Hawaiian Airlines v. PL Dufay Aviation Mgmt. LLC

• Decision Date: 31 August 2020
• Docket Number: CIV. NO. 20-00036 SOM-RT
• Parties: HAWAIIAN AIRLINES, INC., Plaintiff, v. PL DUFAY AVIATION MANAGEMENT LLC, PETER L. DUFAY, Defendants.
• Court: U.S. District Court — District of Hawaii

HAWAIIAN AIRLINES, INC., Plaintiff,
v.
PL DUFAY AVIATION MANAGEMENT LLC, PETER L. DUFAY, Defendants.

CIV. NO. 20-00036 SOM-RT

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII

August 31, 2020

FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART HAWAIIAN AIRLINES, INC.'S MOTION FOR ATTORNEYS' FEES AND COSTS

Before the Court is Plaintiff Hawaiian Airlines, Inc.'s ("Plaintiff") Motion for Attorneys' Fees and Costs Pursuant to HRS § 607-14 and Federal Rules of Civil Procedure Rule 54 (ECF No. 20), filed on June 1, 2020, and Plaintiff's Errata to the Motion (ECF No. 22), filed on June 8, 2020 (collectively "Motion"). Plaintiff claims it is entitled to its reasonable fees of $40,409.50 and costs of $1,022.80. The Court elects to decide the Motion without a hearing pursuant to Rule 7.1(c) of the Local Rules of Practice for the United States District Court for the District of Hawaii.

After careful review of the Motion, record in this case, and applicable law, the Court FINDS and RECOMMENDS that the Motion be GRANTED IN PART and DENIED IN PART. The Court FINDS and RECOMMENDS that Plaintiff be awarded a total of $31,219.00 in attorneys' fees for 112.7 hours or work performed and $1,022.80 in

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costs. The Court RECOMMENDS that out of the 140 hours requested, 27.3 hours should be DENIED.

BACKGROUND

Plaintiff commenced this action on January 24, 2020 by filing its Complaint against Defendants PL Dufay Aviation Management LLC ("Defendant PL Dufay") and Peter L. Dufay (collectively "Defendants"). ECF No. 1. In its Complaint, Plaintiff alleged that Defendants misappropriated payments made by third-party sports teams for charter flight services by Plaintiff and brokered by Defendants. Plaintiff alleged five counts against Defendants—Count I: Breach of Contract; Count II: Negligence; Count III: Conversion; Count IV: Intentional/Negligent Misrepresentation; and Count V: Unjust Enrichment. Id.

Plaintiff properly served each Defendant a copy of the Complaint and Summons by process server on February 13, 2020. ECF Nos. 7 & 8. Defendants failed to answer or respond to Plaintiff's Complaint. On March 6, 2020, Plaintiff requested for an entry of default. ECF No. 9. The Clerk entered an entry of default on March 9, 2020. ECF No. 11. On April 8, 2020, Plaintiff filed a Motion for Default Judgment Against Defendants PL Dufay Aviation Management LLC and Peter Dufay ("Motion for Default Judgment"). ECF NO. 13. Defendants again failed to respond or defend. Nevertheless, Plaintiff filed a Reply on May 7, 2020. ECF No. 16. The Motion for Default Judgment came on for a telephonic hearing on May 21, 2020. ECF No. 19. Defendants did not appear. Id. During the hearing, the Court found that default judgment should be granted and awarded Plaintiff its reasonable attorneys' fees and costs (ECF No. 19), and issued its findings and

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recommendation on May 22, 2020 (ECF No. 18). On June 8, 2020, the district judge issued its Order Adopting Magistrate Judge's Findings and Recommendation to Grant Plaintiff's Motion for Default Judgment. ECF No. 21.

On June 1, 2020, Plaintiff filed its Motion for Attorneys' Fees and Costs. ECF No. 20. On June 8, 2020, Plaintiff filed an Errata to its Motion for Attorneys' Fees and Costs to correct miscalculations. ECF No. 22. Default Judgment was entered in favor of Plaintiff against Defendants in the amount of $1,926,695.00 on August 14, 2020. ECF No. 23.

DISCUSSION

The Court has subject matter jurisdiction over Plaintiff's claim pursuant to diversity jurisdiction under 28 U.S.C. § 1332. A federal court sitting in diversity applies state law to determine whether Plaintiff is the prevailing party entitled to attorneys' fees and costs. Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 883 (9th Cir. 2000). In this case, Hawaii law is applicable. Under Hawaii law, attorneys' fees cannot be awarded as damages or costs unless provided by statute, stipulation, or agreement. Stanford Carr Dev. Corp. v. Unity House, Inc., 111 Hawai'i 286, 305, 141 P.3d 459, 478 (2006) (citing Weinberg v. Mauch, 78 Hawai'i 40, 53, 890 P.2d 277, 290 (1995)). Plaintiff seeks an award pursuant to Haw. Rev. Stat. § 607-14, which states in relevant part:

In all the courts, in all actions in the nature of assumpsit and in all actions on a promissory note or other contract in writing that provides for an attorney's fee, there shall be taxed as attorneys' fees, to be paid by the losing party and to be included in the sum for which execution may issue, a fee that the court determines to be reasonable; provided that the attorney representing the prevailing party shall submit to the court an affidavit stating the amount of time the attorney spent on the action and the amount of time the attorney is likely to spend to obtain a final written judgment, or, if the fee is not based

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on an hourly rate, the amount of the agreed upon fee. The court shall then tax attorneys' fees, which the court determines to be reasonable, to be paid by the losing party; provided that this amount shall not exceed twenty-five per cent of the judgment.

Id. To award reasonable attorneys' fees under Haw. Rev. Stat. § 607-14, the Court must determine whether (1) the moving party is the prevailing party; (2) a promissory note or contract provides for attorneys' fees in writing or the action is in the nature of an assumpsit; (3) the hourly rate and fees requested are reasonable; (4) the requested costs are reasonable; and (5) the fees do not exceed twenty-five (25) percent of the judgment.

A. Prevailing Party

Plaintiff must be the prevailing party to be entitled to its reasonable attorneys' fees under Haw. Rev. Stat. § 607-14. "[I]n general, a party in whose favor judgment is rendered by the district court is the prevailing party in that court . . . " MFD Partners v. Murphy, 9 Haw. App. 509, 514, 850 P.2d 713, 716 (1992) (citation omitted). The judgment need not result from a ruling on the merits. Ranger Ins. Co. v. Hinshaw, 103 Hawai'i 26, 31, 79 P.3d 119, 124 (2003) (quoting Wong v. Takeuchi, 88 Hawai'i 46, 49, 961 P.2d 611, 614 (1998)). In this case, default judgment was entered in Plaintiff's favor against Defendants on August 14, 2020 (ECF No. 23). As such, Plaintiff is the prevailing party in this case.

B. Statutory and/or Contractual Provision for Attorneys' Fees

Haw. Rev. Stat. § 607-14 requires that the action be in the nature of assumpsit, on a promissory note, or on a written contract providing for attorneys' fees. In this case, Plaintiff is entitled to attorneys' fees under Haw. Rev. Stat. § 607-14 because the parties

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entered into written contracts that provide for it and this case is in the nature of assumpsit.

1. Written Contracts Provide for Plaintiff's Attorneys' Fees and Costs

This case stems from Defendants' breach of two contracts, each of which included a clause providing that the prevailing party in an action to compel compliance with the contract was entitled to its reasonable attorneys' fees and costs. The first contract is the 2018 Aircraft Charter Agreement between Plaintiff and Defendant PL Dufay to organize, market, and promote private charter services for the Oakland Raiders from August 17, 2018 to December 31, 2018 ("Raiders Contract"). The Raiders Contract includes a provision for the payment of reasonable attorneys' fees and costs. ECF No. 13-5 § 8.10. The Raiders Contract provides in pertinent part:

In the event of any action or proceeding to compel compliance with, or with respect to any breach of, the Agreement, the prevailing party shall be entitled to recover all reasonable costs and reasonable expenses of such action or proceeding including, without limitation, its reasonable attorneys' fees and costs incurred in connection therewith regardless of whether any formal legal action is commenced or whether such fees and costs are incurred at or in connection with trial or appellate proceedings.

Id.

The parties also entered into a Master Charter Agreement, effective June 26, 2019 ("2019 Master Charter Agreement"). ECF No. 13-6 at § 6.10. Pursuant to the 2019 Master Charter Agreement, the parties entered into a Charter Flight Contract (ECF No. 13-7) relating to the Seahawks ("Seahawks Contract"). The 2019 Master Charter Agreement also provides for attorneys' fees and costs and uses the exact same language as in the Raiders Contract. ECF No. 13-6 at § 6.10. Accordingly, Plaintiff, as the

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prevailing party, may seek its reasonable attorneys' fees and costs under Haw. Rev. Stat. § 607-14.

2. In the Nature of an Assumpsit

"Assumpsit is a common law form of action which allows for the recovery of damages for non-performance of a contract, either express or implied, written or verbal, as well as quasi contractual obligations." 808 Dev., LLC v. Murakami, 111 Hawai'i 349, 366, 141 P.3d 996, 1013 (2006) (citing Blair v. Ing, 96 Hawai'i 327, 332, 31 P.3d 184, 189 (2001)). "Whether 'assumpsit' exists so as to trigger HRS § 607-14 depends upon the 'essential character of the underlying action in the trial court.'" Kamalu v. Paren, Inc., 110 Hawai'i 269, 275, 132 P.3d 378, 384 (2006) (citing Leslie v. Estate of Tavares, 93 Hawai'i 1, 4, 994 P.2d 1047, 1050-51 (2000)). "The character of the action should be determined from the facts and issues raised in the complaint, the nature of the entire grievance, and the relief sought." Blair, 96 Hawai'i at 332, 31 P.3d at 189 (citing Helfand v. Gerson, 105 F.3d 530, 537 (9th Cir. 1997)).

"In deciding whether to award fees under HRS § 607-14, the court must determine the nature of the lawsuit where both assumpsit and non-assumpsit claims are asserted in an action." TSA Intern. Ltd. V. Shimizu Corp., 92 Hawai'i 243, 264, 990 P.2d 713, 734 (1999) (citing Schulz v. Honsador, 67 Haw. 433, 436, 690 P.2d 279, 282 (1984)). The Court shall address each of Plaintiff's claims.

a. Count I: Breach of Contract

Plaintiff's breach of contract claim is in the nature of assumpsit for purposes of Haw. Rev. Stat. §...