He et al v. Rom et al, No. 1:2015cv01869 - Document 311 (N.D. Ohio 2018)
Court Description: Opinion & Order signed by Judge James S. Gwin on 12/20/18. The Court, for the reasons set forth in this order, grants plaintiffs' motion for attorney's fees and costs. The Court orders defendants to pay $57,271.00 in attorney's fees and $911.76 in costs. (Related Doc. 307 ) (D,MA)
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He et al v. Rom et al Doc. 311 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO ----------------------------------------------------------------------: : : : : : : : : : : : Re Hui, et al., Plaintiffs, vs. Davor Rom, et al., Defendants. CASE NO. 1:15-CV-1869 OPINION & ORDER [Resolving Doc. 307] ----------------------------------------------------------------------JAMES S. GWIN, UNITED STATES DISTRICT JUDGE: Plaintiffs Rui He, Xiaoguang Zheng, and Zhenfen Huang sued real estate businessman David Rom and his various real estate companies. On November 16, 2016, a jury found Defendants liable for violating the Ohio Deceptive Trade Practices Act ( ODTPA ), fraudulent inducement, and negligent misrepresentation.1 The jury awarded Plaintiffs compensatory damages, punitive damages, attorney’s fees, and costs. Defendants appealed the judgment, and the Sixth Circuit affirmed. Plaintiffs now move the Court for appellate attorney’s fees and costs. For the following reasons, the Court GRANTS Pla“nt“ffs’ mot“on for Attorney’s fees and costs. The Court ORDERS defendants to pay $57,271.00 “n attorney’s fees and $911.76 in costs. I. Background Between 2013 and 2015, Defendants—Davor Rom and various LLCs under his control—sold distressed real estate properties to Plaintiffs. Defendants marketed these properties as Defendantmanaged hands-off real estate “nvestments that would give a 10 to 20 percent return on investment. 1 Doc. 239. Dockets.Justia.com Case No. 1:15-CV-1869 Gwin, J. After the promised returns failed to materialize, Plaintiffs sued Defendants for fraudulent inducement, negligent misrepresentation, securities fraud, unlicensed sale of securities, breach of fiduciary duty, violations of ODTPA, and conversion.2 A jury returned a verdict for Plaintiffs on their claims for fraudulent inducement, negligent misrepresentation and ODTPA violations. The jury also awarded Pla“nt“ffs attorney’s fees and costs.3 The Court subsequently granted “n part and den“ed “n part Pla“nt“ffs’ mot“on for attorney’s fees and costs.4 Defendants appealed,5 and the Sixth Circuit affirmed the judgment on September 26, 2018.6 On October 10, 2018—fourteen days later—Plaintiffs moved the Sixth Circuit for appellate attorney’s fees and costs.7 On October 30, 2018, the Sixth Circuit denied the motion, indicating that the Plaintiffs should first seek fees in the district court.8 On November 27, 2018, the Sixth Circuit issued its mandate.9 Plaintiffs now move the Court for attorney’s fees and costs. II. Discussion A. Plaintiffs Are Ent“tled to Attorney’s Fees Plaintiffs argue that they are entitled to appellate fees under the Ohio Deceptive Trade Practices Act, wh“ch prov“des that [t]he court may award . . . reasonable attorney’s fees . . . “f the court f“nds that the defendant has willfully engaged in a trade practice listed in division (A) of section 4165.02 of the Plaintiffs later withdrew the breach of fiduciary duty claim. Doc. 222. The Court d“sm“ssed Pla“nt“ffs’ conversion, securities fraud, and unlicensed sale of securities claims before the jury deliberated. 3 Doc. 241. 4 Doc. 265. 5 Doc. 268. 6 Doc. 306. 7 No. 17-3411, Dkt. No. 49. Plaintiffs also moved for sanctions. 8 No. 17-3411 (6th Cir. Oct. 30, 2018), Dkt. No. 57. The court den“ed Pla“nt“ffs’ mot“on for sanct“ons. 9 Doc. 308. 2 2 Case No. 1:15-CV-1869 Gwin, J. Rev“sed Code know“ng “t to be decept“ve. 10 The jury found that Defendants had willfully engaged in deceptive trade practices,11 and the Court awarded Plaintiffs attorney’s fees and costs.12 Defendants oppose an appellate fee award on two grounds. Defendants’ f“rst argument “s that the Plaintiffs waived their rights to fees and costs under Federal Rule of Appellate Procedure 39 because they failed to file within fourteen days of judgment an itemized and verified bill of costs.13 This argument is wrong on two fronts. First, Appellate Rule 39 costs do not “nclude attorney’s fees. 14 Accordingly, the fourteen-day deadline and other Appellate Rule 39 procedural requirements do not apply to attorney’s fees. Secondly, Plaintiffs did apply for attorney’s fees within fourteen days of the judgment.15 Defendants’ second argument is that Plaintiffs are only entitled to fees for attorney time spent defending their ODPTA claim. This argument is also wrong. While Plaintiffs only cite ODPTA’s fee-shifting provision as the basis for their motion, Plaintiffs are eligible for fees on the basis of their successful fraudulent inducement and negligent misrepresentation claims as well.16 Under Ohio law, a jury may award attorney’s fees as damages “n a tort act“on sound“ng “n fraud.17 For this reason, the trial jury form 10 O.R.C. § 4165.03(B). Doc. 239. 12 Doc. 265. 13 See Fed. R. App. P. 39(d)(1) ( A party who want costs taxed must—within 14 days after entry of judgment—file with the circuit clerk, with proof of service, an itemized and verified bill of costs. ). 14 See Kelley v. Metro. Cty. Bd. of Educ., 773 F.2d 677, 681 (6th Cir. 1985) (en banc) ( [T]h“s court concludes that an award of costs pursuant to Fed.R.App.P. 39(a) is separate and distinct from and totally unrelated to an award of attorney's fees pursuant to [a fee-sh“ft“ng statute]. (footnote om“tted)), disapproved of on other grounds by Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 483 U.S. 711 (1987). There is an unresolved circuit split on this issue, with the Sixth Circuit following the majority approach. See Hines v. City of Albany, 862 F.3d 215, 222 (2d Cir. 2017) (collecting cases). 15 Defendants never expla“n whether they cons“der the Pla“nt“ffs’ mot“on unt“mely or merely “mproperly formatted. Perhaps Defendants mean to argue that Pla“nt“ffs’ attorney’s fee appl“cat“on was not an “tem“zed and ver“f“ed b“ll of costs. At any rate, the attorney’s fee mot“on would have been timely if the 14-day deadline did apply. 16 Plaintiffs made their trial fee application on this basis. See Doc. 244 at 4. 17 See Roberts v. Mason, 10 Ohio St. 277, 279 (1859) (hold“ng that attorney’s fees are recoverable as damages for a tort wh“ch “nvolves the “ngred“ents of fraud, mal“ce or “nsult ). 11 3 Case No. 1:15-CV-1869 Gwin, J. “nd“cated that “t could award attorney’s fees “f “t awarded pun“t“ve damages to the Plaintiffs on any of the three claims, which it did.18 Even if the Plaintiffs were not entitled to fees on all three of their claims, none of the cases cited by Defendants support the proposition that appellate fee awards are limited to only those hours spent defending claims subject to statutory fee-shifting.19 B. Pla“nt“ffs’ Hourly Rate and Billed Time Are Reasonable Hav“ng determ“ned that an award of attorney’s fees “s proper, the Court turns to the amount. In calculat“ng reasonable attorney’s fees, the Court employs the lodestar method.20 Under this approach, it calculates the fee by multiplying the number of reasonable hours by the attorneys’ hourly rate.21 The appropr“ate rate . . . “s not necessar“ly the exact value sought by a particular firm, but is rather the market rate “n the venue. 22 Pla“nt“ffs’ attorney Jiang requests fees for 166.13 attorney hours billed at $200 an hour. Jiang has practiced law since 2009,23 and the 2013 median billing rate for an Ohio attorney with 6-10 years of experience was $200.24 In 2017, the Court previously approved trial fees for J“ang’s firm at an hourly rate of $150.25 The Court f“nds that an hourly rate of $200 “s reasonable “n l“ght of J“ang’s Doc 239-4 at 8. See also Braun v. Ultimate Jetcharters, LLC, 828 F.3d 501, 515 (6th Cir. 2016) ( If pun“t“ve damages are proper, the aggr“eved party may also recover attorney fees. ). 19 In Balsey v. LFP, Inc., the f“rst case c“ted by Defendants, the S“xth C“rcu“t s“mply aff“rmed the d“str“ct court’s judgment that the Defendants had not met O.R.C. § 4165.03(B)’s requ“rements. 691 F.3d 747, 774 (6th Cir. 2012). Imwalle v. Reliance Medical Products, Inc. is similarly unavailing. 515 F.3d 531, 554 (6th Cir. 2008). Imwalle merely emphasizes the need for detailed time records—not the need to identify hours spent on claims subject to fee-sh“ft“ng. Th“s dec“s“on actually cuts aga“nst the Defendants’ argument, as “t emphas“zes that [w]hen claims are based on a common core of facts or are based on related legal theories, for the purpose of calculating attorneys fees they should not be treated as distinct claims, and the cost of litigating the related claims should not be reduced. Id. 20 See Wasniewski v. Grzelak-Johannsen, 549 F. Supp. 2d 965, 972 (N.D. Ohio 2008). 18 21 Id. B & G Mining, Inc. v. Dir., Office of Workers Comp. Programs, 522 F.3d 657, 663 (6th Cir. 2008). 23 See Doc. 307-2. 22 24 25 Doc. 307-1 at 39. See Doc. 265 at 29. (awarding fees for Jiang LLC at $150 an hour). 4 Case No. 1:15-CV-1869 Gwin, J. additional experience since trial, the complexity of appellate work, and its conformity with prevailing market rates. Pla“nt“ffs’ attorney Kovach requests fees for 68.7 attorney hours26 billed at $350 an hour. Kovach has practiced law since 1978,27 and Ohio attorneys with 36 or more years of experience charge up to $400 an hour.28 The Court has prev“ously found that Kovach’s $350 hourly rate “s reasonable,29 and it does the same here. Defendants argue that Pla“nt“ffs’ b“ll“ng entr“es are vague, lumped together, and duplicative.30 These arguments are unpersuas“ve, as the Pla“nt“ffs’ t“me entr“es are quite detailed and are sufficient to determ“ne that the hours actually and reasonably expended “n the prosecut“on of the l“t“gat“on. 31 Defendants’ cla“ms that Pla“nt“ffs padded entr“es or duplicated work are also unpersuasive. For example, the Court notes that while both attorneys travelled back and forth from Cincinnati for oral argument, Pla“nt“ffs only b“lled at J“ang’s lesser rate for this time.32 The Court awards Plaintiffs $57,271.00 “n attorney’s fees.33 C. Plaintiffs Are Entitled to $911.76 in Costs Plaintiffs also move for costs. Under Appellate Rule 39(a)(2), costs are taxed against the appellant if a judgment is affirmed. Because the judgment was affirmed on appeal, the Court taxes costs against Defendants. Plaintiffs submit records documenting a total of $911.76 for acquiring and printing the trial transcript, printing briefs, travel, and lodging. 26 Kovach billed 72.2 hours but did not charge for 3.5 of them. See Doc. 244-5. 28 Doc. 307-1 at 39. While the median rate for an attorney with Mr. Kovach’s exper“ence “s $250, a h“gher rate (in the 75th percentile) is justified by his expertise and experience. 29 See Doc. 265 at 29. (awarding fees for Mr. Kovach at the rate of $350 an hour). 30 See Doc. 309-1. (listing disputed time entries). 31 Imwalle, 515 F.3d at 553 (quoting United Slate, Local 307 v. G & M Roofing & Sheet Metal Co., 732 F.2d 495, 502 n.2 (6th Cir. 1984)). 32 See Doc. 307-7. 33 J“ang’s fees are $33,226 (166.13 x $200) and Kovach’s fees are $24,045 (68.7 x $350). 27 5 Case No. 1:15-CV-1869 Gwin, J. Defendants argue that the costs of obtaining and printing the trial transcript are not recoverable. This, too, is incorrect. Federal Rule of Appellate Procedure 39 explicitly provides that the cost of a reporter’s transcr“pt “s taxable.34 III. Conclusion For the foregoing reasons, the Court GRANTS Pla“nt“ffs’ mot“on for attorney’s fees and costs. The Court ORDERS Defendants to pay $57,271.00 “n attorney’s fees and ORDERS Defendants to pay $911.76 in costs. IT IS SO ORDERED. s/ Dated: December 20, 2018 James S. Gwin JAMES S. GWIN UNITED STATES DISTRICT JUDGE 34 Fed. R. App. P. 29(e)(2) (l“st“ng the cost of the reporter’s transcr“pt as a cost taxable “n the D“str“ct Court). 6
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