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Fantastic Sams Franchise Corp. v. Mosley

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

July 27, 2017

Fantastic Sams Franchise Corporation, Plaintiff,
v.
Gerald Mosley, Defendant.

          MEMORANDUM OPINION & ORDER

          GRAY H. MILLER UNITED STATES DISTRICT JUDGE.

         Pending before the court is the plaintiff Fantastic Sams Franchise Corporation's (“Fantastic Sams”) motion for attorneys' fees, litigation expenses, and court costs. Dkt. 31. Having considered the motion, evidentiary record, and applicable law, the court is of the opinion that the motion (Dkt. 31) should be GRANTED IN PART AND DENIED IN PART.

         I. Background

         On August 3, 2016, Fantastic Sams filed a complaint against defendant Gerald Mosley for preliminary injunctive relief, alleging breach of contract, unfair competition, and trademark and trade dress infringement and dilution under the Lanham Act and Texas common law. Dkt. 1. Mosley is a former franchisee of Fantastic Sams. Id. On April 18, 2005, Mosley entered into a ten-year franchise agreement with Fantastic Sams by contracting with Salons Corp. (the parent company to Fantastic Sams). Dkt. 2, Ex. A at 12 (“Franchise Agreement”). Mosley did not exercise his opportunity to renew the franchise, and the Agreement expired on April 17, 2016. Dkt. 1 at 7; Dkt. 16 at 7. The Franchise Agreement contains a Mediation and Arbitration provision for dispute resolution. Dkt. 2, Ex. A. at 31. However, Fantastic Sams reserved the right to seek temporary injunctive relief from a court of competent jurisdiction. Id.

         Fantastic Sams's sought an injunction against Mosley because he was operating a competing hair salon, Shear Perfection of Cypress, in violation his contractual obligations under the Franchise Agreement. Dkt. 11. Mosley filed a motion to dismiss Fantastic Sams's claim. Dkt. 16. On November 29, 2016, the court held a hearing on the motion for a preliminary injunction. Dkts. 18. On December 23, 2016, the court granted in part Fantastic Sams's motion for preliminary injunction solely on the breach of contract cause of action. Dkt. 20. The court also denied Mosley's motion to dismiss. Dkt. 20.

         On January 9, 2017, Fantastic Sams filed a motion to enforce the preliminary injunction. Dkt. 21. On January 13, 2017, Fantastic Sams filed a motion for summary judgment. Dkt. 22. The court denied the motion to enforce and granted in part Fantastic Sam's motion for summary judgment and issued a permanent injunction on the breach of contract cause of action. Dkt. 29. The court order enjoined Mosley, for a period of two years, from operating a competing hair salon within a five mile radius of his former Fantastic Sams franchise location, as required by his franchise agreement. Dkts. 20, 29.

         On February 21, 2017, Fantastic Sams filed a motion for attorneys' fees, litigation expenses, and court costs. Dkt. 31. Mosley did not respond. The Franchise Agreement includes a clause that states:

In the event it becomes necessary for either party to institute any action or proceeding to secure or protect such party's rights under this Agreement, the successful party shall be entlted to recover in any judgment its attorneys' fees, together with court costs, and any and all filing fees and litigation expenses.

Dkt. 2, Ex. A at 34.

         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 ...


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