United States District Court, W.D. Arkansas, Fayetteville Division
MEMORANDUM OPINION AND ORDER
TIMOTHY L. BROOKS, UNITED STATES DISTRICT JUDGE
Now
pending before the Court are a Motion for Attorneys' Fees
and Costs (Doc. 131) filed by Plaintiff Henry Law Firm
("HLF"), a Motion to Quash Writ of Garnishment
(Doc. 142) and Supplement to the Motion to Quash (Doc. 144)
filed by Separate Defendant Adel Atalla, and a Rule 54(b)
Motion (Doc. 145) filed by HLF.
The
Motion for Attorneys' Fees and Costs requests that the
Court not only order the payment of fees and costs, but also
consider sanctioning Atalla's attorneys "for signing
... bad faith pleadings" and "for serving as the
paid mouthpiece for Atalla's objectively bad-faith
litigation tactics." (Doc. 132, p. 3). Accordingly,
Atalla's local counsel, Lloyd W. Kitchens, has filed a
Response in Opposition to the Motion for Fees and Costs on
behalf of Atalla (Docs. 133, 134) that focuses on the
propriety of HLF's request for fees and costs, while
Atalla's California-based counsel, attorneys Brian P.
Worthington and Deborah A. Wolfe, have filed a separate
Response on behalf of Atalla (Doc. 136) that focuses on
HLF's request for sanctions. HLF has filed a combined
Reply (Doc. 140) to both Responses.
The
Motion to Quash Writ of Garnishment filed by Atalla and the
Rule 54(b) Motion filed by HLF concern the Judgment (Doc.
127) that the Court entered on behalf of HLF and against
Atalla on January 4, 2019. The Judgment did not expressly
state that it was final and immediately appealable, in
accordance with Federal Rule of Civil Procedure 54(b), which
reads as follows:
(b) Judgment on Multiple Claims or Involving Multiple
Parties. When an action presents more than one claim for
relief-whether as a claim, counterclaim, crossclaim, or
third-party claim-or when multiple parties are involved, the
court may direct entry of a final judgment as to one or more,
but fewer than all, claims or parties only if the court
expressly determines that there is no just reason for delay.
Otherwise, any order or other decision, however designated,
that adjudicates fewer than all the claims or the rights and
liabilities of fewer than all the parties does not end the
action as to any of the claims or parties and may be revised
at any time before the entry of a judgment adjudicating all
the claims and all the parties' rights and liabilities.
Atalla
contends in his Motion to Quash Writ of Garnishment that HLF
should not be permitted to garnish Atalla's assets to
satisfy the Judgment because the Judgment was not entered in
conformity with Rule 54(b) and therefore is not final and
subject to collection. HLF apparently agrees, and it asks the
Court in its Rule 54(b) Motion to amend its Judgment against
Atalla to conform with Rule 54(b)'s requirements.
Below,
the Court will begin its discussion by addressing HLF's
Motion for Attorneys' Fees and Costs, as well as for
sanctions. Then, the Court will turn to the Motion to Quash
Writ of Garnishment along with the Rule 54(b) Motion. As will
be explained in greater detail herein, (1) HLF's Motion
for Attorneys' Fees and Costs is GRANTED
as to the request for fees and costs but
DENIED as to the request for sanctions; (2)
HLF's Rule 54(b) Motion is GRANTED and
an Amended Final Judgment will issue; and (3) Atalla's
Motion to Quash the Writ of Garnishment (as execution against
the original Judgment) is GRANTED.
I.
Motion for Attorneys' Fees and Costs
The
Motion for Attorneys' Fees and Costs requests fees for
HLF's counsel totaling $55, 819.58 and costs totaling $1,
620.60. It also requests that the Court consider sanctioning
Atalla's attorneys for their conduct in prosecuting this
case, pursuant to 28 U.S.C. § 1927, which permits the
Court, in its discretion, to require an attorney "who so
multiplies the proceedings in any case unreasonably and
vexatiously ... to satisfy personally the excess costs,
expenses, and attorneys' fees reasonably incurred because
of such conduct." 28 U.S.C. § 1927.
Beginning
with the question of fees, the Court looks to the following
relevant factors, as set forth by the Arkansas Supreme Court
in Chrisco v. Sun Industries, Inc., 304 Ark. 227,
229-30 (1990), and cited to with approval by the Eighth
Circuit, see All-Ways Logistics, Inc. v. USA Truck,
Inc., 583 F.3d 511, 521 (8th Cir. 2009): the amount of
time counsel invested in the lawsuit; the appropriateness of
counsel's rates, given the experience and ability of the
attorneys; the time and labor required to perform the legal
services properly; the amount potentially at issue in the
case; the results obtained; the novelty and difficulty of the
issues involved; and the prevailing rate customarily charged
in this area for similar legal services.
Atalla
does not seriously contest that the Chrisco factors
weigh more heavily in HLF's favor. And he specifically
concedes HLF's counsel's rate of $300.00 per hour is
appropriate, given counsel's experience and abilities.
Instead, Atalla argues more generally that the total fee
requested is excessive because this case should have been a
simple collection matter, and in the end, "judgment was
obtained in just months of litigation." (Doc. 134, p.
3). The Court agrees this could have been a simple
collection case, but it didn't turn out that way. Atalla
is solely responsible for running-up HLF's fees, and the
current cries of foul ring hollow in the wake of his
meritless defenses and intentional tactics of delay. For
example, Atalla joined his co-Defendant, Cuker Interactive,
LLC ("Cuker"), in initially protesting this
Court's jurisdiction and/or venue by filing a Motion to
Dismiss or to Transfer (Doc. 7), which was fully briefed, but
ultimately (and easily) denied by the Court, see
Doc. 15. Then Atalla joined Cuker in filing a meritless
Counterclaim and Third Party Complaint for malpractice (Doc.
20), followed by an Amended Counterclaim and Amended Third
Party Complaint (Doc. 32), which was the subject of
exhaustive briefing before being finally dismissed pursuant
to Rule 12(b)(6), see Doc. 69. Atalla restyled these
same malpractice allegations as parallel affirmative defenses
to HLF's contract claims. Next, the parties engaged in
discovery, which resulted in more than one dispute (caused by
Atalla's own unreasonable position) and, on one occasion,
necessitated a telephone conference with the Court,
see Doc. 85. Finally, HLF filed a motion for summary
judgment, and Atalla filed a cross-motion-both of which were
fully briefed.[1] Along the way this Court witnessed a
revolving door of attorneys who appeared of record for
Atalla-some of whom were grossly unprepared during their
appearances before this Court, (e.g. Doc. 23). In total, the
docket reflects six attorneys from five separate law firms
who-within a few short months after entering their
appearances-sought to withdraw.[2] This start-stop approach was a
delay tactic that resulted in no less than five motions for
extensions of time and/or continuances. (Docs. 10, 44, 82,
95, and 100).
So,
what should have been a "simple" collection case
ended up becoming a dragged-out, painful slog to the
case's inevitable conclusion. Ultimately, the Court found
on summary judgment that the guarantee agreement that Atalla
signed was unambiguous and valid, and that, in light of the
fact that Cuker refused to pay the legal bill it owed to HLF,
there was no genuine dispute that Atalla was collaterally
liable to HLF for Cuker's legal debts. See Doc.
126, pp. 8-9. The Court also found that the amount of damages
that Atalla owed to HLF for Cuker's legal bill was
established by a judicial order issued in a
previously-decided case, and that Atalla was judicially
estopped from questioning the bill now. See Id. at
10-13. The circumstances of this case were such that the
Court was moved to preface its summary judgment decision as
follows:
Atalla's post-hoc critique of [HLF's legal] bill is a
transparent act of bad faith. It is a last-ditch attempt to
delay paying the bill until after the appeal of the Walmart
case has ...