Advanced Reimbursement Solutions LLC v. Spring Excellence Surgical Hospital LLC

District Court, D. Arizona·Decided May 28, 2020·No. 2:17-cv-01688·Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Advanced Reimbursement Solutions LLC, No. CV-17-01688-PHX-DWL 10 Plaintiff, ORDER 11 v. 12 Spring Excellence Surgical Hospital LLC, et al., 13 Defendants.

14 15 Pending before the Court is a motion for attorneys’ fees and costs filed by Plaintiff 16 Advanced Reimbursement Solutions LLC (“ARS”). (Doc. 236.) For the following 17 reasons, the motion will be granted in part and denied in part. 18 BACKGROUND 19 ARS is a billing service that contracts with medical providers to process and bill 20 out-of-network insurance claims. Defendant Spring Excellence Surgical Hospital LLC 21 (“SESH”) owns and operates a hospital in Texas. 22 On May 31, 2017, ARS filed a complaint. (Doc. 1.) At the time, ARS was 23 represented by the law firm of Schian Walker PLC (“Schian Walker”). The complaint 24 asserted, among other things, a breach-of-contract claim against SESH. 25 On June 8, 2018, ARS filed a motion for partial summary judgment, limited to the 26 issue of liability on its breach-of-contract claim. (Doc. 97.) 27 On June 29, 2018, SESH filed a motion under Rule 56(d) of the Federal Rules of 28 Civil Procedure for authorization to conduct additional discovery before responding to the

1 partial summary judgment motion. (Doc. 121.) 2 On July 12, 2018, the Court granted the Rule 56(d) motion. (Doc. 135.) 3 On August 10, 2018, SESH filed a motion to transfer the case to Texas. (Doc. 149.) 4 In December 2018—after about a year and a half of litigation—ARS switched to 5 new counsel, the law firm of Thorpe Shwer, P.C. (“Thorpe Shwer”). (Docs. 180, 181.) 6 On January 11, 2019, SESH’s motion to transfer was denied. (Doc. 186.) 7 On April 3, 2019, the Court imposed a $8,230.95 sanction award against SESH. 8 (Doc. 210.) The award stemmed from SESH’s counsel’s failure to attend a deposition in 9 Texas, which was one of the depositions that SESH had sought and obtained authorization 10 to pursue under Rule 56(d). (Doc. 206.) 11 On May 10, 2019, the Court granted ARS’s motion for partial summary judgment 12 on liability. (Doc. 215.) 13 On February 6, 2020, the Court granted ARS’s motion for partial summary 14 judgment on damages, awarding $734,934.03 plus fees and interest. (Doc. 234.) 15 On February 20, 2020, ARS filed a motion for attorneys’ fees and costs. (Doc. 236.) 16 The same day, ARS filed a bill of costs. (Doc. 237.) 17 On March 9, 2020, SESH filed a response. (Doc. 243.) 18 On March 18, 2020, ARS filed a reply. (Doc. 246.) 19 On April 28, 2020, the parties filed a notice stating that they had reached a 20 settlement concerning attorneys’ fees. (Doc. 247.) 21 On May 27, 2020, ARS informed the Court that the parties had not, in fact, settled 22 and thus requested a ruling on its fee motion. (Doc. 251.) 23 DISCUSSION 24 I. Parties’ Arguments 25 In its motion, ARS seeks $522,588.60 in fees—composed of $234,179.10 in fees 26 incurred by attorneys from Schian Walker and $288,409.50 in fees incurred by attorneys 27 from Thorpe Shwer—and $3,178.85 in costs. (Doc. 236 at 1.) In support of its motion, 28 ARS provided a Microsoft Excel spreadsheet containing an itemized statement of legal

1 services, as well as declarations from Tyler Grim (a former Schian Walker associate, see 2 Doc. 236-3 at 2-4) and Sara Witthoft (a Thorpe Shwer partner, see Doc. 236-1 at 2-5) 3 attesting to the reasonableness of each firm’s fees. 4 In its response, SESH does not dispute that ARS, as the prevailing party in this 5 action, is contractually entitled to an award of reasonable attorneys’ fees. (Doc. 243 at 2.)1 6 Additionally, SESH does not dispute ARS’s bill of costs. (Id.) SESH does, however, raise 7 several objections to ARS’s fee request, arguing that: (1) the Grim declaration is 8 insufficient to validate the request for $234,179.10 in fees paid to Schian Walker because 9 Grim was a junior associate who only worked on the case for five weeks and has no 10 personal knowledge as to whether other Schian Walker attorneys actually performed the 11 work in question or exercised reasonable billing judgment when doing so (id. at 2-4); 12 (2) ARS is seeking reimbursement of $6,717.50 for time spent preparing and litigating a 13 motion for sanctions related to a missed deposition in Texas, but the Court already granted 14 the sanctions motion and SESH already paid the resulting award, so the time entries in 15 question amount to impermissible double-billing (id. at 5-6); (3) because ARS made a 16 voluntary “decision to change law firms during the course of the litigation,” the request for 17 $288,409.50 in fees paid to Thorpe Shwer attorneys should be reduced to eliminate “the 18 inherent duplication caused by a change in counsel [coupled with] no indication in either 19 [Thorpe Shwer’s] supporting affidavit or [Thorpe Shwer’s] billing summary that any 20 ‘billing judgment’ was exercised in connection with such transition and duplication” (id. 21 at 6-7); (4) both firms’ timesheets contain entries marred by impermissible “block-billing” 22 (id. at 7-8); (5) due to extensive redaction based on the attorney-client privilege, many 23 entries fail to provide an adequate description of the service being rendered, in violation of 24 Local Rule of Civil Procedure 54.2(e)(2)(A) (id. at 8-9); (6) some of the entries from Schian 25 Walker appear to concern legal advice rendered in unrelated matters (id. at 9-10); and (7) 26 27 1 Specifically, section 12(e) of the parties’ contract provides that “[i]f any legal action . . . is brought in connection with this Agreement, the prevailing Party shall be entitled to 28 recover reasonable attorneys’ fees, accounting fees, and other costs incurred in that action . . . .” (Doc. 98-4 at 9.)

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Advanced Reimbursement Solutions LLC v. Spring Excellence Surgical Hospital LLC, (D. Ariz. 2020).

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