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Garden State Auto Park Pontiac GMC Truck, Inc. v. Electronic Data Systems Corp.

December 31, 1998

GARDEN STATE AUTO PARK PONTIAC GMC TRUCK, INC., PLAINTIFF,
v.
ELECTRONIC DATA SYSTEMS CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Cooper, District Judge

FOR PUBLICATION

MEMORANDUM OPINION

This matter comes before the Court on defendant's renewed motion for attorney's fees and costs pursuant to the contract entered between plaintiff Garden State Auto Park ("GSAP") and defendant Electronic Data Systems, Inc. ("EDS"). For the reasons expressed herein, the motion for attorney's fees and costs is granted, and the Court hereby finds that the amount of $57,918.67 represents reasonable fees and costs under the circumstances of this case.

BACKGROUND

The relevant factual background has been set forth in this Court's May 31, 1996 and March 25, 1998 Memoranda and Orders and will not be repeated herein. Briefly, plaintiff GSAP initiated this lawsuit in the Superior Court of New Jersey, Law Division, Monmouth County on May 24, 1994. The Complaint alleged a breach of warranty claim against defendant EDS. EDS removed the case to this Court on June 30, 1994 and filed a counterclaim against GSAP for breach of contract and unjust enrichment.

EDS filed a motion for summary judgment, arguing that plaintiff's breach of warranty claim alleged in the Complaint was barred by the applicable statute of limitations as set forth in the parties' agreement. We granted the motion by Memorandum and Order dated May 31, 1996, finding that the claim against EDS was barred by the one-year statute of limitations provision in the parties' contract dated March 28, 1991.

GSAP filed an appeal of our May 31, 1996 Memorandum and Order to the Court of Appeals on June 24, 1996. On July 1, 1996, EDS filed its first motion for attorney's fees and costs. We denied that motion without prejudice because of the pending appeal before the Third Circuit. (Order dated 3-27-97.) On June 9, 1997, the Court of Appeals dismissed the appeal for want of jurisdiction because of EDS's pending counterclaim before this Court.

EDS filed a second motion for attorney's fees on July 14, 1997, seeking fees and costs incurred prior to May 31, 1996 as well as fees and costs incurred in litigating the appeal of our May 31, 1996 Memorandum and Order. Shortly thereafter, GSAP moved for summary judgment on EDS's counterclaim. Our March 25, 1998 Memorandum and Order: (1) denied GSAP's motion for summary judgment, and (2) granted in part and denied in part EDS's motion for attorney's fees and costs. With respect to EDS's motion for attorney's fees and costs, we held as a matter of law that EDS was a prevailing party under the relevant provision of the contract. *fn1 We further stated, however, that the evidence EDS presented on the issue of reasonableness was insufficient at that juncture. We thus denied EDS's motion in part without prejudice.

EDS filed the instant motion for attorney's fees and costs along with supportive materials on April 14, 1998. The supportive materials include certifications of local and lead counsel stating that the amount of attorney's fees requested is, in their opinion, reasonable under the circumstances. (See Certif. of Jonathan M. Preziosi, Esq. ("Preziosi Certif."); Certif. of Franklin S. Blackstone, Esq. ("Blackstone Certif.").)

EDS requests $153,118.21 in attorney's fees and costs, which reflects $121,530.86 charged by Goodwin and Carlton, P.C. ("G&C") as lead counsel, and $31,587.35 charged by the law firm of Jamieson, Moore, Peskin & Spicer ("JMP&S") as local counsel. Plaintiff argues that the amount of fees and costs sought by EDS is unreasonable under the circumstances.

GSAP does not appear to dispute the reasonableness of the billing rates charged by the attorneys from both firms or the accuracy of the records submitted; rather, it challenges the number of hours billed by the attorneys. *fn2 Plaintiff argues that both law firms spent an inordinate number of hours on discovery matters prior to filing the motion for summary judgment in light of the fact that EDS prevailed on the basis of a relatively straightforward application of the one-year statute of limitations in the agreement. Plaintiff claims in that connection that attorneys for EDS began researching the possibility of asserting a limitations defense as early as November 1994. (See Preziosi Certif., Ex. A, entry dated 11-28-94.) Plaintiff further maintains that it is unfair for EDS to seek reimbursement of costs for travel time for members of G&C to travel to this Court and the Third Circuit when EDS had retained local counsel here in New Jersey. GSAP also contends that any fees relating to work performed by local counsel should be excluded because EDS had lead counsel in Texas. Finally, plaintiff points out that GSAP has included amounts in their fee application which are unrelated to the successful summary judgment motion. (See generally Certif. of Michael D. Schottland, Esq. ¶ 4; Ltr. From Michael D. Schottland, Esq. to Hon. Mary L. Cooper, U.S.D.J. dated 4-30-98; Ltr. from Bettina Munson, Esq. to Hon. Mary L. Cooper, U.S.D.J. dated 11-22-98.)

DISCUSSION

Relying upon the plain language of the 1991 agreement and the meaning of the phrase "prevailing party" under Texas law, this Court held that EDS qualifies as a prevailing party with respect to our dismissal of plaintiff's breach of warranty claim against EDS. Accordingly, our inquiry here is limited to the reasonableness of the amount of fees and costs requested by EDS.

The Court must ascertain the meaning of the term "reasonableness" as it is used in the 1991 agreement. The determination of the meaning of the term "reasonableness" as it is used in the contract is governed by the law of the contract, which is Texas law in this case. We thus find it appropriate to look to Texas law for guidance in determining the reasonableness of the fee request. See Texas Comm. Bank Nat'l Ass'n v. Capital Bankshares, Inc., 907 F.2d 1571, 1575 (5th Cir. 1990) (finding that in diversity cases, state law governs the issue of attorney's fees).

The amount of attorney's fees awarded by the Court must be reasonable under the circumstances of the case and must have some reasonable relationship to the amount in controversy or to the complexity of the issue to be determined. Id.; Jerry Parks Equip. Co. v. Southeast Equip. Co., 817 F.2d 340, 344 (5th Cir. 1987). In determining the reasonableness of the attorney's fees and costs requested, we must review the entire record, consider the evidence, amount in controversy and nature of the case, and use common knowledge and experience as lawyers and judges. See Argonaut Inc. Co. v. ABC Steel Products Co., 582 S.W.2d 883, 889 (Tex. App. Texarkana 1979, writ ref'd n.r.e.) (noting the relevant factors for consideration in the context of appellate review of the trial court's determination); see also Thomas v. Thomas, 917 S.W.2d 425, 436 (Tex. Ct. App. 1996).

The prevailing party should present the testimony of an expert (usually the party's attorney) who can opine as to whether the amount of time and hourly rate is reasonable in light of the unique circumstances presented in the case. Murrco Agency Inc. v. Ryan, 800 S.W.2d 600, 606-07 (Tex. Ct. App. 1990). The attorney may establish the reasonableness of the fee by comparing the hourly rate charged to the prevailing party to the hourly rate in the community for similar legal services. *fn3 Id. Other evidence of reasonableness may be gleaned from a review of the case file and customary rates if no other evidence is available. Flint & Assoc., 739 S.W.2d at 626; see also Thomas, 917 S.W.2d at 436.

The reasonableness of the application and the amount actually awarded are issues which lie within the sound discretion of the trial court. See Smith v. United Nat'l Bank, 966 F.2d 973, 978 (5th Cir. 1992). The amount of attorney's fees and costs awarded is a question of fact, the determination of which requires sufficient evidence on each element. *fn4 Williamsburg Nursing Home, Inc. v. Paramedics, Inc., 460 S.W.2d 168, 169 (Tex. Ct. App. 1970). The party seeking to recover attorney's fees carries the burden of proof on that issue. Smith, 966 F.2d at 978. In order to recover attorney's fees, the prevailing party must provide evidence segregating attorney's fees among the various claims or responsible parties. Stewart Tile Guaranty Co. v. Sterling, 822 S.W.2d 1, 11 (Tex. 1992).

Lead counsel G&C, by and through attorney Franklin Blackstone, Esq., submitted billing records which reflect all work done on EDS's behalf by members of the G&C firm from June 30, 1994 to December 1997. The billing records provide a description of the services rendered, the date the work was performed, the initials of the individual performing the work, the amount of time spent on each project, the amount of money billed to EDS for each project and the hourly billing rate of the individuals who performed work on EDS's behalf. Local counsel JMP&S, by and through attorney Jonathan Preziosi, Esq., also submitted detailed billing records which reflect work performed from June 1994 through December 1997. Similar details are contained in the JMP&S billing records.

The Court rejects at the outset the total amount requested by EDS, as it is clear that the fee application is overinclusive and unreasonable. By our calculations, the total amount requested reflects attorney's fees and costs charged by both firms for all of the legal services performed on EDS's behalf throughout this entire litigation. However, EDS is only the prevailing party with respect to matters relating to its successful summary judgment motion. Accordingly, it cannot recover attorney's fees relating to other matters in this case. See Stewart Tile Guar. Co. v. Sterling, 822 S.W.2d 1, 10 (Tex. 1991); see also Marcotte v. American Motorists, Inc., 709 F.2d 378, 381 (5th Cir. 1989) (applying Texas law). We find that a more reasonable fee award would reflect only those amounts billed for work performed which was related to the dismissal of the Complaint against EDS.

It is clear that the Court must undertake its own independent examination of the billing records and calculate the fee award based upon the relevant factors set forth above. See Thomas, 917 S.W.2d at 436; Argonaut, 582 S.W.2d at 889. In that connection, the Court has carefully scrutinized the attorney certifications, billing records and entries therein, relevant pleadings, discovery which is of record, briefs filed with respect to EDS's motion for summary judgment, and our May 31, 1996 Memorandum and Order granting summary judgment to EDS on GSAP's Complaint. We have also reviewed and considered the relevant factors outlined in the case law as applied to the facts in this case. Specifically we recognize that: (1) the amount in controversy in GSAP's Complaint against EDS was over $600,000; (2) the dismissal of the Complaint occurred at summary judgment, thus obviating a need for a trial on the merits; (3) EDS obtained summary judgment in its favor based upon a relatively straightforward statute of limitations defense arising out of the plain language of the contract; and (4) GSAP filed a premature appeal of our May 31, 1996 decision to the Third Circuit, as there was no disposition of the counterclaim still pending in this Court at that time.

Based upon the descriptions provided by the attorneys, we have not included in our computation any amounts which we consider to have been included in the fee request in error. First, those amounts include any fees paid by EDS for work which was unrelated to EDS's summary judgment motion. *fn5 Second, we have also excluded any amounts which correspond to entries so general in description that we were unable to ascertain whether or not the work was related to EDS's motion for summary judgment. For example, there were many entries which involved general tasks such as review of documents, "action items" or conferences by both law firms. The Court in many instances was unable to determine how such entries related to this case. *fn6 Finally, we disregarded any portion of the records which was faded and illegible because of the poor quality of the photocopying, as we were unable to ascertain whether or not the entries related to EDS's summary judgment motion, appeal or attorney's fee application. *fn7

Our calculation is described in detail below. However, in the interest of clarity, we will provide a summary description of our method at the outset. We have analyzed the fee requests pertaining to each law firm separately, as EDS submitted two separate billing records (one for each law firm). We separated the entries in the billing records into "litigation tasks" so as to analyze the reasonableness of the time spent (and amounts charged) on each phase of the litigation related in any way to EDS's motion for summary judgment. *fn8 These litigation tasks are: (1) discovery-related matters; (2) preparation, research and discussions related to EDS's summary judgment motion; *fn9 (3) litigation and mediation of GSAP's appeal in the Third Circuit; *fn10 and (4) two attorney's fee applications before this Court. *fn11 We then reviewed the work description for each billing entry and paired each entry with its appropriate litigation task (or disregarded the entry if unrelated or indecipherable). The entries under each category were totaled to determine as best as possible the true amount of time spent and fees charged relating to each litigation task. *fn12 We then ...


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