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Cayne v. Washington Trust Bank

United States District Court, D. Idaho

August 16, 2018

ROBERT CAYNE; RONNIE RIVERA; SEAN RIVERA; KEN McELROY; individually and on behalf of all others similarly situated, Plaintiffs,
WASHINGTON TRUST BANK, a Washington corporation; and WEST SPRAGUE AVENUE HOLDINGS, LLC, a Washington limited liability company, Defendants.


          Ronald E. Bush Chief U.S. Magistrate Judge

         This Court has previously issued its Memorandum Decision and Order re: Defendants' Motion for Attorney Fees and Petition for Costs (Dkt. 492). In that decision, the Court ruled that Defendants were entitled an award of fees and costs in this matter, but it did not rule upon the amount of such an award. The Motion seeks an award of attorney fees and costs incurred over a period of multiple years, involving four different law firms. Having carefully considered the factual record, and otherwise being fully advised, the Court enters the following decision setting the amount of recovery for attorney fees and costs.


         The facts of this case are detailed in multiple decisions issued in the course of the litigation. See, e.g., Dkts. 44, 174, 177, 263, 457. Recounted briefly here are pertinent details of the procedural history and substantive facts that bear upon the Fee Motion. Plaintiffs were members of the “Club at Black Rock” (the “Club”), a golf course and residential resort community located on the shores of Lake Coeur d'Alene, Idaho. Marketed and designed for people of affluence, Plaintiffs each paid a large sum of money as a membership deposit to become members of the Club. In doing so, they entered into Membership Agreements with the Club. Those agreements required payment of a membership deposit but also called for a return of the deposit under certain conditions, which included termination of membership, termination of the Membership Plan, or discontinuance of Club operations.

         A limited liability company owned the Club, which went by the name of The Club at Black Rock, LLC (the “LLC”). Over time, the LLC borrowed more than $12 million from Defendant Washington Trust Bank (“Washington Trust”). The loans making up that debt were secured by various means, including security interests in the real and personal property connected with the Club. When the LLC fell into significant financial difficulty, the LLC and Washington Trust negotiated a work-out agreement, culminating in the execution of an “Agreement for Deed in Lieu of Foreclosure” (the “DIL”). Pursuant to the DIL, Washington Trust released the LLC from all its debts and liabilities in exchange for conveyance of the real and personal property associated with the Club, and it released Marshall Chesrown, the individual primarily responsible for the development of the Club, from any personal liability for the indebtedness.[1]

         In this certified class action lawsuit, Plaintiffs brought claims for breach of contract, misrepresentation/fraud, and a consumer protection act violation, and they sought to recover from Washington Trust the membership deposits they had paid to the Club and other alleged damages. (Dkt. 1-1). This Court granted in part and denied in part Defendants' Motion for Judgment on the Pleadings. (Dkt. 44). Relevant here, the Court ruled that Plaintiffs had stated a plausible claim for relief for breach of contract; however, the Court dismissed, without prejudice, Plaintiffs' claims for misrepresentation/fraud and violation of the Idaho Consumer Protection Act. See Id. After further motion practice, the Court granted in part and denied in part both Plaintiffs' and Defendants' Motions for Summary Judgment. (Dkts. 174, 177.)

         A two-week jury trial followed on the remaining claims, resulting in a verdict in Defendants' favor. The Court entered rulings on Plaintiffs' Motion for Judgment as a Matter of Law and Motion for New Trial (as well as other post-trial motions), following which the Court ruled that Defendants were entitled to recover attorney fees. (Dkt. 492). The decision denied Defendants' request for nontaxable costs. Id. at 12-13. However, the Court did not rule at that time upon the amount of any attorney fee award because of the voluminous record and because of the Court's concern over the potential for duplication of effort, given that Defendants employed four different law firms in the case, including one that was brought into the case only shortly before trial. The Court now issues this Decision setting the amount of the fee award, and the Court's reasoning in support of that award.


         This case sits before this Court under diversity jurisdiction. As such, state law not only determines the right to attorney fees, but also supplies the method of calculating the fees. Mangold v. Cal. Pub. Utils. Comm'n, 67 F.3d 1470, 1478 (9th Cir. 1995). This is because “calculation of the amount of the fee is bound up in the substantive state right.” Id. As discussed in this Court's prior order, Defendants are entitled to attorney fees under Idaho Code § 12-120(3). Thus, the fee award must also be calculated by applying Idaho law.

         Under Idaho law, a prevailing party seeking attorney fees must comply with the requirements set forth in Idaho Rule of Civil Procedure 54 (“I.R.C.P. 54”). Among these is a requirement that any claim for attorney fees “must be supported by an affidavit of the attorney stating the basis and method of computation.” I.R.C.P. 54(e)(5). In considering the request, the Court applies the template of I.R.C.P. 54(e)(3), which provides in pertinent part:

If the court grants attorney fees to a party or parties in a civil action it must consider the following in determining the amount of such fees:
(A) the time and labor required;
(B) the novelty and difficulty of the questions;
(C) the skill requisite to perform the legal service properly and the experience and ability of the attorney in the particular field of law;
(D) the prevailing charges for like work;
(E) whether the fee is fixed or contingent;
(F) the time limitations imposed by the client or the circumstances of the case;
(G) the amount involved and the results obtained; (H) the undesirability of the case;
(I) the nature and length of the professional relationship with the client;
(J) awards in similar cases;
(K) the reasonable cost of automated legal research (Computer Assisted Legal Research), if the court finds it was reasonably necessary in preparing a party's case;
(L) any other factor which the court deems appropriate in the particular case.

         “The court need not specifically address all of the factors contained in I.R.C.P. 54(e)(3) in writing, so long as the record clearly indicates that the court considered them all.” Thomas v. Thomas, 249 P.3d 829, 839 (Idaho 2011).

         Under Idaho law, trial courts awarding attorney fees are entitled to wide discretion. Such discretion includes excluding attorneys' travel time (Smith v. Mitton, 104 P.3d 367, 376 (Idaho 2004)), excluding duplicated effort (Craft Wall of Idaho, Inc. v. Stonebraker, 701 P.2d 324, 326- 327 (Idaho App. 1985)), and excluding excessive time (P.O. Ventures, Inc. v. Loucks Family Irrevocable Trust, 159 P.3d 870, 876 (Idaho 2007)).

         When considering the prevailing charges for like work under I.R.C.P. 54(e)(3)(D), the court considers “the fee rates generally prevailing in the pertinent geographic area.” Lettunich v. Lettunich, 111 P.3d 110, 120 (Idaho 2005). The pertinent geographic area “is the area from which it would be reasonable to obtain counsel.” Lettunich v. Lettunich, 185 P.3d 258, 262-263 (Idaho 2008).

         Finally, “[t]o properly determine reasonableness under Rule 54(e), a court must have sufficient information to consider the relevant factors.” Bailey v. Bailey, 284 P.3d 970, 974 (Idaho 2012). That burden falls upon the party seeking to recover attorney fees, and there is no responsibility on the Court to ferret out or seek to divine the information which might support a claim for attorney fees. Rather, if a prevailing party fails to provide the court with enough information to measure the reasonableness of the requested fees, the court may deny a request for fees. Id. at 975.


         1. In general.

         Defendants have been represented by numerous attorneys associated with four different firms. Defendants seek recovery of fees from the work of nearly all of those lawyers. In total, Defendants request $2, 097, 011.61 in attorney fees for work performed through March 31, 2016.[2]Mem. ISO Defs.' Mot. for Att'y Fees 5 (Dkt. 392-1).[3] Broken down, the amount includes $549, 892.00 in fees for work performed by Dunn & Black, P.S.; $1, 402, 323.65 in fees for work performed by Davis Wright Tremaine LLP; $9, 676.46 for work performed by William Appleton; and $135, 119.50 for work performed by K&L Gates, LLP. Id. at 8.

         The fees requested for each firm's time will be addressed separately. In doing so, the Court has considered carefully and thoroughly each of the factors prescribed in I.R.C.P. 54(e)(3), as to each firm. Important to that analysis is “the amount involved and the results obtained” per I.R.C.P. 54(e)(3)(G). The record before the Court indicates that shortly before trial, Plaintiffs' counsel contended that Plaintiffs' case was worth at least $50, 000, 000 and that, if they prevailed, they would be entitled to an attorney fee award of $7, 000, 000. Childress Aff. Ex. G (Dkt. 392-9). Regardless of whether such amounts were probable, ...

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