Zoroastrian Center & Darb-E-Mehr of Metropolitan Washington, D.C.v. Rustam Guiv Foundation

245 F. Supp. 3d 742, 2017 U.S. Dist. LEXIS 43754
CourtDistrict Court, E.D. Virginia
DecidedMarch 24, 2017
DocketCivil Action No. 1:13-cv-980
StatusPublished
Cited by1 cases

This text of 245 F. Supp. 3d 742 (Zoroastrian Center & Darb-E-Mehr of Metropolitan Washington, D.C.v. Rustam Guiv Foundation) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zoroastrian Center & Darb-E-Mehr of Metropolitan Washington, D.C.v. Rustam Guiv Foundation, 245 F. Supp. 3d 742, 2017 U.S. Dist. LEXIS 43754 (E.D. Va. 2017).

Opinion

MEMORANDUM OPINION

Liam O’Grady, United States District Judge

This matter comes before the Court on remand from the Fourth Circuit Court of Appeals, Dkt. No. 140, and on Defendants’ Motion for Attorney’s Fees and Costs on Appeal. Dkt. No. 143. The Court reviews this matter after receiving supplemental briefing from Defendants. Dkt. No. 157. The Fourth Circuit remanded the case only with respect to the calculation of attorney’s fees. For the reasons discussed below, the Court hereby ORDERS that Defendants’ Motions are GRANTED IN PART and DENIED IN PART. Defendants are entitled to $89,641.69 in fees incurred in the district court proceeding and $57,237.00 in fees incurred on appeal less a credit of $99,717.85 that Plaintiff previously tendered to satisfy the original fee award. Defendants’ Motion for Costs on Appeal is DISMISSED WITHOUT PREJUDICE and any motions for costs which are not time-barred as discussed below may be refiled with the clerk of the appropriate court.

I. Background

This demand for attorney’s fees arises out of litigation over a failed effort to construct a Zoroastrian worship center in Fairfax, Virginia. Plaintiff, Zoroastrian Center and Darb-E-Mehr of Metroplitan Washington D.C. entered into a ninety-nine year lease with Defendants Rustam Guiv Foundation of New York, the land owner, and other trustee defendants. Following difficulties in the relationship, Defendants terminated the lease.1 Article XIII of the parties’ lease states that “In the event of any litigation between the parties hereto, the prevailing party in such litigation shall be entitled to recover from [745]*745the other party its costs, expenses and reasonable attorney’s fees therein incurred.” See Dkt. No. 1-1, Exh. C at 10-11. Plaintiff sued in Virginia state court for a declaratory judgment with respect to its rights under the lease. Defendants removed the case to federal court and filed three counterclaims against Plaintiff.

The Court granted Defendants’ Motion for Summary Judgment and on two of the three counterclaims on May 12, 2014. Dkt. No. 81. One of the counterclaims, for slander of title, was dismissed with prejudice. Id. The Court subsequently ruled that Defendants were the “prevailing party” in the dispute and on July 22, 2014 granted in part Defendants’ Motion for Attorney’s Fees awarding $99,717.85 in fees and no additional costs or expenses. Dkt. No. 93. Plaintiff timely appealed to the Fourth Circuit on August 19, 2015 with respect to the jurisdiction of this Court to hear the case, the merits of the decision, and the award of fees. Dkt. No. 136. The Fourth Circuit issued its judgment on May 4, 2016 affirming the decision of the Court with respect to the jurisdictional and merits findings, but reversing and vacating the Court’s award of attorney’s fees for failure to disambiguate fees awarded for successful claims from those of Defendants’ counterclaims upon which they were not successful. See Dkt. Nos. 139, 140. The Court ordered a new hearing on the issue of attorney’s fees for June 24, 2016 at which time the Court took under advisement the parties’ arguments and requested further briefing on the right to attorney’s fees incurred on appeal. Dkt. No. 152. The parties supplied additional briefing on the fee issues and declined oral argument. The Court entered an order denying Defendants’ Motion in so far as the methodology used to calculate fees was inappropriate and instructed the Defendants to provide an alternative method for calculating appropriate fees. Dkt. No. 156. Defendants submitted an additional memorandum and supporting exhibits on January 25, 2017. Dkt. No. 157.

II. Legal Standard

As the Fourth Circuit observed, “Virginia supplies the substantive law here since the district court was sitting in diversity.” Dkt. No. 140, at 13 (citing Gen. Tech. Applications, Inc. v. Exro Ltda, 388 F.3d 114, 118 (4th Cir. 2004)). Pursuant to Virginia law, “parties are free to draft and adopt contractual provisions shifting the responsibility for attorneys’ fees to the losing party in a contract dispute.” Ulloa v. QSP, Inc., 271 Va. 72, 81, 624 S.E.2d 43 (2006). If, as in this case, the contract provides for an award of fees to the prevailing party, that party bears “the burden of establishing, as an element of its prima facie case, that the attorneys’ fees it seeks are reasonable in relation to the results obtained and were necessary.” Chawla v. BurgerBusters, Inc., 255 Va. 616, 624, 499 S.E.2d 829 (1998). “[U]nder contractual [fee-shifting] provisions a party is not entitled to recover fees for work performed on unsuccessful claims.” Ulloa, 271 Va. at 82, 624 S.E.2d 43.

III. Discussion

The parties dispute whether Defendants have set forth a prima facie case for attorney’s fees which deducts the amount of labor devoted to the slander of title claim. The parties also dispute whether and to what extent Defendants are entitled to attorney’s fees incurred on appeal.

A. Attorney’s Fees for District' Court Proceedings

After the Court rejected Defendants’ first attempt to apportion fees to their successful claims and discount labor attributable to their unsuccessful slander of title claim, Defendants submitted supplemental briefing in support of the apportionment of fees. Dkt. No. 157. Defendants now contend that they are entitled to no less than [746]*746$90,6.02,39 in attorney’s fees for work expended prior to the appeal.

Defendants reach this amount through a two-step process. First, Defendants have highlighted all of the billing records they believe are relevant to the slander of title issue for each of the four timekeepers previously considered by the Court in its original fee determination. Those billing records total 14.1 hours and, relying on the hourly rates the Court utilized in its initial award, Defendants reduced the amount of district court fees to $96,242.00.2 Second, in direct response to the Court’s earlier ruling that the “page count method” of apportioning fees utilized in JTH Tax Inc. v. H&R Block Eastern Tax Services, Inc., 245 F.Supp.2d 756 (E.D. Va. 2002) was an inappropriate mechanism for apportioning fees in this case, Defendants exercised their billing judgment to further reduce each timekeeper’s fees “by the same percentage as the identified time relates to the original award amount.” Stated another way, Defendants divided the total hours worked by the- hours not devoted to the slander of title claim (the “billing judgment adjustment percentage”) and then divided the “other hours” by that percentage as reflected in the following table reproduced from Defendants’ supplemental brief:

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Dkt. No. 157 at 5.

Defendants’ supplemental brief better delineates the unsuccessful slander of title claim from the successful claims. Accordingly, the Court adopts the methodology that Defendants employed. Nevertheless, the figures cited -in Defendants’ table do not precisely match the hours highlighted in-Defendants’ billing records. See Dkt. No. 157, Exhs. 3, 5.

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Bluebook (online)
245 F. Supp. 3d 742, 2017 U.S. Dist. LEXIS 43754, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zoroastrian-center-darb-e-mehr-of-metropolitan-washington-dcv-rustam-vaed-2017.