Federico et al v. Lincoln Military Housing, LLC et al

Filing 1017

MEMORANDUM OPINION & ORDER granting in part and denying in part 988 Motion for Attorney Fees. Defendant's Motion for Attorneys' Fees is DENIED. Plaintiffs' request for attorneys' fees is GRANTED. Defendant is ORDERED to pay Plaintiffs $4,500 in attorneys' fees within THIRTY (30)DAYS of the date of this Order. Signed by District Judge Raymond A. Jackson and filed on 8/31/16. (tbro)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Norfolk Division

SHELLEY FEDERICO, et al.,
Plaintiffs,
CIVIL ACTION NO. 2:12cv80

V.

MID-ATLANTIC MILITARY FAMILY

COMMUNITIES, LLC, et al.,
Defendants.
Member Cases:

2:12cv596
2:14cvl78

MEMORANDUM OPINION & ORDER

Before the Court is LPC Property Management, Inc.'s ("Defendant") Motion for
Attorneys' Fees. ECFNo. 988. Defendant requests attorneys' fees and expenses as a result of
the jury returning a verdict in favor of Defendants on the breach of contract claim. Also before

the Court is Plaintiffs' request for attorneys' fees in responding to Defendant's motion. These

matters have been fully briefed and are ripe for disposition. A hearing will not aid judicial
determination. For the reasons set forth herein, Defendant's Motion for Attorneys' Fees is
DENIED and Plaintiffs' request for attorneys' fees is GRANTED.
I. PROCEDURAL HISTORY

On January 11, 2012, Plaintiffs filed a complaint against Defendants in the Circuit Court
for the City of Norfolk. On February 10, 2012, Defendants removed the action to this Court. A

civil jury trial for this matter began on March 29, 2016. On April 14, 2016, after a twelve day
trial, the jury returned a verdict in favor of the Defendants on the breach of contract claim and

1

against Defendant Mid-Atlantic Military Family Communities, LLC on the negligence per se
claim. The jury awarded Plaintiff Joe Federico $200,000 and Plaintiff Shelley Federico
$150,000 dollars for the negligence per se claim. Judgment was entered on April 19, 2016. ECF
No. 983.

Defendant timely filed the instant motion on May 3, 2016. ECF No. 988. Plaintiffs filed

their Response in Opposition on May 18, 2016. ECF No. 997. Defendant filed its Reply on May
26, 2016. ECF No. 1002. Defendant requests $897,062.75 in fees for successfully defending a
breach ofcontract claim brought by the Plaintiffs. Defendant claims it is entitled to attorneys'

fees pursuant to the Virginia Residential Landlord and Tenant Act ("VRLTA") and because ofa
provision in the lease providing: "Ifany legal action or proceeding is brought by either party to
enforce any part ofthis Lease, the prevailing party will recover, in addition to all other relief,
reasonable attorneys' fees and costs." Def.'s Mem. in Supp. ofMot. for Att'y Fees 3, ECF No.
989. Plaintiff counters that the VRLTA does not authorize lease provisions requiring tenants to

pay attorneys' fees, and nonetheless. Defendant was a managing agent and not a party to the
lease. Plaintiffs request $4,500 in attorneys' fees at a rate of $450 perhour incurred in opposing
Defendant's fee request.
II. LEGAL STANDARD

TheVRLTA applies to all rental agreements entered into in Virginia on or after July 1,

1974. Va. Code § 55-248.3:1. Pursuant to the VRLTA, a tenant or landlord that successfully
challenges compliance with a lease may recover reasonable attorneys' fees. See Va. Code § 55248.21 (noting that if the landlord breaches the lease or fails to comply with the VRLTA, "[t]he
tenant shall be entitled to recover reasonable attorneys' fees unless the landlord proves by a

preponderance of the evidence thatthe landlord's actions were reasonable under the

circumstances"); Va. Code § 55-248.31 (noting that a landlord may recover reasonable attorneys'
fees "in the event of a breach of the rental agreement or noncompliance by the tenant").

However, the VRLTA prohibits a lease term in which a tenant agrees to pay a landlord's

attorneys' fees. Va. Code § 55-248.9 ("A. A rental agreement shall not contain provisions that
the tenant: ... 4. Agrees to paythe landlord's attorney's fees except as provided in this chapter.").
The VRLTA also provides, "B. A provision prohibited by subsection A included in a rental

agreement is unenforceable. If a landlord brings an action to enforce any of the prohibited
provisions, the tenant may recoveractual damages sustained by him and reasonable attorney's
fees." Va. Code § 55-248.9.
III. DISCUSSION

Defendant cites West Square, LLC. v. Communication Techs., Inc., 274 Va. 425,433

(2007) for the principle that when there is a contractual provision providing for attorneys' fees, a
prevailing party is generally entitled to recover attorneys' fees. Notably, that case involved a
commercial real estate lease where a landlord sought attorneys' fees after prevailing on a breach
of lease claim brought against a tenant. In contrast, this matter involves a residential lease and

the Defendant seeks attorneys' fees for prevailing on a breach of lease claim brought by the
tenants. Defendant does not cite any case where a landlord was awarded attorneys' fees for
defending a claim brought by a tenant.

Defendant also cites Va. Code § 55-248.21 and § 55-248.31 of the VRLTA as providing
for the recovery of attorneys' fees for a tenant or landlord that succeeds on a claim under the
lease. These sections provide for attorneys' fees when a tenant or landlord successfully

challenges the other party's compliance with the lease, not for a party successfully defending a

claim brought against it. Further, as noted above, the VRLTA expressly prohibits lease terms

requiring tenants to pay a landlord's attorneys' fees, except for when a landlord successfully

challenges a tenant's compliance with a lease, and designates such a term unenforceable.

Accordingly, the provision in the lease requiring Plaintiffs to pay attorneys' fees is unenforceable
as it is contrary to the VRLTA.

Defendant LPC Property Management, Inc. is a managing agent for the landlord
Defendant Mid-Atlantic Military Family Communities, LLC. The Court held that Defendant
LPC Property Management, Inc. was a proper party under the breach of lease claim based on Va.

Code § 8.01-226.12 and the VRLTA. Trial Tr. 1987-1994, ECF No. 964; Trial Tr. 2030:8-14,

ECF No. 972. The VRLTA is incorporated in the lease agreement and cross references Va. Code

§ 8.01-226.12 with respect to the duty of a landlord and managing agent for visible mold. Va.

Code § 55-248.11:2. Irrespective of Defendant's status as a party to the lease. Defendant may

not obtain relief as an agent for the landlord which the landlord is prohibited from obtaining by
the VRLTA's prohibition of a lease term requiring a tenant to pay the landlord's attorneys' fees.
The Court will not award Defendant its excessive request for attorneys' fees pursuant to a clause
in the lease that is clearly contrary to the VRLTA. Accordingly, Defendant's Motion for
Attorneys' Fees is DENIED.

On the otherhand, the Courtapproves Plaintiffs' fee request. Here it is clearthe

landlord, through its agent, has attempted to obtain attorneys' fees in violation of the VRLTA.

The VRLTA provides that a tenant may recover damages and reasonable attorneys' fees ifa
landlord brings an action to enforce a prohibited provision in a lease. Va. Code § 55-248.9. The
Court finds Plaintiffs' request for $4,500 in attorneys' fees for litigating this matter fair and
reasonable. Therefore, Plaintiffs' request for attorneys' fees is GRANTED.

IV. CONCLUSION

For the reasons stated herein, Defendant's Motion for Attorneys' Fees is DENIED.

Plaintiffs' request for attorneys' fees is GRANTED. Defendant is ORDERED to pay Plaintiffs
$4,500 in attorneys' fees within THIRTY (30) DAYS of the date of this Order. The Court

DIRECTS the Clerk to send a copy of this Orderto counsel and partiesof record.
IT IS SO ORDERED.

Norfolk, Virginia
August ?/, 2016
/

Raymond A.l^kson
United States District Judge