United States District Court, E.D. Virginia, Alexandria Division
Corrected September 4, 2015.
[Copyrighted Material Omitted]
Route Triple Seven Limited Partnership, Plaintiff, Counter
Defendant: Frank Douglas Ross, LEAD ATTORNEY, Odin, Feldman &
Pittleman, PC, Reston, VA.
Total Hockey, Inc., a Missouri corporation, Defendant,
Counter Claimant: John Edward Thomas, Jr., McGuireWoods LLP
(McLean), McLean, VA; David L. Greenspan, McGuireWoods LLP,
Ellis, III, United States District Judge.
issue post-judgment and appeal in this landlord-tenant case
is the tenant's claim for attorney's fees pursuant to
a lease provision that granted attorney's fees to the
" substantially prevailing party" in any suit
brought to enforce the lease. The landlord plaintiff brought
such a suit, which, in the end, was resolved by the entry of
summary judgment in favor of the defendant tenant on all of
the landlord's claims and in favor of the landlord on the
tenant's single counterclaim. The landlord's appeal
failed as the Court of Appeals for the Fourth Circuit
affirmed the grant of summary judgment by unpublished
opinion. Route Triple Seven Limited P'ship v. Total
Hockey Inc., 607 F. App'x. 299 (4th Cir. 2015)
(unpublished). Now at bar is the tenant's fee claim,
which the landlord disputes, raising the following questions:
(1) whether the tenant's fee claim is (i) barred by Rule
9(g), Fed. R. Civ. P., or (ii) permitted by Rule 54(c), Fed.
R. Civ. P., where, as here, the tenant did not specifically
request attorney's fees in its answer and counterclaim
but merely relies on the contractual provision granting
attorney's fees to a " substantially prevailing
(2) whether the tenant is a " substantially prevailing
party" within the meaning of the lease where, as here,
the tenant prevailed on all of the landlord's claims, but
not on the tenant's single counterclaim;
(3) whether the lease provision limiting the tenant's
remedies to termination of the lease bars the tenant from
recovering attorney's fees; and
(4) assuming the tenant is entitled to an award of reasonable
attorney's fees, whether the fees claimed are reasonable
in the circumstances.
parties have fully briefed and argued these questions, this
fee dispute is now ripe for disposition.
facts pertinent to the fee dispute may be succinctly
summarized. The landlord plaintiff is Route Triple
Seven Limited Partnership, a Virginia limited partnership
composed of eight partners, three of whom are Virginia
attorneys. The tenant defendant is Total Hockey, Inc., a
Missouri corporation engaged in the business of selling
February 26, 2013, defendant entered into a lease ("
Lease" ) with plaintiff for commercial property located
in Loudoun County " [f]or the operation of a typical
Tenant store selling hockey and/or lacrosse equipment,
jerseys and other related merchandise" and " for no
other use or purpose whatsoever." Lease § 201(c).
The Lease provided for a ten-year initial term with options
for renewals thereafter. The Lease further provided that, for
the first five years, the minimum rent would be $20 per
square foot of the premises with certain additional rent
payments specified in the Lease. A rent deposit of one
month's minimum rent and tenant's pro rata share of
additional rent was also required. Additionally, the Lease
required defendant (1) to be qualified to do business in
Virginia at the time of the Lease execution and (2) to
deliver to plaintiff plans and specifications showing in
reasonable detail any alterations that defendant proposed to
make to the premises within 30 days of the Lease execution.
The Lease also stated that the " Anticipated Delivery
Date" of the premises was June 1, 2013. Lease §
201(e). In the event the Premises were not delivered within
15 days of June 1, 2013, defendant, as its sole remedy, was
allowed to (i) open for business by September 1, 2013, and
pay all minimum rent and all additional rent; (ii) open for
business after September 1, 2013, pay only minimum rent
through January 2014, and pay minimum rent and additional
rent beginning on February 1, 2014; or (iii) open for
business on February 1, 2014, and pay both minimum and
time the Lease was executed, the defendant was not qualified
to do business in Virginia. Shortly thereafter, plaintiff
advised defendant of this shortcoming, and defendant then
promptly applied for and obtained a Certificate to transact
business in Virginia. Defendant had also failed to pay the
requisite rent deposit at the time of the Lease execution,
but promptly paid this rent deposit within 30 days of the
Lease execution. Additionally, defendant sent plaintiff plans
and specifications within 30 days of the Lease execution as
was required, but it did not send ductwork plans until nearly
two months after the Lease execution. Notably, plaintiff did
not seek to terminate the Lease on any of these grounds.
failed to deliver the premises to defendant within fifteen
days of June 1, 2013, as the Lease required. As a result,
defendant, in accordance with the Lease, elected to open for
business after September 1, 2013, and to pay only minimum
rent through January 2014, but to begin paying minimum rent
and the additional rent payments beginning in February 2014.
January 13, 2014, plaintiff filed the instant action,
alleging three breaches of the Lease:
(1) that defendant was not qualified to do business in
Virginia at the time the Lease was executed;
(2) that defendant did not submit a rent deposit upon the
Lease execution; and
(3) that defendant did not deliver plans and specifications
showing in reasonable detail any proposed alterations to the
premises within 30 days of the Lease execution.
complaint further alleged that defendant's exercise of
the Lease remedy in response to plaintiff's failure to
deliver the premises on time violated Virginia public policy.
February 11, 2014, defendant filed an answer denying that any
material breach occurred and a counterclaim further alleging
that plaintiff failed to provide defendant with an
Improvement Allowance as required by the Lease. Thereafter,
on August 8, 2014, defendant moved for summary judgment on
all of plaintiff's claims.
That same day, plaintiff filed a cross motion seeking summary
judgment on its breach-of-contract claims and also a motion
seeking summary judgment on defendant's counterclaim.
Following full briefing and oral argument, an Order issued on
September 5, 2014, (i) granting defendant's motion for
summary judgment on all of plaintiff's claims; (ii)
denying plaintiff's cross-motion for summary judgment on
plaintiff's claims; and (iii) granting plaintiff's
motion for summary judgment on defendant's single
first two breach-of-contract claims--(i) defendant's
failure to obtain a certificate of authority to transact
business in Virginia and (ii) defendant's brief delay in
paying the rent deposit--were not material because defendant
promptly cured the breaches. And with respect to the third
alleged breach-of-contract claim, no breach in fact occurred
because the defendant timely delivered to defendant the
requisite plans and specifications. Defendant was also
awarded summary judgment on plaintiff's claim that
defendant's exercise of its remedies under the Lease
violated Virginia public policy, given that (i) the parties
were sophisticated, (ii) plaintiff drafted the lease and
hence the remedies clause, and (iii) the remedies clause in
no way violated any Virginia public policy. In sum, defendant
was granted summary judgment on all of plaintiff's claims
and plaintiff's cross-motion for summary judgment on its
claims was denied. Plaintiff's sole victory occurred with
respect to defendant's single counterclaim; the Lease
clearly barred defendant from seeking money damages for the
breach of the Lease alleged in the counterclaim. An Order
issued on September 5, 2014, memorializing these rulings.
See Route Triple Seven Limited P 'ship v. Total
Hockey, Inc., 1:14cv30 (Sept. 5, 2014) (Order) (Doc.
thereafter, defendant filed a motion for attorney's fees
pursuant to the Lease provision entitling the "
substantially prevailing party" to attorney's fees
in any suit to enforce the Lease. When plaintiff appealed
the adverse summary judgment rulings, an order issued on
October 9, 2014, deferring a ruling on defendant's motion
pending final resolution of the appeal and giving defendant
leave to renew its motion for attorney's fees, if
necessary, within 14 days of the appeal's resolution.
Route Triple Seven Limited P'ship, No. 1:14cv30
(Oct. 14, 2014) (Order) (Doc. 43). Defendant did not
cross-appeal the summary judgment ruling on its counterclaim.
22, 2015, in an unpublished per curiam decision, the
Fourth Circuit affirmed the entry of summary judgment in
favor of defendant in all respects. Route Triple Seven
Limited P'ship, 607 F. App'x. 299 (4th Cir.
2015). Defendant then promptly renewed its motion for
of this fee claim dispute properly begins with
plaintiff's threshold argument that because the
claim was not specifically pled, Rule 9(g), Fed. R. Civ. P.,
now bars that claim. Defendant counters, arguing that Rule
9(g) does not apply because the motion for attorney's
fees is not a claim for special damages, and therefore Rule
54, Fed. R. Civ. P., controls and permits defendant's fee
claim. Although it may appear that Rule 9(g) and Rule 54
conflict, a close examination of both Rules reveals that no
conflict exists, and in the circumstances at bar, Rule 54
controls and Rule 9(g) does not operate.
9(g) states that " [i]f an item of special damage is
claimed, it must be specifically pled." And it is true
that the Fourth Circuit has held that " attorneys'
fees are items of special damage for Rule 9(g)
purposes." Atlantic Purchasers, Inc. v. Aircraft
Sales, Inc., 705 F.2d 712, 716 n.4 (4th Cir. 1983). From
these two propositions, plaintiff completes the syllogism,
arguing that defendant's fee claim is barred because it
was not specifically pled in defendant's answer. But
there is a flaw in plaintiff's syllogism; defendant's
claim for attorney's fees is not an item of special
damages; it is not an element of any claim but simply a
contract entitlement for a " substantially prevailing
party." In these circumstances, Rule 9(g) does not
apply. Put differently, attorney's fees are special
damages to which Rule 9(g) applies only when the
substantive law requires that the prevailing party prove
attorney's fees as an element of damages; Rule 9(g) does
not apply where, as here, attorney's fees are sought as a
recoverable cost pursuant to a contract.
authority is consistent with this result. As plaintiff points
out, the Fourth Circuit, in Atlantic Purchasers,
concluded that attorney's fees are special damages for
purposes of Rule 9(g). Atlantic Purchasers, 705 F.2d
at 716 n.4. Significantly, however, the court did so in the
context of an action in which the prevailing party sought
attorney's fees pursuant to the North Carolina ...