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5 6 7 UNITED STATES DISTRICT COURT 8 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 9 10 SUNTRUST BANKS, INC., CASE NO. C18-840 MJP 11 Plaintiff, ORDER DENYING MOTION CONTESTING ATTORNEYS’ 12 v. FEES 13 BE YACHTS, LLC et al., 14 Defendants. 15 16 This matter comes before the Court upon Defendants’ Motion Contesting Plaintiff’s 17 Supplemental Attorneys’ Fees Declarations. (Dkt. No. 78.) Having reviewed the Motion, the 18 Response (Dkt. No. 79), the Reply (Dkt. No. 80), and the related record, the Court DENIES the 19 Motion. 20 Background 21 Defendants Edward Balassanian and Be Yachts, LLC borrowed $1,800,000 from 22 Plaintiff, SunTrust Banks, Inc., to purchase a yacht. When Defendants defaulted on the loan 23 Plaintiff repossessed the yacht and eventually sold it for $1,050,000 and sued for recovery of the 24 1 remaining debt. Defendants brought counterclaims for failure to use reasonable care in the 2 preservation of collateral, failure to hold a commercially reasonable sale, and for damages and 3 rights under RCW 62A.9A-625. 4 Prior to trial in this matter Plaintiff filed two dispositive motions. First, on December 7,
5 2018 Plaintiff moved for partial summary judgment on Defendants’ counterclaim for damages 6 and rights under RCW 62A.9A-625, arguing that if Defendants were successful on their other 7 counterclaims they could not “double dip” by also seeking damages under RCW 62A.9A-625. 8 (Dkt. No. 16.) The Court denied Plaintiff’s motion, concluding that Plaintiff’s argument was 9 contradicted by the statutory text, Federal Rules of Civil Procedure, and case law. (Dkt. No. 24.) 10 A year later Plaintiff submitted a motion for summary judgment on its claim for breach of 11 contract and on Defendants’ counterclaims for failure to use reasonable care in the preservation 12 of collateral and failure to hold a commercially reasonable sale. (Dkt. No. 30.) Of these, only 13 Plaintiff’s motion for summary judgment as to Defendants’ counterclaim for failure to use 14 reasonable care was granted. Plaintiff’s motion was denied as to the other two claims because
15 Defendants submitted evidence that created a genuine issue of material fact. (Dkt. No. 52 at 10, 16 11-12.) 17 The Parties proceeded to trial on Plaintiff’s breach of contract claim and Defendants’ 18 counterclaims for failure to hold a commercially reasonable sale and for damages and rights 19 under RCW 62A.9A-625. On June 30, 2020, following a two-and-a-half-day bench trial, the 20 Court found that Defendants had breached their contract, Plaintiff had used reasonable care in 21 the preservation of the collateral, used commercially reasonable marketing, and conducted a 22 commercially reasonable sale. The Court therefore concluded that Plaintiff was entitled to 23 judgment in its favor in full and awarded Plaintiff $797,979.60.60. (Dkt. Nos. 67-68.)
24 1 Following the judgment, Plaintiff filed a Motion for Attorneys’ fees seeking $267,551.00 2 for the work of attorneys R. Isaak Hurst and Daniel A. Armstrong and paralegal Adrienne 3 Whitmore. (Dkt. No. 69.) On September 28, 2020 the Court held that Plaintiff is entitled to its 4 reasonable attorneys’ fees but had failed to meet its burden of demonstrating the submitted fees
5 were reasonable. (Dkt. No. 74 at 5.) Finding that the Parties had agreed that any dispute under 6 the contract is to be governed by Viginia law, which does not permit a prevailing party “to 7 recover fees for work performed on unsuccessful claims” Ulloa v. QSP, Inc., 271 Va. 72, 82 8 (2006), the Court noted specific categories of billing entries that are not recoverable including 9 time spent on unsuccessful motions, such as Plaintiff’s Motion for Partial Summary Judgment. 10 (Dkt. No. 74 (citing Dkt. No. 16).) The Court ordered Plaintiff to submit specific, unredacted 11 evidence of work performed solely on Plaintiff’s successful claim. 12 On October 9, 2020, Plaintiff submitted supplemental declarations in support of its 13 motion for attorneys’ fees. (Dkt. No. 75.) In this supplemental submission, Plaintiff requests a 14 total award of attorneys’ fees of $232,980.00, representing a total exclusion of $66,360.50 of
15 billing entries in conformance with the Court’s Order. (Dkt. No. 75, Supplemental Declaration 16 of R. Isaak Hurst (“Supp. Hurst Decl.”), ¶ 9.) After reviewing Plaintiff’s supplemental 17 declarations, the Court permitted the Defendants an opportunity to contest individual billing 18 entries or categories of billing entries as listed in Plaintiff’s supplemental declarations. (Dkt. No. 19 77.) 20 Defendants have now submitted a motion contesting the supplemental attorneys’ fees 21 declarations (Dkt. No. 78). Defendants seek to reduce the attorneys’ fees for Plaintiff’s Second 22 Motion for Summary Judgment by $26,482.67 and by $11,670.00 for 31 individual billing 23 entries, totaling a reduction in Plaintiff’s requested attorneys’ fees of $38,152.67. Plaintiff has
24 1 conceded to a reduction of $6,445.0 for the individual billing entries but opposes the remainder of 2 Defendants’ motion. (Dkt. No. 79 at 7.) 3 Discussion 4 A. Fees for Plaintiff’s Second Motion for Summary Judgment
5 Defendants first challenge Plaintiff’s request for fees for its Second Motion for Summary 6 Judgment, which sought judgment on three of Plaintiff’s claims: (1) breach of contract (2) failure 7 to use reasonable care in the preservation of collateral and (3) lack of commercial reasonableness 8 (Dkt. No. 30.) The Court denied Plaintiff’s first and third requests and granted its second. (Dkt. 9 No. 52 at 13). Defendants therefore request that Plaintiff only recover a third of the fees it billed 10 for drafting the motion. 11 Under Virginia law, a party can only recover fees for claims on which it prevailed. 12 Ulloa, 271 Va. at 82. However, a party is not per se barred from recovering fees incurred for 13 unsuccessful motions. Dewberry & Davis, Inc. v. C3NS, Inc., 284 Va. 485, 497 (2012). If the 14 party ultimately prevailed on the claim, the trial court will determine the amount of the claimed
15 fees related to the claim, including those for unsuccessful motions, that were reasonable and 16 necessary. Id. 17 Defendants argue that the Court already ruled that “Plaintiff may not recover attorneys’ 18 fees for time spent on unsuccessful motions, such as its Motion for Partial Summary Judgment,” 19 so allowing attorneys’ fees for work on unsuccessful portions of Plaintiff’s Motion for Summary 20 Judgment would be inconsistent. (Dkt. No. 74 at 5 (citing Dkt. No. 16).) But unlike Plaintiff’s 21 arguments in its Motion for Partial Summary Judgment, which were contradicted by the statutory 22 text, Federal Rules of Civil Procedure, and case law, Plaintiff’s arguments in its second Motion 23 for Summary Judgment were not unreasonable, they were simply defeated by Defendants’
24 evidence, which created a genuine dispute of material fact. (Dkt. No. 52 at 10-13.) Further, 1 Plaintiff was ultimately successful with the same arguments at trial. For these reasons, the Court 2 finds that Plaintiff is entitled to attorneys’ fees for time spent on its second Motion for Summary 3 Judgment, time that was reasonable and necessary to Plaintiff’s ultimate success at trial. 4 B. Individual Entries
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5 6 7 UNITED STATES DISTRICT COURT 8 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 9 10 SUNTRUST BANKS, INC., CASE NO. C18-840 MJP 11 Plaintiff, ORDER DENYING MOTION CONTESTING ATTORNEYS’ 12 v. FEES 13 BE YACHTS, LLC et al., 14 Defendants. 15 16 This matter comes before the Court upon Defendants’ Motion Contesting Plaintiff’s 17 Supplemental Attorneys’ Fees Declarations. (Dkt. No. 78.) Having reviewed the Motion, the 18 Response (Dkt. No. 79), the Reply (Dkt. No. 80), and the related record, the Court DENIES the 19 Motion. 20 Background 21 Defendants Edward Balassanian and Be Yachts, LLC borrowed $1,800,000 from 22 Plaintiff, SunTrust Banks, Inc., to purchase a yacht. When Defendants defaulted on the loan 23 Plaintiff repossessed the yacht and eventually sold it for $1,050,000 and sued for recovery of the 24 1 remaining debt. Defendants brought counterclaims for failure to use reasonable care in the 2 preservation of collateral, failure to hold a commercially reasonable sale, and for damages and 3 rights under RCW 62A.9A-625. 4 Prior to trial in this matter Plaintiff filed two dispositive motions. First, on December 7,
5 2018 Plaintiff moved for partial summary judgment on Defendants’ counterclaim for damages 6 and rights under RCW 62A.9A-625, arguing that if Defendants were successful on their other 7 counterclaims they could not “double dip” by also seeking damages under RCW 62A.9A-625. 8 (Dkt. No. 16.) The Court denied Plaintiff’s motion, concluding that Plaintiff’s argument was 9 contradicted by the statutory text, Federal Rules of Civil Procedure, and case law. (Dkt. No. 24.) 10 A year later Plaintiff submitted a motion for summary judgment on its claim for breach of 11 contract and on Defendants’ counterclaims for failure to use reasonable care in the preservation 12 of collateral and failure to hold a commercially reasonable sale. (Dkt. No. 30.) Of these, only 13 Plaintiff’s motion for summary judgment as to Defendants’ counterclaim for failure to use 14 reasonable care was granted. Plaintiff’s motion was denied as to the other two claims because
15 Defendants submitted evidence that created a genuine issue of material fact. (Dkt. No. 52 at 10, 16 11-12.) 17 The Parties proceeded to trial on Plaintiff’s breach of contract claim and Defendants’ 18 counterclaims for failure to hold a commercially reasonable sale and for damages and rights 19 under RCW 62A.9A-625. On June 30, 2020, following a two-and-a-half-day bench trial, the 20 Court found that Defendants had breached their contract, Plaintiff had used reasonable care in 21 the preservation of the collateral, used commercially reasonable marketing, and conducted a 22 commercially reasonable sale. The Court therefore concluded that Plaintiff was entitled to 23 judgment in its favor in full and awarded Plaintiff $797,979.60.60. (Dkt. Nos. 67-68.)
24 1 Following the judgment, Plaintiff filed a Motion for Attorneys’ fees seeking $267,551.00 2 for the work of attorneys R. Isaak Hurst and Daniel A. Armstrong and paralegal Adrienne 3 Whitmore. (Dkt. No. 69.) On September 28, 2020 the Court held that Plaintiff is entitled to its 4 reasonable attorneys’ fees but had failed to meet its burden of demonstrating the submitted fees
5 were reasonable. (Dkt. No. 74 at 5.) Finding that the Parties had agreed that any dispute under 6 the contract is to be governed by Viginia law, which does not permit a prevailing party “to 7 recover fees for work performed on unsuccessful claims” Ulloa v. QSP, Inc., 271 Va. 72, 82 8 (2006), the Court noted specific categories of billing entries that are not recoverable including 9 time spent on unsuccessful motions, such as Plaintiff’s Motion for Partial Summary Judgment. 10 (Dkt. No. 74 (citing Dkt. No. 16).) The Court ordered Plaintiff to submit specific, unredacted 11 evidence of work performed solely on Plaintiff’s successful claim. 12 On October 9, 2020, Plaintiff submitted supplemental declarations in support of its 13 motion for attorneys’ fees. (Dkt. No. 75.) In this supplemental submission, Plaintiff requests a 14 total award of attorneys’ fees of $232,980.00, representing a total exclusion of $66,360.50 of
15 billing entries in conformance with the Court’s Order. (Dkt. No. 75, Supplemental Declaration 16 of R. Isaak Hurst (“Supp. Hurst Decl.”), ¶ 9.) After reviewing Plaintiff’s supplemental 17 declarations, the Court permitted the Defendants an opportunity to contest individual billing 18 entries or categories of billing entries as listed in Plaintiff’s supplemental declarations. (Dkt. No. 19 77.) 20 Defendants have now submitted a motion contesting the supplemental attorneys’ fees 21 declarations (Dkt. No. 78). Defendants seek to reduce the attorneys’ fees for Plaintiff’s Second 22 Motion for Summary Judgment by $26,482.67 and by $11,670.00 for 31 individual billing 23 entries, totaling a reduction in Plaintiff’s requested attorneys’ fees of $38,152.67. Plaintiff has
24 1 conceded to a reduction of $6,445.0 for the individual billing entries but opposes the remainder of 2 Defendants’ motion. (Dkt. No. 79 at 7.) 3 Discussion 4 A. Fees for Plaintiff’s Second Motion for Summary Judgment
5 Defendants first challenge Plaintiff’s request for fees for its Second Motion for Summary 6 Judgment, which sought judgment on three of Plaintiff’s claims: (1) breach of contract (2) failure 7 to use reasonable care in the preservation of collateral and (3) lack of commercial reasonableness 8 (Dkt. No. 30.) The Court denied Plaintiff’s first and third requests and granted its second. (Dkt. 9 No. 52 at 13). Defendants therefore request that Plaintiff only recover a third of the fees it billed 10 for drafting the motion. 11 Under Virginia law, a party can only recover fees for claims on which it prevailed. 12 Ulloa, 271 Va. at 82. However, a party is not per se barred from recovering fees incurred for 13 unsuccessful motions. Dewberry & Davis, Inc. v. C3NS, Inc., 284 Va. 485, 497 (2012). If the 14 party ultimately prevailed on the claim, the trial court will determine the amount of the claimed
15 fees related to the claim, including those for unsuccessful motions, that were reasonable and 16 necessary. Id. 17 Defendants argue that the Court already ruled that “Plaintiff may not recover attorneys’ 18 fees for time spent on unsuccessful motions, such as its Motion for Partial Summary Judgment,” 19 so allowing attorneys’ fees for work on unsuccessful portions of Plaintiff’s Motion for Summary 20 Judgment would be inconsistent. (Dkt. No. 74 at 5 (citing Dkt. No. 16).) But unlike Plaintiff’s 21 arguments in its Motion for Partial Summary Judgment, which were contradicted by the statutory 22 text, Federal Rules of Civil Procedure, and case law, Plaintiff’s arguments in its second Motion 23 for Summary Judgment were not unreasonable, they were simply defeated by Defendants’
24 evidence, which created a genuine dispute of material fact. (Dkt. No. 52 at 10-13.) Further, 1 Plaintiff was ultimately successful with the same arguments at trial. For these reasons, the Court 2 finds that Plaintiff is entitled to attorneys’ fees for time spent on its second Motion for Summary 3 Judgment, time that was reasonable and necessary to Plaintiff’s ultimate success at trial. 4 B. Individual Entries
5 Defendants next object to 31 “[i]ndividual problematic billing entries” identified in 6 Exhibit 7 to the Declaration of Anna Johnsen (“Johnsen Decl.”), which total $11,670.00 of 7 Plaintiff’s requested fees. (Dkt. No. 78, Ex. 7.) Plaintiff concedes to the exclusion of some of 8 the individual billing entries identified in Defendants’ motion, totaling a concession of 9 $6,445.00. (Dkt. No. 79 at 5-6.). The Court finds that Plaintiff has presented reasonable fees as 10 to each of the remaining five contested entries, which are organized below by date and the 11 description provided by Plaintiff for each entry. 12 July 13, 2018 Entries (1.9 hrs): “Received Defendants’ Answer to SunTrust’s Complaint 13 for Damages. Researching Federal Court rules for the Western District of Washington relating 14 to service of process and whether by answering a complaint, Defendants’ attorney waived
15 service of process on defendant.” (Supp. Hurst Decl. at 12.) Defendants seek to exclude this 16 time because “Balassanian had already agreed to stipulate to service and so this research was 17 unnecessary.” (Johnsen Decl., Ex. 7 at 29.) But as Plaintiff notes, “this entry also includes time 18 spent reviewing and analyzing the answer to the complaint and counterclaims, which were 19 received on that date.” (Dkt. No. 79 at 4.) This is a reasonable amount of time spent in review 20 of the multiple counterclaims and the Answer. 21 December 8, 2019 Entries (2.7 hours): “Review secondary sources on necessary party, 22 prejudice to claims, and mandatory joinder.” (Supp. Hurst Decl. at 60.) Defendants argue this 23 entry is unreasonable because the deadline had already passed for adding additional parties.
24 1 (Johnsen Decl., Ex. 7 at 30.) Plaintiff counters that these entries reflect research “on whether 2 pressure could be brought to ensure witness cooperation in the case given the recent lack of 3 response SunTrust’s attorneys received from key witnesses at the time.” (Dkt. No. 79 at 4.) The 4 Court finds that the few hours spent researching this strategy were reasonable.
5 January 8, 2020 Entries (2 hrs): “Review secondary sources on subpoenas on expert 6 witnesses . . . . Background research on Ron Reisner and Neil Emmott for purposes of drafting 7 deposition subpoenas . . . . Prepare draft subpoena for Ron Reisner . . . . Prepare draft subpoena 8 for Neill Emmott.” (Supp. Hurst Decl. at 76.) Defendants argue this time was unnecessary 9 because Defendants agreed to deposition times and procedures ahead of time and $600 is 10 excessive for filling in the form subpoenas. (Johnsen Decl., Ex. 7 at 30.) Plaintiff counters that 11 is common practice to serve a subpoena despite an agreement from the attorney representing an 12 adverse party that a deponent will appear, the subpoena “provides additional protection and 13 rights.” (Dkt. No. 79 at 5.) The Court agrees with Plaintiff, the billing entry is reasonable. 14 May 1, 2020 Entries (4.6 hrs): “Prepared for and attended a joint pretrial conference.”
15 (Supp. Hurst Decl. at 86.) Defendants seek to strike this entry as an excessive amount of time 16 spent in preparation. (Johnsen Decl., Ex. 7 at 30.) In response, Plaintiff concedes to an 17 exclusion of part of this entry but argues that “the entry is at the very least sufficient to warrant 18 1.2 hours of billing time for preparation and attendance at the pretrial conference.” (Dkt. No. 79 19 at 5.) The Court agrees; a little over an hour preparing for a pretrial conference is reasonable. 20 May 7 and 11, 2020 Entries (7.8 hrs): “Design and draft letters to Rick Young, Don 21 Beaumont, and [B]uck Fowler asking all three to provide witness testimony . . . urge fact 22 witnesses to testify at trial.” (Supp. Hurst Decl. at 94.) Defendants argue this is an excessive 23 amount of time spent urging witnesses to testify. (Johnsen Decl., Ex. 7 at 30.) But the Court
24 1 finds the time reasonable given that the witnesses in this case spent months failing to answer and 2 were key to defending against Defendants’ counterclaims. 3 Conclusion 4 In conclusion, the Court DENIES Defendants’ Motion, after taking into account the
5 conceded reductions from Plaintiff of $6,445.00. Plaintiff is therefore awarded a total of 6 $226,535.00 in attorneys’ fees. 7 8 The clerk is ordered to provide copies of this order to all counsel. 9 Dated December 29, 2020.
A 10 11 Marsha J. Pechman 12 United States Senior District Judge
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