Opinion
NO. CIV. S-03-949 LKK/GGH.
April 12, 2007
ORDER
The El Dorado Irrigation District ("EID") filed suit against Traylor Brothers, Inc. ("TBI") as well as Travelers Casualty and Surety Company of America ("Travelers") for breach of contract. TBI filed a counterclaim. The matter proceeded to trial on September 19, 2006. The jury rendered its verdict on November 30, 2006, concluding that EID breached its contract with TBI and awarded $6,264,312.00 in damages.
Pending before the court are two matters: EID's renewed rule 50(b) motion that TBI failed to prove certain damages claims and TBI's supplemental request for attorneys' fees. The court addresses each matter in turn.
I. EID's Renewed Rule 50(b) Motion
On February 9, 2007, the court deferred judgment on EID's renewed Rule 50(b) motion for judgment as a matter of law that TBI failed to prove certain damages claims. The court requested further briefing on the matter. TBI filed a supplemental brief to which EID filed a reply.
A. Standard of Review under Rule 50(b)
A party may renew its motion for judgment as a matter of law,
[i]f for any reason, the court does not grant a motion for judgment as a matter of law made at the close of all the evidence, the court is considered to have submitted the action to the jury subject to the court's later deciding the legal questions raised by the motion. The movant may renew its request for judgment as a matter of law by filing a motion no later than 10 days after the entry of judgment.
Fed.R.Civ.P. 50(b). A renewed motion for judgment as a matter of law is proper when the evidence construed in the light most favorable to the non-moving party permits only one reasonable conclusion as to the verdict and that conclusion is contrary to the jury's verdict. See Air-Sea Forwarders, Inc. v. Air Asia Co., 880 F.2d 176, 181 (9th Cir. 1989). The motion should be granted "only if the verdict is `against the great weight of the evidence, or it is quite clear that the jury has reached a seriously erroneous result.'" Hangarter v. Provident Life and Acc. Ins. Co., 373 F.3d 998, 1005 (9th Cir. 2004) (internal citations omitted). See also Settlegoode v. Portland Public Schools, 371 F.3d 503, 510 (9th Cir. 2004) (Explaining that a "district court may set aside a jury verdict and grant judgment as a matter of law only if, under the governing law, there can be but one reasonable conclusion as to the verdict.")
Moreover, "[a] party cannot raise arguments in its post-trial motion for judgment as a matter of law under Rule 50(b) that it did not raise in its pre-verdict Rule 50(a) motion." Freund v. Nycomed Amersham, 347 F.3d 752, 761 (9th Cir. 2003), see also Advisory Comm. Notes to the 1991 Amendments, Fed.R.Civ.P. 50 ("A post trial motion for judgment can be granted only on grounds advanced in the pre-verdict motion.")
B. The Contested Damages
EID's initial Rule 50 motion contested seven of TBI's eight claims for damages. Specifically, EID claimed that TBI failed to offer proof for five of the claims: the consumptive water claim, the sedimentation pond claim, the outstanding change order requests, the escalation of labor and power costs, and the extra environmental costs. EID's Rule 50 Mot. at 2:2-3. In addition, EID alleged that TBI could not "prove a causal connection between all of their claims (other than for unpaid contract balance) and the damages it allegedly suffered." Id., at 2:3-5.
In its Rule 50(b) motion, EID also challenged TBI's damages regarding its proof of the unpaid contract balance. EID specifically did not raise this challenge in its initial Rule 50 motion. Given that EID failed to raise this argument in its initial Rule 50 motion, EID cannot raise this challenge for the first time in its Rule 50(b) motion. See Freund v. Nycomed Amersham, 347 F.3d at 761 ("[a] party cannot raise arguments in its post-trial motion for judgment as a matter of law under Rule 50(b) that it did not raise in its pre-verdict Rule 50(a) motion.")
Accordingly, the court addresses only those damages which EID contested in its initial Rule 50 motion.
1. Delay Damages After Hole Through
At trial, TBI sought damages for delays after hole through. TBI presented substantial evidence to support the jury's award of damages. Specifically, the testimony of Mr. Robert Taylor established that the total costs incurred by TBI for 181 days of delay was $1,776,935. (TT 3668:18-21). Mr. Taylor explained that based on a review of TBI's costs, TBI's daily cost of operations was $9,817 ($1,776,935 divided by 181 days). This included costs for equipment rental, fuel costs, labor costs and other time related costs. (TT 3668:18-3669:16).
TBI also presented the testimony of Mark Johnson. Mr. Johnson also testified about the delays post-hole through. Mr. Johnson discussed the following events which delayed TBI's completion: (1) stop work order regarding corrections to the misalignment (TT 3497:10-3498:6); (2) diversion wall or bulkhead stop work order (TT 3501:1-3503:4); and (3) sediment pond stop work order (TT 3503:5-3504:5). Mr. Johnson opined that EID was responsible for 209 days of delay arising from the diversion wall stop work order. (TT 3513:12-23; 3530:1-3531:1).
In light of this testimony, there was sufficient evidence for the jury to determine that TBI suffered damages associated with the delay after hole through.
It is impossible to know the amount the jury awarded for each category of damages. TBI requested that the jury award a total of $6,578,817, and the jury awarded $6,264,312, which was $314,505 less than the requested amount. The general verdict form did not reveal which categories of damages the jury apparently found lacking in evidence. EID did not object to the jury verdict form.
2. Decant Slab Delay Damages
There was sufficient evidence of the decant slab delay to support the jury's award of damages. First, the Dispute Review Board unanimously decided that EID was solely responsible for any delay caused to TBI as a result of the construction of the Decant Slab and that such delay was a "Compensable Delay" pursuant to the Contract. (Trial Exhibit 402, page 7). Second, Mr. Mitter specifically testified to damages regarding the decant slab. (TT 3010:22-3011:10; TT 3010:13-14; TT 3015:4-3016:3). Mr. Greg Cangelosi also testified that trial exibit 309 relfected that the cost of the decant slab delay was $234,860. (TT 3591:4-12; TT 3591:6-17). Finally, Mr. Taylor testified that TBI had in fact incurred costs with respect to the decant slab. (TT 3687:15-3688:3; TT 3664:15-3665:3). In short, there was sufficient evidence to support the jury's verdict.
The parties contest whether or not certain exhibits that were never marked into evidence can, nonetheless, be incorporated as evidence through testimony. Even if the court were to conclude that these exhibits could not be construed as evidence, there is still sufficient admitted evidence which supports the jury's award of damages.
3. Consumptive Water Line Damages
TBI also sought damages for delays associated with EID's request that the consumptive water line design be prepared by a licensed engineer. Again, there was ample evidence to support the jury's damages award.
John McDonald testified that TBI experienced a 22 to 27-day delay as a result of EID's request for an engineered plan for the consumptive water line. (TT 1349:16-21) He also testified that the cost to TBI for URS' work in redesigning the water line was approximately $30,000. (TT 1473:16-18)
Moreover, trial exhibit 309 included a claim for "consumptive water system delay" in the amount of $340,292. Mr. Taylor testified that TBI did in fact incur costs associated with the consumptive water delay. (TT 3662:21-3664:14).
Again, the parties contest whether or not the court can consider trial exhibits which were not admitted as evidence. As with the decant slab, when the court examines just the admitted evidence, it is clear that TBI submitted sufficient evidence to support the jury's verdict.
4. Sedimentation Pond Damages
TBI sought damages for extra work related to cleaning up the sedimentation pond. Ample evidence was presented to the jury on this point. Greg Cangelosi testified that TBI developed and implemented a procedure to clean up the sedimentation pond area that was eventually accepted by EID and MWH. (TT 3567:23-3575:20) He explained that TBI tracked its costs associated with the sedimentation pond area using Time and Materials sheets. The Time and Materials sheets were then used to create additional spread sheets for labor, equipment and materials costs. (TT 3575:21-3577:24)
Mr. Cangelosi was also involved in the preparation of Trial Exhibit 309. (TT 3591:4-12). The "Final Estimate" sheet (page EID26 03687) in Trial Exhibit 309 represents work that was completed by TBI. (TT 3593:2-8). According to Exhibit 309, TBI incurred $177,139.76 in clean up costs for the sedimentation pond. (TT 3594:1-13). Mr. Taylor also testified that TBI incurred costs associated with sedimentation pond clean up. (TT 3667:2-14). In sum, there is ample evidence to support the jury's damages award.
5. Other Potential Change Orders
TBI also sought damages for various potential change orders that were never paid by EID. Substantial evidence was presented as to these damages as well.
Mr. Cangelosi testified generally about various work for which TBI was never paid. (i.e.: TBI installed a tunnel entry protection grate and a diversion wall.) See TT 3586:10-3590:22; TT 3596:5-3598:7. According to Trial Exhibit 309, the "Final Estimate" (EID26 03687) includes a section for "Potential Change Orders" that includes a series of items that total $235,902.91. Subtracting the amount for the sedimentation pond clean up ($177,139.76) which has already been addressed, the remainder totals $58,763.15. It appears that there was ample evidence for the jury to award damages on these grounds.
6. Escalation of Labor and Power Costs
TBI sought damages for the escalation of labor and power costs associated with the delay in the project. Trial exhibit 309 makes multiple mention of the damages related to the escalation of labor and power. For example, the cover letter to TBI's Final Application for Payment references TBI's claim for, among other things, "escalations." (EID26 03679) and the "Pay Summary" indicates a claim for $254,281 for "Escalation of Salaries and Power." (EID26 03682).
Mr. Taylor also testified that he reviewed TBI's claim for escalation of labor and power costs to determine if these were actual costs incurred by TBI. (TT 3669:18-3670:2) The review was to see if there was a difference in labor costs and utility power surcharges due to the passage of time while the project was delayed. Mr. Taylor testified that TBI did in fact incur labor and power costs associated with the delay.
7. Extra Environmental Costs
Lastly, TBI sought damages for extra environmental costs associated with work performed by Mr. John McDonald. Mr. McDonald testified that EID agreed to pay certain costs for Mr. McDonald to take over an environmental consultant position and then refused to pay these costs. (TT 1252:2-1253:19, 1431:8-1432:4; 1434:3-18; 1435:20-1436:16). He testified that the position of environmental safety officer was not in the original contract. (TT 1434:19-1435:4) Mr. McDonald performed the work of an environmental safety officer for approximately 10% of his time from January through August 2002. (TT 1481:5-11; 1491:13-1492:14.) Mr. McDonald compiled his costs for this work and gave it to EID's construction manager. (TT 1437:3-11).
Mr. Taylor testified that he reviewed detailed records on material costs, subcontract costs, labor charges and equipment usage for the project. Mr. Taylor also reviewed back up and supporting information and contracts. (TT 3649:4-23) Mr. McDonald's work was included in the costs incurred calculation. (TT 3675:4-9; 3674:5-3675:3).
In sum, TBI presented ample evidence to support the jury's damages award. It cannot be said that when the evidence is construed in the light most favorable to TBI, it permits only one reasonable conclusion that is contrary to the jury's verdict. See Air-Sea Forwarders, Inc. v. Air Asia Co., 880 F.2d 176, 181 (9th Cir. 1989). Accordingly, EID's Rule 50(b) Motion with respect to damages is DENIED.
II. TBI's Supplemental Motion for Attorneys Fees
TBI and Travelers seek an additional $228,531.00 in attorneys' fees for work related to the parties' post-trial motions. EID contends that the present motion should be denied in full due to its overreaching nature. Alternatively, EID requests that the court reduce the amount requested by $111,434.32. EID objects to various requests on the grounds that the fees are neither reasonable nor necessary. The court addresses each of EID's objections in turn.
TBI and Travelers originally sought $230,233.82, but defendants reduced this amount based on errors in their calculations. See Def.'s Reply to Plt.'s Oppo. pp. 9-10.
The court incorporates by reference the section on applicable law in its February 12 Order. See Feb. 12, 2007 Order 5-6.
A. EID's Objections TO TBI's Requests for Attorneys' Fees
1. Fees for Work Completed by Steven Owen
EID argues that TBI is not entitled to any attorneys' fees incurred by Mr. Steven Owen, TBI's in-house counsel. EID basis its argument on the court's previous ruling that TBI could not recover for the hours Mr. Owens worked as a client representative. Feb. 12, 2007 Order 12:9-14. Accordingly, EID asks that the court reduce TBI's award by $27,720 (79.2 hours at a rate of $350/hr).
The court agrees the TBI is not entitled to recovery for those hours Mr. Owens worked as a client representative. Although TBI claims that all of Mr. Owen's post-trial hours constitute legal work, simply labeling the work as "legal" is insufficient. That said, Mr. Owen did submit an affidavit that set forth the various legal tasks he undertook. Accordingly, the court deducts $13,860.00 (this is half of the amount requested for Mr. Owen) from TBI's total award of attorneys' fees.
2. Fees Related to EID's Rule 50(b) Motion
EID objects to TBI recovering fees for any labor spent on TBI's supplemental brief regarding EID's rule 50(b) motion. EID claims that TBI failed to diligently prepare its original brief, and, as such, should not recover for time spent on the supplemental brief.
Given that the court specifically requested that TBI file a supplemental brief, it seems reasonable to award attorneys' fees for the additional work. Accordingly, the court will disregard EID's objection.
3. Fees for Preparing Motions for Attorneys' Fees
EID argues that TBI spent an exorbitant amount of time preparing the motions for attorneys' fees. TBI spent a total of 227.5 hours preparing the attorneys' fees motions. Of those, 206.6 hours were for attorney time. The court is inclined to agree that collecting attorneys' fees for these hours is excessive. (As one example, Ms. Ljungdahl apparently spend 55.8 hours researching market rates for attorney fees in Sacramento and San Francisco.)
EID asks that the court reduce the award by $28,878.50. This amount represents a portion of the time that TBI spent preparing the motions for attorneys fees. The court agrees and the total award amount will be reduced accordingly.
4. Fees for the Unsuccessful Prejudgment Interest Motion
EID argues TBI should not receive fees for preparing its unsuccessful motion for prejudgement interest. The court disagrees. A prevailing party is entitled to compensation for all hours reasonably spent on the litigation. Serrano v. Unruh, 32 Cal. 3d 621, 639 (1982). Moreover, recovery does not hinge upon the success or failure of a particular motion. See, e.g.,Monroe v. United Air Lines, Inc., 565 F. Supp. 274, 286 (N.D. Ill. 1983) (party entitled to recover fees for unsuccessful motion for a preliminary injunction where motion was based on identical facts and legal theories that underpinned their ultimate success on the merits). Therefore, TBI may recover for its time spent working on the prejudgment interest motion. For this reason, the court will not deduct any attorneys' fees related to work on that motion.
5. Fees Related to Appellate Work
EID argues that TBI cannot recover attorneys' fees for work completed by the firm Heller Ehrman because TBI retained the firm after judgment was entered, in part to preserve issues for appeal. EID asks the court to reduce TBI's award by $12,123.82.
Although TBI retained Heller Ehrman after judgment was entered, the record shows that the firm spent a reasonable amount of time researching EID's Rule 50(b) motion, which is one of the post-trial motions for which TBI seeks recovery of attorneys' fees. See Supp. Decl. of Leanord J. Feldman in Supp. of Def.'s Mot. for Award of Att'ys' Fees. The work does not appear to be appellate in nature. As such, the court will not deduct from the attorneys' fees award for work completed by Heller Ehrman.
6. Miscellaneous Work
EID asserts that numerous tasks for which TBI billed should not be included in the award of attorneys' fees. The court agrees TBI should not recover attorneys' fees related to the following tasks: (1) completing media-related work ($655.50); (2) updating box-indexes ($2,681.00); (3) taking depositions for an unrelated matter ($576.00); (4) creating settlement and appeal strategies ($1,380.00); (5) working on strategies related to trial/verdict/juror comments ($355.00); and (6) preparing documents for offsite storage ($99.00). Accordingly, the court reduces the award in the amount of $5,746.50.
B. Final Calculation of Attorneys' Fees Award
For the reasons explained above, the following amount is awarded as attorneys' fees: Amount Requested: Deductions: Final Award:
$228,531.00 $13,860.00 Work completed by Mr. Owens. $28,878.50 Inefficiency in preparing motions for attorneys fees. $5,746.50 Miscellaneous. = $180,046.00III. Conclusion
For the reasons discussed herein, the court orders as follows:
1. EID's Rule 50(b) Motion regarding TBI's damages is DENIED.
2. TBI's Supplemental Motion for Attorneys' Fees is GRANTED in the amount of $180,046.00.
IT IS SO ORDERED.