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City National Bank v. Charleston Associates, LLC

United States District Court, D. Nevada

March 28, 2017





         This case initially involved an appeal of the Bankruptcy Court's order granting summary judgment in favor of Charleston Associates, LLC (“Charleston”) in an adversary proceeding that Charleston initiated. The Court reversed and directed the granting of summary judgment in favor of City National Bank (“CNB”) and RA Southeast Land Company, LLC (“RAS”). Charleston appealed and the Ninth Circuit Court of Appeals affirmed. The Ninth Circuit then granted CNB and RAS's motion to transfer all requests for attorneys' fees for this Court to address pursuant to 9th Circuit Rule 39-1.8, and directed the Court to establish a briefing schedule. (ECF No. 110.) The Court has not set a briefing schedule, but CNB and RA Southeast have filed their respective motions for attorneys' fees (“Motions”) (ECF Nos. 112, 115). These motions have been fully briefed.

         The parties do not dispute that the Grant of Reciprocal Easements and Declaration of Covenants (“REA”) provides that the prevailing parties - here, CNB and RAS - are entitled to reasonable attorney's fees and costs. (ECF no. 112 at 6; ECF No. 117 at 2; ECF No. 115-1 at 11; ECF No. 116 at 2.) Nor do they dispute that CNB is entitled to attorney's fees and costs under the July 21, 2009 Settlement Agreement. (ECF No. 115-1 at 10; ECF No. 116 at 2.) Their dispute unsurprisingly is whether the amount of fees requested - $333, 669.61 by RAS and $423, 956.45 by CNB[1] - are reasonable. They also dispute whether RAS and CNB are entitled to seek fees against New Boca Syndications Group, LLC (“NBSG”), who is not a party in this case.

         For the reasons discussed below, the Motions are granted in part and denied in part.


         The parties seeking attorney's fees must establish that the fees are reasonable. The district court “has a great deal of discretion in determining the reasonable of the fee.” Prison Legal News v. Schwarzenegger, 608 F.3d 446, 453 (9th Cir. 2010).

         Reasonable attorney's fees are based on the “lodestar” calculation set forth in Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). See Fischer v. SJB-P.D., Inc., 214 F.3d 1115, 1119 (9th Cir. 2000). The court must first determine a reasonable fee by multiplying “the number of hours reasonably expended on the litigation” by “a reasonable hourly rate.” Hensley, 461 U.S. at 433. Next, the court decides whether to adjust the lodestar calculation based on an evaluation of the factors articulated in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975), which have not been subsumed in the lodestar calculation. See Fischer, 214 F.3d at 1119 (citation omitted).

         The factors the Ninth Circuit set forth in Kerr are:

(1) the time and labor required, (2) the novelty and difficulty of the questions involved, (3) the skill requisite to perform the legal service properly, (4) the preclusion of other employment by the attorney due to acceptance of the case, (5) the customary fee, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and the results obtained, (9) the experience, reputation, and ability of the attorneys, (10) the “undesirability” of the case, (11) the nature and length of the professional relationship with the client, and (12) awards in similar cases.

Kerr, 526 F.2d at 70. Factors one through five are subsumed in the lodestar calculation. See Morales v. City of San Rafael, 96 F.3d 359, 364 n. 9 (9th Cir. 1996). Further, the sixth factor, whether the fee is fixed or contingent, may not be considered in the lodestar calculation. See Davis v. City & Cnty. of S.F., 976 F.2d 1536, 1549 (9th Cir. 1992), vacated in part on other grounds, 984 F.2d 345 (9th Cir. 1993). Once calculated, the “lodestar” is presumptively reasonable. See Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 483 U.S. 711, 728 (1987). Finally, only in “rare and exceptional cases” should a court adjust the lodestar figure. Van Gerwen v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir. 2000) (internal quotations omitted). See also Fischer, 214 F.3d at 1119 n. 4 (stating that the lodestar figure should only be adjusted in rare and exceptional cases).

         III. RAS' MOTION

         Charleston argues that RAS' fees are unreasonable because the issues on appeal were identical to the issues briefed and argued in the Bankruptcy Court and this Court, the majority of the work was performed by partners or “senior counsel” who billed at hourly rates that are higher than the Las Vegas market rate, and RAS's counsel often lump their time entries which makes it difficult to assess the reasonableness of the time spent. (ECF No. 117.) RAS contends that the hours spent was reasonable given Charleston's aggressive approach, counsel for RAS and CNB collaborated to avoid duplication of efforts, the development rights at issue justified the time spent by experienced attorneys, the issues raised were novel and required extensive research, the time billed was properly broken down by task and RAS's counsel already discounted their fees by 15% across the board. (ECF Nos. 112, 124.)

         While the Court is not familiar with the parties' approach or the proceedings in connection with the appeal, the Court has an understanding of this case in general having considered the appeal from the Bankruptcy Court. There is no question that the stake in this case is significant given the development rights at issue to justify all parties utilizing experienced partners or senior attorneys at their counsel's law firm. Other than legal research, the work involved in connection with the appeal is generally the type one would expect to be performed by experienced partners. As to legal research, it is difficult to question the reasonableness of a more senior attorney's preference for doing their own legal research to be more versed in the issues than to delegate. The Court does not find that the staffing of multiple partners or the time expended in general to be unreasonable, except for ...

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