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Design Basics LLC v. Lexington Homes Inc.

United States District Court, E.D. Wisconsin

May 8, 2017

DESIGN BASICS LLC, PRIME DESIGNS, INC., and PLAN PROS, INC. Plaintiffs,
v.
LEXINGTON HOMES INC., TEAM STIMPSON LLC, TAILWIND CROSSINGS, LLC, PONDS OF MENASHA, LLC, FIELDSTONE INVESTMENTS, LLC, CENTENNIAL CENTRE, LLC, JEFFREY T. MARLOW, and MICHELLE L. STIMPSON, Defendants, and ACUITY, A MUTUAL INSURANCE COMPANY, Intervenor Defendant.

          DECISION AND ORDER

          William C. Griesbach, Chief Judge

         Plaintiffs Design Basics LLC; Prime Designs, Inc; and Plan Pros, Inc. brought this action against Defendants Lexington Homes, Inc.; Team Stimpson, LLC; Tailwind Crossings, LLC; Ponds of Menasha, LLC; Fieldstone Investments, LLC; Centennial Centre, LLC; Jeffrey Marlow; and Michelle Stimpson (the Lexington Defendants) in 2014. Acuity moved to intervene in the case on December 12, 2014. On January 17, 2017, the court ordered Plaintiffs to pay Defendants' reasonably incurred attorneys' fees and expenses. Defendants now seek a total of $275, 704.88 in attorneys' fees and other expenses. For the reasons below, Acuity is entitled to receive attorneys' fees and other expenses totaling $243, 506.28, but the Lexington Defendants are not entitled to recover their requested attorneys' fees.

         BACKGROUND

         The facts of the underlying action are set forth more fully in the court's decision and order granting Defendants' motion for summary judgment. (ECF No. 100.) In brief, Plaintiffs filed this copyright infringement suit against Defendants on September 10, 2014. On December 12, 2014, Acuity moved to intervene in the case, and the Lexington Defendants tendered the defense to Acuity. On September 29, 2016, the court granted the Lexington Defendants' motion for summary judgment and dismissed Plaintiff's claims. The court granted Defendants' motion for attorneys' fees and expenses under 17 U.S.C. § 505 on January 17, 2017.

         LEGAL STANDARD

         A court calculates attorneys' fees using the “lodestar” amount: “the number of hours that any attorney worked on the case multiplied by a reasonable hourly rate.” Jeffboat, LLC v. Director, Office of Workers' Compensation Programs, 553 F.3d 487, 489 (7th Cir. 2009) (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Mathur v. Bd. of Trs. of S. Ill. Univ., 317 F.3d 738, 742 (7th Cir. 2003)). The court may then adjust the figure depending on a variety of factors, including the time and labor required, the novelty and difficulty of the issue, the degree of the success achieved, the experience and ability of the attorneys, the amount involved and the results obtained, and awards in similar cases. Hensley, 461 U.S. at 429-30 n.3. The party seeking an award of attorneys' fees bears the burden of proving the reasonableness of the fees. Spegon v. Catholic Bishop, 175 F.3d 544, 550 (7th Cir. 1999) (citations omitted).

         ANALYSIS

          A. Acuity's Attorneys' Fees

         Acuity seeks a total award of $228, 272.11 in attorneys' fees which sum represents the work of four law firms. Plaintiffs argue that Acuity has not shown that these attorneys' fees are reasonable. A reasonable hourly rate is “derived from the market rate for the services rendered.” Pickett v. Sheridan Health Care Ctr., 664 F.3d 632, 640 (7th Cir. 2011) (quoting Denius v. Dunlap, 330 F.3d 919, 930 (7th Cir. 2003)). The fee applicant bears the burden of “produc[ing] satisfactory evidence-in addition to the attorney's own affidavits-that the requested rates are in line with those prevailing in the community.” Id. (quoting Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984)). The court will address the reasonableness of each firms' fees in turn.

         1. Davis & Kuelthau and von Brissen & Roper, s.c.

         When the defense of this matter was tendered to Acuity, the Lexington Defendants requested to have Davis & Kuelthau, their existing attorneys, continue representeing them instead of counsel appointed by Acuity. (Kowalkowski Decl. ¶ 5, ECF No. 134.) Acuity allowed Davis & Kuelthau to be its merits counsel, but not before negotiating a standard billing rate for its services.

         Davis & Kuelthau's attorneys, Frank Kowalkowski and Sherry Coley, billed the most hours of any of Acuity's attorneys in this case. Attorney Kowalkowski has been practicing law for 22 years and Attorney Coley has been practicing law for 11 years. (Id. ¶¶ 3-4.) Their 2014 rates, the year in which the action was filed, were $310 and $300, respectively. (Defs.' Reply Br. at 2, ECF No. 133.) Nevertheless, Acuity agreed to pay an hourly rate of $240 for any attorney and $125 for any paralegal or librarian working on the matter. (Id.) As a result, the standard hourly rates for Davis & Kuelthau attorneys were reduced anywhere from 20 to 23%.

         Plaintiffs argue that an hourly rate of $240 for an attorney is “unbelievably high in the geographic locale of Green Bay, Wisconsin.” (Pls.' Br. in Opp. at 11, ECF No. 129.) Yet, they do not suggest an alternative billing rate that would be reasonable. An attorney's “actual billing rate for comparable work is presumptively appropriate to use as the market rate.” People Who Care v. Rockford Bd. of Educ., 90 F.3d 1307, 1310 (7th Cir. 1996). The hourly rates requested for Davis & Kuelthau are below the rate its attorneys normally bill for comparative work. In short, Acuity has demonstrated that Davis & Kuelthau's hourly rates are reasonable.

         Plaintiffs also complain Davis & Kuelthau attorneys used block billing and vague descriptions to document their time entries. They claim counsel improperly lumps several tasks into a single entry without specifying the amount of time spent on each task and request a blanket fee reduction of 40%. “Although ‘block billing' does not provide the best possible description of attorneys' fees, it is not a prohibited practice.” Farfaras v. Citizens Bank & Trust of Chi., 433 F.3d 558, 569 (7th Cir. 2006). Acuity's counsel submitted a comprehensive statement of its charges, including the amount of time spent on ...


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