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Stake Center Locating v. Logix Communications, L.P.

United States District Court, D. Utah

March 31, 2017

STAKE CENTER LOCATING, Plaintiff,
v.
LOGIX COMMUNICATIONS, L.P., Defendant.

          MEMORANDUM DECISION AND ORDER DENYING LOGIX'S MOTION FOR ATTORNEY FEES, COURT COSTS, AND LITIGATION EXPENSES

          Jill N. Parrish, United States District Court Judge

         Before the court is a motion brought by Logix Communications, L.P. requesting an award of attorney fees, court costs, and litigation expenses pursuant to a contractual provision. [Docket 207]. The court DENIES the motion for fees.

         BACKGROUND

         Logix entered into a service agreement contract with Stake Center Locating, Inc. Under the contract, Stake Center would locate underground utility lines for Logix for a set fee. Stake Center was required to provide monthly invoices for the services it provided. The contract contained an attorney fee provision, which stated: “In the event of any litigation or other proceedings between the parties concerning this Agreement, the prevailing party shall be entitled to the payment by the non-prevailing party of all its reasonable attorneys' fees, court costs, and litigation expenses.”

          Stake Center provided the agreed upon services for a period of sixteen months, but failed to submit the required monthly invoices. Upon discovering its error, Stake Center submitted a single invoice for the entire period. Logix refused to pay.

         Stake Center sued Logix for breach of contract and, alternatively, for restitution for the uncompensated services as unjust enrichment. Logix asserted various defenses in its answer, including that Stake Center's material breach of the contract excused its obligation to pay for the services provided. It also asserted a counterclaim for breach of contract based upon Stake Center's failure to submit monthly invoices. As damages, Logix asserted that it was entitled to the difference between the amount billed and the cost of the same services if they had been billed at a more reasonable, high-volume rate.

         This court concluded as a matter of law that Stake Center breached the contract by failing to submit monthly invoices. The court further ruled that the question of whether the breach was material was for the jury to decide.

         At trial, the jury found that Stake Center's breach was material, excusing Logix's contractual obligation to pay for the services Stake Center provided. Logix, therefore, prevailed on its material breach affirmative defense to Stake Center's breach of contract claim. But the jury also found that Stake Center was entitled to relief on its unjust enrichment claim and awarded it $700, 000 as the reasonable value of the utility line location services that it provided. Thus, Stake Center prevailed on its restitution claim.

         Logix filed a motion for attorney fees, court costs, and litigation expenses pursuant to the attorney fee provision of the contract. It argued that since it succeeded on its material breach defense to Stake Center's breach of contract claim, it was the prevailing party under the attorney fee provision. Logix claimed that it was entitled to $1, 014, 937.80-the entire amount of its attorney fees and expenses for this litigation. The attorney fee motion was accompanied by two relevant exhibits: (1) the affidavit of John L. Grayson accompanied by approximately 600 pages of billing records documenting $952, 092.42 in attorney fees, court costs, and litigation expenses and (2) the affidavit of Rodney R. Parker accompanied by billing records documenting $62, 845.38 in attorney fees, court costs, and litigation expenses. The billing records attached to the Grayson affidavit are so heavily redacted that it is impossible to tell which time entries are associated with work on particular claims, counterclaims, or defenses in the suit.

         Stake Center opposed the fee motion. It argued that this court should not award fees or costs because: (1) Logix failed to allocate its fees and costs between the successful contract claim, the unsuccessful contract claim, and the unjust enrichment claim; (2) Logix is not a prevailing party under the attorney fee provision; and (3) Logix sought and obtained rescission of the service contract, negating the attorney fee provision. Stake Center also argued that “reasonable attorneys' fees” would be no fee or a substantially reduced fee.

         In reply, Logix argued that it had no obligation to allocate fees because it was entitled to all of its fees. In the alternative, it attached a second affidavit of John L. Grayson that allocated $827, 205.50 of the attorney fees to the successful breach of contract claim and $35, 011.50 of the attorney fees to the unjust enrichment claim and work done pursuing a claim that Stake Center had filed a fraudulent lien. This second affidavit allocated all of the $89, 874.42 in claimed costs to the successful contract claim. Thus, the affidavit attached to the reply brief allocated over 96% of the requested fees and costs to Logix's successful affirmative defense.

         Stake Center objected to the introduction of new evidence in the affidavit attached to the reply brief, arguing that any allocation should have been included with the motion for fees so that it would have had an opportunity to respond.

         ANALYSIS

         Stake Center first argues that the court should deny the motion for fees due to Logix's failure to allocate its fees and costs between recoverable claims and nonrecoverable claims. The court agrees, and therefore does not reach ...


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