The opinion of the court was delivered by: WILLIAM HART, Senior District Judge
MEMORANDUM OPINION AND ORDER
In this case plaintiff Budget Rent-A-Car System, Inc. alleges
that it was overcharged for premises it leased from defendant
Consolidated Equity III, LLC. Defendant counterclaims that it has
been underpaid. Central to this dispute is the amount of
"additional rent" due under the lease. Additional rent is based
on operating expenses, taxes, and insurance expenses incurred by
defendant. Presently pending are two motions for sanctions
related to previously ruled upon motions to compel.
Federal Rule of Civil Procedure Rule 37(a)(4) provides in
relevant part:
(A) If the motion is granted or if the disclosure or
requested discovery is provided after the motion was filed, the court shall, after
affording an opportunity to be heard, require the
party or deponent whose conduct necessitated the
motion or the party or attorney advising such conduct
or both of them to pay to the moving party the
reasonable expenses incurred in making the motion,
including attorney's fees, unless the court finds
that the motion was filed without the movant's first
making a good faith effort to obtain the disclosure
or discovery without court action, or that the
opposing party's nondisclosure, response, or
objection was substantially justified, or that other
circumstances make an award of expenses unjust.
* * *
(C) If the motion is granted in part and denied in
part, the court may enter any protective order
authorized under Rule 26(c) and may, after affording
an opportunity to be heard, apportion the reasonable
expenses incurred in relation to the motion among the
parties and persons in a just manner.
The Seventh Circuit has held that Rule 37(a)(4) contains a
presumption that the victor on a motion to compel is entitled to
its costs, including attorney fees. Rickels v. City of South
Bend, Ind.,
33 F.3d 785, 786-87 (7th Cir. 1994); Mudron v.
Brown & Brown, Inc., 2005 WL 645927 *1 (N.D. Ill. March 17,
2005). Where the motion to compel is granted, the burden is on
the opposing party to show that an award of costs would be unjust
or that the opposing party's position was substantially
justified. Rickels, 33 F.3d at 787; Burke v. Prudential
Insurance Co. of America, 2004 WL 784073 *2 (N.D. Ill. Jan. 29,
2004). Substantially justified does not mean "`justified to a high degree,' but rather `justified in substance or in the main'
that is, justified to a degree that could satisfy a reasonable
person." Pierce v. Underwood,
487 U.S. 552, 565 (1988). See
also Rickels, 33 F.3d at 787. There is no requirement in Rule
37(a)(4) that, in order to obtain fees, the moving party be
prejudiced by delay in receiving the discovery. Prejudice,
though, could be a factor pertinent to consideration of whether
it would be unjust to award fees.
In November 2003, before litigation had been initiated,
plaintiff requested verification of the expenses upon which the
additional rent was calculated. No such verification was provided
prior to the filing of this lawsuit in March 2004. In June 2004,
plaintiff served discovery requests upon defendant. This included
requests for all documents and communications supporting or
related to additional rent and operating expenses. Defendant did
not respond to the discovery request. In August 2004, plaintiff
filed a motion to compel. Defendant thereafter provided a few
documents, but no supporting documents for operating expenses. In
a September 2004 letter, plaintiff's counsel requested further
supporting documents. Defendant provided operating statements,
but no supporting documents for the amounts contained in the
statements. In October 2004, plaintiff again brought a motion to compel. At the court hearing,
defendant's counsel represented that there were no more
documents. A few days later, though, a general ledger was
produced, but still no documents supporting the expenses.
Plaintiff thereafter propounded requests to admit, seeking
admissions that no supporting expense documents existed. In
November 2004, defendant responded that the general ledger was
supporting documentation. In December 2004, there were some
indications from defendant's counsel that supporting
documentation might exist. Those communications involved more
correspondence and telephone calls between the parties'
attorneys. At that time, discovery was to close at the end of
January 2005. On January 4, 2005, counsel for defendant disclosed
that invoices, bills, and receipts were in storage. Depositions
had already been scheduled for mid-January. None of the expense
documentation was provided until January 12, 2005. The
depositions were postponed and an extension of discovery was
granted. In a January 5, 2005 letter, defendant's counsel stated
that he had only recently learned of the existence of the
documents because they had been archived. Although such documents
had been repeatedly requested, counsel stated: "There was no, and
never has been, any ongoing investigation to produce comprehensive discovery." In response to plaintiff's present
motion, defendant provides no further explanation for the delay
in producing the documents. Also, there is no dispute that the
documents contain prior Bates stamps showing that they had
previously been produced in other litigation.
Defendant contends its failure to provide the expense
documentation is substantially justified because it had already
provided the general ledger and operating expense statements.
That contention has absolutely no merit. The central dispute in
this case regards whether defendant had been accurately computing
additional rent based on the underlying expenses. Whether the
ledger and expense statements accurately reported expenses is an
issue. Plaintiff clearly requested and clearly was entitled to
documentation of the reported expenses. This court would have
granted the initial motion to compel requesting such
documentation, but defendant represented that none existed. Even
if it turns out that all the expenses shown in the statements are
supported by the expense documents, defendant was not justified
in failing to turn over, or even search for, the documents when
first requested in discovery. Plaintiff will be awarded its
reasonable attorney fees and expenses incurred in attempting to
compel production of the documents. Defendant asserts that any award of fees and expenses should be
limited to work related to compelling production of the documents
at issue. Defendant insinuates that some of the fees and expenses
claimed are not related to the motion to compel. Plaintiff has
provided documentation of the attorney hours included and the
expenses charged. Defendant has not particularly pointed to any
charge that should not have been included.
Only one aspect of the claimed fees will be reduced. The
$15,983.00 in fees for pursuing this sanctions motion is not
reasonsable. $4,650.00 (representing 15 hours of associate time)
is sufficient. That results in total fees and expenses of
$25,792.76. This includes fees and expenses related to briefing
multiple motions to compel and related requests to admit,
appearing in court on a number of occasions when the motions were
presented, drafting and reading numerous letters, telephone
conversations with opposing counsel, and the cost of briefing and
presenting the motions for sanctions.
In apparent retaliation for plaintiff's request for sanctions,
defendant also moves for sanctions related to a motion to compel
that it filed on March 7, 2005. On April 20, 2005, defendant's
motion to compel was granted in part and denied in part. Defendant denominates its motion as one for
reconsideration because the April 20 minute order does not
expressly state whether the request for fees contained in the
motion to compel was granted or denied. Also, there was no
express statement in court as to fees because defendant did not
raise that issue at the time the motion to compel was ruled upon.
Most aspects of the motion to compel were denied. All that was
granted was that plaintiff would have to eventually disclose its
computation as to the correct amount of rent. Plaintiff
represented that it would likely do this through the report of
its damages expert, an accountant. Time was allowed for the
disclosure of expert reports.
In accordance with Rule 37(a)(4)(C), the court determined that
the appropriate apportionment of fees and expenses related to the
motion to compel that was granted in part and denied in part was
for each party to bear its owns fees and expenses related to the
motion. Although not expressly stated in the minute order, that
was implicit in there being no statement in the minute order that
fees were being awarded. Defendant's present arguments have been
considered and no reason is found to award defendant any fees and
expenses related to its motion to compel. Defendant's motion will
be denied. IT IS THEREFORE ORDERED that plaintiff's supplemental motion
for fees and sanctions [35] is granted. Defendant's motion to
clarify or, in the alternative, to amend, or in the alternative
to reconsider [58] is denied. The Clerk of the Court is directed
to enter judgment in favor of plaintiff and against defendant in
the amount of $25,792.76 representing fees and expenses awarded
pursuant to Fed.R.Civ.P. 37(a)(4).
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