Opinion
Case No. 5:99 CV 818
November 21, 2002
MEMORANDUM OPINION
This matter comes before the Court on the Liberte Class Representative's Motion for Reconsideration addressing the payment of administrative expenses and attorney fees. Also before the Court is the General Receiver's response and the Class Representative's reply, as well as the Alpha Receiver's response thereto. This Court having jurisdiction pursuant to 28 U.S.C. § 1331 and for the reasons stated below, grants the motion for reconsideration.
MOTION FOR RECONSIDERATION
A. Standard
Although a motion for reconsideration is not mentioned in the Federal Rules of Civil Procedure, it is often treated as a motion made under Rule 59(e). McDowell v. Dynamics Corp. of America, 931 F.2d 380 (6th Cir. 1991); Shivers v. Grubbs, 747 F. Supp. 434 (S.D. Ohio 1990). The purpose of a motion to alter or amend judgment under Fed.R.Civ.P. 59(e) is to have the court reconsider matters "properly encompassed in a decision on the merits." Osterneck v. Ernst and Whinney, 489 U.S. 169, 174 (1988). This rule gives the district court the "power to rectify its own mistakes in the period immediately following the entry of judgment." White v. New Hampshire Dept. of Employment Security, 455 U.S. 445, 450 (1982). Generally, there are three major situations which justify a district court altering or amending its judgment: "(1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct a clear error of law or to prevent a manifest injustice." In re Continental Holdings, Inc., 170 B.R. 919, 933 (Bankr. N.D. Ohio 1994); Braun v. Champion Credit Union, 141 B.R. 144, 146 (Bankr. N.D. Ohio 1992), aff'd, 152 B.R. 466 (ND. Ohio 1993); In re Oak Brook Apartments of Henrico County, Ltd., 126 B.R. 535, 536 (Bankr. S.D. Ohio 1991). It is not designed to give an unhappy litigant an opportunity to relitigate matters already decided; nor is it a substitute for appeal. Dana Corp. v. United States, 764 F. Supp. 482, 488-89 (N.D. Ohio 1991); Erickson Tool Co. v. Balas Collet Co., 277 F. Supp. 226 (ND. Ohio 1967), aff'd, 404 F.2d 35 (6th Cir. 1968).
In the Court's determination of August 29, 2002, Class Counsel was awarded 50% of the requested fees capped at the rate of $185.00/hour in addition to administrative expenses relative to the class notification. (Doc. No. 1717.) The Liberte class arguments may be construed as seeking reconsideration on the basis of manifest injustice in light of the fees and payments to the General and Alpha Receivers. In the interests of fairness and to give due consideration to the positions of the respective parties, the Court grants the motion for reconsideration.
MOTION FOR ATTORNEY FEES
Generally a court may not award attorney's fees to a prevailing party unless allowed by statute. Alyeska Pipeline Co. v. Wilderness, 421 U.S. 240 (1975). An exception to the "American rule" exists where counsel has created a benefit for third parties, such as a common fund in a class action. Under a common fund theory, the court uses its equitable powers to award fees. Several factors considered under a common fund scenario may include: (1) whether the successful creation of such a common fund occurred by efforts of plaintiffs' counsel; (2) whether the fee is limited by the common fund recovered; (3) the weight assigned to the monetary results achieved as contrasted with time expended by counsel; and (4) reasonableness of the time expended. See HERBERT NEWBERG ET AL, NEWBERG ON CLASS ACTIONS, § 14 (3D ED. 1992).
The present action began as a RICO action initiated by Liberte against James Capwill, et al. In July 1999, a General Receiver was appointed to oversee the interests of both Liberte and Alpha. (Doc. No. 121.) Counsel for the Liberte Class attended hearings as early as August 2000, on behalf of the interested investors and sought leave to intervene in September 2000. The Liberte class was certified in March 2001. The Court appointed the Alpha Receiver in October 2001. This brief history of the litigation reveals that this action is somewhat different from a typical class action suit. In addition, class counsel's efforts were not added to the mix until over a year following the appointment of the General Receiver.
The role of the General Receiver, however, is distinguishable from that of class counsel insofar as the receiver is in reality an "arm of the court." See Federal Home Loan Mortgage Corp. v. Tsinos, 854 F. Supp. 113, 115 (E.D.N.Y. 1994). As an extension of the court, a receiver is entrusted with property involved in the dispute and administration of the same. His duties require him to safeguard that property and any other charges stated in the order of appointment. To that end, the Order of appointment expressly stated "the objective of the receivership is to preserve and increase the estate for the benefit of all creditors, investors, owners and parties to this case." (Doc. No. 132.)
The actions of both Receivers in this litigation reflect the efforts to comply with the Court's mandate. The details of those efforts are contained in the regularly filed status reports. The Court's docket reflects over 1,800 pleadings, the bulk of which are attributable to the Receivers in their quest to comply with their mandate. To that end, the variety and scope of responsibilities of the Receivers are distinguishable from that of class counsel since they are supportive of the entire estate and not just a select group.
By way of example, the General Receiver's Twelfth Status Report addressed forty-eight items not including the sale of remaining Liberte policies as well as reporting on the status of litigation related to agents/brokers. (Doc. No. 1741.)
Both Receivers in this instance recognize that the efforts of class counsel contributed to the enhancement of the Receivership estate. The Court is also cognizant of class counsel's efforts and the contribution of all counsel who participated in countless conferences with the Court and amongst themselves in attempting to craft resolutions in the best interests of all investors.
Were this litigation the typical class action case, the Court would agree that compensation to class counsel would be a matter best resolved at the end of the case. However, this is not a class action in which liability is at issue and there is a definite find from which distributions will ultimately be made to the investors. Moreover, the Court is also aware that completion of this case necessarily involves matters to be taken up on appeal. With these factors in mind, the Court finds the interests of justice will best be served by allowing a further interim payment of 20% of those fees at the rate of $185/hour.
At the conclusion of this litigation class counsel's compensation will be reconsidered with regard to the hourly rates. In the interim, class counsel may submit applications for administrative expenses related to class representation.
CONCLUSION
For the reasons stated above, the Liberte Class's motion for reconsideration (Doc. No. 1753) is granted. The General Receiver, Victor M. Javitch, is directed to deduct the following sums from the Receivership which would otherwise go to the class of Liberte investors to the following entities:
These sums reflect a total of 70% of attorney fees in addition to expenses.
Cooper Walinski $22,868.06
Pickerel, Schaeffer Eberling $14,716.92
Finally, at the conclusion of this litigation, the Court will reconsider the hourly rate of class counsel.
IT IS SO ORDERED.