Orgill, Inc. v. Distribution Centers of America (WV), LLC et al

MEMORANDUM of Law in Support of Orgill's Motion for Attorneys' Fees and Expenses

N.D.W. Va.December 1, 2017

4839-8501-4871 2918433-000009 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF WEST VIRGINIA AT MARTINSBURG ORGILL, INC. Plaintiff, v. CIVIL ACTION NO. 3:16-CV-00158-GMG (Judge Gina M. Groh) DISTRIBUTION CENTERS OF AMERICA (WV), LLC Defendant. ____________________________________________________________________________ MEMORANDUM OF LAW IN SUPPORT OF ORGILL’S MOTION FOR ATTORNEY’S FEES AND EXPENSES _____________________________________________________________________________ The Plaintiff and Counterclaim Defendant, Orgill, Inc. (“Orgill”), submits this Memorandum of Law in support of its Rule 54(d)(2) Motion for Attorney’s Fees and Expenses pursuant to Section 7.6 of the Amended Lease Agreement. In support thereof, Orgill states as follows: INTRODUCTION AND SUMMARY OF ARGUMENT Orgill instituted this action, which was removed and brought before this Court, seeking declaratory relief after Defendant Distribution Centers of America's (“DW”) demand for "Additional Rent” under the Parties’ Amended and Restated Lease Agreement (“Amended Lease”). Mem. Op., ECF No. 249 at 2. On September 29, 2017, Orgill filed its motion for summary judgment as to DW’s claims for recovery of property management fees, indirect expenses, and litigation expenses incurred by DW in the Novakovic lawsuit. ECF No. 154. On September 30, 2017, DW filed its motion for summary judgment as to its Counterclaim for breach of contract and seeking declaratory relief Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 1 of 17 PageID #: 6151 2 4839-8501-4871 2918433-000009 under its interpretation of the Amended Lease. ECF No. 159. On November 16, 2017, the Court issued its Memorandum Opinion and Order Granting Plaintiff’s Motion for Summary Judgment “on all issues,” holding that DW was not entitled to recover any of the management fees, indirect expenses, or litigation expenses as additional rent under the Lease. ECF No. 249. The Clerk of Court entered judgment in favor of Orgill on November 17, 2017. ECF No. 250. After resolving in Orgill’s favor the issues raised by summary judgment, the Court stated that there are no remaining issues in the litigation and directed that the Court remove the case from the active docket. ECF No. 249 at 21-22. Procedurally, the Court appears to have entered the final judgment intending to dispose of all claims brought between the parties before the Court under Fed. R. Civ. P. 54(b). Orgill is therefore the prevailing party of this action and entitled to an award of all of its costs and charges, including reasonable attorney’s fees pursuant the Amended Lease. Specifically, Section 7.6 of the Amended Lease (“Section 7.6”) provides: 7.6 Mutual Indemnification; Costs. Each party (“indemnitor”) covenants and agrees to pay, and to indemnify the other (“indemnitee”) against, all costs and charges, including reasonable counsel fees, incurred by the indemnitee in enforcing any agreement or covenant of the indemnitor herein contained, provided the indemnitee prevails in any action or proceeding (except arbitration) brought to secure such enforcement. Am. Lease, ECF No. 162-2 at 1690, (p. 32 of Am. Lease attached as Exhibit 1). The Parties recognize that Section 7.6 provides that the prevailing party in any action to enforce any agreement or covenant contained in the Amended Lease is entitled to all of its costs and charges, including reasonable attorney’s fees. See id. Orgill specifically requested in its Complaint for Declaratory Judgment that this Court order DW to pay all costs and charges, including reasonable attorney’s fees, incurred in enforcing the terms of the Amended Lease, ECF No. 1-1 at 16. DW prayed for the same relief in its Answer and Counterclaim. ECF No. 11 at Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 2 of 17 PageID #: 6152 3 4839-8501-4871 2918433-000009 19. The parties requested attorney’s fees as costs in the initial pleadings; therefore, they have not been waived and are properly sought under Fed. R. Civ. P. 54(d)(2). See, e.g., Route Triple Seven Ltd. P’ship v. Total Hockey, Inc., 127 F. Supp. 3d 607, 613 (E.D. Va. 2015); accord Atlantic Purchasers, Inc. v. Aircraft Sales, Inc., 705 F.2d 712, 716 (4th Cir. 1983); Fed. R. Civ. P. 54(d)(2)(A). As explained in greater detail below, Orgill calculated its reasonable attorney’s fees as sought in this Motion using the “lodestar” method by multiplying its reasonable hourly rates by the number of hours reasonably expended by Orgill’s counsel, Baker, Donelson, Bearman Caldwell & Berkowitz PC (“Baker Donelson”), and Jackson Kelly PLLC (“Jackson Kelly”). See Robinson v. Equifax Info. Servs., L.L.C., 560 F.3d 235, 243 (4th Cir. 2009); see also Affidavit of Buckner Wellford (attached as Exhibit 2); Affidavit of Christopher Robertson (attached as (Exhibit 3). Orgill calculated its reasonable attorney’s fees in recognition of the twelve-factor test that courts use to determine the reasonableness of an attorney’s fee, which was first established by the Fifth Circuit in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974), and adopted by the Fourth Circuit and its district courts. See Robinson, 560 F.3d at 243; Barber v. Kimbrell’s, Inc., 577 F.2d 216, 226 (4th Cir. 1978); Gen. Motors LLC v. Bill Kelley, Inc., No. 2:12-CV-51, 2013 WL 5504445, at *3 (N.D.W. Va. Oct. 1, 2013). Orgill engaged the services of attorneys in both West Virginia, and Memphis, Tennessee, who do not have an interest in this case, to review the rates and hours worked for their reasonableness. Orgill attaches the Affidavits of West Virginia licensed attorney Shawn George and Tennessee licensed attorney John Houseal in support of its Motion. See Affidavit of Shawn George (attached as Exhibit 4); Affidavit of John Houseal (attached as Exhibit 5). For these Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 3 of 17 PageID #: 6153 4 4839-8501-4871 2918433-000009 reasons and those stated further herein, Orgill is entitled to its reasonable attorney’s fees incurred in bringing this action. Pursuant to Section 7.6, Orgill is also entitled to its nontaxable expenses, which consist in large part of deposition expenses and Orgill’s expert witness fees that were necessarily incurred to maintain its claims in this litigation. Orgill’s counsel engaged the services of two experts in commercial real estate to address the “additional rent” issue: one from Tennessee with a broad array of experience in the management of industrial properties and familiar with net-net-net leases for industrial properties, Joseph Steffner, and another from West Virginia, Jay Goldman, who is also licensed in the State of West Virginia to provide property management services. See Wellford Aff. at ¶ 8. Orgill’s counsel engaged the services of Brett Cutchins, an expert on insurance coverage issues. See id. Orgill also relied upon and coordinated the deposition appearance of its insurance broker, Paul Woods. Id. Orgill’s counsel secured expert reports from the following individuals, each of whom were involved in providing services to Orgill relevant to the repair and maintenance issues: Monty Hebb, Joshua Holloman, and Dennis Bennett. Id. The fees incurred by Orgill for engaging the services of these witnesses were necessary to successfully maintaining this action and rebutting the testimony of DW Manager Joseph Myer and DW’s sole expert, Marc Fischer, who testified on each of the issues covered by all of these witnesses, and which were ultimately resolved by the Court in Orgill’s favor in its Mem. Op. granting Orgill’s Motion for Summary Judgment. See id.; ECF No. 249. As it is undisputed between the parties that the prevailing party is entitled to its costs and charges, including reasonable attorney’s fees, in bringing an action to enforce the Amended Lease, Orgill respectfully requests that the Court enter an Order awarding Orgill its reasonable attorney’s fees and expenses, pursuant to both Fed. R. Civ. P. 54(d)(2) and Section 7.6. Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 4 of 17 PageID #: 6154 5 4839-8501-4871 2918433-000009 STANDARD OF LAW A party may be entitled to attorney’s fees that are specifically provided for by contract, statute, or equity. See Travelers Cas. & Sur. Co. v. Pacific Gas & Elec. Co., 549 U.S. 443, 448 (2007); Summit Valley Indus. v. Local 112, United Bhd. of Carpenters & Joiners, 456 U.S. 717, 721 (1982). 54(d) provides that “[a] claim for attorney’s fees and related nontaxable expenses must be made by motion unless the substantive law requires those fees to be proved at trial as an element of damages.” Fed. R. Civ. P. 54(d)(2)(A). Rule 54(d) continues by specifying: Unless a statute or court order provides otherwise, the motion must: (i) be filed no later than 14 days after the entry of judgment; (ii) specify the judgment and the statute, rule, or other grounds entitling the movant to the award; [and] (iii) state the amount sought or provide a fair estimate of it. Id. Here, Orgill claims an award for “all costs and charges, including reasonable counsel fees” under Section 7.6 of the Amended Lease. In compliance with Rule 54(d)(2), Orgill provides a fair estimate by submitting those costs, charges, and reasonable attorney’s fees that have been reasonably ascertainable as of the filing date of this Motion, and Orgill will submit the amount from any further support in due course as it becomes available. See 1993 Amendment to Rule 54(d)(2)(B).1 1 “The rule does not require that the motion be supported at the time of filing with the evidentiary material bearing on the fees. This material must of course be submitted in due course, according to such schedule as the court may direct in light of the circumstances of the case. What is required is the filing of a motion sufficient to alert the adversary and the court that there is a claim for fees, and the amount of such fees (or a fair estimate.” Id. Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 5 of 17 PageID #: 6155 6 4839-8501-4871 2918433-000009 ARGUMENT I. ORGILL IS ENTITLED TO ITS REASONABLE ATTORNEY’S FEES. A. Orgill Is the Prevailing Party. As this Court has recognized, “[t]he Supreme Court of the United States has explained that a prevailing party is one whose lawsuit resulted in the ‘material alteration of the legal relationship of the parties.’” Murphy v. U.S. Customs & Border Prot., No. 3:15-CV-133, 2017 WL 2563230, at *3 (N.D.W. Va. June 13, 2017) (Groh, J.) (quoting Buckhannon Bd. & Care Home, Inc. v. W. Virginia Dep’t of Health & Human Res., 532 U.S. 598, 604 (2001)). Under West Virginia law, the prevailing party in a commercial lease dispute between the tenant and the landlord is entitled to attorney’s fees if a provision in the lease contemplated such an arrangement, and the Supreme Court of Appeals of West Virginia has upheld such a lease provision as valid. Vance v. Smallridge, 2012 WL 3055439, at *2 (W. Va. June 22, 2012); see also Amaker v. Hammond’s Mill Homeowners Ass’n, Inc., 2015 WL 6954981, at *9 (W. Va. Nov. 6, 2015) (citing Moore v. Johnson Service Company, 219 S.E.2d 315, 323 (W. Va. 1975)). In Vance, the court affirmed the circuit court’s finding that the landlord was the prevailing party after the circuit court granted landlord a directed verdict on all of the issues, including a determination of the parties’ rent and maintenance obligations. Vance, 2012 WL 3055439, at *2. These decisions, taken together, establish that Orgill is the prevailing party as defined under the applicable law. Indeed, Orgill prevailed on every claim that it asserted at the summary judgment stage, leaving only its claim for recoupment for the additional rents paid between July 2015 and June 2016.2 After resolving the issues raised by summary judgment in Orgill’s favor, the Court stated that there are no remaining issues in the litigation and directed that the Court 2 Orgill is filing in addition to this Motion a Motion to Alter or Amend the Judgment under Fed. R. Civ. P. 59(e) in order to for the Court to properly dispose of its recoupment claim. Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 6 of 17 PageID #: 6156 7 4839-8501-4871 2918433-000009 remove the case from the active docket. ECF No. 249 at 21-22. By virtue of the Court’s judgment in favor of Orgill on its Motion for Summary Judgment, the parties’ relationship has been materially altered from the new interpretation of the Amended Lease that DW sought beginning in May 2015, which would have substantially affected the parties’ rights and liabilities, dating back to the execution of the Amended Lease and continuing through its expiration. Thus, Orgill is the prevailing party in this litigation and is entitled to receive a “fully compensatory” attorney’s fee award pursuant to Section 7.6. See Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169, 174 (4th Cir. 1994) (quotation marks and citations omitted). B. Orgill’s Attorney’s Fees Are Reasonable. The starting point for establishing the proper amount of an attorney’s fee award is to determine the reasonableness of the fees by using the lodestar method, which is multiplying the number of hours reasonably expended by a reasonable hourly rate. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Best Med. Int’l, Inc. v. Eckert & Ziegler Nuclitec GmbH, 565 F. App’x 232, 236-37 (4th Cir. 2014) (citing McAfee v. Boczar, 738 F.2d 81, 88 (4th Cir. 2013); Rum Creek, 31 F.3d at 174 (citations omitted). Fees for paralegals, database managers, support staff, attorneys who are not yet licensed, and other individuals who contribute to the attorney’s work product may also be included. See Richlin Sec. Serv. Co. v. Chertoff, 553 U.S. 571, 581 (2008); Priestley v. Astrue, 651 F.3d 410, 416 (4th Cir. 2011). First, courts should consider the so-called Johnson factors when determining the reasonableness of the number of hours: (1) The time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney’s opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney’s expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation, and Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 7 of 17 PageID #: 6157 8 4839-8501-4871 2918433-000009 ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneys’ fees awards in similar cases. Best Med., 565 F. App’x at 237. Second, courts “must subtract fees for hours spent on unsuccessful claims unrelated to successful ones.” Id. (quotation marks omitted) (citing McAfee, 738 F.3d at 88 ( internal quotation marks omitted)). Third, and finally, courts “should award some percentage of the remaining amount, depending on the degree of success enjoyed by the [party].” Id. (quotation marks and citation omitted). However, where, as here, full relief is obtained, the “plaintiff’s attorney should receive a fully compensatory fee[.]” Rum Creek, 31 F.2d at 175 (quotation marks and citation omitted). In sum, the number of hours must be reasonable and must represent the product of “billing judgment,” to “exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary.” Hensley, 461 U.S. at 434; Rum Creek, 31 F.2d at 175. 1. The Number of Hours Worked in this Case is Reasonable. The time and labor required from the initiation of the parties’ dispute through the summary judgment phase were substantial. See Gen. Motors, 2013 WL 5504445, at *4 (finding that filing civil complaint, six motions, and two response pleadings to be substantial in light of complexity of issues and 24 page memorandum order granting summary judgment). As explained in Ex. 2 to this Motion, Orgill’s counsel have focused attorney time and effort on the core legal issues between the parties, including the appropriate definition and parameters of “Additional Rent” as contained in the Amended Lease, and defending the breach of contract Counterclaim filed by DW alleging that Orgill was liable for the attorney’s fees and expenses relating to the Novakovic litigation in California. Wellford Aff. at ¶ 7. Buckner Wellford, Orgill’s lead counsel, assumed primary responsibility for the handling and management of those Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 8 of 17 PageID #: 6158 9 4839-8501-4871 2918433-000009 issues, while counsel both Baker Donelson and Jackson Kelly worked in tandem to defend the part of DW’s Counterclaim against Orgill which focused upon Orgill’s alleged failure to meet the “repair and maintenance” obligations under the Lease. Id. Under this framework, Orgill prevailed on all of its claims. See ECF No. 249. On behalf of Orgill, following the completion of discovery, Orgill’s attorneys prepared a Motion for Summary Judgment on the issues identified by the Court in its Mem. Op. granted in Orgill’s favor. See id.; see also Wellford Aff. at ¶ 10. By prevailing at the summary judgment stage, Orgill’s counsel have saved considerable time and resources that would have been incurred by conducting a trial on the issues in this case. While the Court should find that Orgill has satisfied all of the Johnson factors in submitting this Motion, an attorney’s success is generally the most significant factor for a court to consider in deciding what is a reasonable fee. See Adcock-Ladd v. Sec’y of Treasury, 227 F.3d 343, 350 (6th Cir. 2000) (citing Hensley 461 U.S. at 435-36). Considering the Johnson factors (1), (2), and (3) , Orgill noticed and took the depositions of only two individuals in this case: that of Mr. Myer personally, combined with his deposition as the Rule 30(b)(6) corporate representative of DW, and Marc Fischer, DW’s sole retained expert who testified on each of the issues ultimately resolved by the Court in its Memorandum Opinion granting Orgill summary judgment. Wellford Aff. at ¶ 9. Each deposition, taken in Washington, D.C., required significant preparation time and took most of a day to complete. Id. Most of the depositions in this case, a total of fourteen, were taken by DW. Id. Those depositions took place in Memphis, Charleston, West Virginia, and Martinsburg, West Virginia. Id. In determining the difficulty of maintaining this lawsuit, the Court should consider that the parties produced a considerable amount of paper and electronic documents, totaling 10,127 Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 9 of 17 PageID #: 6159 10 4839-8501-4871 2918433-000009 separate documents covering areas such as commercial real estate, accounting, commercial finance, including commercial mortgage-backed securities (“CMBS”), commercial insurance, a separate, out-of-state lawsuit, and industrial maintenance and repair. The bates stamped pages far exceeded this number of documents, and all of them were entered into Baker Donelson’s electronic discovery database and document retrieval system. See id. As larger law firms in their respective markets, Baker Donelson, which has an in-house document review attorney staff, and Jackson Kelly together had the proper resources to manage a lawsuit of this size and complexity. Orgill, as the fee applicant, bears the burden of substantiating the hours worked and the rates claimed to show that the amount requested is reasonable. McAfee, 738 F.3d at 91. Orgill has satisfied the remaining Johnson factors through the Affidavits of Orgill’s counsel, including listing the amount claimed in this Motion and the experience and reputation of counsel, and by attaching the affidavits of disinterested attorneys from the relevant markets who reviewed both the number of hours worked and the rates of Orgill’s counsel along with corresponding billing entries. See George Aff.; Houseal Aff.. As Orgill has complied with Johnson and prevailed on all of its claims, the Court should find that the hours of work and labor expended during this hotly contested litigation was reasonable. 2. The Hourly Rates of the Attorneys’ and Staff Are Also Reasonable. The hourly rate(s) included in an attorney’s fee must also be reasonable, and this is determined by examining the “prevailing market rates in the relevant community.” Rum Creek, 31 F.3d at 175 (quoting Blum v. Stenson, 465 U.S. 886, 894 (1984)); Rodgers v. Abbster Enterprises LLC, No. 3:16-CV-00106-GMG, 2017 WL 4453555, at *2 (N.D.W. Va. Oct. 4, 2017) (Groh, J.). “The market rate should be determined by evidence of what attorneys earn Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 10 of 17 PageID #: 6160 11 4839-8501-4871 2918433-000009 from paying clients for similar services in similar circumstances, which, of course, may include evidence of what the plaintiff’s attorney actually charged his client.” Gen. Motors, 2013 WL 5504445, at *6 (quoting Depaoli v. Vacation Sales Assocs., L.L.C., 489 F.3d 615, 622 (4th Cir. 2007) (quotation marks omitted)). “The relevant market for determining the prevailing rate is ordinarily the community in which the court where the action is prosecuted sits. In circumstances where it is reasonable to retain attorneys from other communities, however, the rates in those communities may also be considered.” Id. (quoting Rum Creek, 31 F.3d at 175 (quotation marks omitted)); see id. at *7 (citing Rum Creek, 31 F.3d at 179) (holding that evidence that plaintiff’s out-of-state attorneys’ rates were charged to and actually paid by plaintiff, and that persons involved in charging and paying rates believed them to be reasonable was sufficient to establish prevailing market rate for services charged by the attorneys)). Here, it is reasonable for the Court to consider the hourly rates charged by attorneys in Martinsburg, West Virginia, and Memphis, Tennessee, to paying clients for providing similar services in similar circumstances to this case. As a company headquartered in Memphis, Tennessee, it was reasonable for Orgill to retain Baker Donelson as lead counsel and Jackson Kelly as local counsel. Indeed, with depositions and experts spread out between Memphis, West Virginia, and Washington, D.C., it was reasonable for Orgill to retain a large, regional law firm like Baker Donelson, and a larger local law firm like Jackson Kelly to handle a case of this size and complexity. DW followed a similar strategy by retaining the international law firm of Steptoe & Johnson LLP, and Kay Casto & Chaney as its local counsel. As provided for the number of hours of work and labor expended in this case, Orgill has substantiated the reasonableness of its counsel’s hourly rates charged in both the West Virginia and Memphis, Tennessee, markets by detailing the skill, experience, and reputation of its Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 11 of 17 PageID #: 6161 12 4839-8501-4871 2918433-000009 lawyers, see Wellford Aff. at ¶¶ 4, 11; Robertson Aff. at ¶10. Additionally, Orgill submits the Affidavits of Shawn George and John Houseal, who have both attested that the rates charged by Baker Donelson and Jackson Kelly are commensurate with rates charged by attorneys and specialists with similar levels of experience, and are comparable to reasonable and customary rates for lawyers with qualifications and experience of those participating in similar large-scale commercial lease disputes. See Houseal Aff. at ¶ 14. Finally, Orgill submits the names, ranks, billed amounts, hours, and average billed rates of its Baker Donelson and Jackson Kelly counsel. Orgill has incurred the following attorney’s fees from Baker Donelson: TKPR Name Tk Rank Desc Avg. Billed Rate Billed Amt Bl Hrs Wellford, Buckner Total Shareholder $452.80 $285,129.00 629.70 Kisber, Zachary Total Associate $224.96 $89,040.00 395.80 Battle, Preston Total Associate $220.00 $53,218.00 241.90 Total $ 427,387.003 Timekeeper Name Timekeeper Rank Billed Amt Bl Hrs Avg Billed Rate Brackstone, Emily Income Shareholder $2,442.00 7.40 $330.00 Brunson, Pete Law Clerk $70.00 0.50 $140.00 Busey, Zachary Associate $275.00 1.10 $250.00 Caitlan, Jim Other Professional $5,805.00 25.80 $215.00 Hughes, Kathy Paralegal $476.00 2.50 $186.67 Johnson, Melissa Document Review Attorney $210.00 1.00 $210.00 Kuhn, Diane Document Review Attorney $2,205.00 10.50 $210.00 Lassiter, Angela Document Review Attorney $6,120.00 27.20 $225.00 Mendenhall, Tony Other Professional $2,002.50 8.90 $225.00 Peaks, Maygan Law Clerk $1,400.00 10.00 $140.00 Sanko, Clinton Income Shareholder $624.00 1.60 $390.00 Schmitz, David Staff Attorney $1,105.50 3.30 $335.00 3 The hourly rates for some of the timekeepers referenced in this Affidavit were adjusted based on Baker Donelson’s fiscal years, which start in February of each year. The time frame of this case has included FY 2016, FY 2017, and FY 2018. The “average billed rate” reflects those adjustments during the case. In the case of Buckner Wellford, the rate has ranged from $430 at the inception of the engagement to $465 currently. Mr. Kisber’s rate ranged from $220 to $225 during this time frame. Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 12 of 17 PageID #: 6162 13 4839-8501-4871 2918433-000009 Strain, Jason Equity Shareholder $396.00 1.10 $360.00 Tilton, Teresa Paralegal $19,575.00 156.60 $123.38 Yohey, Leslie Staff Attorney $607.50 2.70 $225.00 Grand Total $43,313.50 260.2 The total amount of Baker Donelson’s attorney’s fees, through November 27, 2017, is $470,700.50.4 The total amount of Jackson Kelly’s attorney’s fees, through November 19, 2017, is $158,263.50, as reflected below: Timekeeper Name Timekeeper Rank Hourly Rate Hours Billed Total Billed Charlotte D. Ainsworth Legal Assistant $140 1.0 $140.00 Robert E. Glenn, IV Counsel $375 10.70 $4,012.50 William J. Powell Member $370 45.30 $16,761.00 Christopher K. Robertson Member $340 339.00 $113,492.00 Al F. Sebok Member $395 60.50 $23,858.00 Total Jackson Kelly PLLC Fees $158,263.50 See Robertson Aff. at ¶ 9. Based on the proof submitted, the Court should find that Orgill’s counsel fees are reasonable, both in terms of the hours worked and the rates charged in their respective markets, both of which are relevant to this lawsuit, and award the full amount of Orgill’s attorney’s fees requested under Section 7.6 of the Amended Lease. II. ORGILL IS ENTITLED TO ALL OF ITS REMAINING COSTS AND CHARGES. Under Section 7.6, the indemnitor covenants and agrees to pay and to indemnify the prevailing party for all costs and charges, including reasonable counsel fees, incurred by the prevailing party in an action to enforce any part of the Amended Lease. See Ex. 1. Under the 4 Orgill includes Baker Donelson’s fees and expenses incurred after the entry of summary judgment in favor of Orgill because under West Virginia law and the Amended Lease, Orgill is entitled to “all costs and charges” in making perform under the agreement, including Section 7.6 of the Amended Lease. Dalton v. Childress Serv. Corp., 432 S.E.2d 98, 102 (W. Va. 1993) (finding that expenses incurred in successfully enforcing the parties’ indemnity agreement are covered by the indemnity clause); see also O'Neal v. Capital One Auto Fin., Inc., No. 3:10- CV-00040, 2011 WL 3877083, at *5 (N.D.W. Va. Aug. 31, 2011). Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 13 of 17 PageID #: 6163 14 4839-8501-4871 2918433-000009 plain language of Section 7.6, the attorney’s fees are required to be reasonable, but there is no “reasonableness” requirement for the broader “all costs and charges” provision. See id. This fact is only important for the Court’s legal analysis, as Orgill’s counsel certainly does not read the language of Section 7.6 to mean that Orgill may be unreasonable in tendering its expenses in filing this Motion. When determining whether to award Orgill its costs and charges that may not be taxed in the Bill of Costs submitted pursuant to Fed. R. Civ. P. 54(d)(1) and 28 U.S.C. § 1920, the Court should rely solely on the language of Section 7.6 and not employ a reasonableness analysis similar to the one required for the reasonableness of attorney’s fees. The issues present in the matter of In re: Outsidewall Tire Litig. are instructive. 178 F. Supp. 3d 300, 302-03 (E.D. Va. 2016) (“Outsidewall III”), rev’d and remanded sub nom. Gilbert LLP v. Tire Eng’g & Distribution, LLC, 689 F. App’x 197 (4th Cir. 2017) (“Outsidewall IV”). In that case, which went to the Fourth Circuit twice, the Gilbert Law Firm brought an action against former clients after the clients terminated its representation without cause, seeking a determination of the firm’s lien for fees and expenses after the Gilbert Law Firm obtained a $26 million dollar judgment for the clients. Outsidewall III, 178 F. Supp. at 302-03. The attorney’s fees portion of the analysis focused on special considerations related to status of the contingency fee arrangement between the parties, but the costs analysis hinged on the language contained in the engagement letter. In re Outsidewall Tire Litig., 636 F. App’x 166, 171 (4th Cir. 2016) (“Outsidewall II”). The engagement letter provided that “[i]n the event that [clients elect] to terminate our representation . . . [clients] will reimburse the Firm for all out-of-pocket expenses and disbursements incurred by the firm . . . .” Id. Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 14 of 17 PageID #: 6164 15 4839-8501-4871 2918433-000009 The Fourth Circuit in Outsidewall II found that the district court in the original action erred by applying a “reasonableness” standard when reviewing the witness fees and expenses, which was governed by a contract. Outsidewall II, 636 F. App’x at 172. The Fourth Circuit vacated the award of costs and remanded with instructions to recalculate the cost award after considering the language in the engagement letter. Id. On remand, the district court recognized that the Fourth Circuit “made clear” that “reasonable analysis is inappropriate to determine whether the Gilbert Firm is entitled to the costs relating to damages expert Phil Nelson because the costs provision of the Engagement Letter expressly provides that plaintiffs must reimburse the Gilbert Firm for all costs relating to expert and witness fees,” and accordingly awarded the Gilbert Firm its expert fees and costs, even though the damages expert’s rater were higher by a factor of two than the reasonable rates charged by comparable damages experts and support staff. Outsidewall III, 300 F. Supp. 3d at 319. The revised cost award was not challenged on appeal. Under the Fourth Circuit’s analysis from In re Outsidewall II, it would be unnecessary and contrary to the plain language of Section 7.6 for the Court to engage in a “reasonableness” analysis of Orgill’s nontaxable expenses. Pursuant to Section 7.6, Baker Donelson’s advanced expenses in this matter are itemized below and total $65,582.50. Cost Desc Billed Amt Color Copies $268.50 Conference Call Expense $338.43 Copying $7,065.60 Delivery Services/Messengers $2,590.73 Deposition Expenses ($9,207.91 of this figure was paid directly by Orgill) $20,524.12 eDiscovery $284.74 Filing Fee $520.42 Firm Courier Charge $65.08 Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 15 of 17 PageID #: 6165 16 4839-8501-4871 2918433-000009 Litigation Support Vendors $150.00 Meals $364.89 Mileage $27.82 Online Research $414.61 Other $68.02 Out of Town Travel $2,005.30 Outside Printing $1,154.23 Photo Reproduction Charge $600.42 Professional Services Expense $1,645.73 Travel Expenses $5,498.25 Expert Witness Fees (paid by Orgill directly)5 $21,995.61 Grand Total $65,582.50 The total amount of Jackson Kelly’s advanced expenses in this matter are are itemized below, and total $5,701.08.6 Expense Billed Amount Copying $1,522.95 Online Research $756.40 Postage $14.83 Local travel $42.40 Out-of-town travel $954.04 Deposition transcripts $2,400.36 Other professional $10.10 Total $5,701.08 Accordingly, the Court should award Orgill “all costs and charges” incurred in enforcing the Amended Lease pursuant to Section 7.6. CONCLUSION For the foregoing reasons and based on the Affidavits attached to this Motion, this Court should grant Orgill’s Motion for Attorney’s Fees and Expenses under Section 7.6 of the Amended Lease entered into by the parties. 5 Orgill’s counsel have not yet received the invoice from Brett Cutchins at Lipscomb & Pitts, but expect to receive it within the next few days and will supplement at that time. 6 Orgill is submitting separately a Motion for assessment of statutory costs under Fed. R. Civ. P. 54 (d)(1). These costs will include some advanced expenses set forth in this Affidavit. The Motion will clarify and break out those expenses, so that there is no “double counting” of expenses sought in the case. Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 16 of 17 PageID #: 6166 17 4839-8501-4871 2918433-000009 Respectfully submitted, /s/ Christopher K. Robertson Christopher K. Robertson [W.Va. Bar No. 5993] JACKSON KELLY PLLC 310 West Burke Street Post Office Box 1068 Martinsburg, West Virginia 25402 Tel: 304/263-4959 Fax: 304/263-7110 Attorney for Plaintiff, Orgill, Inc. Buckner Wellford [Tenn. Bar No. 9687 - Admitted Pro Hac Vice] Zachary A. Kisber [Tenn. Bar No. 33388 - Admitted Pro Hac Vice] BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ 165 Madison Ave., 20th Floor Memphis, Tennessee 38103 Tel: 901-577-2152 CERTIFICATE OF SERVICE I hereby certify that on December 1, 2017, I electronically filed the forgoing with the Clerk of the Court using the CM\ECF system, which will send notification of such filing to the following: R. Terrance Rodgers trodgers@kaycasto.com, fcasey@kaycasto.com, swhittington@kaycasto.com This, the 1st of December, 2017. /s/ Christopher Robertson CHRISTOPHER ROBERTSON Case 3:16-cv-00158-GMG-RWT Document 252 Filed 12/01/17 Page 17 of 17 PageID #: 6167