United States District Court, S.D. California
SEA PRESTIGIO, LLC, a Delaware limited liability company, Plaintiff,
M/Y TRITON, et al., Defendants.
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR ATTORNEYS' FEES & COSTS
BARRY TED MOSKOWITZ, Chief District Judge.
On June 24, 2013, Plaintiff Sea Prestigio, LLC ("Sea Prestigio" or "Plaintiff") filed a motion for attorneys' fees and costs (Doc. 155). For the reasons set forth below, Plaintiff's motion for attorneys' fees and costs is hereby GRANTED in part and DENIED in part.
Sea Prestigio commenced this action on November 23, 2010, seeking to foreclose on the Motor Yacht Triton (the "Triton") for defendant borrowers' ("Defendants") failure to pay the amount owed under the terms of the parties' $15.5 million loan agreement. The Triton, a high-end megayacht, as well as real property in Laguna Beach, California ("Emerald Bay Property"), served as collateral. This action was temporarily stayed pending the outcome of a related case before the Orange County Superior Court. (See Doc. 59.) In that case, Defendants were found in default on their debt in the amount of $23, 127, 306 and Sea Prestigio was awarded $4, 684, 397 in fees and costs incurred through January 21, 2013. Basinger Decl., Ex. D ¶23 (Judgment of Foreclosure & Order Sale). The Superior Court judgment ordered the foreclosure and sale of the Triton "[p]ursuant to applicable federal law and specific procedures to be ordered by the Federal Court." Id . ¶24. The Triton was sold at auction for $11 million on April 26, 2013. Final judgment was entered in this case on June 10, 2013 (Doc. 150), and funds were ordered disbursed on July 15, 2013 (Doc. 159). Sea Prestigio now seeks an award of $466, 167.55 ($315, 302 in attorneys' fees and $150, 865.55 in costs) for services rendered since January 22, 2013. This amount includes a subsequent request for an additional $6, 529.00 in attorneys' fees related to supplemental briefing (Doc. 172). On January 8, 2014, the Court granted Sea Prestigio's unopposed motion to reopen Count I for the limited purpose of awarding attorneys fees pursuant to the contracts referenced therein. Sea Prestigio thereafter filed a supplemental brief discussing recovery of attorneys' fees and in custodia legis expenses on an in rem foreclosure claim (Doc. 171).
II. LEGAL STANDARDS
The movant "bears the burden of submitting detailed time records justifying the hours claimed to have been expended." In re Washington Public Power Supply Sys. Secs. Litig. , 19 F.3d 1291, 1305 (9th Cir. 1994). Without suggesting that they are the only two possible methods of evaluating reasonableness, the Ninth Circuit "has affirmed the use of two methods of determining attorneys fees, depending on the case, " i.e., the percentage method and the lodestar method. Sea Prestigio urges the Court to use the lodestar method. Defendant does not suggest an alternative methodology, though it disputes various aspects of Sea Prestigio's claims and calculations. The Court therefore applies the lodestar method.
Under the lodestar method, "[t]he 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." Hensley v. Eckerhart , 461 U.S. 424, 433 (1983). Hours that are excessive, redundant, or otherwise unnecessary should be excluded from an award of fees. Id . at 434; Camacho v. Bridgeport Financial, Inc. , 523 F.3d 973, 978 (9th Cir. 2008). To calculate the "lodestar, " the court multiplies the number of hours the prevailing party reasonably expended on the litigation by a reasonable rate. Morales v. City of San Rafael , 96 F.3d 359, 363 (9th Cir. 1996). The hourly rates to be employed in calculating reasonable fees are determined by the "prevailing market rates in the relevant community, regardless of whether the plaintiff is represented by private or nonprofit counsel." Blum v. Stenson , 465 U.S. 886, 895 (1984); see also Sorenson v. Mink , 239 F.3d 1140, 1145 (9th Cir. 2001). "The burden is on the plaintiff to produce evidence that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Id . (internal quotations omitted). "Affidavits of the plaintiffs' attorney and other attorneys regarding prevailing fees in the community, and rate determinations in other cases, particularly those setting a rate for the attorney, are satisfactory evidence of the prevailing market rate." United Steelworkers of Am. v. Phelps Dodge Corp. , 896 F.2d 403, 407 (9th Cir. 1990). "The defendant may introduce rebuttal evidence in support of a lower hourly rate." Sorenson , 239 F.3d at 1145. As to the number of hours reasonably expended, a fee applicant "should make a good-faith effort to exclude... hours that are excessive, redundant, or otherwise unnecessary." Hensley , 461 U.S. at 434.
There is a strong presumption that the lodestar figure represents a reasonable fee award. Harris v. Marhoefer , 24 F.3d 16, 18 (9th Cir. 1994); United Steelworkers , 896 F.2d at 407 (holding that, absent competent rebuttal evidence or a finding that counsels' rates are unwarranted by their level of performance, the requested rates are presumed reasonable). Yet courts may adjust the lodestar figure upward or downward based upon the following factors enunciated in Kerr v. Screen Extras Guild, Inc. , 526 F.2d 67, 70 (9th Cir. 1975): (1) the time and labor required, (2) the novelty and difficulty of the questions involved, (3) the skill requisite to perform the legal service properly, (4) the preclusion of other employment by the attorney due to acceptance of the case, (5) the customary fee, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and 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. See Camacho , 523 F.3d at 978; Cunningham v. Los Angeles , 879 F.2d 481, 484 (9th Cir. 1988) (same). See also Woods v. Sunn , 865 F.2d 982, 991 (9th Cir. 1988) (noting that many factors previously identified by courts as probative on the issue of reasonableness of a fee award are now subsumed within the initial calculation of the lodestar amount); Morales , 96 F.3d at 363-64. Finally, with respect to a voluminous application, the Court may make across-the-board percentage cuts in the number of hours claimed as "a practical means of trimming the fat from a fee application." Gates v. Deukmejian , 977 F.2d 1300, 1307 (9th Cir. 1992) (citation omitted).
A. Governing Fee-Shifting Provisions
1. Contractual Provisions
Sea Prestigio argues that it is entitled to recover all of its attorneys' fees and costs under the Loan Agreement. The Loan Agreement provides, in pertinent part:
Section 6.20 Attorneys' Fees. In the event of any controversy, claim or dispute between the Parties hereto affecting or relating to the purposes or subject matter of this Agreement or any of the Loan Documents, the prevailing party or parties shall be entitled to recover from the nonprevailing party or parties all of its costs and expenses incurred in enforcing, defending, or establishing its rights under this Agreement or the Loan Documents, including, but not by way of limitation, attorneys' fees (including the reasonable value of in-house counsel services). In addition to the foregoing award of costs and fees, such prevailing party shall also be entitled to recover its court costs and expert witnesses' and attorneys' fees incurred in any postjudgment proceedings to collect or enforce any judgment. This provision is separate and several and shall survive the merger of this Agreement or any of the Loan Documents into any judgment on this Agreement or such documents.
Basinger Decl., Ex. B § 6.20 (Doc. 155-1); Compl., Ex. B (same). Additionally, the preferred ship mortgage terms provide that, in the event of default and subsequent demand, the shipowner must pay "... all out-of-pocket costs and expenses, all attorneys' fees incurred by Mortgagee in connection with the Event of Default and collection and enforcement proceedings." Id., Ex. C § 6.06. In light of these contractual provisions, attorneys' fees and costs are recoverable under both the in personam and in rem claims. See 46 U.S.C. § 31325(d)(3)); General Elec. Credit Corp. v. O/S Triton VI , 712 F.2d 991, 994 (5th Cir. 1983). The motion sub judice does not, however, specify which defendant(s) should be liable for fees and costs. Since judgment was granted only as to Count II (Docs. 143, 150), the Court considers the motion with respect to that Count alone. The Complaint couches foreclosure as both an in rem and in personam claim. See 46 U.S.C. § 31325(b) (providing for both in rem enforcement of a preferred mortgage lien and in personam claims for outstanding indebtedness). See also Compl. 6, Ex. A (a $21 million promissory note dated June 30, 2010 and executed by "Borrowers" FPB Investments LP, James and Nancy Baldwin, Cachal Investments S. de RL de CV, and Spearfish Ventures LTD). Nonetheless, the pending motion is ambiguous with respect to the defendants, and the Court reads it to simply request an in rem judgment.
The Orange County Superior Court awarded attorneys' fees and costs incurred in both the state and federal actions through January 21, 2013. Bassinger Decl., Ex. D ¶23(c). That judgment also expressly reserved Sea Prestigio's right to recover related fees and costs incurred thereafter:
Attorney's fees and costs, beginning on January 22, 2013, in amounts to be determined, to be incurred by Lender in order to obtain and enforce this Judgment of Foreclosure and Order of Sale, including, without limitation, (i) attorney's fees and costs to maintain the Vessel pending a judicial foreclosure sale of the Vessel, (ii) attorney's fees and costs to foreclose on the Vessel and Emerald Bay Property, and (iii) attorney's fees and costs to obtain and execute on any deficiency judgment to be entered in favor of Lender and against Borrowers, and each of them, following the judicial foreclosure on the Vessel and Emerald Bay Property.
Id. This Court's judgment provides that "any costs and attorneys' fees in regard to this specific federal case shall be set and ordered as provided for in Rule 54(d) of the ...