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Sanders v. Farina

United States District Court, E.D. Virginia, Alexandria Division

April 21, 2016

DALE EDWIN SANDERS, Plaintiff,
v.
STEPHEN FARINA, Defendant.

MEMORANDUM OPINION

T. S. Ellis, United States District Judge.

At issue in this now-remanded matter are (i) the pro se defendant's objection to the United States magistrate judge's Order requiring defendant to pay plaintiff $3, 325.75 in actual expenses, including attorney's fees pursuant to 28 U.S.C. § 1447(c), [1] and (ii) the pro se defendant's motion for a thirty day extension to file an appeal. The matter has been fully briefed, and is now ripe for disposition.

I.

Plaintiff is an attorney residing in the District of Columbia. Defendant is a resident of Virginia. Their dispute arises out of a legal services agreement entered into on January 23, 2013, in which plaintiff agreed to represent defendant in a legal action against defendant's employer for alleged violations of the District of Columbia Human Rights Act, D.C. Code § 2-1402.21.

On August 19, 2013, plaintiff filed suit against defendant in the Circuit Court for the City of Alexandria, Virginia ("Circuit Court") alleging that defendant breached the legal services agreement by failing to pay plaintiff for legal services rendered and costs advanced. On February 26, 2014, with the trial in the Circuit Court imminent, the pro se defendant removed this breach- of-contract action to federal court on the basis of diversity jurisdiction. Plaintiff promptly filed a motion to remand the action to the Circuit Court on the grounds that (i) defendant's status as a Virginia resident precluded removal to a federal court in Virginia; and (ii) defendant's removal action was untimely. By Order dated March 14, 2014, plaintiffs motion to remand was granted on the ground that pursuant to 28 U.S.C. § 1441(b)(2), the case was not removable because defendant was sued in Virginia, defendant's state of residence.[2] Sanders v. Farina, No. l:14-cv-214 (March 3, 2014) (Order) (Doc. 12).[3]

Thereafter, on September 12, 2014, the day before trial was scheduled to commence in the Circuit Court, defendant once again removed this action to federal court. Importantly, between the issuance of the first Order of remand and the second removal action, there was no material change of circumstance. Plaintiff promptly filed a second motion to remand, and on the eve of the hearing on that motion, defendant filed for Chapter 7 bankruptcy protection. Defendant then argued that as a result of the bankruptcy filing, plaintiffs motion to remand could not be heard in federal district court. On November 18, 2014, an Order issued rejecting defendant's argument that the bankruptcy proceeding barred a ruling on plaintiffs second motion to remand and granting that motion. Sanders v. Farina, No. l:14-cv-1214 (Nov. 18, 2014) (Order) (Doc. 11). After plaintiff filed a motion to dismiss the bankruptcy case in order to allow the parties to resolve their breach-of-contract dispute, and that motion was granted by Order dated December 3, 2015, plaintiff filed a motion dated December 22, 2015, for attorney's fees with respect to defendant's second improper removal to federal court on the basis of (i) § 1447(c), and alternatively, (ii) Rule 11, Fed. R. Civ. P.

In the course of oral argument on plaintiffs motion for attorney's fees before the magistrate judge, defendant argued that an award of attorney's fees stemming from the second removal action was proper because it was the second of two removal attempts, both with no basis in law. Specifically, defendant's first removal action, which was untimely, was based on a theory of removal clearly barred by § 1441(b)(2), and defendant's second removal action was based on a purported right to a jury trial. A party's claim to a right to a jury trial in a state law contract dispute is not a basis for removal to federal court, and defendant's claim to the contrary is frivolous. Moreover, as the magistrate judge made clear, prior to the second removal action, the Circuit Court judge had ruled that defendant was not entitled to a jury trial because defendant had waived that right. Mot. for Attorney's Fees Hr'g Tr., at 13-14 (Jan. 22, 2016). Nonetheless, defendant proceeded to file a second removal action in federal court. Id.[4] On this basis, the magistrate judge concluded that it was appropriate to award plaintiff attorney's fees related to the second improper removal action pursuant to 28 U.S.C.§ 1447(c), which leaves fee award determinations to judicial discretion.[5] Id. at 21. Accordingly, on January 22, 2016, the magistrate judge issued an Order granting plaintiffs motion for attorney's fees with respect to the second removal action. Sanders v. Farina, No. l:14-cv-1214 (Jan. 22, 2016) (Order) (Doc. 19).

Thereafter, defendant filed an objection to the Order awarding plaintiffs motion for attorney's fees, and on February 17, 2016, an Order issued overruling defendant's objection and adopting the magistrate judge's ruling awarding attorney's fees pursuant to 28 U.S.C. § 1447(c). Sanders v. Farina, No. l:14-cv-1214 (Feb. 17, 2016) (Order) (Doc. 24). The Order also remanded the matter to the magistrate judge "for a prompt hearing on the appropriate amount of attorney's fees to be awarded and for entry of a final order." Id.

Accordingly, plaintiff filed a motion to determine the proper amount of attorney's fees to be awarded, and a hearing was scheduled for April 1, 2016. Prior to the hearing, defendant filed (i) a motion to reconsider the award of actual expenses, including attorney's fees, on the ground that under Rule 54(d)(2)(B)(i), Fed. R. Civ. P., plaintiffs motion for these expenses was untimely, and (ii) a motion for disclosure of any relevant fee agreement pursuant to Rule 54(d)(2)(B)(iv), which states that a party must "disclose, if the Court so orders, the terms of any agreement about fees for the services for which the claim is made."

Thus, on April 1, 2016, the parties appeared before the magistrate judge for oral argument regarding each of the pending motions. During the course of oral argument, the magistrate judge made clear that the central issue that remained to be resolved was whether the amount of actual expenses, including attorney's fees, that plaintiff sought to recover was reasonable and in accordance with § 1447(c). Mot. for Attorney's Fees Hr'g Tr., at 6-7 (April 1, 2016). In this regard, plaintiff contended that attorney's fees for the 21.06 hours claimed should be awarded at a rate of $350/hour, whereas defendant contended that attorney's fee for those hours should be awarded at a rate of $150/hour, based on the hourly rate plaintiff had previously charged defendant for legal services. Id. at 4. Ultimately, the magistrate judge concluded that it was appropriate to award attorney's fees at the $150/hour rate, in part because during oral argument, plaintiffs counsel agreed to "live with it." Id. at 18. The magistrate judge also found it appropriate to award plaintiff $166.75 in other expenses to reimburse plaintiff for the cost of a deposition transcription. Id. at 18-19. Accordingly, an Order issued granting in part and denying in part plaintiffs motion for attorney's fees and costs pursuant to § 1447(c), and directing defendant to reimburse plaintiff for attorney's fees in the amount of $3, 159.00 and costs in the amount of $166.75 . The Order also denied (i) defendant's motion to reconsider the award of attorney's fees pursuant to Rule 54(d)(2)(B)(i), and (ii) defendant's motion for disclosure of a fee agreement pursuant to Rule 54(d)(2)(B)(iv). Thereafter, defendant filed an objection to the magistrate judge's April 1, 2016 Order.

II.

The focus of defendant's objection to the magistrate judge's April 1, 2016 Order is not the amount of attorney's fees awarded, but instead whether it is appropriate here to award any amount of actual expenses, including attorney's fees, pursuant to § 1447(c). In other words, defendant objects to the magistrate judge's denial of his motion for reconsideration of the initial January 22, 2016 award of actual expenses, including attorney's fees, pursuant to § 1447(c). As already noted, defendant previously objected to this ruling, and that objection was overruled by Order dated February 17, 2016. Sanders v. Farina, No. l:14-cv-1214 (Feb. 17, 2016) (Order) (Doc. 24).

As elucidated in the February 17, 2016 Order, an award of actual expenses, including attorney's fees, pursuant to § 1447(c) is appropriate here because defendant's sole basis for his second removal action was the fatally flawed theory-with no basis in law-that he could remove the case on a purported right to a jury trial. As already noted, a party's claim to a right to a jury trial in a state law contract dispute is not a basis for removal to federal court, and defendant's claim to the contrary is frivolous. Moreover, prior to defendant's second removal action, the Circuit Court judge had ruled that defendant was not entitled to a jury trial because defendant had waived that right on three separate occasions. See Id. Nonetheless, defendant proceeded to file a second removal action in federal court. Thus, defendant's decision to remove the case on the basis of a purported jury trial right not only had no basis in law, it also demonstrates that defendant disregarded the Circuit Court's clear and repeated rulings that defendant had already waived his right to a jury trial. Accordingly, an award of attorney's fees related to the second improper removal action is appropriate here pursuant to § 1447(c), which leaves fee award determinations to judicial discretion.

Importantly, however, defendant's motion for reconsideration contains a new argument, which defendant failed to raise on his initial objection to the magistrate judge's award of actual expenses, including attorney's fees, pursuant § 1447(c). Specifically, defendant contends that plaintiffs § 1447(c) motion was untimely on the ground that under Rule 54(d)(2)(B)(i), "[u]nless otherwise provided by statute or order of the court, " a party must file a motion for attorney's fees "no later than 14 days after the entry of judgment." Id. In this regard, defendant contends that the November 18, 2014 Order remanding the case for the second time constitutes a judgment, and ...


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