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Griaznov v. J-K Technologies, LLC

United States District Court, D. Maryland

May 16, 2019

KONSTANTIN GRIAZNOV, Plaintiff/Counterclaim Defendant,
v.
J-K TECHNOLOGIES, LLC, Defendant/Counterclaim Plaintiff.

          MEMORANDUM

          ELLEN LIPTON HOLLANDER UNITED STATES DISTRICT JUDGE

         This Memorandum resolves the motion for attorneys' fees and costs (ECF 60) filed by defendant/counterclaim plaintiff J.K. Technologies, LLC (“J.K.”). It is supported by a memorandum of law (ECF 60-1) (collectively, “Motion”) and several exhibits documenting J.K.'s fees and costs. ECF 60-3 to ECF 60-5.

         The Motion follows the Court's entry of summary judgment in favor of J.K., finding Griaznov liable to defendant in the amount of $131, 012.83, plus costs. See ECF 58; ECF 59. The judgment is rooted in a contract to bring a 2012 McLaren MP4-12C into compliance with government regulations regarding safety and emissions. See ECF 45-4 (the “Agreement”). The facts of that case are set out at length in my Memorandum Opinion of September 11, 2018, which are incorporated here, and need not be restated. See ECF 58.

         Plaintiff has not responded to the Motion, and the time to do so has expired. No. hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I will reduce the attorneys' hourly rates to bring them into compliance with the rates customarily permitted in this District. As a result, I will award $92, 530.00 in fees to defendant. I will also award $548.66 in costs, for a total of $93, 078.66.

         I. Discussion

         A.

         The Agreement states, in pertinent part: “If J.K. employs attorneys to enforce any rights arising out of or relating to this Agreement, and J.K. prevails in any action brought by its attorneys, [Griaznov] shall pay J.K.'s reasonable attorneys' fees, costs and other expenses.” ECF 45-4 at 4. Pursuant to the Agreement, J.K. seeks attorneys' fees and costs associated with this litigation. See ECF 61.

         In a diversity action such as this, see 28 U.S.C. § 1332, a party's right to recover attorneys' fees is ordinarily governed by state law. See IOM Corp. v. Brown Forman Corp., 627 F.3d 440, 451 (1st Cir. 2010); McCollum v. State Farm Ins. Co., 376 Fed.Appx. 217, 220 (3d Cir. 2010); Ranger Const. Co. v. Prince William County Sch. Bd., 605 F.2d 1298, 1301 (4th Cir. 1979); Rohn Prods. Int'l, LC v. Sofitel Capital Corp., WDQ-06-504, 2010 WL 3943747, at *4 n.13 (D. Md. Oct. 7, 2010).

         Maryland is the forum state, and its law governs this Court's choice-of-law analysis. Ground Zero Museum Workshop v. Wilson, 813 F.Supp.2d 678, 696 (D. Md. 2011). Under Maryland law, “the parties to a contract may agree as to the law which will govern their transaction.” Bank of Am., N.A. v. Jill P. Mitchell Living Trust, 822 F.Supp.2d 505, 517 (D. Md. 2011) (internal quotation marks omitted). The Agreement contains a choice of law provision that stipulates to the application of Maryland law. See ECF 45-4 at 5. Accordingly, I will apply Maryland law here.

         In general, Maryland follows the “American Rule, ” under which “a prevailing party is not awarded attorneys' fees ‘unless (1) the parties to a contract have 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.'” Nova Research, Inc. v. Penske Truck Leasing Co., 405 Md. 435, 445, 952 A.2d 275, 281 (2008) (quoting Thomas v. Gladstone, 386 Md. 693, 699, 874 A.2d 434, 437 (2005)).

         “Contract provisions providing for awards of attorney's fees to the prevailing party in litigation under the contract generally are valid and enforceable in Maryland.” Myers v. Kayhoe, 391 Md. 188, 207, 892 A.2d 520, 532 (2006). “It is a fundamental principle of contract law that it is ‘improper for the court to rewrite the terms of a contract, or draw a new contract for the parties, when the terms thereof are clear and unambiguous, simply to avoid hardships.'” Calomiris v. Woods, 353 Md. 425, 445, 727 A.2d 358, 368 (1999) (quoting Canaras v. Lift Truck Servs., 272 Md. 337, 350, 322 A.2d 866, 873 (1974)); see Loudin Ins. Agency, Inc. v. Aetna Cas. & Sur. Co., 966 F.2d 1443, 1992 WL 145269, at *5 (4th Cir. 1992) (per curiam) (“[A] court will not rewrite the parties' contract simply because one party is no longer satisfied with the bargain he struck.”).

         However, “Maryland law limits the amount of contractual attorneys [sic] fees to actual fees incurred, regardless of whether the contract provides for a greater amount.” SunTrust Bank v. Goldman, 201 Md.App. 390, 398, 29 A.3d 724, 728 (2011). Moreover, “[e]ven in the absence of a contract term limiting recovery to reasonable fees, trial courts are required to read such a term into the contract and examine the prevailing party's fee request for reasonableness.” Myers, 391 Md. at 207, 892 A.2d at 532; see also Atl. Contracting & Material Co. v. Ulico Cas. Co., 380 Md. 285, 316, 844 A.2d 460, 478 (2004); SunTrust, 201 Md.App. at 401, 29 A.3d at 730 (“Current law allows a court to grant only those attorney's fees it finds reasonable.”). Thus, “courts must routinely undertake an inquiry into the reasonableness of any proposed fee before settling on an award.” Monmouth Meadows Homeowners Ass'n, Inc. v. Hamilton, 416 Md. 325, 333, 7 A.3d 1, 5 (2010). The “reasonableness of attorney's fees is a factual determination within the sound discretion of the court.” Myers, 391 Md. at 207, 892 A.2d at 532.

         “‘The burden is on the party seeking recovery to provide the evidence necessary for the fact finder to evaluate the reasonableness of the fees.'” Ulico, 380 Md. at 316, 844 A.2d at 478 (citation omitted). Therefore, the party seeking a fee award must provide “‘detailed records'” that specify “‘the services performed, by whom they were performed, the time expended thereon, and the hourly rates charged.'” Rauch v. McCall, 134 Md.App. 624, 639, 761 A.2d 76, 84 (2000) (citation omitted), cert. denied, 362 Md. 625, 766 A.2d 148 (2001). “‘[W]ithout such records, the reasonableness, vel non, of the fees can be determined only by conjecture or opinion of the attorney seeking the fees and would therefore not be supported by competent evidence.'” Id. at 639, 761 A.2d at 85 (citation omitted).

         Maryland courts ordinarily utilize the “lodestar” approach when determining attorneys' fees under fee-shifting statutes. Friolo v. Frankel, 373 Md. 501, 504-05, 819 A.2d 354, 356 (2003) (“Friolo I”).[1] However, the Maryland Court of Appeals has held that the lodestar approach is “an inappropriate mechanism for calculating fee awards” under contractual fee-shifting provisions in “disputes between private parties over breaches of contract.” Monmouth Meadows, 416 Md. at 336, 7 A.3d at 7; see also E. Shore Title Co. v. Ochse, 453 Md. 303, 337, 160 A.3d 1238, 1258 (2017) (stating that the “litigation did not involve a fee-shifting statute, and therefore the lodestar method of calculation would not be appropriate”). This is because a “contractual fee-shifting provision is designed by the parties, not by the legislature. . . . Thus, it usually serves no larger public purpose than the interests of the parties.” Congressional Hotel Corp. v. Mervis Diamond Corp., 200 Md.App. 489, 505, 28 A.3d 75, 84 (2011).

         In Maryland, in regard to an award based on a contract, a court “should use the factors set forth in Rule 1.5 [of the Maryland Rules of Professional Conduct (“MRPC”)[2] as the foundation for analysis of what constitutes a reasonable fee when the court awards fees based on a contract entered by the parties authorizing an award of fees.” Monmouth Meadows, 416 Md. at 336-37, 7 A.3d at 8. MRPC 1.5(a) enumerates eight non-exclusive “factors to be considered in determining the reasonableness of a fee”:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other ...

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