C.W. HOFFMAN, JR. UNITED STATES MAGISTRATE JUDGE.
This matter is before the Court on Plaintiffs Motion for Attorney Fees (#60), filed May 23, 2014; Defendants' Response (#63), filed June 6, 2014; and Plaintiffs Reply (#64), filed June 16, 2014.
This case is a relatively straightforward contract dispute, filed approximately two years ago. Compl. (#1). Plaintiff seeks damages from Defendants Donald S. Herman, the Herman Family Trust, and several corporate entities (hereinafter "Defendants") for (1) breach of contract and (2) breach of the covenant of good faith and fair dealing.
The parties submitted a proposed discovery plan and scheduling order on April 19, 2013, which was granted by the Court setting the initial discovery cutoff date for October 14, 2013. (#28). Shortly after briefing was complete on Plaintiffs first motion to compel (#29), the parties stipulated to move the discovery cutoff date to December 12, 2013. (#35). The parties also entered into a protective order to facilitate the exchange of discovery. (#37). The parties entered two more stipulations to extend discovery deadlines before an order was entered on the motion to compel (#29), resulting in moving the discovery cutoff date to April 22, 2014. See Orders (#40) and (#44). Prior to the Court's order on the motion to compel (#29), defense counsel withdrew from the case and the business entity defendants were ordered to advise the court whether they would retain new counsel. See Order (#46).
On January 6, 2014, Defendants appeared through new counsel and also filed a notice of bankruptcy for Defendant Willow Creek San Martin Building, LLC. See (#49) and (#50). Shortly thereafter, on February 20, 2014, the parties filed a fourth stipulation to extend the discovery deadlines acknowledging the bankruptcy and requesting additional time to conduct additional discovery, including expert discovery on the valuation of the business entity defendants, obtaining medical release authorizations, and continued settlement efforts. The stipulation was approved resulting in the discovery cutoff date being moved to June 23, 2014. (#53).
On April 15, 2014, approximately two months before the then operative discovery cutoff date, Plaintiffs filed an emergency motion to compel seeking: (1) further supplementation of prior discovery responses related to the valuation of the defendant entities, (2) contracts, agreements, promissory notes or other negotiations entered into by Defendant Herman for a specified period of time, (3) materials evidencing or supporting any lending or borrowing activities by Defendants for a specified period of time, (4) bank statements, (5) real estate/asset transfers, (6) financial statements, including any balance sheets or cash flow documents, and (7) compelled signatures on medical authorizations for Defendant Herman given the claim that he lacked capacity to enter into the contract at issue in this litigation. The request to consider the motion on an emergency basis was granted and a hearing set for April 29, 2014.
In response, Defendants agreed to provide supplemental information to many of the disputed requests. They continued to contest, however, that Plaintiffs were not entitled to financial records relating to Defendants "lending and borrowing" activities, bank statements, financial statements or other financial records because such information was not relevant unless and until Plaintiff established the existence of a contract. Defendants also continued objection to the request that Defendant Herman sign medical authorizations. In reply, Plaintiff reiterated several of the arguments raised in the initial motion. By declaration, Plaintiffs counsel indicated that she initiated a personal consultation, as instructed by the Court, shortly after filing the motion to compel. It was her understanding that, as a result of the consultation, the objection to signing medical authorizations had been withdrawn as were objections related to the requested supplemental responses.
On May 1, 2014, the Court heard oral argument on the motion to compel. Before addressing the substance of the motion, the Court expressed its extreme dissatisfaction with Defendants' counsel's unwillingness to personally consult with Plaintiffs counsel on the issues raised in the motion. The undersigned found that defense counsel's tactics represented a "dismal failure to cooperate" that were "completely unprofessional" leading to the unnecessary multiplication of litigation costs. Defendants' relevance objection to the further supplementation to financial records was overruled. Defense counsel's argument was not that the records were irrelevant, but that they would not become relevant unless and until Plaintiff proved liability. Thus, the objection was not really an objection, but a desire to hold discovery on damages in abeyance until a determination was made on liability. The undersigned rejected the proposed approach. Further, the parties were able to agree that Defendant would provide the medical authorizations requested for an agreed upon time period. At the end of the hearing, the undersigned found that Plaintiff had prevailed on the motion and was, therefore, entitled to request fees pursuant to Fed.R.Civ.P. 37(a)(5). The parties were encouraged to meet and confer to resolve the fee issue. The parties were also instructed to meet and confer regarding whether an additional discovery extension was necessary in light of the ordered production.
Unable to resolve the fee issue arising from the motion to compel, Plaintiffs counsel filed a motion for attorney fees on May 23, 2015, seeking in excess of $12, 000.00 for having to file the motion to compel. (#60). Defendants oppose the motion on several grounds, including that the objections to the compelled discovery were substantially justified and, therefore, an award of fees is improper under Rule 37(a)(5)(A)(ii). To the extent the objections were not substantially justified, Defendants argue that the fees are unreasonable and based on rates higher than is customary in Las Vegas. Thus, they request that any fee award be limited to a period of 25 hours at a substantially lower rate. Plaintiff replies that it was defense counsel's unwillingness to participate in the pre-motion personal consultation which led to the filing of the motion to compel. Additionally, Plaintiff disputes that the objections to the compelled discovery responses were substantially justified.
The parties assume that fees are appropriate under Fed.R.Civ.P. 37(a)(5)(A), which makes the award of attorney fees and costs mandatory in cases where the moving party prevails unless (1) the motion was filed before the moving party made a good faith attempt to obtain the discovery without court action, (2) the responding party's objection or non-disclosure was substantially justified, or (3) other circumstances would make the award unjust. See Fed. R. Civ. P. 37(a)(5)(A)(i)-(iii). The motion, however, was not granted in full. Though much of the motion was granted, the Court did modify the temporal scope of the medical records sought. Thus, the motion was granted only in part and the Court has discretion whether to apportion the "reasonable expenses" for the motion under Rule 37(a)(5)(C) ("If the motion is granted in part and denied in part, the court may issue any protective order authorized under Rule 26(c) and may, after giving an opportunity to be heard, apportion the reasonable expenses for the motion.").
Near the conclusion of the May 1, 2014 hearing on the motion to compel, the Court indicated that Plaintiff was entitled to move for fees and costs. The Court did not grant an award of fees, but invited the application assuming the parties could not resolve the fee issue. The Court expressly stated during the hearing that Defendants were not precluded from objecting to an award of fees under Rule 37. The primary difference between Rule 37(a)(5)(A) and Rule 37(a)(5)(C) is that an award is discretionary under Rule 37(a)(5)(C). Ultimately, the analysis underlying a decision under either subsection is the same and the arguments pertaining to exceptions under Rule 37(a)(5)(A) are equally applicable to the determination of whether fees and costs should be apportioned under Rule 37(a)(5)(C). C.f. Switch Communications Group LLC v. Ballard, 2011 WL 5041231 (D. Nev.). The primary argument advanced by Defendants is that its objections to the requested discovery were substantially justified. A nondisclosure or objection to a discovery request is substantially justified if reasonable people could differ on whether a party was bound to comply with a discovery rule. See Pierce v. Underwood, 487 U.S. 552, 565 (1988); see also Flones v. Property & Cas. Ins. Co. of Hartford, 2013 WL 5408659 (D. Nev.).
In regard to the financial records, the Court disagrees that Defendants' nondisclosure was substantially justified. Essentially, Defendants argued that disclosure was not necessary because the financial records would only be relevant to damages. Thus, until Plaintiff proved liability, financial records should not have to be disclosed. The acknowledgment that the financial records would be relevant to damages is an express admission that the sought after records are relevant for discovery purposes. What Defendant was ...