Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_15-cv-02129/USCOURTS-azd-2_15-cv-02129-0/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 

Massage Envy Franchising LLC,

Plaintiff, 

v. 

Doc Marketing LLC, et al., 

Defendants. 

No. CV-15-02129-PHX-DLR

ORDER 

 Before the Court is Plaintiff/Counter-Defendant Massage Envy Franchising, 

LLC’s (MEF) Motion for Attorneys’ Fees and Non-Taxable Costs. (Doc. 68.) The 

motion is fully briefed, and the Court heard oral argument on April 15, 2016. For the 

following reasons, MEF’s motion is granted in part. 

BACKGROUND 

 MEF is a franchisor of independently owned and operated massage therapy 

clinics. Defendants/Counterclaimants Doc Marketing, LLC and its managing member 

George Lohmann, Jr. (Defendants) are former MEF franchisees. In June 2014, MEF 

terminated Defendants’ franchise agreements, leading Lohmann to file a wrongful 

termination complaint in the Western District of Texas. MEF and Lohmann resolved 

their dispute through a Settlement Agreement, which, as relevant here, created a process 

for appraising and selling Defendants’ two Texas-based clinics. 

 This case involved MEF’s efforts to compel Defendants to cooperate with the sale 

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of the clinics. MEF successfully obtained a temporary restraining order and preliminary 

injunction compelling Defendants to cooperate with MEF to ensure that the clinics were 

sold according to the terms and procedures of the Settlement Agreement. Defendants 

filed numerous counterclaims, but the parties eventually reached a global settlement 

resolving this matter. MEF now moves for $148,224.44 in attorneys’ fees and $1,103.84 

in non-taxable costs pursuant to a fee-shifting provision in the Settlement Agreement, 

which provides that the prevailing party in a dispute involving or relating to the 

Settlement Agreement shall be entitled to its reasonable attorneys’ fees. (Docs. 68, 92.) 

LEGAL STANDARD 

 When reasonable attorneys’ fees are sought pursuant to a contractual provision, a 

fee award must be supported by proof of what is reasonable. Schweiger v. China Doll 

Rest., Inc., 673 P.2d 927, 931 (Ariz. Ct. App. 1983) (citing Crouch v. Pixler, 320 P.2d 

943, 946 (Ariz. 1958)). “A fee award calculated by a lodestar method—multiplying a 

reasonable hourly rate by the number of hours expended—is presumptively reasonable.” 

Flood Control Dist. of Maricopa Cty v. Paloma Inv. Ltd. P’ship, 279 P.3d 1191, 1212 

(Ariz. Ct. App. 2012). 

Once the prevailing party makes a prima facie case that the fees requested are reasonable, the burden shifts to the party opposing the fee request to establish that the amount requested is clearly excessive. If that party fails to make such a showing of unreasonableness, the prevailing party is entitled to full payment of the fees. If, however, the party opposing the award shows that the otherwise prima facie reasonable fee request is excessive, the court has discretion to reduce the fees to a reasonable level. 

Geller v. Lesk, 285 P.3d 972, 976 (Ariz. Ct. App. 2012) (internal citations omitted).

DISCUSSION 

 MEF is the prevailing party because it obtained all the relief it sought in this 

litigation through the temporary restraining order and preliminary injunction. See Watson 

v. Cty. of Riverside, 300 F.3d 1092, 1096 (9th Cir. 2002). Accordingly, MEF is entitled 

to its reasonable attorneys’ fees pursuant to the Settlement Agreement’s fee-shifting 

provision.

 When analyzing the reasonableness of a requested fee award, the Court begins by 

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determining the billing rate charged by the attorneys who worked on the case. 

Schweiger, 673 P.2d at 931. “[I]n corporate and commercial litigation between feepaying clients, there is no need to determine the reasonable hourly rate prevailing in the 

community for similar work because the rate charged by the lawyer to the client is the 

best indication of what is reasonable under the circumstances of the particular case.” Id.

at 931-32. However, “upon the presentation of an opposing affidavit setting forth the 

reasons why the hourly billing rate is unreasonable, the court may utilize a lesser rate.” 

Id. at 932. 

 Six attorneys and one paralegal performed work on behalf of MEF. Cynthia 

Ricketts, co-founding and named partner of Sacks, Ricketts & Case LLP (SRC) billed at 

an hourly rate of $495, which was discounted from her standard hourly rate of $550. 

(Doc. 69, ¶¶ 4-5.) Robert Bader, Of Counsel with SRC, billed at an hourly rate of $430, 

discounted from his standard hourly rate of $475. (Id., ¶ 7.) Amit Rana, a litigation 

associate with SRC, billed at an hourly rate of $225, discounted from his standard hourly 

rate of $250. (Id., ¶ 8.) Natalya Ter-Grigoryan, a litigation associate with SRC, billed at 

an hourly rate of $315, discounted from her standard hourly rate of $350. (Id., ¶ 9.) 

Claudia Barajas, a paralegal with SRC, billed at an hourly rate of $158, discounted from 

her standard hourly rate of $175. (Id., ¶10.) Barry Heller, a partner with DLA Piper 

LLP, billed at an hourly rate of $639.60, discounted from his standard hourly rate of 

$785. (Doc. 70, ¶¶ 4, 7.) Finally, Richard Greenstein, a partner with DLA Piper, billed 

at an hourly rate of $589, discounted from his standard hourly rate of $730. (Id., ¶¶ 5, 8.) 

 These fees are presumptively reasonable because they are the fees that MEF 

agreed to pay. Although Defendants argue that these rates are too high, they do not 

specify the reasons why the rates are unreasonable. Indeed, Defendants’ counsel Jeffrey 

Goldstein submitted a declaration challenging the reasonableness of the overall fee award 

while assuming that the hourly rates charged by MEF’s attorneys are reasonable. (Doc. 

88-1.) Accordingly, the Court finds that the hourly rates charged by MEF’s attorneys are 

reasonable. 

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Next, the Court must consider whether the number of hours expended is 

reasonable. A reasonable attorneys’ fee award compensates only for those “item[s] of 

service which, at the time rendered, would have been undertaken by a reasonable and 

prudent lawyer to advance or protect his client’s interest . . . .” Schweiger, 673 P.2d at 

932 (quoting Twin City Sportservice v. Charles O. Finley & Co., 676 F.2d 1291, 1313 

(9th Cir. 1982)). To that end, the party seeking a fee award must submit an affidavit 

indicating “the types of legal services provided, the date the service was provided, the 

attorney providing the service . . ., and the time spent providing the service.” Id. Once 

that party establishes its entitlement to fees and submits a sufficiently-detailed affidavit, 

“the burden shifts to the party opposing the fee award to demonstrate the impropriety or 

unreasonableness of the requested fees.” Nolan v. Starlight Pines Homeowners Ass’n, 

167 P.3d 1277, 1286 (Ariz. Ct. App. 2007) (citing State ex rel. Corbin v. Tocco, 845 P.2d 

513, 520 (Ariz. Ct. App. 1992)). The opposing party must “present specific objections to 

the reasonableness of the fees requested.” Id. Generic assertions that the fees “are 

inflated and that much of counsel’s work was unnecessary . . . are insufficient as a matter 

of law.” Id. at 1285-86. 

 Although MEF submitted billing records that include detailed entries describing 

the types of legal services provided, the date the services were provided, the attorneys 

providing the services, and the time spent providing the services, most fee entries are 

block-billed. “Block billing, the practice of including unrelated tasks in a single time 

entry, makes it difficult for a reviewing court to assess the reasonableness of the time 

spent on each task.” Gressett v. Cent. Ariz. Water Conservation Dist., No. CV-12-00185-

PHX-JAT, 2015 WL 5545054, at *4 (D. Ariz. Sept. 18, 2015). For example, on October 

20, 2015, Mr. Bader expended 5.5 hours and billed $2,365.00 for the following tasks: 

“Revise letter to Doc Marketing’s counsel; draft complaint.” (Doc. 69-5 at 2.) Likewise, 

on November 2, 2015, Mr. Bader expended 7.1 hours and billed $3,053.00 for the 

following tasks: “Research alternative methods of service of complaint and summons; 

draft email to J. Goldstein regarding service of complaint; research cases supporting 

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motion to convert TRO; draft motion to convert TRO.” (Id. at 6.) Having reviewed 

MEF’s billing records, the Court finds that the following entries, totaling $100,254.30 in 

fees, reflect inappropriate block-billing: 

Date Attorney/Paralegal Time Expended Amount Billed 

10/20/2015 Bader 5.5 $2,365.00 

10/21/2015 Bader 1.8 $744.00 

10/21/2015 Ricketts 3.8 $1,881.00 

10/22/2015 Ricketts 2.2 $1,089.00 

10/23/2015 Ricketts 1.3 $643.50 

10/23/2015 Rana 5.0 $1,125.00 

10/24/2015 Ricketts 6.4 $3,168.00 

10/25/2015 Bader 6.4 $2,752.00 

10/25/2015 Ricketts 5.2 $2,574.00 

10/26/2015 Ricketts 2.1 $1,039.00 

10/26/2015 Barajas 5.5 $869.00 

10/27/2015 Barajas 2.7 $426.60 

10/28/2015 Ricketts 3.2 $1,584.00 

10/28/2015 Rana 2.8 $630.00 

10/28/2015 Barajas 5.8 $916.40 

10/28/2015 Bader 5.7 $2,451.00 

10/29/2015 Rana 3.1 $697.50 

10/29/2015 Barajas 7.0 $1,106.00 

10/29/2015 Bader 8.9 $3,827.00 

10/29/2015 Ricketts 7.5 $3,712.50 

10/30/2015 Bader 2.9 $1,247.00 

10/30/2015 Ricketts 4.4 $2,178.00 

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11/2/2015 Bader 7.1 $3,053.00 

11/3/2015 Bader 5.9 $2,537.00 

11/4/2015 Ricketts 1.3 $643.50 

11/5/2015 Ricketts 1.2 $594.00 

11/6/2015 Ricketts 0.7 $346.50 

11/9/2015 Ricketts 2.7 $1,336.50 

11/9/2015 Bader 3.2 $1,376.00 

11/10/2015 Bader 6.3 $2,709.00 

11/10/2015 Ricketts 6.2 $3,069.00 

11/10/2015 Barajas 2.0 $316.00 

11/11/2015 Bader 0.7 $301.00 

11/11/2015 Ricketts 4.9 $2,425.50 

11/11/2015 Barajas 3.0 $474.00 

11/12/2015 Bader 2.8 $1,204.00 

11/12/2015 Ricketts 5.4 $2,673.00 

11/12/2015 Barajas 4.2 $663.60 

11/13/2015 Bader 8.6 $3,698.00 

11/13/2015 Barajas 2.8 $442.40 

11/14/2015 Bader 5.5 $2,365.00 

11/16/2015 Ricketts 2.6 $1,287.00 

11/16/2015 Bader 11.0 $4,730.00 

11/17/2015 Bader 12.0 $5,160.00 

11/17/2015 Ricketts 11.4 $5,643.00 

11/18/2015 Barajas 0.6 $94.80 

11/18/2015 Bader 4.5 $1,935.00 

11/18/2015 Ricketts 7.8 $3,861.00 

11/20/2015 Barajas 4.0 $632.00 

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11/22/2015 Bader 6.0 $2,580.00 

11/23/2015 Bader 7.2 $3,096.00 

11/23/2015 Ricketts 2.4 $1,188.00 

11/24/2015 Bader 6.5 $2,795.00 

Total $100,254.30 

 “Where the Court cannot distinguish between the time claimed for the various 

tasks, the Court will reduce the award accordingly.” Moshir v. Automobili Lamborghini 

Am. LLC, 927 F. Supp. 2d 789, 799 (D. Ariz. 2013). The Ninth Circuit has endorsed a 

20% reduction of block-billed fees. See Welch v. Metro. Life Ins. Co., 480 F.3d 942, 948 

(9th Cir. 2007); Cooke v. Town of Colorado City, No. CV-10-08105-PCT-JAT, 2015 WL 

1806751, at *5 (D. Ariz. Apr. 21, 2015). Accordingly, the Court will reduce the blockbilled fees by 20%, or $20,050.86. 

 Additionally, Defendants object to $12,088.44 in fees billed by DLA Piper from 

September 4, 2015 to October 12, 2015, arguing that these fees are not related to the 

litigation. (Doc. 88-2 at 12, 16.) These fee entries relate to pre-litigation work performed 

by DLA Piper to facilitate the sale of one of Defendants’ clinics. For example, DLA 

Piper billed MEF for reviewing the initial purchase offer, appraisal reports, and 

counteroffer. These services pre-date this litigation and presumably would have been 

undertaken even had Defendants not breached the Settlement Agreement. Accordingly, 

the Court sustains Defendants’ objections to the $12,088.44 in attorneys’ fees billed by 

DLA Piper from September 4, 2015 to October 12, 2015. 

 Defendants’ remaining objections are generalized assertions that the fee entries are 

“excessive,” “redundant,” or “unnecessary,” without meaningful explanation or analysis. 

These objections are insufficient as a matter of law and, therefore, are overruled. Nolan, 

167 P.3d at 1285-86. 

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CONCLUSION 

 For the foregoing reasons, the Court grants MEF’s Motion for Attorneys’ Fees and 

Non-Taxable Costs, but reduces the requested fee award by $32,139.30. 

IT IS ORDERED that MEF’s Motion for Attorneys’ Fees and Non-Taxable 

Costs, (Doc. 68), is GRANTED in part. MEF is awarded $116,085.14 in attorneys’ fees 

and $1,103.84 in costs. 

 Dated this 29th day of September, 2016. 

Douglas L. Rayes 

United States District Judge 

 

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