CARPET SUPER MART, INC. v. BENCHMARK INTERNATIONAL COMPANY SALES SPECIALIST, LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CARPET SUPER MART, INC., )

ARTHUR C. JORDAN, JR., and )

JOYCE J. MOBLEY, )

)

Plaintiffs, )

)

v.. ) 1:18CV398

)

BENCHMARK INTERNATIONAL COMPANY )

SALES SPECIALIST, LLC, DARA )

SHAREEF, and BRIAN LOCKLEY, )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

OSTEEN, JR., District Judge

Before the court are Defendants’ motions for the award of

attorneys’ fees under the terms of their contract with

Plaintiffs. (Docs. 24, 42.) The first motion seeks attorneys’

fees for the trial court action in which Defendants prevailed.

(Doc. 24.) The second motion seeks the award of attorneys’ fees

for defending against Plaintiffs’ appeal. (Doc. 42.) For the

reasons stated herein, the court finds that both motions should

be granted insofar as fees should be awarded, but the court

defers its determination of a reasonable fee award pending the

process outlined in the conclusion of this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Background

A lengthy recitation of the facts is not necessary. The

court incorporates the factual details from its order dismissing

the action. See Carpet Super Mart, Inc. v. Benchmark Int’l Co.

Sales Specialist, LLC, No. 1:18CV398, 2019 WL 1244086, at *1

(M.D.N.C. Mar. 18, 2019), aff’d, 789 F. App’x 379 (4th Cir.

2020). Additional relevant factual findings will be addressed as

needed in this opinion.

Plaintiff Carpet Super Mart, Inc. (“Carpet Super Mart”) is

a North Carolina corporation that “was engaged in the business

of commercial and residential sales and installation of carpet

and flooring products.” (First Amended Complaint (“Am. Compl.”)

(Doc. 21) ¶ 17.) Plaintiffs Arthur C. Jordan, Jr. (“Jordan”)

and Joyce J. Mobley (“Mobley”) were the owners of Carpet Super

Mart. (Id. ¶ 18.) Plaintiffs entered into a listing agreement

(the “Agreement”) with Defendant Benchmark International Company

Sales Specialist, LLC (“Benchmark”) on May 27, 2014, pursuant to

which Benchmark agreed to provide certain services to facilitate

the sale of Carpet Super Mart. (Id. ¶¶ 19, 25; Ex. A (Doc.

21-1).) Defendants Dara Shareef and Brian Lockley are each

employed by Benchmark. (Am. Compl. (Doc. 21) ¶¶ 9–10.)

Plaintiffs’ written agreement included attached terms and

conditions (“Terms and Conditions”). (Am. Compl. (Doc. 21)

Ex. B, Benchmark Standard Terms and Conditions (Doc. 21-2).)

This court previously found that those Terms and Conditions were

properly incorporated into the primary contract. Carpet Super

Mart, 2019 WL 1244086, at *4. Those Terms and Conditions

included an attorneys’ fee provision that states:

In the event that either party to this Agreement

brings suit to enforce this Agreement, or for damages

relating to a breach of this Agreement, the prevailing

party shall be entitled to recover from the other, in

addition to its damages or other remedy, all costs and

reasonable attorney’s fees, both at trial and the

appellate level.

(Terms & Conditions (Doc. 21-2) ¶ 8(j).)

This diversity action was originally filed in North

Carolina state court and subsequently removed to this court.

(Doc. 1.) Plaintiffs’ Complaint sought a declaratory judgment

invalidating and/or altering the written contract. (Complaint

(“Compl.”) (Doc. 3) ¶¶ 63–68.) Plaintiffs also brought

“alternative” claims for Fraud and Misrepresentation, (id.

¶¶ 69–89), Unfair and Deceptive Trade Practices (“UDTPA”), (id.

¶¶ 96–99), and a claim for Civil RICO, (id. ¶¶ 90–95), though

they later dismissed that claim in their Amended Complaint, (see

generally Am. Compl. (Doc. 21)). The RICO claim was withdrawn

after Defendants filed their Rule 11 Motion for Sanctions, (Doc.

13), though the court declined to “draw any adverse inference”

from the timing. Carpet Super Mart, 2019 WL 1244086, at *5 n.6.

This court dismissed Plaintiffs’ Amended Complaint in its

entirety and with prejudice on March 18, 2019. Id. at *6.

Plaintiffs filed an appeal, and the Fourth Circuit subsequently

affirmed this court in all respects. See Carpet Super Mart, Inc.

v. Benchmark Int’l Co. Sales Specialist, LLC, 789 F. App’x 379,

380 (4th Cir. 2020).

B. Procedural Background: Motions for Fees

Within fourteen days of this court entering judgment,

Defendants filed a motion for trial-level attorneys’ fees

pursuant to Fed. R. Civ. P. 54(d). (Doc. 24.) Defendants also

filed a supporting brief, (Defs. Mem. in Supp. of Rule 54(d)

Mot. for Award of Attorneys’ Trial Fees (“Defs.’ Trial Br.”)

(Doc. 25)); Plaintiffs responded, (Pls’ Resp. to Defs.’ Mot.

for Trial Fees (“Pls.’ Trial Resp.”) (Doc. 28)); and Defendants

replied, (Defs.’ Reply to Pls.’ Resp. to Defs.’ Mot. for Trial

Fees (“Defs.’ Trial Reply”) (Doc. 30)). Defendants consulted

with Plaintiffs as required by Local Rule of Civil Procedure

54.2. (Doc. 37.) The parties were unable to reach an agreement

about trial fees; therefore, Defendants filed several sworn

declarations and an affidavit to support their requested trial

fees. (Docs. 31, 32, 33, 34, 35, 36, 38.) Defendants also filed

a supplemental memorandum summarizing the declarations. (Defs.’

Mem. Summarizing Trial Fees Declarations (“Defs.’ Trial Summ.”)

(Doc. 39).)

Within fourteen days of the Court of Appeals entering

judgment affirming this court’s decision, Defendants filed a

motion for appellate attorneys’ fees pursuant to Fed. R. Civ. P.

54(d). (Doc. 42.) Defendants also filed a supporting brief,

(Defs.’ Mem. in Supp. of Mot. for Appellate Fees (“Defs.’ Appeal

Br.”) (Doc. 43).) Plaintiffs moved the court to file a response

out of time, (Docs. 46, 47), which this court granted, (Doc.

49). Plaintiffs filed their response, (Pls.’ Resp. to Defs.’

Mot. for Appellate Fees (“Pls.’ Appeal Resp.”) (Doc. 45)), and

Defendants replied, (Defs.’ Reply to Pls.’ Resp. to Defs.’ Mot.

for Appeal Fees (“Defs.’ Appeal Reply”) (Doc. 48)). Defendants

again consulted with Plaintiffs, pursuant to Local Rule of Civil

Procedure 54.2. (Doc. 50.) The parties were unable to reach an

agreement about appellate fees, so Defendants filed several

sworn declarations and an affidavit to support their requested

appellate fees. (Docs. 51, 52, 53, 54, 55, 56.) Defendants also

filed a supplemental memorandum summarizing the evidence

regarding appellate fees. (Defs.’ Mem. Summarizing Appellate

Fees Declarations (“Defs.’ Appeal Summ.”) (Doc. 57).)

Plaintiffs have not requested a hearing, have not presented

their own evidence, and have not contested any specific billing

entry offered by Defendants. Both motions are ripe for ruling.

C. Arguments

Defendants argue that they are entitled to attorneys’ fees

pursuant to the Terms and Conditions of the Agreement. (Terms &

Conditions (Doc. 21-2) ¶ 8(j).) Defendants argue they are

entitled to fees, both for trial and appellate work, regardless

of whether North Carolina or Florida law applies. (Defs.’ Trial

Br. (Doc. 25) at 10 n.4; Defs.’ Appeal Br. (Doc. 43) at 5.)1

Plaintiffs’ response to the trial fees motion raises two

issues. First, Plaintiffs argue that the fee estimate provided

by Defendants was four-to-five times higher than Plaintiffs’

fees, suggesting unreasonableness. (Pls.’ Trial Response (Doc.

28) at 3.) Second, Plaintiffs argue that, since Defendants’

Motion for Sanctions, (Doc. 13), was denied, Defendants should

not recover fees for work on that specific motion, (id. at 3–4).

In its response to Defendants’ motion for attorneys’ fees

following the appeal, Plaintiffs repeated, almost verbatim, the

first two arguments, and then added two more. (Pls.’ Appeal

1 All citations in this Memorandum Opinion and Order to

documents filed with the court refer to the page numbers located

at the bottom right-hand corner of the documents as they appear

on CM/ECF.

Resp. (Doc. 45) at 4.) Plaintiffs now argue that the underlying

action, a declaratory judgment action, was not a suit related to

enforcement of the contract. (Id.) Therefore, they argue, the

Agreement’s attorneys’ fee provision does not apply. Plaintiffs

further argue that no North Carolina court has construed N.C.

Gen. Stat. § 6-21.6 to apply to declaratory judgment actions,

and that such a construction would be barred since the statute

does not expressly include declaratory judgment actions.2 (Id.)

The court addresses these arguments in two sections. First,

the court considers whether fees should be awarded. Next, the

court addresses reasonable fees. Finding that fees should be

awarded, but unable to determine if the requested fees are

2 The court notes that Plaintiffs did not raise their

statutory or contract interpretation arguments until their

response to Defendants’ Motion for Appellate Attorneys’ Fees.

(Compare Pls.’ Trial Resp. (Doc. 28), with Pls.’ Appeal Resp.

(Doc. 45).) Plaintiffs did not contest the propriety of awarding

attorneys’ fees at the trial level, pending appeal, only the

estimated amount. (See Pls.’ Trial Resp. (Doc. 28) at 3.)

Plaintiffs’ newly raised arguments are untimely as to the trial-

level fees, but the court will still address the arguments as to

both.

reasonable, the court defers its determination of a reasonable

fee award and provides additional directions to the parties.3

II. WHETHER FEES SHOULD BE AWARDED

The court finds that trial and appellate attorneys’ fees

should be awarded pursuant to the fee provision in the

Agreement’s Terms and Conditions.

“Attorney’s fees mandated by state statute are available

when a federal court sits in diversity.” Cotton v. Slone, 4 F.3d

176, 180 (2d Cir. 1993) (citing Alyeska Pipeline Serv. Co. v.

Wilderness Soc’y, 421 U.S. 240, 259 n.31 (1975)); see Legacy

Data Access, Inc. v. Cadrillion, LLC, 889 F.3d 158, 169 (4th

Cir. 2018) (noting, implicitly, that attorneys’ fees may be

awarded under N.C. Gen. Stat. § 6-21.6 in a diversity action).

Fees may be awarded based on state law in diversity actions

3 “The court may decide issues of liability for fees before

receiving submissions on the value of services.” Fed. R. Civ. P.

54(d)(2)(C); Carter v. Inc. Vill. of Ocean Beach, 759 F.3d 159,

167 (2d Cir. 2014) (“Rule 54(d)(2)(C) is permissive; the court

‘may’ decide liability for fees first, but need not.”); see also

Fed. R. Civ. P. 54(d) advisory committee’s note to 1993

amendment (“The court is explicitly authorized to make a

determination of the liability for fees before receiving

submissions by the parties bearing on the amount of an award.

This option may be appropriate in actions in which the liability

issue is doubtful and the evaluation issues are numerous and

complex.”). Though the fee petition is not particularly complex,

as explained below, the evaluation issues before the court are

“numerous.”

because “[t]he right to an award of attorneys’ fees is

considered a matter of substantive law.” Astanza Design, LLC v.

Giemme Stile, S.P.A., 220 F. Supp. 3d 641, 651 (M.D.N.C. 2016)

(citing Alyeska Pipeline, 421 U.S. at 259 n.31). In North

Carolina,4 “[i]f a business contract governed by the laws of this

State contains a reciprocal attorneys’ fees provision, the court

. . . may award reasonable attorneys’ fees in accordance with

4 “[W]hen a court decides upon a rule of law, that decision

should continue to govern the same issues in subsequent stages

in the same case.” Arizona v. California, 460 U.S. 605, 618

(1983). The “Mandate Rule” requires a subordinate court to apply

the law of a superior court as it pertains to “issues expressly

or impliedly decided by the appellate court.” United States v.

Bell, 5 F.3d 64, 66 (4th Cir. 1993). Courts should not follow

the law-of-the-case doctrine if a previous decision was clearly

erroneous and following it “would work a manifest injustice.”

Arizona, 460 U.S. at 618 n.8.

Even if Florida law is appropriate in light of the choice-

of-law clause in paragraph 8(i) of the Terms and Conditions, see

Tanglewood Land Co. v. Byrd, 299 N.C. 260, 262, 261 S.E.2d 655,

656 (1980), the court agrees with Defendants that the result

here is the same under North Carolina or Florida law. For that

reason, the court will continue to apply the law of North

Carolina in interpreting the Agreement, since that is the law

that was applied at the trial and appellate levels.

the terms of the business contract.” N.C. Gen. Stat.

§ 6-21.6(c).5

A. Fee Provision Interpretation

The court begins with Plaintiffs’ argument that the

underlying action is not covered by the fee provision in the

Agreement.

“When a contract is in writing and free from any ambiguity

which would require resort to extrinsic evidence, or the

consideration of disputed fact, the intention of the parties is

a question of law.” Lane v. Scarborough, 284 N.C. 407, 410, 200

S.E.2d 622, 624 (1973). Here, Plaintiffs do not point to any

ambiguity that requires the consideration of extrinsic evidence.

Instead, they call the terms of the provision “express” and

argue those “express terms” exclude a declaratory judgment suit.

(Pls.’ Appeal Resp. (Doc. 45) at 4.) Therefore, this court may

interpret the contract as a matter of law.

“[W]hen the language of a contract is clear and

unambiguous, the court must interpret the contract as

written. . . .” Root v. Allstate Ins. Co., 272 N.C.

580, 583, 158 S.E.2d 829, 832 (1968) (citation

omitted). “The heart of a contract is the intention of

5 The requirement that the business contract be signed “by

hand,” N.C. Gen. Stat. § 6-21.6(b), is not in dispute, (see Doc.

22-1). Plaintiffs also do not contest that the attorneys’ fees

provision in the Terms and Conditions qualifies as a “Reciprocal

attorneys’ fees provision” under N.C. Gen. Stat. § 6-21.6(a)(4).

The fee provision contains definite terms and fits the statutory

definition.

the parties,” so the trial court must “seek to

determine the intention of the parties as shown by the

whole written instrument.” Id. (citation and quotation

marks omitted).

Master v. Country Club of Landfall, 263 N.C. App. 181, 187, 823

S.E.2d 115, 120 (2018). “If the plain language of a contract is

clear, the intention of the parties is inferred from the words

of the contract.” Walton v. City of Raleigh, 342 N.C. 879, 881,

467 S.E.2d 410, 411 (1996).

The court begins with the language of the provision itself.

The standard Terms and Conditions of the Agreement state that:

In the event that either party to this Agreement

brings suit to enforce this Agreement, or for damages

relating to a breach of this Agreement, the prevailing

party shall be entitled to recover from the other, in

addition to its damages or other remedy, all costs and

reasonable attorney’s fees, both at trial and the

appellate level.

(Terms & Conditions (Doc. 21-2) ¶ 8(j) (emphasis added).)

Plaintiffs contend that a declaratory judgment action is neither

a suit to enforce the agreement nor one related to a breach.

(Pls.’ Appeal Resp. (Doc. 45) at 4.) Instead, Plaintiffs argue

that their declaratory judgment action “merely requested the

Court to construe the agreement.” (Id.) The court disagrees with

Plaintiffs.

First, the fee provision specifically mentions both suits

to recover damages for a breach of the Agreement and suits to

enforce the Agreement. The inclusion of language allowing

recovery for suits enforcing the Agreement, separate from a

damages provision, indicates the parties intended to authorize

recovery of attorneys’ fees expended when a dispute arose

without the necessity of incurring damages from a breach.

Second, though Plaintiffs might suggest the only suit to

enforce the Agreement contemplated by the Terms and Conditions

was a suit seeking specific enforcement or injunctive relief,

the parties could have included more precise language, as they

did for breach and damages. Instead, they left the language

broad enough to include any suit to enforce the Agreement.

Third, the fee provision is broad by its own terms. The fee

provision applies to suits by either party, and it includes

pre- and post-breach actions. Plaintiffs’ interpretation,

however, would cabin the broad terms to exclude actions to

invalidate the Agreement itself, (see Am. Compl. (Doc. 21)

¶¶ 64(a), (e)), an absurd result given the shared intent of the

parties to conclude the sale of the business, (see generally

Doc. 21-1).6

Fourth, a declaratory judgment action has been construed as

a suit to enforce other agreements in other contexts,

strengthening the conclusion that the language of the fee

provision includes declaratory judgment actions. See Hemric v.

Groce, 154 N.C. App. 393, 398, 572 S.E.2d 254, 257 (2002)

(suggesting a declaratory judgment action as one of the ways to

enforce a consent judgment); DeMent v. Nationwide Mut. Ins. Co.,

142 N.C. App. 598, 604, 544 S.E.2d 797, 801 (2001) (noting, in a

declaratory judgment case, that third parties may bring actions

to “enforce a contract”); see also Widman v. Keene, 721 F. App’x

772, 775–76 (10th Cir. 2018) (interpreting California law and

classifying wife’s declaratory judgment action to determine

amount owed in settlement as an action to enforce a contract and

awarding attorneys’ fees); Rafael Rodriguez Barril, Inc. v.

6 The fee provision also states that the parties may recover

attorneys’ fees, “in addition to its damages or other remedy

. . . .” (Terms & Conditions (Doc. 21-1) ¶ 8(j).) A similar fee

provision that included costs incurred pursuing all remedies was

found to include declaratory judgment actions in at least one

other case. See Fluor Corp. v. Citadel Equity Fund Ltd., Civil

Action No. 3:08-CV-1556-B, 2011 WL 3820704, at *3 (N.D. Tex.

Aug. 26, 2011) (“Citadel’s argument that a declaratory judgment

action is not a suit for enforcement of a right is irrelevant.

The Indenture also allows party litigants to recover fees for a

remedy, and a declaratory judgment is a type of remedy.”).

Conbraco Indus., Inc., 619 F.3d 90, 92–93 (1st Cir. 2010)

(awarding attorneys’ fees for breach of contract and declaratory

judgment action to enforce agreement);7 Wis. Province of Soc’y of

Jesus v. Cassem, 373 F. Supp. 3d 378, 381, 385 (D. Conn. 2019)

(construing declaratory judgment action as an action to “enforce

a contractual right”); Principal Life Ins. Co. v. Robinson, No.

CV 00-1345-BR, 2003 WL 27383315, at *2 (D. Or. Mar. 21, 2003)

(noting that Oregon considers a declaratory judgment action

interpreting a lease as one to enforce a contract, thus meriting

attorneys’ fees); Pic ’N Pay Stores, Inc. v. Jessee, No. C.A.

79, 1986 WL 2148, at *1 (Tenn. Ct. App. Feb. 12, 1986) (refusing

to “emasculate” a contract’s fee provision based on argument

7 Rafael Rodriguez Barril discussed whether the action in

question was captured by a fee provision similar to the one at

bar. That provision stated fees should be awarded if “either

party brings suit to enforce the terms of this [a]greement.”

Rafael Rodriguez Barril, 619 F.3d at 93. The court found the

declaratory judgment action was captured by the provision

“insofar as [plaintiff] is suing for breach of contract and for

injunctive and declaratory relief seeking specific performance

of the contract.” Id. Plaintiffs here sought an enforceable

order and judgment regarding the Agreement. (See Complaint (Doc.

3) ¶ 68.) The practical effect of their suit was to enforce the

Agreement as they read it. Cf. Branch Banking & Trust Co. v.

Harrelson Bldg., LLC, 238 N.C. App. 362, 768 S.E.2d 200, 2014 WL

7472955, at *3–5 (2014) (unpublished table decision) (analyzing

a declaratory judgment action involving a lease to determine if

a “judgment adjudicating the existence or nonexistence of the

lease will directly and primarily affect defendant-lessors’

vested interest in the leasehold” (emphasis omitted)).

that declaratory judgment action was not an action to enforce a

provision of a lease); cf. BKCAP, LLC v. Captec Franchise Tr.

2000-1, 701 F. Supp. 2d 1030, 1035 (N.D. Ind. 2010) (finding

that a fee provision did not cover defending against a

declaratory judgment action when the provision, by its own

terms, only applied to actions by a lender to enforce its

rights).8

Fifth, Plaintiffs did not bring a strict breach of contract

action, but the declaratory judgment action was a “suit to

enforce this Agreement” as the Plaintiffs wanted it enforced,

8 There have been some other contexts where declaratory

judgments did not qualify for attorneys’ fees or as enforcement

actions. In the §§ 1983, 1988 context, the Supreme Court has

noted that a “declaratory judgment . . . will constitute relief,

for purposes of § 1988, if, and only if, it affects the behavior

of the defendant toward the plaintiff.” Rhodes v. Stewart, 488

U.S. 1, 4 (1988). The Rhodes Court noted that the plaintiffs,

former inmates, would not receive the benefit of their judgment

since they were no longer prisoners. Id. Such is not the case

here.

Some district courts have also found that declaratory

judgment actions in the ERISA context are not suits to enforce

the terms of an ERISA plan, but are actions to clarify

obligations. See Siskin Enters., Inc. v. W.B. Stoddard, Jr.,

Inc., 147 F. Supp. 2d 1125, 1129 (D. Utah 2001); Conn. Gen. Life

Ins. Co. v. Cole, 821 F. Supp. 193 (S.D.N.Y. 1993). ERISA plans,

however, are not the same as general commercial contracts. In

Siskin, the plaintiff sought a judgment validating its previous

decision to terminate an agreement. Siskin Enters., 147 F. Supp.

2d at 1129. The court in Connecticut General Life Insurance also

left open the possibility that certain declaratory judgment

actions can be enforcement actions under ERISA. Conn. Gen. Life

Ins., 821 F. Supp. at 197.

(Terms & Conditions (Doc. 21-2) ¶ 8(j)), and Plaintiffs would

not have had standing had they not had an enforceable right. In

order to have standing to bring a declaratory judgment action,

an actual controversy must exist, though a plaintiff need not

allege a more “traditional cause of action.” See, e.g., Goldston

v. State, 361 N.C. 26, 33, 637 S.E.2d 876, 881 (2006) (“[A]

declaratory judgment should issue ‘(1) when [it] will serve a

useful purpose in clarifying and settling the legal relations at

issue, and (2) when it will terminate and afford relief from the

uncertainty, insecurity and controversy giving rise to the

proceeding.’” (quoting Augur v. Augur, 356 N.C. 582, 588, 573

S.E.2d 125, 130 (2002))). A party may not bring a declaratory

judgment action unless they are a “real party in interest,” and

a “real party in interest is one who benefits from or is harmed

by the outcome of the case and by substantive law has the legal

right to enforce the claim in question.” Beachcomber Props.,

L.L.C. v. Station One, Inc., 169 N.C. App. 820, 824, 611 S.E.2d

191, 193–94 (2005) (emphasis added). “Absent an enforceable

contract right, an action for declaratory relief to construe or

apply a contract will not lie.” Id. at 824, 611 S.E.2d at 194

(quoting Terrell v. Lawyers Mut. Liab. Ins. Co., 131 N.C. App.

655, 661, 507 S.E.2d 923, 926 (1998) (citations omitted)).

Plaintiffs were a “real party in interest” because they had

a “legal right to enforce” the Agreement, and they wanted it

construed differently than what was written. That construction

would ultimately determine enforcement. As Defendants point out,

Plaintiffs brought this action, in large part, to determine the

following questions:

a. Whether there was a meeting of the minds

regarding all material terms of the listing

agreement;

b. If so, what are the material terms of the listing

agreement;

c. How is the commission calculated;

d. What is the amount of the commission;

e. If the listing agreement is unenforceable because

there was no meeting of the minds on all material

terms, what is the reasonable value of services

provided by the Defendant Benchmark;

f. Have the Plaintiffs tendered the full amount of

commission that is due and payable to the

Defendant.

(Compl. (Doc. 3) ¶ 64.) Had the court answered in the negative

to the first question, the Agreement would not have been

enforceable at all. Had the court answered any of the other

questions in a way that differed from the express terms of the

Agreement, then the Agreement would have been enforced as

Plaintiffs sought to have it enforced. Instead, the agreement is

enforceable as it is written, not as Plaintiffs sought to have

it interpreted in their declaratory judgment action.

Sixth, the court’s construction of the agreement was

authoritative. Defendants argue that Plaintiffs are attempting

to place form over function. The court does not find that

analogy compelling. The court does find compelling the fact that

Plaintiffs were asking this court to construe its obligations,

and once the court issued its judgment, the parties were

obligated to comply. Had they not, this court possessed the

power, upon notice, to issue further orders to compel

compliance. 28 U.S.C. § 2202 (“Further necessary or proper

relief based on a declaratory judgment or decree may be granted,

after reasonable notice and hearing, against any adverse party

whose rights have been determined by such judgment.”). “The

power of the court to retain jurisdiction to give complete and

effectual relief is well established, and it follows without any

serious controversy that the court may make such further orders

to give effect to a declaratory judgement as shall seem meet and

proper.” Ins. Servs. of Beaufort, Inc. v. Aetna Cas. & Sur. Co.,

966 F.2d 847, 852 (4th Cir. 1992) (quoting Anderson, Actions for

Declaratory Judgments § 451 (2d ed. 1951 and Supp. 1991)). The

requested relief need not have been proven or requested during

the underlying declaratory judgment action. Id. at 582.

As other circuits have held, § 2202 allows “the

prevailing party in a declaratory judgment action [to]

seek further relief in the form of damages or an

injunction.” See, e.g., United Teacher Assocs. Ins. v.

Union Labor Life Ins., 414 F.3d 558, 570 (5th Cir.

2005) (quoting Kaspar Wire Works, Inc. v. Leco Eng’g &

Mach., Inc., 575 F.2d 530, 537 (5th Cir. 1978))

(internal quotation marks omitted) (also noting that

“[o]ther circuits that have addressed the type of

relief available under § 2202 have reached similar

conclusions” and listing cases); see also Gant v.

Grand Lodge of Tex., 12 F.3d 998, 1002 (10th Cir.

1993) (explaining that Declaratory Judgment Act

“permits the original judgment to be supplemented

either by damages or by equitable relief even though

coercive relief might have been available at the time

of the declaratory action” (quoting 10A C. Wright, A.

Miller, & M. Kane, Federal Practice & Procedure,

§ 2771, at 765-67 (2d ed. 1983))). The Fourth Circuit

has “long recognized the discretion afforded to

district courts in determining whether to grant

declaratory relief” and consequently reviews decisions

under the abuse-of-discretion standard. See Travelers

Indem. v. Miller Bldg. Corp., 221 Fed. App’x 265, 267

(4th Cir. 2007) (discussing 28 U.S.C. § 2201).However,

before deciding whether to grant such relief under

§ 2202, the court must hold a hearing (which it did on

September 10, 2019). Ins. Servs. of Beaufort, Inc.,

966 F.2d at 853.

Steves & Sons, Inc. v. JELD-WEN, Inc., Civil Action No. 3:16-cv-

545, 2019 WL 6138200, at *7 (E.D. Va. Nov. 19, 2019); see also

Horn & Hardart Co. v. Nat’l Rail Passenger Corp., 843 F.2d 546,

548 (D.C. Cir. 1988) (“The ‘further relief’ provisions of both

state and federal declaratory judgment statutes clearly

anticipate ancillary or subsequent coercion to make an original

declaratory judgment effective. Neither a completed appeal, nor

a considerable period of delay after the trial court ruling

terminates this authority.”). As demonstrated by these

authorities, Plaintiffs’ declaratory judgment was no idle

exercise in contract interpretation.

In conclusion, the court finds that the declaratory

judgment action was an action to enforce the Agreement.

Therefore, the attorneys’ fees provision of the Terms and

Conditions applies.

Finally, the court notes that though Defendants did not

“bring” any suit, their defense was an effort to preserve and

enforce the Agreement as written. “The plain and unambiguous

meaning of the word ‘enforcing’ in the Agreement is to mandate

compliance with existing contractual obligations.” Siskin

Enters., Inc. v. W.B. Stoddard, Jr., Inc., 147 F. Supp. 2d 1125,

1129 (D. Utah 2001). Defendants sought to compel Plaintiffs’

compliance with “existing contractual obligations.”

B. Whether N.C. Gen. Stat. § 6-21.6 Applies

Turning to Plaintiffs’ second argument, it is true that no

North Carolina court has yet to apply § 6-21.6 in the

declaratory judgment context. However, the plain language of the

statute permits application in this situation. The statute

defines reciprocal attorneys’ fees provisions as:

Provisions in any written business contract by which

each party to the contract agrees, in the manner set

out in subsection (b) of this section, upon the terms

and subject to the conditions set forth in the

contract that are made applicable to all parties, to

pay or reimburse the other parties for attorneys’ fees

and expenses incurred by reason of any suit, action,

proceeding, or arbitration involving the business

contract.

N.C. Gen. Stat. § 6-21.6(a)(4) (emphasis added). The statute

goes on to say that “[i]f a business contract governed by the

laws of this State contains a reciprocal attorneys’ fees

provision, the court or arbitrator in any suit, action,

proceeding, or arbitration involving the business contract may

award reasonable attorneys’ fees . . . .” Id. § 6-21.6(c)

(emphasis added).9

9 Plaintiffs also raise the argument that, if the North

Carolina Legislature wanted to include declaratory judgment

actions in § 6-21.6, they would have listed them as they list

another specific type of action in another provision. (Pls.’

Appeal Resp. (Doc. 45) at 4.) Plaintiffs cite N.C. Gen. Stat.

§ 6-21(2). That provision, dealing with costs in actions

construing wills and estates, allows attorneys’ fees in “any

action or proceeding which may require the construction of any

will or trust agreement, or fix the rights and duties of parties

thereunder.” N.C. Gen. Stat. § 6-21(2). Plaintiffs are

essentially arguing that since the legislature included actions

to construe wills, then any omission of actions to construe

other documents is an intentional point to exclude them in other

statutory provisions. The court disagrees.

With a related interpretative canon, courts have noted that

a negative inference must be a “sensible inference that the term

left out must have been meant to be excluded.” United States v.

Hawley, 919 F.3d 252, 256 (4th Cir. 2019). The inference here is

not sensible. First, § 6-21(2) does not expressly mention

declaratory judgments, but actions to construe wills. The

legislature did not expressly include declaratory judgments

(Footnote continued)

A declaratory judgment action falls into the statute’s

definition of what constitutes reciprocal attorneys’ fees:

“attorneys’ fees and expenses incurred by reason of any suit,

action, proceeding . . . involving the business contract.” Id.

§ 6-21.6(a)(4) (emphasis added). The underlying declaratory

judgment action in this case asked the court to determine the

rights of the parties as it pertained to the Agreement. (Compl.

(Doc. 3) ¶¶ 64–68.) It was a “suit, action, [and] proceeding”

directly “involving the business contract.”

Even if the declaratory judgment action was somehow not

captured by § 6-21.6, Plaintiffs’ Complaint listed several other

causes of action directly involving the business contract at

least one of which would have warranted an award of attorneys’

fees. Plaintiffs brought claims for fraud, civil RICO, and

unfair and deceptive trade practices. (Compl. (Doc. 3)

¶¶ 69-99.) At least one court has awarded fees under § 6-21.6

anywhere in § 6-21. Second, the language in § 6-21.6 is broad

and includes “any suit, action, proceeding, or arbitration

involving the business contract.” It is not a “sensible

inference” that such capacious language is cabined by a

reference to the construction of wills in a different statutory

provision. Finally, § 6-21 is a listing of miscellaneous civil

actions where costs, including fees, can be apportioned within

the discretion of the court. By contrast, § 6-21.6 deals with a

separate, specific category of actions: those involving business

contracts with fee provisions. Any inferences drawn from the

general civil actions listed in § 6-21 are of limited value in

§ 6-21.6’s specialized context.

for unfair and deceptive trade practice claims. See Insight

Health Corp. v. Marquis Diagnostic Imaging of N.C., LLC, No.

14 CVS 1783, 2018 WL 3327799, at *3, *6 (N.C. Super. July 6,

2018) (awarding fees under § 6-21.6 for breach of contract and

constructive fraud claims, as well as for time spent pursuing

UDPTA claims and defending against UDTPA counterclaims); cf.

Peters v. Cadrillion, LLC, Civil Action No. 3:15-CV-00163-FDW-

DCK, 2019 WL 3756391, at *3 (W.D.N.C. Aug. 8, 2019) (declining

to award fees under § 6-21.6 for unfair and deceptive trade

claims because the motion for fees was not timely filed);

Liberty Mut. Fire Ins. Co. v. KB Home, No. 5:13-CV-831-BR, 2015

WL 4877835, at *4 (E.D.N.C. Aug. 14, 2015) (declining to award

fees under § 6-21.6 for declaratory judgment and unfair and

deceptive trade claims, among others, since the contract’s fee

provision restricted it to matters resolved in arbitration);

Hometown Servs., Inc. v. Equitylock Sols., Inc., Civil No. 1:13-

cv-00304-MR-DLH, 2014 WL 5335928, at *3 (W.D.N.C. Oct. 20, 2014)

(declining, in an unfair and deceptive trade practices case, to

award fees because the requesting party was not the prevailing

party, nor were requested fees reasonable). Even if declaratory

judgment actions did not merit fees under § 6-21.6, fees would

have been appropriate in at least one other cause of action.10

Finally, North Carolina is one of the many states that has

adopted the Uniform Declaratory Judgment Act (“UDJA”). Swaps,

LLC v. ASL Props., Inc., 250 N.C. App. 264, 266, 791 S.E.2d 711,

713 (2016). “[T]he Uniform Declaratory Judgment Act ‘shall be so

interpreted and construed as to effectuate its general purpose

to make uniform the law of those states which enact it.’” Id.

(quoting N.C. Gen. Stat. § 1–266). Though North Carolina’s

courts have not directly held that a declaratory judgment action

involving a contract is an action to enforce the contract, at

least two other UDJA jurisdictions have. All. Indem. Co. v.

Kerns, 54 Kan. App. 2d 155, 163, 398 P.3d 198, 205 (2017)

(noting that attorneys’ fees are available in certain

declaratory judgment actions against insurers, though the UDJA

itself did not permit fees in the defense of a declaratory

10 The court notes that North Carolina’s Unfair and

Deceptive Trade Practices Act has its own attorneys’ fee

provision. See N.C. Gen. Stat. § 75-16.1. However, at least one

court has also awarded fees for time spent on UDTPA claims under

N.C. Gen. Stat. § 6-21.6. See Insight Health, 2018 WL 3327799,

at *3, *6.

judgment action);11 Ladum v. City of Reedsport, 83 Or. App. 666,

670, 733 P.2d 66, 68 (1987) (“Because the court construed the

contested clauses in defendant’s favor, it prevailed on the

significant disputed issues and the court erred in denying its

request for attorneys’ fees.”); see also Feldman v. KPMG LLP,

438 S.W.3d 678, 685 (Tex. App. 2014) (noting the UDJA, as

adopted in Texas, statutorily permits an award of attorneys’

fees); Trs. of Indiana Univ. v. Buxbaum, 315 Mont. 210, 227, 69

P.3d 663, 674 (2003) (finding an award of attorneys’ fees

appropriate under the “supplemental relief” provision of the

UDJA).12

11 Of course, N.C. Gen. Stat. § 6-21.6 is the statutory

basis for fees here, not North Carolina’s UDJA. For that reason,

the Kansas Supreme Court’s holdings on the issue of the UDJA

itself authorizing fees is inapposite. The court cites Kerns for

the proposition that declaratory judgments have been viewed as

actions to enforce agreements. Even though the Kerns court found

fees were not merited, it reached that conclusion based on

reasoning about a dismissal of the suit without prejudice,

reasoning, that does not apply here.

12 North Carolina adopted the “supplemental relief” portion

of the UDJA at N.C. Gen. Stat. § 1-259. That provision states

that “[f]urther relief based on a declaratory judgment or decree

may be granted whenever necessary or proper. The application

therefor shall be by petition to a court having jurisdiction to

grant the relief. If the application be deemed sufficient, the

court shall, on reasonable notice, require any adverse party

whose rights have been adjudicated by the declaratory judgment

or decree, to show cause why further relief should not be

granted forthwith.”

In summary, the court finds that the attorneys’ fees

provision in the Agreement applies to the underlying suit. The

court also finds that N.C. Gen. Stat. § 6-21.6 applies to the

underlying suit.13 Since Plaintiffs do not contest that

Defendants were the prevailing party at both the trial and

appellate levels,14 the court now turns to the calculation of

reasonable attorneys’ fees.

13 This is so despite the following public policy analysis

by a North Carolina Court of Appeals panel. In determining if

North Carolina’s Uniform Declaratory Judgment Act (N.C. Gen.

Stat. § 1-253 et seq.) included attorneys’ fees in its “costs”

provision, the panel held it did not, noting that

“[p]articularly in contract or property disputes where the cost

of litigation might exceed any monetary recovery, enterprising

litigants would have tremendous incentives to race to the

courthouse with a request for declaratory relief rather than

pursuing a traditional, affirmative claim for relief.” Swaps,

LLC v. ASL Props., Inc., 250 N.C. App. 264, 267–68, 791 S.E.2d

711, 714 (2016).

The case at bar is distinguishable in two important ways.

First, Defendants, not Plaintiffs, seek attorneys’ fees.

Awarding fees to Defendants does not risk encouraging other

plaintiffs to bring declaratory judgment actions as substitutes

for a more “affirmative claim for relief.” Id. Second, this case

does not deal with N.C. Gen. Stat. § 1-263, but a reciprocal

contractual provision and § 6-21.6, an independent statutory

basis for the award of attorneys’ fees.

14 Plaintiffs contend that Defendants were not the

prevailing party on their Motion for Sanctions. (Pls.’ Trial

Resp. (Doc. 25) at 3–4.) This issue will be addressed in Section

III.B, infra, when the court evaluates reasonable trial fees.

III. REASONABLE FEES

Though the court finds that fees should be awarded, the

court is unable to determine whether the fees requested are

reasonable. The court can, however, determine that the requested

billing rates, both for trial and appellate fees, are

reasonable.

“[T]he fee applicant bears the burden of establishing

entitlement to an award and documenting the appropriate hours

expended and hourly rates.” Hensley v. Eckerhart, 461 U.S. 424,

437 (1983).15

Normally, “[i]n a diversity case, federal law controls in

regard to the assessment of costs” even if state statute permits

the awarding of fees. Gobbo Farms & Orchards v. Poole Chem. Co.,

81 F.3d 122, 123 (10th Cir. 1996) (quoting Chaparral Res., Inc.

v. Monsanto Co., 849 F.2d 1286, 1291–92 (10th Cir. 1988)); see

Best Med. Int’l, Inc. v. Eckert & Ziegler Nuclitec GmbH, 565 F.

App’x 232, 237 (4th Cir. 2014) (utilizing federal law to

calculate fees in diversity action); Cargill, Inc. v. WDS, Inc.,

15 Hensley, of course, did not deal with N.C. Gen. Stat.

§ 6-21.6, nor did it deal with any North Carolina law. Still,

the conclusion about the burden being on the moving party is

sound. See Hamilton v. Memorex Telex Corp., 118 N.C. App. 1, 16,

454 S.E.2d 278, 286 (1995) (noting that North Carolina courts

find federal court rulings “instructive” when dealing with

attorneys’ fees).

Docket No. 3:16-cv-00848-FDW-DSC, 2018 WL 1525352, at *18

(W.D.N.C. Mar. 28, 2018); see also Ray v. Wells Fargo Bank NA,

No. CV 11-1477 AHM (JCx), 2012 WL 2343283, at *1 (C.D. Cal.

June 20, 2012) (collecting cases and noting that Rule 54(d)

governs an award of costs in diversity cases).

However, “[w]hen a ‘case is a diversity action based on

state contract law, the contract, including its provisions on

attorneys’ fees, is to be interpreted using state law.’” Peters,

2019 WL 3756391, at *5 (quoting W. Insulation, LP v. Moore, 362

F. App’x 375, 379 (4th Cir. 2010)); see also Zoroastrian Ctr. &

Darb-E-Mehr of Metro. Washington, D.C. v. Rustam Guiv Found. of

N.Y., 822 F.3d 739, 754 (4th Cir. 2016). Without expressly

holding that North Carolina law governs the assessment of

reasonable fees, the Fourth Circuit directed a district court,

on remand, to apply the factors in N.C. Gen. Stat. § 6-21.6(c)

when calculating contractual reciprocal attorneys’ fees under

that statute. Legacy Data, 889 F.3d at 169. In the case at bar,

North Carolina law continues to govern the Agreement. This court

will therefore determine reasonable attorneys’ fees utilizing

the factors in N.C. Gen. Stat. § 6-21.6(c).

“[T]o determine if the statutory award of attorneys’ fees

is reasonable the record must contain findings of fact as to the

time and labor expended, the skill required, the customary fee

for like work, and the experience or ability of the attorney.”

WFC Lynnwood I LLC v. Lee of Raleigh, Inc., 259 N.C. App. 925,

933, 817 S.E.2d 437, 444 (2018); Parker v. Hensley, 175 N.C.

App. 740, 742, 625 S.E.2d 182, 184–85 (2006). As noted, N.C.

Gen. Stat. § 6-21.6(c) sets out several factors for a court to

consider in making such findings. Those factors include:

(1) The amount in controversy and the results

obtained.

(2) The reasonableness of the time and labor

expended, and the billing rates charged, by the

attorneys.

(3) The novelty and difficulty of the questions

raised in the action.

(4) The skill required to perform properly the legal

services rendered.

(5) The relative economic circumstances of the

parties.

(6) Settlement offers made prior to the institution

of the action.

(7) Offers of judgment pursuant to Rule 68 of the

North Carolina Rules of Civil Procedure and

whether judgment finally obtained was more

favorable than such offers.

(8) Whether a party unjustly exercised superior

economic bargaining power in the conduct of the

action.

(9) The timing of settlement offers.

(10) The amounts of settlement offers as compared to

the verdict.

(11) The extent to which the party seeking attorneys’

fees prevailed in the action.

(12) The amount of attorneys’ fees awarded in similar

cases.

(13) The terms of the business contract.

N.C. Gen. Stat. § 6-21.6(c).

For the reasons set out herein, the court is unable to

assess most of these factors with the evidence currently before

it. However, the court can assess one factor on the evidence

before it: the reasonableness of the requested rates. The court

will first address trial fees before turning to appellate fees.

A. Defendants’ Trial Fees

Defendants move this court to award fees in the amount of

$116,324 for services rendered during the underlying suit’s

trial phase. (Defs.’ Trial Summ. (Doc. 39) at 4.) Defense

counsel actually provided $127,401 in legal services for its

trial services but provided a roughly ten-percent discount to

its clients. (Id.; Affidavit of Mark A. Stafford (“Stafford

Aff.”) (Doc. 31) ¶ 14.) This total, according to Defendants,

results in 339.4 hours billed, a reduction from the 371.1 hours

that were actually expended. (Defs.’ Trial Summ. (Doc. 39) at

5.) Plaintiffs did not submit any affidavits or declarations of

their own but did initially contest Defendants’ estimated fees

since the estimate was four-to-five times the amount of fees

incurred by Plaintiffs. (Pls.’ Trial Resp. (Doc. 28) at 3.)

Plaintiffs have not requested an evidentiary hearing or

otherwise challenged Defendants’ evidence.

Defendants submitted six declarations16 from attorneys who

worked on this matter. M. Cabell Clay was counsel of record for

Defendants and is with Moore & Van Allen PLLC (“MVA”) in North

Carolina. (Declaration of M. Cabell Clay (“Clay Decl.”) (Doc.

33) ¶ 1.) Ms. Clay graduated from William & Mary Law School, has

been admitted to practice in North Carolina since 2008, and

primarily practices in complex commercial litigation. (Id.

¶¶ 2-4.) Since 2014, she has been named a “Rising Star” in

business litigation by North Carolina Super Lawyers, was named a

“Young Gun” by Business North Carolina Legal Elite, and was

recognized by the Women Lawyers of Charlotte as the 2018 Woman

of the Year. (Id. ¶ 5.)

William M. Butler is also with MVA and also served as

counsel to Defendants. (Declaration of William M. Butler

(“Butler Decl.”) (Doc. 32) ¶ 1.) Mr. Butler graduated from the

University of North Carolina School of Law in 2015 and has been

16 Plaintiffs submitted unsworn declarations, made under

penalty of perjury, which are permissible in lieu of affidavits.

See 28 U.S.C. § 1746; see also Willard v. Internal Revenue

Serv., 776 F.2d 100, 102 n.3 (4th Cir. 1985) (citing § 1746 in

the context of declarations attached to a motion for summary

judgment).

a member of the North Carolina Bar since. (Id. ¶¶ 2–3.)

Mr. Butler’s practice at MVA focuses on complex commercial

litigation and contractual disputes. (Id. ¶ 4.)

Jason H. Baruch is a partner at Holland & Knight LLP

(“H&K”). (Declaration of Jason H. Baruch (“Baruch Decl.”) (Doc.

38) ¶ 1.) Mr. Baruch graduated magna cum laude from the

University of Florida Levin College of Law in 2004. (Id. ¶ 2.)

Mr. Baruch is a member of the Florida State Bar and has

practiced law since 2005. (Id. ¶¶ 3–4.) Mr. Baruch’s practice

focuses on complex commercial litigation and contract disputes.

(Id. ¶ 4.) Mr. Baruch is board-certified in Business Litigation

by the Florida Bar. (Second Declaration of Jason H. Baruch

(“Second Baruch Decl.”) (Doc. 52) ¶ 5.) He was also recognized

as among the “Florida Legal Elite” in Florida Trend Magazine in

2018, and has received many other accolades. (Id. ¶ 6.)

Anthony J. Palermo is an associate at H&K. (Declaration of

Anthony J. Palermo (“Palermo Decl.”) (Doc. 35) ¶ 1.) Mr. Palermo

graduated from Harvard Law School in 2012 and is a member of the

Florida Bar. (Id. ¶¶ 2–3.) He has practiced law since 2012,

focusing on contract disputes and other commercial matters. (Id.

¶ 4.) In recognition of his successful practice, Mr. Palermo has

been named a “Rising Star” by several legal publications, was

appointed Vice Chair of the Florida Bar’s Consumer Protection

Law Committee, and was hired by the State of Florida as a

Special Assistant Attorney General for consumer protection and

lending issues. (Id. ¶¶ 4–5.)

Finally, Paul J. Punzone is also an associate with H&K.

(Declaration of Paul J. Punzone (“Punzone Decl.”) (Doc. 34)

¶ 1.) Mr. Punzone graduate magna cum laude from the University

of Florida Levin College of Law. (Id. ¶ 2.) He has practiced law

since 2017, focusing on commercial contract and consumer

protection law. (Id. ¶ 4.)

In support of the reasonableness of their fee requests,

Defendants also submit the affidavit and declaration of two

attorneys who were not directly involved in the action. Clinton

Johnston is General Counsel for Benchmark. (Declaration of

Clinton Johnston (“Johnston Decl.”) (Doc. 36) ¶ 2.) Mark A.

Stafford is a North Carolina attorney and partner with Nelson

Mullins Riley & Scarborough LLP. (Stafford Aff. (Doc. 31)

¶¶ 1-2.)

1. Reasonable Rates

The court is only able to assess one factor at this time:

the “reasonableness of the . . . billing rates charged, by the

attorneys.” N.C. Gen. Stat. § 6-21.6(c)(2).

Defendants seek the following hourly rates. Ms. Clay does

not specify a rate in her declaration, but her timesheets show

that her hourly rate started at $395 per hour and eventually

moved to $405. (Clay Decl. (Doc. 33), Ex. 1, MVA Invoices (“MVA

Timesheets”) (Doc. 33-1) at 4, 14; Defs.’ Trial Summ. (Doc. 39)

at 6.) Mr. Butler first billed at a rate of $285 per hour and

then $300 per hour. (MVA Invoices (Doc. 33-1) at 4, 17; Defs.

Time Summ. (Doc. 39) at 6.) Mr. Baruch requests an hourly rate

of $435 per hour. (Baruch Decl. (Doc. 38) ¶ 9; Defs.’ Trial

Summ. (Doc. 39) at 6.) Mr. Punzone does not request a specific

rate in his declaration but billed at $265 to $290 per hour.

(Baruch Decl. (Doc. 38), Ex. 1, H&K Invoices (“H&K Timesheets”)

(Doc. 38-1) at 2; Defs.’ Trial Summ. (Doc. 39) at 6.) Finally,

Mr. Palermo billed at $325 to $360 per hour. (Palermo Decl.

(Doc. 35) ¶ 8; Defs.’ Trial Summ. (Doc. 39) at 6.)

In support of these rates, Defendants submitted the

affidavit of Mark Stafford, a partner and litigator with Nelson

Mullins, a law firm in North Carolina. (Stafford Aff. (Doc. 31)

¶¶ 1–2.) Mr. Stafford has been a member of the North Carolina

Bar since 1989. (Id. ¶ 1.) Mr. Stafford’s practice focuses on

complex commercial litigation. (Id.) Mr. Stafford contends that,

in North Carolina, for the type of legal work conducted in this

action, the normal hourly rate for associates ranges from $240

to $410 per hour; for partners, the rate is between $375 to

$695. (Id. ¶ 3.) Mr. Stafford’s evaluation is based on his

personal experience with MVA attorneys, his peers’ experiences

with H&K’s attorneys, as well as the type of actions in the

underlying suit. (Id. ¶¶ 7–11.) Mr. Stafford is also familiar

with rates charged by other commercial litigators in North

Carolina. (Id. ¶ 4.)

Mr. Johnston, general counsel for Benchmark, stated that

the rates charged by both MVA and H&K were reasonable. (Johnston

Decl. (Doc. 36) ¶ 15.) Mr. Johnston also states that one of his

duties is to procure outside legal services for Benchmark, a

task that makes him familiar with rates charged by firms both in

Florida and North Carolina. (Id. ¶¶ 14, 16–18.) Benchmark has

paid higher rates for legal services than the rates they paid

MVA and H&K in this matter, but it has paid similar rates for

similar legal services. (Id. ¶ 12.)

Plaintiffs cursorily contest these rates but offer no

specific objections. (Pls.’ Trial Resp. (Doc. 28) at 3.) Without

any evidence that the requested rates are not reasonable, but

with two sworn statements averring that the rates are

reasonable,17 the court finds the requested rates are reasonable.

17 The fact that one of those declarations is from

Benchmark’s own general counsel, Mr. Johnston, does raise

questions about his objectivity. But Mr. Stafford also stated he

believed that H&K’s requested times and rates were reasonable.

(Stafford Aff. (Doc. 31) ¶ 10.)

This finding is supported by Mr. Stafford’s affidavit as a

disinterested party and experienced North Carolina commercial

litigator. The rates are also justified by the experience and

accolades of each respective attorney involved in this action.

The court is also familiar with rates for similar actions in

this market and does not find the requested rates are outside

that range. This conclusion is consistent with similar actions

in this district. See Fisher-Borne v. Smith, No. 1:12CV589, 2018

WL 3581705, at *3–4 (M.D.N.C. July 25, 2018). The court now

turns to the time expended.

2. Reasonable Time Spent

Defendants claim they devoted 371.1 hours to this matter,

but only billed 339.4. (Defs.’ Trial Summ. (Doc. 39) at 5.)

Plaintiffs’ primary contention as to the reasonableness of the

requested trial fees is that the amount is “four to five times

the amount of fees incurred by the Plaintiffs, which brings into

question the reasonableness of the time and labor expended, as

well as the billing rates.” (Pls.’ Trial Resp. (Doc. 28) at 3.)

Plaintiffs do not offer any timesheets or sworn declarations of

their own. Plaintiffs also argue that the time Defendants spent

pursuing the Motion for Sanctions should not be included since

this court denied that motion. (Id. at 3-4.) The court begins by

addressing the time spent on the Motion for Sanctions, finding

that a reasonable amount of time dedicated to the Motion for

Sanctions should be included in the total.

a. Motion for Sanctions

The court finds that Defendants are not barred from

recovering for reasonable time spent on the Motion for

Sanctions, (Doc. 13), though the court cannot determine at this

juncture if the time devoted to the motion was reasonable. No

North Carolina court has analyzed N.C. Gen. Stat. § 6-21.6 and

the issue of unsuccessful motions, but at least one court has

analyzed the statute and as it pertains to unsuccessful claims.

Insight Health Corp., 2018 WL 3327799, at *3.

Federal courts have addressed whether fees spent on

unsuccessful motions are recoverable. In this case, state law

governs the interpretation of the parties’ attorneys’ fees

provision, but North Carolina courts find the reasoning of

federal courts “instructive.” Hamilton v. Memorex Telex Corp.,

118 N.C. App. 1, 16, 454 S.E.2d 278, 286 (1995) (citing Hensley,

461 U.S. 424). “Where a plaintiff has obtained excellent

results, his attorney should recover a fully compensatory fee.

Normally this will encompass all hours reasonably expended on

the litigation . . . . [T]he fee award should not be reduced

simply because the plaintiff failed to prevail on every

contention raised in the lawsuit.” Hensley, 461 U.S. at 435.

The Hensley Court noted that an award of fees is

appropriate “for time spent pursuing [a denied] motion [if] the

plaintiffs ‘substantially advanced their clients’ interests’ by

obtaining ‘a significant concession from defendants as a result

of their motion.’” Id. at 430-31 (quoting Stanford Daily v.

Zurcher, 64 F.R.D. 680, 684 (N.D. Cal. 1974), aff’d, 550 F.2d

464 (9th Cir. 1977), rev’d on other grounds, 436 U.S. 547

(1978));18 see also Uniroyal Goodrich Tire Co. v. Mut. Trading

Corp., 63 F.3d 516, 526 (7th Cir. 1995) (“Were we to deem

unreasonable the reimbursement of fees incurred for [colorable

but unsuccessful motions], we would be discouraging the type of

representation attorneys are duty-bound to provide.”); Wales v.

Jack M. Berry, Inc., 192 F. Supp. 2d 1313, 1321 (M.D. Fla.

2001). For that reason, “[t]he mere failure of certain motions

. . . is insufficient to warrant a fee reduction under Hensley.”

18 The Hensley Court also noted that Stanford Daily was

cited with approval in the legislative history of 42 U.S.C.

§ 1988. Hensley, 461 U.S. at 429–30.

Blum v. Witco Chem. Corp., 829 F.2d 367, 378 (3d Cir. 1987);19

Bd. of Educ. of Frederick Cty. v. I.S. ex rel. Summers, 358 F.

Supp. 2d 462, 469 (D. Md. 2005) (citing Blum for the proposition

that time spent on unsuccessful motions are not per se

unrecoverable); see also Fish v. St. Cloud State Univ., 295 F.3d

849, 852 (8th Cir. 2002) (finding district court did not abuse

its discretion in declining to reduce lodestar for “unsuccessful

motion practice”); Air Transp. Ass’n of Can. v. F.A.A., 156 F.3d

1329, 1335 (D.C. Cir. 1998) (“Rare, indeed, is the litigant who

doesn’t lose some skirmishes on the way to winning the war.”

(quoting Cabrales v. Cty. of L.A., 935 F.2d 1050, 1053 (9th Cir.

1991))); cf. Zisumbo v. Ogden Reg’l Med. Ctr., 801 F.3d 1185,

1208 (10th Cir. 2015), cert. denied, ____ U.S. ____, 136 S. Ct.

1660 (2016) (finding district court did not abuse its discretion

19 In Blum v. Witco Chemical Corp, as in the present case,

the party opposing the award of fees did not

identify for the court any factual dispute or pinpoint

any specific area where a hearing would have been

helpful. Rather, . . . counsel simply challenged the

fee request on the grounds of reasonableness of the

number of hours billed, particularly objecting to

hours billed in connection with unsuccessful motions

. . . .

Blum, 829 F.2d 367, 378 (3d Cir. 1987).

in declining to award attorneys’ fees for unsuccessful motion

with improper purpose).20

Accordingly, district courts in this circuit award fees for

unsuccessful motions if the moving party was successful on the

underlying claim and the motion advanced that claim in some

permissible way. Compare Hair Club for Men, LLC v. Ehson, Civil

Action No. 1:16-cv-236, 2017 WL 1250998, at *9 (E.D. Va. Apr. 3,

2017) (interpreting Virginia law and finding that a “[c]ourt may

award fees for unsuccessful motions to the extent that the

motions were necessary and Plaintiff was ultimately successful

on the claims underlying the motions”), and Plant Genetic Sys.,

N.V. v. Mycogen Plant Scis., Inc., No. 1:95CV741, 2012 WL

4511263, at *7 (M.D.N.C. Sept. 28, 2012), and Cross v. Fleet

Reserve Ass’n Pension Plan, Civil No. WDQ-05-0001, 2010 WL

3609530, at *8 (D. Md. Sept. 14, 2010), amended in part, No.

Civil No. WDQ-05-0001, 2010 WL 4809126 (D. Md. Nov. 19, 2010)

(“Because the hours spent on these activities does not appear

20 To underscore the point that a motion’s success is not

determinative of whether fees are recoverable, even unfiled

motions may qualify for an award of attorneys’ fees. “Although

the Fourth Circuit does not appear to have squarely addressed

the issue, courts have held that time spent on unfiled motions

may be compensable where a plaintiff shows that the motion was

prepared to advance the litigation.” Fisher-Borne, 2018 WL

3581705, at *9 (citing Alvarez v. Haywood, NO. 1:06-CV-745

(FJS/DRH), 2011 WL 13130851, at *10-11 (N.D.N.Y. Aug. 29,

2011)).

excessive and these efforts — though unsuccessful — were not

unreasonable or in bad faith, no reduction to these entries will

be made.”), with Raleigh Wake Citizens Ass’n v. Wake Cty. Bd. of

Elections, Nos. 5:15-CV-156-D, 5:13-CV-607-D, 2017 WL 4400754,

at *8 (E.D.N.C. Sept. 29, 2017) (reducing fees for failed motion

to amend complaint), and Design & Prod. Inc. v. Am. Exhibitions,

Inc., No. 1:10-cv-899, 2011 WL 6002598, at *1 (E.D. Va. Nov. 30,

2011) (reducing fees for unsuccessful motion for which moving

party was sanctioned).

Turning back to Defendants’ Motion for Sanctions, although

Defendants did not prevail on the Motion for Sanctions, overall

they obtained “excellent results.” Hensley, 461 U.S. at 435.

When calculating fees, “the most critical factor is the degree

of success obtained.” Id. at 436; Out of the Box Developers, LLC

v. Doan Law, LLP, No. 10 CVS 8327, 2014 WL 4298329, at *10 (N.C.

Super. Aug. 29, 2014). Here, Defendants defeated all of

Plaintiffs’ claims at or before the motion-to-dismiss phase.

Still, the court cannot conclude that the Motion for

Sanctions led directly to the dismissal of any claims by

Plaintiffs.21 The court can say that the motion was part of an

overall litigation strategy that was successful. Reviewing the

timesheets for both MVA and H&K reveals that preparation of the

Rule 11 motion was interwoven with other litigation tactics.

(See, e.g., MVA Timesheets (Doc. 33-1) at 9–10; H&K Timesheets

(Doc. 38-1) at 17.) That litigation strategy led to success for

Defendants, supporting the inference that the motion, though

denied, advanced Defendants’ interests in some way. Hensley, 461

U.S. at 431. Plaintiffs’ conclusory assertion that the motion

was over-briefed and unsuccessful is not persuasive. See Plant

Genetic Sys., 2012 WL 4511263, at *7 (“Plaintiff claims

Defendants should not recover fees associated with this motion

because it was denied and because Plaintiff claims it to have

been ‘over-briefed.’ This court finds Plaintiff’s argument in

this regard to be conclusory and unpersuasive.”).

Further, though the court is not aware of any North

Carolina court that has addressed awarding fees for unsuccessful

motions, those courts have addressed related claims, an

21 The court previously noted that it declines to draw an

adverse inference as it specifically pertains to Plaintiffs’

decision to withdraw the Civil RICO claim following Defendants’

Motion for Sanctions. See Carpet Super Mart, 2019 WL 1244086, at

*5 n.6. The reason the court then stated holds, and the court

will therefore not draw such a specific adverse inference. A

broader inference, however, is appropriate.

analogous area. “Where a lawsuit consists of related claims, a

plaintiff who has won substantial relief should not have his

attorney’s fee reduced simply because the [fact finder] did not

adopt each contention raised.” Insight Health Corp., 2018 WL

3327799, at *3 (citing Hensley, 461 U.S. at 440). Related claims

share a common nucleus of operative facts when “each claim [is]

inextricably interwoven with the other claims[.]” Id. (quoting

Whiteside Estates, Inc., v. Highlands Cove, L.L.C., 146 N.C.

App. 449, 467, 553 S.E.2d 431, 443 (2001)). Defendants’ Motion

for Sanctions is not a claim, but it was “inextricably

interwoven with” the arguments made by Defendants in their

Motion to Dismiss. (Compare Doc. 14, with Doc. 8.) This analogy,

though imperfect, suggests that Defendants should be allowed to

recover for some part of their work on the Motion for Sanctions.

In light of the foregoing analysis, this court finds that

Defendants should be permitted to recover fees for a reasonable

amount of time dedicated to the Motion for Sanctions. Given the

level of redaction in Defendants’ timesheets, however, the court

is presently unable to determine if the time dedicated to the

Motion for Sanctions was reasonable. Further, and as noted

above, fees spent pursuing unsuccessful motions are reasonable

to the extent the motion advanced the litigation. See Hensley,

461 U.S. at 431; Raleigh Wake Citizens Ass’n, 2017 WL 4400754,

at *8; Hair Club for Men, 2017 WL 1250998, at *9; Plant Genetic

Sys., 2012 WL 4511263, at *7; Design & Prod., 2011 WL 6002598,

at *1; Cross, 2010 WL 3609530, at *8. While the Motion for

Sanctions appears to have advanced the litigation in some way,

it is not clear to what extent it did. A fuller record is needed

before the court can make that determination.

b. Total Time Spent

Including the time for the Motion for Sanctions, the

Defendants request they receive fees for 339.4 hours of the

371.1 devoted to the matter in the trial court. (Defs.’ Trial

Summ. (Doc. 39) at 5-8.)

Mr. Baruch declares that H&K devoted 317.7 hours to this

matter but only billed for 286. (Baruch Decl. (Doc. 38) ¶ 11.)

These figures, however, do not match the timesheets H&K

provided. The totals from the H&K timesheets do list 317.7 hours

of labor expended, yet they show only 240.7 hours billed. (H&K

Timesheets (Doc. 38-1) at 28.) Mr. Baruch states that some of

the H&K timesheets provided were generated before the client was

billed. (Baruch Decl. (Doc. 38) ¶ 11.) It is possible the total

hours billed had not caught up with the timesheets when they

were generated; however, it is not clear from the timesheets

actually submitted to the court how this discrepancy should be

addressed.

It is the moving party’s burden to show they are entitled

to an award of fees, see Hensley, 461 U.S. at 437, and

Defendants have not adequately explained the difference between

Mr. Baruch’s figures and those on the timesheets. Since H&K did

not provide a breakdown of billed hours by attorney or a clear

explanation of where they had already made discounts, the court

is unable to reconcile Mr. Baruch’s figures with the H&K

timesheets provided. Without any additional evidence or guidance

from H&K, the court will start at 240.7 hours for H&K, the

number of hours actually listed as having been billed. (H&K

Timesheet (Doc. 38-1) at 28.)

MVA billed 66.7 hours between two attorneys. (See generally

MVA Timesheets (Doc. 33-1).) MVA requested compensation for two

individuals, Lynn Holder and Jennifer Braccia, but did not

provide any background evidence from which the court can find

that the requested rates and time are reasonable. (See MVA

Timesheets (Doc. 33-1) at 4, 14.) In fact, Defendants did not

provide any evidence explaining who these individuals are or

what they do. The court therefore does not include the time

billed by those individuals in MVA’s total. MVA also included

time spent on appellate tasks in its request for trial fees. On

appellate tasks, Ms. Clay billed 3.6 hours, and Mr. Butler

billed 4.4 hours. (Id. at 19-20, 22–23.) The court will reduce

MVA’s billed time by 8 hours. This leaves MVA’s total trial-

level hours at 58.7.

Combining the MVA billed time with H&K’s billed time, the

total hours billed for trial-level work is 299.4 hours. 226.3 of

those hours were dedicated to tasks completed up to and

including the filing of Defendants’ Reply Brief for their Motion

to Dismiss. The remaining 73.1 hours were dedicated to tasks

supporting the Motion for Trial Attorneys’ Fees, including the

collection of declarations, production and redaction of

timesheets, consultation with Plaintiffs’ counsel, a primary

brief, analysis of Plaintiffs’ response, and a reply brief. In

addition to tasks in support of the motion for attorneys’ fees,

there was time billed for other tasks and communications

regarding Plaintiffs’ Amended Complaint and this court’s Order

and Opinion.

Based on the record before it, the court is unable to

determine if 299.4 hours is a reasonable amount of time for the

trial-level work done on this matter. Defendants have redacted

their timesheets to the point that the court cannot determine

what hours were spent on what tasks and/or if the task

reasonably related to the litigation. Were the court to make a

fee determination on the record before it, it would be required

to significantly reduce the requested fees.

“[T]o determine if the statutory award of attorneys’ fees

is reasonable the record must contain findings of fact as to the

time and labor expended . . . .” WFC Lynnwood I, 259 N.C. App.

at 933, 817 S.E.2d at 444 (quoting Cotton v. Stanley, 94 N.C.

App. 367, 369, 380 S.E.2d 419, 421 (1989)); Parker, 175 N.C.

App. at 742, 625 S.E.2d at 184–85; see also Robinson v. Equifax

Info. Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009). It is

Defendants burden to establish the propriety of their fee

request. Hensley, 461 U.S. at 437. “[T]he documentation must be

sufficient for the court to verify that the applicant has met

its burden.” La. Power & Light Co. v. Kellstrom, 50 F.3d 319,

324 (5th Cir. 1995). “While ‘counsel is not required to record

in great detail how each minute of his time was expended at

least counsel should identify the general subject matter of his

time expenditures.’” Rumsey v. Dep’t of Justice, 866 F.3d 1375,

1379 (Fed. Cir. 2017) (alterations in original) (quoting

Hensley, 461 U.S. at 437 n.12). “The documentation offered in

support of the hours charged must be of sufficient detail and

probative value to enable the court to determine with a high

degree of certainty that such hours were actually and reasonably

expended in the prosecution of the litigation.” United Slate,

Tile & Composition Roofers, Damp & Waterproof Workers Ass’n,

Local 307 v. G & M Roofing & Sheet Metal Co., 732 F.2d 495, 502

n.2 (6th Cir. 1984).

Excessive redaction of timesheets removes information the

court needs to determine the reasonableness of a fee request.

See Am. Home Assurance Co. v. Weaver Aggregate Transp., Inc. v.

Manzo, Case No. 5:10-cv-329-Oc-10PRL, 2015 WL 12830413, at *10

(M.D. Fla. Jan. 14, 2015), report and recommendation adopted sub

nom. Am. Home Assurance Co. v. Weaver Aggregate Transp., Inc.,

Case No. 5:10-cv-329-Oc-10PRL, 2015 WL 12850589 (M.D. Fla.

Feb. 26, 2015) (“While reviewing Weaver’s invoices, the Court

noticed a significant amount of redactions, which made it

difficult, if not impossible, to determine the nature of the

attorney’s task.”); In re 50 Pine Co., LLC, 317 B.R. 276, 286

(Bankr. S.D.N.Y. 2004); cf. Bapu Corp. v. Choice Hotels Int’l,

Inc., Civ. No. 07-5938 (WJM), 2010 WL 2245600, at *2 (D.N.J.

June 1, 2010) (noting that the level of redaction did not

prevent court from discerning what tasks were billed). A more

common issue is block billing which, like excessive redaction,

can remove the details a court needs to accurately assess the

reasonableness of a fee request. See, e.g., Raynor v. G4S Secure

Sols. (USA) Inc., 327 F. Supp. 3d 925, 949 (W.D.N.C. 2018),

aff’d, 805 F. App’x 170 (4th Cir. 2020); see also In re Olson,

884 F.2d 1415, 1428 (D.C. Cir. 1989); Project Vote/Voting for

Am., Inc. v. Long, 887 F. Supp. 2d 704, 716–17 (E.D. Va. 2012);

Uzzell v. Friday, 618 F. Supp. 1222, 1226 (M.D.N.C. 1985).

With the current redactions, Defendants’ documentation is

not “sufficient for the court to verify that the applicant has

met its burden.” La. Power & Light, 50 F.3d at 324. For example,

in H&K’s timesheets, Mr. Baruch has an entry for April 11, 2018,

that contains the following description: “Review factual

background, finalize draft of demand letters and correspondence

with [REDACTED] re: same.” (H&K Timesheets (Doc. 38-1) at 2.)

The omission of the name of the person involved in the

conversation makes it impossible to know if the work was

reasonably related to the matter. The court notes similar issues

with Mr. Baruch’s second entry on April 23, 2018: “Review newly

filed complaint, assist in analysis regarding [REDACTED];

prepare for and conduct phone conference with plaintiffs’

counsel re: initial litigation and settlement issues; draft

settlement demand to plaintiff’s counsel; advise re:

[REDACTED].” (Id. at 3.) Mr. Palermo’s redactions present

similar issues, often noting that he researched case law and

statutes, but redacted the portions specifying the issue he was

specifically researching. (See, e.g., id. at 2, 22.) These

redactions prevent the court from assessing the reasonableness

of the fee request.22 For that reason, the court directs the

parties to proceed as outlined in the Conclusion of this

opinion.

B. Appellate Fees

The court is unable to determine a reasonable appellate fee

award based on the record before it. Due to redaction issues,

the court cannot determine whether the time expended on

appellate tasks was reasonable, though it can determine if the

requested billing rates are reasonable. As with the trial fees,

the court will direct the parties to confer further as described

in the Conclusion of this Memorandum Opinion and Order.

22 As one example of the effect of the redactions, the court

cannot determine if Defendants spent a reasonable amount of time

on their fee petition. Parties are permitted to recover fees for

time spent preparing a fee petition, so long as the amount of

time is reasonable. See E.E.O.C. v. Serv. News Co., 898 F.2d

958, 966 (4th Cir. 1990) (“The expenditure of over twenty

percent of the claimed time on fee preparation would appear to

be unreasonable under the circumstances.”); United Supreme

Council v. United Supreme Council of Ancient Accepted Scottish

Rite for 33 Degree of Freemasonry, Civil No. 1:16-cv-1103, 2019

WL 3848784, at *5 (E.D. Va. Aug. 15, 2019) (finding that

dedicating 8% of total time to preparation of fee petition was

excessive); Kabore v. Anchor Staffing, Inc., Civil Case No.

L-10-3204, 2012 WL 5077636, at *6 (D. Md. Oct. 17, 2012) (noting

that 9.8 hours out of a requested 413.1 was not excessive for

work on a fee petition). Defendants’ redactions, however, make

it impossible to determine if they dedicated a reasonable or

unreasonable amount of time on this or any other part of the

litigation. (See, e.g., MVA Timesheets (Doc. 33-1) at 16.)

After the Fourth Circuit affirmed this court’s dismissal of

Plaintiffs’ Complaint, Defendants moved for an award of fees

generated during the appellate phase of this suit. (Doc. 42.)

Many of the attorneys who represented Benchmark at the trial

level continued to represent Benchmark during the appeal. For

MVA, Ms. Clay and Mr. Butler continued their representation.

Second Declaration of M. Cabell Clay (“Second Clay Decl.”) (Doc.

54 ¶ 6.) In addition to Ms. Clay and Mr. Butler, Scott Tyler of

MVA also worked on the appeal. (Id.) Mr. Tyler graduated from

Duke University School of Law in 1995 and, since 1996, has

practice law with MVA in North Carolina. (Declaration of

Scott M. Tyler (“Tyler Decl.”) (Doc. 55) ¶¶ 3–4.) Mr. Tyler’s

practice focuses on business tort litigation, in addition to

other areas. (Id. ¶ 4.)

For H&K, Mr. Baruch and Mr. Palermo continued to represent

Benchmark at the appellate level. (Second Declaration of

Jason H. Baruch (“Second Baruch Decl.”) (Doc. 52) ¶ 8; Second

Declaration of Anthony J. Palermo (“Second Palermo Decl.”) (Doc.

53) ¶ 7.) Mr. Punzone was not involved in the appeal. (See

Defs.’ Suppl. Mem. in Supp. of Mot. for Appellate Attorneys’

Fees and Costs (“Defs.’ Appeal Summ.”) (Doc. 57) at 7.) In

support of the requested rates and hours, Defendants once again

provide an affidavit from Mr. Stafford. (Second Affidavit of

Mark A. Stafford (“Second Stafford Aff.”) (Doc. 51).)

Defendants request the following billing rates: For

Ms. Clay, $405 per hour; for Mr. Butler, $300 per hour; for

Mr. Baruch, $435 per hour; and for Mr. Palermo, $360 per hour.

(Defs.’ Appeal Summ. (Doc. 57) at 7.) Mr. Stafford continues to

aver that these rates are reasonable both for the legal markets

and type of work. (Second Stafford Aff. (Doc. 51) ¶¶ 3–5.) The

court has addressed the qualifications of these attorneys and

continues to find these rates reasonable. The court has not

addressed Mr. Tyler’s requested rate of $525 per hour. Given

Mr. Tyler’s extensive experience in commercial litigation, and

considering the averments of Mr. Stafford and the court’s own

knowledge of local billing rates, see Design Res., Inc. v.

Leather Indus. of Am., No. 1:10CV157, 2016 WL 5477611, at *10

(M.D.N.C. Sept. 29, 2016), the court finds that Mr. Tyler’s rate

of $525 per hour is also reasonable, (Defs.’ Appeal Summ. (Doc.

57) at 7; Tyler Decl. (Doc. 55) ¶ 4).

Though the rates are reasonable, the court once again

cannot determine if the time dedicated to appellate tasks is

reasonable.23 Defendants’ redactions are such that the court

cannot determine what time was dedicated to what tasks. For that

reason, as with the trial fees, the court will defer its

judgment, pending the process outlined below, as to the

reasonableness of the requested award.

IV. CONCLUSION

In order to determine a reasonable amount of fees, the

court directs the next steps.

Defendants have offered to file unredacted time entries to

their contemporaneously filed declarations for the court’s in

camera review upon request. (Defs.’ Trial Summ. (Doc. 39) at 11

n.10; Defs.’ Appeal Summ. (Doc. 57) at 12 n.7.) That review

would exclude Plaintiffs’ counsel from the review process. At

this time, this court declines that request. Though an in camera

review has been used by courts assessing timesheets and fee

requests, see Dreher v. Experian Info. Sols., Inc., Case No.

3:11-cv-624, 2016 WL 4055638, at *3 (E.D. Va. July 26, 2016),

the court is not aware of any authority requiring it to choose

that option at this time, nor did Defendants address that in

23 In addition to redaction issues, the court notes that

Defendants have provided timesheets including considerable work

done by attorneys who have provided no declarations and whom

Defendants do not mention in their briefing.)

their briefs. And though Plaintiffs have offered a tepid defense

against the fee request,24 it is ultimately this court’s

responsibility to determine if the fee request is reasonable. To

fulfill its duty, the court directs the following next steps:

(1) The court will take the issue of the amount of the

award, both for trial and appellate fees, under advisement for a

period of 60 days. Within 45 days of the issuance of this

Memorandum Opinion and Order, the parties are directed to confer

and determine if there is an amount for trial and appellate fees

to which they can agree. If so, the court will adopt a

consented-to award. Such an agreement by Plaintiffs, if it

should arise, would necessarily be without prejudice as to the

objections raised as to whether fees should be awarded in the

first instance.

(2) If an agreement still cannot be reached, Defendants

shall determine whether they wish for the court to proceed to a

24 Other courts raising issues with redacted timesheets have

dealt with plaintiffs who raised their own objections to

specific time entries and billing issues, something Plaintiffs

here have not done. See Yamada v. Nobel Biocare Holding AG, 825

F.3d 536, 544 (9th Cir. 2016). Nevertheless, this court has

serious concerns about proceeding with an in camera review of

redacted timesheets even if such a process has been used in

other cases.

final ruling on the record as it currently stands.25 If an

agreement cannot be reached, and Defendants do not wish this

court to make a determination on the record before it, it shall

so advise this court via written notice. That notice shall

simply state that the parties have failed to reach an agreement

and that Defendants do not wish the court to make a

determination based on the redacted records before it. If such

notice is provided, the court will provide further directions,

mindful of the fact that “[c]ourts have often observed that

litigation over attorneys’ fees should not become a separate

trial unto itself.” See Dreher, 2016 WL 4055638, at *3. For that

reason, the court will not entertain any further briefing on the

issue of attorneys’ fees.

For the reasons set forth herein, IT IS HEREBY ORDERED that

Defendants’ Motions for Award of Attorneys’ Fees and Costs,

(Docs. 24, 42), are GRANTED insofar as the court finds fees

should be awarded to Defendants for trial and appellate work and

that the requested rates are reasonable. The court will defer

25 The court notes again that, based on the record before

it, it cannot find 299.4 hours is a reasonable amount of time

for what was a basic contract dispute that never proceeded past

the 12(b)(6) phase, nor could it find that more than $60,000 in

appellate fees is reasonable for an appeal that involved no oral

argument and was affirmed in a short, unpublished opinion by the

Fourth Circuit. An award based on the redacted timesheets would

be reduced.

ruling on what fee award is reasonable pending the process

outlined in this section.

This the 5th day of August, 2020.

LA; Wakes

Lh) □□ tan L. (XS xX

United States District Ju

-56-