Branch Banking and Trust Company v. Meridian Holding Company, LLC et al

Filing 89

MEMORANDUM OPINION AND ORDER granting Plaintiff's 86 MOTION for Attorney Fees; directing Defendants to reimburse Plaintiff its reasonable attorney's fees in the amount of $85,035.51. Signed by Judge Robert C. Chambers on 5/26/2020. (cc: counsel of record; any unrepresented parties) (hkl)

Case 3:18-cv-00486 Document 89 Filed 05/26/20 Page 1 of 11 PageID #: 799

IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF WEST VIRGINIA
HUNTINGTON DIVISION

BRANCH BANKING AND
TRUST COMPANY,
Plaintiff,
v.

CIVIL ACTION NO. 3:18-0486

MERIDIAN HOLDING COMPANY, LLC
a West Virginia limited liability company;
GREGORY L. HOWARD, JR.;
ROGER J. HARRIS, JR.; and
MICHAEL C. DRAGOVICH,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending before the Court is Plaintiff Branch Banking and Trust Company’s Motion for
Attorney’s Fees. Mot. for Fees, ECF No. 86. Defendants Meridian Holding Company, LLC,
Gregory L. Howard, Roger J. Harris, and Michael C. Dragovich did not file a response opposing
Plaintiff’s Motion; nevertheless, the issues have been adequately presented to the Court and the
Motion is ripe for review. For the reasons set forth below, The Court GRANTS Plaintiff’s Motion
and ORDERS Defendants to reimburse Plaintiff its reasonable attorney’s fees in the amount of
$85,035.51.
I. BACKGROUND
Although the facts of this case are more fully set out in the Court’s earlier Memorandum
Opinion and Order addressing Plaintiff’s Motion for Summary Judgment, this case—at core—is a
straightforward action for breach of contract. See Branch Banking & Trust Co. v. Meridian
Holding Co., LLC, No. 3:18-0486, 2020 WL 1908490, at *1–3 (S.D.W. Va. Apr. 17, 2020). The

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contract at issue is a Promissory Note (“Note”) executed in 2008, which provided that Meridian
Holding Company, LLC (“Meridian”) would repay an $858,276.62 loan from Plaintiff over the
course of five years. See Pl.’s Ex. A, ECF No. 76-1, at 2–5. Relevant here, the Note also provided
that Meridian would be responsible for “all costs of collection, including but not limited to
reasonable attorneys’ fees incurred by” Plaintiff in the event of default. Id. at 4. The individual
defendants executed Guaranty Agreements with Plaintiff, in which they “absolutely and
unconditionally” guaranteed prompt payment of Meridian’s debt to Plaintiff under the Note. Pl.’s
Ex. B, ECF No. 76-2, at 2–10. The Guaranty Agreements also expressly provided that the
individual defendants would be “responsible for . . . all costs and expenses (including reasonable
attorneys’ fees, if permitted by law) incurred by [Plaintiff] in connection with the enforcement of
the Guaranty” and “in connection with its attempts to collect the indebtedness, obligations, and
liabilities guaranteed” by the Agreements. See, e.g., id. at 3.
Over the following several years, Plaintiff and Defendants executed several modifications
to the Note and Guaranty Agreements. See, e.g., Pl.’s Ex. A, at 6–22. None of the modifications
changed aspects of the original contractual arrangement that were not expressly modified. See,
e.g., id. at 7 (“It is agreed that except for the modification(s) contained herein, the Promissory
Note, and any other Loan Documents or Agreements evidencing, securing, or relating to the
Promissory Note and all singular terms and conditions thereof, shall remain in full force and
effect.”). A final modification provided that the Note would mature on January 5, 2018, id. at 19,
and on February 7, 2018, Plaintiff’s attorneys formally advised Defendants that they had defaulted
on the Note. Pl.’s Ex. O, ECF No. 76-15, at 2.
This litigation commenced on March 23, 2018, with Plaintiff arguing that Defendants had
breached the terms of the Note and Guaranty Agreements. Compl., ECF No. 1, at ¶¶ 13–14.

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Defendants responded with a set of five counterclaims, grounded in theories of breach of contract,
breach of the duty of good faith and fair dealing, common law fraud and misrepresentation, special
duty and negligence, and promissory estoppel. Am. Counterclaim, ECF No. 50, at ¶¶ 1–31. They
also filed a Third-Party Complaint against State Auto Property and Casualty Insurance Company,
Inc., which the Court struck from the docket on November 12, 2019. Branch Banking & Trust Co.
v. Meridian Holding Co., LLC, No. 3:18-0486, 2019 WL 5957204, at *4 (S.D.W. Va. Nov. 12,
2019). On April 17, 2020, the Court granted Plaintiff’s Motion for Summary Judgment on its
breach of contract claim and on all of Defendant’s counterclaims
in the principal sum of $614,341.73, plus accrued interest of $9,594.85 through
March 22, 2018, and late fees and other charges of $8,065.88, for a total of
$632,002.46, together with pre-and post-judgment interest after March 22, 2018 at
a per annum rate equal to Plaintiff’s Prime Rate, as announced from time to time,
plus 5% until paid, and for Plaintiff’s reasonable attorney’s fees and costs incurred
in attempting to collect the indebtedness due under the Note and Guaranty
Agreement.
Branch Banking & Trust Co., 2020 WL 1908490, at *11 (emphasis added). In reliance on this
judgment, Plaintiff filed the instant Motion for Attorney’s Fees on May 1, 2020. Appended to the
motion is Alexander Macia’s Affidavit in support of Plaintiff’s requested fees, as well as a billing
record of counsel’s work on this matter. See Macia Aff., ECF No. 76-1, at 2–5; Billing Record,
ECF No. 76-1, at 7–19. Although Defendants did not file a response, the Court is prepared to
undertake a review of Plaintiff’s Motion.
II. DISCUSSION
“Without . . . express contractual or statutory authorization, courts generally adhere to the
American Rule which requires each party to bear its own litigation costs, including attorney’s
fees.” United Food & Comm. Workers, Local 400 v. Marval Poultry Co., 876 F.2d 346, 350 (4th
Cir. 1989). Pertinent here, “a federal court sitting in diversity and adjudicating state claims applies

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state law in determining whether to allow attorneys’ fees so long as the state law does not run
counter to a valid federal statute or court rule.” Koontz v. Wells Fargo N.A., No. 2:10-cv-00864,
2013 WL 1337260, at *2 (S.D.W. Va. Mar. 29, 2013). In West Virginia, “[a]s a general rule each
litigant bears his or her own attorney’s fees absent a contrary rule of court or express statutory or
contractual authority for reimbursement.” Sally-Mike Properties v. Yokum, 365 S.E.2d 246, 247,
Syl. Pt. 2 (W. Va. 1986); see also Amaker v. Hammond’s Mill Homeowner’s Ass’n, Inc., No. 150203, 2015 WL 6954981, at *9 (W. Va. 2015) (unpublished opinion) (“An award of attorney’s
fees is appropriate where the document governing the parties’ relationship contains a clause
allowing for recovery of attorney’s fees.”). Plaintiff relies on such contractual authority here, and
points to clauses in the Note and Guaranty Agreements that provide for “reasonable attorneys’
fees” in connection with Defendants’ default. See Pl.’s Ex. A, at 4; Pl.’s Ex. B, at 3. The Court
considers this language unambiguous and enforceable, and thus a proper basis for assessing an
award of attorney’s fees against Defendants. See Travelers Cas. And Sur. Co. of Am. v. Pacific
Gas & Elec. Co., 549 U.S. 443, 448 (2007) (reasoning that the American Rule can “be overcome
by an ‘enforceable contract’ allocating attorney’s fees”).
If the contract provided for assessment of all attorney’s fees against Defendants, the
Court’s analysis would likely end here. See, e.g., Textron Fin. Corp. v. New Horizon Home Sales,
Inc., No. 1:10CV39, 2011 WL 901844, at *9–10 (N.D.W. Va. Mar. 15, 2011) (interpreting express
contractual provision awarding “attorneys’ fees and all other expenses by the Secured Party in
enforcing its rights after Debtor’s default” as enforceable as written and directing Plaintiff to file
its bill of costs with the court). Of course, the contractual provisions at issue here provide only that
“reasonable” attorney’s fees may be assessed against Defendants. The Court is thus left to consider
whether Plaintiff’s submitted expenses are, in fact, reasonable.

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The Court’s analysis proceeds in two parts. “First, the Court must calculate the lodestar by
multiplying the ‘hours reasonably expended on the litigation . . . by a reasonable hourly rate.’”
Beattie v. CMH Homes, Inc., No. 3:12–2528, 2015 WL 4163337, at *2 (S.D.W. Va. July 9, 2015)
(quoting Bishop Coal Co. v. Salyers, 380 S.E.2d 238, 248 n.9 (W. Va. 1989)). “This calculation
provides an objective basis on which to make an initial estimate of the value of a lawyer’s
services.” Koontz, 2013 WL 1337260, at *6. Second, the Court will determine whether an upward
or downward adjustment of this objective metric is necessary to ensure the fee is reasonable—that
is, a fee that is “sufficient to entice competent counsel to take the case, but not so excessive as to
provide a windfall to the attorney.” Beattie, 2015 WL 4163337, at *2.
Here, Plaintiff submits that the total fee of $85,035.51 billed by Spillman, Thomas &
Battle, PLLC (“Spillman”) is reasonable “in light of the number of parties involved in this matter,
the defense against the counterclaim[s] brought against [Plaintiff], and otherwise the complexities
presented therein.” Macia Aff., at ¶ 7. Of course, the Court’s analysis does not begin with this block
figure. Instead, an examination of the hourly rates charged by each Spillman employee who played
a role in this litigation is necessary. Plaintiff’s submitted billing statement reveals the following
hourly compensation for its attorneys and paralegals:1
Table 1. Hourly Rates2
Hourly Rate
Debra Lee Allen
(Member)
Corey P. Bonasso
(Associate)

Hours Worked

Total Fee

$292.59

32.9 hours

$9,626.33

$187.13

15.9 hours

$2,975.40

Fee awards “should compensate the work of paralegals, as well as that of attorneys.”
Missouri v. Jenkins by Agyei, 491 U.S. 274, 285 (1989).
2
This table excludes hours billed by Spillman employees whose time was not actually
charged to Plaintiff. Hourly rates are rounded to the nearest cent.
1

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E. Eric Gadd
(Member)
Travis A. Knobbe
(Member)
Alexander Macia
(Member)
James C. Walls
(Associate)
Christina Dye-Hayes
(Paralegal)
Kristen E. Harrison
(Paralegal)
Nicole L. Vike
(Paralegal)
Catherine A. Dennis
(Paralegal)

$245.00

12.3 hours

$3,013.50

$260.00

5.6 hours

$1,456.00

$300.65

106.2 hours

$31,929.68

$118.53

299.6 hours

$35,510.30

$101.65

2 hours

$203.30

$110.00

1.3 hours

$143.00

$110.00

0.5 hours

$55.00

$120.00

1 hour

$120.00

Having considered these hourly rates, the Court applies its own knowledge of this region’s
legal market to find that Plaintiff’s hourly rates are eminently reasonable for use as lodestar figures
as they stand. See Wolfe v. Green, No. 2:08-cv-01023, 2010 WL 3809857, at *4 (S.D.W. Va. Sept.
24, 2010) (“In determining the market rate, the court should consider evidence of what attorneys
earn for performing similar services in similar circumstances, ‘which, of course, may include
evidence of what the plaintiff’s attorney actually charged his client.’” (quoting Depaoli v. Vacation
Sales Assocs., L.L.C., 489 F.3d 615, 622 (4th Cir.2007)). There are understandable differences in
compensation between partners, associates, and paralegals, as well as differences that stem from
various discounts applied to the work of particular lawyers and paralegals. Yet the Court has
previously calculated lodestar hourly rates for local counsel at even higher levels, see Beattie, 2015
WL 4163337, at *3, and sees no basis to arbitrarily lower or raise these rates in this case. “[T]he
essential goal in shifting fees (to either party) is to do rough justice, not to achieve auditing
perfection,” and “trial courts may take into account their overall sense of a suit, and may use
estimates in calculating and allocating an attorney’s time.” Fox v. Vice, 563 U.S. 826, 838 (2011).

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This is particularly true where—as here—Defendants have submitted no evidence or argument
suggesting that these rates are in any way inflated.
Turning to the hours each attorney and paralegal actually devoted to this case, the Court
has undertaken a line-by-line review of Spillman’s billing statement to determine whether any
extraneous items warrant a reduction in the lodestar number of hours worked. Simply put, the
billing statement’s descriptions are detailed, precise, and directly related to exercising its rights
under the Note and Guaranty Agreements.3 Once again, the Court applies its own knowledge of
legal practice in this region (and of legal practice in general) to conclude that the total number of
hours worked by each attorney and paralegal in this case—477.3 in total—is objectively
reasonable and well-suited for use in calculating a lodestar sum. And as the Court adopts Plaintiff’s
recorded hourly rates and number of hours worked, that lodestar figure is $85,035.51.
Having determined an appropriate lodestar, the Court will consider whether any upward or
downward adjustment in Plaintiff’s fees are warranted to render the award reasonable. In doing so,
courts consider
factors such as: (1) the time and labor required; (2) the novelty and difficulty of the
questions; (3) the skill requisite to perform the legal service properly; (4) the
preclusion of other employment by the attorney due to acceptance of the case; (5)
the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations
imposed by the client or the circumstances; (8) the amount involved and the results
obtained; (9) the experience, reputation, and ability of the attorneys; (10) the
undesirability of the case; (11) the nature and length of the professional relationship
with the client; and (12) awards in similar cases.

3

If this were a statutory fee-shifting case, the Court would carefully consider whether
certain billed activities—for example, preparing for the foreclosure sale of the property secured by
the Note—were directly connected to this litigation. Of course, this is not such a case; instead, the
fee-shifting arrangement at issue stems from contractual obligations providing that Defendants are
liable for fees incurred “in connection with [Plaintiff’s] attempts to collect the indebtedness,
obligations, and liabilities guaranteed” by the Guaranty Agreements and Note. See, e.g., Pl.’s Ex.
B, at 3.
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Aetna Cas. & Sur. Co. v. Pitrolo, 342 S.E.2d 156, 157, Syl. Pt. 4 (W. Va. 1986). The Court will
address each factor in turn.
First, a significant amount of time and labor was required to litigate this case. While
Plaintiff’s underlying breach of contract claim was relatively straightforward, Defendants filed a
set of five counterclaims that required Plaintiff to file an Answer along with a Partial Motion to
Dismiss. After completing a round of briefing, Defendants filed two motions to amend their
counterclaims and file a third-party complaint against State Auto. The Court granted both motions,
mooting Plaintiff’s pending Motion to Dismiss. All of this occurred alongside extensive discovery,
travel, and other proceedings surrounding the foreclosure and sale of the property secured by the
Note. The second, third, and fourth Aetna factors turn on similar considerations. While the legal
questions presented by this litigation were not especially novel or difficult, the procedural
complexity certainly necessitated a high degree of skill in litigation and a commitment of time that
would preclude work on other matters.
The fifth factor requires the Court to look to the “customary fee” for particular legal work.
In his affidavit, Mr. Macia separates the hours and rates billed by each billable employee at
Spillman. See id. at ¶ 4. The affidavit demonstrates that each member, associate, and paralegal at
the firm billed either a standard or discounted rate, with some work going entirely unbilled as a
professional courtesy. There is no evidence that Spillman has assessed fees for this litigation
greater than it would asses in other litigation; indeed, the opposite appears to be true. And as noted
above, the Court’s own knowledge of legal practice in this region is sufficient to conclude that
Spillman’s fees fall well within customary bounds. With respect to the sixth factor, Spillman’s bill
is based on hourly compensation for the work of its employees. This is only relevant insofar as it
would preclude any “contingency enhancement,” which in any event is disfavored as a matter of

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law. See Koontz, 2013 WL 1337260, at *12. Turning to the seventh factor, it does not appear that
Plaintiff placed any restrictions on the amount of time Spillman was able to devote to its case. This
factor is similarly of limited usefulness, as the Court has already concluded that each billed hour
was reasonable in exercising Plaintiff’s rights under the Note and Guaranty Agreements.
The eighth factor is “most critical,” and looks to the amount in controversy and the results
obtained. Heldreth v. Rahimian, 637 S.E.2d 359, 370 (W. Va. 2006). Plaintiff brought this action
in order to recover $632,002.46 (in addition to pre- and post-judgment interest), along with
attorney’s fees. See Compl., at 4. This is a significant sum, and one that would warrant significant
litigation expenses. In turn, the result obtained by counsel represented exactly the relief that
Plaintiff requested in its Complaint. Id. Counsel cannot achieve anything more for their client than
they already have—a fact that weighs heavily in the Court’s reasonableness assessment. The ninth
factor is also significant, as this matter involved the work of four partners, two associates, four
paralegals, one summer associate, and at least one litigation support staffer. 4 Combined, this
represents a significant pool of experience, reputation, and ability.
The final three factors are not particularly probative in this case, but are worth discussing
nonetheless. First, there is nothing particularly undesirable or desirable about this matter; it is a
straightforward breach-of-contract action that was complicated by several counterclaims, but that
nevertheless involved hourly billing and a routine schedule. The Court cannot speak to the scope
or duration of Spillman’s relationship with Plaintiff, but the firm has represented Plaintiff since
the initiation of this action without the involvement of other attorneys. Finally, the Court is
unaware of any cases in West Virginia addressing a similar set of procedural facts or even a similar

4

Spillman did not charge Plaintiff for work completed by the summer associate or
litigation support staffer.
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contractual fee-shifting provision. Cf. Koontz, 2013 WL 1337260, at *11 (noting that “many of the
West Virginia cases addressing reasonable attorneys’ fees analysis are in the context of civil
rights”). For this reason, it is difficult to determine whether this fee comports with fees assessed
in like cases. Yet as has already been noted, Plaintiff’s hourly rates are well within the bounds of
reasonable fees in this District. See, e.g., Watkins v. Wells Fargo, No. 3:08–cv–0132, 2010 WL
2486247, at *3 (S.D. W. Va. June 15, 2010).
In sum, each of these factors is either neutral or favorable to Plaintiff in the Court’s
reasonableness analysis. A reduction in counsel’s fee is therefore plainly unwarranted, as nothing
suggests that counsel’s performance was deficient or that the nature of this suit somehow
necessitates a reduction. But the Court also notes that enhancements to a lodestar figure are rarely
appropriate, and are reserved for truly exceptional cases. Perdue v. Kenny A. ex rel. Winn, 559
U.S. 542, 552 (2010) (noting that the United States Supreme Court Court has “never sustained an
enhancement of a lodestar amount for performance”). Counsel’s performance in this case has been
capable, but the Court perceives no basis for enhancing Plaintiff’s attorney’s fees beyond their
lodestar sum. Yet a total fee of $85,035.51 is exactly the sort of “reasonable attorneys’ fee” that
Defendants agreed to pay when they entered into a contractual relationship with Plaintiff, and they
are bound to do so now.
III. CONCLUSION
For the foregoing reasons, the Court GRANTS Defendant’s Motion for Attorney’s Fees,
ECF No. 86, and ORDERS Defendants to reimburse Plaintiff its reasonable attorney’s fees in the
amount of $85,035.51. Nothing contained in this Memorandum Opinion and Order affects the
other relief provided for in the Court’s April 17, 2020 Judgment Order.

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The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and any
unrepresented parties.
ENTER:

May 26, 2020

ROBERT C. CHAMBERS
UNITED STATES DISTRICT JUDGE

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