United States District Court, S.D. Alabama, Southern Division
KRISTI K. DUBOSE, District Judge.
This matter is before the Court on Plaintiff's Rule 55(a) and (b)(1) motion for entry of a default judgment against Defendant Pounds Wrecking, Inc. (Doc. 17), the Court's Order on same (Doc. 22), and Plaintiff's Supplemental Motion in support thereof (Doc. 23).
Plaintiff PNC Bank, N.A. ("PNC") filed a Complaint (as amended) against Defendant Pounds Wrecking, Inc. ("Pounds Wrecking") for breach of a promissory note, alleging that Pounds Wrecking failed and/or refused to pay PNC amounts due under a promissory note and thus is indebted to PNC for the amount due including attorney's fees, stemming from said breach and default. (Docs. 1, 8). Specifically, on July 1, 2008, RBC Bank (USA),  and Pounds Wrecking executed an Promissory Note in the principal amount of $200, 000. (Doc. 8-1 at 6-7). The Note was secured by a July 1, 2008 mortgage recorded in the Probate Court of Mobile County, Alabama on July 3, 2008. (Doc. 8-1 at 9-18). The Note matured on July 1, 2013 and PNC alleges that Pounds Wrecking failed to pay the sums due as provided for under the terms of the Note, and thus defaulted under same. PNC accelerated the Note and on September 9, 2013 made demand up on Pounds Wrecking for payment of all sums due. (Doc. 8-1 at 30-32).
On June 11, 2014, Pounds Wrecking was served with a copy of the summons and complaint by certified mail, by personal service on its Agent for Service of Process, Joseph G. Pounds. (Doc. 11). Pounds Wrecking's answer was due by July 2, 2014. (Id.) Pounds Wrecking did not answer or otherwise defend. As such, upon PNC's application, the Clerk entered a default against Pounds Wrecking on July 9, 2014. (Doc. 14). PNC now moves for entry of a default judgment against Pounds Wrecking and seeks a monetary judgment under Rule 54(b) in favor of PNC as to the amounts owed to it by Pounds Wrecking. (Doc. 17).
On September 16, 2014, this Court ruled that entry of a default judgment against Defendant Pounds Wrecking was proper and that the outstanding indebtedness on the Note consisted of principal in the amount of $130, 490.64, $10, 396.42 in unpaid accrued interest, $7, 040.51 in late charges, plus per diem interest at the rate of $24.466995. The matter of attorneys' fees, however, needed further explanation and supplementation as detailed in the Court's Order at Doc. 22. As such, on September 23, 2014, PNC supplemented its motion for default judgment with explanation as to the new amount of attorneys' fees sought. (Doc. 23).
Specifically, rather than the $7, 859.50 in fees originally sought for 47.40 hours of time billed by three (3) attorneys and two (2) paralegals, in response to this Court's Order (Doc. 22) PNC now seeks recovery of only $3, 099 in attorneys' fees for 19.70 hours of time billed by two (2) attorneys and one (1) paralegal. (Doc. 23 at 5 (Aff. Motes)). In support, PNC submitted affidavits from Stephen Enns (PNC Asset Manager) and T. Julian Motes (one of PNC's attorneys) (Doc. 17-2 (Aff. Enns); Doc. 17-3 (Aff. Motes)), its original and amended complaints, the Promissory Note (Doc. 1-2; Doc. 8-1), and a second affidavit from Motes (Doc. 23 at 4-6).
II. Default Judgment
Per Doc. 22, the Court granted default judgment in favor of PNC and against Pounds Wrecking in the amount of $130, 490.64 (outstanding principal) plus $10, 396.42 (unpaid accrued interest), $7, 040.51 (late charges), and per diem interest at the rate of $24.466995 from July 30, 2014 through the date of the entry of judgment, but denied PNC's request of reimbursement for "future accruals of interest and courts costs" and reserved ruling on the matter of attorneys' fees.
III. Attorneys' Fees
The Promissory Note provides that Pounds Wrecking shall pay PNC's attorneys fees if it fails to pay. (Doc. 8-1 at 7). Motes (counsel for PNC) asserts that the requested fees and expenses were reasonably incurred. (Doc. 17-3 at 3 (Aff. A.Motes); Doc. 23 at 5 (Aff. Motes)).
"Alabama follows the American rule, whereby attorney fees may be recovered if they are provided for by statute or by contract...." Jones v. Regions Bank , 25 So.3d 427, 441 (Ala. 2009) (citations omitted). See also Battle v. City of Birmingham , 656 So.2d 344, 347 (Ala. 1995) (same). The law is clear that "provisions regarding reasonable attorney's fees are terms of the contracts susceptible to breach." Army Aviation Center Federal Credit Union v. Poston , 460 So.2d 139, 141 (Ala.1984). See also Ierna v. Arthur Murray Int'l, Inc. , 833 F.2d 1472, 1476 (11th Cir. 1987) ("When the parties contractually provide for attorneys' fees, the award is an integral part of the merits of the case"). Under Alabama law, such attorney's fees are recoverable; however, recovery is subject to Alabama's imposition of a reasonableness constraint on all fee-shifting contracts, as a matter of public policy. See, e.g., Willow Lake Residential Ass'n, Inc. v. Juliano , 80 So.3d 226, 241 (Ala. Civ. App. 2010) ("Alabama law reads into every agreement allowing for the recovery of attorney's fees a reasonableness limitation"); PNCEF, LLC v. Hendricks Bldg. Supply LLC , 740 F.Supp.2d 1287, 1294 (S.D. Ala. 2010) (rejecting claim for attorney's fees in amount of 15% of fund to be collected, where plaintiff made no showing of its actual attorney's fee incurred in enforcing contract). Thus, PNC is entitled to recover only its reasonable attorneys' fees and costs incurred in collecting on Pounds Wrecking's debt.
The calculation of reasonable attorney's fees is clearly within the sound discretion of the court. Dowdell v. City of Apopka, Fla. , 698 F.2d 1181, 1187 (11th Cir. 1983); Kiker v. Probate Court of Mobile Cty. , 67 So.3d 865, 867 (Ala. 2010). In assessing the reasonableness of attorney's fee requests, courts generally apply the "lodestar" method to obtain an objective estimate of the value of an attorney's services. Norman v. Housing Auth. of City of Montgomery , 836 F.2d 1292, 1299 (11th Cir. 1988); Dillard v. City of Greensboro , 213 F.3d 1347, 1353 (11th Cir. 2000) (explaining that the lodestar "is the number of hours (tempered by billing judgment) spent in the legal work on the case, multiplied by a reasonable market rate in the local area"). The value of an attorney's services is calculated by multiplying the hours that the attorney reasonably worked by a reasonable rate of pay, defined as "the prevailing market rate in the legal community for similar services by lawyers of reasonably comparable skills, experience, and reputation." Blum v. Stenson , 465 U.S. 886, 895-896 n. 11 (1984). The party moving for fees bears the burden of establishing the "reasonableness" of the hourly rate and number of hours expended via specific evidence supporting the hours and rates claimed. Hensley v. Eckerhart , 461 U.S. 424, 433 (1983); American Civil Liberties Union of Ga. v. Barnes , 168 F.3d 423, 427 (11th Cir. 1999). The court may utilize its own "knowledge and expertise" to come to an independent judgment regarding the reasonableness of requested attorney's fees. Loranger v. Stierheim , 10 F.3d 776, 781 (11th Cir. 1994).
When seeking attorney's fees, the prevailing party must not request fees for hours that are "excessive, redundant, or otherwise unnecessary;" or request fees for unsuccessful claims. Hensley , 461 U.S. at 434-435. When a request for attorney's fees is unreasonably high, the court may "conduct an hour-by-hour analysis or it may reduce the requested hours with an across-the-board cut." Bivins v. Wrap it Up, Inc. , 548 F.3d 1348, 1350 (11th Cir. 2008). Likewise, where the rates or hours claimed seem excessive or lack the appropriate documentation, a court may calculate the award based on its own experience, knowledge, and observations. See, e.g., Norman , 836 F.2d at 1299. Notably, "[t]he court, either trial or appellate, is itself an expert on the question and ...