United States District Court, E.D. Virginia, Alexandria Division
MEMORANDUM OPINION AND ORDER
BRUCE LEE UNITED STATES DISTRICT JUDGE.
MATTER is before the Court on Defendants Andrew S. Lemer,
Esq. and Gregory B. Walz, Esq.'s Statement of Costs and
Fees (Dkt. No. 99) and Respondent Ernest P. Francis'
Opposition to Defendants' Statement of Costs and Fees
(Dkt. No. 136). This matter concerns the reasonableness of
the attorneys' fees that Defendants seek in connection
with the Court imposing sanctions against Mr. Francis,
pursuant to 28 U.S.C. § 1927, for multiplying the
proceedings unreasonably and vexatiously.
are three issues before the Court. The first issue is whether
the Court lost jurisdiction to award Defendants
attorneys' fees, costs, and expenses, where the Court
dismissed Plaintiffs claims but indicated its intent to
maintain jurisdiction over Plaintiffs' former counsel,
Mr. Francis, to impose sanctions. The Court holds that it has
subject-matter jurisdiction to impose sanctions against Mr.
Francis based on the text of 28 U.S.C. § 1927, the
relevant case law, and the procedural posture of this case.
second issue is whether Defendants reasonably incurred the
attorneys' fees they seek and provided adequate
documentation. The Court finds that Defendants reasonably
incurred the attorneys' fees as a result of Mr.
Francis' misconduct from September 30, 2015 (when Mr.
Francis failed to convey Defendants' settlement offer to
Plaintiff) through February 2016 (when the Court had resolved
substantive motions and the parties completed briefing their
cross-motions for sanctions). However, the Court will reduce
the overall award by $5, 000-from $84, 752 to $79,
752-because Defendants' provided inadequate documentation
for certain fees.
third issue is whether Defendants reasonably incurred the
costs and expenses they seek, and whether Defendants provided
adequate documentation. Because the time for one of
Defendants' attorneys who traveled from outside the state
is compensable, the Court finds that the attorneys' costs
and expenses are compensable under 28 U.S.C. § 1927.
Further, the Court finds that Defendants provided adequate
documentation for the out-of-state attorneys' costs and
reasons stated above and those that follow, the Court will
require Mr. Francis to pay $79, 752.00 to Defendants for the
excess costs, expenses, and attorneys' fees that they
reasonably incurred as a result of Mr. Francis'
Court previously set forth details concerning the factual and
procedural background in the case. (See Dkt. Nos.
113 & 134). This opinion focuses only on those facts
pertinent to the reasonableness of Defendants' costs,
expenses, and attorneys' fees.
Andrew Blowers, through counsel, filed a Complaint against
Defendants Andrew S. Lemer, Esq. and Gregory B. Walz, Esq.
(collectively, "Defendants"), alleging violations
of the Fair Debt Collection Practices Act, 15 U.S.C. §
1692 et seq. (Dkt. No. 1.) Defendants were
represented by John Altmiller and Joshua Morehouse of Pesner
Kawamoto, PLC, and by pro hac vice counsel Manuel
Newburger (collectively, "Defense Counsel").
Complaint in federal court concerned allegations that
Defendants improperly sought to collect a debt in a state
court action. (See Id. ¶¶ 7-9.) On October
9, 2014, Defendants filed suit against Plaintiff in the
Fairfax County Circuit Court to recover a debt of
approximately $40, 000 owed on Plaintiffs credit card.
(Id. ¶¶ 27-28.)
case, Plaintiff filed the Complaint against Defendants on
July 9, 2015. (Dkt. No. 1.) The Complaint alleged that
Plaintiff incurred $50, 000 in actual and statutory damages,
and the allegations primarily stemmed from Defendants'
purported failure to properly serve Plaintiff with a summons
before seeking default judgment in the debt collection
action. (See id.) On December 24, 2015, Defendants
moved for the admission pro hac vice of attorney
Manuel H. Newburger. (Dkt. No. 39 at 1.) Despite Plaintiffs
opposition to the pro hac vice application, the
Court granted Mr. Newburger's pro hac vice
application on December 30, 2015. (Dkt. Nos. 46, 47.) On
January 12, 2016, at Plaintiffs deposition, he agreed to a
settlement agreement in which Plaintiff agreed to dismiss
with prejudice his claims in this Court and his counterclaim
in the Fairfax County Circuit Court case. (See Dkt.
Nos. 56-1, 89-1.) During the deposition hearing, Plaintiff
also discharged Mr. Francis as counsel after learning that
Defendants made an offer of settlement through Mr. Francis,
which he not convey to Plaintiff. (See Dkt. No.
after the deposition, Mr. Francis filed a Motion to Withdraw
as Counsel. (Dkt. No. 56.) In Defendants' response, they
did not challenge the withdrawal as counsel but requested
that the Court retain jurisdiction over Mr. Francis for
alleged attorney misconduct. (Dkt. No. 61.) On January 29,
2016, the Court granted the Motion to Withdraw as Counsel and
retained jurisdiction over Mr. Francis. (Dkt. No. 65.)
Francis previously filed a Motion for Sanctions Under Rule 11
(Dkt. No. 74), in which he asserted that Defendants'
Motion for Sanctions Pursuant to 28 U.S.C. § 1927 (Dkt.
No. 69) is frivolous. On February 19, 2016, the Magistrate
Judge held a two-hour hearing. (See Dkt. No. 97 at 12.) On
August 31, 2016, the Court issued a Memorandum Opinion and
Order adopting the Magistrate Judge's recommendation,
granting Defendants' Motion for Sanctions, and denying
Mr. Francis' Motion for Sanctions. (Dkt. No. 113.)
Defendants requested a total of $89, 177.57 for
attorneys' fees, various expenses, and costs. (See
id.) Based on the calculations provided in the
affidavit of a non-party attorney, Mikhael Charnoff, the
Court awarded Defendants a total $84, 752.00. The Court broke
down that amount as follows:
Fees and Costs
Pesner Kawamoto, PLC (for work performed by
Associate Mr. Morehouse)
(Dkt. No. 113 at 25.)
point, Mr. Francis had not asserted any substantive arguments
about the unreasonableness of the fees, expenses, or costs
sought by Defendants, even though Mr. Francis had months to
make such arguments. Contemporaneous with issuing the
Memorandum Opinion on August 31, 2016, the Court entered the
initial Final Judgment in favor of Defendants and against Mr.
Francis in the amount of $84, 752.00. (Dkt. No. 114.)
September 28, 2016, Mr. Francis moved to vacate the Final
Judgment. (Dkt. No 116.) The Court denied Mr. Francis'
Motion to Vacate based on the ground that the Court erred in
concluding that Plaintiff would have accepted Defendants'
settlement offer in September 2015. However, the Court
granted in part Mr. Francis' Motion to Vacate to provide
an opportunity for Mr. Francis to challenge the
reasonableness of Defendants' attorneys' fees and
costs. On August 4, 2017, Mr. Francis filed his Opposition to
Defendants' Statement of Fees and Costs. (Dkt. No. 136.)
On August 11, 2017, Defendants filed a reply. (Dkt. No. 138.)
Standard of Review
to 28 U.S.C. § 1927,
Any attorney or other person admitted to conduct cases in any
court of the United States or any Territory thereof who so
multiplies the proceedings in any case unreasonably and
vexatiously may be required by the court to satisfy
personally the excess costs, expenses, and attorneys'
fees reasonably incurred because of such conduct.
Fourth Circuit has established a three-step process for
calculating attorneys' fees. McAfee v. Boczar,
738 F.3d 81, 88 (4th Cir. 2013). First, a district court
"must 'determine the lodestar figure by multiplying
the number of reasonable hours expended times a reasonable
rate.'" McAfee, 738 F.3d at 88 (quoting
Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235,
243 (4th Cir. 2009)). Second, "the court must
'subtract fees for hours spent on unsuccessful claims
unrelated to successful ones."' McAfee, 738
F.3d at 88. Third, "the court should award 'some
percentage of the remaining amount, depending on the degree
of success enjoyed by the [litigant].'" Id.
the three major issues before the Court is addressed in turn.
First, the Court holds that it has jurisdiction to impose
sanctions against Mr. Francis pursuant to 28 U.S.C. §
1927. Second, the Court finds that Defendants reasonably
incurred attorneys' fees as a result of Mr. Francis'
misconduct, but the Court will reduce the overall award by
$5, 000 because of inadequate documentation. Third, the Court
finds that Defendants reasonably incurred the costs and
expenses they seek and finds that Defendants provided
adequate documentation for those costs and expenses.
Jurisdiction to Award Attorneys' Fees
Court holds that it continues to have jurisdiction to award
attorneys' fees, costs, and expenses to ...