United States District Court, D. Utah
MICHAEL R. MAJOR; JAMES D. GRANUM; JONE LAW KOFORD; and ALLAN CARTER, Plaintiffs,
VALDERRA DEVELOPMENT, LLC; DIVERSIFIED MANAGEMENT SERVICES, LLC; VALDERRA INVESTMENT PARTNERS, LLC; DMS SERVICES, LLC; LYNN PADAN; ALLAN WRIGHT; and DOES 1-50, Defendants.
MEMORANDUM DECISION AND ORDER AWARDING ATTORNEYS'
FEES AND COSTS TO DEFENDANTS
Nuffer, United States District Judge.
are entitled to an award of their reasonable attorneys'
fees and costs incurred in the defense of Plaintiffs'
first and fourth causes of action. They submitted an Attorney
Declaration of Apportioned Attorney Fees and Costs
(“Attorney Declaration”) requesting $25, 395.00
in attorneys' fees and $499.50 in costs. Plaintiffs
objected arguing that Defendants' requested
attorneys' fees are unreasonable, duplicative, involve
non-compensable claims, and act as a violation of
Plaintiffs' due process rights.
careful review of Defendants' Attorney Declaration, and
consideration of the complexity of the case, the work
performed and the record, a forty percent (40%) reduction of
the hours billed by Defendants' counsel is appropriate to
achieve a reasonable attorneys' fee award.
determine a reasonable attorneys' fee, a
“lodestar” figure is arrived at “by
multiplying the hours . . . counsel reasonably spent on the
litigation by a reasonable hourly rate.” Factors for
determining the reasonableness of the hours billed for a
given task or to prosecute or defend the litigation as a
whole include: the complexity of the case; the No. of
reasonable strategies pursued; the responses necessitated by
the maneuvering of the other side; and the potential
duplication of services.
reasonable hours awarded may be reduced if “the No. of
compensable hours claimed by counsel includes hours that were
unnecessary, irrelevant and duplicative.” Reduction is also
justified “if the attorney's time records are
sloppy and imprecise and fail to document adequately how he
or she utilized large blocks of time.” But there is no
requirement that each disallowed hour be identified and
justified. Nor is there any requirement for the No.
of hours permitted for each legal task to be
announced. Instead, a method of general reduction to
the hours claimed may be implemented in order to achieve a
reasonable number, “so long as there is sufficient
reason for [the method's] use.”
request $25, 395.00 in attorneys' fees for their defense
of Plaintiffs' first and fourth causes of
action. Defendants' Attorney Declaration
breaks down the requested attorneys' fees as follows:
• For attorney Jeff Mills, 3.75 hours billed at a rate
of $185.00 per hour and 89.95 hours billed at a rate of
$200.00 per hour, totaling $18, 683.75; and
• For attorney Lewis P. Reece, 22.75 hours billed at a
rate of $295.00 per hour, totaling $6, 711.25.
object to several specific billing entries included in the
Attorney Declaration,  and generally object to the
reasonableness of the hours billed for counsels' work
relating to a motion to dismiss and a motion for
attorneys' fees and costs.
unnecessary to address the specific billing entries to which
Plaintiffs object. “[A]n overly particularized approach
‘is neither practical nor
desirable.'” “What is ‘important is
the discretionary determination by the district court of how
many hours, in its experience, should have been expended on
the specific case.'” And considering the complexity
of this case, the work performed and the record, the total
No. of hours billed in the Attorney Declaration is not
reasonable. A general reduction of the hours billed by
Defendants' counsel is warranted.
case involved challenges to Defendants' operation and
management of The Ledges of St. George Master Homeowner's
Association (the “Association”).
Plaintiffs' first and fourth causes of action alleged
unreasonable and non-qualifying expenditures under the
federal corporate tax exemption statute, 26 U.S.C. §
501(c)(3),  and violation of the Fair Debt
Collection Practices Act (“FDCPA”) §
1692f(1). These causes of action were not so
factually or legally complex to justify the No. of
counsels' billed hours. Indeed, the causes of action were
dismissed early in the procedural stages of the case by the
granting of a motion to dismiss.
causes of action arose from allegations that Defendants
collected and benefited from management fees that exceed the
actual costs of managing the Association. And while
pleaded as federal claims, the causes of action were merely
seeking to enforce Plaintiffs' interpretation of the
Association's governing documents. They boiled
down to straightforward breach of contract issues that failed
to state federal claims. The issues presented did not involve
novel or unsettled areas of the law, and extensive research
was unnecessary. Plaintiffs' first cause of action was
dismiss because 26 U.S.C. § 501(c)(3) does not provide a
private right of action, and to the extent it was a state law
claim for breach of contract, it did not confer federal
“arising under” jurisdiction.
Plaintiffs' fourth cause of action was dismissed because
Plaintiffs failed to sufficiently allege that Defendants were
“debt collectors” under the FDCPA, and because
the facts alleged were incapable of supporting a claim for
violation of FDCPA § 1692f(1).
the work performed, Defendants' counsel engaged in
settlement and scheduling discussions with Plaintiffs'
counsel; attended a scheduling
hearing; drafted initial disclosures and
discovery; briefed and attended oral argument on a
motion to dismiss; and briefed a motion for attorneys'
fees and costs. This work is reflected in
Defendants' Attorney Declaration.
Attorney Declaration also includes over 13 hours billed for
work on an unfiled answer and research on affirmative
defenses. This No. of hours billed is a stark
contrast to the representation that “Defendants
identified the need for dismissal of the Federal Claims early
on in the litigation, and . . . thereafter reasonably focused
their efforts on the Federal Claims.”It was
reasonable for Defendants' counsel to begin the process
of researching and responding to Plaintiffs' Complaint
through work on an answer and affirmative defenses. However,
the total hours billed for this work is not reasonable in
light of the issues in the case and Defendants filing of a
motion to dismiss.
amount of hours billed for counsels' work relating to the
motion to dismiss is also not reasonable. Defendants'
Attorney Declaration identifies over 70 hours billed for work
relating to the motion to dismiss. This is far greater than
the No. of hours expected given the factual and legal issues
presented. And although Plaintiffs' response to the
motion raised additional arguments that were addressed in
Defendants' reply,  such maneuvering does not justify the
total hours billed for counsels' work relating to the
motion to dismiss.
Defendants' request for attorneys' fees was expressly
limited to the defense of Plaintiffs' first and fourth
causes of action. But counsel's initial declaration in
support of the request did not apportion the hours billed
among the compensable first and fourth causes of action, and
the non-compensable second and third causes of
action. It was because of this that Defendants
were ordered to file a new declaration which properly
apportioned their attorneys' fees.
Defendants' newly submitted Attorney Declaration includes
billing entries for the preparation of counsel's initial
declaration, as well as the Attorney
Declaration. The inclusion of billing entries for
both declarations is duplicative and not reasonable given
that counsel should have apportioned the hours billed in the
this is meant to suggest that Defendants' counsel
inflated the raw time it took to perform the various legal
tasks in this case. Rather, the issue is one of billing
judgment- particularly in the hours billed by counsel for
research and drafting-in the context of an award of
attorneys' fees. “Because not all hours expended in
litigation are normally billed to a client, [counsel] should
exercise billing judgment with respect to a claim of the No.
of hours worked.” “Billing judgment consists of
winnowing the hours actually expended down to the hours
on the complexity of the case, the work performed and the
record a forty percent (40%) reduction of the hours billed by
Defendants' counsel is appropriate to achieve a
reasonable attorneys' fee award. Plaintiffs did not
object to the reasonableness of counsels' billing rates.
Regardless, counsels' rates are reasonable considering
the fees customarily charged in the locality for similar
legal services. Therefore, Defendants' are awarded $15,