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Bishop v. GNC Franchising

April 12, 2006

HAROLD BISHOP, ET UX., PLAINTIFFS,
v.
GNC FRANCHISING, LLC, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

Electronically Filed

Memorandum Opinion

I. Introduction

Currently pending before this Court in this breach of contract action is the petition for attorneys fees and costs (doc. no. 121) filed by defendant, GNC ("GNC"), following a non-jury trial in which this Court found for GNC on all claim and counterclaims. In the Judgment Order (doc. no. 120), this Court ordered GNC to file said petition by March 27, 2006, and the parties were ordered to meet and confer to attempt a resolution of the issue by March 30, 2006, and if no resolution was reached, plaintiffs ("the Bishops") were ordered to file a response in opposition, which they have done (doc. no. 122).

On April 4, 2006, the Court then issued initial rulings on Exhibit A of GNC's motion for attorneys fees and costs. The Court eliminated charges which the Court believed to be duplicative, unnecessary or excessive, including "travel time", excess "review" of correspondence, excess attorney conferences, the work on the "Indiana" case, time spent on billing/audit letter matters, and Mr. Gasworth's time. The Court also reviewed the expenses and costs, line by line, and found them to be reasonable, with the exception of "staff overtime" and "secretarial overtime" which this Court eliminated. The Court next ordered GNC to undertake a recalculation of attorneys fees and costs based upon said rulings by April 6, 2006 (doc. no. 123).

Plaintiffs were ordered to file any "objections" to the recalculations by April 10, 2006; however, plaintiffs did not file any further objections.

After personally reviewing every item of the 92 page affidavit setting forth the hours billed, an exercise of which this Court is intimately familiar and well-experienced, this Court finds that the contract provisions provide for the recovery of attorneys fees and costs, that the hourly rates are reasonable, and that the number of hours billed (as recalculated) are reasonable, especially in light of the conduct of plaintiff's counsel for the duration of this litigation. After hearing all the evidence in this case, it is obvious to the Court that plaintiffs brought this case as a defensive tactic against GNC's demand for overdue advertising fund contributions, royalties, rental payments, inventory purchase charges and other finance charges. Accordingly, and for the reasons that follow, this Court will grant GNC's petition for attorneys fees and costs and will award $330,185.25 in attorneys fees and $20,533.92 in costs.

II. Contract Provisions - - Prevailing Party is entitled to "Reasonable" Attorneys Fees

Under Pennsylvania law, attorneys fees and expenses are generally not recoverable in a breach of contract action. Gorzelsky v. Leckey, 586 A.2d 952, 955 (Pa. Super. 1991). However, attorneys fees and expenses may be awarded where there is statutory authorization or a "clear agreement by the parties." Merlino v. Delaware County, 728 A.2d 949. 951 (Pa. 1999)(citations omitted).

In this case, Paragraph XXVI.G of the Franchise Agreements sets forth the parties "agreement" in that regard as it states that: "In any litigation between Franchisor prospective Franchisee or Franchisee relating to the Franchise Business or to this Agreement, the prevailing party shall recover its reasonable costs and expenses, including attorney's fees."

A contract is unambiguous where it is reasonably capable of only one construction. Inter Medical Supplies, Ltd. v. EBI Medical, 181 F.3d 446, 457 (3d Cir. 1999)(citations omitted). In their response in opposition to the petition for attorneys fees, the Bishops neither attempt to argue that the language of the franchise agreements on the issue of attorneys fees is anything other than clear and unambiguous, nor do they present any other extrinsic evidence to support any such argument. Accordingly, the Court finds that the language of the agreement is clear and unambiguous on its face, and it entitles GNC, as the prevailing party in this litigation, to recover its reasonable costs and expenses, including attorney's fees.

Although the approach set forth by the United States Court of Appeals for the Third Circuit in the Lindy cases (and their progeny) is not directly applicable to this action because those cases involved the judicial award of attorneys fees, whereas here, the recovery of attorneys fees and expenses is an item of damages to be proved under a breach of contract action, this Court will employ the lodestar formula (which requires multiplying the number of hours reasonably expended by a reasonable hourly rate) as a guide to determine the measures of damages on attorneys fees and expenses. Coleco Industries v. Berman, et al., 423 F.Supp. 275, 317 (E.D. Pa. 1976); See also, Hensley v. Eckerhart, 461 U.S. 424 (1983).

III. Analysis

A. Time ...


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