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Gillespie v. Dring

United States District Court, M.D. Pennsylvania

October 17, 2019

MARJORIE M. GILLESPIE, et al., Plaintiffs,
v.
LORI DRING AND NANCY ASARO, Defendants.

          MEMORANDUM

          A. RICHARD CAPUTO UNITED STATES DISTRICT JUDGE.

         Presently before me is Defendants' Application for Reasonable Attorneys' Fees and Costs. (Doc. 119). Attorneys Rosenn, Jenkins & Greenwald, LLP (“RJ&G”), Michael Profita (“Profita” or “Attorney Profita”), and R. Anthony Waldron (“Waldron” or “Attorney Waldron”) (collectively “Attorneys”) for Defendants Lori Dring (“Dring”) and Nancy Asaro (“Asaro”) (collectively “Defendants”) seek $299, 123.18 in various fees and costs associated with their representation of the Defendants in a land dispute governed by a previously entered into Settlement Agreement (Doc. 6-1 Ex. A (“the Agreement”)). (See Docs. 119, 121, 133). The Attorneys and Defendants contend that following the dismissal of Plaintiffs', including named Plaintiff Marjorie M. Gillespie's (“Gillespie”), (collectively “Plaintiffs”) claims against the Defendants, that the Attorneys are entitled to reasonable attorneys' fees and costs according to the terms of the Agreement. (See id.). In opposition, the Plaintiffs contend that: the Attorneys are either not entitled to any or not entitled to at least some of the listed fees; that the listed fees are unreasonable; that this Application should be stayed; and, in the alternative, that I should hold a hearing on the matter before ruling on the Application. (See Doc. 128). Because Defendants have not demonstrated their entitlement to all fees and costs as requested, their Application for Reasonable Attorneys Fees and Costs will be granted in part and denied in part.

         I. Background

         This action arises out of claims brought by Plaintiff landowners against the Defendants for failure to grant the Plaintiffs an easement over a certain tract of land at Lake Ariel in Wayne County, Pennsylvania. (See generally Doc. 1). The parties are familiar with the factual background of this long-standing dispute and I will only summarize the necessary procedural history of the current action. The Plaintiffs' claims, which, in part, sought to enforce the Agreement (Doc. 6-1 Ex A.) as it pertained to an easement over Defendants' land and, in part, tried to equitably claim an easement over the same land, were all dismissed first by Motion to Dismiss, for failure to state a claim (See Docs. 15, 16), and second, on a Motion for Summary Judgment. (See Docs. 98, 99). In so ruling, I found that the Defendants, according to the Agreement, had no duty to convey the easement and were otherwise released from all other claims brought by the Plaintiffs. (See Docs. 16, 99).

         Moreover, Defendants, when answering the Complaint, filed a counterclaim against the Plaintiffs for trespass on the same disputed tract of land for which the Plaintiffs requested an easement. (See Doc. 25). The Defendants, in their Motion for Summary Judgment, also stated their intention to seek attorneys' fees from the Plaintiffs. (See Doc. 61). The same order which granted Defendants' summary judgment on all of Plaintiffs' claims, however, directed the Clerk to close the case without resolving the counterclaim or request for fees. (See Doc. 99). As such, Defendants filed a Motion for Reconsideration (Doc. 102), which was granted (Doc. 104), to resolve these outstanding issues. The parties then entered into a stipulation (Doc. 113), which I approved (Doc. 114), dismissing the Defendants' counterclaim without prejudice while also allowing the Defendants thirty days to submit an application for attorneys' fees and costs.

         Plaintiffs soon thereafter appealed the ruling on the Motion for Summary Judgment (Docs. 98, 99) to the Third Circuit. (See Doc. 115). Defendants then filed the instant Application for Reasonable Attorneys' Fees and Costs Pursuant to Section 14 of the Agreement on June 13, 2019. (Doc. 119). The Application states that pursuant to the Agreement (Doc. 6-1, Ex. A), which has governed all of the claims by the Plaintiffs and against the Defendants, that Dring and Asaro are entitled to all reasonable attorneys' fees accrued in litigating the matter as well as all the fees expended in obtaining these fees. (See Docs. 119, 121, 133).

         The Agreement in relevant part states:

The United States District Court for the Middle District of Pennsylvania shall have exclusive jurisdiction over any action or proceeding involving the interpretation or breach of this Agreement, and the parties hereto submit to the personal jurisdiction of such Court. The Prevailing party in any such action shall be entitled to recover reasonable attorneys' fees from the other party.

(Doc. 6-1 Ex. A). In their application, Defendants request a total of $299, 123.18 in legal fees and costs. (Doc. 133 at 19). Of these fees, RJ&G claims $239, 649.61 in fees and $10, 398.76 in costs for a total of $250, 048.37 for all work done on this matter, including the instant fee litigation. (See Doc. 133-2). RJ&G staffed two partners, two associates, and two paralegals on the matter at rates ranging from $100 to $285 an hour. (See Docs. 122-2; 122-3 Exs. G, M; 133-1 Ex. D). Attorney Profita then claims $42, 087.31 in fees and $781.06 in costs, for the same period, at rates of at least $375 an hour, which is a reduction in his typical fee. (See Docs. 122-2 Ex. B; 122-3 Exs. C, H). Finally, Attorney Waldron claims $2, 000 in fees at a rate of $200 an hour for preparing a title report connected to the litigation and for other fees accrued in creating the report. (See Docs. 122-3 Ex. I; 133-5). Defendants attached affidavits prepared by themselves, their billing departments, and an independent lawyer all swearing to the reasonableness of their fees. (See Docs. 122-3; 133-1 - 133-8). Defendants have also attached detailed billing records and invoices for the matter, redacting certain line items for which they are not seeking reimbursement. (See Docs. 122-1, 122-2; 133-1 Exs. B-D).

         The Plaintiffs responded to this application on August 1, 2019 stating first that the Defendants were not prevailing parties under the Agreement. (See Doc. 128). The Plaintiffs further contend that, should I consider the Defendants to be the prevailing parties, the fees are nonetheless unreasonable. (Id.). To the extent some fees might be reasonable, the Plaintiffs would, in the alternative, seek to stay the Application pending the outcome of their appeal or would have me hold a hearing before deciding on the Application. (Id.). The Defendants filed their Reply Brief in support of their application on September 5, 2019 waiving certain fees for unrelated billings, while also elaborating on the fees relating to this fee litigation. (See Doc. 133). The Application has been fully briefed and is ripe for review.

         II. Discussion

         A. Prevailing Party

         In opposing the Application, Plaintiffs first claim that the Defendants were not the “prevailing parties” under the Agreement and are therefore not entitled to any attorneys' fees. (Doc. 128 at 12-15). The Plaintiffs base this argument primarily on an interpretation of Federal Rule of Civil Procedure 41 which states that a notice of dismissal by a party acts as an adjudication on the merits when that party has previously dismissed an action based on the same claim. (Id.); see also Fed. R. Civ. P. 41. Plaintiffs claim that, when executing the original Agreement (see Doc. 6-1 Ex. A) and releasing their claims, the Defendants dismissed an action against the Plaintiffs based on the same claim as was brought as a counterclaim in this litigation, which was then also dismissed. (Doc. 128 at 12-15) (“[I]n other words, the previous litigation was between the same parties, dealt with the same claim, and the dismissal in the current suit now operates as an actual adjudication on the merits.”). Therefore, Plaintiffs believe that the current stipulation to dismissal (Doc. 114) acts as an adjudication on the merits. (See id.). The Plaintiffs further believe that an adjudication on the merits in their favor and a summary judgment in the Defendants' favor makes it “less clear” who the prevailing party is under the Agreement. (See id.).

         The Defendants have responded, stating: (a) that by “successfully defending all of the Plaintiffs' claims, ” they were clearly the prevailing parties; and (b) that the previous trespass claim was not based on the same claim as that which was dismissed by the Agreement. (See Doc. 133 at 2-4).

         In relevant part, the Agreement states that “the prevailing party” in any action involving “interpretation or breach of [the] Agreement . . . shall be entitled to recover reasonable attorney's fees from the other party.” (Doc. 6-1 Ex. A). “‘Prevailing party is commonly defined as ‘a party in whose favor a judgment is rendered, regardless of the amount of damages awarded.'” Profit Wize Marketing v. Weist, 812 A.2d 1270, 1275 (Pa. Super. 2002) (quoting Black's Law Dictionary, 7th ed. at 1145). The application of the term prevailing party “is [ ] limited to those circumstances where the fact finder declares a winner and the court enters judgment in the party's favor.” Id. at 1275-76; see also Zavatchen v. RHF Holdings, Inc., 907 A.2d 607, 610-11 (Pa. Super. 2006) (holding that it is not an abuse of discretion to find that defendant parties are not prevailing when no judgment is entered in their favor and when the plaintiff's claims are not frivolous).

         Moreover, a failure to recover on a counterclaim does not make the defendant unable to recover its costs in defending an action. Burgess v. Senior, 64 Pa. D. & C. 167, 169 (Pa. Ct. Comm. Pl. 1945); Stahl et al. v. Erie Delivery Co., 31 Pa. D. & C. 429, 437 (Pa. Ct. Comm. Pl. 1937). Courts have considered defendants to be prevailing parties despite the presence of counterclaims where plaintiffs are the initial agressors in the action and where the defendant's counterclaims ought to be tried, based on factual overlap, in the same action. Id.; see also Tyler v. O'Neill, 112 Fed.Appx. 158, 161-63 (3d Cir. 2004) (holding, in a federal context, that defendant was still prevailing party where counterclaims involved the same issues as the claims brought against the defendant).

         Here, a judgment was entered in favor of the Defendants on the Plaintiffs' original claims, thereby making the Defendants the prevailing party as it pertains to the defense of those claims. See Gardner v. Clark, 33 Pa. D. & C.3d 662, 664-665 (Pa. Ct. Comm. Pl. 1985) (holding that defendant was a prevailing party for successfully getting claims dismissed on a motion for summary judgment); Zavatchen, 907 A.2d at 611 (recognizing that prevailing on summary judgment could justify finding that defendants were prevailing parties); see also Lynn v. Smith, 664 F.Supp. 929, 929-30 (M.D. Pa. 1986) (holding that, federally, defendants can be prevailing parties if they prevail on a motion for summary judgment). Further, the counterclaim brought by the Defendants arose out of the same facts as the Plaintiffs' claims and will not disrupt the finding that the Defendants are the prevailing party. See Burgess v. Senior, 64 Pa. D. & C. at 169.

         For their assertions under Rule 41, the Plaintiffs omit from the citation of the rule that a “notice of dismissal, ” and not a stipulation to dismissal “operates as a an adjudication on the merits.” Fed.R.Civ.P. 41(a)(1)(B). I also take notice of the fact that “Rule 41(a)(1) was intended to eliminate the annoying of a defendant by being summoned into court in successive actions and then, if no settlement is arrived at, requiring him to permit the action to be dismissed and another one commenced at leisure.” Cooter & Gell, 496 U.S. 384, 397 (1990) (internal quotations and citations omitted). Moreover, Rule 41(a)(1) is “aimed at curbing abuses of the judicial system” so as to prevent duplicative or serial litigation. Id. at 398; see also Orman v. Citimortgage, 2016 WL 1592948, at *6 (E.D. Pa. 2016).

         Here, the Defendants did not initiate a suit nor did they endeavor to harass the Plaintiffs. In fact, the counterclaim was dismissed shortly after the Motion for Summary Judgment was decided. The aim of Rule 41(a)(1) was to prevent misuse of the judicial process which the Defendant has not been accused of here. Because the Defendants prevailed on summary judgment and because Rule 41 does not apply to the present action, the Defendants will be considered the “prevailing party” for the purposes of the Agreement and the stipulation to dismissal of the counterclaim will not be considered an adjudication on the merits.

         B. Reasonableness of Fees and Costs

         The Attorneys in this case collectively request a total of $299, 123.18 in fees and costs. (Doc. 133 at 19). Lawyers from RJ&G request $239, 649.61 in fees as calculated by their Accounts Receivable Manager Polly A. Butler (“Butler”). (Doc. 133-2). Butler arrived at this calculation by taking the collective hours billed and to be billed on the case at the rates listed below and then reduced the fees by those hours which were expended on matters irrelevant to the current claim, though Butler does not explicitly detail which hours she reduced. (Id.). Butler then applied a 6.4% “courtesy reduction” to the remaining balance. (Id.). RJ&G had six people staffed on this matter; Partner Garry S. Taroli (“Taroli” or “Attorney Taroli”), who requests a $285 hourly fee; Partner Robert N. Gawlas (“Gawlas” or “Attorney Gawlas”), who requests a $275 hourly fee; Associates Robert L. Gawlas (“Associate Gawlas”) and Daniel A. Taroli (“Associate Taroli”), who request a $175 hourly fee; and paralegals Helen P. Chvotzkin and Tania Garrity, who request a $100 and $110 hourly fee, respectively. (See Docs. 122-2; 122-3 Exs. G, M; 133-1 Ex. D).

         RJ&G has presented the hours they worked on this case to me in the form of a “Unbilled Recap of Time Detail” or “Time Detail” (“the Detail”) which purports to account for every potentially billable hour in the case. (See Docs. 122-2; 133-1). Hours not being charged are redacted from the Detail. (See Docs. 122-3 Ex. F (Butler Declaration); 133-2 (Butler Supplemental Declaration)). Further, every billed hour on the Detail corresponds to an actually charged line item on an invoice sent or to be sent to the client, also provided. (See Docs. 122-1, 122-2, 133-1 Exs. B-D).

         Tallying all the visible, non-redacted, and potentially relevant hour totals in the Detail, the professionals from RJ&G have billed and could further bill a collective 1142.80 hours, for which they do not seek full reimbursement. (See Docs. 122-2, 133-1 Ex. D) (adding all hours from the Detail which were billed or could be billed by Partners Gawlas and Taroli, Associates Gawlas and Taroli, and Paralegals Chvotzkin and Garrity). Lawyers from RJ&G further request $10, 398.76 in costs. (Doc. 133-1 Ex. F) (Butler Declaration)).

         Attorney Profita requests $44, 448.75 in fees based on rates ranging from $375 to $425 an hour for a cumulative 129.20 relevant billable hours. (Docs. 122-3 Ex. H; 133-4). Attorney Profita also applied a discount for certain billed hours. (Doc. 122-3 Ex. H). Attorney Profita further requests $781.06 in costs. (Id.; Doc. 133-4). Attorney Waldron finally seeks $2, 000 in fees based on 10 hours worked at a rate of $200 an hour. (Doc. 122-3 Ex. D).

         While the Defendants have represented the total fees sought to be $299, 123.18, I note that the actual totals represented by the individual costs and fees requested are $297, 278.18. See Moffitt v. Tunkhannock Area School District, 2017 WL 319154, at *8 (M.D. Pa. 2017) (correcting mathematical inaccuracies in a request for fees).

         1. Attorney Fees

         Plaintiffs contend that, to the extent fees should be awarded, some attorneys' rates are unreasonable and, for those rates that are reasonable, the Defendants have made claims for more than they are entitled. (Doc. 128 at 15-19).

         For the reasonableness of the rate, the Plaintiffs only contend specifically that Attorney Profita's hourly rate of $425 “is clearly an excessive rate for the Middle District of Pennsylvania, ” especially as compared to the rates of Attorneys Gawlis and Taroli. (Id. at 18-19). For reasonableness of the hours expended, Plaintiffs claim that the Defendants are attempting to collect fees unrelated to the instant litigation, such as “fees relating to Culotta, Cardinal Lane, Swingle, Lehutsky, and the preparation of a title report by R. Anthony Waldron.” (Id. at 17). For these fees, the Plaintiffs claim that they “relate to an unrelated quiet title action for the Cardinal Lane property . . . as well as an unrelated legal malpractice action.” (Id.).

         Further, Plaintiffs claim that, to the extent that billed or billable hours relate to the current suit, they overlap with services rendered for a separate matter which they refer to as the “ALO litigation.” (Id.). Specifically, Plaintiffs claim that listings involving Motions for Election of Remedies, which were filed in both cases, were potentially billed inappropriately and should be reduced to the extent time was spent on the Motion from ALO litigation as opposed to the instant litigation. (Id.).

         Plaintiffs also point to the “Grodack litigation, fees relating to individuals who reside on the West Shore Strip who may have entered into agreements with Dring and Asaro, including Barone and Gardner, and the Keystone Landfill Condemnation” as fees not attributable to this action. (Id. at 18). Plaintiffs also seek access to the redacted (and unbilled) records of the Defendants because, while they are not being billed, they may provide clarity as to what services apply to which litigation. (Id. at 18). Plaintiffs also contend that the Defendants needlessly employed two law firms which may have been conducting the same work on the matter. (Id. at 18).

         Plaintiffs finally contend that Defendants should only be compensated according to their degree of success trying the claim and as such, because Defendants were either not the prevailing parties in the suit or because they did not prevail on all of their claims, their recovery should be reduced. (Id. at 15-16). To this end, Plaintiffs also believe that Defendants recovery should be reduced to the extent the Plaintiffs were the only parties, of all the parties involved, not to breach the Agreement, and thus, Defendants should receive an equitable deduction in fees. (Id. at 19).

         Defendants respond to these contentions first, by saying that they should receive no deduction as they are clearly the prevailing party, including with regards to fees for the counterclaim. (Doc. 133 at 4-5). They then say that the allegedly unrelated suits are in fact related to the instant litigation and that any matter relating to “Cardinal Lane” was billed appropriately. (Id. at 6-7). Defendants also contend that any objections concerning overlap with the ALO litigation are not relevant because everything was billed separately. (Id. at 7-8). For the claims that representation by two separate firms was duplicative, Defendants simply claim that this is common practice and that Attorney Profita had experience with and historical knowledge of the particular issues involved which was necessary to defend against the claims. (Id. at 9-10; see also Doc. 133-4).

         Defendants further seek no fees for any redacted line items and “for the sake of judicial economy, ” will withdraw requests for fees relating to “the Grodack litigation, West Shore residents pursuing agreements with Dring/Asaro, including Barone and Gardner, and the Keystone Landfill Condemnation.” (Id. at 8-9). Defendants also state that Attorney Profita is only seeking a $375 hourly rate. (Id. at 10).

         “‘The starting point for a court's determination of reasonable attorney fees is to calculate the ‘lodestar' by multiplying the number of hours reasonably expended by a reasonable hourly rate.'” Borrell v. Bloomsburg University, 207 F.Supp.3d 454, 506 (M.D. Pa. 2016) (quoting Arlington Indus., Inc. v. Bridgeport Fittings, Inc., 2014 WL 2860863, at *5 (M.D. Pa. June 23, 2014), amended, 2014 WL 2991813 (M.D. Pa. 2014), aff'd,612 Fed.Appx. 612 (Fed. Cir. 2015) (“Arlington”)). The lodestar ...


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