Opinion
Civil No. 3:96-CV-2068-BC
September 28, 2000
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant The Sabre Group, Inc.'s ("Sabre") Motion to Recover Attorney Fees as Costs, filed December 1, 1999. Sabre moves the Court for an award of attorney's fees against Plaintiff Lyn-Lea Travel Corporation d/b/a First Class International Travel Management ("FCI") in the amount of $282,030.61, plus an additional $30,000 in appellate fees. Having reviewed the pertinent pleadings and the evidence submitted therewith, the Court GRANTS Sabre's motion in part for the reasons that follow.
The following pertinent background facts are undisputed and are taken from the Joint Pretrial Order submitted by the parties on October 29, 1999.
This diversity action stems from FCI's contractual agreement with American Airlines, Inc. ("American") involving FCI's use of a computerized reservation system in connection with its travel agency business. In 1995, FCI entered into a leasing agreement ("the Sabre Agreement") with American to use their automated system for booking travel reservations. Shortly after making this agreement, American decided to modify its commission structure, changing the way in which it paid commissions to travel agents, including FCI. According to FCI, these changes had a severe financial impact on its business. FCI subsequently failed to make its payment obligations under the Sabre Agreement and, in 1996, after FCI refused to pay the outstanding amounts due, American terminated the agreement.
On July 24, 1996, FCI filed this suit against American alleging several causes of action including breach of contract, fraud, deceptive trade practices, and tortious interference with business relationships. More specifically, FCI claimed that American entered into the Sabre Agreement knowing, but failing to disclose to FCI, that it was about to change its commission system. FCI also alleged that American interfered with and lured some of its clients and customers away from FCI.
In the meantime, American transferred ownership of the computerized reservation system along with the Sabre Agreement to Sabre. Accordingly, Sabre intervened in this lawsuit asserting a counterclaim against FCI for breach of the Sabre Agreement. FCI then lodged counterclaims of its own against Sabre for breach of contract, fraud, deceptive trade practices and tortious interference and also alleged numerous affirmative defenses to Sabre's counterclaim. Pl.'s Resp. to Sabre's Countercl., filed July 30, 1997.
Sabre was operated as a division of American, but it separated in 1996 as part of a corporate reorganization. Jt. Pretrial Order at 2.
On December 2, 1997, this Court granted American's and Sabre's summary judgment motions on FCI's tortious interference and breach of contract claims. See Memorandum Opinion and Order, filed Dec. 2, 1997. The Court also granted summary judgment on each of FCI's remaining claims, concluding that they were preempted by the Airline Deregulation Act ("ADA"), 49 U.S.C. § 41100, 49 U.S.C. § 42101, et. seq. See id. Thus, with Sabre's breach of contract counterclaim remaining as the only pending claim, the Court abated this case to allow FCI to pursue its preempted claims before the Department of Transportation ("DOT"), with the understanding that in the event the DOT did not issue a ruling on FCI's claims within six months, then Sabre could initiate a status conference with the Court for the purpose of setting its counterclaim for trial. See id at 23-24; See also Agreed Order Regarding Abatement filed Dec. 22, 1997 at 1-2.
According to FCI, it's preempted claims are still pending before the DOT. See Pl's Resp. to Sabre's Mot. to Recover Attorneys Fees at 5 n. 1.
One and a half years later, on July 8, 1999, this Court set Sabre's breach of contract counterclaim for a jury trial commencing on November 15, 1999. See Scheduling Order, entered July 8, 1999. Prior to trial, in September of 1999, the Court convened two status conferences to address the viability of FCI's affirmative defenses to Sabre's counterclaim. The Court issued various rulings on FCI' a affirmative defenses, but in particular, found that three of them — fraud in the inducement of the Sabre Agreement, breach of the duty of good faith and fair dealing, and estoppel — were preempted by the ADA on the grounds that they were virtually identical to FCI's affirmative claims against American and Sabre, which the Court had previously found to be preempted by the ADA. See Memorandum Opinion and Order, filed Sept. 29, 1999 at ¶¶ 1, 3-7.
In November of 1999, FCI and Sabre settled the breach of contract claim and filed an agreed motion requesting the entry of a final judgment awarding Sabre $30,000. The Court has signed that judgment, and it will be filed contemporaneously with this order. Sabre's motion to recover its attorneys fees followed on December 1, 1999. On December 20, 1999, FCI filed its responsive brief to which Sabre filed a reply on January 4, 2000.
FCI opposes Sabre's request for attorney's fees, contending that Sabre's counterclaim is unrelated to the other claims asserted in this lawsuit, and, as a result, Sabre is only entitled to recover the fees incurred for pursuing its counterclaim. Pl.'s Reap. at 1-2. In that regard, FCI urges the Court to reduce or deny Sabre's request in its entirety because Sabre has failed to segregate the fees associated with its counterclaim from the other fees incurred in this case. Id at 1-2, 10. FCI also contends that $282,000 in fees is unreasonable, particularly in light of the $30,000 settlement and the usual and customary fees for a breach of contract claim. Id. at 2-6.
II. Analysis
The two issues presented by Sabre's motion for attorney's fees are whether Sabre is entitled to any fees, and if so, how much. The Court will address these issues in turn.
A. Is Sabre Entitled to Recover Attorney's Fees?
In diversity cases such as this, state law governs whether a party is entitled to an award of attorney's fees. Atchison, Topeka and Santa Fe Ry. Co. v. Sherwin-Williams Co., 963 F.2d 746, 751 (5th Cir. 1992). Texas law allows for the recovery of reasonable attorney's fees, in addition to the amount of a valid claim and costs, if the claim is for an oral or written contract. Tex. Civ. Prac. Rem. Code Ann. § 38.001(8) (Vernon 1997); See Lyons v. Montgomery, 701 S.W.2d 641, 644 (Tex. 1985). Neither party disputes here that Sabre is entitled to recover fees for its breach of contract claim. The issue, rather, is whether Sabre's recovery is limited to the fees expended solely on that claim.
Ordinarily, when a lawsuit involves multiple claims or multiple parties, the party requesting attorney's fees has a duty to segregate non-recoverable fees from recoverable fees, and to segregate the fees owed to different parties. Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 11 (Tex. 1991). An exception to this rule, when segregation is not required, arises when the attorney's fees are incurred "in connection with claims arising out of the same transaction and are so interrelated that their prosecution or defense entails proof or denial of essentially the same facts." Id. (citation and internal quotations omitted). In that case, when the claims involved in a suit are "interwined [sic] to the point of being inseparable, the party suing for attorney's fees may recover the entire amount covering all claims." Id. (internal quotations omitted).
Here, FCI contends that Sabre's counterclaim was unrelated to the other claims in this case, thus Sabre was required but failed to segregate the fees for its counterclaim from those nonrecoverable fees incurred in connection with its defense of FCI's affirmative claims. Pl.'s Resp. at 1-4. The Court disagrees. In response to Sabre's counterclaim, FCI asserted several counterclaims of its own along with numerous affirmative defenses including fraud, breach of the duty of good faith and fair dealing, and estoppel. Pl.'s Resp. to Sabre's Countercl., filed July 30, 1997. Following the September 10, 1999 status conference regarding the viability of these affirmative defenses, the Court recognized that they were based on the same conduct underlying FCI's affirmative claims against both American and Sabre regarding the Sabre Agreement; i.e., that FCI was tricked by American's silence into signing an otherwise undisputed contract. See Memorandum Opinion and Order filed Sept. 29, 1999 at ¶¶ 3-4. Because the same conduct gave rise to these affirmative defenses and FCI's affirmative claims, the Court concluded that these defenses were, similar to the affirmative claims, preempted by the ADA. See Memorandum Opinion and Order filed Sept. 29, 1999 at ¶¶ 4-6 and generally Memorandum Opinion and Order filed Dec. 2, 1997.
The key here for purposes of this motion, is that Sabre, in order to recover on its breach of contract claim had to successfully defend against both FCI's affirmative defenses and its affirmative claims, "Where the defense to a [claim] and the prosecution of a [counterclaim] for which recovery of attorneys' fees are closely interwoven, Texas law allows recovery of attorneys' fees for both." FSLIC v. Brenner, 96 B.R. 72, 74 (N.D. Tex. 1988) (citations omitted); See also RepublicBank Dallas, N.A. v. Shook, 653 S.W.2d 278 282-83 (Tex. 1983) (holding that bank could recover attorney's fees for both the plaintiff's affirmative claims and the bank's related counterclaim for collection of a note because the bank "had to overcome [plaintiff's] claims before it could recover."). Furthermore, FCI expressly admitted that Sabre's counterclaim arose out of the same facts underlying FCI's affirmative claims. Pl.'s Resp. to Sabre's Countercl. at ¶¶ 1. Accordingly, the Court finds that Sabre's breach of contract counterclaim was necessarily related to FCI's affirmative defenses and to its affirmative claims regarding the Sabre Agreement, therefore, Sabre is entitled to recover attorney's fees related to each of these claims without the need for segregation.
Similarly, the Court finds that FCI's tortious interference claims against Sabre were related to Sabre's counterclaim. As just noted, FCI alleged a theory of estoppel as an affirmative defense to Sabre's breach of contract claim, stating that "[b]y its own actions, SABRE is barred from maintaining any action on the SABRE agreement." Pl.'s Resp. to Sabre's Countercl. at ¶¶ 20. At the September 10, 1999 status conference, FCI argued that Sabre's tortious interference conduct was sufficient to estop Sabre from recovering on its breach of contract counterclaim. See Sabre's Reply at 5-6 n. 9 (quoting Transcript of Sept. 10, 1999 hearing at pp. 21-22). Additionally, in the October 29, 1999 joint pretrial order, FCI listed as a contested issue of fact, "[w]hether American Airlines and/or Sabre encouraged Mary Earhart's decision not to return to FCI and to solicit FCI's current customers." Jt. Pretrial Order, received Oct. 29, 1999 at 9. Thus, the record in this case clearly establishes that FCI, in attempting to avoid liability on Sabre's counterclaim, relied on facts giving rise to its tortious interference claims. Because these allegations made by FCI required Sabre to defeat the tortious interference claims, the Court finds that they are, similar to FCI's other affirmative claims, closely related to Sabre's breach of contract counterclaim. Consequently, Sabre is entitled to recoup its fees incurred in defending against each of FCI's affirmative claims and in prosecuting its counterclaim without the need for segregation. The Court must now determine whether Sabre's fee request is reasonable.
B. Is Sabre's Fee Request Reasonable?
The Court notes that while Texas law governs whether Sabre is entitled to attorney's fees in this diversity action, the calculation of a reasonable fee may not be controlled by state law. The Fifth Circuit has consistently passed on this question because Texas and federal courts engage in a similar analysis in calculating a fee award. Compare Mid-Continent Cas. Co. v. Chevron Pipe Line Co., 205 F.3d 222, 232 nn. 1-2. (5th Cir. 2000) (citations omitted) and Arthur Andersen Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997) (listing factors); See also Robinson v. State Farm Fire Cas. Co., 13 F.3d 160, 164 (5th Cir. 1994). Because Texas and federal law are similar in this respect, the Court finds that in this case the determination of a reasonable fee for Sabre would produce the same result under either standard. See August Reuchlen Chirburgie Instrumente, GMBH v. Deutschland Surgical, Inc., No. Civ. A. 3:97-CV-0585-BC, 1998 WL 345548 at *1 n. 1. (June 22, 1998) (Boyle, J.).
Federal courts in this circuit use the lodestar method for determining the amount of reasonable attorney's fees. Louisiana Power Light Co. v. Kellstrom, 50 F.3d 319, 323-24 (5th Cir. 1995). The lodestar fee, which has been characterized as "the most useful starting point" in determining a reasonable fee award, is calculated by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate. See Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983). The court may then either accept or adjust the lodestar fee depending on the circumstances of the case based on the factors set forth in Johnson v. Georgia Hwy. Express, Inc., 488 F.2d 714 (5th Cir. 1974) See Wegner v. Standard Ins. Co., 129 F.3d 814, 822 (5th Cir. 1997); Johnson, 488 F.2d at 717-19 . The lodestar is presumptively reasonable, however, and should be modified only in exceptional cases. Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993) (citing City of Burlington v. Dague, 505 U.S. 557, 562, 112 S.Ct. 2638, 2641, 120 L.Ed.2d 449 (1992)).
The Johnson factors are: (1) the time and labor required; (2) the novelty and difficulty of the case; (3) the skill required; (4) the preclusion of other employment; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed; (8) 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. Johnson, 488 F.2d at 717-19 .
Sabre's motion seeks reimbursement for $282,030.61 in fees paid to seven different attorneys who worked at hourly rates ranging from $250.00 down to $108.00. Mot., Ex. A ( Albright Decl. at 3), Ex. B ( Crews Decl. at unnumbered 2). FCI does not dispute the reasonableness of these hourly rates, therefore, the Court will apply these rates to the number of hours reasonably expended to calculate the lodestar fee.
FCI does dispute, however, that Sabre's attorneys reasonably expended the claimed hours on this litigation. More specifically, Sabre maintains the fee award should disallowed entirely or at least significantly reduced because (1) Sabre's documentation is inadequate to show the nature and type of work performed; (2) any fees expended prior to May 6, 1997, the date Sabre sought to intervene in this lawsuit, are unreasonable; (3) Sabre's proof indicating that billing statements were sent to American shows that the work was performed for American rather than for Sabre; (4) any fees incurred while this case was abated between December 1997 and July 1999 are unreasonable; and(S) Sabre's request is excessive in light of the agreed settlement for $30,000. Pl.'s Resp. at 2-7. The Court will address these contentions in turn.
1. Inadequate Documentation
Sabre's fee request covers 1,819.35 hours of attorney labor. Mot., Ex. A ( Albright Decl. at 3), Ex. B ( Crews Decl. at unnumbered 2). FCI first claims that Sabre's documentation is inadequate to show the number of hours reasonably expended because the billing statements submitted do not show the nature and type of work performed. Pl.'s Resp. at 2. According to Sabre's attorneys, they redacted portions of the billing statements showing the type of work performed in order to protect attorney client privileged communications and attorney work product. Mot., Ex. A ( Albright Decl. at 2-3), Ex. B ( Crews Decl. at unnumbered 2). Thus, the billing statements supporting Sabre's fee request merely detail the time spent by each attorney working on the case. See Mot., Exs. A-1 and Ex. B-1.
Sabre bears the burden of proving that the hours claimed were "reasonably expended on the litigation." See Alberti v. Klevenhagen, 896 F.2d 927, 933-34, modified in part on other grounds 903 F.2d 352 (5th Cir. 1990) (on rehearing); See also Hensley, 461 U.S. at 434 ("The district court also should exclude from this initial fee calculation hours that were not `reasonably expended.'"). "In determining the amount of an attorney fee award, courts customarily require the applicant to produce contemporaneous billing records or other sufficient documentation so that the district court can fulfill its duty to examine the application for noncompensable hours." Bode v. United States, 919 F.2d 1044, 1047 (5th Cir. 1990); See, e.g. Kellestrom, 50 F.3d at 325-26 (reducing fee award by ten percent where challenged billing records did not provide the court with "sufficient information to determine whether all of the amounts requested were reasonably expended on this litigation."). "[T]he documentation must be sufficient for the court to verify that the applicant has met its burden." Kellestrom, 50 F.3d at 324 . Where the party seeking attorney's fees has failed to present adequately documented time records, the court may "exclude all time that is . . . inadequately documented." Watkins, 7 F.3d at 457 . Without sufficient documentation, the court will reduce the number of hours awarded or deny the fee application in its entirety. Kellestrom, 50 F.3d at 324, 326 .
Upon reviewing the evidence submitted in support of Sabre's motion, the Court finds that it is wholly inadequate to justify an award of $282,000 in fees. As noted, the attorney's billing statements contain nothing more than the itemized time entries that each attorney spent working on this case. There is no indication of the nature and type of work performed or any proof of how many of the 1,819 hours were spent on any particular aspect of this case. And although the Court has no reason to question the attorneys' declarations that the entire 1,819 hours were reasonably and necessarily expended on this litigation, the Court will, in its discretion, require more substantiating proof to warrant a fee award of $282,000. The Court, however, being intimately familiar with the progression of this litigation, finds that Sabre's attorneys have reasonably expended a significant number of hours working on this case. This has been a hotly contested, litigious controversy which has extended well over three years. Although none of the claims proceeded to trial, the pre-trial and discovery matters occupied an extraordinary amount of this Court's and the parties' attention. Numerous discovery disputes arose necessitating the Court's intervention on several occasions. Additionally, the Court has mentioned the vast array of claims asserted in this case, and certain issues raised by these claims have been litigated not only before this Court but also before the Department of Transportation. Motions for summary judgment were filed by each of the parties requiring the resolution of some relatively simple issues but also more complex preemption issues. Even a cursory review of the docket sheet evidences the substantial amount of time spent by, not only Sabre, but both parties working on this case.
The Court appreciates the attorneys' concerns with disclosing privileged matters or attorney work product. Nonetheless, many documents in this case were filed under seal and, certainly, the attorneys could have utilized the same or a similar procedure here to provide more detailed records regarding the fee request while at the same time protecting their client's interests.
Still, because of the lack of proof offered by Sabre regarding the nature and type of work performed for all of its claimed hours, the Court finds that the number of compensable hours requested for each attorney should be reduced. Utilizing the Court's discretion and its familiarity with this litigation and how it has progressed, the Court finds that the number of compensable hours should be reduced by twenty-five percent. See Kellestrom, 50 F.3d at 324 ("[A] district court may reduce the number of hours awarded if the documentation is vague or incomplete."); See generally Freiler ". Tangipahoa Parish Bd. of Educ., 185 F.3d 337, 349 (5th Cir. 1999) (district court did not err in calculating attorney's fees when, instead of determining the necessity of each billed hour, it reduced the overall number of hours by 10%); Hopwood v. Texas, 999 F. Supp. 872, 916, 919-212 (W.D. Tei 1998) (reducing compensable hours by 25% and 35% for failure to exercise billing judgment); Baxter v. Crown Petroleum Partners 90-A, No. 3:97-CV-2371-P, 2000 WL 269747 at *10 (N.D. Tex. March 10, 2000) (Solis, J.) (reducing excessive request for hours by 25%).
2. Fees Incurred Prior to Intervention
FCI next alleges that Sabre should not be reimbursed for fees incurred prior to May 6, 1997, the date its motion to intervene was filed in this case. Pl.'s Resp. at 3. The Court disagrees. The attorneys' billing statements reflect that work was performed on Sabre's behalf as early as February 18, 1997, less than three months before Sabre sought to intervene in this lawsuit. Mot., Ex. A-1. While the Court has found that Sabre should not be awarded all of its requested fees, Sabre is not precluded from being reimbursed for some fees merely because they were incurred prior to the actual filing date of the motion to intervene. See Williamson v. Tucker, 615 S.W.2d 881, 893 (Tex.App. — Dallas 1981, writ ref'd n.r.e.) (holding that plaintiff employing counsel was a reasonable means of protecting his right to collect a note, thus, plaintiff could recover pre-petition attorney's fees). As some fees were reasonably incurred prior to Sabre's intervention, its fee award will not be further reduced on this basis.
3. Billing Statements Sent to American
FCI also claims that because some of Sabre's billing statements were addressed to American, Sabre is trying to recover fees for work performed on behalf of American and not Sabre. Pl.'s Resp. at 4. The Court is unpersuaded. As explained in the declarations attached to this motion, American and Sabre, throughout most of this litigation, were represented by the same lawyers. See Mot., Ex. A ( Albright Decl. at 2) and Ex. B ( Crews Decl. at unnumbered 1). The fact that some billing statements were simply addressed to American in no way suggests that no work was performed on Sabre's behalf. Without any further evidence substantiating FCI's allegation that Sabre is attempting to recover for work performed solely for American, the Court finds that Sabre's award should not be further reduced on this basis.
Perhaps Sabre's stronger argument is that, even for work performed on behalf of American. Sabre may recover American's attorney's fees because American assigned all of its rights in the Sabre Agreement, including the right to recover attorney's fees, to Sabre. Mot. at 1 and Reply at 6 n. 10. Although a party's right to receive attorney's fees may be assigned under Texas law, See In The Matter of Southland Corp., 19 F.3d 1084, 1089 (5th Cir. 1994), the Court has been presented no evidence of an assignment between American and Sabre or evidence concerning the specific terms of that assignment.
4. Fees Incurred During Abatement
FCI next contends that no work should have transpired on Sabre's counterclaim while this case was abated from December 1997 until July 1999 and, consequently, Sabre's attorney's fees expended during this time period were unreasonable. Pl.'s Resp. at 4-5.
The Court abated this case in December of 1997 to allow FCI to pursue its ADA preempted claims against American and Sabre in the appropriate administrative agency. Agreed Order Regarding Abatement filed Dec. 22, 1997; See also Memorandum Opinion and Order filed Dec. 2, 1997 at 23-24 n. 20. Based on the Court's earlier finding in this order that FCI's affirmative claims were closely related to Sabre's counterclaim, it follows that Sabre would necessarily have to address FCI's claims in connection with its counterclaim in the administrative proceedings. FCI's contention, therefore, that no work should have transpired while this case was abated is without merit. Furthermore, Texas courts allow recovery of attorney's fees for substantially related claims even when the fees are incurred in separate lawsuits. See Boulware v. Sec, State Bank of Navasota, Texas, 640 S.W.2d 735, 737 (Tex.App.-Houston [14th Dist.] 1982, n.w.h.); See also Concorde Limousines, Inc. v. Maloney Coachbuilders, Inc., 835 F.2d 541, 546 n. 22 (5th Cir. 1987).
The problem here, however, is that Sabre has provided no proof of what fees were incurred in connection with the administrative proceedings. And a review of the record in this case shows that by far the majority, if not all, of the litigation before this Court between December 1997 and July 1999 concerned contempt proceedings and matters related to FCI's improper disclosure of Sabre's confidential business information, for which Sabre has already been awarded attorney's fees. Absent proof setting forth the work performed in the administrative proceedings apart from the work performed on the contempt matters, the Court cannot calculate how much in fees Sabre should be reimbursed during this relevant time period. Since Sabre has failed to carry its burden to establish compensable hours during the period from December 1997 through July 1999, the Court will reduce its award by the amount of fees claimed for this time period, or $78,187.
Sabre's attorney assures the Court that, in calculating the total amount of fees requested in this motion, he has excluded $18,393 in fees previously awarded by the Court as a result of the contempt findings against FCI. Mot., Ex. A ( Albright Decl. at 3-4). According to the record, though, Sabre was awarded fees totaling $20,451.50 for the contempt related matters. See Order of Sanctions Against Stephen Gardner filed Dec. 1, 1998 and Order filed Jan. 2, 2000. In any event, Sabre's billing statements covering the period from December 1997 through July 1999 total approximately $78,187 in attorneys' fees. Unfortunately for Sabre, because the statements do not specify the type of work performed, the Court cannot determine which work was performed in connection with the contempt proceedings or the administrative proceedings and thus which fees, if any, have been reimbursed and which, if any, have not.
5. Excessive Fee Request
FCI further claims that Sabre's fee request is excessive in light of FCI's settlement offers in this case and the agreed final judgment for $30,000. Pl.'s Resp. at 5-6. According to FCI, the usual and customary fees for a breach of contract claim of this nature is 30-40% of the award, or $12,000. Id. at 7.
First, the Court earlier concluded that Sabre is entitled to recover its fees incurred not only for the breach of contract claim, but also for all of the claims in this case. Second, FCI's argument incorrectly assumes that the amount of the judgment accurately reflects the value of this case. To the contrary, the simple fact that this litigation has spanned well over three years is, by itself, a sufficient indicator that this case was worth much more than $30,000. And the record contains ample evidence that more was at stake here. For example, although Sabre made a written demand to FCI prior to this lawsuit for $20,982 owed pursuant to the Sabre Agreement, Sabre's counterclaim sought over $100,000 in damages. FCI responded to Sabre's claim with its own counterclaims seeking an indeterminate amount of actual damages for Sabre's alleged fraud, tortious interference and deceptive trade practices, and punitive damages under the DTPA. Pl.'s Resp. to Sabre's Countercl. at 4-10. FCI also alleged no less than nine affirmative defenses to Sabre's counterclaim, the validity of which were resolved by the Court after two separate hearings and extensive briefing by the parties.
Sabre points out that its initial $20,000 demand was only for past booking shortfalls due under the Sabre Agreement at that time, but when FCI refused to pay resulting in the termination of the agreement, the total amount due under the agreement, including future shortfalls, was approximately $95,000. Reply at 8 n. 12.
In addition, the summary judgment practice was quite involved in this case. The appendix and supplemental appendix to Sabre's motion contained thirty-five exhibits, while FCI submitted a 3-volume appendix with its response. And both parties filed countering objections with motions to strike portions of the other's summary judgment evidence. Similarly, the earlier pretrial materials submitted by the parties also reflect the nature of this dispute. For instance, the first joint pretrial order filed in November of 1997 listed 136 contested issues of fact, and estimated the trial length at one to two weeks. In short, the record establishes that, at least prior to the Court's disposing of FCI's claims through summary judgment, this case involved much more than just a simple $30,000 breach of contract claim.
Furthermore, both the amount of recovery and the total amount involved in the case are factors to consider in determining a reasonable fee award. Flint Assoc. v. Intercontinental Pipe Steel, Inc., 739 S.W.2d 622, 626 (Tex.App.-Dallas 1987, writ denied). "The determination of what is reasonable cannot be made by application of some mechanical formula. Rather, the court must take into consideration the entire nature of the case." Id. "In deciding whether fees are excessive, we are entitled to look at the entire record and to view the matter in the light of the testimony, the amount in controversy, the nature of the case, and our common knowledge and experience as lawyers and judges." Mid-Continent, 205 F.3d at 232 (internal quotations and citations omitted). Viewing this case with these guidelines in mind, the Court finds that the $30,000 agreed judgment in this case, while relevant to determining a reasonable fee award, does not operate to limit Sabre's recovery as suggested by FCI.
In the end, however, none of the claims in this case proceeded to trial, and, as explained previously, Sabre has been fully reimbursed for the contempt proceedings which consumed a large portion of the time devoted to this case. Considering these facts in conjunction with Sabre's inadequate billing records, the Court finds that Sabre's fee award should be further reduced by fifteen percent. See Kellestrom, 50 F.3d at 325-26 (reducing fee award by ten percent where challenged billing records did not provide court with "sufficient information to determine whether all of the amounts requested were reasonably expended on this litigation").
Having addressed FCI's objections to the reasonableness of Sabre's fee request, and after making the appropriate adjustments as outlined above, the Court calculates the lodestar fee as follows:Attorney Reduced Hours Billing Rate/Hour Total Fee 9,037.30 78.187.00 21.870.65
William J. Albright 539.59 (719.45 x 25%) $225.00 $121,407.75 Cindy Connelly 55.05 (73.40 x 25%) 132.57 7,297.98 Timothy A. Daniels 65.81 (87.75 x 25%) 148.50 9,772.79 Amy E. Gibson 354.19 (472.25 x 25%) 108.00 38,252.52 Julie H. Robertson 268.35 (357.80 x 25%) 130.00 34,885.50 John R. Crews 13.35 (17.80 x 25%) 250.00 3,337.50 Aaron G. York 68.17 (90.90 x 25%) 132.57 Sub-Total $223,991.34 (Fees from 12/97 — 7/99) $145,804.34 (15% reduction) TOTAL LODESTAR FEE $123,933.69 Keeping in mind that the lodestar is presumptively reasonable, the Court now turns to examine the remaining Johnson factors to determine whether the lodestar should be adjusted.C. Should the Lodestar Be Adjusted Based on the Johnson Factors?
The Fifth Circuit has stated that Johnson factors one and seven are included in the lodestar calculation and should not be analyzed again in deciding whether to adjust the lodestar. Walker v. U.S. Dep't of Hous. and Urban Dev., 99 F.3d 761, 771-72 (5th Cir. 1996). With respect to some of the other factors, the Circuit further explained:
The Supreme Court has limited greatly the use of the second, third, eighth, and ninth factors, and we have held that enhancements based upon these factors are only appropriate in rare cases supported by specific evidence in the record and detailed findings by the courts . . . An enhancement based on the eighth factor is appropriate only when the fee applicant can demonstrate that it is customary in the area for attorneys to charge an additional fee above their hourly rates for an exceptional result . . . The Supreme Court has barred any use of the sixth factor.Id . (citations, internal quotations, and footnotes omitted).
Applying the Johnson factors to this case, the Court finds that the lodestar fee should not be adjusted. Factors 1 and 7 are included in the lodestar calculation and will not be considered again in deciding whether to adjust the lodestar. See id . Likewise, factor 8 — the amount involved and the results obtained — was included in the lodestar calculation in addressing FCI's argument that Sabre's fee request is limited by the $30,000 judgment. Factors 2, 3, and 9 do not warrant an adjustment. The complexity of this case along with the attorneys' skill, experience, and reputation are not sufficiently unusual to equate this dispute with those "rare cases supported by specific evidence." See id .
As to factor 6, the Supreme Court has barred its use to enhance a fee award, but even considering it in this case, the Court finds it insufficient to warrant an adjustment. Factor 4 provides no basis for a fee adjustment because there is no evidence offered by Sabre that its attorneys were precluded from taking other work to litigate this case. Likewise, factors 5 and 11 do not justify an enhancement. While Sabre's attorneys have provided their services at discounted rates due to their attorney-client relationship, their hourly fee is not disputed, and it appears to be a comparable fee for representation of similar quality in this area. Factor 10 does not warrant an adjustment to the lodestar because the Court finds this case to be no more undesirable than any other similar lawsuit. And finally, factor 12 — the awards made in similar cases — provides no reason to adjust the award in this case.
In summary, the Court finds that a consideration of the Johnson factors provides no basis for either increasing or decreasing the lodestar fee award in this case. Accordingly, Sabre's motion to recover attorney's fees is GRANTED in the amount of $123,933.69.
C. Appellate Fees
Sabre also seeks an additional $30,000 in fees in the event FCI unsuccessfully appeals this Court's judgment. Mot. at ¶¶ 9. FCI counters that this request is excessive because the majority of the appellate work will involve issues related to FCI's affirmative claims for which Sabre should not be awarded appellate fees. Pl.'s, Resp. at 7. FCI claims that a reasonable fee for defending Sabre's counterclaim is no more than $2,000. Id.
Neither party disputes that the Court may award fees for appellate work on a contingent basis. See Norris v. Hartmarx Specialty Stores, Inc., 913 F.2d 253, 257 (5th Cir. 1990) ("A long and consistent line of Fifth Circuit precedent allows awards of attorney's fees for both trial and appellate work") (citations omitted); See also Mid-Continent, 205 F.3d at 234 (citations omitted). Based on the Court's earlier findings regarding the related nature of the claims in this case, the Court concludes that Sabre should be awarded appellate fees covering all of those claims. As previously explained, in pursuing its counterclaim, Sabre necessarily had to defend against FCI's affirmative claims. The same principle, the Court finds, applies on appeal. Quite naturally, Sabre will be required to address all of the claims in this case on appeal, and any success which FCI may have regarding its affirmative claims will unquestionably affect Sabre's recovery on its counterclaim. The Court, therefore, finds that Sabre is entitled to an award of appellate fees covering all of the claims in this case. Accordingly, Sabre is awarded $30,000 in reasonable appellate fees contingent on the fact that FCI's appeal is unsuccessful.
III. Conclusion
For the foregoing reasons, the Court GRANTS in part Sabre's Motion to Recover Attorney's Fees As Costs. Sabre is awarded $123,933.69 as reimbursement for fees reasonably expended and an additional $30,000 in appellate fees contingent on the fact that FCI's appeal is unsuccessful.