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Preez v. Banis

United States District Court, D. Hawaii

October 18, 2017

RONI DU PREEZ Plaintiff,
v.
RICK BANIS, ET AL., Defendants.

          FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART DEFENDANTS' MOTION FOR AN AWARD OF ATTORNEYS' FEES AND NON-TAXABLE COSTS [1]

          Richard L. Puglisi United States Magistrate Judge

         Before the Court is Defendants' Motion For an Award of Attorneys' Fees and Non-Taxable Costs, filed on August 10, 2017 (“Motion”). ECF No. 342. Defendants request an award of attorneys' fees and non-taxable costs as the “prevailing party” pursuant to Hawaii Revised Statutes Section 607-14. Plaintiff filed her Opposition on September 5, 2017. ECF No. 352. Defendants filed their Reply on September 19, 2017. ECF No. 355. The Court finds this matter suitable for disposition without a hearing pursuant to Local Rule 7.2(d). After careful consideration of the submissions of the parties and the relevant legal authority, the Court FINDS AND RECOMMENDS that Defendants' Motion be GRANTED IN PART AND DENIED IN PART.

         BACKGROUND

         Plaintiff filed her original Complaint in state court on March 20, 2014. See ECF No. 1. Defendants removed the action on April 11, 2014 based on diversity jurisdiction. Id. Prior to trial, the district court granted motions for summary judgment in favor of Defendants Kent Green and Racquel Bridgewater on all counts, and granted summary judgment in favor of all Defendants on claims of wrongful termination, breach of the covenant of good faith and fair dealing, interference with prospective economic advantage, fraudulent misrepresentation, and breach of oral contract. ECF No. 211. The surviving two claims were breach of implied contract and promissory estoppel. Id.

         After a number of continuances, trial began on May 2, 2017, and the jury returned its special verdict form on May 5, 2017, finding in favor of Defendants. ECF No. 325. Following trial, Plaintiff filed a motion for judgment as a matter of law and for new trial, which was denied on July 27, 2017. ECF No. 329; ECF No. 338. The Clerk entered judgment in favor of Defendants on July 27, 2017. ECF No. 339. On August 10, 2017, Defendants filed a Bill of Costs seeking costs pursuant to Rule 54(d). ECF No. 341. Plaintiff did not file objections to Defendants' Bill of Costs. On August 28, 2017 the Clerk taxed costs in the amount of $25, 874.39. ECF No. 345. The present Motion followed.

         ANALYSIS

         In diversity cases, the Court must apply state law in determining whether the prevailing party is entitled to attorneys' fees. Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 883 (9th Cir. 2000). Under Hawaii law, “[o]rdinarily, attorneys' fees cannot be awarded as damages or costs unless so provided by statute, stipulation, or agreement.” Stanford Carr Dev. Corp. v. Unity House, Inc., 141 P.3d 459, 478 (Haw. 2006) (citing Weinberg v. Mauch, 890 P.2d 277, 290 (Haw. 1995)). Here, Defendants seek an award of fees and costs under Hawaii Revised Statutes Section 607-14. Section 607-14 provides that attorneys' fees shall be awarded “in all actions in the nature of assumpsit.” Haw. Rev. Stat. § 607-14. Section 607-14 also provides that such fees shall “not exceed twenty-five per cent of the judgment.” Haw. Rev. Stat. § 607-14. To award attorneys' fees and costs under Section 607-14, the court must determine whether: (A) Defendants are the prevailing party; (B) the action is in the nature of assumpsit; (C) the fees and costs requested are reasonable; and (D) the fees and costs do not exceed twenty-five percent of the judgment.

         A. Prevailing Party Status

         “In general, a party in whose favor judgment is rendered by the district court is the prevailing party in that court.” MFD Partners v. Murphy, 850 P.2d 713, 716 (Haw. Ct. App. 1992) (quoting 6 J. Moore, W. Taggart & J. Wicker, Moore's Federal Practice ¶ 54.70[4], at 54-323-54-324. (2d ed. 1992)) (some alteration in original); see also Village Park Cmty. Ass'n v. Nishimura, 122 P.3d 267, 283 (Haw. Ct. App. 2005).

         Here, the parties do not dispute that Defendants are the prevailing party for purposes of Section 607-14 because they obtained final judgment in their favor. See ECF No. 342-1 at 10; ECF No. 352.

         B. Action in the Nature of Assumpsit

         The parties agree that the essential character of Plaintiff's claims sounded in assumpsit in this case. See ECF Nos. 342-7 at 7; 352 at 1; see, e.g., Schultz v. Honsador, 690 P.2d 279, 281 (Haw. 1984), overruled on other grounds (holding that assumpsit is “a common law form of action which allows for the recovery of damages for nonperformance of a contract, either express or implied, written or verbal, as well as quasi-contractual obligations.”). Accordingly, the Court FINDS that Defendants are entitled to an award of attorneys' fees under Section 607-14.

         C. Reasonable Attorneys' Fees and Non-Taxable Costs

         1. Reasonable Attorneys' Fees

         Hawaii courts calculate the reasonableness of attorneys' fees based on a method that is nearly identical to the traditional “lodestar” calculation set forth in Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). See DFS Grp. L.P. v. Paiea Props., 131 P.3d 500, 505 (Haw. 2006). Under the lodestar method, the court must determine a reasonable fee by multiplying the number of hours reasonably expended by a reasonable hourly rate. See id. at 505-06. In addition, the court may consider additional factors including the novelty of the questions involved and charges for similar service in the community. See Chun v. Bd. of Trs. of Emps.' Ret. Sys. of Haw., 106 P.3d 339, 358 (Haw. 2005); Chun v. Bd. of Trs. of Emps.' Ret. Sys. of Haw., 992 P.2d 127, 137 (Haw. 2000).

         Defendants request the following attorneys' fees for work performed by their counsel:

NAME

RATE

HOURS

TOTAL

Terence O'Toole, Esq.

$500.00

27.40

$13, 700.00

Mark J. Bennett, Esq.

$500.00

33.80

$16, 900.00

Andrew Lautenbach, Esq.

$275-$350

582.30

$180, 990.00

Lane Hornfeck, Esq.

$300.00

27.40

$8, 220.00

Sharon V. Lovejoy, Esq.

$250/$275

79.70

$21, 500.00

Orian Lee, Esq.

$275.00

170.10

$46, 777.50

Lindsay Orman, Esq.

$200/$225

9.10

$1, 907.50

Maile S. Miller, Esq.

$175/$190

116.50

$21, 619.00

Danielle Kiyabu, Esq.

$230.00

50.90

$11, 707.00

Kukui Claydon, law clerk

$175.00

9.20

$1, 610.00

Connie Gardner, paralegal

$135.00

26.40

$3, 564.00

Elton Johnson, paralegal

$175.00

15.80

$2, 765.00

Gayla Evora, paralegal

$135.00

.40

$54.00

Elizabeth Spradlin, paralegal

$60.00

148.90

$8, 934.00

TOTAL

$340, 248.00

         See ECF No. 342-10. In total, Defendants assert that they incurred $340, 248 in attorneys' fees and taxes.[2] Id.

         a. Reasonable Hourly Rate

         Hawaii courts consider the reasonable hourly rate in a manner similar to the traditional lodestar formulation, and some Hawaii state courts have considered federal law in determining a reasonable hourly rate. See, e.g., Cnty. of Haw. v. C & J Coupe Family Ltd. P'ship, 208 P.3d 713, 720 (Haw. 2009). The Court finds that federal case law regarding the determination of a reasonable hourly rate is instructive in this case. In assessing whether an hourly rate is reasonable, a court “should be guided by the rate prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation.” Webb v. Ada Cnty., 285 F.3d 829, 840 (9th Cir. 2002) (citing Chalmers v. City of L.A., 796 F.2d 1205, 1210-11 (9th Cir. 1986)); see also Gates v. Deukmejian, 987 F.2d 1392, 1405 (9th Cir. 1992) (noting that the rate awarded should reflect “the rates of attorneys practicing in the forum district”). In addition to their own statements, the fee applicant is required to submit additional evidence that the rate charged is reasonable. Jordan v. Multnomah Cnty., 815 F.2d 1258, 1263 (9th Cir. 1987).

         Based on the information provided by counsel, the Court's knowledge of the prevailing rates in the community, and the Court's familiarity with this case, the Court finds that the hourly rates requested for Ms. Lovejoy and Ms. Spradlin are reasonable. However, as discussed below, the Court finds that the remaining rates requested are unreasonable.

         Defendants request $500 per hour for Mr. O'Toole and Mr. Bennett. Both Mr. O'Toole and Mr. Bennett have been licensed to practice law in Hawaii for over forty years. ECF No. 342-2 ¶¶ 14-15. The Court finds that $500 per hour is excessive compared with the prevailing market rates in this community. Based on the information provided by counsel, counsel's respective roles in this litigation, the Court's knowledge of the prevailing market rates in the community, and the nature of this action, the Court finds that $400 per hour is a reasonable rate for both Mr. O'Toole and Mr. Bennett. See, e.g., Algal Partners, L.P. v. Santos, CV. No. 13-00562 LEK-BMK, 2014 WL 7420442, at *4 (D. Haw. Dec. 31, 2014) (awarding $375 per hour to senior partner with forty years of experience); Balboa v. Hawaii Care and Cleaning, Inc., CV. No. 14-00009 ACK-RLP, 2015 WL 4418304 at *3 (D. Haw. June 23, 2015) (finding $400 to be a reasonably hourly rate for an attorney with forty-seven years of experience).

         Defendants request $300 per hour for work performed by Ms. Hornfeck, an attorney with nineteen years of experience. ECF No. 342-2 ¶ 17. Based on the information provided by counsel, the Court's knowledge of the prevailing market rates in the community, and the nature of this action, the Court finds that the requested rate is slightly excessive and that $275 per hour is a reasonable rate for Ms. Hornfeck. See CUMIS Ins. Society, Inc. v. CU Pacific Audit Sols., LLC, CV. No. 14-00140 LEK-BMK, 2015 WL 13234467, at *7 (D. Haw. Nov. 20, 2015) (finding $275 per hour a reasonable rate for an attorney with approximately twenty years litigation experience).

         Defendants request $275 to $350 per hour for work performed by Mr. Lautenbach and $275 per hour for work performed by Mr. Lee. ECF No. 342-2 ¶¶ 13, 18. Mr. Lautenbach and Mr. Lee both have approximately eleven years of experience. ECF No. 342-2 ¶ 13. Based on a review of the rates generally awarded for attorneys with comparable experience in this community, the Court finds that $250 is a reasonable hourly rate for Mr. Lee and $275 is a reasonable hourly rate for Mr. Lautenbach given his significant role in this litigation. See Liberty Mutual Ins. Co. v. Sumo-Nan LLC, CV. No. 14-00520 DKW-KSC, 2017 WL 810277, at *10 (D. Haw. Mar. 1, 2017) (awarding $250 per hour to attorney with twelve years of experience).

         Defendants requests an hourly rate of $230 for work performed by Ms. Kiyabu and an hourly rate of $200 to $225 for work performed by Ms. Orman. ECF No. 342-2 ¶¶ 21-22. Ms. Kiyabu has been practicing law since 2010, and Ms. Orman has been practicing law since 2012. Id. Based on the information provided by counsel, the Court's knowledge of the prevailing market rates in the community, and the nature of this action, the Court finds that $175 is a reasonable rate for both Ms. Kiyabu and Ms. Orman. See Liberty Mutual, 2017 WL 810277, at *10 (awarding $175 to attorney with approximately six years experience).

         Defendants request $175 to $190 per hour for work performed by Ms. Miller, an associate with three years of experience. ECF No. 342-2 ¶ 19. Based on a review of the rates generally awarded for attorneys with comparable experience in this community, the Court finds that a reasonable hourly rate for Ms. Miller is $130. See CUMIS Ins., 2015 WL 13234467, at *7 (awarding an hourly rate of $130 for an attorney with three years experience).

         Defendants request $175 per hour for work performed by Ms. Claydon. ECF No. 342-2 ¶ 20. Ms. Claydon was a law clerk following her second year of law school while working on the present case. Id. The Court finds $175 per hour to be excessive and reduces Ms. Claydon's hourly rate to $100. See BlueEarth Biofuels, LLC v. Hawaiian Elec. Co., Inc., CV. No. 09-00181 LEK-KSC, 2015 WL 881577, at *13 (D. Haw. Feb. 27, 2015) (finding $100 to be a reasonable hourly rate for law clerks).

         Finally, the Court finds that the rates requested for paralegal work performed by Ms. Gardner, Mr. Johnson, and Ms. Evora are excessive. The Court finds that $85 is a reasonable hourly rate for Ms. Gardner, Mr. Johnson, and Ms. Evora. See Pelayo v. Platinum Limousine Servs., Inc., CV. No. 15-00023 DWK-KJM, 2016 WL 7734557 at *8 (D. Haw. June 6, 2016) (holding that a reasonable hourly rate for an experienced paralegal is $85).

         b. Hours Reasonably Expended

         For the same reasons as those discussed above, the Court finds that federal case law regarding the determination of reasonable hours spent is instructive in this case. Defendants bear the burden of documenting the appropriate hours expended in the litigation and must submit evidence in support of those hours worked. See Smothers v. Renander, 633 P.2d 556, 563 (Haw. Ct. App. 1981) (stating that it is the prevailing party's burden to show that the fee is for services reasonably and necessarily incurred). The opposing party then has the burden of rebuttal that requires submission of evidence challenging the accuracy and reasonableness of the hours charged. Gates, 987 F.2d at 1397-98.

         Attorneys' fees pursuant to Section 607-14 are not presumptive and do not require a detailed explanation of the rationale underlying the reduction in the amount of fees awarded as long as there is support in the record. Ranger Ins. Co. v. Hinshaw, 79 P.3d 119, 126 (Haw. Nov. 14, 2003) (citing Finley v. Home Ins. Co., 975 P.2d 1145, 1159 (Haw. 1998)). See also Moreno v. City of Sacramento, 534 F.3d 1106, 1111 (9th Cir. 2008) (stating that the district court's explanation of an award “need not be elaborate, but it must be comprehensible”); Hensley, 461 U.S. at 437 (the court's explanation may be “concise, ” but must also be “clear”). The court need not set forth an hour-by-hour analysis of the fee request but may instead make across-the-board percentage cuts to the number of hours claimed as a “practical means of trimming the fat” from a fee application. Gates, 987 F.2d at 1399.

         i. Duplicate Billing

         Generally, two attorneys cannot bill for attending: (1) a meeting between co-counsel; (2) a client meeting; or (3) a meeting with opposing counsel. See, e.g., Ko Olina Dev., LLC v. Centex Homes, CV. No. 09-00272 DAE-LEK, 2011 WL 1235548, at *12 (D. Haw. Mar. 29, 2011) (quoting Nat'l Comm'n for Certification of Crane Operators v. Ventula, CV. No. 09-00104 SOM-LEK, 2010 WL 2179505, at *5 (D. Haw. ...


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