reply Mem. Supp. Mot. Att'ys Fees

others unenforceable.

1

& 2.)

As a result,

Textron's attorneys drafted a summary seventy specific factual
Supp.

judgment motion containing
with references Fees 3.) Upon submitting

assertions
Mot. Att'ys

to AIC's Answer.

(PL's Mem.

its Motion for Summary Judgment,

Textron's

attorneys began preparation for a subsequent
Reply Mem. Supp. Mot. Att'ys Fees 2.)

trial.

(PL's

Textron's attorneys and records, and Supp.

interviewed witnesses,

procured affidavits

focused on an effective trial strategy. Mot. Att'ys Fees
30,

(PL's Reply Mem.

2-3.)
the Court granted Textron's Motion for Summary

On April

Judgment on all

counts the

except as Complaint.

to the action on account and (Dkt. No. 65.) By the same

detinue counts of Order,

the Court denied AIC's Motion for Partial Summary
(Dkt. No. 65.) In granting Textron's Motion, the its

Judgment.

Court acknowledged that Textron is

entitled to an award of

attorneys'

fees and costs pursuant

to its

Financing Agreement
ten Guarantors.

and Guaranty Agreements

with AIC and its

Thereafter,

Textron filed a Stipulation of Dismissal as to (Dkt. No. 66.) By

the action on account and detinue counts.
Order dated May 6, 2010,

the Court accepted Textron's

Stipulation and dismissed the action on account and detinue
counts of Textron's Complaint.
June 7, 2010,

(Dkt.

No.

67.)

By Order dated
for

the Court directed the Clerk to enter judgment

Textron against Defendants prejudgment.
$102,419.68

in the amount of

$3 64,777.02,

plus for

(Dkt.

No.

78.)
fees

Textron now moves the Court
and costs.

in attorneys'

II.

STANDARD

OF REVIEW

Under

the

"American Rule," fees.

parties are

responsible Co.

for v.

their own attorneys' Wilderness Soc'y,

Alyeska 240, 247

Pipeline Serv. (1975). fees v. As

421 U.S.

such,

courts

generally will not award attorneys' statutory authority. U.S. 809, 814-15 Key Tronic

absent

explicit 511

Corp.

United States,

(1994).

However, authority,

even in the absence of

explicit

statutory in
Inc.,

parties may incorporate
See Sun Ref.

fee

shifting provisions
Co. v. FCF Enter.,

their contracts.

& Mktg.

Nos.

Civ.

A.

91-0501,
26, 1995)

Civ.

A.

92-0132,

1995 WL 17017116,

at

*2

(D.R.I.

Jan.

(upholding parties' fees and costs fees

ability to contract

for award of Under Rhode

attorneys' Island law,

to a prevailing party). are properly awarded

attorneys'

where the parties have contractually agreed to such an award.1
Id.

When attorneys' three analytical
the amount is

fees are authorized,

a court must undertake fees
560

steps

in calculating an award of
See Robinson v.

to ensure
F.3d

reasonable.

Eguifax,

235,

243-44

(4th Cir.

2009) .

First,

a court must

"determine a

lodestar figure by multiplying
expended times a reasonable

the number of reasonable hours
Id. at 243 (citing Grissom

rate."

v.

Mills Corp.,

549

F.3d 313,

320

(4th Cir.
of

2008)).

Second,
the court

after

"determining the

[reasonableness

the]

figure,

then should subtract fees

for hours
Id.

spent on unsuccessful claims
at
has

unrelated to successful ones."
omitted). Third, "[o]nee

244

(internal citation
the fees

the court

subtracted

incurred for unsuccessful,
percentage of the

unrelated claims,

it

then awards some

remaining amount,

depending on the degree of

success enjoyed by the plaintiff."

Id.

III.

ANALYSIS

The Costs

Court grants

Textron's

Motion

for Attorneys' representing finds the

Fees

and

in the total amount of

$98,633.68, The

$93,482.50 $97,268.50

in fees and $5,151.18
in fees reasonable as

in costs.
to both the

Court

hours

expended and rate

charged.
analysis,

However,
the Court

pursuant
reduces

to the
the

second step
from

in the

Robinson
to

amount

$97,268.50

1 Rhode Island law governs the Agreement.

(Financing Agreement H 16.)

$93,482.50 because the amount requested includes time spent on
unsuccessful and unrelated claims. The Court need not discuss

the third step of the Robinson analysis in depth because AIC
does not challenge the degree of success obtained by Textron,

and the Court finds no reduction necessary as Textron prevailed
on each of the claims it pursued. Finally, the Court awards

Textron costs
delivery,

in the amount of

$5151.18,
travel,

which includes document
Westlaw usage, and pro

document

reproduction,

hac vice filing fees, the parties'

because

such expenses are authorized by

Financing and Guaranty Agreements.

A.

Lodestar Figure lodestar figure encompasses a reasonable rate charged because many of the

Textron's proposed

number of hours at a reasonable

hours expended were necessitated by Defendants'
throughout the litigation, and because Textron's

actions
attorneys

charged reasonable reduced billing rates. reasonable award of attorneys'
determine a lodestar figure

When calculating a first

fees,

wa court must

by multiplying the

number of

reasonable hours expended times 560 F.3d at 243. A court's
both hours

a reasonable

rate."

Robinson,

discretion in determining the
and rate is guided by twelve

reasonableness of
factors:

(1)

the

time

and
the

labor expended;
questions

(2)

the novelty and
(3) the skill

difficulty of

raised;

required to properly perform the

legal

services

rendered;

(4)

the attorney's opportunity costs instant (7) litigation; time (5) the limitations

in

pressing the

the customary fee imposed by the

for like work; and the

client or circumstances;
results obtained;

(8)
(9)

the amount
the

in controversy
(10) the community

experience, legal

reputation and ability of the attorney; undesirability of
the professional

the case within the

in which the suit arose;
client;
cases.

(11)

the nature and length of
in similar

relationship between attorney and

and

(12)

attorneys'

fees awards

Robinson,
F.2d 216, set

560 F.3d at 243
226 n.28

(citing Barber v.
1978)

Kimbrell's Inc.,
twelve 4 88

577

(4th Cir. Ga.

(adopting the

factors F.2d 714 "submit Where
court may

forth in Johnson v. 1974))).

Highway Express,

Inc.,

(5th Cir. evidence
the

The attorneys'

fees applicant

should

supporting the hours worked and rates
hours is inadequate,

claimed.

documentation of

the district

reduce the award accordingly."
424, the of the 433 (1983).

Hensley v.

Eckhart,

461 U.S.

"In addition to the attorney's own affidavits, * specific evidence community' Comstock
No. 2010)

fees applicant must produce satisfactory the prevailing market rates [it]

in the relevant

for

type of work for which
Yard, L.C. v.

seeks an award."

Potomac

Balfour Beatty Const., at *26 (E.D. Va.

L.L.C., Feb. 23,

1:O8CV894,

2010 WL 678129,

(quoting Plyler v.
Examples of what

Evatt,

902 F.2d 273,

277-78

(4th Cir.

1990)).

constitutes

satisfactory

specific

evidence

"sufficient
of other

to verify the prevailing market rates are affidavits
lawyers who are familiar both with the skills of

local

10

the fee applicants and more generally with the type of work in
the relevant community." F.2d at 278 own rates, ("[A]ffidavits Robinson, 560 F.3d at 245; Plyler, 902

testifying to

[the fee applicants']

experience and skills as well as affidavits of South

Carolina lawyers who were familiar both with the skills of some
of the [fee] applicants and more generally with civil [were] sufficient rights evidence

litigation in South Carolina

....

of

the prevailing market
The Court finds

rates

.

.

.

.").
charged

the hours

expended and rate

reasonable

and properly documented.

Textron submitted two

separate affidavits

from Mr.

John Morris and Ms.

Laura Miller,

two practitioners in the Eastern District of Virginia
experienced with cases involving awards of attorneys' fees,

attesting that both the number of hours

expended and the rates

charged by Textron's attorneys are reasonable. Supp. Mot. Att'ys Fees Exs.
the

(PL's Mem. the affiants

B & C.)
of

Specifically,

attested to

reasonableness Mr. Bay,

the rates

charged by Textron's and paralegals.

senior attorney,

associate

attorneys,

(PL's Mem. Defendants'

Supp.

Mot.

Att'ys Fees Exs.

B

& C.)

As a result of the Financing and

challenge to the enforceability of
Textron's

Guaranty Agreements, amount of work,

attorneys did a substantial a substantial and the Supp.

including

the preparation of

summary judgment brief, preparation of

the

interviewing of witnesses,

affidavits

and exhibits

(PL's Reply Mem.

11

Mot.

Att'ys Fees 2-3),

all of which were reasonable under the

circumstances here.

Therefore,

the Court finds that Textron's

proposed lodestar figure encompasses a reasonable number of
hours at a reasonable rate charged. Defendants argue that the first Johnson factor is not to

satisfied because Textron's expenditure of nearly 400 hours
litigate (Defs.' this Mem. case "far exceeds

the bounds of reasonableness." Att'ys Fees "made
Court

Opp'n to PL's Mot. because
fees,"

1.)

Defendants to

further argue that,
minimize attorneys'

they
this

significant attempts
should

reward Defendants

for

"narrowly focusing their litigation" than Textron seeks.

by ordering a sum (Defs.' Mem. Opp'n to

substantially less

PL's Mot.

Att'ys Fees 4.)

Specifically,

Defendants submit that
same attorney, and

they sought minimal discovery,

all used the

rarely opposed Textron,
fact that

the proof of which can be seen in the
. . . once on a contested

"the parties only appeared

motion."
Further,
the

(Defs.'

Mem.

Opp'n to PL's Mot.
14 8 hours of

Att'ys

Fees

5.)
not

Defendants offer that

time and labor,
a

371.5 hours of

time Textron requests, in this case. (Defs.'

represents Mem.

reasonable amount

Opp'n to PL's

Mot.

Att'ys Fees Ex.
The Court

B,

at U 6.)
Defendants' argument for three reasons.

rejects

First, many of

the Court the

finds

the number of hours

reasonable because

hours expended were necessitated by Defendants'

12

actions throughout the

litigation.

Although Defendants now
the amount
in time

argue that they did not contest ninety-six percent of
sought by Textron for breach of contract, at no point

did Defendants ever admit liability to Textron for breaching
their contractual obligations.
tender an offer of Procedure 68
not

At no point did Defendants
of Civil

judgment under Federal Rule that a portion of

to acknowledge
In fact,

the claims were

contested.

because Defendants

litigated this Textron was the way in Supp.

matter all

the way through summary judgment, at each

responsively required to prepare contemplation of a potential

step of

trial.

(PL's

Reply Mem.

Mot.

Att'ys

Fees

2.)

Notably,

Textron's billing entries are attempts to settle with Fees Ex. 1.)

replete with entries demonstrating its Defendants. However, (PL's Mem. Supp. Mot.

Att'ys

because neither Defendants nor Textron could find a summary judgment stage, more hours were

common ground before the

necessarily and reasonably expended. Second, the number of hours was reasonable because this

case was procedurally burdensome. that each of the eleven Defendants

Textron meticulously ensured received proper service of

process

in their jurisdictions.
sets

Likewise,
of

Textron also produced
requests for

and served eleven separate

interrogatories,

admissions, Defendants.

and requests (PL's Mem.

for production of Supp. Mot. Att'ys

documents Fees 2-3.)

on

13

Additionally,

Defendants

forced Textron to draft a very detailed

summary judgment brief because of their position asserting the
unenforceability of Mot. Att'ys Fees 3.) the Financing Agreement. Thus, (PL's Mem. Supp.

additional hours were reasonably

expended in these pursuits.

Third,

Defendants offer no specific reasons why the Court
their hours chart hours calculation concluding instead of 14 8 hours Textron's. is reasonable as Opp'n do not

should accept

Defendants proffer a opposed to PL's Mem. the 371.5

claimed by Textron. 5-6.) However,

(Defs.'

Supp.

Att'ys

Fees

Defendants

specifically articulate what was unreasonable about Textron's expenditure of hours on various of why 371.5 hours Court is tasks. Without a clear showing for this case, the

truly unreasonable

is unpersuaded by Defendants'

argument as

to the

reasonableness of hours and rate under the Defendants also briefly challenge the the

first Johnson factor. third Johnson factor, legal services

skill required to properly perform the Defendants argue
and

rendered.
form of

that this

case was

"the most basic

litigation"

"could easily have been handled by a

single attorney with relatively little

experience but guided by

a senior attorney."
7.) The Court

(Defs.'

Opp'n PL's Mem.

Supp.

Att'ys

Fees

finds Defendants' to

arguments

irrelevant because its choosing. The

Textron was

entitled

the representation of

14

possibility that Textron might hire an entire legal team was

presumptively contemplated by the parties at the time they
entered into the Financing and Guaranty Agreements. Accordingly, the Court will not conclude the lodestar figure is
to hours or rate under Johnson's third factor

unreasonable as

simply because this case might or could have been tried with
fewer resources than Textron elected to use.
the Court finds that

Thus,

in analyzing
and rate

the Johnson factors,

the hours

claimed by Textron are

reasonable.

B^

Reduction for Unsuccessful and Unrelated Claims
finds the hours expended and rate

Although the Court

charged by Textron's attorneys were
a reduction appropriate because the

reasonable,
claimed

the Court

finds

fee amount

improperly includes

fees and expenses associated with Textron's After then

unsuccessful detinue and fraudulent conveyance claims. "determining the
should subtract

[reasonableness of
fees for hours
ones.'"

the]

figure,

the

'court
claims

spent

on unsuccessful
2010 WL

unrelated to
*26.

successful

Comstock,

678129,

at

Here,

Textron's

requested

fees

improperly conveyance

include issues

time because

spent on the detinue and the former claim was

fraudulent

dismissed and the

latter never brought by

Textron.

Thus,

time

spent on these claims must be excised from

15

the lodestar calculation pursuant to the second step in the Robinson analysis.
Mr. Bay, Ms.

The attorneys'
and Ms.

first

invoice indicates that
spent approximately

Gammell,

Muzzarelli

14.9 hours working on the detinue and fraudulent conveyance

claims.

(PL's Mem.
work

Supp.
total

Mot.

Att'ys Fees Ex.

1).

The fees
the Court

charged for that

$3786.00.

Accordingly,

reduces

the requested fee amount by $3786.00,

resulting in a new

lodestar figure $93,482.50.

C^

Other Costs

and

Expenses

The

Court awards

Textron costs

in the

amount of travel,

$5151.18 Westlaw

for document delivery,

document reproduction,

usage,

and pro hac vice filing

fees,

because

such expenses are

authorized by the parties'

Financing and Guaranty Agreements.

In addition to the provision of Financing Agreement

reasonable attorneys' for "other

fees,

the in

also provides

legal expenses

connection with or arising out of any deficiency suit."

(Financing Agreement H

11.)

Further,
"shall

the Guaranty Agreements
be liable for all

provide that AIC's Guarantors attorneys' fees

and other costs

and expenses

incurred by Textron

in connection with Textron's enforcement of

this Guaranty."

(Guaranty Agreement 1111 1,
"other legal expenses"

6.)

It is clear to the Court that
costs for document delivery,

include

16

document reproduction,
filing fees.

travel,

Westlaw usage,

and pro hac vice

Defendants

argue

that

these

costs

are not properly

includible because this case could have been tried by Textron's
local counsel,
Att'ys Fees

Ms.

Gammell.
The Court

(Defs.'
rejects

Mem.
this

Opp'n to PL's Mot.
argument because

10.)

Textron is entitled to

the representation of

its

choosing.

Thus,

the award of
chose

costs

is not affected by whether Textron's
tasks to local expenses, counsel or instead to those

attorneys

to allocate

other counsel who incurred travel costs were contemplated by the The Court

so long as

parties finds

in their Financing and that the language in these

Guaranty Agreements.

Agreements
the

indicates

that

the parties did not
in any meaningful
amount of $5151.18

intend to

limit
the

definition of
finds costs

"costs"
in the

way.

Therefore,

Court

properly awarded.

IV.

CONCLUSION

The

Court grants

Plaintiff's Motion for Attorneys'
request for fees represents

Fees

and

Costs because Textron's

a reasonable

number of

hours at a reasonable the

rate

charged.

However,

the

Court reduces request

claimed amount by $3786.00 because Textron's time spent on unsuccessful and unrelated

includes

claims.

Additionally,

the Court

finds

that

costs

in the amount

17

of

$5,151.18

are properly awarded pursuant Therefore, it

to the Financing and

Guaranty Agreements.

is hereby

ORDERED

that Plaintiff Fees

Textron Financial and Costs

Corporation's Defendants AIC

Motion for Attorneys'

is GRANTED.

of Manassas,

Inc.,

AIC of Glen Burnie,
Inc.,

Inc.,

D.N.
LLC,

Motors,

Inc.,

American Import Center, LLC, Dornik, LLC, JAB 1

AIC Properties, LLC,

JNC Auto, Adel

Enterprises,

Seyed Halatai,

Tajdar,

and Nomie D.

Bates are,

jointly and severally,

liable to
in

Textron Financial Corporation for attorneys'
the total amount of $98,633.68, representing

fees and costs
$93,482.50

in fees

and $5,151.18

in costs.

The
counsel.

Clerk is directed to forward a copy of

this Order to

Entered this ^V'"day of July,

2010.

/s/ Gerald Bruce Lee United States District Judge
Alexandria, Virginia

18