UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

DENIS QUAIN, an individual, 

Plaintiff, Case No. 09-13512

Hon. Marianne O. Battani

v.

AURAGAN, LLC, a Delaware

limited liability company,

Defendant.

__________________________________/

ORDER AWARDING ATTORNEY FEES

Plaintiff Denis Quain initiated this action on September 4, 2009, alleging Defendant

Auragan, LLC, defaulted on a Note and Security Agreement. On October 1, 2009, the clerk

entered judgment by default in the amount of $325,905. Thereafter, Plaintiff filed a motion

requesting attorney fees in the amount of $128,635.

Under Michigan law, parties to a contract may agree that the breaching party must

pay the reasonable attorney’s fees of the other side. Zeeland Farm Servs., Inc. v. JBL

Enters., Inc., 555 N.W.2d 733, 736 (Mich. Ct. App. 1996). Several factors must be

considered when examining the reasonableness, including:

(1) the time and labor required, the novelty and difficulty of the questions

involved, and the skill requisite to perform the legal service properly;

(2) the likelihood, if apparent to the client, that the acceptance of the

particular employment will preclude other employment by the lawyer;

(3) the fee customarily charged in the locality for similar legal services;

(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the circumstances;

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

(7) the experience, reputation, and ability of the lawyer or lawyers performing

the services; and

8) whether the fee is fixed or contingent.

Zeeland, 555 N.W.2d at 737 n. 3.

According to Plaintiff, the Promissory Note provided for recovery of costs and

reasonable attorney fees, Def.’s Ex. A, and Plaintiff and his counsel entered into a

contingency agreement that required payment of one-half of the first $100,000 recovered,

40% of the next $50,000, and one-third of any amounts in excess of $150,000. Aff. in

Support of Attorneys’ Fees at ¶ 3. Plaintiff directs the Court’s attention to those cases in

which state courts have awarded attorneys’ fees based upon the amount of a contingency

fee arrangement. See e.g. Awada v. Hamood, 2003 WL 21465339 (Mich. Ct. App. June

24, 2003). Accord City of Detroit v. J. Cusmano & Son, Inc., 459 N.W.2d 3, 5-6 (Mich Ct.

App. 1989) (affirming a trial court's award of attorneys' fees based upon the amount a 33%

contingency fee arrangement after examining many of the factors set forth in Crawley).

Nevertheless, a contingency fee “is not irrebuttable proof that the same amount should be

awarded [ ] as a reasonable attorney fee.” City of Flint v. Patel, 497 N.W.2d 542, 545

(Mich. Ct. App. 1993). 

Plaintiff’s counsel notes that he has a great deal of experience, that he spent

considerable time analyzing the evidence in this case as well as addressing jurisdictional

issues. According to Plaintiff, the case was difficult because of jurisdictional and venue

requirements. In addition, Plaintiff and his counsel deemed the fee reasonable because

of the possibility of litigation in New York, where counsel was not admitted. Plaintiff’s

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counsel added that he could not find an attorney admitted to federal court in New York

willing to act as local counsel on a contingency fee. Under those circumstances, counsel

would have had to bear the costs of litigating in New York, which are significantly higher

than in Detroit. Further, Plaintiff’s counsel advanced the costs of litigation. Finally,

Plaintiff’s counsel argues that the results achieved warrant the award. 

Here, the Court considers the contingency fee agreement; however, the agreement

in and of itself is not dispositive. 

In assessing the merits of Plaintiff’s argument, the Court is mindful of the Supreme

Court’s decision in City of Burlington v. Dague, 505 U.S. 557, 562-67 (1992). Although the

opinion is not binding as the Supreme Court was addressing attorneys’ fees pursuant to

federal statutory authority, the reasoning is helpful in resolving this dispute. Notably, the

Supreme Court criticized awards of attorneys' fees based on the amount of a continency

fee as well as the use of a multiplier to increase the lodestar amount based upon the

difficulty of the legal issues or the riskiness of assuming a case. The Supreme Court

reiterated the merits of using the lodestar approach in addressing attorneys’ fee award.

The Sixth Circuit adopted the reasoning when it affirmed the lower courts award of attorney

fees in a breach of contract case based on the hourly rate times the approved hours rather

than a contingency fee in Advanced Accessory Systems, LLC v. Gibbs, Nos. 01-1740, 01-

1796, 01-2245, 2003 WL 21674748 at * 9 (6th Cir. July 16, 2003).

Without question, the contingency fee agreement between Plaintiff and his attorney

does not require Defendant to pay the amount contemplated in the agreement. Nor does

the Court find the amount contemplated reasonable under the circumstances presented.

Here, the matter was resolved by a default judgment; the issues were not particularly

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Although Plaintiff’s counsel claimed he spent 28.6 hours, the attached invoice

shows he spent 29.1 hours on this litigation. Accordingly, the Court uses the hours as

reflected in the invoice.

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difficult as reflected by the amount of time expended by Plaintiff’s counsel.

Here, the Court cannot ignore the fact that Plaintiff’s counsel spent a mere 29.1

hours on this matter.1

 His hourly rate is $350. Therefore, under the lodestar approach,

reasonably attorneys’ fees total $10,185, whereas the contingency fee arrangement yields

an award of $128,635, an amount over twelve times the hourly rate. Should the Court

award the amount requested by Plaintiff, his counsel would recover attorneys’ fees at an

hourly rate of $4420.45. Consequently, the Court declines to enter the amount requested.

Because Plaintiff’s counsel did undertake the risk of litigation and advance the costs of this

litigation, the Court finds he is entitled to fees at 1.5 times his hourly rate. Accordingly, the

Court awards Plaintiff’s counsel attorneys’ fees at a rate of $525 per hour for 29.1 hours.

Defendant is to pay Plaintiff’s attorneys’ fees in the amount of $15,277.50. 

IT IS SO ORDERED.

s/Marianne O. Battani 

 MARIANNE O. BATTANI

UNITED STATES DISTRICT JUDGE

DATED: December 16, 2009

CERTIFICATE OF SERVICE

A copy of this Order was e-filed and/or mailed to counsel of record on this date.

s/Bernadette M. Thebolt

Case Manager

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