United States District Court, E.D. North Carolina, Western Division
C. DEVER III CHIEF UNITED STATES DISTRICT JUDGE
March 23, 2017, this court granted summary judgment to Banner
Life Insurance Company ("Banner" or
"defendant") on plaintiff John Laschkewitsch's
("Laschkewitsch" or "plaintiff') claims
and Banner's counterclaims. See [D.E. 100]. Banner now
moves for attorneys' fees [D.E. 103], and Laschkewitsch
moves to alter or amend the judgment under Rule 59(e) of the
Federal Rules of Civil Procedure [D.E. 105]. As explained
below, the court grants Banner's motion for
attorneys' fees and denies Laschkewitsch's motion to
alter or amend the judgment.
order granting Banner summary judgment, the court directed
Banner to brief its entitlement to attorneys' fees and
costs. See [D.E. 100] 18. On April 6, 2017, Banner filed a
motion for attorneys' fees [D.E. 103] and a declaration
in support [D.E. 104]. On May 8, 2017, Laschkewitsch
responded in opposition [D.E. 107]. On May 17, 2017, Banner
replied [D.E. 111].
claims that both the Agent/Broker Agreement and N.C. Gen.
Stat. § 75-16.1 allow Banner to recover $144, 031.65 in
attorneys' fees in this action. Banner's entitlement
to attorneys' fees turns on two inquiries: (1) whether
the cited source authorizes an award of attorneys' fees,
and if so, (2) whether the requested fees are reasonable.
breached bis Agent/Broker Agreement ("Producer
Agreement”) with Banner by submitting a policy
application containing material misrepresentations. See [D.E.
100] 15-16. Maryland law governs the Producer Agreement. See
Id. at 15; [D.E. 103-1] 6. Under Maryland law, a
prevailing party can recover attorneys' fees if "the
parties to a contract have an agreement to that effect."
Nova Research. Inc. v. Penske Truck Leasing Co., 405
Md. 435, 445, 952 A.2d 275, 281 (2008) (quotation omitted).
Banner cites the Producer Agreement's indemnity clause as
providing a right to attorneys' fees:
The Agent/Broker shall indemnify the Company and the above
named Brokerage General Agent and hold each of them harmless
from any and all expenses, costs, attorneys' fees, causes
of action, losses, and damages resulting or arising from
unauthorized acts done by the Agent/Broker or his/her/its
103-1 ] 3. The Court of Appeals in Maryland recently held
that a materially indistinguishable indemnity clause
contemplated an award of attorneys' fees in a first-party
action brought for a breach of the agreement that contained
the clause. See Bainhridge St. Elmo Bethesda
Apartments. LLC v. White Flint Express Realty Grp. Ltd.
P'ship. LLLP, 454 Md. 475, 478-94, 164 A.3d 978,
980-89 (2017). Banner's attorneys' fees
"result or aris[e] from unauthorized acts done
by" Laschkewitsch. Thus, the indemnity clause authorizes
Maryland law, Banner can recover not only fees incurred in
prosecuting its breach- of-contract claim, but also fees
incurred in litigating claims sharing "a common core of
facts" with the breach claim. See, e.g.,
Ochse v. Henry, 216 Md.App. 439, 459-68, 88 A.3d
773, 785-90 (2014); Weichert Co. of Md. Inc. v.
Faust, 191 Md.App. 1, 14-21, 989 A.2d 1227,
1234-38(2010), aff'd. 419 Md. 306, 19 A.3d 393
(2011). This case revolved around Laschkewitsch's
knowledge of his brother's ALS and coverage under other
life-insurance policies when Laschkewitsch sent his
brother's application to Banner. Laschkewitsch's
fraudulent conduct permeated all claims, counterclaims, and
defenses in this case, and Banner succeeded in every respect.
Moreover, the inextricable nature of all claims,
counterclaims, and defenses makes apportioning fees among the
breach-of-contract claim and other claims impractical. Thus,
Banner can recover the attorneys' fees it incurred in
N.C. Gen. Stat. § 75-16.1 allows Banner to recover its
attorneys' fees. Under North Carolina law, "a
successful litigant may not recover attorneys' fees,
whether as costs or as an item of damages, unless such a
recovery is expressly authorized by statute." Silicon
Knights. Inc. v. Epic Games. Inc., 917 F.Supp.2d
503, 516 (E.D. N.C. 2012) (quotation omitted), affd.
551 Fed.Appx. 646 (4th Cir. 2014) (per curiam) (unpublished);
see Stillwell Enters. Inc. v. Interstate Equip. Co.,
300 N.C. 286, 289, 266 S.E.2d 812, 814 (1980). In relevant
part, section 75-16.1 allows a court to award "a
reasonable attorney fee" to the attorney representing
"the prevailing party" upon concluding that
"[t]he party instituting the action knew, or should have
known, the action was frivolous and malicious." N.C.
Gen. Stat. § 75-16.1(2). Banner defeated
Laschkewitsch's section 75-1.1 claim on summary judgment
and qualifies as a prevailing party under section 75-16.1(2).
See Fed. Point Yacht Club Ass'n. Inc. v. Moore,
781 S.E.2d 351, at *8 ( N.C. Ct. App. 2015) (unpublished
table decision); Birmingham v. H & H Home
Consultants & Designs. Inc., 189 N.C.App. 435, 443,
658 S.E.2d 513, 519 (2008).
claim is frivolous if a proponent can present no rational
argument based upon the evidence or law in support of
it." Blyth v. McCrary, 184 N.C.App. 654, 663
n.5, 646 S.E.2d 813, 819 n.5 (2007) (alteration, citations,
and quotations omitted); see Rhyne v. K-Mart Corp.,
149 N.C.App. 672, 689, 562 S.E.2d 82, 94 (2002); see also
Greensboro Scuba Sch., LLC v. Robertson, 776 S.E.2d
363, at *8-9 ( N.C. Ct. App. 2015) (unpublished table
decision); Castle McCulloch, Inc. v. Freedman, 169
N.C.App. 497, 504, 610 S.E.2d 416, 422, aff'd 360 N.C.
57, 620 S.E.2d674 (2005). "A claim is malicious if it is
wrongful and done intentionally without just cause or excuse
or as a result of ill will." Blyth, 184
N.C.App. at 663 n.5, 646 S.E.2d at 819 n.5 (citations and
quotations omitted); see Rhyne, 149 N.C.App. at 689,
562 S.E.2d at 94. Maliciousness can develop during the course
of litigation if a party persists after discovering that his
claim is meritless. See Furniture Distribs., Inc. v.
Software Support-PMW. Inc., No. 3:12-CV-90-GCM, 2014 WL
421913, at *2 (W.D. N.C. Feb. 4, 2014) (unpublished);
Fed. Point Yacht Club Ass'n. Inc., 781 S.E.2d
351, at *10. If a plaintiff s claims are reasonably
"subject to dispute and analysis, " the claims are
not frivolous or malicious. See KT.M Commc'ns. Inc.
v. Tuschen, No. 5:14-CV-250-FL, 2015 WL 1268283, at *4
(E.D. N.C. Mar. 19, 2015) (unpublished).
other courts have held when faced with Laschkewitsch's
fraud, the court concludes that the allegations underlying
Laschkewitsch's section 75-1.1 claim were both frivolous
and malicious. See Laschkewitsch v. Lincoln Life
& Annuity Distribs., Inc., 47 F.Supp.3d
327.337-3 8 (E.D. N.C. 2014); Order, Rehastar Life Ins.
Co., 5:13-CV-210-BO, [D.E. 169] (E.D. N.C. Nov. 12,
2014). After losing on nearly identical claims in two
previous cases, Laschkewitsch knew or should have known that
he could "present no rational argument based upon the
evidence or law in support" of his section 75-1.1
claims. Indeed, in each of those cases, the court concluded
that Laschkewitsch's claims were frivolous yet he pressed
forward in this case. As for maliciousness,
Laschkewitsch's claims are wrongful and done
intentionally without just cause or excuse. He defrauded
Banner, and then sued Banner in order to obtain the fruits of
his fraud. He then persisted in forcing Banner to defend
against a claim he knew was frivolous, stonewalled discovery,
and filed a myriad of meritless motions. Laschkewitsch's
conduct falls squarely within section 75-16.1(2), and Banner
can recover its attorneys' fees.
awarded under section 75-16.1 typically are limited to fees
related to either prosecuting or defending against section
75-1.1 claims. See Parlier v. Casteen, No.
514CV00085RLVDCK, 2016 WL 3032692, at *9 (W.D. N.C. May 26,
2016) (unpublished); McKinnon v. CV Indus., Inc.,
228 N.C.App. 190, 198 n.2, 745 S.E.2d 343, 349 n.2 (2013).
"However, where all of [a] plaintiffs claims arise from
the same nucleus of operative facts and each claim was
inextricably interwoven with the other claims, apportionment
of fees is unnecessary." Whiteside Estates. Inc., v.
Highlands Cove. L.L.C.,146 N.C.App. 449, 467, 553
S.E.2d431, 443 (2001); see Philips v. Pitt Cty. Mem'l
Hosp. Inc.,242 N.C.App. 456, 458-59, 775 S.E.2d 882,
884-85 (2015). As noted, all claims in this case were based