Phila. Indem. Ins. Co. v. Ohana Control Sys.
| Decision Date | 30 September 2020 |
| Docket Number | CIV. NO. 17-00435 SOM-RT |
| Parties | PHILADELPHIA INDEMNITY INSURANCE COMPANY, A PENNSYLVANIA CORPORATION; Plaintiff, v. OHANA CONTROL SYSTEMS, INC., A HAWAII CORPORATION; AMIR BOROCHOV, LINDA KINJO, Defendants. |
| Court | U.S. District Court — District of Hawaii |
Before the Court is Plaintiff Philadelphia Indemnity Insurance Company's ("Plaintiff") Second Motion for Attorneys' Fees and Related Nontaxable Expenses ("Second Motion for Attorneys' Fees") (ECF No. 299), filed on June 16, 2020, pursuant to Haw. Rev. Stat. § 607-14, Federal Rules of Civil Procedure 54, and Local Rules of Practice for the United States District Court for the District of Hawaii ("Local Rule") 54.2. Plaintiff claims attorneys' fees in the amount of $369,055.00, as of May 29, 2020, plus general excise tax of $17,389.87, plus an estimated additional $10,000.00 in attorneys' fees, for a total of $396,444.87. Philadelphia also seeks related nontaxable expenses in the amount of $367.36. The total attorneys' fees and costs claimed is $396,812.23. The Court elects to decide the Motion without a hearing pursuant to Local Rule 7.1(c).
After careful review of Plaintiff's submissions, the parties' joint statement, the 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 $276,693.98 in attorneys' fees and $367.36 in costs. The Court RECOMMENDS that the Second Motion for Attorneys' Fees be DENIED in all other respects.
On August 29, 2017, Plaintiff filed its Complaint for (1) Breach of Contract of Indemnity; (2) Unjust Enrichment; (3) Quia Timet; and (4) Foreclosure of Security Interest. ECF No. 1. The Complaint alleges that Plaintiff and Defendants Ohana Control Systems, Inc. ("Defendant Ohana"), Amir Borochov, and Linda Kinjo (collectively "Defendants") entered into a General Indemnity Agreement ("GIA"), where Plaintiff, as Surety, issued performance and payment bonds on behalf of Defendant Ohana, as contractor and principal, upon which claims have been filed. Under the GIA, Defendants agreed to indemnify and hold Plaintiff harmless from any loss sustained or incurred as defined in the GIA. Defendants filed their Answer, Counterclaim, and Jury Demand, on October 31, 2017. ECF No. 16.
On November 21, 2017, Plaintiff filed a Motion to Dismiss the Defendants' Counterclaim for failure to state a claim upon which relief can be granted. ECF No. 18. The Court granted the Motion to Dismiss as to all counts of the Defendants'Counterclaim on January 30, 2018. ECF No. 31. On February 21, 2018, Defendants filed their First Amended Counterclaim. ECF No. 37.
Jury trial in this case began on January 14, 2020, and lasted twelve days. ECF No. 226. On February 7, 2020, the Jury returned its verdict. ECF No. 229. Plaintiff prevailed on both its Complaint and defense against Defendants' First Amended Counterclaim. Id.
On February 21, 2020, Plaintiff filed a Motion for Judgment for Specific Performance (ECF No. 231), which the Court granted on March 31, 2020 (ECF No. 246) and entered a First Amended Judgment on April 7, 2020 (ECF No. 250). Defendants were ordered to deposit cash collateral with Plaintiff in the amount of $698,515.00. ECF No. 250. Defendants failed to post collateral with Plaintiff as required, and have filed several post-judgment motions: Motion for New Trial (ECF No. 235); Second Motion for New Trial (ECF No. 262); Defendants' Motion for Extension of Time to Post Collateral (ECF No. 258); and Defendants' Motion for Stay of Proceedings Pending Appeal and Approval of Form of Supersedeas Bond or Other Security (ECF No. 265).
On May 13, 2020, Plaintiff filed its first Motion for Attorneys' Fees and Related Nontaxable Expenses ("First Motion"). ECF No. 281. In its First Motion, Plaintiff alleged that Defendants merely made a generalized objection and failed to identify their specific objections. Out of concern that the parties did not have the opportunity to fully discuss Plaintiff's First Motion, the Court denied the First Motion without prejudice and directed the parties provide information to one another and to meet and confer in ameaningful attempt to resolve any disputes. ECF No. 283. On May 26, 2020, Defendants filed a Notice of Appeal. ECF No. 288.
The parties filed its Joint Statement Re: Plaintiff's Attorney's Fees and Related Nontaxable Expenses on June 9, 2020. ECF No. 298. On June 16, 2020, Plaintiff filed its Second Motion for Attorney's Fees and Related Nontaxable Expenses ("Second Motion for Attorneys' Fees"). ECF No. 299. On June 17, 2020, Plaintiff filed a Notice of Errata to the Second Motion for Attorneys' Fees to include a table of authorities and to correct the first four page numbers in the memorandum to the Second Motion for Attorneys' Fees. ECF No. 300.
On June 24, 2020, Defendants filed their Memorandum in Opposition to the Second Motion for Attorneys' Fees ("Opposition"). ECF No. 301.
On June 27, 2020, Defendants filed their First Amended Notice of Appeal. ECF No. 305.
On July 1, 2020, Plaintiff filed its Reply to Defendants' Memorandum in Opposition to the Second Motion for Attorneys' Fees. ECF No. 306.
This case is currently pending appeal before the United States Court of Appeals for the Ninth Circuit. The appeal, however, has not divested this Court of jurisdiction to review the Second Motion for Attorneys' Fees. The Ninth Circuit has stated that district courts in the Ninth Circuit retain jurisdiction over attorneys' fees motions even if a notice of appeal has been filed. See Leslie v. Grupo ICA, 198 F.3d 1152, 1160 (9th Cir. 1999);Moore v. Permanente Med. Group, Inc., 981 F.2d 443, 445 (9th Cir. 1992); Sam K. ex rel. Diane C. v. Dep't of Educ., Hawaii, Civ. No. 12-00355 ACK, 2013 WL 3071317, at *2 (D. Haw. June 17, 2013), aff'd sub nom. Sam K. ex rel. Diane C. v. Hawaii Dep't of Educ., 788 F.3d 1033 (9th Cir. 2015).
The Court has subject matter jurisdiction over Plaintiff's claim pursuant to diversity jurisdiction pursuant to 28 U.S.C. § 1332. When sitting in diversity, a federal court 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). Thus, Hawaii law is applicable in this case.
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 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 determine whether Plaintiff is entitled to an award of reasonable attorneys' fees under Haw. Rev. Stat. § 607-14, the Court must address whether (1) Plaintiff 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.
Under Local Rule 54.2, Defendants' Opposition was due "within seven (7) days after service of the Fee Motion." LR54.2(g). Plaintiff's Second Motion for Attorneys' Fees was filed on June 16, 2020 (ECF No. 299) and was served on Defendants via electronic service that same day through the Court's CM/ECF system (ECF No. 299-14). Defendants' opposition was due on June 23, 2020. Defendants' Opposition was late: it was filed on June 24, 2020 (ECF No. 301). When this Court denied without prejudice Plaintiff's First Motion for Attorneys' Fees in its Order Denying Without Prejudice Motion for Attorneys' Fees and Related Nontaxable Expenses, the Court reminded Defendants to "timely file their responsive memoranda in accordance with LR54.2(g)." ECF No. 283. Here, Defendants disregarded the Court's instructions and Local Rule 54.2(g). Pursuant to Local Rule 7.2, "[a]ny opposition or reply that is untimely filed may be disregarded by the court or stricken from the record." Accordingly, the Court shall disregard Defendants' untimely Opposition (ECF No. 301).
Only a prevailing party is entitled to its reasonable attorneys' fees under Haw. Rev. Stat. § 607-14. This Court must thus first determine whether Plaintiff is the prevailing party in this case. "[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). In this case, the jury found in favor of Plaintiff and determined that Defendants breached the GIA, including the duty to post collateral, and...
To continue reading
Request your trial