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Kiewit Offshore Services Ltd. v. Dresser-Rand Global Services, Inc.

United States District Court, S.D. Texas, Houston Division

June 15, 2017

Kiewit Offshore Services Ltd., Plaintiff,
v.
Dresser-Rand Global Services, Inc., Defendant.

          MEMORANDUM OPINION AND ORDER

          Gray H. Miller United States District Judge

         Pending before the court is plaintiff Kiewit Offshore Services, Ltd.'s (“Kiewit”) motion for attorneys' fees and costs. Dkt. 77. Having considered the motion, response, and applicable law, the court is of the opinion that Kiewit's motion for attorneys' fees and costs should be GRANTED IN PART and DENIED IN PART.

         I. Background

         This motion for attorneys' fees stems from a business dispute between Kiewit and defendant Dresser-Rand Global Services, Inc. (“Dresser-Rand”) for services that Kiewit rendered in engineering, designing, and fabricating two 1220 ton litoral compression modules for Dresser-Rand. Dkts. 1, 62. The contract between the two parties included an estimated “contract price before Change Orders” of approximately $27 million. Dkt. 62; Dkt. 77-1, Ex. A (“Contract”). While working on the project, Kiewit submitted eight invoices to Dresser-Rand. Id. Dresser-Rand paid the first four invoices, totaling approximately $33 million. Id. However, Dresser-Rand refused to pay the remaining four invoices, totaling approximately $9.5 million. Id. Dresser-Rand alleged that Kiewit invoiced Dresser-Rand without submitting a Change Order for “Changes in the Scope of Work” as required under their contract. Id.

         On May 14, 2015, Kiewit filed this lawsuit against Dresser-Rand, raising claims for breach of contract, promissory estoppel, and unjust enrichment. Dkt. 1. On June 12, 2015, Dresser-Rand filed an answer and a counterclaim for breach of contract. Dkt. 3. The parties filed a series of motions for summary judgment. See Dkts. 15-23, 46-47. On September 1, 2016, the court issued its memorandum opinion and order granting Kiewit's five motions for partial summary judgment on Dresser-Rand's counterclaims and Kiewit's claims for payment of invoices. Dkt. 62. The court held that Dresser-Rand was liable for breach of contract for its failure to pay Kiewit $9, 572, 271.90. Id. The court also granted Dresser-Rand's motion for summary judgment in part on Kiewit's claims for Project Impact Damages, promissory estoppel, and unjust enrichment. Id. The Project Impact Damages claim is based on allegations that Dresser-Rand failed to timely provide information that Kiewit and its subcontractor needed to design the modules. Id. The court held that Kiewit could not recover for these costs, because Kiewit did not follow the procedures outlined in the Contract. Id.

         On September 21, 2016, Kiewit filed a proposed final judgment seeking $9, 527, 271.90 for outstanding invoices, interest on the payments, and reasonable attorneys' fees and costs. Dkt. 64. Dresser-Rand objected and sought to delay final judgment until after the court has ruled on its motion for reconsideration (Dkt. 63) and has assessed an award of attorneys' fees. Dkt. 65.

         On September 20, 2016, Dresser-Rand filed a motion for reconsideration of the court's summary judgment order. Dkt. 63. In October 2016, the parties filed their respective response and reply, and the court held a hearing on the matter. Dkts. 67, 68, 70. On November 29, 2016, the court issued an order denying Dresser-Rand's motion for reconsideration (Dkt. 63). Dkt. 71. The court also issued an order outlining the briefing schedule for Kiewit's motion on attorneys' fees. Dkt. 72.

         On December 12, 2017, Dresser-Rand filed a motion to modify the briefing schedule for attorneys' fees and sought post-judgment discovery. Dkt. 73. On January 3, 2017, Kiewit filed its response (Dkt. 74), and the next day the court issued its order denying Dresser-Rand's motion to modify the briefing schedule for attorneys' fees and post-judgment discovery. Dkt. 75.

         On January 5, 2017, Kiewit filed a motion for attorneys' fees and costs seeking $2, 272, 399.62. Dkt. 77. On January 26, 2017, Dresser-Rand responded. Dkts. 79, 80. The motion has been fully briefed and is ripe for disposition.

         II. Legal Standard

         Once a court has determined that a plaintiff is entitled to attorneys' fees, then it must determine the amount. Hopwood v. Texas, 236 F.3d 256, 277 (5th Cir. 2000). The district court has “broad discretion in determining the amount of a fee award.” Associated Builders & Contractors of La., Inc. v. Orleans Par. Sch. Bd., 919 F.2d 374, 379 (5th Cir. 1990). Courts use a two-step process to calculate reasonable attorneys' fees. Migis v. Pearle Vision, Inc., 135 F.3d 1041, 1047 (5th Cir. 1998).

         First, the court calculates a “lodestar” fee by multiplying the reasonable number of hours spent on the case by the reasonable hourly rates for the participating lawyers. Id. Where “a plaintiff has achieved only partial or limited success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount. This will be true even where the plaintiff's claims were interrelated, nonfrivolous, and raised in good faith.” Saizan v. Delta Concrete Prods. Co., Inc., 448 F.3d 795, 801 (5th Cir. 2006) (citing Hensley v. Eckerhart, 461 U.S. 424, 436, 103 S.Ct. 1933 (1983)).

         Second, the court considers whether the lodestar should be adjusted upward or downward depending on the circumstances of the case, under the twelve Johnson factors. Migis, 135 F.3d at 1047 (citing Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974)). The factors are: (1) the time and labor required for the litigation; (2) the novelty and difficulty of the questions presented; (3) the skill required to perform the legal services 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 result 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. See Id . Texas courts weigh similar factors under Rule 1.04 of the Texas Disciplinary Rules of Professional Conduct to determine reasonable fees. See Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).

         The movant seeking attorneys' fees bears the initial burden of submitting adequate documentation of the hours expended and hourly rates. Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933 (1983) (“The applicant should exercise ‘billing judgment' with respect to hours worked . . . and should maintain billing time records in a manner that will enable a reviewing court to identify distinct claims.”).

         III. Analysis

         Kiewit contends that because it is the prevailing party in this case, it is entitled to attorneys' fees. Dkt. 77 (citing Dkt. 71). Although Kiewit did not prevail on its Project Impact Claim seeking approximately $7 million in damages, the court granted summary judgment in favor of Kiewit on its breach of contract claims for approximately $9.5 million in unpaid invoices and dismissed all of Dresser-Rand's counterclaims. Dkt. 62.

         “State law controls both the award of and the reasonableness of attorneys' fees awarded where state law supplies rule of decision.” Mathis v. Exxon Corp., 302 F.3d 448, 461 (5th Cir. 2002). The court finds that an award of attorneys' fees is warranted based on the Contract between the parties. See Dkt. 77, Ex. A (Contract, Art. 913) (“[I]f suit is brought . . . then the prevailing Party shall be entitled to recover reasonable attorneys' fees and costs from the other Party.”). Here, Kiewit's breach of contract claim was governed by Texas law, and Kiewit is entitled to fees incurred in successfully litigating its breach of contract claim. See Tex. R. Civ. Pro. § 38.001.

         The first step in determining an award of attorneys' fees is to calculate the lodestar by multiplying the reasonable number of hours spent on the case by the reasonable hourly rates for the participating lawyers. Migis, 135 F.3d at 1047. Kiewit incurred $2, 239, 321.75 in attorneys' fees and $216, 442.20 in costs. Dkt. 77 at 22; Dkt. 77-4, Ex. B-2. After voluntarily reducing its fees and costs by 15% to account for the segregation of fees and a billing judgment deduction in costs, Kiewit seeks $1, 903, 423.75 in attorneys' fees; $183, 975.90 in costs; $35, 000 in post-judgment fees for the additional time incurred responding to Dresser-Rand's motion to modify the court's attorneys' fees briefing schedule; and $150, 000 in conditional appellate fees. Dkt. 77 at 22. In total, Kiewit seeks $2, 272, 399.62 in attorneys' fees and costs. Id.

         Dresser-Rand does not dispute the rates charged by Kiewit's counsel, but objects to the excessive amount of time Kiewit's counsel spent on each task. Dkt. 79. Specifically, Dresser-Rand asserts that the fees should be reduced because Kiewit's attorneys: (1) failed to exercise good billing judgment, (2) billed for paralegal clerical work which is not recoverable, (3) reduced the total fee for hours worked on its unsuccessful claims by 15% instead of by 30%, (4) did not substantiate the $35, 000 requested in post-judgment fees, and (5) did not substantiate the $150, 000 requested in conditional appellate fees. Dkt. 79.

         A. Reasonable Hourly Rate

         A reasonable rate for an award of attorneys' fees is the “prevailing market rates in relevant community” for attorneys of comparable experience employed in cases of similar complexity. Blum v. Stenson, 465 U.S. 886, 895-96 n.11 (1984). Kiewit's fees are based on average hourly rates for partners ($353-$402 per hour), associates ($241-$242 per hour), and paralegals ($150-$160). Dkt. 77-2 (Fogler expert report); Dkt. 77-4, Ex. B-2 (fee summary chart). Kiewit's expert witness on attorneys' fees, Murray Fogler, attests that these hourly rates are customarily charged in Houston for similar legal services and are on the “low side.” Dkt. 77-2 at 8. Dresser-Rand does not dispute the rates. The court finds the rates charged are reasonable given the level of complexity of the case.

         B. ...


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