Southern Bank and Trust Company v. Pride Group, LLC et al, No. 2:2014cv00255 - Document 18 (E.D. Va. 2015)
Court Description: OPINION AND ORDER that the Court GRANTS IN PART and DENIES IN PART 11 Plaintiff's Motion for Default Judgment. The Court GRANTS Plaintiff's motion to the extent it seeks default judgment in this action, but DENIES such motion to the extent Plaintiff seeks post-judgment interest in excess of the rate established by 28 U.S.C. § 1961(a). The Court GRANTS Plaintiff's motion to the extent it seeks an award of reasonable attorneys' fees, but, as noted above, DENIES Plaintiff& #039;s motion to the extent the attorneys' fees sought by Plaintiff are unreasonable; directing the Clerk to judgment against PrideGroup, LLC, Pradip Shah, Vijay Patel, and Vijay Shah in the amount of $1,693,488.11 in principal, $275,9 04.09 in pre-judgment interest through September 19, 2014, pre-judgment interest at the rate of $505.69 per diem between such date and the entry of judgment, post-judgment interest at the rate set forth in 28 U.S.C. § 1961(a), and attorneys' fees and costs inthe amount of $121,378. Signed by District Judge Mark S. Davis and filed on 1/28/2015. (rsim, )
Download PDF
<![CDATA[
Southern Bank and Trust Company v. Pride Group, LLC et al UNITED Doc. 18 STATES DISTRICT EASTERN DISTRICT FILED COURT OF VIRGINIA Norfolk Division JAN 2 8 2C SOUTHERN BANK AND TRUST COMPANY, CLERK, U.S. DISTRICT NORFOLK. V Plaintiff, Civil No.: v. PRIDE GROUP, LLC, VIJAY PATEL, and VIJAY PRADIP 2:14cv255 SHAH, SHAH, Defendants. OPINION AND ORDER This matter is before the Court on an unopposed Motion for Default Judgment, ECF No. Company ("Plaintiff") in favor its under against Pradip Shah, "Individual 11, filed by Southern Bank and Trust requesting that Federal Rule Vijay Patel, Defendants"), and the of Civil PART set forth below, Plaintiff's default judgment be Procedure Pride Group, LLC 55(b)(2) (collectively ("Pride" "Defendants"). the Court GRANTS for Default Judgment entered against Defendants Motion enter judgment and Vijay Shah collectively with Individual Defendants, reasons Court or, For the IN PART and DENIES and in DIRECTS the IN that amounts detailed below. I. This guaranties action FACTUAL AND involves on such notes. PROCEDURAL BACKGROUND two promissory notes Plaintiff alleges and a that series of Pride failed Dockets.Justia.com to make timely payments Pradip Shah, on Vijay Patel, the two promissory notes and that and Vijay Shah failed to make payments as required under guaranties of such notes. On March 15, Note") with an 2006, Pride executed a promissory note original principal amount favor of Bank of the Commonwealth. Ex. 1, 7.65 ECF No. percent provision 1-1. per annum; whereby interest rate See Bank on default. id. Shah, Vijay commercial "First The the Patel, collectively, the note Ex. 1. and guaranties Patel of rate for such note Commonwealth by 4.00 Shah (respectively, and "the Guaranties") the First Note. First See id. "First 1H 21, 29, was also could each "First Guaranty," id. First the March V. increase 2 006, January 20, 2009, the terms of the loan Pradip separate Guaranty," of payment of Individual Defendants 7, 9, ECF Nos. 1-5, 1-7, 1-9. the and, Commonwealth and Pride Id. On modified the First Note by revising the principal amount of ("First $4,622,291.67 Bank the upon each guaranteed payment of $2,422,500.00 on the First Note. H1 21, 29, 38; Compl. Exs. 5, a Shah Guaranty," guaranteeing 38. points executed P. Note contained 15, Shah in ECF No. 1; percentage On or about Vijay $4,84 5,000.00 Compl. H 7, interest however, of ("First and Loan") evidenced by decreasing the by the interest First rate on from 7.65 percent per annum to 6.75 percent per annum. Note the to note Id. K 8; id. Ex. 2, ECF No. 1-2.x On February ("Second Note") 4, 2010, Pride in the principal amount of of Bank of the Commonwealth. The interest annum; rate however, Bank of executed for such the note a Second also Note was contained a the Pradip Shah, 6.75 V. Shah Guaranty," Shah Guaranty," and, Vijay Patel, "the 1 Although the the First text Note of does the not Change show that in On and Vijay (respectively, and "Second Second Guaranties") guaranteeing payment in full of the Second Note. modified per whereby See id. Ex. 4. "Second Patel Guaranty," collectively, percent provision Shah each executed separate commercial guaranties "Second P. ECF No. 1-4. interest rate on the note by 4.00 percentage points upon default. 2010, note $190,000.00 in favor Id. H 15; id. Ex. 4, the Commonwealth could increase or about February 4, promissory Terms Individual See id. 1JH 22, Agreement that Defendants were a party thereto, see Compl. Ex. 2, Plaintiff has alleged—and the Court must accept as true for the purposes of resolving this motion—that Individual Defendants guarantied payment of "the First Note," and Plaintiff has defined "the First Note" to include the March 15, 2006 "First Original Note" and the Change in Terms Agreement, see id. ^ 9. Thus, Plaintiff has alleged that the First Guaranties encompass both the original March 15, 2 006 promissory note and the January 20, 2009 modification thereof. In addition, in the First Guaranties, Individual Defendants guarantied "the performance and discharge of all [Pride's] obligations under the Note . . ." and such guaranties state that " [t] he word "Note" means the promissory note dated March 15, 2006, in the original principal amount of $4,845,000.00 from [Pride] to [Plaintiff], together with all modifications of and renewals, replacements, and substitutions for the promissory note or agreement." Compl. Exs. 5, 7, 9. Accordingly, it appears that Individual Defendants have guaranteed Pride's performance under the First Note as modified by the Change in Terms Agreement. 30, 39; id. Exs. September 22, 6, 1-10.2 On after being placed into receivership, 2011, 8, 10, ECF Nos. 1-6, 1-8, Bank of the Commonwealth was closed by regulatory authorities. Id. H 10. Thereafter, Plaintiff purchased and succeeded to Bank of the Commonwealth's interest in the First Loan, the First Note and the the First Second Guaranties. See Guaranties; id. the fH 10, 16, Second 23, all of including Note; 31-32, and 40-41. Thus, Plaintiff is the current holder of the First Note, id. H 12, and the Second Note, id. H 19. The First Note is 2013, Plaintiff First Note. demanded payment Id. payment and, at liable principal; 2) to Id. in 1 11. full However, On November 14, from Pride has Pride under the failed Plaintiff in the at the for: First rate Note; fees and collection expenses. 1) 42. make $1,513,145.49 of and Id. interest 4) H 14. reasonable Individual Defendants have in 2014; 3) after default attorneys' Plaintiff has also demanded payment in full under the First Guaranties. 33, to is in default under the First Note and $213,824.32 in interest through May 30, thereafter provided for 13. therefore, allegedly interest in default. failed to Id. UH 24, make payment in 2 Following Paragraph 38, the numbering of the paragraphs in the Complaint reverts back to Paragraph 22. The Court's references to the paragraphs in the Complaint reflect the numbering if the Complaint's paragraphs had continued in order following Paragraph 38. response to Therefore, Plaintiff's Plaintiff Individual demands. alleges Defendants $1,513,145.4 9 May 30, 2014; and 3) id. under that, are in principal; See the liable 2) to fH 25, First in 43. Guaranties, Plaintiff $213,824.32 34, for: interest 1) through interest thereafter at the rate of interest after default provided for in the First Note; attorneys' fees and collection expenses. and 4) reasonable Id. Uf 26, 35, 44. The Second Note is also in default. Id. H 17. Plaintiff demanded payment in full from Pride under the Second Note. Id. H 19. However, Pride has failed to make payment and, therefore, is default in under Plaintiff for: interest 1) through the Second $180,342.62 May 30, 2014; Note in and allegedly principal; 3) interest to $6,959.56 2) liable in thereafter at the rate of interest after default provided for in the Second Note; and 4) reasonable attorneys' H 20. Plaintiff has Second Guaranties. fees and collection expenses. also demanded payment Id. HH 24, 33, 42. in Id. full under the Individual Defendants have failed to make payment in response to Plaintiff's demands. See id. UK 25, 34, 43. the Second Plaintiff interest Therefore, Guaranties, for: 1) through Individual $180,342.62 May 30, Plaintiff alleges that, under 2014; in 3) Defendants principal; interest are 2) liable to $6,959.56 in thereafter at the rate of interest after default provided for in the Second Note; and 4) reasonable attorneys' fees and collection expenses. Id. H 20. Id^ 1111 27, 36, 45. On May 30, 2014, Plaintiff filed an action in this Court to recover from Individual ECF No. Pride under Defendants 1. On June the under 5, ECF No. 4. with through process Defendants the 2014, with process. First and Second First and Second 2014, registered and from Guaranties. Individual Defendants On June 23, its Notes were served Pride was served agent. ECF No. 7. failed to timely file an answer to the Complaint or otherwise respond thereto. On July 18, default as to Defendants. ECF No. 2014, the Clerk entered 10. On September 19, 2014, Plaintiff moved for entry of default judgment. Mot. for Default J., ECF No. 11. In such motion, Plaintiff requests judgment against Defendants on the First Note and First principal, and Guaranties the amount of $1,513,145.49 $263,074.88 in interest through September 19, interest interest in thereafter after default at of the 11.65 First Note's percent alleged per annum. in 2014, rate of Plaintiff seeks judgment against Defendants on the Second Note and Second Guaranties in the amount of $180,342.62 in principal, in interest through September 22, $12,829.91 2014, and interest thereafter at the Second Note's alleged rate of interest after default of 10.75 percent per annum. Plaintiff also and collection seeks expenses to recover reasonable attorneys' already incurred in the amount fees of $121,528.00 and post-judgment estimated at $30,000. fees, Plaintiff Gray, Plaintiff's billing billed by lead to submitted counsel in substantiate Plaintiff's an affidavit counsel. from a and action, amount In a declaration this the support of its motion for default submit fees expenses In support of its request for attorneys' initially entries attorneys' its of detailed attorneys' fees briefing Plaintiff disinterested attesting to the reasonableness of Jeffrey and initial judgment, of in did not local attorney the hourly rates charged by Plaintiff's counsel or information concerning recent fee awards by courts in comparable cases. On submit December fee awards reasonableness counsel, with 2014, in the of 1) an the Court advisement in a hourly until an a Plaintiff's failure to attorney or evidence of cases rates order Plaintiff from of local similar entered affidavit light of either an affidavit courts' under 1, to billed taking establish by Plaintiff's Plaintiff's supplemented disinterested, the its motion submission experienced local attorney attesting to the reasonableness of the hourly rates and hours billed, and 2) relevant biographical information for each attorney and staff member who billed services. ECF No. response that to such order, Plaintiff requested 15. the In Court reconsider its requirement that Plaintiff submit an affidavit to support the reasonableness of the attorneys' fees Plaintiff seeks and, instead, allow reasonableness of such fees cases. PL's Supplement Recons., ECF No. 16. fee Southern award Bank & reasonableness of a Trust Plaintiff's of for Default very Co. v. the support in J. the comparable & Req. for Plaintiff submitted that the Court consider a similar case Priyam, for for Recons., in in LLC, request submissions to this District, determine attorneys' ECF No. response 17. to the fees. With the the Court's this matter is now ripe for disposition. II. 55 Mot. Plaintiff's December 1, 2014 Order, Rule decisions requesting PL's Supplement to Req. benefit on On December 17, 2014, in of to based to an additional supplement recent Plaintiff LEGAL Federal STANDARD Rules of Civil that entry of default is appropriate Procedure provides "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend . . . ." is the case here and, as noted Fed. R. Civ. P. 55(a). above, the default against Defendants in this matter. of default, judgment. a plaintiff then move has entered After securing entry for entry of default Rule 55(b) (2) provides that, where a claim is not for a sum certain, the plaintiff must apply to the of default judgment. Inc. v. White, decision may Clerk Such to Fed. R. Civ. P. 55(b)(2); EMI April Music, 618 F. Supp. enter court for entry default 2d 497, judgment 505 (E.D. Va. lies within 2009). the The sound discretion of F.2d 951, F. Supp. party the 953-54 court. (4th Cir. 2d at 505 is not Lolatchy v. 1987); Arthur Murray, to default (noting that judgment as 816 Inc., see EMI April Music, (citation omitted) entitled Inc., 618 "the moving a matter of right"). When a defendant defaults, pleaded allegations of fact." 253 F.3d 778, citations fact, a 780 (4th Cir. omitted). To complaint he admits "the plaintiff's well- Ryan v. Homecomings Fin. Network, 2001) (internal quotation marks and present "contain must well-pleaded sufficient allegations factual of matter, accepted as true, to 'state a claim to relief that is plausible on Ashcroft its face.'" v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Accordingly, allegations in in the the default complaint judgment are deemed context, factual admitted and the "appropriate inquiry is whether or not the face of the pleadings supports the default judgment and the causes of action therein." Anderson v. Found. Indians, 187 decision) (citing Nishimatsu Constr. 515 F.2d 1200, F.3d 1206 for 628 Advancement, (4th (5th Cir. Although well-pleaded true not for admit default the Cir. 1999) & Emp't of (unpublished Am. table Co. v. Houston Nat'l Bank, 1975)). factual judgment purposes, allegations Educ. in the allegations are accepted as a party who defaults claim as to the does amount of damages. See Fed. R. Civ. P. 8(b)(6) allegation—other than one relating to (providing the that "[a]n amount of damages—is admitted if a responsive pleading is required and the allegation is not denied."). concludes that independently Ryan, For that liability calculate damages, a district is the 253 F.3d at 780-81. reason, after a district established, appropriate it amount court must of then damages. To assess the extent of a plaintiff's court may hearing under Rule 55(b)(2), conduct a formal evidentiary or may determine damages based on affidavits or documents attached to the plaintiff's motion. See Anderson v. Am. Indians, 155 Found. F.3d for 500, Advancement, 507 (4th Cir. Educ. 1998) & Emp't of (citation omitted) (noting that "in some circumstances a district court entering a default judgment may award damages pleadings without holding a hearing."); Inc. v. 1872535, omitted) Old Dominion at *2 (W.D. (finding hearing on the Saw Va. "no Works, June 30, need issue of to damages" ascertainable 2005) No. 4:04cvll, Inc., No. 2009) 6:09cv4, (unpublished) convene where (unpublished) unnecessary because 2005 WL 3435030, (citation the a formal at *2 had evidence to support its claim for damages, 10 2009 evidentiary submitted DirecTV, (W.D. WL (citation the plaintiff omitted) plaintiff the cf. Pentech Fin. Servs., affidavits establishing the amount of damages); Yancey, from Va. (deeming "presented a Inc. v. Dec. 12, hearing sufficient costs and fees by way of uncontradicted affidavits"). III. As noted above, DISCUSSION Plaintiff requests that the Court enter default judgment against Defendants for breach of the First and Second Notes and the First and Plaintiff reasonable attorneys' first consider judgment on whether it Plaintiff's Second Guaranties fees and costs. is appropriate claims against to and award The Court will enter Defendants. default The Court will then assess whether to award Plaintiff the attorneys' fees and costs requested in Plaintiff's motion.3 A. Default Judgment on the Notes and Guaranties In this case, Defendants were properly served with process, see ECF Nos. 4, 7, yet, failed to timely file pleading or otherwise respond to the Complaint. pleaded factual admitted, Ryan, allegations 253 F.3d in at the 780 ascertain whether Defendants are Thus, Complaint (citation id. If the well- are omitted), liable to Plaintiff, need only consider whether such allegations which relief can be granted, any responsive deemed and, to the Court state a claim upon liability is established, the Court must then determine whether it can appropriately award Plaintiff 3 The the damages Court has it seeks in subject matter the Complaint. jurisdiction over See id. ; this action because the amount in controversy exceeds $75,000 and Defendants, citizens of Virginia, are completely diverse from Plaintiff, a citizen of North Carolina. 37, See 28 U.S.C. § 1332; Compl. HU 1-3, 46. 11 14, 20, 28, Portfolio LLC, 18, Recovery Civil No. Assocs., 2:12cv649, Inc. v. Portfolio 2013 WL 5723869, Recovery at *9 (E.D. Va. Oct. 2013). "Under Virginia common law, breach of a promissory note is encompassed under a breach of contract claim."4 Inc. v. Tech. Res., *5 (E.D. Va. Dec. v. Core Holdings, *1 Grp., (E.D. elements Va. of enforceable Inc., 23, a 2013) LLC, Feb. No. 7, breach l:13-CV-340, 2:12cv505, 2013)). obligation of WL 6834380, at (citing CIT Small Bus. Lending Corp. Civil No. of 2013 Premier Bank, Under contract a Virginia action defendant 2013 WL 711395, to are: law, (1) a a plaintiff; at "[t]he legally (2) the 4 "A federal court sitting in diversity is required to apply the substantive law of the forum state, including its choice-of-law rules." Francis v. Allstate Ins. Co., 709 F.3d 362, 369 (4th Cir. 2013) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 49697 (1941); Erie R.R. Co. v. Tompkins, 305 U.S. 64, 79 (1938)). "Virginia has long adhered to the traditional conflicts principle that the *nature, validity and interpretation of contracts are governed by the law of the place where made, unless the contrary appears to be the express intention of the parties.'" Crosson v. Conlee, 745 F.2d 896, 902 (4th Cir. 1984) (quoting Woodson v. Celina Mut. Ins. Co., 177 S.E.2d 610, 613 (Va. 1970)). "Virginia law looks favorably upon choice of law clauses in a contract, giving them full effect except in unusual circumstances." Colgan Air, Inc. v. Raytheon Aircraft Co., 507 F.3d 270, 275 (4th Cir. 2007) (citing Hitachi Credit Am. Corp. v. Signet Bank, 166 F.3d 614, 624 (4th Cir. 1999)). If the selected "state is reasonably related to the purpose of the agreement, [the Hooper v. court] will apply the parties' choice of substantive law." Musolino, 364 S.E.2d 207, 211 (Va. 1988). Here, the First and Second Notes and the First and Second Guaranties expressly provide that they will be governed by "federal law applicable to [Plaintiff] and, to the extent not preempted by federal law, the laws of the Commonwealth of Virginia without regard to its conflicts of law provisions . . . ." See Compl. Exs. 1-2, 4-10. The Court concludes that such choice of Virginia law is reasonably related to the purposes of such agreements because Defendants are citizens of Virginia and the First and Second Notes and First and Second Guaranties were executed in Virginia. Thus, the Court will apply Virginia's substantive law to this action. 12 defendant's injury or violation damage obligation." to to breach the Filak v. In addition, must or bring of that plaintiff George, 594 an action obligation; caused S.E.2d 610, to enforce "be signed by the party who is to be his agent." Va. Code Ann. by the 614 a and (3) breach (Va. note, of 2004). such note charged thereby, or § 8.01-27. The Court FINDS that Plaintiff has alleged facts sufficient to state a cause of action against Defendants. Complaint Notes in establish favor Defendants under Bank guaranteed such Plaintiff of that of loans Notes, and to is Pride, the to First and performance of the Bank is the Commonwealth Further, succeeded in both the executed Pride's notes. has Pride The facts in the the of holder beneficiary that obligations indicates Commonwealth's of of the the Second Individual its Complaint the and First First that interest and Second and Second Guaranties. With respect has stated Plaintiff a claim has enforceable to Pride, for breach established obligation the in Court concludes that Plaintiff of the that Pride the form First owed of embodied in the First and Second Notes. 12, 15, 16, 18; id. Exs. 1, 4. and Second Plaintiff the a promises Notes. legally to pay See Compl. UK 7, 10, Plaintiff has also alleged facts showing that Pride breached such obligation by failing to make payments on the First and Second 13 Notes as demanded and that Plaintiff suffered financial injury as a result of such failure. See id. HH 13-14, party to under be Va. 19-20. charged, Code Ann. Pride, § and, have been signed by therefore, 8.01-27. Thus, for breach of claim against Pride See Filak, Both notes the are Plaintiff the enforceable has stated a First and Second Notes. 594 S.E.2d at 614. Likewise, the Court finds that Plaintiff has stated a claim against Individual Defendants for breach of the First and Second Guaranties. The First and Second Guaranties established Individual Defendants owed enforceable obligations to that Plaintiff to pay Plaintiff in the event Pride failed to perform its duties under the First and Second Notes. 38-3 9; show id. Exs. that obligations payment 5-10. Defendants by to failing 33-36, pay Pride's financial HI 24-27, allegations Individual following sustained The See Compl. HH 21-22, 29-30, harm Complaint also failed to perform such result and of Accordingly, after that such it demanded Plaintiff failure. See has id. Plaintiff has stated a claim against Individual Defendants for breach of the First and Second Guaranties. 42-45. a the Plaintiff default as in See Filak, 594 S.E.2d at 614. Having determined that Plaintiff has stated a claim against Defendants, appropriate Complaint. the to Court award must Plaintiff Plaintiff seeks now the to 14 consider relief recover it whether it is requested in the from Pride and the Individual Defendants the outstanding principal and interest on the First and Second Notes, as well as post-judgment interest at the rate allegedly established in the First and Second Notes. The Court FINDS that it is appropriate damages against Pride for breach of the based First on such Note and Complaint, First notes and Change the in Hill included a First and Second Notes Declaration. Terms Agreement the Court concludes that, Note Principal Similarly, Amount the Court finds included a the that, principal amount 6.75 percent per annum, 10.75 of C. Hill, establishes September $263,074.88 19, in the 2014 thereafter at rate interest of ECF No. 12-1. after 2010, $190,000, an id. Ex. 4. in support of due the amount was interest, accrues See Compl. See submitted that the the an the Ex. 1-2. Complaint, Second Note interest rate of and a rate of interest after default of percent per annum. James to and a rate of interest February 4, of the $4,622,2 91.67, Second Note attached to the as on attached of 10.75 percent per annum. based on Based as of January 20, 2009, interest rate of 6.75 percent per annum, after default of to award Plaintiff and that the First in interest per diem under default. Hill the amount due on the Second Note 15 Decl. of Declaration of Plaintiff's $1,513,145.49 $451.84 Likewise, on The motion, Note as principal on such the James principal First C. and Note's Hill at Declaration establishes as of of September 19, 2014 4, that was $18 0,342.62 in principal and $12,82 9.21 in interest, and that interest on such principal accrues thereafter at $53.85 per diem under the Second Therefore, based Declaration, direct Note's on rate the of First interest and Second on the First Note, $263,074.88 in enter judgment in its in the amount of interest through judgment interest at the rate of $180,342.62 September of Notes and Id. the Hill September $53.85 per 19, 2014, and pre rate of $451.84 per diem between such in 19, favor against Pride: $1,513,145.49 in principal, date and the entry of judgment; and, through default. the Court will GRANT IN PART Plaintiff's motion and the Clerk to amount after principal, 2014, diem on the Second Note, and $12,829.21 pre-judgment between such date in in the interest interest and the entry the at of judgment. Moreover, Plaintiff the damages Court FINDS against that it Individual is appropriate to award Defendants for breach of the First and Second Guaranties based on such guaranties and the Hill Declaration. The Complaint, establish Shah First that Pradip guaranteed each amount on the thereon. Compl. attached Patel, First to and the Vijay payment Note, Exs. 5, as 7, Complaint, Shah also Guaranties, of Shah, as The establish each 16 Vijay $2,422,500 well 9. attached Patel, of accrued Second that principal unpaid interest Guaranties, full the and Vijay the Pradip guaranteed to Shah, also Vijay payment of Pride's 10. basis obligations under As noted above, for the the Second Note. Compl. the Court GRANT PART IN First 6, 8, the Hill Declaration provides a sufficient to determine the amount Pride and Second Guaranties, Plaintiff's motion and the direct owes to Therefore, Plaintiff under both the First and Second Notes. light of Exs. in Court will also the Clerk to enter judgment in favor of Plaintiff against Individual Defendants in the following amounts: on the First Guaranties, $1,513,145.49 in September 2014, 19, principal, $263,074.88 and pre-judgment $451.84 per diem between such date and, on the Second Guaranties, principal, $12,829.21 in in the amount of in interest interest at rate of and the entry of judgment; in the amount of interest the through through $180,342.62 in September 19, 2014, and pre-judgment interest at the rate of $53.85 per diem between such date and the entry of judgment. Plaintiff also seeks post-judgment interest at the rates of interest after default Under 28 U.S.C. stated in the First and Second Notes. § 1961, [i]nterest shall be allowed on any money judgment in a civil case interest recovered shall be in a district calculated from court. the . date . . of Such the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding[] date of the judgment. 28 U.S.C. § 1961(a). Nonetheless, 17 the the Court of Appeals for the Fourth Circuit has suggested that the "parties may different rate [of post-judgment interest], *stipulate a consistent with state usury and other applicable law.'" Kanawha-Gauley Coal & Coke Co. v. 501 F. App'x 247, (4th Cir. Pittston Minerals Grp. , Inc., 2012) 67 F.3d 294 (4th Cir. absent a clear, must (quoting Carolina Pizza Huts, 1995) established Pickens, 274 indicating "clear, in 28 (unpublished table decision)). federal U.S.C. the § 568, F.R.D. that Inc. v. Woodward, unequivocal agreement by the parties, apply the uniform 574 parties' rate See (D.S.C. 2011) agreement and unequivocal unambiguous, id.; interest Braunstein (collecting must be language" Yet, the Court of post-judgment 1961. 254 cases expressed for a v. court in to award post-judgment interest at a rate other than the statutory rate). In this case, Court should Plaintiff has failed to demonstrate that the award statutory rate. post-judgment As stated above, interest the in First excess and of the Second Notes both establish a four percent per annum increase in the rate of interest on such notes following default. not of expressly indicate that interest after default However, the parties agreed that would apply as the judgment interest in any action on such notes. Court concludes a clear, that the the notes do rate such rates of post- Therefore, the First and Second Notes do not establish unequivocal agreement between Plaintiff and Pride that 18 the rates of interest after default in each note established an agreed rate of post-judgment interest. See S. Bank & Trust Co. v. 2014 Priyam, (E.D. Va. matter, LLC, Dec. Action 16, No. 2013) 2:14cv254, (Smith, C.J.) WL 7239123, (in an almost at *1 identical adopting a magistrate judge's report and recommendation finding that the inclusion of a rate of interest after default in a promissory note did not unequivocally demonstrate an agreed rate of post-judgment interest). seeks the post-judgment Court GRANT will IN DENY PART judgment interest IN PART at excess Plaintiff's Plaintiff's interest in Thus, motion the rate to the extent Plaintiff of the statutory rate, motion. and The award established Court Plaintiff by 28 will post- U.S.C. § 1961(a). B. Attorneys' Fees and Costs Incurred to Date Plaintiff also seeks an award of reasonable attorneys' and costs. Given that Plaintiff has invoked the fees Court's diversity jurisdiction to assert a state-law cause of action in which it seeks attorneys' provisions Guaranties, in the "Virginia available and, v. Sarrion 2012) 379 if so, Travel, (citing W. (4th First Cir. fees on the basis of and Second Notes law governs Inc., 846 Insulation, 2010) F. L.P. v. attorneys' fees are Airlines Reporting Corp. Supp. (unpublished)). 19 and First and Second whether in what amount." the contractual 2d Moore, 533, 362 Under 536 F. (E.D. App'x Virginia Va. 375, law, "'contractual provisions shifting valid and enforceable.'" Id. Corp. Va. 2010)) . However, precise amount of fees, from the evidence what P'ship, 730 The party F. Supp. are reasonable fees determine whether . are 2d 513, 518 "fix the an award of under the Inc., the 499 S.E.2d amount of facts and Id. (quoting Mullins v. 403 S.E.2d 334, 335 seeking BurgerBusters, . xa fact finder is required to determine (Va. 1991)). attorneys' fees burden of proving the reasonableness of such fees. v. . where a contract does not circumstances of the particular case.'" Richlands Nat'l Bank, fees (quoting Signature Flight Support v. Landow Aviation Ltd. (E.D. attorneys' 829, 833 (Va. attorneys' has the See Chawla 1998). fees sought To is reasonable, "[a] fact finder may consider, inter alia, the time and effort expended by the attorney, the nature of the services rendered, value of the the complexity of the services, services to the client, the the results obtained, whether the fees incurred were consistent with those generally charged for similar services, and whether the services were necessary and appropriate." W. Square, L.L.C. v. Commc'n (Va. 2007) a to fee, assist "[w]hile the every case." Bank/Crestar Bank, 413 Mullins, S.E.2d 403 at expert fact in required Inc., 649 S.E.2d 698, (quoting Chawla, 499 S.E.2d at 833) . reasonable necessary Techs♦, testimony finder, Tazewell such Co. 621 (Va. S.E.2d 611, 335). Indeed, 20 the In determining ordinarily testimony Oil 702 v. is not United 1992) Supreme is Va. (citing Court of Virginia has upheld an award of extensive time for "contemporary which the plaintiff's] fees were attorneys attorneys' records sought" upon the fees detailing and supported by the activities "affidavits reasonableness of of the [the hourly rates charged and the accuracy of the time billed." Id. at 620. Under Virginia fees awarded" LG lies Marion law, in the Corp., the "amount discretion 521 S.E.2d of of the the 528, attorneys' trial court. (Va. 1999) 533 to be Holmes v. (citations omitted). The Fourth Circuit has indicated that, reasonableness law, a of court may nonconflicting F.3d Applying guidance, in of to attorneys' federal (4th Cir. applicable interpreting 1995) "as a Virginia persuasive, reasonable (unpublished federal-law fees table principles the requests are uncontested, contractually obligated to pay all 5 See also Airlines Reporting, Se. law under under decision) .5 as persuasive even though Plaintiff claims that the requested fees are reasonable, Supply, fees GE Supply, a Div. of Gen. Elec. Co. v. Thomas, 1414 the award look guide Virginia law." 62 an when determining the reasonable attorneys' 6:12-cv-00052, fees, 846 F. Supp. 2d at 536 (quoting GE 62 F.3d 1414); Elderberry of Weber City, Inc. , No. and Defendants are 2014 WL 3900389, LLC v. at *9 n. Living Ctrs. 1 (report and recommendation) (noting that "District Courts in the Fourth Circuit sitting pursuant to diversity jurisdiction vary as to whether they apply the Virginia law factors or [federal-law] Johnson/Kimbre11's factors, or a combination of both, in an attorneys' fee analysis" and collecting cases) , adopted by, 2014 WL 3900389 (W.D. Va. Aug. 11, 2014)). 21 "the Court is nevertheless obligated to review request independently for reasonableness." of Va. Patience Shared Hous. , Inc., 2011) . Under attorneys' request fees, for the a attorneys' the multiplying number reasonable 549 the rate." F.3d 235, federal court's determination of law fees of the v. (4th Cir. 2009) 313, 320 (4th Cir. award A Touch 525 to (E.D. awards reasonableness necessarily begins of of with a the which is calculated "by reasonable Robinson 2d 516, applicable "lodestar figure," fee Kennedy v. Supp. review of 243 F.3d 779 F. the hours Equifax expended Info. Servs., (citing Grissom v. 2008)). The times LLC, Mills lodestar a 560 Corp., figure is " [t]he most useful starting point for determining the amount of a reasonable which to fee," make services." an because initial Hensley v. it "provides estimate Eckerhart, of an objective basis the 461 value U.S. of 424, a 433 on lawyer's (1983). When determining the "reasonable" number of hours and rate, the following factors should guide the Court's exercise discretion: (1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney's opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney's expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal 22 of community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneys' fees awards in similar cases. Robinson, 577 560 F.3d at 243-44 F.2d 216, 226 need not address n.28 Supp. 2d factors, (4th Cir. 1978)). 766, Inc. 768 or v. Norcor Bolingbrook Assocs., (E.D. otherwise Va. 2009) . unnecessary,' v. Long, 887 F. Supp. 2d court LLC, In addition to as reasonably expended on the litigation." Inc. "the these factors." "the court must exclude any hours that are redundant, Am., However, in detail every single one of Dollar Tree Stores, F. (quoting Barber v. Kimbrell's Inc., such 699 these 'excessive, hours are not Project Vote/Voting for 704, 709 (E.D. Va. 2012) (quoting Hensley, 461 U.S. at 434). In this because the Guaranties attorney' case, an award of First and provide Second that Defendants see Compl. Exs. 1-2, enforceable under Virginia 2d at 536. law—the Notes fees and is First will pay appropriate and Second Plaintiff's fees and costs in a lawsuit to enforce such notes and guaranties, Supp. attorneys' Court Plaintiff seeks However, must and such provisions are see Airlines Reporting, 846 F. under Virginia law—as under federal determine to recover. the reasonableness of law, 4-10, the The reasonableness Court will do of the fees so by assessing the hours billed by Plaintiff's attorneys and the reasonableness of such attorneys' 23 hourly rates. 1. After a Reasonable Hours careful review of Billed the billing Plaintiff submitted in support of its motion, Court concludes attorneys the the number of is reasonable. burden of reasonable. 437. that Chawla, The that 499 significant the S.E.2d amount ECF No. that 16-1, the hours billed by Plaintiff's Plaintiff, proving records as the fee applicant, number at of 833; hours Hensley, in controversy billed 461 in has this is U.S. at action, $4,500,000 in principal and $129,000 in unpaid interest and late fees at Decl. the of time of Jeffrey Defendants' Gray at 2, default ECF in mid-November No. 16-1, and 2013, more than $1,900,000 in principal and unpaid interest as of September 19, 2014, see Hill reasonableness of Decl. at 1-2, the hours ECF No. Plaintiff's 12-1, supports the attorneys billed. In addition, this action involved complex matters requiring skilled attorneys and the expenditure of significant time, considering that the action involved, restructure obligations owed by inter alia, Defendants especially attempts to to Plaintiff, foreclosure proceedings, the emergency appointment of a receiver to protect collateral various receivership securing proceedings, the First and a and Second Notes, contested motion to intervene in a state-court proceeding to sell property securing such notes. provided See Gray Decl. detailed billing at 2-5. entries 24 Moreover, Plaintiff describing the has work Plaintiff's attorneys performed in connection with this action. See Mem. Supp. records, the Plaintiff's Finally, Mot. for Default J. Court has attorneys Plaintiff's Ex. assessed billed the in attorneys 2 at 10-57. necessity connection achieved a From such of with the this favorable hours matter. result in selling the property securing the First and Second Notes and in obtaining a judgment in this action on such notes and the First and Second Guaranties. in Chawla—and carefully entries, the having considered the factors substantially analyzed the Therefore, similar Plaintiff's Court FINDS that Robinson attorneys' the hours factors—and detailed billed by billing Plaintiff's attorneys to date are reasonable. 2. Reasonable Hourly Rate Under Virginia law, in determining the reasonableness of a fee award, "whether the fees incurred were consistent with those generally charged for for the Court's similar services" consideration. awards 64 9 attorneys' S.E.2d 7 02. pursuant to federal the Fourth Circuit has explicitly held that it is [a fee applicant] fees at when error to "excus[e] court Square, important factor Furthermore, law, a W. is an from [its] well-established burden to provide evidence of an applicable prevailing rate as a starting point for the attorney's fees analysis." Coal Co. v. Cox, 602 F.3d 276, 290 (4th Cir. Westmoreland 2010). The fee applicant meets its burden by, in addition to the attorney's own 25 affidavits, "produc[ing] satisfactory specific evidence of the prevailing market rates in the relevant community for the type of work for which he seeks an award." (quoting Plyler v. Evatt, accord Westmoreland, 277). 902 Grissom, F.2d 273, 602 F.3d at 290 277 54 9 F.3d at 321 (4th Cir. (citing Plyler, 1990)); 902 F.2d at Specifically, the Fourth Circuit explains: The prevailing market rate may be established through affidavits reciting the precise fees that counsel with similar qualifications have received in comparable cases; information concerning recent fee awards by courts in comparable cases; and specific evidence of counsel's actual billing practice or other evidence of actual rates which counsel can command in the market. Spell v. McDaniel, (citations omitted); (4th Cir. 1986) "affidavits 824 F.2d see also Daly v. (noting the from 1380, other 1402 Hill, "customary" area attorneys (4th Cir. 1987) 790 F.2d 1071, 1080 practice of submitting as evidence that [the] requested rates were within the market rates generally charged for similar services"). The Court Plaintiff's FINDS that attorneys similar cases.6 are the hourly rates reasonable based charged by most on fee awards of in Along with the affidavit of its lead counsel 6In this case, to support the requested award of attorneys' fees, Plaintiff initially only submitted billing entries and an affidavit of its lead counsel attesting to the reasonableness of the attorneys' fees it seeks to recover. Under Virginia law, Tazewell suggests that an affidavit of a plaintiff's attorney and billing records can establish the reasonableness of an award of attorneys' fees. See 413 S.E.2d at 621. However, to support an award of attorneys' fees pursuant to federal law, which did not note any the affidavit of Plaintiff's lead attorney— specific similar cases 26 in which courts have attesting to the reasonableness of Plaintiff's attorneys, biographical Gray Decl. information for the hourly rates charged by at 7, the provided services to Plaintiff, Plaintiff has submitted attorneys and staff who as well as information regarding comparable cases in which courts have approved similar billing rates. After comparing partners, attorneys of counsel, the hourly associates, paralegals who performed legal hourly rates included in rates services fee awards charged by the staff attorney, and for Plaintiff with the in similar cases, and considering such hourly rates with the added context provided by the biographical concludes that Plaintiff's comparable the counsel 2:14cv254, (Smith, hourly in this to the rates similar matters. No. information C.J.) Plaintiff rates charged (in courts WL 7239123, an by all case are reasonable. have at almost *1 the but Court one v. (E.D. identical Priyam, Va. of Such rates are approved in this area See S. Bank & Trust Co. 2014 submitted, LLC, Dec. matter, 16, in Action 2014) adopting a approved of hourly rates comparable to those charged by Plaintiff's attorneys-would be insufficient to substantiate the reasonableness of Plaintiff's attorneys' hourly billing rates. E.g., Project Vote, 887 F. Supp. 2d at 710 (citing Plyler, 902 F.2d at 277) . As noted above, the Court applies Virginia law to determine the reasonableness of the fees Plaintiff seeks because right to recover such fees. Virginia law establishes Plaintiff's See Peter Farrell Supercars, Inc. v. Monsen, 82 F. App'x 293, 301 (4th Cir. 2003) (unpublished) . Plaintiff's additional submissions of its attorneys' biographical information and information concerning fee awards in similar cases bolsters the Court's conclusion that the attorneys' fees Plaintiff seeks are reasonable under both Virginia law and the federal standard for determining reasonableness. 27 magistrate hourly judge's rates report charged by those in this matter, Wright Hospitality, Inc. , No. 2009) the (unpublished) recommendation same attorneys other than Messrs. LLC 2:07cv530, and v. Holiday 2009 WL 4841017, (finding that a approving and paralegals Starr and Beaman); Hospitality at *7 as Lake Franchising, (E.D. partner's the Va. Oct. billing 23, rate of failed to $465.00 per hour is reasonable). However, submit the sufficient of Mr. Starr, Court FINDS evidence to $565 per hour, submitted Hospitality, in Plaintiff demonstrate that has the hourly rate is a reasonable hourly rate within this area in cases similar to Plaintiff that this action. support of its The only case that motion, Lake Wright approved an hourly rate $100 lower than the hourly rate sought for Mr. Starr's services and the affidavit Plaintiff provided involved the reasonableness of attorneys' in an eminent Although Mr. based on his domain Starr's matter dissimilar hourly rate experience and the may, to the hourly rates case in fact, nature of be the at bar.7 reasonable services he performed, Plaintiff has not carried its burden of demonstrating that Mr. Starr's hourly rate is reasonable. See Chawla, 499 7 Tellingly, in the affidavit submitted by Plaintiff—an affidavit originally used to support the reasonableness of attorneys' fees in a different matter—while Mr. Barr opines that an hourly rate of $550 per hour is reasonable for the lead attorney in a complex eminent domain matter, Mr. Barr also indicates that his hourly rate did not exceed $475 per hour. See Affidavit of Stanley G. Barr, 16-5. 28 Jr. at 7, ECF No. S.E.2d at 833; will IN PART DENY Hensley, Plaintiff's recover fees for Mr. per hour. The services at 461 U.S. motion to Therefore, the extent the Court it seeks of will only fees for per hour—the $465 award Mr. Starr's rate approved in Lake Wright Hospitality—and will reduce the amount of attorneys' awarded for Mr. Accordingly, Starr's hours fees services by $150 to reflect such rate. the Court will GRANT IN PART Plaintiff's motion and award $121,378 in attorneys' of to Starr's services at an hourly rate of $565 Court a rate at 437. billed by fees based on the reasonable number Plaintiffs' attorneys, to date, at the fees and reasonable hourly rates discussed above. C. Plaintiff costs that judgment Future Attorneys' also it seeks to anticipates collection Fees and Costs recover incurring in proceedings. Virginia post- law, in fees under a fee-shifting attorneys' fees for future services in connection with the case. has S.E.2d at court with in 403 a connection provision See Mull ins, contract, attorneys' Under connection with an award of attorneys' a the 335. may also award reasonable The Supreme Court of Virginia stated that [i] f future services of in connection with a an attorney will be case, the fact a reasonable estimate of their value. fact finder should estimate the required finder should make time In so doing, to be the consumed, the effort to be expended, the nature of the services to be rendered, and any other relevant circumstances. 29 Id. However, "a fact finder may only do so on the basis of a record that allows the fact finder to make a reasonable judgment as to future fees that, more likely than not, will be incurred." Airlines Reporting, omitted). when a plaintiff the attorneys' Wireless Inc., 14, No. 2d at 540 & n.9 (citations presented and See I:08cv421, insufficient necessity id. at 2009 WL (unpublished) at Prospect to the future v. Airbee Akula 122795, (citing evidence of 540; fees *2 (E.D. Va. Dev. Co. v. 515 S.E.2d 291, 301 (Va. 1999); GT Warehousing Co. v. Inc., Ct. Nov. The has sought. 2009) Mattrix, At 14, Court sufficient attorneys' $30,00 0 Supp. reasonableness fees Bershader, Cir. F. Courts have denied an award of future attorneys' determine Jan. 846 Law No. 105741, FINDS that to attorneys' fees proceedings. 835298, at *1 has Plaintiff allow the fees to Plaintiff. attorneys' WL (Va. failed to present 1991)). evidence in 1991 it fees will Court to In this case, as a incur reasonable in award future Plaintiff seeks estimate post-judgment of the collection While such a properly supported assertion does not strike the Court as particularly unreasonable, the only evidence that Plaintiff affidavit of has its submitted lead to counsel anticipate[s] that [Plaintiff] support stating such simply figure that he is the "also is reasonably likely to expend an additional $30,000 in fees and costs in its attempts to collect 30 the judgment entered in this case." Gray Decl. at 7. Aside from the conclusory assertion of its attorney, whose credentials and expertise the Court does not question, submitted any evidence concerning the Plaintiff has not number of hours it reasonably expects to incur in post-judgment proceedings or the reasonable fees in this area for the sort of legal services that will be required concludes Plaintiff that in it such cannot solely on the speculative proceedings. award basis assertion Therefore, future of Plaintiff's reasonably Plaintiff will incur $30,000 in attorneys' proceedings because the figure is reasonable. attorneys' he that Court cannot See Priyam, the Court fees to counsel's purely estimates that fees in post-judgment determine whether such 2014 WL 7239129, at *1, *6 (adopting magistrate judge's report and recommendation that the court could not based solely on Accordingly, the award $30,000 extent in post-judgment attorneys' the declaration of the plaintiff's fees counsel). the Court will DENY IN PART Plaintiff's motion to it seeks an award of $30,000 in future attorneys' fees. IV. CONCLUSION For the reasons stated above, the Court GRANTS IN PART and DENIES IN PART Plaintiff's Motion for Default Judgment, 11. The Court GRANTS ECF No. Plaintiff's motion to the extent it default judgment in this action, 31 seeks but DENIES such motion to the extent Plaintiff rate seeks post-judgment established by 28 U.S.C. § Plaintiff's motion to the extent attorneys' to the fees, but, extent the interest in 1961(a). excess of The Court the GRANTS it seeks an award of reasonable as noted above, DENIES Plaintiff's motion attorneys' fees sought by Plaintiff are unreasonable. The Court DIRECTS the Clerk to ENTER judgment against Pride Group, LLC, amount of judgment Pradip Shah, Vijay $1,693,488.11 interest interest at the through rate of the entry of judgment, forth in 28 U.S.C. in Patel, and Vijay principal, September Shah in the $275,904.09 19, 2014, in pre pre-judgment $505.69 per diem between such date and post-judgment § 1961(a), interest at the rate set and attorneys' fees and costs in the amount of $121,378. The Clerk is REQUESTED to send a copy of this Opinion and Order to all counsel of record. IT IS SO ORDERED. M^r /s/ Mark S. UNITED Norfolk, Virginia January £o , 2015 32 Davis STATES DISTRICT JUDGE
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
