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Lord & Taylor, LLC v. White Flint, L.P.

United States District Court, D. Maryland

December 15, 2017

LORD & TAYLOR, et al., Plaintiffs,



         This Report and Recommendation addresses Plaintiffs' Motion Requesting the Award of Attorney's Fees (“Plaintiffs' Motion”)(ECF No. 450), as well as the opposition and reply thereto. Pursuant to 28 U.S.C. § 636, and Local Rule 301, the Honorable Roger W. Titus referred this matter to me for the making of a Report and Recommendation concerning the award of attorney's fees. For the reasons stated herein, I recommend the Court DENY the Motion as enumerated herein.

         I. Factual and Procedural Background

         The present dispute arises from the redevelopment of the White Flint Mall located in Bethesda, Maryland. Plaintiffs were tenants, whereas Defendant was the lessor of the property. The relationship between the parties is governed by a Reciprocal Easement Agreement (“REA”)(ECF No. 450-1) which Plaintiffs allege was violated. After a multi-week jury trial, Plaintiffs obtained a jury verdict of $31 million. Specifically, the jurors determined that Defendant violated Plaintiffs' “rights under the REA in one or more ways described in the Court's instructions.” Plaintiffs now seek $2, 725, 363.00 in attorney's fees for nearly nine thousand hours of legal work flowing from the litigation. It is the purpose of this report to recommend to the Court the appropriateness of the award of legal fees to Plaintiffs.

         II. Discussion

         A. Maryland Follows the “American Rule” in Awarding Attorney's Fees

         This case was filed pursuant to the diversity jurisdiction of the court. As such, Maryland law is applicable. Under Maryland law, “the prevailing party in a lawsuit may not recover attorney's fees as an element of damages or costs unless (1) the parties to a contract had an agreement to that effect, (2) there is a statute that allows the imposition of such fees, (3) the wrongful conduct of a defendant forces a plaintiff into litigation with a third party, or (4) a plaintiff is forced to defend against a malicious prosecution.” Thomas v. Gladstone, 386 Md. 693, 699, 874 A.2d 434, 437 (2005). Plaintiffs seek attorney's fees here on the basis of contracts, specifically the REA and its relevant counterpart in Paragraph 31 of the Sub-Lease Agreement (the “Sub-Lease”)(ECF No. 450-8).

         B. The Indemnification Clauses of Sections 1.13 and 5.4 of the REA

         The REA contains at least two indemnification provisions under which Plaintiffs contend they are entitled to attorney's fees. Section 1.13 states

“Each party shall at all times: (A) take any and all safety measures reasonably required to protect the other parties hereto and their employees, agents, contractors, and invitees from injury or damage caused by or resulting from the performance of its construction, (B) indemnify and hold harmless the other parties hereto from or in respect to the death of or any accidents, injury, loss or damage . . . whatsoever caused by any person or to property as shall occur in the process of, during the course of or by virtue of its construction and (C) indemnify and hold the others harmless from and against mechanic's, materialman's and laborers' liens, and all costs, expenses and liabilities in connection with or arising from its said construction.

Section 1.13 (emphasis added). Under this Section, the parties intended to mutually indemnify each other during the construction phase of the mall. By its terms, it is not applicable to a more general award of fees. Section 5.4 of the REA is similarly concerned about insurance. It states

Except for claims paid pursuant to joint general public liability insurance referred to in Section 5.5, [Defendant] will indemnify and save [Plaintiffs] harmless from and against any and all claims, actions, damages, liability and expense in connection with the loss of life, personal injury or damage to property, or any of them, in, on or about the Shopping Center Site or the Access Easement occasioned wholly or in part by any act or omission of [Defendant], its tenants, agents, contractors or employees, including but not limited to any and all claims, actions, damages, liability and expense arising out of [Defendant's] maintenance of the Common Areas, common facilities and improvements and common utility facilities on the Shopping Center Site and Access Easement as in Section 4.1 provided[.]

Section 5.4 of the REA. The plain reading of the REA suggests that Section 5.4 is limited to issues of insurance. There is no indication that attorney's fees are to be paid due to any other breach of the REA.

         In light of the broad language of indemnification used in both sections, Plaintiffs argue that case law supports the reimbursement of attorney's fees to the prevailing party in a lawsuit such as the present one. Plaintiffs contend that their position is supported by AtlanticContracting & Material Co., Inc. v. Ulico Cas. Co., 380 Md. 285, 844 A.2d. 460 (2004). AtlanticContracting deals with a surety and indemnification agreement in a first party lawsuit which did not use the term “attorney's fees.” The Maryland Court of Appeals allowed Ulico to pursue its claim ...

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