WIHC LLC v. Nextgen Labs.

• Docket Number: Civ. 22-00305 DKW-RT
• Decision Date: 31 May 2023
• Parties: WIHC LLC, Plaintiff, v. NEXTGEN LABORATORIES, INC., JOSEPH DEL SIGNORE, Defendants.
• Court: U.S. District Court — District of Hawaii

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WIHC LLC, Plaintiff,
v.
NEXTGEN LABORATORIES, INC., JOSEPH DEL SIGNORE, Defendants.

Civ. No. 22-00305 DKW-RT

United States District Court, D. Hawaii

May 31, 2023

FINDINGS AND RECOMMENDATION TO GRANT PLAINTIFF'S MOTION FOR ATTORNEYS' FEES

Rom A. Trader, United States Magistrate Judge

Plaintiff WIHC LLC (“Plaintiff”) seeks a total award of $23,331.40 in attorneys' fees, which includes General Excise Tax (“GET”) of 4.712%, in its Motion for Attorneys' Fees (“Motion” or “Motion for Attorneys' Fees”), filed on February 16, 2023. ECF No. 30. 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 (“LR”).

After consideration of the Motion, record in this case, and applicable law, the Court FINDS and RECOMMENDS that the Motion for Attorneys' Fees be GRANTED for attorneys' fees in the amount of $15,446.40 and $727.83 in GET for a total amount of $16,174.23. The Court RECOMMENDS that the district court reduce

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Plaintiff's total request for fees by $7,157.17 in attorneys' fees and GET as explained below.

BACKGROUND

On July 14, 2022, Plaintiff filed its Complaint (ECF No. 1) against Defendants NextGen Laboratories, Inc. (“Defendant NextGen”) and Joseph Del Signore (“Defendant Del Signore”) (collectively “Defendants”) seeking to enforce a settlement agreement (“Settlement Agreement”) (ECF No. 30 at PageID.316). The Settlement Agreement required Defendant NextGen to make monthly payments to Plaintiff, and Defendant Del Signore executed a personal guaranty as security for the payments. ECF No. 1. at PageID.5-6. Defendant NextGen failed to make the last two monthly payments to Plaintiff. Id. at 6-7. The Complaint thus alleges breach of contract claims against the Defendants based on the Defendants' failure to make timely payments under the Settlement Agreement. Id. at 7. The Defendants failed to answer or respond to the Complaint (ECF No. 1), and the Motion for Default Judgment (ECF No. 14) filed against them on September 6, 2022.

On December 29, 2022, the district court issued its Order Adopting Findings and Recommendation to Grant Plaintiff's Motion for Default Judgment. ECF No. 25. Default Judgment was issued by the Clerk's Office that same day. ECF No. 26. On February 16, 2023, Plaintiff filed the Motion presently before this Court.

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ECF No. 30. The Defendants have not objected or responded to Plaintiff's fee request.

DISCUSSION

This Court has jurisdiction over this case based on diversity of citizenship under 28 U.S.C. § 1332(a)(1). ECF No. 1 at PageID.2. A federal court sitting in diversity applies state law to determine whether Plaintiff is entitled to attorneys' fees and costs. Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 883 (9th Cir. 2000). Hawaii state law applies to 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

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Id. Accordingly, to award reasonable attorneys' fees under Haw. Rev. Stat. § 60714, 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 whether the action is in the nature of an assumpsit; (3) the hourly rate and fees requested are reasonable; and (4) the fees do not exceed twenty-five (25) percent of the judgment.

A. Plaintiff is the Prevailing Party

Under Haw. Rev. Stat. § 607-14, the Plaintiff must be the prevailing party to be entitled to reasonable attorneys' fees. “[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 favor of the Plaintiff on December 29, 2022. ECF No. 26. Plaintiff is thus the prevailing party.

B. This Action is in the Nature of an Assumpsit

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, the action is in the nature of assumpsit and the Settlement

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Agreement is a written contract providing for attorneys' fees. “Assumpsit is a common law form of action which allows for the recovery of damages for nonperformance 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)). Plaintiff alleges breach of contract claims against the Defendants, and breach of contract claims are in the nature of assumpsit for the purposes of Haw. Rev. Stat. § 607-14. Helfand v. Gerson, 105 F.3d 530, 537 (9th Cir. 1997) (citing S. Utsunomiya Enters., Inc. v. Moomuku Country Club, 76 Hawai'i 396, 400, 879 P.2d 501, 505 (1994)) (citation omitted).

In addition, the Settlement Agreement provides the contractual provisions for the award of attorneys' fees. The Security Agreement (ECF No. 30 at PageID.332), attached to the Settlement Agreement, entered into between Plaintiff and Defendant NextGen states:

5. Fees and costs. In the event of any dispute or litigation concerning the enforcement of this Agreement or the Settlement Agreement, the prevailing party shall be entitled to its reasonable attorneys' fees and costs.

Id. at 333. The Personal Guaranty (Id. at 330), also attached to the Settlement Agreement, entered into between Plaintiff and Defendant Del Signore where Defendant Del Signore agreed to personally guaranty Defendant NextGen's obligation under the Settlement Agreement states in relevant part:

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10. Attorneys' Fees. In any

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