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United States v. Bilbro Construction Co., Inc.

United States District Court, S.D. California

September 18, 2019

UNITED STATES OF AMERICA for the Use and Benefit of PENN AIR CONTROL INC., a California corporation,
v.
BILBRO CONSTRUCTION COMPANY, INC., a California corporation; and INTERNATIONAL FIDELITY INSURANCE COMPANY, a New Jersey corporation, Defendants. And Related Counterclaims. Name Years’ Experience Billing Rate Hours Amount Billed

          ORDER

          Hon. William Q. Hayes, United States District Court Judge.

         The matters before the Court are 1) Alpha Mechanical, Inc.’s (“Alpha”) Motion fo Attorneys’ Fees, Costs and Pre-Judgment Interest (ECF No. 289); 2) Shadpour Consultin Engineer, Inc.’s (“SCE”) Motion for Attorneys’ Fees and Costs (ECF No. 292); and 3 Alpha’s Motion to Re-Tax Costs (ECF No. 315).

         I. BACKGROUND

         The background to this action is described in detail in the Court’s Order on Bilbro Construction Company, Inc.’s (“Bilbro”) Motion for New Trial. (ECF No. 335).

         II. ALPHA’S MOTION FOR ATTORNEYS’ FEES, COSTS AND PRE-JUDGMENT INTEREST

         A. Contentions

         Alpha contends that it is the prevailing party in this litigation and entitled to attorneys’ fees and costs pursuant to Article XXXV of the Subcontract between Alpha and Bilbro. Alpha requests an award of “(1) at least $720, 182 in attorneys’ fees actually and reasonably incurred in having to defend itself and to prosecute its claims in this litigation; (2) $70, 325 in costs incurred by Alpha in having to retain experts in this litigation; and (3) $107, 051.45 in pre-judgment interest on the amounts withheld by Bilbro starting from April 2015.” (ECF No. 289-1 at 6-7). Alpha’s attorneys’ fee request includes $49, 709.50 in work performed prior to being served with Bilbro’s Counterclaim, which Alpha asserts is “related to the enforcement of the Subcontract and preparation of a complaint by Alpha against Bilbro.” Id. at 8-9. Alpha asserts that its billing rates are “well within those customarily charged by experienced litigation counsel within the Southern California legal community” and that it “took reasonable measures to staff the case, using one associate and one paralegal at a time with no overlap, where possible, to minimize cost . . . .” Id. at 14. Alpha states that it is only requesting fees already billed and paid by Alpha to its law firm, Solomon, Ward, Seidenwurm and Smith, LLP (“SWSS”). (Angert Decl., ECF No. 289-2 ¶ 22).

         Bilbro contends that Alpha is not entitled to recover attorneys’ fees for time spent prosecuting claims against litigants other than Bilbro or for Alpha’s claim for “additional work” it performed implementing Sparling’s noise mitigation suggestions. (ECF No. 311 at 6-7). Bilbro also contends that Alpha’s fees should be reduced by 40% because Alpha overstaffed the matter and charges rates not commensurate with the San Diego legal community. Bilbro contends that Alpha is not entitled to expert fees because the experts were not ordered by the Court. Finally, Bilbro contends that pre-judgment interest is only appropriate on the $323, 352.00 that Bilbro withheld from Alpha at a simple interest rate because the award for additional work was uncertain. Id. at 8, 19.

         B. Legal Standard

         Under Federal Rule of Civil Procedure 54(d)(2)(B)(ii), a motion for attorneys’ fees must “specify the judgment and the statute, rule, or other grounds entitling the movant to the award.” State law governs the interpretation and application of a provision in a contract that permits an award of attorney’s fees. Resolution Trust Corp. v. Midwest Fed. Sav. Bank of Minot, 36 F.3d 785, 800 (9th Cir. 1993).

         Section 1717 of the California Civil Code provides:

In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.

Cal. Civ. Code § 1717(a). “Section 1717 is calculated to provide mutuality of remedy and eliminate one-sided attorney fees clauses which would otherwise be used to force settlements of unmeritorious claims.” Lafarge Conseils Et Etudes, S.A. v. Kaiser Cement & Gypsum Corp., 791 F.2d 1334, 1339 n.15 (9th Cir. 1986) (citing Berge v. Int’l Harvester Co., 190 Cal.Rptr. 815, 825 (Ct. App. 1983)).

         Under California law, the trial court has discretion to determine what constitutes reasonable attorneys’ fees. PLCM Grp. v. Drexler, 997 P.2d 511, 519 (Cal. 2000). “[T]he fee setting inquiry in California ordinarily begins with the ‘lodestar, ’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.” Ctr. for Biological Diversity v. Cty. of San Bernardino, 115 Cal.Rptr.3d 762, 772-73 (Ct. App. 2010) (quotation omitted). “California courts have consistently held that a computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys’ fee award.” Id. (quotation omitted). “Generally, the reasonable hourly rate used for the lodestar calculation is that prevailing in the community for similar work.” Id. at 772. After determining the reasonable hourly rate for comparable legal services in the community, courts may adjust that amount based on the following factors: “(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award.” Ketchum v. Moses, 17 P.3d 735, 741 (Cal. 2001). “[T]he purpose of such adjustment is to fix a fee at the fair market value for the particular action.” Id.

         C. Discussion

         The jury in this matter found in favor of Alpha and against Bilbro on the parties’ competing breach of contract claims. (ECF No. 266). The jury awarded Alpha more than a million dollars in damages for breach of contract. Id. Alpha was the prevailing party in this litigation.

         Article XXXV of the Subcontract between Bilbro and Alpha provides:

ATTORNEY FEES: Contractor shall have the right to collect from Subcontractor reasonable attorney fees and other costs of enforcing any provision or obligation arising under this agreement. Subcontractor expressly agrees to ...

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