Opinion
Case No. 98-2277-JWL.
December 3, 2004
MEMORANDUM AND ORDER
Plaintiff filed this action for securities violations and fraud to redress losses suffered in stock transactions involving a corporation controlled and promoted by defendants. After the jury found against defendants and awarded plaintiff $38,722 in compensatory damages, the court heard additional evidence and awarded plaintiff $150,000 in punitive damages; $35,921 in statutory interest; $186,000 in attorney fees; and $12,000 in costs. Plaintiff filed a motion to alter or amend judgment, seeking an increase in the punitive damages, fees, and costs. The court increased the award of costs to $12,143, but left the punitive damages and fee awards unchanged. Both sides appealed to the Tenth Circuit, with defendants asserting numerous objections regarding the judgment of liability and the determination of damages and plaintiff raising several issues regarding the fee award and the court's determination of punitive damages and costs. With one minor modification regarding plaintiff's allowable costs, the Circuit affirmed this court in all respects.
This matter is presently before the court on plaintiff's motion to alter or amend the judgment to include an additional amount of attorneys' fees and costs (doc. #383). Specifically, plaintiff seeks additional fees of $94,251.46, representing 540 hours of work in connection with appeal-related work, filing the present motion plus two previous motions to alter or amend and efforts to collect the judgment in this case. Plaintiff seeks additional costs of $29,100.41 incurred in connection with these same tasks. As set forth in more detail below, the motion is granted in part and denied in part. Specifically, the court awards plaintiff $18,010.00 in fees for time spent attempting to collect the judgment and in preparing the present motion, awards plaintiff $907.41 in costs and denies plaintiff's motion in all other respects.
Fees Relating to the Tenth Circuit Appeal
The billing statements submitted by plaintiff's counsel reflect that he spent nearly 225 hours in connection with defending the appeal filed by defendants and advancing his cross-appeal. In the Tenth Circuit, an application for appeal-related attorneys' fees must first be made to the appellate court. See Hoyt v. Robson Cos., Inc., 11 F.3d 983, 985 (10th Cir. 1993); see also Wood v. Harrington, No. 96-6337, 1998 WL 3469, at *2 (10th Cir. Jan. 6, 1998) (unpublished opinion). Should the appellate court "decide that it is appropriate to award such fees, [it] may then remand to the district court to determine an award of reasonable fees." Hoyt, 11 F.3d at 985. In this case, plaintiff has not made an application to the Tenth Circuit for an award of appeal-related attorneys' fees. This court, then, does not have jurisdiction to consider plaintiff's request and the court must subtract 225 hours from plaintiff's request. See id. Plaintiff's motion for additional attorneys' fees and nontaxable costs is denied. Fees Relating to Plaintiff's First Motion to Alter or Amend the Judgment
Plaintiff seeks reimbursement for approximately 43 hours spent in connection with preparing a motion to alter or amend the judgment in which plaintiff, after the jury found against defendants and awarded plaintiff $38,722 in compensatory damages, sought an award of fees, costs and interest pursuant to K.S.A. § 17-1268. Plaintiff, however, has already sought reimbursement for a substantial portion of these hours; indeed, the billing statements submitted by plaintiff in connection with his second motion to alter or amend (addressed below) included 28 of the 43 hours for which plaintiff seeks to be reimbursed. The court denied plaintiff's second motion to alter or amend to the extent it sought additional fees and the Tenth Circuit has affirmed that aspect of the decision. See Sheldon v. Vermonty, 2004 WL 1730348, at *1 (10th Cir. Aug. 3, 2004). Plaintiff is not entitled to a second bite at the apple.
The remaining 15 hours for which plaintiff seeks reimbursement relate to the time that Jim Kunce, a local lawyer who served as plaintiff's expert on the attorneys' fees issue, spent preparing for and testifying during the hearing on plaintiff's fee request. In that regard, plaintiff seeks to recover $2,615.40 for the work performed by Mr. Kunce. But absent a specific statutory provision, an award of expert fees must be based on 28 U.S.C. §§ 1821 and 1920, see Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 445 (1987), which limit the amount recoverable to $40 per day. Plaintiff has not characterized this request as one for costs under section 1920 and the court is not inclined to construe the request as such. To the extent plaintiff is simply seeking to recover fees for Mr. Kunce's role as an attorney working on the motion to alter or amend (as opposed to his role as an expert witness), that request is denied as Mr. Kunce's contribution to the motion, in large part, did not aid the court in its disposition of the motion.
Fees Relating to Plaintiff's Second Motion to Alter or Amend the Judgment
Plaintiff also seeks reimbursement for approximately 42 hours spent in connection with preparing a motion to alter or amend the judgment in which plaintiff sought an increase in the punitive damages, fees and costs awarded by the court after the jury found against defendants. The motion was largely unsuccessful — the court left the punitive damages and fee awards unchanged and increased the award of costs by only $143.00. The court, then, denies plaintiff's request for fees incurred in connection with this motion. See Karnes v. SCI Colorado Funeral Servs., Inc., 1998 WL 879479, at *4 n. 2 (10th Cir. Dec. 17, 1998) (district court did not abuse its discretion in denying fees for the filing of an unsuccessful motion).
Fees Relating to Plaintiff's Efforts to Collect the Judgment
In his motion, plaintiff seeks an award of fees for 206 hours spent attempting to collect the judgment. While plaintiff's motion is silent as to the statutory basis for such fees, the court construes the motion as a request for fees pursuant to K.S.A. § 17-1268. See Sheldon v. Vermonty, 237 F. Supp. 2d 1270, 1273 (D. Kan. 2002). The court, then, must first decide whether this statute permits recovery of fees incurred in connection with post-judgment collection efforts. Section 17-1268(a) provides that
Any person, who offers or sells a security in violation of K.S.A. 17-1254 or 17-1255 . . . or offers or sells a security by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made in the light of the circumstances under which they are made not misleading . . . is liable to the person buying the security from such person, who may sue either at law or in equity to recover the consideration paid for the security, together with interest at 15% per annum from the date of payment, costs, and reasonable attorney fees. . . .
The court has uncovered no Kansas cases addressing the issue of whether "reasonable attorney fees" for purposes of 17-1268(a) includes fees incurred attempting to collect a judgment.
In the context of federal law, the Tenth Circuit has awarded fees under ERISA for post-judgment collection efforts. See Sheet Metal Workers Health Welfare Trust Fund v. Big D Serv. Co., 876 F.2d 852, 854 (10th Cir. 1989). In doing so, the Circuit noted that "nothing in the language of the statute or its legislative history . . . indicate[s] that post-judgment attorney's fees are not recoverable." See id. The court further emphasized that the "award of fees in connection with collection efforts involving the employer comports with the purpose of the statute." See id.; see also Shaw v. AAA Engineering Drafting, Inc., 213 F.3d 538, 544-45 (10th Cir. 2000) (holding that the attorney fees provisions of the False Claims Act allowed an award of fees for time spent in post-judgment collection activities and looking to civil rights cases and Clean Air Act cases for guidance).
Looking to federal cases for guidance, the court believes that Kansas courts, if faced with the issue, would conclude that a plaintiff suing under K.S.A. § 17-1268(a) is entitled to an award of fees for time spent attempting to collect a judgment rendered under the statute. The attorneys' fees provisions analyzed by the Tenth Circuit and the attorneys' fees provision found in 17-1268(a) share the requirement that an award must be "reasonable." While many of the statutes under which federal courts have awarded fees for collection activities were enacted to encourage citizen enforcement of important federal policies (and, thus, an award of fees for collection activities is central to the implementation of these policies), the court does not believe that the difference should affect the issue here. The point is that the entry of judgment is not the end of the litigation. Significantly, nothing on the "face of the statute, or in its history or purpose, suggests that the only legal efforts that can be compensated by an award of fees are those that precede the judgment, and not those incurred afterward to make the judgment a reality." See Free v. Briody, 793 F.2d 807, 809 (7th Cir. 1986). Moreover, as the Seventh Circuit has articulated, it "would make no more sense to deny attorney's fees for efforts to collect a judgment than it would to deny them for efforts to defend a judgment on appeal." See id.
The court turns, then, to plaintiff's specific fee request. To arrive at a reasonable attorney fee, Kansas courts multiply a reasonable number of hours worked by a reasonable hourly rate. See, e.g., Naff v. Davol, Inc., 28 Kan. App. 2d 726, 729 (2001). The court may then adjust that number to account for the eight factors set out in Rule 1.5 of the Kansas Rules of Professional Conduct. Davis v. Miller, 269 Kan. 732, 751 (2000) (explaining that "the eight factors set forth in Rule 1.5 (1999 Kan. Ct. R. Annot. 312) of the Kansas Rules of Professional Conduct should be considered in deciding the reasonableness of an attorney fee"). Often, however, no adjustment is needed as the eight factors listed in Rule 1.5 are the factors on which the initial calculation, known as the lodestar calculation, is made. Shrout v. Holmes, No. 00-2069-KHV, 2001 WL 980280, at *2 (D. Kan. Aug.10, 2001) (applying the § 1988 lodestar analysis to award attorney fees on a Kansas state law statutory claim).
In calculating a reasonable attorney fee, the court must first determine the number of hours counsel reasonably expended on the litigation. Case v. Unified Sch. Dist. No. 233, 157 F.3d 1243, 1249 (10th Cir. 1998). The burden is on the applicant to prove that the hours billed are reasonable by "submitting meticulous, contemporaneous time records that reveal, for each lawyer for whom fees are sought, all hours for which compensation is requested and how those hours were allotted to specific tasks." Id. at 1250. The court "is justified in reducing the reasonable number of hours if the attorney's time records are `sloppy and imprecise' and fail to document adequately how he or she utilized large blocks of time." Id. (citing Jane L. v. Bangerter, 61 F.3d 1505, 1517 (10th Cir. 1995)).
The court also looks at the hours expended on each task to determine if they are reasonable. Id. The court may reduce the reasonable hours awarded if "the number [of compensable hours] claimed by counsel include[s] hours that were unnecessary, irrelevant and duplicative." Id. (quoting Carter v. Sedgwick County, Kan., 36 F.3d 952, 956 (10th Cir. 1994)). The court is not compelled to identify each disallowed hour and it is not required to announce what hours are permitted for each legal task. See id. Instead, a "general reduction of hours claimed in order to achieve what the court determines to be a reasonable number is not an erroneous method, so long as there is sufficient reason for its use." Id.
Plaintiff's billing statements reflect that his counsel spent nearly 206 hours attempting to collect the judgment in this case. The court certainly understands plaintiff's desire to collect his judgment and further appreciates that collecting that judgment from two recalcitrant defendants (who are unrepresented by counsel) who reside in New York would be difficult and time-consuming. However, the vast majority of the descriptions associated with the time entries for this work are extremely general, such as "Disc. with Dave Sheldon on collection issues" and "exec. issues." Because of these general descriptions, it is impossible for the court to determine the precise nature of the tasks plaintiff performed in his efforts to collect the judgment and, thus, it is impossible to determine whether plaintiff took more time than necessary to complete various tasks associated with collecting the judgment. As such, plaintiff's billing statements do not adequately support his request to recover for 206 hours of work. Due to the imprecision in plaintiff's billing statements, the court will reduce the amount of hours by approximately one-half and will permit plaintiff to recover for 100 hours spent in collection efforts. See Johnson v. Spencer Press of Maine, Inc., 2004 WL 1859791, at *4-5 (D. Me. Aug. 19, 2004) (recommending that district court award plaintiff attorneys' fees for 50 hours spent attempting to collect judgment and that plaintiff be permitted to supplement his fee request if additional time was needed to collect judgment) (Title VII).
After determining whether the hours are reasonable, the court must determine the reasonable rate. "The first step in setting a rate of compensation for the hours reasonably expended is to determine what lawyers of comparable skill and experience practicing in the area in which the litigation occurs would charge for their time." Case, 157 F.3d at 1256. "The party requesting the fees bears `the burden of showing 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.'" United Phosphorus, Ltd. v. Midland Fumigant, Inc., 205 F.3d 1219, 1234 (10th Cir. 2000) (citations omitted). "The focus must be on the `prevailing market rate in the relevant community.'" Id. "A district court abuses its discretion when it ignores the parties' market evidence and sets an attorney's hourly rate using the rates it consistently grant[s]." Id. (quoting Case, 157 F.3d at 1255). "The court may not use its own knowledge to establish the appropriate rate unless the evidence of prevailing market rates before the court is inadequate." Id.
Plaintiff has submitted no evidence concerning the prevailing market rate. The hourly rate in his billing statements is $188.58 which, according to plaintiff, represents the $155/hour rate that this court previously concluded was appropriate, adjusted for inflation. Due to the lack of evidence regarding this issue, the court believes it is appropriate to rely on its own knowledge of prevailing market rates. Case, 157 F.3d at 1257 (explaining that when the district court does not have before it adequate evidence of prevailing market rates, it may turn to other factors, including its own knowledge, to establish the rates). Based on the court's knowledge of the prevailing market rates, the court finds that a reasonable rate for counsel's work on this case is $175.00 per hour. See Russell v. Sprint Corp., 2003 WL 21994746, at *2 (D. Kan. Aug. 20, 2003) (establishing market rate as $175.00 per hour for analogous case and collecting cases on this issue).
In sum, plaintiff is entitled to an award of $17,500.00 (representing 100 hours of time at the rate of $175.00 per hour) for attorneys' fees incurred in connection with plaintiff's efforts to collect the judgment in this case.
Fees Relating to Present Motion to Alter or Amend the Judgment
Finally, plaintiff seeks to recover fees for 23.5 hours spent in connection with the present motion. This time consists of only two entries in the billing statements. One entry reflects 11.08 hours spent on "Motion for Atty fees. Defendants failure to pay. Successful appeal. Work on documents and billing statement. File and serve documents." The other entry reflects 12.42 hours spent for "work on documents Motion [sic] and billing statement." Plaintiff, then, has failed to document adequately how he utilized these large blocks of time and the court is justified in reducing the hours on this basis. Moreover, plaintiff's motion has been, in large part, unsuccessful. Finally, the motion and accompanying memorandum totaled a mere 2.5 pages in length. In light of these circumstances, the court concludes that 2 hours is reasonable for the work of plaintiff's counsel (at $175 per hour) and that 2 hours is reasonable for the work of counsel's paralegal (at $80 per hour). Thus, the court awards plaintiff $510.00 in fees for work on this motion.
Costs
Plaintiff seeks more than $29,000 in additional costs that he has incurred since judgment was entered in this case. The Tenth Circuit has instructed that the assessment of costs rests in the sound judicial discretion of the trial court. Allison v. Bank One-Denver, 289 F.3d 1223, 1248 (10th Cir. 2002). Federal procedural law controls with respect to such an assessment. Chaparral Resources, Inc. v. Monsanto Co., 849 F.2d 1286, 1291-92 (10th Cir. 1988) (noting that "[i]n a diversity case, federal law controls in regard to the assessment of costs"). Under federal law, 28 U.S.C. § 1920 allows the prevailing party to recover as costs:
(1) Fees of the clerk and marshal; (2) Fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case; (3) Fees and disbursements for printing and witnesses; (4) Fees for exemplification and copies of papers necessarily obtained for use in the case; (5) Docket fees under section 1923 of this title; (6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.28 U.S.C. § 1920. The court has no discretion to award items as costs that are not set out in section 1920. See Bee v. Greaves, 910 F.2d 686, 690 (10th Cir. 1990).
Plaintiff seeks to recover as "costs" $18,139.00 that he paid to various attorneys in New York for their efforts to collect the judgment in this case. These amounts — characterized in the billing statements as attorneys' fees — are simply not taxable under section 1920. Plaintiff also seeks to recover $7500.00 for costs incurred in connection with having a sheriff in New York advertise the sale of and sell one of the defendant's homes for purposes of collecting the judgment. This expense does not fall within the bounds of section 1920. Plaintiff's bill of costs contains a multitude of other expenses that are simply not recoverable under section 1920. Without detailing all of these expenses, such expenses include charges for phone calls, "execution costs," electronic research expenses, stamps for various mailings to plaintiff, non-court-mandated federal express charges and courier service charges. The court also disallows various items due to plaintiff's failure to adequately describe the nature of the expenses (e.g., "copies of documents," "mailing costs," "filing costs," and "service fees").
While plaintiff may have been able to recover the amounts he paid to attorneys in New York as "reasonable attorneys' fees" under K.S.A. § 17-1268(a), he expressly requests to recover these expenses as "costs" under section 1920. In any event, even if the court were inclined to construe the request as one for attorneys' fees, the court would deny the request as plaintiff's billing statements do not reflect the number of hours spent by the New York attorneys and do not reflect the nature of the work performed by those attorneys.
Plaintiff also seeks to recover as costs various items that the Tenth Circuit has already taxed as costs pursuant to Federal Rule of Appellate Procedure 39, including $100.00 for the docketing fee; $501.08 for copies of briefs; and $229.11 for other copies. The court, then, will exclude these items from plaintiff's request. Pursuant to Rule 39(e), however, certain appeal-related costs identified by plaintiff are taxable in the district court, including costs associated with obtaining the reporter's transcript and the preparation and transmission of the record. Thus, the court concludes that the following items are properly taxable as costs: $5.00 docket fee to the district court; $336.16 for service of appeal-related documents; and $566.25 for the trial transcript.
Finally, plaintiff seeks to recover as costs $131.44 for the service and copying of his second motion to alter or amend the judgment. However, expenses incurred by a party copying his own pleadings and serving such pleadings on opposing counsel are not taxable because they are not "necessarily obtained for use in the case." See 28 U.S.C. § 1920(4); UNI-Systems, Inc. v. Delta Air Lines, Inc., 2002 WL 505914, at *3 (D. Minn. Mar. 28, 2002).
In sum, the court awards plaintiff $907.41 in costs.
IT IS THEREFORE ORDERED BY THE COURT THAT plaintiff's motion to alter or amend the judgment (doc. #383) is granted in part and denied in part. Specifically, the court awards plaintiff $18,010.00 in fees for time spent attempting to collect the judgment and in preparing the present motion and the court award plaintiff $907.41 in costs. The court denies plaintiff's motion in all other respects.
IT IS SO ORDERED.