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Equity Partners HG, LLC v. Samson, Inc.

United States District Court, D. South Dakota, Western Division

September 30, 2019

EQUITY PARTNERS HG, LLC and HERITAGE GLOBAL PARTNERS, INC., Plaintiffs,
v.
SAMSON, INC.; BLACK EARTH, LLC; and KENNETH PRICE, Defendants.

          AMENDED ORDER

          JEFFREY L. VIKEN, CHIEF JUDGE.

         INTRODUCTION

         In January of 2018, plaintiffs brought this diversity action alleging breach of contract, unjust enrichment and tortious interference with a contract. (Docket 1). Now pending before the court is plaintiffs’ motion for service costs and attorney’s fees. (Docket 27). Plaintiffs assert defendants refused to waive service without good cause. Defendants respond that defendants improperly sent the request to waive service and that plaintiffs unnecessarily incurred service expenses without giving defendants the opportunity to waive service. (Docket 29). Defendants also contest the amount of attorney’s fees plaintiffs seek. (Docket 32). For the reasons given below, the court finds defendants must pay service costs and attorney’s fees to plaintiffs but disagrees with plaintiffs’ calculation of those costs.

         I. Facts

         Plaintiffs communicated with defense counsel Nathan Chicoine prior to filing the complaint. (Docket 27-1 at pp. 2-4). On January 29, 2018, plaintiffs’ counsel asked Mr. Chicoine via e-mail if he would waive service on behalf of defendants. Id. at p. 2. Plaintiffs’ counsel followed up on this request on January 31 and March 2. Id. at pp. 1-2. On March 6, Mr. Chicoine informed plaintiffs he was not representing defendants. Id. at p. 1. Plaintiffs then attempted to personally serve defendants and were unsuccessful. See Docket 7 at pp. 1-2 (describing service attempts).

         On May 30, plaintiffs’ counsel contacted defendant Kenneth Price-who is also the registered agent for defendants Samson, Inc. and Black Earth Inc.- by e-mail with a waiver request. (Docket 27-5). Plaintiffs also sent the waiver request to defendant Price’s home by FedEx. Id. In June, plaintiffs hired law enforcement local to defendant Price to complete service, which was also unsuccessful. (Docket 27-6). Defendants never returned the service waivers. Defendant Price asserts he was away from his home in March, April and May of 2018. (Docket 28 at ¶¶ 6-8). He does not assert he was away from home in June, but states he does not recall receiving any FedEx package and never refused service. Id. at ¶¶ 9-10. Defendant Price further states he does not monitor the e-mail address plaintiffs used to contact him. Id. at ¶ 11.

         On June 27, the court authorized plaintiffs to complete service by publication. (Docket 13). Plaintiffs published notice in the Rapid City Journal and the Black Hills Pioneer. (Dockets 17-19). The publication ended on August 15. On September 6, defendants answered the complaint through Mr. Chicoine. (Docket 21). Defendant Price now states he was unaware of this action until notice was published in the Journal and the Pioneer. (Docket 28 at ¶ 13). He further states he hired counsel in August. Id. at ¶ 14.

         II. Legal Standards

         Federal Rule of Civil Procedure 4(d)(2) states:

If a defendant located within the United States fails, without good cause, to sign and return a waiver requested by a plaintiff located within the United States, the court must impose on the defendant: the expenses later incurred in making service; and the reasonable expenses, including attorney’s fees, of any motion required to collect those service expenses.

Fed. R. Civ. P. 4(d)(2)(A)-(B). Defendants “ha[ve] a duty to avoid unnecessary expenses of serving the summons.” Fed.R.Civ.P. 4(d)(1).

         Where, as here, the applicable fee-shifting provision does not explain how to calculate attorney’s fees, the court uses the lodestar method. See Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 550-51 (2010).

The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer’s services. The party seeking an award of fees should submit evidence supporting the hours worked and rates claimed. ...

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