Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-00095/USCOURTS-azd-2_12-cv-00095-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

FB-Stark, L.L.C.,

 Plaintiff,

vs.

Joseph White, et al.,

 Defendants.

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No. CV-12-00095-PHX-PGR

 

 ORDER

 

Having reviewed the plaintiff’s Motion for Entry of Judgment (Doc. 14), the

Court finds that the plaintiff is entitled to have a default judgment entered in its

favor pursuant to Fed.R.Civ.P. 55(b)(2) inasmuch as the record establishes that

defendants Joseph White and White Media Group LLC were properly served

(Docs. 10 and 11) with the plaintiff’s Amended Complaint and have failed to make

any appearance in this action, that the Clerk of the Court properly entered default

against them (Doc. 13), and that the principal amounts and interest owed to the

plaintiff by the defendants on the parties’ “Broadway” and “Van Buren” promissory

notes at issue have been sufficiently supported.

The Court concludes, however, that it cannot award the plaintiff the full

amount of its requested attorneys’ fees. The plaintiff seeks $5,924.00 in

Case 2:12-cv-00095-PGR Document 17 Filed 09/26/12 Page 1 of 6
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attorneys’ fees and $724.01 in costs “pursuant to A.R.S. § 12-341 and 12-341.01

and the terms of the promissory notes[.]” Both promissory notes contain an

identical provision entitled “Collection Costs and Attorney’s Fees” that state in

relevant part: “I agree to pay all costs of collection, replevin or any other or similar

cost if I am in default. In addition, if you hire an attorney to collect this note, I also

agree to pay any fee you incur with such attorney plus court costs (except where

prohibited by law.)”

A federal court sitting in diversity applies the law of the forum state

regarding an award of attorneys’ fees. Kona Enterprises, Inc. v. Estate of Bishop,

229 F.3d 877, 883 (9th Cir.2000). Arizona law provides that the law chosen by the

parties in their contract governs unless that law is contrary to the fundamental

policy of a state with a materially greater interest in the issue. Landi v. Arkules,

835 P.2d 458, 462 (Ariz.App.1992). Although inexplicably not raised by the

plaintiff, the promissory notes at issue both state that “[t]he law of the state of

Indiana will govern this note.” Indiana law recognizes the ability of parties to

contractually shift the obligation to pay attorney’s fees notwithstanding Indiana’s

adoption of the “American Rule” as its default rule on awarding attorney’s fees.

Stewart v. TT Commercial One, LLC, 911 N.E.2d 51, 58 (Ind.App.2009). While

the parties have agreed through the attorney’s fee provision in the promissory

notes that the defendants must pay “any fee” incurred by the plaintiff in collecting

on the notes, Indiana courts “emphasize that even under a contract, an award of

attorneys’ fees must be reasonable.” Bruno v. Well Fargo Bank, N.A., 850 N.E.2d

940, 951 (Ind.App. 2006). Where, as here, the amount of the requested

attorneys’ fee is not inconsequential, the plaintiff must provide objective evidence

of the nature of the legal services and the reasonableness of the fee. Posey v.

Case 2:12-cv-00095-PGR Document 17 Filed 09/26/12 Page 2 of 6
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1

 For example, the Court notes that McDowell charged his full rate for

“preparing” various documents filed with the Court that a paralegal easily could

have prepared, such as two form documents, the corporate disclosure statement

and the civil cover sheet that accompanied the filing of the complaint (January 12,

2012), and the application for entry of default (February 22, 2012), and he

charged his full rate to “study” documents that a paralegal could have been

assigned to peruse, such as the Order Setting Scheduling Conference (January

23, 2012) and Clerk of the Court’s one-sentence entry of default (February 24,

2012).

 A senior associate assigned to the case, Michael Kuehn, also billed for

work at his full rate of $250.00 that a paralegal could have performed, such as

searching through UCC and county recorder filings (March 28, 2012).

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Lafayette Bank and Trust Co., 583 N.E.2d 149, 152 (Ind.App.1991). The

determination of the reasonableness of the requested fee necessitates the

consideration of all relevant circumstances, Stewart, 911 N.E.2d at 58, which

include such factors as the hourly rate that is charged, the results achieved, and

the difficulty of the issues involved in the litigation. H & G Ortho, Inc. v.

Neodontics Internat’l, Inc., 823 N.E.2d 734, 737 (Ind.App.2005). The trial court

has “wide discretion” in determining what a reasonable attorney’s fee should be.

Id.

Having reviewed the materials submitted by the plaintiff related to the issue

of attorneys’ fees, the Court cannot conclude that all of the attorneys’ fees

requested are reasonable because the plaintiff’s counsel did not exercise

sufficient billing judgment in certain respects. First, the Court notes that the

attorney time sheets submitted by the plaintiff show that the senior attorney

assigned the case, law firm partner David McDowell, performed multiple tasks at

$275.00 per hour that could have, and should have, been done by the lesser-paid

employees who worked on this litigation, such as the two associate attorneys and

the paralegal assigned to the case.1 See e.g., New Mexico Citizens for Clean Air

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The Court will decrease the billing for these tasks (.9 hours for McDowell

and .6 hours for Kuehn) to the paralegal rate of $135.00, and will accordingly

decrease the requested fee award by $195.00.

Kuehn also billed for attending a telephone conference with one of the

client’s members that McDowell also billed his full rate for (January 25, 2012). 

Such double billing is not appropriate and the Court will decrease the requested

fee award by $75.00, the amount billed by Kuehn.

2

 For example, the Court notes that McDowell charged his full rate to

communicate with, or to study communications from, the plaintiff’s two members

some 42 times in the three month period this action was litigated.

 The fee request states that McDowell billed 11.4 hours for his part in

this litigation. The Court will decrease the billing of four hours of McDowell’s time

to the senior associate rate of $250.00, and will accordingly decrease the

requested fee award by $100.00.

 

 

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and Water v. Espanola Mercantile Co., 72 F.3d 830, 835 (10th Cir.1996) (“[W]hen

a lawyer spends time on tasks that are easily delegable to non-professional

assistance, legal service rates are not applicable.”); Ursic v. Bethlehem Mines,

719 F.2d 670, 677 (3rd Cir. 1983) (“Nor do we approve the wasteful use of highly

skilled and highly priced talent for matters easily delegable to non-professional or

less experienced associates. ... A Michelangelo should not charge Sistine Chapel

rates for painting a farmer’s barn.”) 

Second, the time sheets show that McDowell spent excessive time

communicating with his client’s two members. While the Court understands the

need for a law firm to keep in close contact with a client, that does not mean that

the defendants should have to pay for the decision to assign that task almost

exclusively to a senior attorney.2

 

Third, the plaintiff is requesting that the defendants pay for its fees incurred

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3

 The Court will deduct $431.50 from the requested fee award for tasks

related to the amended complaint taken by McDowell, Kuehn, and a paralegal.

(January 18-20, 2012.)

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in complying with the Court’s order (Doc. 7) that required the plaintiff to file an

amended complaint because the original complaint, prepared by McDowell, failed

to properly allege the basis of diversity of citizenship jurisdiction. Given that the

Court should not have had to instruct the plaintiff’s senior counsel how to allege

subject matter jurisdiction, a very basic task, the Court will not permit the plaintiff

to pass the costs associated with the amended complaint on to the defendants.3

Based on the above, the Court concludes that a reasonable attorneys’ fee

for the services provided by the plaintiff’s counsel is $5,122.50.

Because the defendants agreed in the promissory notes to pay the costs,

including court costs, associated with the collection of the notes, and because the

costs sought by the plaintiff are reasonable, the Court will award the plaintiff its

requested costs of $724.01. Therefore,

IT IS ORDERED that plaintiff FB-Stark, L.L.C.’s Motion for Entry of

Judgment (Doc. 14) is granted and that Clerk of the Court shall enter judgment in

favor of the plaintiff and against defendants Joseph White and White Media

Group LLC pursuant to Fed.R.Civ.P. 55(b)(2) as follows:

(1) As to the “Broadway” promissory note, for the sum of $79,029.20,

representing the principal amount of $63,269.00, plus $12,263.20 in interest and

late fees as of May 16, 2012, and $3,597.00 for the loan exit fee, with interest to

accrue at the contractual rate of 12% per annum on the principal balance of the

note until paid in full;

(2) As to the “Van Buren” promissory note, for the sum of $42,708.32,

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representing the principal amount of $37,356.00, plus $5,352.32 in interest and

late fees as of May 16, 2012, with interest to accrue at the contractual rate of

15% per annum on the principal balance of the note until paid in full; and

(3) For the sum of $5,846.51, representing $5,122.50 in attorneys’ fees and

$724.01 in costs.

DATED this 26th day of September, 2012.

Case 2:12-cv-00095-PGR Document 17 Filed 09/26/12 Page 6 of 6