Carpet Super Mart, Inc. v. Benchmark Int'l Co.
| Decision Date | 05 August 2020 |
| Docket Number | 1:18CV398 |
| Court | U.S. District Court — Middle District of North Carolina |
| Parties | CARPET SUPER MART, INC., ARTHUR C. JORDAN, JR., and JOYCE J. MOBLEY, Plaintiffs, v. BENCHMARK INTERNATIONAL COMPANY SALES SPECIALIST, LLC, DARA SHAREEF, and BRIAN LOCKLEY, Defendants. |
Before the court are Defendants' motions for the award of attorneys' fees under the terms of their contract with Plaintiffs. (Docs. 24, 42.) The first motion seeks attorneys' fees for the trial court action in which Defendants prevailed. (Doc. 24.) The second motion seeks the award of attorneys' fees for defending against Plaintiffs' appeal. (Doc. 42.) For the reasons stated herein, the court finds that both motions should be granted insofar as fees should be awarded, but the court defers its determination of a reasonable fee award pending the process outlined in the conclusion of this opinion.
A lengthy recitation of the facts is not necessary. The court incorporates the factual details from its order dismissing the action. See Carpet Super Mart, Inc. v. Benchmark Int'l Co. Sales Specialist, LLC, No. 1:18CV398, 2019 WL 1244086, at *1 (M.D.N.C. Mar. 18, 2019), aff'd, 789 F. App'x 379 (4th Cir. 2020). Additional relevant factual findings will be addressed as needed in this opinion.
Plaintiff Carpet Super Mart, Inc. ("Carpet Super Mart") is a North Carolina corporation that "was engaged in the business of commercial and residential sales and installation of carpet and flooring products." (First Amended Complaint ("Am. Compl.") (Doc. 21) ¶ 17.) Plaintiffs Arthur C. Jordan, Jr. ("Jordan") and Joyce J. Mobley ("Mobley") were the owners of Carpet Super Mart. (Id. ¶ 18.) Plaintiffs entered into a listing agreement (the "Agreement") with Defendant Benchmark International Company Sales Specialist, LLC ("Benchmark") on May 27, 2014, pursuant to which Benchmark agreed to provide certain services to facilitate the sale of Carpet Super Mart. Defendants Dara Shareef and Brian Lockley are each employed by Benchmark. (Am. Compl. (Doc. 21) ¶¶ 9-10.)
Plaintiffs' written agreement included attached terms and conditions ("Terms and Conditions"). This court previously found that those Terms and Conditions were properly incorporated into the primary contract. Carpet Super Mart, 2019 WL 1244086, at *4. Those Terms and Conditions included an attorneys' fee provision that states:
In the event that either party to this Agreement brings suit to enforce this Agreement, or for damages relating to a breach of this Agreement, the prevailing party shall be entitled to recover from the other, in addition to its damages or other remedy, all costs and reasonable attorney's fees, both at trial and the appellate level.
(Terms & Conditions (Doc. 21-2) ¶ 8(j).)
This diversity action was originally filed in North Carolina state court and subsequently removed to this court. (Doc. 1.) Plaintiffs' Complaint sought a declaratory judgment invalidating and/or altering the written contract. (Complaint ("Compl.") (Doc. 3) ¶¶ 63-68.) Plaintiffs also brought "alternative" claims for Fraud and Misrepresentation, (id. ¶¶ 69-89), Unfair and Deceptive Trade Practices ("UDTPA"), (id. ¶¶ 96-99), and a claim for Civil RICO, (id. ¶¶ 90-95), though they later dismissed that claim in their Amended Complaint, . The RICO claim was withdrawn after Defendants filed their Rule 11 Motion for Sanctions, (Doc.13), though the court declined to "draw any adverse inference" from the timing. Carpet Super Mart, 2019 WL 1244086, at *5 n.6.
This court dismissed Plaintiffs' Amended Complaint in its entirety and with prejudice on March 18, 2019. Id. at *6. Plaintiffs filed an appeal, and the Fourth Circuit subsequently affirmed this court in all respects. See Carpet Super Mart, Inc. v. Benchmark Int'l Co. Sales Specialist, LLC, 789 F. App'x 379, 380 (4th Cir. 2020).
Within fourteen days of this court entering judgment, Defendants filed a motion for trial-level attorneys' fees pursuant to Fed. R. Civ. P. 54(d). (Doc. 24.) Defendants also filed a supporting brief, (Defs. Mem. in Supp. of Rule 54(d) Mot. for Award of Attorneys' Trial Fees ( ) ; Plaintiffs responded, ( ) ; and Defendants replied, Mot. for Trial Fees ( ) (Doc. 30)). Defendants consulted with Plaintiffs as required by Local Rule of Civil Procedure 54.2. (Doc. 37.) The parties were unable to reach an agreement about trial fees; therefore, Defendants filed several sworn declarations and an affidavit to support their requested trial fees. (Docs. 31, 32, 33, 34, 35, 36, 38.) Defendants also fileda supplemental memorandum summarizing the declarations. (Defs.' Mem. Summarizing Trial Fees Declarations ( )
Within fourteen days of the Court of Appeals entering judgment affirming this court's decision, Defendants filed a motion for appellate attorneys' fees pursuant to Fed. R. Civ. P. 54(d). (Doc. 42.) Defendants also filed a supporting brief, (Defs.' Mem. in Supp. of Mot. for Appellate Fees ( ) Plaintiffs moved the court to file a response out of time, (Docs. 46, 47), which this court granted, (Doc. 49). Plaintiffs filed their response, ( ) , and Defendants replied, Mot. for Appeal Fees ( ) (Doc. 48)). Defendants again consulted with Plaintiffs, pursuant to Local Rule of Civil Procedure 54.2. (Doc. 50.) The parties were unable to reach an agreement about appellate fees, so Defendants filed several sworn declarations and an affidavit to support their requested appellate fees. (Docs. 51, 52, 53, 54, 55, 56.) Defendants also filed a supplemental memorandum summarizing the evidence regarding appellate fees. (Defs.' Mem. Summarizing Appellate Fees Declarations ( )
Plaintiffs have not requested a hearing, have not presented their own evidence, and have not contested any specific billing entry offered by Defendants. Both motions are ripe for ruling.
Defendants argue that they are entitled to attorneys' fees pursuant to the Terms and Conditions of the Agreement. (Terms & Conditions (Doc. 21-2) ¶ 8(j).) Defendants argue they are entitled to fees, both for trial and appellate work, regardless of whether North Carolina or Florida law applies. (Defs.' Trial Br. (Doc. 25) at 10 n.4; Defs.' Appeal Br. (Doc. 43) at 5.)1
Plaintiffs' response to the trial fees motion raises two issues. First, Plaintiffs argue that the fee estimate provided by Defendants was four-to-five times higher than Plaintiffs' fees, suggesting unreasonableness. (Pls.' Trial Response (Doc. 28) at 3.) Second, Plaintiffs argue that, since Defendants' Motion for Sanctions, (Doc. 13), was denied, Defendants should not recover fees for work on that specific motion, (id. at 3-4).
In its response to Defendants' motion for attorneys' fees following the appeal, Plaintiffs repeated, almost verbatim, the first two arguments, and then added two more. (Pls.' AppealResp. (Doc. 45) at 4.) Plaintiffs now argue that the underlying action, a declaratory judgment action, was not a suit related to enforcement of the contract. (Id.) Therefore, they argue, the Agreement's attorneys' fee provision does not apply. Plaintiffs further argue that no North Carolina court has construed N.C. Gen. Stat. § 6-21.6 to apply to declaratory judgment actions, and that such a construction would be barred since the statute does not expressly include declaratory judgment actions.2 (Id.)
The court addresses these arguments in two sections. First, the court considers whether fees should be awarded. Next, the court addresses reasonable fees. Finding that fees should be awarded, but unable to determine if the requested fees arereasonable, the court defers its determination of a reasonable fee award and provides additional directions to the parties.3
The court finds that trial and appellate attorneys' fees should be awarded pursuant to the fee provision in the Agreement's Terms and Conditions.
"Attorney's fees mandated by state statute are available when a federal court sits in diversity." Cotton v. Slone, 4 F.3d 176, 180 (2d Cir. 1993) (citing Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 259 n.31 (1975)); see Legacy Data Access, Inc. v. Cadrillion, LLC, 889 F.3d 158, 169 (4th Cir. 2018) (). Fees may be awarded based on state law in diversity actionsbecause "[t]he right to an award of attorneys' fees is considered a matter of substantive law." Astanza Design, LLC v. Giemme Stile, S.P.A., 220 F. Supp. 3d 641, 651 (M.D.N.C. 2016) (citing Alyeska Pipeline, 421 U.S. at 259 n.31). In North Carolina,4 "[i]f a business contract governed by the laws of this State contains a reciprocal attorneys' fees provision, the court . . . may award reasonable attorneys' fees in accordance withthe terms of the business contract." N.C. Gen. Stat. § 6-21.6(c).5
The court begins with Plaintiffs' argument that the underlying action is not covered by the fee provision in the Agreement.
"When a contract is in writing and free from any ambiguity which would require resort to extrinsic evidence, or the consideration of disputed fact, the intention of the parties is a question of law." Lane v. Scarborough, 284 N.C. 407, 410, 200 S.E.2d 622, 624 (1973). Here, Plaintiffs do not point to any...
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