United States District Court, D. Maryland
REPORT AND RECOMMENDATION
CHARLES B. DAY, UNITED STATES MAGISTRATE JUDGE.
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.
Factual and Procedural Background
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.
Maryland Follows the “American Rule” in Awarding
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).
The Indemnification Clauses of Sections 1.13 and 5.4 of the
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.
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