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Atmosphere Hospitality Management, LLC v. Curtullo

United States District Court, District of South Dakota, Western Division

March 3, 2015

ATMOSPHERE HOSPITALITY MANAGEMENT, LLC, Plaintiff,
v.
ZELJKA CURTULLO, Defendant, and SHIBA INVESTMENTS, INC. and KARIM MERALI, Defendants and Third-Party Plaintiffs,
v.
JAMES HENDERSON, Third-Party Defendant.

ORDER GRANTING SANCTIONS ON PLAINTIFF’S DOCKET NO. 127 MOTION TO COMPEL [DOCKET NO. 175]

VERONICA L. DUFFY UNITED STATES MAGISTRATE JUDGE

INTRODUCTION

This matter is before the court on plaintiff Atmosphere Hospitality Management, LLC’s complaint, filed pursuant to the court’s diversity jurisdiction, 28 U.S.C. § 1332. Now pending is a motion for sanctions [Docket No. 175] on plaintiff’s previously-filed motion to compel, Docket No. 127. The district court, the Honorable Karen E. Schreier, referred this motion to this magistrate judge for decision. See Docket No. 165.

FACTS

Plaintiff filed a motion to compel discovery on numerous written discovery requests consisting of interrogatories, requests for the production of documents, and requests for admissions. See Docket No. 127. In ruling on the motion, the court grouped the discovery requests into 13 groups. See Docket No. 168. Of those 13 groups, the court granted plaintiffs motion fully as to 10 of the groups. Two other groups of discovery requests were partially granted. Id. The court denied in its entirety only one group of discovery requests. Id. The court indicated that sanctions would be granted and directed plaintiff to file a motion for attorney’s fees and costs associated with the motion. Id.

Plaintiff has now filed that motion and seeks an award of $12, 665 in attorney’s fees and $2, 381.77 in costs. See Docket No. 175 & 176. Defendants resist the motion and assert that the court should award no more than $1, 500 in sanctions. See Docket No. 192.

DISCUSSION

A. Lodestar Method of Determining Reasonable Award of Attorney's Fees

Plaintiff must carry the burden to establish a factual basis for the award of fees it requests and the court must evaluate plaintiffs request for attorney's fees to determine whether it is reasonable. See Johnston v. Comerica Mortg. Corp., 83 F.3d 241, 246 (8th Cir. 1996). "Because any award [of attorney’s fees] has the potential for 'precedential value' in future cases, the Court owes a duty to the principled development of the law to exercise careful judgment in reviewing agreed-upon [or undisputed] fees.'' Duhaime v. John Hancock Mut. Life Ins. Co., 989 F.Supp. 375, 379 (D. Mass. 1997) (citing Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518, 526 (1st Cir. 1991)).

The appropriate amount of attorney’s fees is highly fact-specific to the case. There are two methods of determining attorney’s fees: the lodestar method and the ''percentage of the benefit'' method. See H.J. Inc. v. Flygt Corp., 925 F.2d 257, 259-60 (8th Cir. 1991); Comerica Mortg. Corp., 83 F.3d at 246; Walitalo v. Iacocca, 968 F.2d 741, 747-48 (8th Cir. 1992). The court has discretion to decide which method of determining fees is appropriate. Comerica Mortg. Corp., 83 F.3d at 246. Here, the parties address only the lodestar method, so the court chooses to employ that method.

The lodestar is figured by multiplying the number of hours reasonably expended by the reasonable hourly rates. Finley v. Hartford Life & Accident Ins. Co., 249 F.R.D. 329, 332-33 (N.D. Cal. Feb. 22, 2008); Tequila Centinela, S.A. de C.V. v. Bacardi & Co., Ltd., 248 F.R.D. 64, 68 (D.D.C. 2008); Creative Resources Group of New Jersey, Inc. v. Creative Resources Group, Inc., 212 F.R.D. 94, 103 (E.D.N.Y. 2002); Kayhill v. Unified Gov't. of Wyandotte County, 197 F.R.D. 454, 459 (D.Kan. 2000); and Trbovich v. Ritz-Carlton Hotel Co., 166 F.R.D. 30, 32 (E.D. Mo. 1996). The burden is on the moving party to prove that the request for attorney’s fees is reasonable. Tequila Centinela, S.A. de C.V., 248 F.R.D. at 68; Creative Resources Group, Inc., 212 F.R.D. at 103; Kayhill, 197 F.R.D. at 459.

Once the lodestar is calculated, there are twelve factors that are relevant in considering whether that figure should be adjusted up or down:

(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 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 circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the ''undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.

See Hensley v. Eckerhart, 461 U.S. 424, 430 n.3, 434 (1983) (citing the American Bar Association Code of Professional Responsibility, Disciplinary Rule 2-106). ''[T]he most critical factor ...


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