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Hidden Hills Management, LLC v. Amtax Holdings 114, LLC

United States District Court, W.D. Washington, Tacoma

November 8, 2019

AMTAX HOLDINGS 114, LLC, et al., Defendants.



         THIS MATTER is before the Court on Defendant Amtax's Motion[1] for attorneys' fees (from HHM) under the Environmental Indemnity in the Hidden Hills dispute [Dkt. # 120], and on Plaintiff 334th Place's Motion for attorneys' fees (from Amtax) in connection with the reconvened deposition of Christopher Blake in the Parkway dispute [Dkt. # 123].

         The Hidden Hills Environmental Indemnity agreement was discussed at length in this Court's Order on the parties' competing motions for summary judgment [Dkt. # 89]. Tamaro argued that Hidden Hills' appraised value should be discounted by the potential cost of remediating Asarco-related arsenic contamination on the site, and she doggedly sought to make that point with the appraisers and the Court. The Court rejected her argument for three reasons- one, she improperly interfered with the “independent” nature of the third appraisal; two, the environmental clean-up cost she demanded as a discount was never going to be incurred; and three, in any event, the parties had long since agreed that HHM would indemnify its Limited Partner for the cost of any actual environmental clean-up.

         The hypothetical cost of the clean-up was therefore not properly deducted from the fair market value for purposes of determining the option price. After that Order, the Environmental Indemnity agreement was no longer an issue, except for the fact it provides for fees and costs to the party prevailing in any litigation under it: “in the event of litigation concerning this agreement, the prevailing party shall be entitled to collect from the losing party all attorneys' fees and costs including those on appeal.” Neither the Hidden Hills nor the Parkway Partnership Agreements included an attorneys' fee provision.

         Amtax seeks $443, 752.50 in fees[2] (and $169, 357.68 in costs, mostly fees for expert Anderson) that it claims it incurred in litigating and prevailing on claims related to the Environmental Indemnity, from the date the case was filed (November 14, 2017) to the date the Court sided with Amtax on the appraisal issues on summary judgment (May 2, 2019). It argues that the environmental contamination at Hidden Hills predominated in that (larger) portion of the overall litigation (nine of thirteen depositions, for example, were on the Hidden Hills portion of the case). Amtax correctly argues that it prevailed on its claim that HHM was required to indemnify it for the cost of any environmental cleanup. Amtax claims it has excised all the time Perkins Coie spent on the case, and all the time its attorneys spent on the Parkway dispute. It claims the remainder relates to the environmental indemnity.

         HHM argues that Amtax improperly seeks to recover fees under the environmental indemnity agreement for work that was wholly unrelated to it (or only tangentially related to it), seeking to “shoehorn” the bulk of its fees under the environmental indemnity. It points out that while Amtax does not seek fees for Perkins Coie's work, it does claim $125, 000 in fees incurred even before Amtax asserted its “environmental indemnity counterclaim.” It also seeks $159, 000 in expert costs under the agreement, even though it never presented expert testimony[3] on that topic. HHM argues that its review of the bills reveals that only $17, 000 in fees was spent directly on the indemnification agreement and Amtax's claim under it.

         The second fee dispute is minor, particularly in the context of this case. A year ago, the Court ordered that Amtax should pay the fees associated with Chris Blake's reconvened Rule 30(b)(6) deposition in the Parkway dispute [Dkt. # 51]. 334th seeks $27, 054.91 in fees and costs for that deposition. Amtax argues that 334th's billing records are not detailed enough to ascertain whether all the entries are related to Blake's deposition on the Parkway dispute (recoverable) and those incurred in preparing to defend Blake's Hidden Hills deposition, taken the same day. Amtax points out it already paid $7500 for the cost of the first deposition. It seeks a 25% discount to reflect fees and costs that were attributable to the Hidden Hills portion of Blake's deposition. 334th insists that it already excluded the time spent preparing and taking Blake's deposition in connection with the Hidden Hills dispute.

         334th's request for $27, 000 for one deposition to some extent undercuts its claim that Amtax only spent $17, 000 litigating the environmental indemnity portion of the Hidden Hills dispute. But it accurately points out that Amtax had three times as many lawyers working on the case, at much higher rates, than HHM and 334th did. It seeks a steep discount of the fees related to the environmental indemnity.

         A. Attorneys' Fee Standard.

         The first step in determining reasonable fees is to calculate the lodestar figure, by taking the number of hours reasonably expended on the litigation and multiplying it by the appropriate hourly rate. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). The Court should exclude overstaffed, redundant, or unnecessary time. Id. at 434. The Court must also consider the extent of Plaintiffs' success, as that is a “crucial factor” in determining an appropriate award. Id. at 440.

         After determining the lodestar figure, the Court should then determine whether to adjust the lodestar figure up or down, based on factors not subsumed in the lodestar figure. These factors[4] were adopted in this Circuit by Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 69-70 (9th Cir. 1975) cert. denied, 425 U.S. 951 (1976). The applicability of the sixth (whether the fee is fixed or contingent) and tenth (the “undesirability ” of the case) Kerr factors is doubtful after City of Burlington v. Dague, 505 U.S. 557 (1992); see also Davis v. City & County of San Francisco, 976 F.2d 1536, 1549 (9th Cir. 1992), vacated in part on other grounds, 984 F.2d 345 (9th Cir. 1993)(the fixed or contingent nature of fee is not to be considered). Additionally, numerous courts have subsequently held that the bulk of these factors are subsumed in the lodestar calculation. See, for example, Blum v. Stenson, 465 U.S. 886, 898-900 (1984).

         In any event, the lodestar calculation is presumptively reasonable, and adjustments (up or down) are appropriate only in rare and exceptional cases. Id., see also Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 483 U.S. 711, 728 (1987).

         B. Reasonable Rate.

         Amtax's attorneys (like HHM's) did excellent work on this case, as the Court noted and as Amtax reiterates. Even the revised rates Amtax seeks are high for this market (particularly for associates and paralegals), but HHM's primary objections to the fees are based on its claim that Amtax has not demonstrated that it spent the hours it seeks litigating the environmental indemnity. Indeed, Amtax ...

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