Western Towboat Company v. Vigor Marine LLC

Filing 153

ORDER granting in part Defendant's 134 Motion for Attorney Fees and denying Plaintiff's 139 Motion for Post-Judgment Discovery. Defendant Vigor is awarded attorney fees and costs in the amount of $959,100.98 for substantially prevailing against Defendant Western. Signed by Judge Ricardo S. Martinez. (SB)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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WESTERN TOWBOAT COMPANY,

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Plaintiff,

ORDER GRANTING IN PART
DEFEDANT’S MOTION FOR
ATTORNEY FEES AND COSTS
AND DENYING PLAINTIFF’S
MOTION FOR POST-JUDGMENT
DISCOVERY

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Case No. C20-416-RSM

v.
VIGOR MARINE, LLC,
Defendant.

I. INTRODUCTION
This matter comes before the court on Defendant Vigor Marine, LLC (“Vigor”)’s Motion
for Attorney Fees and Costs, Dkt. #134. Plaintiff Western Towboat Company (“Western”)
opposes the Motion. Dkt. #136. If the Court grants Vigor’s attorney fees request, however,
Western has filed and asks the Court to consider its “Motion to Permit Post-Judgment
Discovery,” Dkt. #139. For the reasons stated below, the Court GRANTS IN PART Vigor’s
Motion and DENIES Western’s Motion.
II. BACKGROUND
This case arose out of the sinking of the YFD-70 Drydock (“drydock”), approximately
.92 nautical miles inside the Monterey Bay Marine Sanctuary on October 26, 2016. Dkt. #42-19

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ORDER RE: ATTORNEY FEES AND DISCOVERY - 1

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at 12; Dkt. #42-23 at 3. Vigor owns and operates shipyards that utilize drydocks; Western owns
and operates tugboats, including the OCEAN RANGER. Dkt. #75 at 3. On April 14 ,206, Vigor
sold a decommissioned drydock to Amaya Curiel Corporation (“Amaya Curiel”). Dkt. #113 at
2.
On October 4, 2016, Western and Vigor entered into an agreement (“the Tow
Agreement”) providing that Western tow the Drydock from Seattle to Amaya Curiel’s shipyard
in Ensenada, Mexico. Id. The Tow Agreement stated that Vigor would pay a lump sum hire of
$142,800 in additional to fuel charges. Id. The Tow Agreement also required Vigor to “use due
diligence to tender the [drydock] in a seaworthy condition.” Id.
On October 7, 2016, the tow commenced from Seattle with Western’s tug OCEAN
RANGER towing the drydock. Id. at 3. By early morning of October 26, 2016, the drydock was
about .92 mils inside the border of the Monterey Bay Marine Sanctuary, at which point the
OCEAN RANGER released the drydock, and the drydock sank. Id.
In a letter dated January 19, 2021, the U.S. National Oceanic and Atmospheric
Administration (“NOAA”) advised Vigor, Western, and Amaya Curiel of their potential liability
under the National Marine Sanctuaries Act (“NMSA”) for damages arising from the drydock’s

17 sinking in the Marine Sanctuary and invited them to “work cooperatively” with NOAA to
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complete an injury assessment, develop restoration actions, and assist with restoring injured
sanctuary resources. Id. In response to NOAA’s investigation, Vigor chartered a research vessel
and a Remote Operated Vehicle to survey the ocean floor to confirm the drydock’s location. Id.
Western filed this action against Vigor on March 16, 2020, alleging breach of maritime
contract to recover the $187,462.01 Vigor owed Western for its tug services under the Tow
Agreement. Dkt. #1. Western also sought a declaratory judgment that Western was not
responsible for the sinking of the drydock in the Marine Sanctuary, thereby exculpating it from
ORDER RE: ATTORNEY FEES AND DISCOVERY - 2

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liability to the United States in any forthcoming enforcement action under the NMSA. Id. at ¶¶
24-26. Vigor counterclaimed for breach of maritime contract based on Western’s alleged failure
to render reasonable assistance in the event the drydock became “disabled . . . or otherwise unable
to continue the voyage,” causing Vigor to incur costs to cooperate with NOAA and creating
potential liability to the United States under the NMSA. Dkt. #15 at ¶¶ 26-38. Vigor also
counterclaimed for general maritime negligence based on Western’s failure to exercise
reasonable care in towing the sinking drydock into the Marine Sanctuary and for unjust
enrichment on the costs Vigor expended to cooperate with NOAA. Id. at ¶¶ 33-35, 40-45.
On June 21, 2021, this Court concluded as a matter of law that Western failed to exercise
prudent seamanship by releasing the drydock inside the Marine Sanctuary.

Dkt. #77.

Accordingly, the Court granted summary judgment on Western’s counterclaim for maritime
negligence. Id. at 38. The Court likewise concluded that, to the extent the parties sought
preemptive relief from liability to the United States under the NMSA, such claims were properly
dismissed for lack of subject matter jurisdiction. Id. Furthermore, in its Order on the parties’
post-trial briefing, the Court concluded that Vigor could not collect from Western those costs
already reimbursed by Vigor’s insurers. Dkt. #108 at 10.

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Between June 28 and July 7, 2021, the Court conducted a bench trial on the parties’

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crossclaims for breach of contract under the Tow Agreement and the question of Vigor’s

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comparative negligence with respect to the drydock’s sinking. Dkts. #91-94, #96. On October
27, 2021, the parties presented their oral arguments. Dkt. #109. On December 16, 2021, the
Court issued its Bench Order, Findings of Fact, and Conclusions of Law pursuant to Fed. R. Civ.
P. 52(a). Dkt. #113. On Western’s breach of contract claim, the Court found that Western could
not recover the lump sum hire owed under the Tow Agreement due to its negligence contributing
to the drydock’s sinking. Id. at 30-33. On Vigor’s breach of contract counterclaim, the Court
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found that Western did not breach the Tow Agreement for failure to render reasonable assistance
to the Tow when it developed a list. Id. at 33-34. Finally, on Vigor’s negligence counterclaim,
the Court limited Vigor’s recovery by 60% to account for its contribution of fault, thus awarding
Vigor $40,000 in damages of the $100,000 Vigor sustained because of the drydock’s sinking in
the Marine Sanctuary. Id. at 34-35.
On January 13, 2022, Vigor filed a Motion for Attorney Fees. Dkt. #117. On January
21, 2022, Western filed its own Motion for Attorney Fees. Dkt. #120. On May 12, 2023, this
Court granted Vigor’s Motion for Attorney Fees and denied Western’s Motion, concluding that
Vigor was the substantially prevailing party and entitled to recover its reasonable attorney fees
under the Tow Agreement. Dkt. #133.
On June 1, 2023, Vigor again filed a Motion for Attorney Fees and Costs, requesting
$1,461,393.90 in attorney fees and $111,063.13 in costs. Dkt. #134. In its Response, Western
argues that the Court should deny Vigor’s Motion. Dkt. 136. However, if the Court grants Vigor’s
Motion, Western has also filed a “Motion to Permit Post-Judgment Discovery” to clarify Vigor’s
submissions, or, if the Court denies discovery, requests an evidentiary hearing instead. Id. at 1415; Dkt. #139.

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III. DISCUSSION
Washington law generally provides for an award of attorney’s fees when authorized by

18 contract, statute, or a recognized ground of equity. Labriola v. Pollard Grp., Inc., 152 Wn.2d
19 828, 839 (2004). Whether a specific statute, contractual provision, or recognized ground in
20 equity authorizes an award of fees is a question of law. Tradewell Grp., Inc. v. Mavis, 71 Wn.
21 App. 120, 126 (1993).
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Vigor argues that the requested fees and costs are reasonable due to the complexity of the

23 case, especially with the potential NOAA liability that was not dismissed until just before trial.
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Dkt. #134 at 3. Furthermore, Vigor states that it already “excluded over $190,000.00 in
time/legal fees that were spent/incurred cooperating with NOAA or preparing for and negotiating
resolution of Vigor’s potential liability to the Federal Government arising out of the drydock’s
sinking.” Id.
Western argues that there are no fees to award because Vigor’s underwriters already paid
these fees, and this Court should determine that Vigor cannot recover fees paid by insurance just
as the Court ruled concerning damages and costs. Dkt. #136 at 1-2. Western further argues that
these fees are “wildly disproportionate to the scope of litigation” because Vigor “overstaffed”
what was “only a $187,000 contract claim and a Vigor counterclaim[.]” Id. at 7-8. Western also
argues that Vigor failed to segregate its claims, charged unreasonable costs, and is wrongfully
attempting to collect fees that its attorneys wrote-off. Id. at 10-14. The Court addresses
Western’s arguments in turn below.
A. Fees Paid by Insurance
Western first argues that there are no fees to award Vigor because “Vigor’s underwriters
have paid everything above $100,000.” Id. at 1-2. Concerning damages, this Court determined
that Vigor’s insurance had paid for damages over Vigor’s $100,000 deductible, and because the

17 insurance procured was agreed upon by both parties, thus mutually beneficial, Vigor was only
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entitled to its deductible less its 60% negligence contribution. Dkt. #115. Western argues that
Vigor’s attorney fees and costs were already accounted for in these damages. Dkt. #136 at 1-2.
Vigor contends that the Tow Agreement’s clause limiting recoverable damages to the insurance
deductible did not limit a separate clause allowing for the prevailing party to recover attorney
fees and costs. Dkt. #134 at 4.
Many courts have held that where insurance policies did not define “damages” or “losses”
or were otherwise ambiguous, a reasonable person would consider damages an insured is required
ORDER RE: ATTORNEY FEES AND DISCOVERY - 5

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to pay in a civil action to include attorney fees, thus an insurer would have to cover the fees. See
City of Ypsilanti v. Appalachian Ins. Co., 547 F. Supp. 823 (E.D. Mich. 1982); St. Paul Fire and
Marine Ins. Co. v. Hebert Const., Inc., 450 F. Supp. 2d 1214, 1234-35 (W.D. Wash. 2006);
Sokolowski ex rel. M.M.&P. Pension Plan v. Aetna Life & Cas. Co., 670 F. Supp. 1199, 1210
(S.D.N.Y. 1987). However, these cases addressed ambiguities in insurance contracts, which
courts view in favor of the insured, and insurance companies can contractually limit coverage if
they so choose, including from covering attorney fees. See Sullivan County, Tenn. V. Home
Indem. Co., 925 F.2d 152, 153 (6th Cir. 1991) (holding that an attorneys’ fees award is not a sum
insured is legally obligated to pay as damages because of the insurance policy’s specific
limitations); see also Board of Cty. Com’rs, etc. v. Guarantee Ins. Co., 90 F.R.D. 405, 407 (D.
Colo. 1981) (holding that where the policy defined damages, it was not unambiguous that the
policy did not cover other claims).
Clause 8 of the Tow Agreement provided that Western and Vigor mutually contracted
and considered insurance, which the parties would look to for covering damages. Dkt. #40-1 at
4. This is why the Court found that payments by Vigor’s insurers did not comprise benefits from
a wholly independent source solely arranged for by Vigor, thus concluding that the collateral

17 source rule applied to Vigor’s damages. Dkt. #108 at 10. Vigor and Western were required to
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procure insurance per the Tow Agreement, which paid for the wreckage site survey or directly
reimbursed Vigor. Id. at 8. However, the Tow Agreement provided in a completely different
clause, Clause 15, that “the substantially prevailing party [would be] entitled to recover its
reasonable legal fees and costs.” Dkt. #40-1 at 7. Looking within the four corners of the Tow
Agreement, Clause 15 is several pages down from Clause 8 and in no way appears to be limited
by Clause 8. Dkt. #40-1. Thus, it is no major leap in logic to conclude that Western and Vigor
contemplated that, though a party’s damages would be limited by insurance, deductibles, and
ORDER RE: ATTORNEY FEES AND DISCOVERY - 6

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degree of fault (all provided for in Clause 8), the prevailing party would be entitled to recover
attorney fees without a supposed windfall. See gen. Abendroth v. Benjamin Ryan Cmtys. LLC,
2022 Wl 277713 at *7 (Jan. 31, 2022). Just as insurance companies can limit coverage to not
include attorney’s fees, Western could have included attorney’s fees and costs under Clause 8
and limited recovery to what insurance did not pay. Western’s own-provided Tow Agreement
clearly contemplates both parties being required to procure insurance, limiting damage recovery,
and clearly and separately provides that the prevailing party at court may obtain attorney fees
and costs. Accordingly, the Court concludes that Clause 15 of the Tow Agreement allows for
Vigor’s attorney fees and costs recovery and is not subject to the same limitation as damages
provided by Clause 8.
Western further argues that Vigor should not be awarded attorney fees due to insurance
paying the fees because the Tow Agreement provided that “the substantially prevailing party
[would be] entitled to recover its reasonable legal fees and costs.” Dkt. #40-1 at 7 (emphasis
added). Western argues that “its” refers to Vigor recovering fees, not underwriters, and Vigor
was already provided these fees by insurance. Dkts. #136 at 4-7, 13, #152. Western also argues
that Vigor attempts to recover attorney fees that were “write-offs” from Schwabe and are not

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This Court is unconvinced by any of these arguments. The parties’ Tow Agreement
provided that the prevailing party (here, Vigor) could recover reasonable attorney fees and costs
with no limitations as to what was paid by underwriters. Dkt. #40-1 at 7. “Furthermore,
concerning whether [Vigor] incurred the expenses itself is irrelevant to our resolution of this
issue, as evidenced by cases which recognize that attorney fees may be awarded to a party who
received the assistance of pro bono counsel.” Frank Coluccio Constr. Co., Inc. v. King County,
136 Wn. App. 751, 780 (2007) (citing Blair v. Wash. State Univ., 108 Wn.2d 558, 570-71
ORDER RE: ATTORNEY FEES AND DISCOVERY - 7

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(1987)). Concerning “write-offs,” when asked by this Court during oral argument on March 22,
2024, if Vigor was claiming the fees listed in document A2 of $196,937.00 for 308.50 hours of
work, Vigor’s attorney said no. Dkt. #152. However, Vigor’s requested attorney fees of
$1,461,393.90 includes these fees. See Dkts. #134, #140. Therefore, these “write-off” fees are
not part of this discussion, and the Court accordingly deducts these fees from the total award.
B. Reasonableness of Fees

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District courts have broad discretion to determine the reasonableness of fees. Gates v.

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Deukmejian, 987 F.2d 1392, 1398 (9th Cir. 1992). To make this determination, courts determine
the “lodestar amount,” which is calculated by multiplying the number of hours reasonably
expended by a reasonable hourly rate. Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th
Cir. 2008). The lodestar figure is presumptively a reasonable fee award. Id. at 977. The court
may adjust the lodestar figure up or down based upon the factors listed in Kerr v. Screen Extras
Guild, Inc., 526 F.2d 67, 70 (9th Cir.1975). The court need not consider the Kerr factors,
however, unless necessary to support the reasonableness of the fee award. Cairns v. Franklin

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16 reasonable hourly rate ‘is not made by reference to the rates actually charged the prevailing
17 party.’” Welch v. Metro. Life Ins. Co., 480 F.3d 942, 946 (9th Cir. 2007) (quoting Mendenhall
18 v. Nat’l Transp. Safety Bd., 213 F.3d 464, 471 (9th Cir. 2000)). “Rather, billing rates should be
19 established by reference to the fees that private attorneys of an ability and reputation comparable
20 to that of prevailing counsel charge their paying clients for legal work of similar complexity.”
21 Id. (internal quotation omitted). “Affidavits of the plaintiffs’ attorney and other attorneys
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Additionally, numerous courts have subsequently held that the bulk of these factors are subsumed in the lodestar

24 calculation. See, e.g., Blum v. Stenson, 465 U.S. 886, 898-900, 104 S. Ct. 1541, 79 L. Ed. 2d 891 (1984).
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those setting a rate for the plaintiffs’ attorney, are satisfactory evidence of the prevailing market
rate.” United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990).
“The party seeking fees bears the burden of documenting the hours expended in the litigation and
must submit evidence supporting those hours…” Welch, 480 F.3d at 945-46 (citing Hensley v.
Eckerhart, 461 U.S. 424, 433 (1983)). It is reasonable for a district court to conclude that the
party seeking attorney’s fees fails to carry its burden of documenting the hours expended when
that party engages in “block billing” because block billing makes it more difficult to determine
how much time was spent on particular activities. Welch, 480 F.3d at 948. The district court
“should exclude any hours ‘that are excessive, redundant, or otherwise unnecessary.’” McCown
v. City of Fontana, 565 F.3d 1097, 1102 (9th Cir. 2009) (quoting Hensley, 461 U.S. at 434).
The Court finds that the hourly rates for Vigor’s attorneys are reasonable based on the
experience, skill, and education of each attorney and paralegal. See Dkts. #135, #141, #142.
Western does not oppose the hourly rates. See gen. Dkt. #136. Western contends that Vigor’s
claimed fees are “wildly disproportionate” because this case was “only a $187,000 contract
claim” that Vigor “overwork[ed] and overstaff[ed]” with 7 individuals, including 5 Schwabe
shareholders, as opposed to Western’s 2 attorneys. Id. at 7-8.

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However, as mentioned before, the Court did not dismiss the issue of potential liability

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under NMSA until less than a week from trial. See Dkt. #77. Until then, this “specter of

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astronomical damages . . . [because of] future liability to the United States under the NMSA”
was a live issue. Dkt. #77 at 11-12. Given the complexity of the issues right up until trial, the
Court concludes that Vigor’s reported hours and fees are reasonable.
The Court also disagrees with Western’s argument that Vigor cannot collect fees from
before March 16, 2020, when Western filed its Complaint against Vigor. See Dkt. #136 at 10.
Western attempts to use Clause 15 to enforce this limit, stating that “[t]he parties submit . . . with
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respect to any litigation arising out of this agreement, with the substantially prevailing party
entitled to recover its reasonable legal fees and cost.” Dkt. #40-1 at 7. Western takes this “with
respect to” provision out of context. Id. Clause 15 actually states that the parties submit to the
jurisdiction of courts in Seattle, Washington “with respect to any litigation arising out of this
agreement[.]” Id. The “with respect to” limitation refers to court jurisdiction, not the collection
of fees. Id. Vigor claims attorney fees from February 13, 2017, “after Western demanded that
Vigor defend and indemnify it for any and all proceedings related to the sinking of the Drydock—
the same claims that Western filed in this Court.” Dkt. #140 at 6. The Court agrees with Vigor
that these fees were incurred in connection to the litigation in this Court and are recoverable
under the Tow Agreement.
The Court also agrees with Vigor that a $204.77 charge to the Washington Athletic Club
while the case was on appeal, a $121 dinner charge during trial, and $5,050 in fees for preparing
the notice of appeal documents should be removed, as conceded by Vigor during oral argument.
Dkts. #135, #152.
Western also argues that Vigor has failed to segregate fees related to NOAA liability after
this Court removed that issue and appellate-related fees. Dkt. #136 at 13. Vigor claims that it

17 has already segregated and removed over $190,000 in fees. Dkts. #134 at 3-4. Upon independent
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review, the Court finds evidence of unclear NOAA-related billings after the Court’s judgment
separating this issue on June 21, 2021, and appellate related work other than those already
conceded, as well as some evidence of block billing and redundant work. See gen. Dkt. #135.
Accordingly, the Court will impose a 10% reduction on Vigor’s award. See Moreno v. City of
Sacramento, 534 F.3d 1106, 1112-13 (9th Cir. 2008) (holding that a 10% haircut without specific
explanation is not error).

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The Court also finds that Vigor’s litigation-related expert fees of $24,000.000 to Heger
Drydock and $28,001.50 to K&L Gates are reasonable and awardable under the Tow Agreement.
See Dkt. #135-4. Though Clause 8 contemplated limiting any losses or damages not covered by
insurance by degree of fault, the Court has already concluded that the limitations of Clause 8 do
not apply to the later and separate provision allowing for attorney fees and costs concerning
litigation under Clause 15. Therefore, the Court concludes that these fees are properly awarded
to Vigor.
Finally, the Court finds that a further 20% reduction is appropriate due to the
disproportionality between the fee request and damages awarded at trial. In Washington, a fee
award may be reduced where it is disproportionate to the trial results. See e.g., Singleton v. Frost,
108 Wn.2d 723, 731 (1987). Here, Vigor’s net award at trial was its $100,000 insurance
deductible less $60,000 for Vigor’s comparative fault of 60%, thus a $40,000 award. See Dkts.
#113, #115. The Court finds that Vigor’s attorney fees and costs are disproportionate to the
results obtained, especially considering Vigor’s attributable negligence. Therefore, the Court
finds a 20% discount factor is appropriate in order to balance the fees with the results obtained
in this case.
In sum, the Court concludes that Vigor’s requested attorney fees and costs of
$1,572,457.03 shall be reduced by the following:
1) The conceded fees from document A2 of $196,937.00, the $204.77 charge to the
Washington Athletic Club, the $121 dinner charge, and $5,050 in fees for preparing
the notice of appeal documents (leaving a total of $1,370,144.26 in requested fees);
2) A 10% reduction due to lack of clarity, block billing, and unproperly requested fees
($137,014.43 from the total requested amount);

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3) A 20% reduction for disproportionality ($274,028.85 from the total requested
amount).
This amounts to a $959,100.98 award to Vigor for attorney fees and costs.
C. Western’s Motion for Post-Judgment Discovery
Western filed a Motion for Post-Judgment Discovery to allow for limited, additional
discovery for sixty days related to Vigor’s attorney fees. Dkt. #139. In its Motion, Western
includes a list of seven questions pertaining to what documents and information it seeks in postjudgment discovery to answer said questions. Id. at 5. Western’s questions involve if insurance
paid Vigor’s fees, why Vigor paid for fees to K&L Gates and Heger Drydock, and if the awarded
deductible at trial included attorney fees. Id. The Court concludes that, given its foregoing
reasoning for reducing and awarding Vigor’s request, it considered and accounted for these
questions in awarding Vigor’s fees, thus there is no need for further discovery. Therefore, the
Court denies Western’s Motion.
IV.

CONCLUSION

For the foregoing reasons, Defendant Vigor’s Motion for Attorney Fees and Costs, Dkt.
#134, is GRANTED IN PART. Defendant Vigor is awarded attorney fees and costs in the

17 amount of $959,100.98 for substantially prevailing against Defendant Western. Plaintiff
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Western’s Motion for Post-Judgment Discovery, Dkt. #139, is DENIED.

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DATED this 5th day of April, 2024.

A

RICARDO S. MARTINEZ
UNITED STATES DISTRICT JUDGE

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