Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-96-05126/USCOURTS-caDC-96-05126-0/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 

---

<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 2, 1997 Decided September 23, 1997 

No. 96-5126

FEDERAL DEPOSIT INSURANCE CORPORATION, AS RECEIVER FOR 

MADISON NATIONAL BANK,

APPELLEE

v.

MORTON A. BENDER, ET AL.,

APPELLANTS

Consolidated with 

No. 96-5137

Appeals from the United States District Court 

for the District of Columbia 

(No. 93cv00864)

-

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 1 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

Ross D. Cooper argued the cause for appellants, with whom 

Nelson Deckelbaum was on the briefs.

Sharon M. Murphy, Attorney, United States Department 

of Justice, argued the cause for appellee, with whom Eric H. 

Holder, Jr., United States Attorney at the time the brief was 

filed, Frank W. Hunger, Assistant Attorney General, United 

States Department of Justice, J. Christopher Kohn, Director, 

Ruth A. Harvey, Attorney, and J. Scott Watson, Counsel, 

Federal Deposit Insurance Corporation, were on the brief for 

appellee.

Before: WALD, WILLIAMS and GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge WALD.

WALD, Circuit Judge: On October 27, 1994, the district 

court granted summary judgment to the Federal Deposit 

Insurance Corporation ("FDIC") in its action against Van 

Dorn Retail Management, Inc. ("Van Dorn Retail") to recover 

the amounts due on several promissory notes, including attorneys' fees of 15 percent of the outstanding balance as provided in the notes. See FDIC v. Bender, Civ. No. 93-0864 

(D.D.C. Oct. 27, 1994). Similarly, on February 28, 1996, the 

district court granted summary judgment to the FDIC in its 

action against Morton Bender ("Bender") as guarantor of the 

loan to Van Dorn Retail, holding that Bender's opposition to 

the motion for summary judgment was untimely. See FDIC 

v. Bender, Civ. No. 93-0864 (D.D.C. Feb. 28, 1996). In this 

consolidated appeal, Van Dorn Retail now challenges the 

district court's refusal to reconsider its award of 15 percent 

attorneys' fees to the FDIC, and Bender challenges the 

district court's treatment of the FDIC's motion for summary 

judgment as conceded. We hold that the district court erred 

with respect to Van Dorn Retail, but not with respect to 

Bender, in granting summary judgment on the fee issue to 

the FDIC, but because these results run the risk of creating 

inconsistent obligations between Van Dorn Retail and Bender 

as guarantor, we remand both cases to the district court for 

renewed consideration.

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 2 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

I. BACKGROUND

On December 1, 1986, Morton Bender, on behalf of MAB 

Development, Inc., executed and delivered to Madison National Bank ("Madison") a promissory note in which MAB 

Development, Inc., promised to pay a principal amount of 

$1,700,000 plus interest. On or about December 4, 1986, this 

note was replaced with six separate notes from Morton 

Bender, Scott Bender, Kenneth Bender, Jeffrey Bender, Lisa 

Bender, and Jay Bender. Each maker promised to make 

quarterly payments until December 4, 1991, when the balance 

payable under the note would become due. On December 31, 

1986, Morton Bender executed a personal guaranty of each of 

the six notes.

In addition, on December 1, 1989, Morton Bender executed 

and delivered to Madison a promissory note, of which he was 

sole maker, in which he promised to pay a principal amount of 

$2,000,000 plus interest by December 1, 1990. This additional 

note provided that should it go into default, Bender would be 

liable for attorneys' fees in the amount of 15 percent of the 

outstanding balance of principal and interest. On April 5, 

1990, N Street Follies, a limited partnership of which Morton 

Bender was general partner, executed and delivered to Madison a promissory note in which it agreed to pay a principal 

amount of $2,500,000 plus interest by April 5, 1991. Morton 

Bender also executed a personal guaranty of this note, which, 

similar to the note on which Bender was sole maker, provided 

for attorneys' fees of 15 percent upon default.

Finally, on January 21, 1991, Morton Bender, acting as 

secretary of Van Dorn Retail, executed and delivered to 

Madison a promissory note in which Van Dorn Retail agreed 

to pay a principal amount of $2,500,000 plus interest on 

demand. This note, too, provided for attorneys' fees of 15 

percent upon default.

On May 10, 1991, Madison was declared insolvent, and the 

FDIC was appointed as receiver pursuant to 12 U.S.C. 

§ 1819. As such, it succeeded to all of Madison's rights 

under the promissory notes. When each of these promissory 

notes and guaranties went into default, the FDIC brought 

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 3 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

suit in district court on April 26, 1993, seeking judgment 

against the Benders and N Street Follies (collectively, the 

"Bender Defendants") and Van Dorn Retail for the amount 

due, costs, and, where applicable, the full 15 percent in 

attorneys' fees.

The FDIC moved for summary judgment on all of the 

notes on February 4, 1994. The Bender Defendants and Van 

Dorn Retail, who were represented by the same counsel, 

jointly opposed the motion, arguing, among other things, that 

the 15 percent attorneys' fees requested in the FDIC's motion were "not only unreasonable, but clearly unconscionable" 

because, though based on the contractual rates provided for 

in the notes, they bore no relationship to the reasonable fees 

actually incurred. The district court granted the FDIC's 

motion on October 27, 1994, ruling that because the defendants "have not produced any evidence other than the mere 

allegation that the attorney's fees are unconscionable to combat plaintiff's motion for summary judgment[,] the court must 

grant plaintiff's motion for summary judgment."

The Bender Defendants (but not Van Dorn Retail, which 

had obtained separate counsel) filed a motion for reconsideration on November 8, 1994, citing FDIC v. Hadid, 947 F.2d 

1153 (4th Cir. 1991), as authority for the proposition that 

under District of Columbia law the court may hold an evidentiary hearing if there is a legitimate dispute as to the reasonableness of a contractual attorneys' fee provision. The court 

denied the motion on February 28, 1996, erroneously stating 

that the Bender Defendants had not sought reconsideration of 

the ruling on attorneys' fees. The Bender Defendants (this 

time joined by Van Dorn Retail) filed a motion for reconsideration of this ruling on March 13, 1996, pointing out that they 

had, in fact, sought reconsideration of the fee award in their 

earlier motion. The court, recognizing its error, granted the 

motion in favor of the Bender Defendants on April 17, 1996, 

and required the FDIC to submit a motion for attorneys' fees 

addressing the reasonableness of the 15-percent provision. 

However, it denied Van Dorn Retail any relief, noting that 

Van Dorn Retail had not filed a motion for reconsideration in 

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 4 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

November and thus could not ask the court to reconsider its 

February decision.

In the meantime, the FDIC had been granted leave on May 

17, 1994, to amend its complaint to include a new count 

against Bender as guarantor of the loan to Van Dorn Retail, 

which provided for 15 percent attorneys' fees, as well as a 

count against Delburt Van Dorn, Marc Goodman, Cindy Van 

Dorn, John C. Richards, and Connie J. Richards (the "Van 

Dorn Guarantors"), none of whom is a party to this appeal, as 

guarantors of the same loan. The FDIC subsequently moved 

for summary judgment on the amended complaint on November 10, 1994. The Van Dorn Guarantors filed an opposition 

to the motion on December 9, 1994, alleging that a material 

issue of fact existed with respect to the amount of attorneys' 

fees. The Bender Defendants1filed an opposition to the 

motion on December 19, 1994, which stated that the Bender 

Defendants joined the opposition of the Van Dorn Guarantors. This opposition was challenged by the FDIC as untimely filed. On February 28, 1996, the district court granted the 

FDIC's motion as to the Bender Defendants in its entirety, 

ruling that the opposition was filed beyond the time limit 

prescribed in Local Rule 108(b) and that the FDIC's motion 

was thereby conceded. As to the Van Dorn Guarantors, the 

district court granted the FDIC's motion with respect to the 

amount due on the notes but reserved judgment as to the 

amount of attorneys' fees, holding that because the Van Dorn 

Guarantors had challenged the reasonableness of the contractual provision in their opposition to the FDIC's motion for 

summary judgment, the court, pursuant to District law, would 

not enforce the 15-percent provision "absent a showing by 

plaintiff that the amount is reasonable." The Bender Defendants and Van Dorn Retail appeal from these rulings, both 

__________

1 The Bender Defendants have filed as a unit throughout this suit 

and on appeal despite the fact that Morton Bender is the only party 

of the group to whom the guaranty agreement pertains. We refer 

to the parties on appeal as "Morton Bender" or "Bender."

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 5 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

arguing that the district court erred in not affording them a 

similar opportunity to contest the 15-percent fee provision.

II. DISCUSSION

A. Van Dorn Retail's Appeal

Although Van Dorn Retail has styled its appeal as a 

challenge to the district court's failure to extend to it the 

benefit of the reconsideration afforded the Bender Defendants on the fee issue, we believe that it is more properly 

considered as a direct challenge to the original grant of 

summary judgment in favor of the FDIC as to the 15 percent 

attorneys' fees provided in the note. Although Federal Rule 

of Appellate Procedure 4(a)(1) requires that appeals be taken 

within 30 days after the date of entry of the judgment 

appealed from, Federal Rule of Appellate Procedure 4(a)(4) 

provides that if any party files a timely motion under Rule 59, 

the time for appeal for all parties runs from the entry of the 

order disposing of the last such motion. The Bender Defendants filed two motions for reconsideration; the last, filed on 

March 13, 1996, was granted on April 17, 1996. Van Dorn 

Retail's appeal was filed on May 8, 1996, and thus may be 

considered a timely filed appeal from the initial grant of 

summary judgment. As a result, we do not need to reach 

Van Dorn Retail's challenge to the district court's denial of 

reconsideration.

This court reviews de novo the district court's order granting the FDIC's motion for summary judgment. Consumer 

Fed'n of Am. and Public Citizen v. U.S. Dep't of Health and 

Human Servs., 83 F.3d 1497, 1501 (D.C. Cir. 1996). Summary judgment is appropriate if there is no genuine issue as 

to any material fact and the moving party is entitled to 

judgment as a matter of law. FED. R. CIV. P. 56(c); Anderson 

v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The initial 

burden on both these determinations rests with the moving 

party, who must show initially the absence of a genuine issue 

concerning any material fact, Adickes v. S.H. Kress & Co.,

398 U.S. 144, 159 (1970), as well as her entitlement to 

judgment in her favor as a matter of law, Bloomgarden v. 

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 6 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

Coyer, 479 F.2d 201, 207 (D.C. Cir. 1973). If the moving 

party complies with this requirement, the burden shifts to the 

opposing party, who must set forth, by affidavit or otherwise, 

"specific facts showing that there is a genuine issue for trial," 

FED. R. CIV. P. 56(e), or demonstrate that the moving party is 

not entitled to judgment as a matter of law in order to defeat 

the motion. Our first task, then, is to ascertain whether a 

factual dispute existed as to any material issue. If we find 

there to be no controversy with regard to the material facts, 

we focus on whether the district court correctly applied the 

relevant law. Painting and Drywall Work Preservation 

Fund, Inc. v. Dep't of Housing and Urban Development, 936 

F.2d 1300, 1302 (D.C. Cir. 1991).

Because the promissory notes themselves provide, and the 

parties do not dispute, that their enforcement is to be governed by the law of the District of Columbia, we look to that 

law to determine how stipulated attorneys' fees provisions are 

to be interpreted and, thus, the nature of the burden each 

party must meet in a motion for summary judgment.2 District law incorporates the "American Rule," under which each 

party bears his or her own attorneys' fees "unless a statute or 

a contract specifically provides for an award of such fees." 

Cahn v. Antioch Univ., 482 A.2d 120, 132-33 (D.C. 1984) 

(quoting Washburn v. Washburn, 475 A.2d 410, 413 (D.C. 

1984)); see also Nepera Chemical, Inc. v. Sea-Land Service, 

Inc., 794 F.2d 688, 695-96 (D.C. Cir. 1986). Unlike some 

jurisdictions, which hold that a contractual provision for a 

fixed percentage to be paid as attorneys' fees is enforced 

according to its terms, see, e.g., NationsBank v. Scott Farm,

465 S.E.2d 98, 101 (S.C. Ct. App. 1995), the D.C. Court of 

Appeals has long held, and this court has acknowledged, that 

in the District such provisions are sustained "only as an 

indemnity for the reasonable fees necessarily and properly 

paid or incurred," United States v. Reed, 31 A.2d 673, 675 

__________

2 Although the district court's ruling was based on an opinion of 

the D.C. Court of Appeals, Central Fidelity Bank v. McLellan, 563 

A.2d 358 (D.C. 1989), we review de novo its determination of 

District law. Salve Regina College v. Russell, 499 U.S. 225, 231 

(1991).

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 7 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

(D.C. 1942); see also Manchester Gardens, Inc. v. Great West 

Life Assur. Co., 205 F.2d 872, 878 (D.C. Cir. 1953).3 The 

amount of these fees is to be determined by the trial judge 

"on an individual basis." Central Fidelity Bank v. McLellan,

563 A.2d 358, 360 n.6 (D.C. 1989). Although a court charged 

with the task of enforcing a contract that provides for attorneys' fees does not have the discretion to award no fees at all, 

it does retain the discretion to determine what constitutes a 

reasonable amount. Id. at 360.

Included within the scope of this discretion is the nature 

and amount of proof necessary to determine reasonableness. 

As the D.C. Court of Appeals noted in Reed, "[t]he question 

of what constitutes a reasonable fee depends on the circumstances of each case. If the court deems it necessary, or if 

either party desires, testimony may be taken as to the nature 

of the services rendered, and the reasonable value thereof." 

Reed, 31 A.2d at 675-6. Subsequent cases interpreting Reed

have read "testimony may be taken" (emphasis added) as 

permissive rather than hortatory and have taken pains to 

make clear that the trial judge decides what sort of proof, if 

any, is needed to determine what a reasonable fee would be in 

any individual case. See, e.g., Nolan v. Nolan, 568 A.2d 479, 

490 (D.C. 1990) ("Lest there be any uncertainty, we now 

make explicit that the trial court retains discretion to decide 

the nature of proof necessary to establish the facts affecting 

its decision as to the amount of fees to award."). Because a 

judge who has monitored the case from its inception is 

considered to be "an expert on the value of legal services," 

she can fix the amount of the fee without hearing any 

evidence at all. Dew v. Simon, 95 A.2d 482, 484 (D.C. 1953); 

see also Tyler v. Dixson, 57 A.2d 648, 649-50 (D.C. 1948); 

Williams Enterprises, Inc. v. Sherman R. Smoot Co., 938 

F.2d 230, 237 (D.C. Cir. 1991) (interpreting D.C. law).

__________

3 This is not the case, however, with respect to contingent fee 

agreements between a client and his or her attorney; contingent fee 

agreements in the District of Columbia are "entirely permissible as 

long as they meet certain requirements and are not invalid for any 

other [public policy] reason." Chang v. Louis & Alexander, Inc.,

645 A.2d 1110, 1116 (D.C. 1994).

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 8 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

With these principles in mind, we now consider whether the 

FDIC met its burden pursuant to Rule 56. The FDIC's legal 

memorandum accompanying its motion for summary judgment asserted that Van Dorn Retail had defaulted under the 

terms of the note and thus was liable for the amount due, plus 

interests, costs, and attorneys' fees pursuant to the provisions 

of the note. The motion was accompanied by an affidavit 

supporting the FDIC's claims of default. Van Dorn Retail 

contends in its argument before this court that because 

District law requires that only reasonable fees be awarded 

pursuant to such contractual provisions, the FDIC, in order 

to make out its case, was required to submit with its motion 

for summary judgment some evidence of what would constitute a reasonable fee in this case. We disagree. Such a 

requirement would be inconsistent with our prior reading of 

District law in Columbia Plaza Corp. v. Security Nat'l Bank,

676 F.2d 780 (D.C. Cir. 1982), in which we held that absent a 

challenge to a stipulated fee provision, the terms of the 

contract governed. At issue in Columbia Plaza was a foreclosure on property that secured a number of promissory 

notes held by two banks, each of which provided for attorneys' fees of either 10 or 15 percent. The trial court, on a 

directed verdict, awarded attorneys' fees to the banks in 

accordance with the terms of the notes. The debtors challenged this ruling on appeal, claiming that the court erred by 

not inquiring into the reasonableness of the fee award. We 

rejected the debtors' contention as to the 10-percent notes

that the trial court, by treating the fee provision as conceded, 

had precluded them from challenging the reasonableness of 

the feesby noting that the parties had stipulated before 

trial that the foreclosure deficiency included attorneys' fees 

pursuant to the terms of the note. Id. at 791. With respect 

to the 15-percent notes, we observed that before the banks 

presented the court with the amount of claimed interest and 

fees, the trial court asked the debtors whether they had any 

issue to present to the jury. Id. The debtors did not take 

advantage of that or any other opportunity to challenge the 

attorneys' fees provisions. Because the debtors did not challenge either of the attorneys' fees provisions, and because the 

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 9 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

trial court did not have "an independent duty to examine 

whether [the debtors] had entered into a favorable bargain," 

we held that the trial court properly awarded attorneys' fees 

pursuant to the terms of the notes. Id.

A similar analysis of D.C. law was conducted by the Fourth 

Circuit in Hadid. Hadid involved two promissory notes, each 

of which provided for attorneys' fees of 15 percent in the 

event litigation to collect was required. The trial court, 

relying on our Columbia Plaza case, after finding that the 15-

percent provision was the result of arm's-length bargaining, 

awarded the contractual amount on a motion for judgment 

notwithstanding the verdict. Hadid challenged the award on 

appeal, noting that the amount was unreasonable in light of 

the bank's affidavit that the actual fees incurred were considerably less than the amount granted. The Fourth Circuit, 

noting that, unlike the debtors in Columbia Plaza, Hadid had 

challenged the amount of the award before the trial court, 

remanded the case to the district court with instructions to 

award only reasonable attorneys' fees, not exceeding the 

contractual limit of 15 percent. Hadid, 947 F.2d at 1158. 

The court noted:

[I]n the absence of a challenge to the fees' reasonableness, in which the actual fees are proved, the contractual 

provision would be enforced, much as a liquidated damage provision would be. When, however, as here, the 

reasonableness of the fees is challenged before the trial 

court and the proved actual fees amount to $99,861, an 

award of $272,035 in accordance with a 15% contractual 

provision amounts to a windfall, or even a penalty, that 

the District of Columbia courts will not permit.

Id.

Columbia Plaza and Hadid both establish that absent a 

challenge to a stipulated fee provision, the trial court should 

award attorneys' fees in accordance with the terms of the 

contract. In effect, as the FDIC argued before this court, a 

contractual provision creates a rebuttable presumption that 

the stipulated amount is reasonable. If this provision goes 

completely unchallenged, the trial court may assume that the 

parties are in agreement as to the fee provision and award 

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 10 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

summary judgment to a moving creditor. Van Dorn Retail is 

therefore incorrect in its assertion that the FDIC was required to submit evidence of reasonableness with its motion 

for summary judgment, for until an opposition to that motion 

was received, the district court could properly have assumed 

that the reasonableness of the contractual provisions would 

go unchallenged and thus awarded attorneys' fees in the 

amount of 15 percent.

The adequacy of the FDIC's motion does not end our 

analysis, however. Before we can affirm the district court's 

grant of summary judgment, we must find that Van Dorn 

Retail did not establish the existence of a genuine issue of 

material fact and that the FDIC was entitled to judgment as 

a matter of law.

In its memorandum in opposition to the FDIC's motion for 

summary judgment, Van Dorn Retail claimed both that there 

were material facts in dispute and that the FDIC was not 

entitled to judgment as a matter of law. It went on to argue 

that the amounts sought as attorneys' fees "are not only 

unreasonable, but clearly unconscionable, since they are 

based on the contractual rates set forth in the notes, and in 

no wise constitute an indemnity for the reasonable fees 

necessarily and properly paid or incurred," citing Hadid, 

Reed, and Central Fidelity and attaching, as required by 

Local Rule 108(h),4a "Statement of Material Facts in Issue," 

which included "2. Whether the claimed attorneys [sic] fees 

are justified."

In granting the FDIC's motion, the district court held that 

the promissory notes "clearly and unambiguously" established 

the terms of the agreement as to attorneys' fees, which it was 

bound to enforce given that Van Dorn Retail failed to produce 

any evidence "other than the mere allegation that the attor-

__________

4 Local Rule 108(h) provides, in pertinent part: "An opposition to 

[a summary judgment motion] shall be accompanied by a separate 

concise statement of genuine issues setting forth all material facts 

as to which it is contended there exists a genuine issue necessary to 

be litigated, which shall include references to the parts of the record 

relied on to support the statement." D.D.C. R. 108(h).

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 11 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

ney's fees are unconscionable." We find this appraisal of the 

record to be inaccurate. The district court, understandably, 

construed Van Dorn Retail's challenge as one attempting to 

present issues of fact. We believe, however, that despite the 

inclusion of its challenge to the fees in its Rule 108(h) 

statement, Van Dorn Retail's opposition is more properly 

read as a challenge to the FDIC's entitlement to the stipulated fee amount as a matter of District law. In other words, 

even assuming that Van Dorn Retail conceded the factual 

matters alleged in the FDIC's motionthe existence of the 

notes, the occurrence of default, and the language of the fee 

provisionit is clear that it disputed the legal effect of the 

fee provision. If its opposition sufficed as a challenge to the 

stipulated fee, the district court was obliged under District 

law to award only reasonable fees, with reasonableness a 

determination to be made by the judge. See Urban Masonry 

Corp. v. N & N Contractors, Inc., 676 A.2d 26, 34-35 (D.C. 

1996). Van Dorn Retail's challenge to the FDIC's entitlement to collect the full 15 percent in attorneys' fees thus 

represented a legal, rather than a factual, dispute.

The question thus remaining is whether Van Dorn Retail's 

inclusion of the fee issue in its Rule 108(h) statement and its 

identification of the relevant District law in its legal memorandum raised a challenge sufficient to warrant a conclusion 

that the FDIC was not entitled to 15 percent attorneys' fees 

as a matter of law without a determination that such an 

amount would be reasonable. We hold that the challenge was 

sufficient. By citing to Hadid, Central Fidelity, and Reed,

the seminal District case on this issue, and by clearly setting 

forth in its legal memorandum the appropriate interpretation 

of the fee provision, Van Dorn Retail put the district court on 

notice that the controlling law required a determination of 

reasonableness. The district court's conclusion that Van 

Dorn Retail failed to discharge its burden under Rule 56 was 

therefore in error.

Given that Van Dorn Retail successfully challenged the 

contractual fee provision, it was incumbent upon the district 

court to award only a reasonable fee. Because under District 

case law, the trial judge has discretion as to the amount of 

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 12 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

proof, if any, needed to determine a reasonable fee, see, e.g., 

Nolan, 568 A.2d at 490, we could still uphold a 15-percent fee 

award if the record before us showed that the district court 

had awarded the fees on the basis of a finding that the 15-

percent figure was reasonable. The district court's opinion 

shows that this was not the case. From the record before us, 

it is clear that the district court did not use the "lodestar" 

method5or, indeed, any other method to arrive at a conclusion that the 15-percent figure was reasonable. Rather, 

believing that Van Dorn Retail had not raised a sufficient 

challenge to the stipulated fee, the district court awarded the 

FDIC attorneys' fees pursuant to the provisions of the note. 

It did not hold that such an amount was reasonable, nor did it 

make any attempt to determine whether the amount that 15 

percent represented in any way reflected the time and labor 

exerted by the FDIC's attorneys in litigating this case.6 We 

__________

5 The lodestar method, a common method for calculating the 

amount of attorneys' fee awards, involves multiplying the number of 

hours reasonably expended by a reasonable hourly rate. The 

former is determined by considering the total number of hours 

expended and disallowing unproductive time; the latter is determined by reference to the prevailing market rate in the relevant 

community. Murray v. Weinberger, 741 F.2d 1423, 1427 (D.C. Cir. 

1984); see also Ginberg v. Tauber, 678 A.2d 543, 552 (D.C. 1996), 

cert. denied, 117 S. Ct. 738 (1997).

6 The District has adopted a list of 12 factors to be considered by 

the trial judge in determining attorneys' fee awards. These include:

(1) the time and labor required;

(2) the novelty and difficulty of the questions;

(3) the skill requisite to perform the legal service properly;

(4) the preclusion of other employment by the attorney due to acceptance of the case;

(5) the customary fee;

(6) whether the fee is fixed or contingent;

(7) time limitations imposed by the client or the circum-stances;

(8) the amount involved and the results obtained;

(9) the experience, reputation, and ability of the attorneys;

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 13 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

therefore conclude that the lower court misapplied District 

law and thus reverse its grant of summary judgment to the 

FDIC only with respect to the issue of the amount of 

attorneys' fees for which Van Dorn Retail is liable and 

remand to the district court with instructions to award only a 

reasonable attorneys' fee, not to exceed the 15-percent limit 

in the notes.7

B. Morton Bender's Appeal

Although Bender attempted to challenge the 15-percent fee 

provision before the district court, he denied himself the 

opportunity to do so by the late filing of his opposition to the 

FDIC's motion for summary judgment. In the United States 

District Court for the District of Columbia, Rule 56 of the 

Federal Rules of Civil Procedure and other federal rules 

concerning the submission of motions are supplemented by 

Local Rule 108(b), which provides, in pertinent part, that in 

response to all motions:

Within 11 days of the date of service or at such other 

time as the Court may direct, an opposing party shall 

serve and file a memorandum of points and authorities in 

opposition to the motion. If such a memorandum is not 

filed within the prescribed time, the Court may treat the 

motion as conceded.

D.D.C. R. 108(b). Like other local rules that contain time 

limits for submissions, the purpose of Rule 108(b) is to assist 

__________

(10) the "undesirability" of the case;

(11) the nature and length of the professional relationship with the client; and

(12) awards in similar cases.

Frazier v. Franklin Inv. Co., Inc., 468 A.2d 1338, 1341 n.2 (D.C.

1983). These factors are derived from Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), a case 

concerning Title VII of the Civil Rights Act of 1964, 42 U.S.C. 

§ 2000e et seq., but have been held by the D.C. Court of Appeals to 

apply to the assessment of attorneys' fees in general. Frazier, 468 

A.2d at 1341 n.2.

7 Of course, the district court is free to award the same amount if 

it is persuaded that such an amount represents a reasonable fee in 

this case.

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 14 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

the district court in "maintain[ing] docket control and ... 

decid[ing] motions for summary judgment efficiently and 

effectively." See Jackson v. Finnegan, Henderson, Farabow, 

Garrett & Dunner, 101 F.3d 145, 150 (D.C. Cir. 1996) (discussing Rule 108(h)). Rule 108(b) is a rule of "neutral 

applicability," Geller v. Randi, 40 F.3d 1300, 1304 (D.C. Cir. 

1994), applying to any and all oppositions to motions filed in 

the district court.

We review the district court's decision under Rule 108(b) to 

bar consideration of Bender's opposition only for abuse of 

discretion. Twist v. Meese, 854 F.2d 1421, 1425 (D.C. Cir. 

1988), cert. denied sub nom. Twist v. Thornburgh, 490 U.S. 

1066 (1989). In claiming that the refusal of the district court 

to entertain his opposition was such an abuse, Bender argues 

that default is to be used only in extreme circumstances and 

is thus subject to certain procedural constraints, citing Shepherd v. American Broadcasting Cos., Inc., 62 F.3d 1469, 1478 

(D.C. Cir. 1995), and Shea v. Donohoe Constr. Co., Inc., 795 

F.2d 1071 (D.C. Cir. 1986). He further notes that admission 

of the opposition would not have been prejudicial: the FDIC 

admitted that it would not have opposed an extension of time; 

the district court took over a year to issue a ruling on the 

motion; and the brief submitted raised no new issues.

Bender's reliance on Shepherd and Shea is misplaced. In 

both cases, we were concerned with a district court's inherent 

power to issue a default judgment as a sanction for misconducta power whose exercise avoids the textual constraints 

on rules, which, consequently, earns it more searching review: 

"When rules alone do not provide courts with sufficient 

authority to protect their integrity and prevent abuses of the 

judicial process, the inherent power fills the gap.... Here 

... the court imposed a default judgment under its inherent 

power, which is not grounded in rule or statute and must be 

exercised with particular restraint." Shepherd, 62 F.3d at 

1474, 1480. Bender's characterization of the district court's 

action as a sanction is thus unpersuasive.

Rather, the district court's action constituted a straightforward application of Rule 108(b), and we have yet to find that 

a district court's enforcement of this rule constituted an abuse 

of discretion. See, e.g., Weil v. Seltzer, 873 F.2d 1453, 1459 

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 15 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

(D.C. Cir. 1989) (appellant who failed to file response within 

time prescribed by Local Rule 108(b) "is deemed to have 

waived his opposition" to the motion and "may not now 

complain on appeal"); Twist, 854 F.2d at 1424-25 (noting that 

the letter of Rule 108(b) specifically provides the time limit 

within which an opposition should be filed).

This court's most recent consideration of the rule suggests 

that the discretion to enforce this rule lies wholly with the 

district court: "Where the district court relies on the absence 

of a response as a basis for treating the motion as conceded, 

we honor its enforcement of the rule." Twelve John Does v. 

District of Columbia, 117 F.3d 571, 577 (D.C. Cir. 1997). The 

district court's decision in this case was clearly based on 

Bender's late filing:

As the Bender defendants did not request, nor did this 

court grant, an extension of time in which to file an 

opposition, this opposition was untimely.... Thus, pursuant to Local Rule 108(b), this court shall treat plaintiff's motion as conceded in its entirety.

Any doubt that the district court was acting in response to 

Bender's late filing is resolved by the last sentence of footnote 3 of the memorandum opinion:

Moreover, the pleading rules of this court shall not be 

plainly disregarded by litigants. It is incumbent upon all 

parties appearing before this court to read and follow 

these rules. This court will not tolerate an unjustified 

deviation.

Because Local Rule 108(b) provides for an exception to the 

11-day limit only upon leave from the court ("[w]ithin 11 days 

of the date of service or at such other time as the Court may 

direct ..."), and because Bender did not seek such an 

extension of time, it was not an abuse of discretion for the 

district court, pursuant to Local Rule 108(b), to treat the 

FDIC's motion for summary judgment as conceded.

Nonetheless, we think that it would create an anomalous 

situation were we to enforce the 15-percent fee award against 

Bender as guarantor of the loan to Van Dorn Retail when we 

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 16 of 17
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

have vacated that award as to Van Dorn Retail itself. We are 

confident that the district court would welcome the opportunity to reconsider its disposition of Bender's opposition in light 

of its assessment of attorneys' fees against Van Dorn Retail, 

and, accordingly, we vacate the summary judgment against 

Bender and remand to the district court so that it can 

appropriately exercise its discretion as to both parties' 

claims.8

III. CONCLUSION

We reverse the grant of summary judgment against Van 

Dorn Retail, vacate the grant of summary judgment against 

Bender, and remand to the district court with directions to 

enter judgment against Van Dorn Retail for reasonable attorneys' fees not to exceed the contractual limit of 15 percent 

and for the district court to reconsider its refusal to permit 

Bender, as guarantor of the loan to Van Dorn Retail, to 

challenge the fee award in light of the outcome of any future 

proceedings concerning the award of fees against Van Dorn 

Retail.

It is so ordered.

__________

8 With respect to the Bender Defendants, the district court has 

held upon reconsideration that it will require the FDIC to submit a 

motion for attorneys' fees that "specifically addresses the reasonableness of the fifteen percent provision." Given the congruence of 

the issues in this case, it would not be inappropriate for the district 

court to conduct proceedings with respect to Van Dorn Retail 

and/or Bender in the same manner.

USCA Case #96-5126 Document #298224 Filed: 09/23/1997 Page 17 of 17