Opinion
Case No. 94-2680-CIV-LENARD/SIMONTON.
July 29, 2004
THIS CAUSE is before the Court on the Report and Recommendation of U.S. Magistrate Judge John J. O'Sullivan (D.E. 548), issued December 15, 2000, and the Report and Recommendation of U.S. Magistrate Judge John J. O'Sullivan (D.E. 575), issued April 22, 2003. The Amlongs filed Objections to the December 15, 2000 Report on January 3, 2001. (D.E. 550.) Defendants filed a Joint Response to the Amlong's Objections on January 31, 2001. (D.E. 553.) The Amlongs filed a Response to the April 22, 2003 Report on May 2, 2003. (D.E. 576.) Defendants filed a Joint Response Memorandum Opposing the Amlong's Response on May 19, 2003. (D.E. 577.) Upon a de novo review of the record, Court finds as follows.
I. Factual and Procedural History
For a detailed history of this action, see the Court's March 21, 2000 Order Sustaining Objections to Magistrate's Report and Recommendation and Granting Defendants' Motions for Fees, Costs and Expenses. (D.E. 475.)
On December 19, 1994, Plaintiff Floride Norelus, a/k/a Lavictore Remy, filed a Complaint alleging that she was sexually harassed, assaulted, battered, and raped by Defendants Asif Jawaid and Raheel Hameed, managers of two Denny's restaurants where she was employed as a bus-person. Plaintiff also named as Defendants Denny's, Inc. ("Denny's") and T.W. Services, Inc., and Meos Corporation ("Meos"), the corporate owners and franchisee of the restaurants, respectively. During discovery, Plaintiff did not substantiate her allegations, but made numerous false and contradictory statements. Plaintiff's attorneys, Karen and William Amlong ("the Amlongs"), never investigated the facts alleged by Plaintiff. On June 14, 1996, five months after Plaintiff gave a deposition replete with contradictions, they served defense counsel with a 63-page Errata Sheet that made 868 changes to Plaintiff's sworn testimony.
On August 1, 1996, Defendants filed a Motion to Dismiss based on Plaintiff's alleged falsities and misrepresentations during the deposition and filing of the 63-page Errata Sheet. On August 26, 1996, the Court denied the Motion to Dismiss but ordered the reopening of Plaintiff's deposition at her expense and directed Plaintiff to file an appendix identifying the errata changes and explaining in detail the reasons for those changes. On October 16, 1996, the Court directed Plaintiff or her attorneys to pay the costs associated with the reopening of the deposition. Neither Plaintiff nor her attorneys complied with either Order. On December 11, 1996, the Court dismissed the case due to Plaintiff's lack of compliance. (D.E. 347.)
On January 10, 1997, Defendants filed motions for attorneys' fees and costs. Defendants sought to recover fees and costs from the Amlongs pursuant to 28 U.S.C. § 1927, due to their failure to investigate Plaintiff's claims and their pursuance of the case after it became obvious that the action was baseless. The Court referred Defendants' motions to Magistrate Judge Bandstra, who conducted an evidentiary hearing and submitted a Report and Recommendation on February 5, 1998. Judge Bandstra found that the case was frivolous but concluded that Plaintiff's counsel should not pay Defendants' fees and costs. Defendants filed Objections to Magistrate Bandstra's Report.
Upon a de novo review of the record, the Court sustained Defendants' Objections and granted Defendants' Motions for Fees, Costs and Expenses, on March 21, 2000. (D.E. 475.) In that Order, the Court found that the Amlongs failed to investigate the facts alleged by Plaintiff and that they were put on notice of the baseless nature of Plaintiff's claims from the time Plaintiff's deposition first revealed inconsistencies and falsehoods requiring a sixty-three page Errata Sheet. The Court held that the preparation and filing of the Errata Sheet demonstrated counsel's bad faith in this litigation and that the number and nature of the Errata Sheet "corrections" amounted to unreasonable, vexatious behavior that multiplied the proceedings. Thus, the Court awarded Defendants' attorneys' fees and costs pursuant to 28 U.S.C. § 1927, 42 U.S.C. § 2000e-5(k), Rule 26, and the Court's inherent power, from the date of the submission of the Errata Sheet on June 20, 1996, to the date of the March 21, 2000 Order. The Court further found the Amlongs to be in violation of the Court's October 16, 1996 Order awarding Defendants the costs and attorneys' fees associated with the reopening of Plaintiff's deposition, and ordered the Amlongs to pay those expenses with back interest of 10% per annum from October 26, 1996 to the date of remittence. The Court directed Defendants' attorneys to provide an accounting of all fees, costs, and expenses incurred between June 20, 1996, and March 21, 2000, and the fees, costs, and expenses associated with the reopening of Plaintiff's deposition, and to submit affidavits from two members of the local bar not associated with this case, attesting to a reasonable fee amount. The Court then referred Defendants' Motions for Attorneys' Fees, Costs and Expenses to Magistrate Turnoff. (D.E. 506.) Upon Judge Turnoff's recusal, the matter was reassigned to Judge O'Sullivan. (D.E. 510.)
On June 30, 2000, the Court denied Plaintiff's Motion for Reconsideration and clarified that Plaintiff Floride Norelus, the law firm of Amlong Amlong, P.A., Karen Amlong, Esq., and William R. Amlong, Esq., were jointly and severally responsible for the fees, costs, and expenses awarded in the March 31, 2000 Order. (D.E. 508.)
II. Magistrate's December 15, 2000 Report and Recommendation
Based upon the parties' written submissions and an oral hearing, held November 2, 2000, Judge O'Sullivan issued a detailed Report and Recommendation (the "R R"). Judge O'Sullivan recommended that general fees and costs be awarded as follows: (1) general attorney fees in the amount of $160,490.00 and general costs in the amount of $6210.87 to Denny's, Inc. and T.W. Services, Inc.; (2) general attorney fees in the amount of $109,254.00 and general costs in the amount of $1550.00 to Meos Corporation; and (3) general attorney fees in the amount of $114,580.50 and general costs in the amount of $10,743.08 to Asif Jawaid. Judge O'Sullivan also recommended that fees, costs and expenses associated with the re-opening of Plaintiff's deposition be awarded as follows: (1) $5,302.50 for attorney fees and $791.67 in costs with back interest of 10% per annum from October 26, 1996 to the date of remittance, to Denny's, Inc. and T.W. Services, Inc.; (2) $7,039.25 for attorney fees and $791.67 in costs with back interest of 10% per annum from October 26, 1996 to the date of remittance, to Meos Corporation; and (3) $3,883.00 for attorney fees and $791.67 in costs with back interest of 10% per annum from October 26, 1996 to the date of remittance, to Asif Jawaid.
III. Amlongs' Objections and Defendants' Joint Response
The Amlongs object to the R R generally on grounds that it lacks specificity. In particular, they argue that Judge O'Sullivan erred by: (1) refusing to compare the amount of hours claimed by Defendants' attorneys with the time spent by the Amlongs; (2) overruling their objection that defense counsel could have spent less time by filing more pleadings jointly; and (3) not making specific findings with respect to defense counsel's exercise of billing judgment. In addition, the Amlongs argue that Mr. Marcus, counsel for Meos, would receive a windfall if his fees were calculated based on the market rate, rather than the lower rate he actually charged Meos. Finally, the Amlongs contend that Defendants are not entitled to payment for the appeal and ancillary insurance litigation.
Defendants argue that the magistrate's recommendations are supported by substantial evidence, including expert testimony whose admissibility has not been challenged by the Amlongs. Defendants' attorneys assert that they worked closely together, to the extent permitted by their clients' interests. They maintain that the time and amounts sought are reasonable and that they exercised billing judgment. Defense counsel concede that they are not entitled to fees associated with the appeal but maintain that they are entitled to fees associated with the ancillary insurance litigation that was precipitated by this matter.
IV. Magistrate's April 22, 2003 Report and Recommendation
On January 6, 2003, the Court referred this case back to the Magistrate Judge for a finding with respect to the Amlongs' ability to pay the fees and costs award recommended by the Magistrate Judge in his December 15, 2000 Report. (D.E. 561.) Based upon the parties' written submissions, the Magistrate Judge found that the Amlongs, jointly and severally, have the ability to pay the recommended award. (D.E. 575.)
V. Amlongs' Response to April 22, 2000 Report and Defendants' Memorandum Opposing the Response
Within the time allowed for the filing of objections to the Magistrate Judge's Report, the Amlongs filed their Response to the April 22, 2003 Report and Recommendation. In the second sentence of the Response, the Amlongs concede the accuracy of the Magistrate Judge's finding in the Report. (D.E. 576 at 1.) In the remainder of the "Response," the Amlongs argue that the Court should reconsider its March 21, 2000 Order Granting Defendants' Motions for Fees, Costs and Expenses based on more recent case law. (D.E. 576 at 1 n. 1.)
In their Joint Response Memorandum, Defendants argue that the Court should adopt the April 22, 2003 Report, as the Amlongs do not object to its findings. Moreover, Defendants assert that the Amlongs motion for reconsideration, contained in their Response to the April 22, 2003 Report, should be denied because it is both untimely and without merit.
VI. Standard of Review
Findings of fact made by a magistrate judge pursuant to the authority of 28 U.S.C. § 636, and which are not objected to by any party, are reviewed by the district court only for clear error. See LeConte v. Dugger, 847 F.2d 745, 749-50 (11th Cir.), cert. denied, 488 U.S. 958 (1988). Where a party files a specific and timely objection to a finding of fact by a magistrate, the district court must conduct a de novo review of the record with regard to that factual issue. Id. All questions of law are subject to de novo review. See id.; Monroe v. Thigpen, 932 F.2d 1437, 1440 (11th Cir. 1991).
VII. Analysis
i. Reasonable Number of Hours Expended
A. December 15, 2000 Report and Recommendation
At the outset, the Court rejects the Amlongs' assertions that Judge O'Sullivan's report lacks the specificity required for the Court to adopt it. To the contrary, Judge O'Sullivan issued a thorough report that addresses the Amlongs' objections in detail. Indeed, the Magistrate agreed with some of the Amlongs' objections, and, for instance, recommended exclusion of certain costs for which Defendants' attorneys had not provided sufficient documentation. (RR at 5-6.)
To the extent that the Amlongs have raised specific objections, the Court reviews them in accordance with ACLU of Ga. v. Barnes, 168 F.3d 423 (11th Cir. 1999).
(a) Relevance of Time Spent by Plaintiffs' Counsel
The Court finds that it was not error for Judge O'Sullivan to reject the Amlongs' proposed comparison between the amount of time spent on the same tasks by Plaintiffs' attorneys and Defendants' attorneys. In reviewing fee awards, the Eleventh Circuit has repeatedly questioned the relevance of the number of hours spent by opposing counsel. Brooks v. Ga. State Bd. of Elections, 997 F.2d 857, 869 (11th Cir. 1993) (finding clear error in the district court's reliance on the rate paid to opposing counsel); Johnson v. Univ. Coll. of Univ. of Ala. in Birmingham, 706 F.2d 1205, (11th Cir. 1983) ("The case may have far greater precedential value to one side than the other.");Harkless v. Sweeny Indep. Sch. Dist., 608 F.2d 594, 598 (5th Cir. 1979) ("That defense counsel spent significantly less time on this case than did counsel for the plaintiffs is irrelevant so long as all compensated work was necessary and performed in an expeditious manner."). Particularly in the present situation, where the Court has already determined that Plaintiff's counsel failed to undertake a reasonable investigation of their client's case, it would be inappropriate to rely upon the time spent by Plaintiff's counsel to determine the reasonableness of time expended by Defendants' counsel.
Similarly, the Court agrees with Judge O'Sullivan that a comparison between the time spent by each of Defendants' attorneys is not appropriate. Defendants' counsel have explained that counsel for Denny's and Jawaid did more work than counsel for Meos because they had superior financial resources. The Amlongs have not contested this assertion, and the Court finds it to be a reasonable explanation.
(b) Joint Filings by Defendants' Attorneys
While it could always be argued that it would be more efficient for co-defendants to submit joint pleadings, it is undisputable that the interests of multiple defendants may diverge in numerous ways. Here, Defendants' attorneys worked together in many instances and submitted a number of joint filings. Nonetheless, the Amlongs assert that needless repetition occurred. The Amlongs argue that Judge O'Sullivan erred by making no findings with regard to the specific differences in Defendants' interests that might have necessitated separate pleadings. However, the Amlongs have not presented, nor has the Court discovered, any binding authority requiring counsel for multiple defendants to submit joint filings. The essential question is whether Defendants' attorneys unreasonably duplicated one another's efforts.
Here, the Amlongs have not demonstrated that it was unreasonable for Defendants' counsel to file four separate fee applications or three separate objections. Plaintiffs' expert opined that defense counsel could have expended less hours preparing for the sanctions hearing if they had coordinated more efficiently. (Test. of James Green, Tr. at 104.) However, Plaintiffs' expert did not dispute that defense counsel actually worked the hours claimed and billed them to the clients, nor did he explain specifically how defense counsel could have reduced the number of hours spent. (Tr. at 119.) The record contains ample evidence to support the reasonableness of the hours expended by defense counsel, including testimony by both of Defendants' experts reflecting upon the remarkably high degree of cooperation among defense counsel. (Test, of Robert Kofman, Tr.at 191-92; Test of Richard Critchlow, Tr. at 209.) Based on the transcript and the record, the Court finds that it was not unreasonable for Defendants' counsel to submit separate filings as they did in this matter.
(c) Billing Judgment
"Billing judgment" means that attorneys must exclude from fee applications "`excessive, redundant, or otherwise unnecessary [hours]' . . . `that would be unreasonable to bill to a client and therefore to one's adversary irrespective of the skill, reputation or experience of counsel.'" ACLU of Ga. v. Barnes, 168 F.3d at 428 (quoting Norman v. Hous. Auth. of Montgomery, 836 F.2d 1292, 1301 (11th Cir. 1988)). The Amlongs urge the Court to reject the R R because Judge O'Sullivan did not make specific findings regarding defense counsel's exercise of billing judgment. They cite the following portion of Barnes:
If fee applicants do not exercise billing judgment, courts are obligated to do
it for them, to cut the amount of hours for which payment is sought, pruning out those that are "excessive, redundant, or otherwise unnecessary." Courts are not authorized to be generous with the money of others, and it is as much the duty of the courts to see that excessive fees and expenses are not awarded as it is to see that an adequate amount is awarded.ACLU of Ga. v. Barnes, 168 F.3d at 428.
Significantly, the Amlongs do not dispute that defense counsel actually charged their clients and received payment for the number of hours claimed in the fee application. Additionally, Defendants have submitted affidavits from knowledgeable attorneys who declare that the number of hours spent and billed to the client in this matter were reasonable and necessary. (Aff. of Jon Stage ¶ 10; Aff. of Averill Marcus ¶ 9; Aff. of Dale Friedman ¶ 9.) Defendants' expert also testified that, in his experience, large corporate defendants are likely to scrutinize their legal bills carefully, and it is highly unlikely that Defendants in this matter would have continued to retain the same counsel for more than six years of litigation if counsel had not exercised an adequate amount of billing judgment. (Test. of Robert Kofman, Tr. at 192.) Plaintiffs' counsel did not cross-examine Mr. Kofman with respect to this statement. Moreover, unlike the party opposing the fee application in Barnes, the Amlongs have not objected to specific tasks which they contend display a lack of billing judgment. 168 F.3d at 428-29 ("The more specific the objections to a fee application are, the more specific the findings and reasons for rejecting those objections can be.") Where defense counsel has billed their clients and been paid for the number of hours requested in the fee application, the Court concludes that Defendants' attorneys exercised adequate billing judgment in this matter.
ii. Reasonable Rate for Mr. Marcus
This Court has already held that Defendants' attorneys are to be awarded fees based on a reasonable hourly rate, rather than the hourly rates actually charged to the clients in this matter. (6/30/00 Order Denying Motion for Reconsideration at 9-10.) As the Court noted, a "reasonable hourly rate" is defined as the "prevailing market rate in the relevant legal community for similar services by lawyers of reasonably comparable skills, experience, and reputation. . . ." Norman, 836 F.2d at 1299. Despite the clarity of the Court's previous ruling and the precedent on this issue, the Amlongs continue to argue that Mr. Marcus should be awarded fees based the rate he actually charged his client, rather than his normal market rate.
Judge O'Sullivan found, and the Amlongs do not dispute, that Mr. Marcus charged the owners of Meos significantly lower hourly rates than he normally charged clients, and that he turned down other work for which he could have received his normal, much higher, billing rate, had he not chosen to continue defending this frivolous lawsuit. (RR at 10.) Thus, Judge O'Sullivan recommends that Mr. Marcus be awarded fees based upon the market value, that is, the normal rate he could have received from other clients. (RR at 12.)
The Amlongs cite a Seventh Circuit case, Barrow v. Falck, 977 F.2d 1100 (7th Cir. 1992), which they claim stands for the proposition that "lawyers should not be paid at a higher rate than what they actually charged their clients." (Obj. at 8.) InBarrow, the plaintiff's lawyer sought $135 per hour, when he conceded that the client paid him between $80 and $110 per hour, his regular rate, and that he had never received more than $120 per hour for his services. 997 F.2d at 1105. The Seventh Circuit rejected the higher fee request:
Perhaps other attorneys in central Illinois have market rates in the range of $135; rates vary with skill and the time a lawyer needs to accomplish a task. But this attorney had a market rate of $110 or less. "[I]t is not the function of judges in fee litigation to determine the equivalent of the medieval just price. It is to determine what the lawyer would receive if he were selling his services in the market rather than being paid by court order." (citation omitted). No need to answer a hypothetical in this case, for we know what counsel did receive by selling his services in the market.977 F.2d at 1105.
The Seventh Circuit's holding in Barrow, while not binding upon this Court, is consistent with Judge O'Sullivan's recommendation. Judge O'Sullivan determined what Mr. Marcus "would receive if he were selling his services in the market. . . ." Id. Unlike the plaintiff's attorney inBarrow, Mr. Marcus does not seek payment at a higher rate than he charged any client. He represented Meos at a reduced hourly rate based upon the limited financial resources of that client. He now requests compensation commensurate with his normal market rate — the rate he would have received from potential clients he was forced to turn down in order to defend Meos against Plaintiff's frivolous litigation. As a lawyer's own market rate is generally a reasonable rate, the Court adopts Judge O'Sullivan's recommendations with regard to the Mr. Marcus's reasonable hourly rate.
iii. Fees Related to Appeal and Ancillary Insurance Litigation
(a) Appeal
Defendants' counsel concede that they are not entitled to fees expended on the appeal of this matter without an order to that effect from the Eleventh Circuit, which they did not obtain before the Amlongs voluntarily dismissed their appeal. Accordingly, the Court declines to adopt Judge O'Sullivan's finding in this regard.
Defendants calculate the amount of fees awarded by Judge O'Sullivan in his Report are as follows: $1618.88 to Denny's; $468.00 to Meos; and $6015.00 to Jawaid. (Defendant's Joint Response to Amlong's Objections at 24 n. 21.)
(b) Ancillary Insurance Litigation
Due to Plaintiff's frivolous prosecution of the case at hand, Defendants' insurance carrier brought a declaratory judgment action against them to determine whether Plaintiff's claims are covered under their policies. The Amlongs argue that Defendants' counsel should not be awarded fees for the insurance litigation because it is separate and distinct from the main civil rights suit. Judge O'Sullivan does not address this argument in his Report and the Amlongs raise it again in their objections to the Report.
Plaintiff's Counsel's Notice of Filing Declarations (D.E. 504) included the Unsworn Declaration of Karen Coolman Amlong Pursuant to 28 U.S.C. § 1746 Opposing Defendants' Request for Attorney's Fees, Costs and Expenses, in which Karen Amlong objects to the inclusion of attorney's fees related to the "declaratory relief actions." She calculates the amount of fees requested by Defendants (and included in Judge O'Sullivan's recommended award amounts) as follows: $4629.50 to Denny's; and $358.00 to Jawaid. (K. Amlong Decl. at 8-10; Attached Chart re: "Dec Action.")
The Court finds that Defendants' fees related to the ancillary insurance litigation were not within the scope or the intent of the Court's Order Granting Defendant's Motions for Fees and Costs. (D.E. 475.) Therefore, the Court declines to adopt Judge O'Sullivan's findings to the extent that the fee awards he recommends include those fees.
B. April 22, 2003 Report and Recommendation
As neither party objects to the Magistrate Judge's findings of fact or conclusions of law, the Court hereby adopts the April 22, 2003 Report and finds that the Amlongs have the ability to pay the attorneys' fees and costs award recommended by the Magistrate Judge in his December 15, 2000 Report.
To the extent that the Amlongs' Response to the Magistrate's April 22, 2003 Report can be considered a Motion for Reconsideration of the Court's March 21, 2000 Order Granting Defendants' Motions for Fees, Costs and Expenses, that motion is denied for the following reasons. On June 30, 2000, the Court denied the Amlongs' Motion for Reconsideration of the March 21, 2000 Order. (D.E. 508.) Thus, the instant motion amounts to a second motion for reconsideration. The Amlongs have not cited and the Court has not found any legal authority allowing a party to make a second motion for reconsideration, where reconsideration previously has been denied. Moreover, the Court finds that the Amlongs' motion is untimely. A motion to alter or amend judgment made pursuant to Rule 59 must be made no later than 10 days after entry of judgment. Fed.R.Civ.P. 59(e). Under Rule 60, a motion for relief from judgment or order must be made within "a reasonable time." Fed.R.Civ.P. 60(b). The Court finds that the instant motion, made more than three years after the Court's original order was issued, was not made within a reasonable time under Rule 60.
The "current" Eleventh Circuit cases the Amlongs are relying on in their motion were decided in 2001. See McMahan v. Toto, 256 F.3d 1120 (11th Cir. 2001); Byrne v. Nexhat, 261 F.3d 1075 (11th Cir. 2001). The only truly recent case they cite is a non-binding Second Circuit case reviewing a district court grant of Rule 11 sanctions. See In re: Pennie and Edmonds, LLP, 323 F.3d 86 (2d Cir. 2003). Sanctions under Rule 11 are not at issue in this case. Thus, the Court finds that a motion for reconsideration based on a change in the law, made two years after that change allegedly occurred, cannot be considered to have been made "within a reasonable time" under Rule 60.
Finally, courts in this district have recognized that Reconsideration is only justified on three major grounds: (1) an intervening change in controlling law; (2) the availability of new evidence; or (3) the need to correct clear error or prevent manifest injustice. In re Managed Care Litig., Nos. MDL 1334, 00-1334-MD-MORENO, 2002 WL 1359734, at *1 (S.D. Fla. 2002) (citing Offices Togolais Des Phosphates v. Mulberry Phosphates, Inc., 62 F. Supp. 2d 1316, 1331 (M.D. Fla. 1999)). The Court finds that the Amlongs have not demonstrated that they are entitled to reconsideration on any of these bases. Therefore, reconsideration is denied.
Accordingly it is
ORDERED AND ADJUDGED that:
1. The Report and Recommendation of U.S. Magistrate Judge John J. O'Sullivan (D.E. 548), issued December 15, 2000, is ADOPTED, in part, and MODIFIED, in part, consistent with this Order.
2. The Amlongs' Objection with respect to the award of attorney fees for the appeal of this matter is SUSTAINED, and the award of attorney's fees recommended by Judge O'Sullivan shall be reduced by the following amounts: $1618.88 to Denny's; $468.00 to Meos; and $6015.00 to Jawaid.
3. The Amlongs' Objection with respect to the award of attorney fees related to the ancillary insurance litigation of this matter is SUSTAINED, and the award of attorney's fees recommended by Judge O'Sullivan shall be further reduced by the following amounts: $4629.50 to Denny's; and $358.00 to Jawaid.
4. The Report and Recommendation of U.S. Magistrate Judge John J. O'Sullivan (D.E. 575), issued April 22, 2003, is ADOPTED.
5. The Amlongs' second motion for reconsideration, made in their Response to the Magistrate Judge's April 22, 2003 Report (D.E. 576), is DENIED.