United States District Court, E.D. Virginia, Alexandria Division
ZOROASTRIAN CENTER AND DARB-E-MEHR OF Metropolitan Washington, D.C., Plaintiff,
Rustam Guiv Foundation, et al., Defendants.
O'GRADY, UNITED STATES DISTRICT JUDGE
matter comes before the Court on remand from the Fourth
Circuit Court of Appeals, Dkt. No. 140. The Fourth Circuit
remanded the case only with respect to the calculation of
attorneys' fees. For the reasons discussed below, the
Court ORDERS Defendants to submit an appropriate downward
adjustment of attorneys' fees, and supporting evidence as
appropriate, within twenty-one (21) days of the issuance of
this Order. Plaintiff shall have fourteen (14) days to
respond to Defendants' filing if it so chooses.
dispute arose out of a failed effort to construct a
Zoroastrian worship center in Fairfax, Virginia. Plaintiff,
Zoroastrian Center and Darb-E-Mehr of Metroplitan Washington
D.C. entered into a ninety-nine year lease with Defendants
Rustam Guiv Foundation of New York, the land owner, and other
trustee defendants. Following difficulties in the
relationship, Defendants terminated the lease. Article XIII
of the parties' lease states that "[i]n the event of
any litigation between the parties hereto, the prevailing
party in such litigation shall be entitled to recover from
the other party its costs, expenses and reasonable
attorney's fees therein incurred." See Dkt.
No. 1-1, Exh. C at 10-11. Plaintiff sued in Virginia state
court for a declaratory judgment with respect to their rights
under the lease. Defendants removed the case to federal court
and filed three counterclaims against Plaintiff.
Court granted Defendants' Motion for Summary Judgment on
two of the three counterclaims on May 12, 2014. Dkt. No. 81.
One of the counterclaims, for slander of title, was dismissed
with prejudice. Id. The Court subsequently ruled
that Defendants were the "prevailing parties" in
the dispute and granted in part Defendants' Motion for
Attorney's Fees on July 22, 2014 awarding $99, 717.85 in
fees and no additional costs or expenses. Dkt. No. 93.
Plaintiff timely appealed to the Fourth Circuit on August 19,
2015, with respect to the jurisdiction of this Court to hear
the case, the merits of the decision, and the award of fees.
Dkt. No. 136. The Fourth Circuit issued its judgment on May
4, 2016 affirming the decision of the Court with respect to
the jurisdictional and merits findings, but reversing and
vacating the Court's attorney's fees for failure to
disambiguate fees awarded for successful claims from those of
Defendants' counterclaims upon which they were not
successful. See Dkt. Nos. 139, 140. The Court
promptly ordered a new hearing on the issue of attorney's
fees for June 24, 2016 at which time the Court took under
advisement the parties' arguments and requested further
briefing on the right to attorney's fees incurred on
appeal. Dkt. No. 152. The parties have filed the requested
Fourth Circuit observed, "Virginia supplies the
substantive law here since the district court was sitting in
diversity." Dkt. No. 140, at 13 (citing Gen. Tech.
Applications, Inc. v. Exro Ltda, 388 F.3d 114, 118 (4th
Cir. 2004)). Pursuant to Virginia law, "parties are free
to draft and adopt contractual provisions shifting the
responsibility for attorneys' fees to the losing party in
a contract dispute." Ulloa v. QSP, Inc., 271
Va. 72, 81 (2006). If, as in this case, the contract provides
for an award of fees to the prevailing party, that party
bears 'the burden of establishing, as an element of its
prima facie case, that the attorneys' fees it seeks are
reasonable in relation to the results obtained and were
necessary." Chawla v. BurgerBusters, Inc., 255
Va. 616, 624 (1998). "[U]nder contractual [fee-shifting]
provisions a party is not entitled to recover fees for work
performed on unsuccessful claims." Ulloa, 271
Va. at 82.
parties dispute whether Defendants have set forth a prima
facie case for attorneys' fees which deducts the amount
of labor devoted to the slander of title claim. The Court
finds that Defendants' deductions, and the methodology
upon which they are based, are inadequate and inappropriate
to the case at bar.
attempt to comply with the decision of the Court of Appeals,
Defendants request that the Court reduce the original
attorney's fees award of $99, 717.85 to $95, 763.49.
Defendants achieve this downward adjustment by subtracting a
percentage of fees for each unsuccessful claim based on the
number of pages in the parties' written submissions that
dealt with the issues upon which the opposing party
prevailed. Defendants aver that of the 1428 pages of
pleadings, only 24 pages concerned the unsuccessful claim for
slander of title. By this calculation, the briefing pages
devoted to the slander of title claim amount to only 1.68% of
the Defendants' briefing. Rounding to the nearest whole
number, Defendants argue that the award "should not be
less than 98% of the Court's prior award, or $95,
763.49." This method for calculating attorneys'
fees was adopted by a court in this district in JTH Tax
Inc. v. H&R Block Eastern Tax Services, Inc., 245
F.Supp.2d 756 (2002).
rejects the use of the page number calculation for
attorneys' fees. First, Plaintiff rejects the approach as
a matter of law, because the attorneys' fees calculation
in this case is governed by Virginia law which
"steadfastly reject[s]" the Federal Court's
approach to awards of attorneys' fees on federal claims.
Ulloa, 271 Va. at 82. JTH Tax and the case
upon which it is based, both concerned attorneys' fees
for federal claims adjudicated pursuant to federal attorney
fee rules which permit recovery for fees for unsuccessful
claims where the entire case involves a common core of fact
or related legal theories. See JTH Tax Inc., 245
F.Supp. at 757; see also Sands, Taylor & Wood Co. v.
Quaker Oats Co., No. 84 C 8075, 1993 WL 204092, at *1
(N.D. 111. June 8, 1993), affd in part, rev'd in part
sub nom. Sands, Taylor & Wood v. Quaker Oats Co., 34
F.3d 1340 (7th Cir. 1994), on reh'g in part, 44
F.3d 579 (7th Cir. 1995). Thus, the court in JTH Tax
did not analyze the page count calculation as prima facie
evidence of the reasonableness of the fees request. See
Id. Rather, the court used its equitable discretion to
reduce the attorneys' fees as a percentage of the page
count devoted to the successful claims. See Id. The
Virginia standard is not one of equitable discretion but
rather a prima facie evidentiary burden on the moving party.
also objects to the page number calculation, as a matter of
fact, because it does not accurately reflect the labor
assignable to each portion of a legal brief. First, Plaintiff
improperly includes pages of attachments and exhibits, in
addition to legal arguments, when calculating the percentage
of the briefing associated with each argument.
Plaintiff calculates that 47 pages of Defendant's 103
page Memorandum in Support of their Motion for Summary
Judgment consisted of attachments or exhibits; 75 pages of
its 105 page Opposition to Plaintiffs Motion for Summary
Judgment consisted of attachments or exhibits. Furthermore,
Defendants may well have researched issues extensively but
not featured those issues prominently in the briefing.
Plaintiff contends that 'there simply is no correlation
between the number of pages of a filing and the
attorneys' fees devoted to the exercise. A very lengthy
pleading may well require very little attorney effort, while
a very short pleading could require significant effort."
Dkt. No. 154 at 4.
Court agrees with the Plaintiff that the page number
calculation is an inappropriate method for apportioning
attorneys' fees in this case as a standard of law and as
a matter of fact. Virginia's standard for awarding
attorneys' fees is materially different from the federal
standard applied in JTH Tax. Virginia law imposes
the burden on the moving party to establish that fees are
reasonable and necessary, whereas the court in JTH
Tax employed the page calculation method as part of its
equitable power to reduce a fee award. See Chawla,
255 Va. at 624; JTH Tax Inc., 245 F.Supp. at 757. No
court applying the Virginia rule has employed the methodology
in JTH Tax and the Court will not adopt it in this
account of the page numbers devoted to the unsuccessful claim
as a percentage of all of the documents submitted is, as a
matter of fact, a poor approximation for the actual amount of
labor exerted on each subject. Defendants assume that all
attachments and exhibits should count as pages devoted to
successful claims but they have provided no evidence to
overcome the reasonable assumption that the supporting
documents may be of greater importance to the unsuccessful as
opposed to the successful claims. Thus it is inappropriate to
automatically discount those pages from the unsuccessful
claims. Even if the Court could determine which of these
pages should count towards the ...