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Global Control Systems, Inc. v. Luebbert

United States District Court, W.D. Missouri, Western Division

August 3, 2016

GLOBAL CONTROL SYSTEMS, INC., Plaintiff,
v.
DEREK LUEBBERT, et al., Defendants.

          ORDER GRANTING IN PART PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES

          GREG KAYS, CHIEF JUDGE UNITED STATES DISTRICT COURT

         A jury found Defendants liable for breach of contract. Plaintiff Global Control Systems, Inc. (“GCS”), has filed a motion for an award of attorneys’ fees (Doc. 224). GCS asserts that it has used three law firms-the Intellectual Property Center, the McClain Law Firm, and Van Osdol & Magruder-over the course of this litigation which have collectively billed $498, 855.05 in fees. In conjunction, GCS has filed a motion to amend the judgment (Doc. 228) to add these attorneys’ fees and to add pre- and post-judgment interest.

         As explained below, a part of GCS’s fee request is unreasonable. Therefore, the motion for attorneys’ fees is GRANTED IN PART. The Court awards GCS $305, 802.89 in attorneys’ fees.[1] The motion to amend the judgment is GRANTED and the Court awards GCS pre- and post-judgment interest.

         Discussion

         Defendants breached a contract that read, “In the event either party commences any action in a court of law to enforce this Settlement Agreement or obtain damages for the breach of this Settlement Agreement, the prevailing Party shall be entitled to an award of its actual attorneys’ fees and costs incurred in such action.” (Doc. 224-3 at 8). GCS argues that, having obtained judgment on all counts, it is entitled to attorneys’ fees from Defendants.

         In a diversity case, “[i]f a contract provides for the payment of attorneys’ fees and expenses incurred in the enforcement of a contract provision, the trial court must comply with the terms of the contract and award them to the prevailing party.” DocMagic, Inc. v. Mortg. P’ship of Am., L.L.C., 729 F.3d 808, 812 (8th Cir. 2013) (applying Missouri law). Defendants do not contest that GCS is the “prevailing Party” under the contract. See also Id. at 813-14. GCS is thus entitled to attorneys’ fees per the contract.

         Although the contract guarantees GCS “its actual attorneys’ fees, ” only reasonable fees may be recovered. See State ex rel. Chase Resorts, Inc. v. Campbell, 913 S.W.2d 832, 835 (Mo.Ct.App. 1995) (“[R]easonableness is an implied term in every contract for attorney’s fees.”). The Court assesses whether it is reasonable for GCS to claim half a million dollars in attorneys’ fees.

         “Under Missouri law, the reasonableness of attorney’s fees is determined by examining [1] the time expended; [2] the nature, character and amount of the services rendered; [3] the nature and importance of the litigation; [4] the degree of responsibility imposed on the attorney; [5] the amount of money involved; [6] the degree of professional ability, skill, and experience called for and used; and [7] the result obtained.” Weitz Co. v. MH Washington, 631 F.3d 510, 528-29 (8th Cir. 2011). “A plaintiff can be compensated for work on unsuccessful claims if they are sufficiently related to the successful claim because they ‘involve a common core of facts’ or ‘are based on related legal theories.’” Al-Birekdar v. Chrysler Grp., LLC, 499 F. App’x 641, 649 (8th Cir. 2013) (applying Missouri law). However, the court may reduce the awardable fees that represent work unrelated to the plaintiff’s winning issues. Id. The court may do this by a global reduction or by line-item cuts. Id. at 648-49.

         I. GCS may not recover fees unrelated to its claims against Luebbert and Atlas.

         First, the Court looks at what GCS’s attorneys spent their time doing. GCS invoiced $498, 855.05 in attorneys’ fees, but as Defendants point out, not all of those fees relate to GCS’s breach of contract claims. The attorneys incurred significant fees prosecuting claims against Defendants Alliant Techsystems Inc. (“ATK”) and Midwest Controls, LLC (“Midwest”), which were never parties to the contract with the fee provision. Some of these fees are still recoverable, however, because the ATK and Midwest claims share the same factual nucleus with Luebbert’s and Atlas’s breach of contract claims. Work performed building a case against ATK and Midwest also helped GCS build a case against Luebbert and Atlas.

         The Court finds that fees relating to discovery of GCS’s claims against ATK or Midwest are presumptively reasonable because discovery against those defendants helped GCS’s claims against Luebbert and Atlas. The Court finds that fees relating solely to ATK or Midwest are unreasonable. For example, GCS may not recover fees incurred: drafting an amended complaint that joined ATK and Midwest; responding to ATK’s and Midwest’s motions for summary judgment; or mediating claims with just ATK.

         For entries on GCS’s itemized billing statement that are not compensable, the Court cuts the fees. For entries that comprise both compensable and non-compensable work roughly equally, the Court halves the fees. Accordingly, the Court cuts $9, 895.25 and 43.6 hours from the McClain Law Firm’s bill and $62, 850.25 and 219.5 hours from the Intellectual Property Center’s bill, a total of $72, 745.50 and 263.1 hours. See Al-Birekdar, 499 F. App’x at 648-49.

         Relatedly, GCS has submitted duplicate requests for $18, 272.36: first in its bill of costs (Doc. 226), and now in its motion for attorneys’ fees. Because GCS may not recover costs twice, the Court excludes those costs from the award of attorneys’ fees.

         The Court therefore line-item cuts GCS’s requested attorneys’ fees ...


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