Ross v. Rothstein

• Decision Date: 22 January 2016
• Docket Number: Case No. 13-CV-2101-DDC-TJJ
• Parties: STANTON E. ROSS, Plaintiff/Counter Defendant, v. ADAM ROTHSTEIN, Defendant/Counterclaimant.
• Court: U.S. District Court — District of Kansas

STANTON E. ROSS, Plaintiff/Counter Defendant, v. ADAM ROTHSTEIN, Defendant/Counterclaimant.

Case No. 13-CV-2101-DDC-TJJ

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

January 22, 2016

MEMORANDUM AND ORDER

This matter comes before the Court on: (1) defendant's Motion to Recover Attorney's Fees and Expenses (Doc. 308); (2) defendant's Amended Motion to Recover Attorney's Fees and Expenses (Doc. 316); and (3) defendant's Motion to Dismiss With Prejudice His Counterclaim Counts IV-VII (Doc. 329). The Court first addresses defendant's motion to dismiss, and then considers defendant's motions for attorney's fees and expenses. After considering the parties' arguments, the Court grants defendant's motion to dismiss and grants, in part, defendant's motions for attorney's fees and expenses.

I. Defendant's Motion to Dismiss With Prejudice His Counterclaim Counts IV-VII

The parties are well familiar with the factual and procedural background of this case. The Court briefly summarizes background information that is relevant to the pending motions.

This lawsuit arises out of plaintiff's default on a $210,000 loan that defendant made to plaintiff. The parties filed various claims against one another over the default, and the Court entered two summary judgment orders in this case. Docs. 55-1 & 297. Those orders granted summary judgment against plaintiff on all his claims against defendant and on three of the seven counterclaims that defendant asserted against plaintiff. Id. Afterwards, the only claims remaining were four of defendant's counterclaims against plaintiff.

Following the Court's second summary judgment ruling, defendant voluntarily moved to dismiss his remaining four counterclaims without prejudice and asked the Court to enter a final judgment in the case. Doc. 298. The Court granted defendant's motion to dismiss the counterclaims without prejudice subject to certain conditions (Docs. 304, 309), and entered a final judgment (Doc. 310) that: (1) granted judgment for defendant on all of plaintiff's claims and three of defendant's counterclaims; (2) granted judgment in the amount of $43,151.64, with post-judgment interest accruing at a rate of 18% compounding monthly from the date of the judgment until paid in full; (3) ruled that defendant is entitled to recover his attorney's fees incurred in this matter, under the procedures set forth in Fed. R. Civ. P. 54(d)(2) and D. Kan. Rule 54.2; and (4) ruled that defendant is the prevailing party for purposes of recovering costs under Rule 54(d)(1).

On August 14, 2015, plaintiff filed a Notice of Appeal of the Judgment. Doc. 313. On September 11, 2015, the Tenth Circuit Clerk entered an Order sua sponte advising that the court was considering a summary disposition of the appeal for lack of appellate jurisdiction. Appellate Case No. 15-3186, Doc. 01019489687 (filed Sept. 11, 2015). The Order explained that the Tenth Circuit lacks jurisdiction to consider an appeal of the case to the extent that this Court's dismissal of defendant's remaining counterclaims without prejudice did not render a final judgment. Id. at 2 (citing Heimann v. Snead, 133 F.3d 767, 769 (10th Cir. 1998)). In response to this Order, defendant sought a temporary remand of the case so that he could seek dismissal of his remaining counterclaims with prejudice to ensure that the Court's disposition of the case is final and appealable to the Tenth Circuit. Appellate Case No. 15-3186, Doc. 01019505339 (filedOct. 9, 2015). The Tenth Circuit granted defendant's motion and partially remanded the case to this Court for defendant to seek a dismissal with prejudice of his remaining counterclaims. Appellate Case No. 15-3186, Doc. 01019506264 (filed Oct. 13, 2015).

On October 19, 2015, defendant filed in this Court a Motion to Dismiss Counterclaim Counts IV-VII with Prejudice (Doc. 329). D. Kan. Rules 6.1(d)(2) and 7.1(c) required plaintiff to respond to defendant's motion within 21 days, or by November 9, 2015. The deadline for plaintiff to respond has passed, and plaintiff has not filed any response to defendant's motion to dismiss his remaining counterclaims with prejudice. Under D. Kan. Rule 7.4(b), a party "who fails to file a responsive brief or memorandum within the time specified in D. Kan. Rule 6.1(d) waives the right to later file such brief or memorandum" unless there is a showing of excusable neglect. This rule also provides "[i]f a responsive brief or memorandum is not filed within the D. Kan. Rule 6.1(d) time requirements, the court will consider and decide the motion as an uncontested motion. Ordinarily, the court will grant the motion without further notice." D. Kan. Rule 7.4(b). Because plaintiff has not responded timely to defendant's motion to dismiss his remaining counterclaims with prejudice, the Court may grant the motion as uncontested under D. Kan. Rule 7.4(b). For this reason and the reasons below, the Court grants defendant's motion and dismisses the remaining counterclaims with prejudice.

The Court treats defendant's motion as a motion for relief from a final judgment or order under Fed. R. Civ. P. 60(b)(6). This rule provides: "On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons: . . . (6) any other reason that justifies relief." Id. The decision to grant a Rule 60(b)(6) motion lies within the sound discretion of the trial court. Pierce v. Cook & Co., Inc., 518 F.2d 720, 722 (10th Cir. 1975), cert. denied, 423 U.S. 1079 (1976) (citation omitted); seealso Chief Freight Lines Co. v. Local Union No. 886, 514 F.2d 572, 576-77 (10th Cir. 1975) (holding that a district court did not abuse its discretion by reopening a dismissal without prejudice under Fed. R. Civ. P. 60(b)(6)). A court should construe the rule liberally to serve substantial justice. Pierce, 518 F.2d at 722 (quoting Radack v. Norwegian Am. Line Agency, Inc., 318 F.2d 538, 542 (2d Cir. 1963)).

Here, defendant urges the Court to dismiss his remaining counterclaims with prejudice in the interest of judicial economy. Defendant seeks to eliminate any question about the finality of the Court's judgment and to expedite the ultimate termination of this litigation. The Court, in its discretion, finds that granting defendant's motion under Fed. R. Civ. P. 60(b)(6) serves substantial justice. It provides finality and allows the parties to proceed with an appeal in search of the litigation's ultimate conclusion. Under these circumstances, defendant is entitled to Rule 60(b)(6) relief.

The Court therefore relieves defendant from its previous Orders dismissing Counterclaim Counts IV-VII without prejudice (Docs. 304 & 309) under Fed. R. Civ. P. 60(b)(6), and dismisses Counterclaim Counts IV-VII with prejudice.

II. Defendant's Motions for Attorney's Fees and Expenses

In several earlier rulings, the Court determined that defendant is entitled to recover attorney's fees and expenses under the terms of the written loan agreements between the parties. See Doc. 283 at 39-40 (Magistrate Judge James' report recommending that defendant is entitled to recover his reasonable out-of-pocket costs and expenses as provided by the (Superseding) Pledge Agreement); Doc. 297 at 32-36 (overruling plaintiff's objections and adopting Judge James' recommendation that defendant is entitled to recover attorney's fees under the (Superseding) Pledge Agreement); Doc. 304 at 10-13 (rejecting plaintiff's argument thatdefendant's fee request is untimely and ordering defendant to submit a motion for attorney's fees within 14 days after entry of the final judgment); Doc. 310 at 2 (stating in the Judgment that "defendant Rothstein is entitled to recover his attorney's fees incurred in this matter, under the procedures set forth in Fed. R. Civ. P. 54(d)(2) and D. Kan. Rule 54.2.").

As required by Fed. R. Civ. P. 54(d)(2) and D. Kan. Rule 54.2,¹ defendant filed a Motion to Recover Attorney's Fees and Expenses (Doc. 308) seeking $589,300 in total attorney's fees and expenses, $10,800 in expert witness fees, and $1,600 in travel expenses. Doc. 308 at 1. Defendant stated in the motion that, consistent with D. Kan. Rule 54.2: (a) he would consult with plaintiff and attempt to reach an agreement about the amount of attorney's fees and expenses owed; and (b) if the parties did not reach an agreement, defendant would file a memorandum supporting his request and a Statement of Consultation, as D. Kan. Rule 54.2 requires. Doc. 308 at 1.

The parties could not agree on the attorney's fees and expenses owed to defendant. See Doc. 317-2 (explaining in defendant's Statement of Consultation that the parties engaged in substantive communications about the amount of defendant's claim for fees and expenses but did not reach an agreement). Therefore, on August 17, 2015, defendant filed an Amended Motion to Recover Attorney's Fees and Expenses (Doc. 316) and Memorandum in Support (Doc. 317). In his Amended Motion, defendant requests a total award of $622,139.62 in attorney's fees and legal expenses ($609,739.28 for total attorney's fees and expenses, $10,800 for expert witnessfees, and $1,600.34² for travel expenses). Defendant explained that he filed the amended motion to include the additional attorney's fees incurred in preparing the memorandum and materials filed in support of the fee request. Doc. 316 at 2; see also Case v. Unified Sch. Dist. No. 233, 157 F.3d 1243, 1254 (10th Cir. 1998) (holding that an award of reasonable attorney's fees may include compensation for work performed in preparing and presenting the fee application).

Plaintiff has filed a Memorandum in Opposition to Defendant's Amended Motion to Recover Attorney's Fees and Expenses (Doc. 326). It asserts several arguments against defendant's request for $622,139.62 in attorney's fees and expenses in an action that he characterizes as one seeking to collect on a $210,000 secured loan. Defendant has submitted a Reply (...