First Interstate Bank v. SOSCO Aviation, LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

FIRST INTERSTATE BANK, a

Montana State chartered bank, 3:20-cv-01649-BR

as successor in interest by

merger to Bank of the OPINION AND ORDER

Cascades,

Plaintiff,

v.

SOSCO AVIATION, LLC, an Ohio

limited liability company, and

HAROLD SOSNA,

Defendants.

BRUCE H. CAHN

Lane Powell PC

601 S.W. Second Ave., Ste. 2100

Portland, OR 97204

(503) 778-2100

Attorneys for Plaintiff

BROWN, Senior Judge.

This matter comes before the Court on Plaintiff First

Interstate Bank=s Motion (#37) for an Award of Attorneys' Fees

and Costs and Bill of Costs (#39). For the reasons that follow,

the Court GRANTS as modified Plaintiff=s Motion for Attorneys'

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Fees and AWARDS Plaintiff attorneys= fees of $78,515.55 and

paralegal fees of $631.40. The Court also AWARDS Plaintiff

costs of $2,455.80.

BACKGROUND

On September 22, 2020, Plaintiff filed a Complaint and

alleged claims for breach of loan documents and breach of a

personal guarantee against Defendants SOSCO Aviation, LLC;

Harold Sosna; and Premier Health Care Management, LLC. Plaintiff

initially sought damages in excess of $4,880,050.00.

On November 17, 2020, Plaintiff voluntarily dismissed its

claims against Premier without costs or fees.

On December 30, 2020, Plaintiff filed a First Amended

Complaint (#22) naming only SOSCO and Sosna as defendants and

reduced the damages sought to approximately $1,866,836.00.

Defendants were served with Summons and Complaint, but

neither Defendant filed an Answer or other appearance within the

time required by law.

On March 25, 2021, Plaintiff filed a Motion (#30) for Entry

of Default against Defendants.

On March 29, 2021, the Court granted Plaintiff's Motion and

entered an Order of Default against Defendants. The Court also

directed Plaintiff to submit a proposed form of default judgment

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for the Court's consideration.

On April 14, 2021, the Court entered Default Judgment (#36)

in favor of Plaintiff and against Defendants for damages in the

amount of $1,824,321.09.

On April 28, 2021, Plaintiff filed a Motion (#37) for an

Award of Attorneys' Fees and Costs and a Bill of Costs (#39).

Plaintiff seeks attorneys' fees in the amount of $79,609.95 and

costs in the amount of $2,455.80.

DISCUSSION

I. Plaintiff is entitled to reasonable attorneys' fees.

As noted, Plaintiff alleges claims for breach of loan

documents and breach of a personal guarantee. Plaintiff's

claims are based on its loan of $5,000,000.00 to SOSCO. SOSCO

executed a Promissory Note to secure the loan, SOSCO used the

loan proceeds for the purchase of a Cessna aircraft, and SOSCO's

obligation to pay the Note was guaranteed by a Personal Guaranty

of Payment executed by Defendant Sosna. Plaintiff also obtained

a security interest in the aircraft.

SOSCO ultimately defaulted on the payments required under

the Note. Plaintiff made a demand for payment to SOSCO and,

pursuant to the Guaranty, also made a demand to Sosna for

payment of the remaining obligation on the Note. When neither

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SOSCO nor Sosna responded, Plaintiff filed this action.

Plaintiff subsequently foreclosed its security interest in

the aircraft, sold the aircraft in a private sale, and applied

the proceeds of the sale to offset the obligations of SOSCO and

Sosna on the Note.

Plaintiff seeks recovery of attorneys' fees pursuant to

Oregon Revised Statutes §§ 20.083 and 20.096(1) and under the

Note provision for recovery of reasonable attorneys' fees in the

event of default. In addition, the Guaranty signed by Sosna

included a right to recover attorneys' fees incurred in

enforcing his obligations under the Guaranty.

As noted, on April 14, 2021, the Court entered Default

Judgment in favor of Plaintiff and against Defendants.

Accordingly, on this record the Court concludes Plaintiff

is entitled to reasonable attorneys' fees and costs.

II. Plaintiff is entitled to attorneys' fees and paralegal fees

in the amount of $79,122.35.

Plaintiff seeks a total of $79,609.95 in attorneys' fees

and paralegal fees incurred when it enforced its rights under

the Note and Guaranty.

A. Standards

The Supreme Court has stated under federal

fee-shifting statutes that "the lodestar approach" is "the

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guiding light" when determining a reasonable fee. Perdue v.

Kenny A., 559 U.S. 542, 551 (2010). Under the lodestar method

the court first determines the appropriate hourly rate for the

work performed and then multiplies that amount by the number of

hours properly expended in doing the work. Id. Although "in

extraordinary circumstances" the amount produced by the lodestar

calculation may be increased, "there is a strong presumption

that the lodestar is sufficient." Id. at 556. The party

seeking an award of fees bears "the burden of documenting the

appropriate hours expended in the litigation, and [is] required

to submit evidence in support of those hours worked." United

Steelworkers of Am. v. Ret. Income Plan For Hourly-rated Emps.

Of Asarco, Inc., 512 F.3d 555, 565 (9th Cir. 2008)(quotations

omitted). When "determining the appropriate number of hours to

be included in a lodestar calculation, the district court should

exclude hours 'that are excessive, redundant, or otherwise

unnecessary.'" McCown v. City of Fontana, 565 F.3d 1097, 1102

(9th Cir. 2009)(quoting Hensley v. Eckerhart, 461 U.S. 424, 434

(1983)).

To determine the lodestar amount the court may

consider the following factors:

(1) the time and labor required; (2) the novelty

and difficulty of the questions involved; (3) the

skill requisite to perform the legal service

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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) any time limitations

imposed by the client or the circumstances;

(8) the amount involved and the results 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.

Fischel v. Equitable Life Assur. Soc'y of U.S., 307 F.3d 997,

1007 n.7 (9th Cir. 2002)(quotation omitted). A rote recitation

of the relevant factors is unnecessary as long as the court

adequately explains the basis for its award of attorneys' fees.

McGinnis v. Kentucky Fried Chicken of Cal., 51 F.3d 805, 809

(9th Cir. 1995).

The lodestar amount is presumed to be the reasonable

fee, and, therefore, "'a multiplier may be used to adjust the

lodestar amount upward or downward only in rare and exceptional

cases, supported by both specific evidence on the record and

detailed findings by the lower courts.'" Summers v. Carvist

Corp., 323 F. App'x 581, 582 (9th Cir. 2009)(quoting Van Gerwen

v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir.

2000)). "Adjustments [to the lodestar amount] must be carefully

tailored . . . and [made] only to the extent a factor has not

been subsumed within the lodestar calculation." Rouse v. Law

Offices of Rory Clark, 603 F.3d 699, 704 (9th Cir. 2009)(citing

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Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 982 (9th Cir.

2008)).

B. Time Expended in Connection with Plaintiff's Action

Plaintiff seeks to recover attorneys' fees and

paralegal fees for the time attorneys David Criswell, Bruce

Cahn, Lisa Poplowski, Rebecca Mares, and Andrew Geppert and

paralegals Ruth Peake and Carole Brock spent in the handling of

Plaintiff=s claims against Defendants. The hourly billing

records for the services rendered by the attorneys and

paralegals were submitted with the Declaration of Bruce Cahn

(#38). Those records reflect a total of 185.5 hours (181.4

hours by the attorneys and 4.1 hours by the paralegals) spent in

the handling of this case.

Even though Defendants have not objected to

Plaintiff's requests, the Court has an independent duty to

review a motion for attorneys' fees for reasonableness. Gates

v. Deukmejian, 987 F.2d 1392, 1398 (9th Cir. 1992). See also

Cruz v. Alhambra Sch. Dist., 282 F. App'x 578, 580 (9th Cir.

2008)(The district court has an "obligation to articulate . . .

the reasons for its findings regarding the propriety of the

hours claimed or for any adjustments it makes either to the

prevailing party's claimed hours or to the lodestar.").

The records submitted by Plaintiff in support of its

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request indicate the attorneys and paralegals engaged in

significant efforts to investigate and to negotiate Plaintiff's

claims before filing this lawsuit; reviewed loan documents,

lease agreements, guaranty documents, security agreements, UCC

registration agreements, and other documents regarding the

claims; filed the Complaint and Amended Complaint; prepared

service documents; prepared pleadings related to the Motion for

Default; performed legal research; corresponded and met with the

client; analyzed issues regarding aircraft valuation,

maintenance, sales brokers, insurance coverage, and personal

guarantees; drafted communications to Defendants; prepared

pleadings for entry of default and judgment; and drafted this

Motion for an Award of Attorneys' Fees and Bill of Costs.

Attorney Cahn specifically states in his Declaration that the

liquidation and sale of the aircraft by means of a Uniform

Commercial Code Article 9 foreclosure sale involved the

assignment of related contracts with another entity and

protective advances for maintenance work done on the aircraft,

and there was also an out-of-state receivership related to

Defendant Premier who was later dismissed as a party due to

commencement of the receivership.

On this record the Court concludes the time spent by

the attorneys and paralegals on this matter was reasonable.

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C. Requested Hourly Rates for Attorneys

To determine the reasonable hourly rate of an

attorney, this Court uses the most recent Oregon State Bar

Economic Survey published in 2017 as its initial benchmark.

Attorneys may also argue for higher rates based on inflation,

specialty, or any number of other factors.

1. Attorney Criswell

Attorney Criswell requests an hourly rate of $495

for his time. Criswell is a senior partner at Lane Powell P.C.

and has over 32 years of experience focusing on business

bankruptcy, corporate restructuring, loan workouts, insolvency,

and real estate. Criswell has represented Plaintiff since 2005

and was the primary attorney representing Plaintiff in

connection with the enforcement of the security interest in the

aircraft, which secured the loan and was guaranteed by Sosna.

Criswell billed 58.9 hours in connection with this matter.

The Oregon State Bar Economic Survey rates for an

attorney with comparable years of practice in Portland is

between $413 and $610 per hour. As noted, the rate sought by

Criswell is $495 per hour, which is within the compensation

range of the Economic Survey.

On this record the Court concludes the hourly

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rate of $495 for attorney Criswell is reasonable. The Court,

therefore, awards Plaintiff attorneys' fees of $29,155.50 for

Criswell (58.9 hrs. x $495/hr.).

2. Attorney Cahn

Attorney Cahn requests an hourly rate of $500 for

his time. Cahn has over 30 years of experience as an attorney

and focuses on commercial litigation, construction, creditors'

rights, and real-estate transactions. Cahn was the primary

attorney handling this case and billed a total of 26 hours.

The Oregon State Bar Economic Survey rates for an

attorney with comparable years of practice in Portland is

between $394 and $525 per hour. As noted, the rate sought by

Cahn is $500 per hour, which is within the compensation range of

the Economic Survey.

On this record the Court concludes the hourly

rate of $500 for attorney Cahn is reasonable. The Court,

therefore, awards Plaintiff attorneys' fees of $13,000.00 for

Cahn (26 hrs. x $500/hr.).

3. Attorney Poplowski

Attorney Poplowski requests an hourly rate of

$400 for her time. Poplowski has nine years of experience as a

business attorney and focuses on mergers and acquisitions,

securities, corporate finance, governance, and aviation law.

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Poplowski was involved in the sale of the aircraft security in

this matter and billed a total of 52.1 hours.

The Oregon State Bar Economic Survey rates for an

attorney with comparable years of practice in Portland is

between $282 and $400 per hour. As noted, the rate sought by

Poplowski is $400 per hour, which is within the compensation

range of the Economic Survey.

On this record the Court concludes the hourly

rate of $400 for attorney Poplowski is reasonable. The Court,

therefore, awards Plaintiff attorneys' fees of $20,480.00 for

Poplowski (51.2 hrs. x $400/hr.).

4. Attorney Geppert

Attorney Geppert requests an hourly rate of

$346.50 for his time. Geppert has four years of experience as

an attorney and focuses on commercial litigation and creditors'

rights. Geppert billed a total of 42 hours.

The Oregon State Bar Economic Survey rates for an

attorney with comparable years of practice in Portland is

between $249 and $350 per hour. As noted, the rate sought by

Geppert is $346.50 per hour, which is within the compensation

range of the Economic Survey.

On this record the Court concludes the hourly

rate of $346.50 for attorney Geppert is reasonable. The Court

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therefore, awards Plaintiff attorneys' fees of $14,617.80 for

Geppert (42 hrs. x $346.50/hr.).

5. Attorney Mares

Attorney Mares requests an hourly rate of $382.50

for her time. Mares has seven years of experience as an

aviation attorney and focuses on acquisition, disposition,

operation, and leasing and financing of business and commercial

aircraft. Mares was involved in the sale of the aircraft

security and billed a total of 3.3 hours.

The Oregon State Bar Economic Survey rates for an

attorney with comparable years of practice in Portland is

between $282 and $400 per hour. As noted, the rate sought by

Mares is $382.50 per hour, which is within the compensation

range of the Economic Survey.

On this record the Court concludes the hourly

rate of $382.50 for attorney Mares is reasonable. The Court,

therefore, awards Plaintiff attorneys' fees of $1,262.25 for

Mares (3.3 hrs. x $382.50/hr.).

D. Requested Hourly Rate for Paralegals

The Court relies on the National Utilization and

Compensation Survey Report published by NALA - The Paralegal

Association (NALA) in 2018 to determine the reasonable hourly

rate for paralegals.

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1. Paralegal Peake

Plaintiff requests an hourly rate of $282.60 for

Paralegal Peake's time. Attorney Cahn states in his Declaration

that Peake has over 25 years of experience as a litigation

paralegal and assisted with the preparation of Plaintiff's

filings. Plaintiff has not submitted any support for the hourly

rate sought for Peake.

The NALA survey indicates in the Far West Region

(which includes Oregon) the hourly billing rate for paralegals

with comparable years of practice (over 25 years) is $154 per

hour.

This case involved a commercial loan issue, and

Peake billed a total of 2 hours assisting in this case.

On this record and in light of the NALA Survey,

the Court concludes an hourly rate of $154 per hour for

Paralegal Peake's time is reasonable. The Court, therefore,

awards Plaintiff paralegal fees in the amount of $308.00 for

Peake (2 hrs. x $154/hr.).

2. Paralegal Brock

Plaintiff requests an hourly rate of $252 for

Paralegal Brock=s time. Attorney Cahn states in his Declaration

that Brock has over 30 years of experience as a real estate,

creditors' rights, and bankruptcy paralegal and assisted with

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reviewing loan documents. Plaintiff has not submitted any

support for the hourly rate sought for Brock.

The NALA survey indicates in the Far West Region

(which includes Oregon) the hourly billing rate for paralegals

with comparable years of practice (over 25 years) is $154 per

hour.

This matter involved a commercial loan issue, and

Paralegal Brock billed a total of 2.1 hours assisting in this

case.

On this record and in light of the NALA Survey,

the Court concludes an hourly rate of $154 per hour for

Paralegal Brock's time is reasonable. The Court, therefore,

awards Plaintiff paralegal fees in the amount of $323.40 for

Brock (2.1 hrs. x $154/hr.).

In summary, the Court AWARDS Plaintiff attorneys' fees

in the amount of $78,515.55 and paralegal fees in the amount of

$631.40 for a total of $79,146.95.

PLAINTIFF'S COSTS

Plaintiff requests an award of costs in the amount of

$2,455.80 comprised of the filing fee ($400.00) and service of

process fees (2,055.80).

Absent a showing of circumstances not relevant here, an

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award of costs is governed by federal law. See Champion

Produce, Inc. v. Ruby Robinson Co., Inc., 342 F.3d 1016, 1022

(9th Cir. 2003).

28 U.S.C. § 1920 allows a federal court to tax specific

items as costs against a losing party pursuant to Federal Rule

of Civil Procedure 54(d)(1). Section 1920 provides:

A judge or clerk of any court of the United

States may tax as costs the following:

(1) Fees of the clerk and marshal;

(2) Fees of the court reporter for all or any

part of the stenographic transcript necessarily

obtained for use in the case;

(3)Fees and disbursements for printing and

witnesses;

(4)Fees for exemplification and copies of papers

necessarily obtained for use in the case;

(5)Docket fees under section 1923 of this title;

(6)Compensation for court-appointed experts,

compensation of interpreters, and salaries, fees,

expenses, and costs of special interpretation

services under section 1828 of this title.

A bill of costs shall be filed in the case and,

upon allowance, included in the judgment or

decree.

Costs generally are awarded to the prevailing party in a

civil action as a matter of course unless the court directs

otherwise. Fed. R. Civ. P. 54(d). The court must limit an

award of costs to those defined in 28 U.S.C. § 1920 unless

otherwise provided for by statute. Grove v. Wells Fargo Fin.

Ca., Inc., 606 F.3d 577, 579-80 (9th Cir. 2010).

Here the costs for which Plaintiff seeks recovery are items

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allowed under § 1920. Accordingly, the Court awards costs to

Plaintiff in the amount of $2,455.80.

CONCLUSION

For these reasons the Court GRANTS as modified Plaintiff's

Motion (#37) for an Award of Attorney Fees and Costs and AWARDS

Plaintiff attorneys' fees of $78,515.55 and paralegal fees of

$631.40. The Court also AWARDS Plaintiff costs of $2,455.80 as

set out in Plaintiff's Bill of Costs (#39).

IT IS SO ORDERED.

DATED this 19th day of May, 2021.

/s/ Anna J. Brown

_____

ANNA J. BROWN

United States Senior District Judge

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