Trujillo v. Banco Cent. Del Ecuador

• Decision Date: 01 November 2002
• Docket Number: No. 98-0373-CIV-KING.,98-0373-CIV-KING.
• Citation: 229 F.Supp.2d 1369
• Parties: Leonidas Ortega TRUJILLO, Jaime Ortega Trujillo, and Luis Alberto Ortega Trujillo, Plaintiffs, v. BANCO CENTRAL DEL ECUADOR, an agency of the Government of Ecuador, Augusto de la Torre, and Conover & Company Communications, Inc., Defendants.
• Court: U.S. District Court — Southern District of Florida

229 F.Supp.2d 1369

Leonidas Ortega TRUJILLO, Jaime Ortega Trujillo, and Luis Alberto Ortega Trujillo, Plaintiffs, v. BANCO CENTRAL DEL ECUADOR, an agency of the Government of Ecuador, Augusto de la Torre, and Conover & Company Communications, Inc., Defendants.

No. 98-0373-CIV-KING.

United States District Court, S.D. Florida. Miami Division.

November 1, 2002.

Steven E.M. Hartz, Esq., Akerman, Senterfitt & Eidson, P.A., Miami, Counsel for Banco Central del Ecuador.

Mark P. Schnapp, Esq., Greenberg Traurig et al., Miami, Counsel for the Ortegas.

Thomas R. Julin, Esq., Hunton & Williams, Miami, Counsel for Conover & Company.

Laura Besvinick, Esq., Davis Scott, Weber & Edwards, Miami, Counsel for Ansbacher Bahamas Ltd.

Peter J. Yanowitch, Esq., Miami, Counsel for Ansbacher Bahamas Ltd.

Thomas E. Scott, Esq., Cole, Scott & Kissane, Miami.

ORDER GRANTING DEFENDANT'S MOTION FOR ATTORNEY'S FEES AND COSTS

KING, District Judge.

We have now arrived, after eighteen months of massive document filings, extensive evidentiary hearings and briefings to the last procedural step of Banco Central Del Ecuador's Motion for Attorneys Fees and Costs.

I. FACTUAL BACKGROUND

On March 28, 2001, this Court granted the Plaintiffs Ortegas' motion for voluntary dismissal of their complaint and reserved jurisdiction to determine the fees, costs, and expenses sustained by the Defendants in defending this action.

The Court's last consideration of this issue resulted in this Court's order of March 1, 2002, directing the parties (more specifically their attorneys) to furnish such detailed information as would be needed to make an intelligent decision on the legal work necessarily performed in this case (as distinguished from legal work usable in pending litigation between the parties in foreign jurisdictions). That order reads in part:

Defendant Banco Central del Ecuador's ("Central Bank") motion for approximately $2 million dollars in Attorney's Fees and Costs is the final issue in this case. This issue has literally "taken on a life of its own."

The Plaintiffs Ortega originally filed a suit for liable on February 20, 1998.¹ Now, four years later and eleven months after filing for attorneys' fees and costs, the only issue remaining in this case is for the Court to determine what part of these expenses are "wasted" effort defending this case in that the results of this effort cannot be used in the ongoing case between the same parties in the Bahamas; and the reasonableness of the expenses Defendant incurred.

Mindful of the teachings of the Eleventh Circuit opinion in Yoffe v. Keller Indus., 580 F.2d 126, 129 (5th Cir.1978),² which affirmed a 1977 S.D. of Fla. (King, J.) decision, and now understanding the massive cost involved, the Court must give consideration to a fair method for applying Federal Rule of Civil Procedure 41(a)(2).

Plaintiffs moved for voluntary dismissal pursuant to Federal Rule of Civil Procedure 41(a)(2) on February 28, 2001. Pursuant to Federal Rule of Civil Procedure 41(a)(2), a federal court may dismiss an action at the request of a plaintiff "upon such terms and conditions as the court deems proper." (Id.) The Court granted Plaintiffs' Motion for Voluntary Dismissal and retained jurisdiction to determine the reasonableness of attorneys' fees, costs and expenses incurred by Defendants in defending this case. (See Court's Orders dated March 28 and July 11, 2001.)

Defendant Central Bank seeks more than $2 million³ in attorneys' fees, costs and expenses paid its attorneys in this litigation. Defendant Central Bank has submitted voluminous, and substantially redacted, time and billing records.⁴ In addition, Steven E.M. Hartz, Thomas E. Scott, George Volsky and John F. O'Sullivan filed declarations in support of Plaintiffs' motion.⁵ Plaintiffs contest Defendant Central Bank's claim for attorneys' fees, costs and expenses submitting the declarations of Daniel S. Pearson and Samuel A. Terilli, Jr. in support of their opposition. Plaintiffs contend that Defendant has not met its burden of substantiating entitlement to a fee and cost award, and that the redacted submission effectively prevents Plaintiffs from asserting meaningful objections.

All of the witnesses who had filed written declarations, (named in the preceding paragraph) gave oral expert opinion testimony before the Court on November 15, 2001. Plaintiffs' experts opined that Defendant Central Bank's recovery should be no more than approximately $50,000 to prepare a motion to dismiss, or no more than $110,000 for costs incurred by Defendant Conover & Company Communications ("Conover"); and no cost recovery for the time, effort and expense incurred for work performed by Defendant's counsel that can be used in the still pending Bahamas litigation between Plaintiffs and Central Bank."⁶

Pursuant to that Order the Defendants filed a revised fee application on August 16, 2002, reducing its application fee from $2 million to less than $600,000. According to Defendants, this amount "only includes work that was incurred in defense of the defamation action and is not usable in other pending litigation." (Def.'s Mot. at 2.) Additionally, Defendant Banco Central seeks reimbursement of fees on behalf of fees it was legally obliged to pay for Defendant Conover & Company Communications' legal expenses ($133,267.48), and fees paid to its expert witness, Thomas E. Scott, Esq. ($37,800.00). Banco Central was obliged to indemnify Conover & Company Communications, Inc. ("Conover") in connection with this action. Banco Central in fact incurred expenses in the form of fees and costs paid to Hunton & Williams for the defense of Conover. Those amounts were specifically included within Banco Central's application for fees, costs, and expenses and the supporting documentation was provided to the Court, the Ortegas, and the expert witnesses for both sides.

The reasonableness of the amounts incurred by the Banco Central in connection with the defense of Conover in this action was attested to in the declaration of expert witness Thomas E. Scott. Counsel for the Ortegas had a full opportunity to examine Mr. Scott about his opinion on the reasonableness of those fees and costs. Indeed, the fees and costs incurred in connection with the defense of Conover were the subject of extensive discussion in connection with the hearings held by this Court on Banco Central's application.

Conover's fees and costs have been paid by the Banco Central and Banco Central is therefore the real party in interest on this motion. Banco Central's submission in response to this Court's March 28, 2001 Order, including its application for reimbursement of expenses paid to Hunton & Williams, complied in all respects with the provisions of Southern District of Florida Local Rule 7.3. The Ortegas point to no requirement of S.D. Fla. L.R. 7.3 that has not been met by the Banco Central and their objection on the basis of that Rule is rejected.

The Ortegas also object to the Banco Central's request for reimbursement of amounts paid to its expert witness Thomas E. Scott, Esq. The Ortegas do not argue that fees and expenses incurred in connection with litigating the issue of an award of fees and expenses are not a recoverable item. Instead they argue that reimbursement should be denied because the amount was not included in the materials filed by the Banco Central before Mr. Scott testified or rendered any bill for his services.

The Ortegas themselves retained two experts on this issue of a proper award of fees and costs. It was reasonable and necessary for the Banco Central to retain the services of an expert witness in this matter. The amounts paid to Mr. Scott relate solely to matters at issue in this action and will not result in work product that will be "useful elsewhere." Accordingly, under the terms of this Court's March 1, 2002 Order, the amounts paid to Mr. Scott are properly included in the award to the Banco Central.

The Plaintiffs object to virtually all of the entries in the revised fee application. (11/26/01 Hr'g Tr. at 29-30).

II. LEGAL STANDARD

Once the initial determination to award fees and costs is made, the burden is upon the fee applicant, in this case Banco Central, to establish their fees and costs. Norman v. Housing Auth. of the City of Montgomery, 836 F.2d 1292, 1299 (11th Cir.1988). On March 1, 2002, the Court ordered Defendant Banco Central to provide the Court with specific and detailed evidence from which the Court could determine the reasonableness and necessity of the hourly rates charged for the work performed.⁷

Plaintiffs do not contest the hourly rates charged by the law firm of Akerman Senterfitt & Eidson for work performed by the numerous lawyers (15), paralegals, secretaries and staff. (Ex. No. 11, Vol.II, p. 479.) The Court assumes no challenge was made because the hourly rates charged by Defendant's counsel are similar (or the same) as those charged by Plaintiff's counsel. But in any event, the Court finds the requested rates to be reasonable and consistent with hourly rates charged in this legal community.

In Loranger v. Stierheim, 10 F.3d 776 (11th Cir.1994), decided after the Norman case, the Eleventh Circuit concerned itself with the standard by which to determine the reasonableness of attorney's fees in massive litigation strikingly similar to this case. A motion for attorney's fees and costs pursuant to 42 U.S.C.A. § 1988, requesting $944,775 in fees and $9,671.23 in costs was filed. Plaintiff's counsel Ray "bombarded the district court with a vast array of documents in support of his motion for fees and costs." Ray filed time sheets totaling 199 pages and an 82 page summary of those sheets. The submitted motions, time sheets, and summaries exceeded 400 pages, and reflected work performed representing Loranger since 1979, in both state and federal court.

Presented with these voluminous documents, the district court awarded Ray fees of $50,400, finding 800 of...