Seven Signatures Gen. P'ship v. Irongate Azrep BW LLC, Civil No. 11–00500 JMS/RLP.

• Decision Date: 09 May 2012
• Docket Number: Civil No. 11–00500 JMS/RLP.
• Citation: 871 F.Supp.2d 1040
• Parties: SEVEN SIGNATURES GENERAL PARTNERSHIP, Plaintiff, v. IRONGATE AZREP BW LLC, Defendants.
• Court: U.S. District Court — District of Hawaii

871 F.Supp.2d 1040

SEVEN SIGNATURES GENERAL PARTNERSHIP, Plaintiff,

v.IRONGATE AZREP BW LLC, Defendants.

Civil No. 11–00500 JMS/RLP.

United States District Court, D. Hawai‘i.

May 9, 2012.

Connie Chow, Rosemary T. Fazio, Ashford & Wriston, Honolulu, HI, for Plaintiff.

Andrew James Lautenbach, Terence J. O'Toole, Starn O'Toole Marcus & Fisher, Honolulu, HI, for Defendants.

ORDER ADOPTING MAGISTRATE JUDGE'S FINDINGS AND RECOMMENDATION

J. MICHAEL SEABRIGHT, District Judge.

Findings and Recommendation having been filed and served on all parties on April 19, 2012, and no objections having been filed by any party,

IT IS HEREBY ORDERED AND ADJUDGED that, pursuant to Title 28, United States Code, Section 636(b)(1)(C) and Local Rule 74.2, the “Second Amended Findings and Recommendations Regarding Respondent Irongate Azrep BW LLC, Bill of Costs and Motion for an Award of Attorneys' Fees and Non–Taxable Costs” are adopted as the opinion and order of this Court.

IT IS SO ORDERED.

SECOND AMENDED ¹ FINDINGS AND RECOMMENDATION REGARDING RESPONDENT IRONGATE AZREP BW LLC'S BILL OF COSTS AND MOTION FOR AN AWARD OF ATTORNEYS' FEES AND NON–TAXABLE COSTS²

RICHARD L. PUGLISI, United States Magistrate Judge.

Two matters are before the Court: (1) Irongate's Bill of Costs; and (2) Irongate's Motion for an Award of Attorneys' Fees and Non-taxable Costs (“Motion”). Irongate requests $641.65 in costs, $44,426.34 in attorneys' fees, and $75.17 in nontaxable costs as the “prevailing party” pursuant to the Court's Order (1) Denying Seven Signatures General Partnership's Motion to Compel Arbitration; and (2) Granting Respondent Irongate Azrep BW LLP's Motion to Dismiss Petition for Order Compelling Mediation/Arbitration, or, in the Alternative, for Summary Judgment, filed on January 18, 2012, 2012 WL 162290 (“January 18 Order”). See Docket No. 25. The Court found these matters suitable for disposition without a hearing pursuant to Local Rule 7.2(d) of the Local Rules of Practice for the United States District Court for the District of Hawaii. See Docket No. 29. After careful consideration of the Bill of Costs, the Motion, the supporting and opposing memoranda, declarations, and exhibits attached thereto, and the record established in this action, the Court FINDS AND RECOMMENDS that Irongate's Bill of Costs be GRANTED IN PART AND DENIED IN PART and its Motion be GRANTED IN PART AND DENIED IN PART. The Court RECOMMENDS that Irongate be awarded $482.93 in costs, $25,400.51 in attorneys' fees, and $67.01 in non-taxable costs, for a total award of $25,950.45.

BACKGROUND

The parties and the Court are familiar with the factual and procedural background of this case, which are discussed in detail in the Court's January 18 Order. The Court will only address the background relevant to the Bill of Costs and Motion.

Seven Signatures General Partnership (“Seven Signatures”) filed a Petition to compel Irongate to mediate or arbitrate a dispute regarding the enforcement of the Sales Contract executed by the parties on November 10, 2006 (“Sales Contract”). Docket No. 1, Ex. 1. As the court stated in its January 18 Order, resolution of that issue implicated two different agreements between the parties: (1) the Sales Contract; and (2) the Master Settlement Agreement (“MSA”). Jan. 18 Order at 2, 8. The Sales Contract required arbitration of disputes; the MSA did not. Id. at 16. In its Petition and motion to compel, Seven Signatures asserted that the Sales Contract controlled and thus the parties were required to arbitrate their dispute. Id. at 16–17. Irongate opposed the motion to compel and filed a motion to dismiss or in the alternative for summary judgment as to the issues raised in the Petition arguing that the MSA controlled and arbitration was not required. Id. The court examined both agreements and concluded that the MSA controlled any dispute regarding Irongate's termination of the Sales Contract. Jan. 18 Order at 29. Accordingly, the court held that any dispute regarding Irongate's termination is not subject to arbitration. Id. at 28–29. The court denied Seven Signature's motion to compel and granted Irongate's motion for summary judgment. Id. at 29. The Clerk of Court filed a Judgment in a Civil Case, and the case was dismissed. See Docket No. 26. The Bill of Costs and Motion followed.

ANALYSIS

I. Bill of Costs

Rule 54(d)(1) of the Federal Rules of Civil Procedure provides that costs “should be allowed to the prevailing party.” Fed.R.Civ.P. 54(d)(1). Under Local Rule 54.2(a), “the prevailing party in whose favor judgment is entered” is the party entitled to taxable costs. LR 54.2(a). Here, Irongate prevailed on its motion for summary judgment, and judgment was issued in its favor. See Docket Nos. 25, 26. Accordingly, Irongate is the “prevailing party” and is entitled to its costs under Rule 54(d)(1). Rule 54 creates a strong presumption in favor of awarding costs to the prevailing party. See Miles v. Cal., 320 F.3d 986, 988 (9th Cir.2003). To overcome this presumption, the losing party must “establish a reason to deny costs.” Dawson v. City of Seattle, 435 F.3d 1054, 1070 (9th Cir.2006).

Here, Irongate seek $641.65 in costs: filing fees of $350.00 and photocopy costs of $291.65. Bill of Costs, Docket No. 28. To support the requested filing fees, Irongate attached a receipt reflecting the cost. See Ex. B to Aff. of Andrew Lautenbach submitted in support of Bill of Costs (“Lautenbach Aff.”). The Court finds that these costs are taxable.

To support the requested photocopy costs, Irongate submitted a table showing: the date each document was copied; a description of each document copied; the number of copies made; the number of pages in each document; and the total number of pages copied as required by Local Rule 54.2(f)(4). Ex. A to Lautenbach Aff. Irongate requests (1) $0.15 per page for regular copies and (2) $1.00 per page for color copies. Lautenbach Aff. ¶ 3. First, Irongate requests costs for 1171 pages of regular copies at $0.15 per page. Id. Based on the table provided, it appears that 569 pages of regular copies requested were copies for “Defendants' file.” See Ex. A to Lautenbach Aff. Local Rule 54.2(f)(4) specifically states that “[ t]he cost of copies obtained for the use and/or convenience of the party seeking recovery and its counsel is not taxable.” LR 54.2(f)(4). The cost for these 569 pages is not taxable. Irongate is only entitled to costs for 602 pages of regular copies at $0.15 per page ($90.30). Second, Irongate requests costs for 116 pages of color copies at $1.00 per page. Lautenbach Aff. ¶ 3. Irongate was required by the court to submit color copies of its supplemental exhibits. See Docket No. 24. However, the $1.00 per page requested by Irongate is not reasonable. Local Rule 54.2(f)(4) provides that the practice of this court is to allow $0.15 per page in copying costs. LR 54.2(f)(4). Although it is reasonable to expect that the cost of color copies is more than regular copies, Irongate provides no support for its requested $1.00 per page. Seven Signatures contacted a commercial copier and was quoted a price of $0.49 per page for color copies. Decl. of Connie C. Chow submitted in support of Seven Signatures' Objection to Irongate's Request for Taxation of Cost ¶ 4. The Court finds that $0.49 per page for color copies is reasonable. Also, as noted above, Irongate is not allowed costs for copies made for its files. See LR 54.2(f)(4). Accordingly, the Court finds that Irongate is entitled to costs for 87 pages of color copies at $0.49 per page ($42.63). In total, the Court RECOMMENDS that the costs be taxed against Seven Signatures and in favor of Irongate in the amount of $482.93.

II. Attorneys' Fees

In diversity cases, the Court must apply state law in determining whether the prevailing party is entitled to attorneys' fees. Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 883 (9th Cir.2000); See Notice of Removal ¶¶ 3–6 (asserting jurisdiction under 28 U.S.C. § 1332). Under Hawaii law, “[o]rdinarily, attorneys' fees cannot be awarded as damages or costs unless so provided by statute, stipulation, or agreement.” Stanford Carr Dev. Corp. v. Unity House, Inc., 111 Hawai'i 286, 141 P.3d 459, 478 (Haw.2006) (citing Weinberg v. Mauch, 78 Hawai'i 40, 890 P.2d 277, 290 (Haw.1995)). Here, Irongate seeks an award of fees under Hawaii Revised Statutes section 607–14. Section 607–14 provides that attorneys' fees shall be awarded “in all actions on a ... contract in writing that provides for an attorney's fee.” Haw.Rev.Stat. § 607–14; see also Sheehan v. Centex Homes, Civil No. 10–00695 SOM–RLP, 853 F.Supp.2d 1031, 2011 WL 3702671 (D.Haw. July 27, 2011) (awarding attorneys' fees under section 607–14 to the defendant who prevailed on a motion to compel arbitration in an action under a sales contract that provided for an award of attorneys' fees). Section 607–14 also provides that such fees shall “not exceed twenty-five per cent of the judgment.” Haw.Rev.Stat. § 607–14. To award attorneys' fees under 607–14, the court must determine whether: (A) the action is on a contract in writing that provides for attorneys' fees; (B) Irongate is the prevailing party; (C) the fees requested are reasonable; and (D) the fees do not exceed twenty-five percent of the judgment.

A. Action on a Contract that Provides for Attorneys' Fees

Irongate asserts that it is entitled to fees because this action was on a contract that provides for attorneys' fees. Mem. in Supp. of Mot. at 4–7. Specifically, Irongate asserts this action involved the Sales Contract and the MSA and that both contracts provide for an award of attorneys' fees. Id.

1. Sales Contract

Irongate argues that the Sales Contract provides for an award of attorneys' fees. Id. at 6. In support of its contention, Irongate points to the following provision:

D(39)f. NO JUDICIAL INTERVENTION. THE PARTY BRINGING ANY LITIGATION NOT PERMITTED UNDER THESE PROCEDURES SHALL BE RESPONSIBLE FOR ALL...