Novoselsky v. Zvunca et al

Filing 51

ORDER signed by Judge J.P. Stadtmueller on 2/16/2018. In accordance with 42 the Court's 12/29/2017 Order, Defendants Jeanine L. Stevens and F. John Cushing, III are AWARDED reasonable attorney's fees in the amount of $12,000.00 agai nst Plaintiff David Alan Novoselsky. Movants Marshall Spiegel, John S. Xydakis, and Neil R. Meccia's 46 Motion to Consolidate is DENIED and 47 Motion for a Litigation Bar is DENIED as moot. See Order for further details. (cc: all counsel) (jm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
DAVID ALAN NOVOSELSKY,
Plaintiff,
v.
CRISTINA ZVUNCA, as Supervised
Administrator of the Estate of Claudia
Zvunca, JEANINE L. STEVENS, and F.
JOHN CUSHING, III,

Case No. 17-CV-427-JPS

ORDER

Defendants,
and
MARSHALL SPIEGEL, JOHN S.
XYDAKIS, and NEIL R. MECCIA,
Movants.
On July 17, 2017, the Court issued an order dismissing this action for
lack of subject-matter jurisdiction. Novoselsky v. Zvunca, Case No. 17-CV427-JPS, 2017 WL 3025870, at *1 (E.D. Wis. July 17, 2017). Defendants
Jeanine L. Stevens and F. John Cushing, III (collectively, “Defendants”) then
filed a motion for sanctions against Plaintiff David Alan Novoselsky
(“Novoselsky”). (Docket #35). The Court granted that motion in an order
dated December 29, 2017, finding that Novoselsky’s filings in this case were
frivolous and deserving of sanctions pursuant to Federal Rule of Civil
Procedure 11. (Docket #42).
The Court awarded Defendants their reasonable attorney’s fees and
expenses incurred in this case—excluding any fees or expenses incurred in
connection with the sanctions request itself—and directed the parties to
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submit supplemental briefing on the appropriate amount of the award. Id.
at 20–22. That briefing has been submitted, and the Court now arrives at the
final fee award for Defendants.
1.

DEFENDANTS’ FEE PETITION
As the Court noted in its prior order, a district court enjoys broad

discretion in arriving at a sanctions award that it believes will deter future
violations of Rule 11 by the violator and others like him. See Divane v. Krull
Elec. Co., 319 F.3d 307, 314 (7th Cir. 2003); Fries v. Helsper, 146 F.3d 452, 459
(7th Cir. 1998); Brandt v. Schal Assoc., Inc., 960 F.2d 640, 645 (7th Cir. 1992).
When attorney’s fees are awarded under Rule 11, the Seventh Circuit
applies the teachings of Hensley v. Eckerhart, 461 U.S. 424 (1983), to this
determination, Divane, 319 F.3d at 317. “Under Hensley, the starting point in
a district court’s evaluation of a fee petition is a lodestar analysis; that is, a
computation of the reasonable hours expended multiplied by a reasonable
hourly rate.” Id. (citing Hensley, 461 U.S. at 434). While the lodestar figure
can be adjusted where the circumstances warrant it, “[t]here is a strong
presumption that the lodestar calculation yields a reasonable attorneys’ fee
award.” Pickett v. Sheridan Health Ctr., 664 F.3d 632, 639 (7th Cir. 2011).1

It is also important that the award address only those fees which result
directly from sanctionable conduct. Divane, 319 F.3d at 314. Sometimes, that is a
difficult question, particularly in cases with numerous litigants, claims, and
defenses. See id. Here, it is not. The Court has already found that Defendants are
entitled to a reasonable fee for all their work related to this case, as Novoselsky’s
complaint contained several obvious jurisdictional defects. Those deficiencies
undermined the entire action, because they demonstrate that it should never have
been filed. Thus, all of counsel’s work on the case outside the sanctions motion
itself bears a sufficient causal relationship to Novoselsky’s misconduct. With the
question of causation easily resolved, the only remaining matter is a calculation of
what the reasonable fee is.
1

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On the matter of reasonable rate, courts normally use the attorney’s
actual billing rate for similar litigation as a representation of the market rate
for the services. Id. The fee applicant bears the burden of proving that his
rate is reasonable. Id. While fights often arise over a comparison between
the counsel’s rate and comparable rates charged by others in the
community, Novoselsky does not dispute the $300 per hour rate of
Defendants’ counsel. (Docket #45 at 1).
The parties’ dispute instead focuses on the reasonableness of the
claimed hours. In determining the reasonable number of hours expended,
a court should exclude hours that are “excessive, redundant or otherwise
unnecessary.” Hensley, 461 U.S. at 434. In this vein, counsel for the fee
applicant is expected to exercise “billing judgment” when presenting their
bill to the court, by “winnowing the hours actually expended down to the
hours reasonably expended.” Spegon v. Catholic Bishop of Chicago, 175 F.3d
544, 552 (7th Cir. 1999) (quotation omitted). The “winnowing” process
involves excluding not only hours “that would normally not be billed to a
paying client, but also those hours expended by counsel on tasks that are
easily delegable to non-professional assistance.” Id. at 553. This principle is
sometimes characterized as an antecedent duty to mitigate fee
expenditures. Dubisky v. Owens, 849 F.2d 1034, 1037 (7th Cir. 1988). This
means that “[c]ounsel must mitigate [his] damages by correlating his
response, in terms of hours and funds expended, to the merit of the claims.”
Id. (quotations omitted).
Once a lodestar figure is calculated, the court may “adjust that figure
to reflect various factors including the complexity of the legal issues
involved, the degree of success obtained, and the public interest advanced
by the litigation.” Schlacher v. Law Office of Phillip J. Rotche & Assoc., P.C., 574
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F.3d 852, 856-57 (7th Cir. 2009). In doing so, the court must “provide a clear
and concise explanation for its award, and may not ‘eyeball’ and decrease
the fee by an arbitrary percentage because of a visceral reaction that the
request is excessive.” Id. at 857.
Defendants have submitted a request for $16,050 in attorney’s fees.
(Docket #44). They report that this amount represents substantial selfediting of their counsel’s timesheets, including seeking recompense for only
one of their two lawyers and declining to seek fees for work performed that
was not ultimately presented to the Court. See id. at 2–4. The sought-after
amount includes, primarily, review of Novoselsky’s complaint, legal
research, telephone calls with other co-counsel regarding litigation strategy,
and preparation of the motion to dismiss and the reply brief relating
thereto. See (Docket #44-1 at 2–4). In total, Defendants seek payment for 53.5
hours of work (at counsel’s above-stated, unchallenged rate of $300 per
hour). Id. at 5. They believe that their counsel’s fee, which approximates a
week’s worth of work over a four-month period and a little over a tenth of
the $100,000 amount in controversy stated in the complaint, is reasonable.
Id. at 4–5.
Novoselsky does not seek to nitpick counsel’s time records. (Docket
#45 at 1). Instead, he relies upon an order of the Seventh Circuit, previously
referenced in the Court’s order on the motion for sanctions, in which the
appellate court substantially cut Defendants’ lawyer’s time in awarding
fees for Novoselsky’s frivolous appeal in MB Financial, N.A. v. Stevens, No.
11-2603. See id. at 2–3. The court stated that because the appeal was
frivolous, it should not have cost over $40,000, the amount requested, to
defend it. (Docket #39-2 at 2). That was well above the fee award in the
district court. Id. Moreover, counsel claimed to have spent nearly three
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billable days preparing for a 15-minute appellate argument, which the court
found indicative of “padding.” Id. In the end, the Seventh Circuit awarded
as an appellate fee half the underlying fee award in the district court. Id. For
Defendants’ counsel in this case, that came to $5,000. Id.
As in that appeal, Novoselsky alleges that here that counsel’s
claimed time is disproportionate to the needs of the case. (Docket #45 at 3).
First, conceding the frivolousness of this action, he says that it should have
taken less time to defend against his frivolous complaint as opposed to one
that might have had merit. Id. Thus, Novoselsky believes that an award of
three times the amount awarded to this lawyer in the Seventh Circuit
appeal is too much.
His second argument is that certain time entries belie the same
padding that the Seventh Circuit detected in Stevens. For instance, counsel
purports to have spent over twenty-five hours on legal research, drafting,
and conferences with co-counsel in preparing Defendants’ motion to
dismiss and the accompanying Rule 11 safe-harbor letter. Id. at 4–5.
(Defendants’ counsel did not seek compensation for the time expended
actually preparing that letter.) Novoselsky points out that if twenty-six
hours were needed to carefully research and determine that the complaint
was frivolous, the remaining twenty-seven hours of time were cumulative
and unnecessary. Id. As such, Novoselsky contends that the Court should
use the Seventh Circuit’s fee award of $5,000 in Stevens as a ceiling for its
award in this case. Id.
Defendants reply that the Seventh Circuit’s Stevens decision reflects
the principle that a frivolous appeal is easier to defeat than a frivolous
action in the district court. (Docket #49 at 1). Because counsel was engaged
in trial court litigation in this instance, the appellate fee award is not
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comparable. Id. Next, Defendants argue that their time expenditures after
the motion to dismiss were reasonably related to Novoselsky’s numerous
post-complaint filings, which required research, conference, and response.
Id.
The Court, having carefully reviewed counsel’s time records and the
relevant authorities, finds that a reasonable fee award in this case is $12,000.
As to Novoselsky’s first challenge—that the Stevens case should be a
guiding light here—the Court finds both parties’ positions to miss the mark.
True, as Defendants contend, the Seventh Circuit was primarily concerned
with appellate fees exceeding those expended in the district court. But at
least part of the Seventh Circuit’s point in Stevens was also that defending
against frivolous cases should be easier and less time-consuming than
defending against those with a modicum of merit. Other Seventh Circuit
decisions buttress this view. See Kathrein v. Monar, 218 F. App’x 530, 532 (7th
Cir. 2007) (comparing costs to defend against a frivolous suit to those
needed to litigate against a frivolous appeal). This Court is in agreement
with that broad principle.
The idea that Novoselsky’s frivolous complaint should have been
easier to defend against than a meritorious complaint (but more difficult
than a frivolous appeal) dovetails into Novoselsky’s second argument
about over-billing, which the Court finds slightly more persuasive.
Appellate guidance on how long a particular task should take is sparse, and
with good reason; each case presents its own challenges and bright-line
rules simply do not work. Thus, at the outset the Court finds that the Stevens
award would be an arbitrary cap for the award in this case. But the Seventh
Circuit did make a cogent observation in Kathrein when, in assessing
defense counsel’s claim for 200 hours of work for seven filings made, it said,
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“[w]e have instructed that 57.5 hours, or $8,000, to defend a frivolous suit
(albeit on appeal) is unreasonable, see [Szopa v. United States, 460 F.3d 884,
887 (7th Cir. 2006)], and 13.7 hours, or $4,354, to prepare a single filing is
‘too high,’ see [Budget Rent-A-Car Sys., Inc. v. Consol. Equity LLC, 428 F.3d
717, 718 (7th Cir. 2005)]. If 13.7 hours is too much for one filing then 191
hours is too much for seven.” Kathrein, 218 F. App’x at 532.
The Court appreciates counsel’s robust exercise of billing judgment
in preparing the instant fee petition. However, setting aside counsel’s
review of the complaint and conferences about strategy—to the extent
possible, given counsel’s practice of block billing related tasks—
Defendants’ counsel spent 25–30 hours researching and drafting the motion
to dismiss.2 This was unreasonable. The Court appreciates that the factual
history of this case is long and tortured, and the arguments warranting
dismissal were numerous, but expending nearly a full week’s worth of
work on researching and drafting alone is too much. By the same token, it
should be remembered that the challenged filing in Budget Rent-A-Car, cited
in Kathrein, was only four pages and cited only five cases. Budget Rent-ACar Sys., Inc., 428 F.2d at 718. Defendants’ motion was far longer and more
complex, but a modest reduction in the fee is nevertheless warranted.
Furthermore, the Court must make a reduction for counsel’s billing
clerical work like filing documents with the Court. Such work is typically
considered an overhead expense reflected in an attorney’s billing rate, but
it is not separately compensable because it is not the work of a lawyer. See

Novoselsky believes that no conferences with co-counsel should be
reimbursed, (Docket #45 at 4–5), but, as is his modus operandi, he cites no authority
for the proposition. The Court does not find that such conferences are per se
unreasonable or non-compensable.
2

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Missouri v. Jenkins by Agyei, 491 U.S. 274, 288 n.10 (1989) (“Of course, purely
clerical or secretarial tasks should not be billed at a paralegal [or attorney]
rate, regardless of who performs them.”). If counsel is a solo practitioner
who has forgone the services of clerical or paralegal staff, he is not entitled
to an enhanced fee for taking that work on himself. See Pecha v. Barnhart,
No. 05-C-0099-C, 2008 WL 3850388, at *2 (W.D. Wis. Mar. 8, 2009).
As such, the Court finds a reduction in the claimed hours is required.
But neither party addressed the time records in granular fashion, and so the
Court declines to do so on its own initiative. Moreover, Defendants’
counsel’s practice of block billing, while not impermissible in itself,
prevents the Court from fully analyzing the time spent on discrete tasks.
Farfaras v. Citizens Bank & Trust of Chicago, 433 F.3d 558, 569 (7th Cir. 2006).
Thus, the Court will take Defendants’ sought-after amount—$16,050—as
the lodestar figure, then apply a 25-percent reduction across the board to
account for excessive time expenditures and non-compensable time. Harper
v. City of Chicago Heights, 223 F.3d 593, 605 (7th Cir. 2000) (“[W]hen a fee
petition is vague or inadequately documented, a district court may either
strike the problematic entries or (in recognition of the impracticalities of
requiring courts to do an item-by-item accounting) reduce the proposed fee
by a reasonable percentage.”). The result, rounded down slightly for
simplicity’s sake, is $12,000.
2.

MOTION TO CONSOLIDATE CASES
One other matter needs to be addressed. Just prior to the close of

briefing on Defendants’ fee petition, attorney John Xydakis (“Xydakis”), on
behalf of himself and two other individuals (“Movants”), filed a motion to
consolidate another action pending in this District, Case No. 17-CV-477-LA
(E.D. Wis.), with the instant case. (Docket #46). In that case, Novoselsky
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sued Xydakis and his associates based on facts similar to those underlying
this action, including the Illinois sanctions award. Id. at 2–3. The case is
presently pending before District Judge Lynn Adelman and is under an
administrative stay he entered. Xydakis asks this Court to take over the
proceedings in the lower-numbered case. This includes a motion Xydakis
filed contemporaneously with his motion to consolidate, in which he
requests that the Court bar Novoselsky from all future filings until he pays
sanctions awarded in this and other cases. (Docket #47).
The Court will decline Xydakis’ invitation. Certainly, the Court has
broad discretion to consolidate cases when they share common issues of
law or fact. Fed. R. Civ. P. 42(a); Civ. L. R. 42(a). And no doubt, at some
level, after cutting through Novoselsky’s byzantine factual allegations and
legal arguments, there could be common thread between this case and
Judge Adelman’s. See U.S. Bank Nat’l Assoc. v. Springfield Prairie Props., LLC,
No. 3:15–cv–3199, 2015 WL 13333510, at *1 (C.D. Ill. Dec. 16, 2015) (common
questions of law or fact militate in favor of consolidation).
But Xydakis fails to appreciate two crucial facts which show that
judicial economy will not be served by consolidation. See id. at *2; Ikerd v.
Lapworth, 435 F.2d 197, 204 (7th Cir. 1970). First, the matter before Judge
Adelman has been pending since April 3, 2017. Xydakis appeared in the
case for the first time on September 12, 2017. Although there is no time limit
on a motion to consolidate, prudence dictated that it should have come
much earlier. Xydakis gives no explanation for the delay. And while Judge
Adelman has not issued a merits ruling as yet, he has far greater familiarity
with the proceedings that have been before him for the better part of a year.
This leads to the second vital consideration which Xydakis has
missed: this case is over. The Court has issued a ruling on the merits of
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Novoselsky’s claims against the particular defendants in this action, has
awarded Defendants sanctions after carefully reviewing the record and
their allegations, and, prior to the filing of Xydakis’ motion, had nothing
left to do but engage in a straightforward review of Defendants’ counsel’s
fee request and timesheets. In short, the Court has finished with its work on
this matter and there is no reason to start afresh with different allegations
against different defendants. See Mills v. Beech Aircraft Corp., Inc., 886 F.2d
758, 762 (5th Cir. 1989) (consolidation may be denied based on differing
stages of litigation). Consequently, the Court will deny the motion to
consolidate and deny as moot the motion for a litigation bar against
Novoselsky. That motion may be resolved in the action before Judge
Adelman or elsewhere, as appropriate.
Accordingly,
IT IS ORDERED that Defendants Jeanine L. Stevens and F. John
Cushing, III be and the same are hereby AWARDED their reasonable
attorney’s fees in this action in the amount of $12,000.00 against Plaintiff
David Alan Novoselsky in accordance with the Court’s order of December
29, 2017 (Docket #42);
IT IS FURTHER ORDERED that the motion to consolidate filed by
Movants Marshall Spiegel, John S. Xydakis, and Neil R. Meccia (Docket #46)
be and the same is hereby DENIED; and
IT IS FURTHER ORDERED that the motion for a litigation bar
against Plaintiff filed by Movants Marshall Spiegel, John S. Xydakis, and
Neil R. Meccia (Docket #47) be and the same is hereby DENIED as moot.

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Dated at Milwaukee, Wisconsin, this 16th day of February, 2018.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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