Opinion
A-22-CV-202-LY
03-20-2023
BRANDON JOHNSON, Plaintiff, v. MERCEDES BENZ FINANCIAL, JP MORGAN CHASE BANK, BLAKELY WHITT & ASSOCIATES, INC and TEXAS CHILD SUPPORT DIVISION Defendants.
THE HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
MARK LANE UNITED STATES MAGISTRATE JUDGE
Before the court is Defendant Mercedes-Benz Financial Services USA LLC's Rule 54 Motion for Attorneys' Fees (“Motion”) (Dkt. #56). The Motion was docketed on January 17, 2023. To date, Plaintiff has not filed a response. Having considered the Motion, the applicable law and the entire docket, the undersigned enters the following report and recommendation.
On February 15, 2023, the Motion was referred by United States District Judge Lee Yeakel to the undersigned for the preparation of a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B), Rule 72 of the Federal Rules of Civil Procedure, and Rule 1(d) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas. Dkt. #58.
I. The Motion
The District Court granted summary judgment in favor of Mercedes-Benz Financial Services USA LLC's (“MBFS”) on its counterclaim for breach of the Motor Vehicle Lease Agreement (“Lease”). Dkt. #52. The District Court entered final judgment and ordered “[a] party contending this judgment entitles it to attorney's fees may request such fees following the procedures set forth in the Federal Rules of Civil Procedure and the Local Rules of P. 54; Loc. R. W.D. Tex. CV-54” Dkt. #53 at 1-2.
In compliance with the District Court's order, MBFS seeks to recover attorneys' fees in the amount of $15,871.50 pursuant to Fed.R.Civ.P. 54(d)(2)(A). In support of the Motion, MBFS attached three exhibits and a proposed order. Attached as exhibits are:
(1) the Declaration of Greg DeVries. Dkt. #56-1;
(2) a copy of MBFS' attorneys' fees invoices Dkt. #56-2;
(3) a copy of the Lease at the center of this lawsuit. Dkt. #56-3.
MBFS represents that the 53 pages of attorneys' fee invoices (a) contains only the fees incurred that are associated with the outstanding debt owed pursuant to the Lease; and (b) fees associated with the defense of Plaintiffs' claims have been redacted and are not reflected in the total amount of attorneys' fees sought in this motion.
MBFS contends it is authorized to recover attorneys' fees in this matter for two reasons. Dkt. #56 at 2. Specifically, MBFS argues that its attorneys' fees are recoverable pursuant to Texas Civil Practice and Remedies Code Section 38.001 or the terms of the Lease. Id.
Pursuant to Rule 54(b)(2) of the Local Rules, counsel for MBFS attempted to contact Plaintiff regarding the amount of attorneys' fees sought in this matter. Counsel represents this attempt was made by email because Plaintiff did not provide a working phone number. Dkt. #56 at 3. Plaintiff failed to respond to this inquiry. Id.
II. Analysis
To secure an award of attorneys' fees from an opponent, the prevailing party must prove that: (1) recovery of attorneys' fees is legally authorized, and (2) the requested attorneys' fees are reasonable and necessary for the legal representation, so that such an award will compensate the prevailing party generally for its losses resulting from the litigation process.
A determination of reasonable and necessary attorneys' fees is premised on the application of the lodestar method. Courts in the Fifth Circuit apply the lodestar method to calculate attorneys' fees. Black v. SettlePou, P.C., 732 F.3d 492, 502 (5th Cir. 2013) (citing Heidtman v. Cnty. of El Paso, 171 F.3d 1038, 1043 (5th Cir. 1999)). The lodestar amount is calculated by multiplying the number of hours an attorney reasonably spent on the case by an appropriate hourly rate. Id. (citing Smith & Fuller, P.A. v. Cooper Tire & Rubber Co., 685 F.3d 486, 490 (5th Cir. 2012)). The appropriate hourly rate is defined by the market rate in the community in which the district court sits and should reflect the prevailing market rates, not the rates that “lions at the bar may command.” Black, 732 F.3d at 502 (citing Smith & Fuller, 685 F.3d at 490). Litigants seeking attorneys' fees have the burden to show the reasonableness of the hours billed and that the attorneys exercised reasonable billing judgment. Black, 732 F.3d at 502 (citing Saizan v. Delta Concrete Prods. Co., 448 F.3d 795, 799 (5th Cir. 2006)); Riley v. City of Jackson, 99 F.3d 757, 760 (5th Cir. 1996). The lodestar amount is entitled to a strong presumption of reasonableness. Black, 732 F.3d at 502 (citing Perdue v. Kenny A., 559 U.S. 542, 552 (2010)).
After calculating the lodestar amount, the district court may adjust the amount of attorneys' fees based on the twelve factors set forth in Johnson v. Georgia Highway Express, Inc. Id. Many of these factors are subsumed within the initial calculation of hours reasonably expended at a reasonable hourly rate and should not be double-counted. See id.; Jason D.W. v. Hous. Indep. Sch. Dist., 158 F.3d 205, 209 (5th Cir. 1998) (internal citations omitted).
These factors are: (1) the time and labor required; (2) the novelty and difficulty of issues in the case; (3) the skill required to perform the legal services properly; (4) the preclusion of other employment by the attorney due to accepting the case; (5) the customary fee charged for those services in the relevant community; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or circumstances; (8) the amount involved and 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. Black, 732 F.3d at 502 n.7 (citing Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974)).
Section 38.001 of the Texas Civil Practice and Remedies Code states, “a person may recover reasonable attorney's fees from an individual or organization . . . if the claim is for: . . . an oral or written contract.” TEX. CIV. PRAC. & REM. CODE § 38.001(b)(8). Plaintiff is an individual and MBFS prevailed on a claim based on a written contract (the Lease). MBFS is entitled to recover its attorneys' fees from Plaintiff as they relate to the prosecution of its breach of contract counterclaim. Similarly, the Lease also provides for the recovery of attorneys' fees. Paragraph 23 defines the rights of the parties in the event Plaintiff is in default. Section (c) states, in relevant part, “You [Plaintiff] agree that in the event we hire an attorney to collect any amount due or enforce any right or remedy under this lease, you shall pay our attorney fees and court costs.” Dkt. #56-3 at 9. MBFS retained the services of an attorney to collect amounts due and otherwise enforce its rights and remedies under the Lease.
MBFS is a prevailing party and has established that it is authorized to recover reasonable attorneys' fees under the terms of the lease or Section 38.001(b)(8) of the Texas Civil Practice and Remedies Code.
With this said, the court proceeds to calculate an appropriate attorneys' fee award.
A. Requested Attorneys' Fees, Expenses and Costs
MBFS's application for fees seeks a total award of $15,871.50 in attorneys' fees. Dkt. #56. The application is supported by an affidavit prepared by associate attorney Greg DeVries of McGlinchey Stafford and the firm's billing invoices.
B. Hourly Rate
MBFS's application is based on attorneys' fees generated by McGlinchey Stafford partners, associates, and paralegals. The firm bills clients $425/hour for work performed by partners, $365/hour for associates and $220/hour for paralegals. DeVries's declaration is largely silent on the individual qualifications of the attorneys and paralegals who worked on this matter. Nonetheless, the hourly rates are reasonable and consistent with the rates associated with similar litigation matters filed in the Austin Division of the Western District of Texas.
C. Time Expended
Unfortunately, DeVries's declaration fails to summarize the amounts billed by each attorney and paralegal. Nonetheless, the court undertook the effort to do so. Having done so, the undersigned finds that the total amount of legal work reflected in the billing invoices to be both reasonable and necessary. This conclusion is strengthened after reviewing the entire docket and considering the favorable results obtained.
D. $35,000 in Conditional Attorneys' Fees
MBFS also seeks an additional $15,000.00 for attorneys' fees associated with an appeal to the Fifth Circuit Court of Appeals and an additional $20,000.00 for attorneys' fees should the matter by appealed to the United States Supreme Court. These requested fees are “conditional” in that Plaintiff must first file notice of appeal and that appeal must eventually be unsuccessful.
MBFS's request for conditional attorneys' fees should Plaintiff unsuccessfully appeal in this matter is granted. That said, the amount of any additional reimbursement will be determined if, and when, that unsuccessful appeal is finalized.
E. The Lodestar
MBFS's proposed hourly rates for the attorneys and paralegals involved in this litigation are appropriate. Similarly, the total number of hours worked on the matter were reasonable and necessary. MBFS's request for conditional attorneys' fees is granted but the amount of those fees will be decided at a later date, if that becomes necessary.
F. Johnson Factors
MBFS did not seek any adjustments based on the application of the Johnson factors. Similarly, the court does not find any adjustments based on the Johnson factors is necessary.
III. Recommendations
For these reasons, the undersigned RECOMMENDS that Defendant Mercedes-Benz Financial Services USA LLC's Rule 54 Motion for Attorneys' Fees (Dkt. #56) be GRANTED.
The undersigned RECOMMENDS that the court enter judgment for Defendant Mercedes-Benz Financial Services USA LLC's for attorneys' fees and nontaxable expenses in the amount of $15,871.50.
The court further RECOMMENDS that MBFS's request for conditional attorneys' fees if Plaintiff pursues an unsuccessful appeal of the District Court's award be GRANTED. The amount of additional attorneys' fees will be determined after resolution of any further appeals by Plaintiff.
IV. Objections
The parties may file objections to this Report and Recommendation. A party filing objections must specifically identify those findings or recommendations to which objections are being made. The District Court need not consider frivolous, conclusive, or general objections. See Battles v. U.S. Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987).
A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen (14) days after the party is served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations in the Report and, except upon grounds of plain error, shall bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Services Auto. Ass'n, 79 F.3d 1415 (5th Cir. 1996) (en banc).