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BAM Capital, LLC v. Houser Transport, Inc.

United States District Court, W.D. North Carolina, Statesville Division

January 8, 2020

BAM Capital, LLC, Plaintiff,
Houser Transport, Inc. Houser Logistics, Inc. Candy Feaganes Sibling Leasing, LLC Sherry Lee Samuel Houser, Defendant.


          Kenneth D. Bell, United States District Judge.

         THIS MATTER is before the Court on Plaintiff's Motion for Attorney Fees and Related Costs (Doc. No. 24). Defendants have not responded to the motion, consistent with their general lack of dispute as to the Plaintiff's entitlement to a judgment (and perhaps their practical inability to pay the multi-million dollar judgment that has already been entered). However, notwithstanding the absence of a formal response, [1] the Court still has an independent duty to carefully consider the motion, Plaintiff's memorandum of law and exhibits and award only those fees and costs that it finds to be appropriate and reasonable under the relevant circumstances and governing law.

         After full consideration, the Court finds that the motion for attorneys' fees should be GRANTED, but that the amount of fees and costs requested is excessive. In nearly all respects, Defendants have not opposed Plaintiff's claims in this straightforward action seeking a judgment for non-payment under commercial notes, agreements and guarantees, so the amount of legal work undertaken and fees requested are unreasonable. Also, Plaintiff's counsel has not properly supported their proposed hourly billing rates. Accordingly, Plaintiff will be awarded attorneys' fees in the amount of $68, 697.75, reflecting a 25% reduction in its requested fee award and $1394.26 in costs, reflecting only the portion of those requested costs that the Court finds to be true out of pocket costs (excluding “computer research” costs of $839.29, which are more properly classified as law firm overhead encompassed by counsel's hourly billing rates).


         In 2016, Defendant Houser Transport entered into a Factoring Agreement with Max Capital Group, LLC, which was subsequently acquired by Plaintiff BAM Capital, LLC (“BAM”). The Factoring Agreement is secured by three Continuing Guaranty Agreements (the “Guaranty Agreements”) made by the individual Defendants Houser, Feaganes and Lee. In April 2019, the parties executed a Forbearance Agreement and an accompanying Promissory Note in connection with certain events of default that had occurred under the Factoring Agreement. On August 9, 2019, Plaintiff filed this action seeking Judgment against the Defendants for all amounts allegedly due under the parties' various agreements.

         The corporate defendants - Houser Transport, Inc.; Houser Logistics, Inc.; and Sibling Leasing, LLC - did not respond to the Complaint and upon Plaintiff's motion the Clerk of this Court entered Default against them on November 5, 2019 (Doc. No. 19). All of the individual Defendants answered the Complaint, admitting its material allegations. On October 29, 2019, Plaintiff filed its Motion for Summary Judgment. The individual Defendant Samuel Houser and the defaulted corporate Defendants did not respond to the Motion for Summary Judgment. Defendants Feaganes and Lee responded to the Motion, but only opposed Plaintiff's proposed calculation of post-judgment interest.

         On November 20, 2019, the Court granted Plaintiff's Motion for Summary Judgment and a judgment in the amount of $3, 331, 825.37 was entered against the Defendants pursuant to that Order. (Doc. 22-23). Thereafter, Plaintiff filed its motion seeking attorneys' fees in the amount of $91, 597, reflecting over 128 hours of billable time by two law firm partners, two associate attorneys, two paralegals and a “project assistant.” The motion also requests $2, 233.55 in costs, including court filing fees; a pro hac vice fee; copy, shipping and postage costs; and charges for “Computer Research.”


         Once a party crosses the statutory threshold to a fee award of some kind, the Court has discretion to determine the amount of the award. J.D. ex rel. Davis v. Kanawha County Bd. of Educ., 571 F.3d 381, 387 (4th Cir.2009) (citing Tex. State Teachers Ass'n v. Garland Indep. Sch. Dist., 489 U.S. 782, 789-90, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989)); Robinson v. Equifax Info. Services, 560 F.3d 235, 243 (4th Cir.2009). “In Hensley, the Supreme Court noted that ‘[t]here is no precise rule or formula' for determining the amount of attorneys' fees, and that district courts ‘necessarily [have] discretion' in such matters.” Kanawha County Bd., 571 F.3d at 387 (quoting Hensley, 461 U.S. at 436-37). The burden is on the party requesting fees and costs to demonstrate, by clear and convincing evidence, that the fees and costs requested are reasonable. EEOC v. Nutri/System, Inc., 685 F.Supp. 568, 572 (E.D. Va. 1988) (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983), Spell v. McDaniel, 824 F.2d 1380, 1402 (4th Cir. 1987)); see also Bland v. Fairfax Cty., 2011 WL 5330782, at *3 (E.D. Va. Nov. 7, 2011).

         In determining a reasonable fee, the court employs the twelve-factor test set out by the Supreme Court in Hensley:

(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 employment by the attorney due to the 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.

Hensley, 461 U.S. at 430 n. 3 & 434 (adopting same from Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974)). “The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services.” Hensley, 461 U.S. at 433. This is the “lodestar” approach, which is regularly employed in numerous contexts in which Federal courts are called upon to determine the amount of reasonable attorneys' fees. See Kanawha County Bd., 571 F.3d at 387.

         A Plaintiff must “furnish specific support for the hourly rate[s] [it] proposes.” Nutri/System, 685 F.Supp. at 573. A court must consider the “prevailing market rates in the relevant community” when determining what a reasonable hourly fee is in a given case. Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169, 175 (4th Cir. 1994) (quoting Blum v. Stenson, 465 U.S. 886, 895 (1984)). “The relevant market for determining the prevailing rate is ordinarily the community in which the court where the action is prosecuted sits, ” however, “[i]n circumstances where it is reasonable to retain attorneys from other communities ... the rates in those communities may also be considered.” Id. This is generally accomplished “through affidavits from disinterested counsel, evidence of awards in similar cases, or other specific evidence that allows the court to determine ‘actual rates which counsel can command in the [relevant] market.' ” Project Vote/Voting for America, Inc. v. Long, 887 F.Supp.2d 704, 710 (E.D. Va. 2012) (quoting Spell, 824 F.2d at 1402). Finally, in determining the reasonable hourly rate in a given case, a court may look toward the Johnson factors, specifically factors three, five, nine, and twelve. See Alexander S., 929 F.Supp. at 936-38 (considering Johnson factors three, four five, eight, nine, ten, eleven, and twelve when determining reasonable hourly rate).

         Also, counsel must present records of the time worked on the matter in a format which allows the Court an opportunity to determine if the time was reasonably spent. The practice of “block billing” (which was employed by Plaintiff's counsel here) involves listing multiple tasks within a single time entry. This practice may be problematic because it does not provide the district court with a clear sense of how many hours were performed on a particular task because multiple tasks are lopped into a single block of hours. In lopping multiple tasks into a single time entry, counsel's time records frustrate a court's attempt to review whether an attorney's hours on a given task were reasonable versus excessive. Courts faced with block billing entries often reduce, by a given percentage, the total time requested or reduce the individual time entries infected by block billing. SeeDenton v. PennyMac Loan Servs., LLC, 252 F.Supp.3d 504, 525-26 (E.D. Va. 2017) (noting that “[t]he traditional remedy for block billing is to reduce the fee by a fixed percentage reduction” and reducing total hours by 10%); Lusk v. Virginia Panel Corp., 96 F.Supp.3d 573, 583 (W.D. Va. 2015) (reducing overall fee by 5% for block billing); McAfee v. Boczar, 2012 WL 6623038, at *2 (E.D. Va. ...

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