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Berkley Trace, LLC v. Food Lion, LLC

United States District Court, Fourth Circuit

October 18, 2013

BERKLEY TRACE, LLC, et al., Plaintiffs,
v.
FOOD LION, LLC, et al., Defendants.

MEMORANDUM ORDER

RICHARD D. BENNETT, District Judge.

Plaintiffs Berkley Trace, LLC ("Berkley Trace") and the Hampton Company, Inc. ("Hampton") (collectively "Plaintiffs") brought this breach of contract and civil conspiracy action against Food Lion, LLC ("Food Lion"), Camellia Food Stores, Inc. ("Camellia"), and Eastern Shore Markets, Inc. ("ESM"). The allegations arose out of a commercial lease agreement between the Plaintiffs and Defendants Camellia and ESM. Specifically, the Plaintiffs alleged that Camellia and ESM, in concert with Food Lion, closed the "Fresh Pride" grocery store which they had agreed to operate in the Pines Plaza Shopping Center in Ocean Pines, Maryland. It was alleged that this action was in breach of the business operation terms of their commercial lease. Pursuant to a settlement agreement, the claims against Food Lion were dismissed with prejudice.[1] Upon review of cross-motions for summary judgment, this Court entered an Order dated July 18, 2013 granting summary judgment in favor of the Plaintiffs on their claim for breach of contract against Defendants Camellia and ESM. Pending before this Court is Plaintiffs' Petition for Award of Attorneys' Fees and Costs (ECF No. 102) ("Motion"). The parties' submissions have been reviewed and no hearing is necessary.[2] See Local Rule 105.6 (D. Md. 2011). For the reasons that follow, Plaintiffs' Motion (ECF No. 102) is GRANTED in the amounts of $50, 000.00 in attorneys' fees and $17, 170.05 in expenses.

BACKGROUND

The facts of this case were set forth in detail in this Court's Memorandum Opinion of July 18, 2013. (ECF No. 100.) For present purposes, a brief summary will suffice.

The Plaintiffs were at all times relevant to this case the owners and operators of the "Pines Plaza Shopping Center" ("Pines Plaza") in Ocean Pines, Maryland. Beginning in 1985, the Plaintiffs and the Defendants[3] were parties to a lease agreement (the "Lease") for space at Pines Plaza. Over the years, the parties amended and renewed the Lease; the relevant Lease term commenced April 1, 2006 and expired March 31, 2011. The Lease required that the Defendants operate a grocery supermarket in the space for the duration of the Lease term. The supermarket was to operate in a "first class" manner in order to "assure the transaction of the maximum volume of business" at Pines Plaza as a whole. The Lease provided that in the event the Defendants failed to operate the supermarket as required by the Lease, the Plaintiffs would be entitled to liquidated damages of $100.00 for each day that the Defendant failed to do so. In addition, the Lease provided that the Defendants would be in default if they failed to be open "for more than five (5) days." Lease § 18.1(a). If the Defendants abandoned the space, the Plaintiffs could enforce all "rights and remedies under this Lease, including the right to receive the rent and any other charges as may become due hereunder." Id. § 18.2(b). In accordance with the Lease, Defendant ESM operated a grocery store at Pines Plaza under the name "Fresh Pride" from 1985 until 2008.

In or about 2007, Food Lion opened a store in Ocean Pines at a nearby shopping center known as Pennington Commons. The competition from the new Food Lion store caused the Fresh Pride grocery store in the Pines Plaza Shopping Center to rapidly lose business to the point where it was no longer profitable. As a result, in January 2008, Camellia and ESM entered a written agreement with Food Lion, wherein Food Lion would pay Camellia and ESM to close Fresh Pride. The Fresh Pride store closed on February 4, 2008, but ESM continued to pay rent and reimbursable charges to the Plaintiffs until the termination of the Lease on March 31, 2011. This amounted to total payments of $642, 759.00. The parties agree that the store remained closed for 1, 151 days during that period.

The Plaintiffs originally filed this action in the Circuit Court for Worcester County, Maryland, and Food Lion removed the case to this Court. The Plaintiff filed a Second Amended Complaint which alleged breach of contract against ESM and Camellia (Count I), civil conspiracy against ESM, Camellia, and Food Lion (Count II), and tortious interference with contractual relations against Food Lion (Count IV).[4] Pls.' Second Am. Compl., ECF No. 75. Following a period of discovery, the Plaintiffs and Food Lion settled, and the claims in Counts II and IV against Food Lion were dismissed with prejudice on December 20, 2012. See Order Granting Stip. of Dismissal, ECF No. 85. The claim for civil conspiracy in Count II as against ESM and Camellia was also dismissed. Id. In connection with the settlement, the Plaintiffs' attorneys received a contingent fee payment of $76, 500.00.[5]

As to the sole remaining claim for breach of contract against Defendants Camellia and ESM set forth in Count I of the Second Amended Complaint, the parties filed crossmotions for summary judgment. The Plaintiffs, in their motion for summary judgment, sought liquidated damages and attorneys' fees. In a teleconference held on July 15, 2013, the Plaintiffs agreed that their motion for summary judgment raised purely legal issues. See Letter Order of July 15, 2013, ECF No. 99. The Defendants also agreed that only legal issues remained before this Court to the extent that the cross-motions were resolved in Defendants' favor. However, the Defendants argued that the defense of impracticability of performance could raise a factual issue if this Court resolved the cross-motions in favor of the Plaintiffs. Accordingly, it was established that if any factual issue survived this Court's ruling on the cross-motions for summary judgment, a jury trial would proceed on that issue. During the teleconference this Court also set forth a procedure by which the issue of attorneys' fees would be addressed. It was agreed that only in the event that the case was fiduciary duty against ESM and Camellia but did not re-number Count IV. Pls.' Second Am. Compl. at 11, ECF No. 75. resolved in favor of the Plaintiffs on summary judgment, the Plaintiffs would submit a petition for fees, which the Defendants would be free to oppose. See Telephone conference with Bruce Bright, counsel for the Plaintiffs, and Sanford Friedman, counsel for the Defendants (July 15, 2013, 2:39 p.m. to 3:24 p.m.).

This Court granted summary judgment in favor of the Plaintiffs on the claim for breach of contract against Defendants Camellia and ESM, and denied the Defendants' motion for summary judgment. This Court found as a matter of law that the liquidated damages clause was valid and enforceable, and that the Defendants' assertion of a defense based on impracticability of performance did not raise a genuine issue of material fact. In an Order and Judgment dated July 18, 2013 (ECF No. 101), this Court awarded the Plaintiffs $115, 100.00 in liquidated damages pursuant to the Lease. The Plaintiffs filed the pending Petition for Award of Attorneys' Fees and Costs (ECF No. 102).[6]

ANALYSIS

The Plaintiffs request a total award of $126, 246.90 for fees expended by Bruce F. Bright and Kevin P. Gregory of Ayres, Jenkins, Gordy & Almand, P.A., including one-half of the $76, 500.00 contingency fee recovered, additional hourly fees, and various expenses. This Court finds that the total amount of fees requested is excessive in relation to the amount involved and the results obtained. In addition, the Plaintiffs may not recover any portion of the contingent fee already received by their counsel. Finally, this Court concludes that a portion of the requested costs are not recoverable and the total must be reduced.

I. Fees Are Recoverable in this Case

The Defendants first argue that no award of fees is proper in this case. The Defendants contend that because the fees requested by the Plaintiffs are an element of damages for breach of contract, this Court's entry of judgment merged the contract with the judgment. The Defendants assert that further claims on the issue of fees pursuant to the contract are precluded because the contract no longer exists. While the Defendants are correct that the attorneys' fees at issue comprise an element of damages for breach of contract, there has been no merger of the contract because this Court's judgment was not a final judgment. For reasons more fully explained below, the Plaintiffs may recover attorneys' fees in this case.

As this Court has previously held, in a diversity case, absent a conflicting applicable federal rule of procedure, Maryland law governs a party's right to recover attorneys' fees. Roger E. Herst Revocable Trust v. Blinds to Go (U.S.) Inc., No. ELH-10-3226, 2011 WL 6444980, at *1 (D. Md. Dec. 20, 2011). Pursuant to the Lease between the parties in this case,

If Landlord is required to bring or maintain any action (including assertion of any counterclaim or cross-claim, or claim in proceeding in bankruptcy, receivership or any other proceeding instituted by Tenant or by others), or otherwise refers this Lease to an attorney for the enforcement of any of the covenants, terms or conditions of this Lease, the Landlord shall, in addition to all other payments required herein, receive from Tenant all costs incurred by the Landlord, ...

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