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Morrison v. Veale

United States District Court, M.D. Alabama, Eastern Division

December 14, 2017

CHARLES J. VEALE, M.D., P.C., Defendant.



         This action is assigned to the undersigned magistrate judge to conduct all proceedings and order entry of judgment by consent of all the parties pursuant to 28 U.S.C. § 636(c). See Docs. 45, 46. Pending before the Court is the Joint Motion for Approval of Plaintiff’s Acceptance of Defendant’s Offer of Judgment (Doc. 121, filed 9/14/17).

         In addition, Defendant previously filed a Status Report (Doc. 125, filed 10/20/17) which the Court now construes as a “Motion to Reinstate” the various motions for attorneys’ fees (Docs. 93, 114, and 115). It is ORDERED that the motion to reinstate is GRANTED and those motions are reopened. Therefore, also pending are Defendant’s Motion for Attorney’s Fees (Doc. 93, filed 2/10/17), Plaintiff’s Petition for Attorneys’ Fees, Expenses and Costs (Doc. 114, filed 8/25/17), and the former counsel’s Petition for Attorneys’ Fees (Doc. 115, filed 8/25/17). The Court held a hearing on the matters on December 1, 2017 after negotiations between the parties reached an impasse. After a review of the motions, responses, oral arguments, and relevant law, the Court issues this memorandum opinion and order.

         I. Background and Procedural History

         The procedural history has been previously recited in great detail in the memorandum opinion on the motion for sanctions and memorandum opinion on the motion for summary judgment. See Docs. 87, 92, 98. The Court incorporates by reference the detailed facts and conclusions from those opinions. In sum, the Court found that Plaintiff Morrison deliberately and with bad faith destroyed evidence. See Doc. 92. After the Court issued its order and opinion, Defendant filed its request for attorney’s fees. See Doc. 93. Defendant requests a total of $22,680.00 for fees related to the sanctions motion. See Doc. 93 at p. 1. Specifically, counsel requests a rate of $450.00 per hour for 50.4 hours of work. The Court issued an order directing Plaintiff to show cause why the motion should not be granted. Plaintiff timely responded in opposition to the motion for attorney’s fees. See Doc. 97. Plaintiff avers that the extensive relief imposed in the ruling on the motion for sanctions and the broad discretion on whether fees and expenses should be imposed, requests that the relief already given in the motion for sanctions be sufficient. Plaintiff further argues the awarding of fees and expenses would be excessive. Id. Alternatively, even if the Court did award fees and expenses, Plaintiff opposes the hourly rate and the amount of time spent. The motion related to the Defendant’s attorney’s fees is now fully briefed and ripe for review.

         Subsequent to the Defendant’s motion for attorney’s fees, on March 23, 2017, the Court also issued its Memorandum Opinion and Order on the Motion for Summary Judgment wherein the Court granted summary judgment as to the Plaintiff’s overtime claim and denied summary judgment as to Plaintiff’s minimum wage claim. See Doc. 98. Concurrently, the Court issued an order setting the case for a status conference and instructed that “the parties shall not incur any additional attorneys’ fees, costs, or expenses with the exception of reviewing this order, reviewing the Memorandum Opinion issued this same date, and any communication to the clients regarding this order and ruling on summary judgment. If the parties need to incur additional expenses outside of those parameters, they should first contact the Court.” See Doc. 99. The status conference was set for the following week. At the status conference, the Court suggested the possibility of mediation and also discussed resetting the trial and corresponding pretrial deadlines. The trial was reset for September 18, 2017. See Doc. 102.

         On August 4, 2017, the parties filed a Notice of Acceptance of Offer of Judgment and requested cancellation of the pretrial conference and trial. See Doc. 110. The parties also indicated that attorney’s fees for both sides remained an issue and further briefing would be needed. See Doc. 111. Plaintiff timely filed her motions for attorneys’ fees and bill of costs. See Docs. 114, 115, and 116; see also Doc. 18, Notice of Attorneys’ Lien. The Court also entered an order requesting a copy of the Offer of Judgment and a Joint Motion to Approve Settlement under FLSA.

         II. Offer of Judgment and Approval

         Federal Rule of Civil Procedure 68 provides, in relevant part, that at least 14 days before trial, a defendant may serve upon a plaintiff an offer of judgment to be taken against the defendant for money with cost then accrued. Fed. R. Civ. P. 68(a). Courts are somewhat mixed on the use of an offer of judgment in Fair Labor Standards Act (“FLSA”) cases. However, what is clear is that in FLSA cases, Courts must still determine whether a settlement is a fair and reasonable resolution in order to give it final and binding effect. See, e.g., Arencibia v. Miami Shoes, Inc., 113 F.3d 1212 (11th Cir. 1997) (discussing FLSA settlements in the context of Rule 68 offers of judgment); Silva v. Miller, 307 F.App’x 349 (11th Cir. 2009) (discussing requirement of judicial oversight in context of an offer of judgment even when full claimed amount is paid when attorney’s fees are involved);[1] Norman v. Alorica, Inc., 2012 U.S. Dist. LEXIS 159512 (S.D. Ala. Nov. 7, 2012) (same); Baxter v. Automated Gate Sys., Inc., 2010 U.S. Dist. LEXIS 100566, 2010 WL 3730900, *2 (M.D. Fla. Sept. 2, 2010) (same); Delgado v. Excel One, Inc., 2009 U.S. Dist. LEXIS 43476, 2009 WL 1456452, *1 (M.D. Fla. May 22, 2009) (same); Urshan v. Orlando Utilities Comm’n, 2009 U.S. Dist. LEXIS 68066, 2009 WL 2392060, *2 (M.D. Fla. Apr. 20, 2009) (same).

         In the case at hand, Plaintiff originally sought back pay for the minimum wage claim in the amount of $7,160.01 (including interest accrued). See Doc. 95 at p. 8 and Ex. F. Later, in the joint motion for approval of the accepted offer of judgment, Plaintiff increased her claim to $9,214.76. While normally that would be a matter of concern for the court, it is not a factor in this particular instance. It seems apparent from the Offer of Judgment and correspondence relating to it that the amount pertains to both the minimum wage principal amount and liquidated damages.

         Based on a review of the Offer of Judgment, it is clear that Plaintiff was compensated for that amount plus liquidated damages and a small additional amount rounded up regardless of which number is used. See Doc. 121, Ex. B. Specifically, “the judgment shall provide for an award of damages, including compensatory and liquidated damages, in the total amount of $10,000.00.” Id. at (1).[2][3] The Offer of Judgment also provided for an award of reasonable fees and costs. Id. at (2) and (3). Finally, the offer of judgment preserved appellate rights. Id. at (4). As the total value clearly covers Plaintiff’s minimum wage claim, the Court finds that the settlement is a fair and reasonable settlement of a bona fide dispute for the sole remaining claim. Therefore, the joint motion for approval of settlement is approved.

         III. Attorneys’ Fees

         In evaluating a request for attorneys’ fees, the Court applies the “lodestar” method. Hensley v. Eckerhart, 461 U.S. 424, 433-34, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983); Ass’n of Disabled Ams. v. Neptune Designs, Inc., 469 F.3d 1357, 1359 (11th Cir. 2006). The “lodestar” is found by “multiply[ing] the number of hours reasonably expended on the litigation by the customary fee charged in the community for similar legal services.” Neptune Designs, 469 F.3d at 1359. The fee applicant bears the burden of “establishing entitlement and documenting the appropriate hours and hourly rates.” Norman v. Hous. Auth. of City of Montgomery, 836 F.2d 1292, 1303 (11th Cir. 1988). To satisfy this burden, the fee applicant shall supply to the court: (1) specific and detailed evidence from which it can determine the reasonable hourly rate for the community and (2) records evidencing time spent on different claims and setting out with sufficient particularity the general subject matter of the time expenditures so that the court can assess the time claimed for each activity. Am. Civil Liberties Union of Ga. v. Barnes, 168 F.3d 423, 427 (11th Cir. 1999).

         After determining the lodestar, the court then addresses whether the award should be adjusted upwards or downwards. Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546, 565-66, 106 S.Ct. 3088, 3098-99, 92 L.Ed.2d 439 (1986); Neptune Designs, 469 F.3d at 1359. In conducting this inquiry, the court is guided by the twelve factors set out in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974).[4], [5] See also Hensley, 461 U.S. at 429-30, 103 S.Ct. at 1937-38 (endorsing the Johnson factors). These twelve factors are:

(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee in the community; (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.

Hensley, 461 U.S. at 430 n. 3, 103 S.Ct. at 1937 n. 3; Johnson, 488 F.2d at 717-19. Finally, when awarding an attorney’s fee, the “[c]ourts are not authorized to be generous with the money of others, and it is as much the duty of courts to see that excessive fees and expenses are not awarded as it is to see that an adequate amount is awarded.” Barnes, 168 F.3d at 428.

         A. Defendants’ Attorneys’ Fees from Plaintiff’s Spoliation and Sanction Opinion[6]

         On January 25, 2017, this Court entered a lengthy opinion which granted Defendant’s motion for sanctions due to Plaintiff’s spoliation of evidence. See Doc. 92. In the motion, Defendant requested attorney’s as a part of the sanction, but did not include the supporting documentation as it was not yet fully determinable. Thus, at the end of the opinion, the Court instructed the defendant to file his requested attorneys’ fees on or before February 10, 2017. Defendant timely filed his renewed motion for attorneys’ fees with his specific amounts and supporting documentation. See Doc. 93. Specifically, he provided billing statements for the time spent on the deletion of emails and corresponding sanctions motion. Defendant also submits an affidavit from another attorney supporting his requested rate.

         The law is clear that the sanctions a court may impose against a party of spoliation of evidence include an award of attorney’s fee incurred by the injured party as a result of the spoliation. Swofford v. Eslinger, 671 F.Supp.2d 1274, 1280 (citing Flury v. Daimler Chrysler Corp., 427 F.3d 939, 945 (11th Cir. 2005)). With regard to those fees, “the amount of fees and costs awarded may not exceed the ‘costs, expenses, and attorneys’ fees reasonably incurred because of [the sanctionable] conduct.’” Id. at 1287 (quoting Amlong & Amlong, P.A. v. Denny’s, Inc., 500 F.3d 1230, 1239 (11th Cir. 2007)). As such, the Court turns to whether Defendant’s requested amount is reasonable and appropriate under the circumstances.

         Defense counsel seeks an award of $22,680.00 for fees related to the sanctions motion. See Doc. 93 at p. 1. This represented 50.4 hours or work at a requested rate of $450.00 per hour. Plaintiff opposes the imposition of attorney’s fees and argues the sanction previously imposed is more than adequate to address the wrongdoing.[7] Perhaps the Court should have been clearer in its sanctions opinion, but the question of whether attorney’s fees would be imposed was already impliedly answered when the court requested that Defendant file a “properly supported motion for attorney’s fees.” The award of attorney’s fees remains part of the sanctions order. Thus, the sole question remaining is whether the fees sought are reasonable and what amount the Court will impose.

         i. Reasonable hourly rates

         Defense counsel seeks $450 per hour, but acknowledges that his rate is the prevailing rate for the Atlanta, Georgia metropolitan area. Plaintiff argues that a more appropriate rate for the Middle District of Alabama (Montgomery) is $200-$250 for a lawyer with 17 years of experience. Therefore, Plaintiff proposes $212.50 as the midpoint between those amounts.

         “A reasonable hourly rate is the prevailing market rate in the relevant legal community for similar services by lawyers of reasonably comparable skills, experience, and reputation.” Norman, 836 F.3d at 1299 (citing Blum v. Stenson, 465 U.S. 886, 895-96 n. 11, 104 S.Ct. 1541, 1547 n. 11, 79 L.Ed.2d 891 (1984). The Court has reviewed the evidentiary submissions and arguments of the Defendant and Plaintiff with regard to the appropriate rate.

         Defense counsel submitted an affidavit from Gary B. Andrews (another Atlanta based attorney) as well as his own affidavit. See Doc. 93 at p. 7-17. In both affidavits, they conclude the $450 rate sought is reasonable. In fact, Mr. Andrews indicates it is even slightly lower than he would expect from Mr. Moore based on his qualifications and experience. Id. at p. 17. Plaintiff submits a declaration from Matthew P. Teague as support for the assertion that the $450 rate sought is too high for the local area. Mr. Teague is a partner at the Montgomery-based firm Beasley, Allen, Crow, Methvin, Portis & Miles, P.C. In his affidavit, he provides the prevailing rate for an attorney with 17 years of experience would be between $200 and $225 per hour. See Doc. 97, Ex. A. Although opinion testimony can satisfy an attorney’s burden to prove reasonable hourly rates, “where there is a lack of documentation, a district court may make an independent judgment based on its own experience and knowledge concerning the rates charges by lawyers of similar skill in similar lawsuits in the same market area.” Miller v. Kenworth of Dothan, Inc., 117 F.Supp.2d 1247, 1254 (M.D. Ala. 2000).

         “In the Middle District of Alabama, skilled lawyers with twenty years or more experience may expect to receive $300 an hour, lawyers with ten years or more experience may receive between $200 and $250 an hour, and associates may expect to receive $150-185 an hour. In the Middle District of Alabama, paralegals may expect to receive between $50 and $85 an hour.” Weekes-Walker v. Macon County Greyhound Park, Inc., 31 F.Supp.3d 1354, 1360 (M.D. Ala. 2014) (Fuller, J.) (citations omitted); see also Alfa Corp. v. Alfa Mortgage, Inc., 560 F.Supp.2d 1166, 1180 (M.D. Ala. 2008) (Watkins, J.); Simpleville Music v. Mizell, 511 F.Supp.2d 1158, 1163 (M.D. Ala. 2007) (Thompson, J.); Gaylor v. Comal Credit Union, Civ. Act. No. 2:10-cv-725-MHT, 2012 U.S. Dis. LEXIS 75972, 2012 WL 1987183 (M.D. Ala. 2012) (Thompson, J.) (using same fee structure).

         While findings of other courts with regard to attorney’s fees (even those within this same district) are not binding, the undersigned does find, in the Court’s experience, the above statement regarding rates to be essentially accurate within this district with some adjustments for inflation over the last few years. When looking to the rates requested by Defense counsel, the Court does find that they merit some reduction. The preliminary question is: what constitutes the “relevant legal community” for purposes of determining the prevailing market rate? “The general rule is that the ‘relevant market’ for purposes of determining the reasonable hourly rate for an attorney's services is 'the place where the case is filed.’” Barnes, 168 F.3d at 437 (citing Cullens v. Georgia Department of Transportation, 29 F.3d 1489, 1494 (11th Cir. 1994)). As this case was filed in the Middle District of Alabama – Northern Division, the Court finds that is the relevant market for this case. The rates requested by defense counsel are not entirely in line with the rates generally requested in the Middle District of Alabama. The rates requested by counsel are more in line with the rates appropriate for the Northern District of Georgia. As such, the Court adjusts the rate to $325.00 taking into consideration Mr. Moore’s years of experience to include specialized experience in electronic discovery.[8]

         ii. Reasonable hours

         Having determined the reasonably hourly rates for the services provided in the case, the Court now must address the number of hours reasonably expended on the matter. Plaintiff argues that several entries are “block time entries” and therefore should have 10-24% across the board reductions. See Doc. 97 at p. 3-5. The Court has carefully reviewed all of counsel’s billing summaries. While there is some block billing, a review of the blocks establishes that it relates to the motion for sanctions and the deletion of the gmail account. Further, the time expended relating to the motion for sanctions is reasonable. The motion itself was comprehensive, thoroughly researched, and supported by significant evidence. Therefore, after a careful review of the submitted billing statement, the Court finds the 50.4 hours spent were reasonable.

         iii. Adjustment to Lodestar Amount

         Computation of the lodestar amount does not necessarily terminate the fee analysis. After determining the lodestar amount, “the court must next consider the necessity of an adjustment for results obtained.” Norman, 836 F.2d at 1302. The Court generally uses the Johnson factors in determining whether an increase or decrease is appropriate. Defendant prevailed on the heavily contested sanctions motion. However, as the Court is utilizing its inherent authority to impose attorney’s fees as a sanction, the Court looks to whether any further adjustments are appropriate. The current amount approved after the reduction in rate is $16,380.00 (50.4 x $325). The Court finds that no further reduction or increase is needed.

         B. Plaintiff’s Attorney’s Fees

         Plaintiff has two sets of attorneys’ fees for review.[9] Her second counsel, David Arendall and Allen Arnold filed a Notice of Attorneys’ Lien upon their withdrawal. See Doc. 18. In the lien, they seek $10,207.50 for attorneys’ fees, costs, and expenses pursuant to the contract Plaintiff entered into with the law firm. Id. They attach the fee agreement signed by Plaintiff. Id., Exhibit A. The original attorneys also submitted a more detailed motion for attorney’s fees and bill of costs once a settlement had been reached. See Docs. 115-116.

         Next, Plaintiff’s current counsel Robert Childs, Jr. also submits a request for attorney’s fees and costs. See Doc. 114. Originally, counsel requested $60,838.75 in attorneys’ fees and $4,885.01 in costs. Id. at p. 2. However, after reviewing Defendant’s response in opposition, counsel acknowledged that certain amounts were inadvertently included and should be excluded. Thus, the revised fee petition seeks $47,920.00 in attorneys’ fees and $1,457.68 in costs accrued by the attorney and $2,741.48 accrued directly by Plaintiff. See Docs. 120, 122.

         Ultimately, the Court will deal with a review of costs in a later section, but the Court must first look to whether attorneys’ fees are warranted and if so, how to reconcile the two different motions for separate attorneys and finally what amount may be reasonable.

         Turning first to whether attorney’s fees are appropriate. Firstly, the Offer of Judgment clearly provides “for an award of reasonable attorneys’ fees to Plaintiff for services rendered by her counsel up to and including the date of receipt of this offer that are attributable solely to Plaintiff’s claim for alleged unpaid minimum wage, on the condition that Plaintiff must prove such fees in the manner provided by law.” See Doc. 121, Exhibit A ¶ 2. Further, FLSA requires that the Court “shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.” 29 U.S.C. § 216(b). “FLSA requires judicial review of the reasonableness of counsel’s ...

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