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Catalan v. RBC Mortgage Co.

September 16, 2009


The opinion of the court was delivered by: Judge Robert M. Dow, Jr.


Before the Court are Plaintiffs'petition for attorneys'fees and costs [281], Defendant RBC Mortgage Company d/b/a RBC Centura Bank' s ("RBC") response [288], and Plaintiffs' reply [289].*fn1 For the reasons stated below, Plaintiffs'petition is granted in part and denied in part.

I. Background

In December 2005, Plaintiffs Saul Catalan and Mia Morris filed a complaint against Defendants RBC Mortgage Company ("RBC") and GMAC Mortgage Corporation ("GMAC"). Before the case was transferred to this Court' s docket, Judge Lindberg granted summary judgment in favor of GMAC [see 118]. The case proceeded to trial on three claims against RBC:

(i) violation of the Real Estate Settlement Practices Act ("RESPA"), (ii) breach of contract, and (iii) negligence. Following a seven-day trial, the jury returned a verdict in Plaintiffs' favor on the RESPA and negligence claims and in RBC's favor on the breach of contract claim. The jury awarded damages in the amount of $1,100 on the RESPA claim and $10,000 on the negligence claim, for a total award to Plaintiffs of $11,100.*fn2

Currently before the Court is Plaintiffs'fee petition [281]. In that petition, Plaintiffs request fees and costs as follows: $234,643.30 in attorneys' fees; $1,904.00 in "recaptured telephone calls"; $25,364.00 for "fee petition related matters"; $7,162.00 in additional fees also related to objections to the fee petition; and $7,066.85 in costs.*fn3 RBC -- which, according to the parties'Local Rule 54.3 joint statement, incurred $369,000 in attorneys'fees and $31,000 in costs in this litigation -- responds that Plaintiffs should receive little or no attorneys' fees because of their limited success at trial.

Mindful of the Supreme Court' s admonition that "[i]deally, of course, litigants will settle the amount of the fee" (Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)), the Court referred the fee dispute to Magistrate Judge Nolan for a settlement conference. Unfortunately, the parties were unable to reach accord, and the tail thus has continued to wag the dog in this case. See Estate of Enoch v. Tienor, 570 F.3d 821, 823 (7th Cir. 2009). It therefore is incumbent on this Court to resolve the ongoing fee dispute and to provide a "concise but clear" explanation for its ultimate ruling. Hensley, 461 U.S. at 437; see also Schlacher v. Law Offices of Phillip J. Rotche & Assocs., 574 F.3d 852, 857 (7th Cir. 2009) (explaining that a district court "must provide a clear and concise explanation for its award, and may not ' eyeball' and decrease the fee by an arbitrary percentage because of a visceral reaction that the request is excessive" and that the court of appeals "review[s] an award of attorney's fees under a highly deferential abuse-of-discretion standard").

II. Analysis

The impetus for Plaintiffs'

2605(f)(3), which is designed "to ensure the effective prosecution of meritorious claims." Pedraza v. United Guar. Corp., 313 F.3d 1323, 1332-33 (11th Cir. 2002). By "permitting attorneys fees and costs as part of each allowable recovery," Congress sought to "encourage[] individual customers to raise valid RESPA claims." Glover v. Standard Fed. Bank, 283 F.3d 953, 965 (8th Cir. 2002). As the Seventh Circuit has observed more generally, "Congress provided fee shifting to enhance enforcement of important civil rights, consumer-protection, and environmental policies. By providing competitive rates we assure that attorneys will take such cases, and hence increase the likelihood that the congressional policy of redressing public interest claims will be vindicated." Tolentino v. Friedman, 46 F.3d 645, 652-53 (7th Cir. 1995).*fn4 fee petition is the RESPA' s fee-shifting provision, 12 U.S.C. §

A. RBC's Threshold Objections

As an initial matter, RBC contends that Plaintiffs should not be entitled to any fee at all because their recovery at trial was so small. In other words, in RBC' s view, even if Plaintiffs' were "prevailing parties," the reasonable fee award for a trifling victory is zero (or an amount very close to it).

The Seventh Circuit has read Farrar v. Hobby, 506 U.S. 103, 112 (1992), as "holding that a plaintiff who wins any measure of damages is a prevailing party for the purposes of fee-shifting statutes." Moriarty v. Svec, 233 F.3d 955, 966 (7th Cir. 2000). Thus, "[a] plaintiff achieves ' prevailing party'status by recovering any judgment, even for nominal damages."

Johnson v. Daley, 339 F.3d 582, 587 (7th Cir. 2003) (en banc). Under that standard, Plaintiffs are prevailing parties.

Nevertheless, because fee-shifting statutes generally authorize only "reasonable" attorneys'fees, the case law indicates that, in some circumstances, parties who obtain an extremely small victory -- described variously as "Pyrrhic," "nominal," "technical," or "de minimis" -- may not be entitled to an award of fees. See, e.g., Tuf Racing Prods., Inc. v. Am. Suzuki Motor Corp., 233 F.3d 585, 592 (7th Cir. 2000); see also Farrar, 506 U.S. at 114-15. In those circumstances, there is at least a presumption that any fee award would be unreasonable. See Cole v. Wodziak, 169 F.3d 486, 488 (7th Cir. 1999) ("a paltry jury award * * * implies that the only reasonable fee is zero").*fn5 But, after careful review of the applicable Seventh Circuit precedent, the Court concludes that the jury award in this case, although modest, cannot be considered either "paltry" or "de minimis." See Moriarty, 233 F.3d at 592 (party awarded a judgment of $2,400 was entitled to reasonable attorneys' fees); Cole, 169 F.3d at 488 (recoveries by one plaintiff of $3,500 and by the other plaintiff of $1,000 in compensatory and punitive damages were "more than a pittance" and qualified both plaintiffs as "prevailing parties" who were "entitled to ' reasonable' fees").*fn6

B. Computation of the lodestar

Having rejected RBC' s threshold contentions that a minimal fee (or no fee at all) is appropriate in this case, the court now begins the analysis of determining a reasonable fee. See Anderson v. AB Painting & Sandblasting, Inc., 2009 WL 2525571, at *2 (7th Cir. Aug. 20, 2009) ("If a party prevails, and the damages are not nominal, then Congress has already determined that the claim was worth bringing" and the Court then "must limit itself to determining whether the hours spent were a reasonable means to that necessary end"). As the Seventh Circuit recently reiterated, "[a]lthough there is no precise formula for determining a reasonable fee, the district court generally begins by calculating the lodestar -- the attorney's reasonable hourly rate multiplied by the number of hours reasonably expended." Schlacher, 574 F.3d at 856 (citing Hensley, 461 U.S. at 433-37).

Before determining the hours and rates in this case, however, the Court notes a few basic principles that apply in generating the lodestar in a fee-shifting case. First, it is appropriate to consider the litigation as a whole, rather than viewing the specific claims atomistically, if "the plaintiff's claims of relief * * * involve a common core of facts or [are] based on related legal theories," such that "much of counsel's time will be devoted generally to the litigation as a whole, ...

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