United States District Court, D. Arizona
Zounds Hearing Franchising, LLC, an Arizona limited liability company; and Zounds Hearing Inc., a Delaware corporation, Plaintiffs,
Edward T. Bower and Barbara Bower, husband and wife; and Lend Me Your Ears, Inc., an Ohio corporation; Defendants. Zounds Hearing Franchising, LLC, an Arizona limited liability company; and Zounds Hearing Inc., a Delaware corporation, Plaintiffs,
Frank R. Graziano and Mary E. Graziano, husband and wife; and FNM Enterprises, Inc., an Ohio corporation, Defendants. Zounds Hearing Franchising, LLC, an Arizona limited liability company; and Zounds Hearing Inc., a Delaware corporation, Plaintiffs,
Glenn Harbold, an individual; and Perfect Clarity LLC, an Ohio limited liability company, Defendants. Zounds Hearing Franchising, LLC, an Arizona limited liability company; and Zounds Hearing Inc., a Delaware corporation, Plaintiffs,
Lawrence R. Woerner and Nancy Woerner, husband and wife; Susan Steigerwald and David Steigerwald, husband and wife; Lawrence W. Woerner and Rosemarie Woerner, husband and wife; and WOCO Franchise LLC, an Ohio limited liability company, Defendants.
V. WAKE, SENIOR UNITED STATES DISTRICT JUDGE
the Court is Defendants' Motion for Attorneys' Fees
(Doc. 60), the Response, and the Reply. The Court has
previously determined that Defendants' fees will be
awarded under Ariz. Rev. Stat. § 12-341.01(A) and Ohio
Rev. Code § 1334.09(B)(2). Fees are awardable under the
Arizona statute because the four failed Arizona actions were
filed in Arizona, claiming to be under Arizona contract law.
Fees are also awardable in the four Arizona actions under the
Ohio statute because they were filed in violation of the Ohio
statute, which prohibits lawsuits out of Ohio and non-Ohio
choice-of-law clauses and permits a fee award for violation
of the Ohio statute.
fees incurred in the four Arizona cases and in the Ohio case,
except the fees incurred in the Ohio case before the Arizona
cases were filed, are awardable in these Arizona cases
because all the work was the same for all the cases, with one
exception noted later. The only task remaining on this motion
is the quantification of the fee award.
both sides' briefs are burdened with erroneous and
inapplicable assertions concerning attorney fee awards. The
correct legal analysis concerning the fee award is as
basis for the award is the reasonable hours expended at the
agreed hourly rates, assuming those rates are reasonable.
Ariz. Rev. Stat. § 12-341.01(B) (“the award may
not exceed the amount paid or agreed to be paid”);
Schweiger v. China Doll Restaurant, Inc.,
138 Ariz. 183, 187-88, 673 P.2d 927, 931-33 (Ariz.Ct.App.
2006) (the agreed hourly rate is presumptively the reasonable
rate in commercial litigation). Nevertheless, Defendants seek
an award above the agreed rates and even above the reasonable
lodestar rate for the services, a multiplier on the lodestar
value. That is because Defendants' counsel agreed to a
mixed attorney fee based on a reduced hourly rate and a
contingent fee as well. Under the Arizona statute the Court
can award at most the agreed hourly rate for time reasonably
expended. Moreover, the four Arizona cases did not produce a
monetary recovery, so no contingent fee has been earned.
monetary recovery may yet occur in the Ohio case, first
transferred to Arizona and the transferred back to Ohio. That
remains to be seen. If further proceedings do result in a
monetary recovery to the Franchisees, the Ohio court will
have to quantify and award later fees incurred in the Ohio
proceedings, including any shifting of fees to Zounds based
on the contingent fee portion of the recovery.
is no authority on whether the Ohio statute allows a
multiplier on lodestar value. If there is a monetary recovery
and the Ohio court concludes a multiplier may be awarded
under the Ohio statute, then the Ohio court may make such an
award at that time, together with the additional hourly-rate
Defendants' counsel's discounted hourly rates are
eminently reasonable. The services at the reduced rates are
reasonable, and the times and fees as a whole are reasonable.
Even at counsel's full regular hourly rate, the total
fees would be reasonable. Contrary to Zounds' repeated
assertions, this was not a simple case. Zounds fought hard to
oust Ohio franchise law from protecting Ohio franchisees in
Ohio franchises. Zounds' attack on the Ohio franchise law
was bold and had to be met with full force.
Sometimes unidentified legal research can be ascertainable in
the context of other described services. This case called for
substantial legal research and it is inferable that the legal
research was being done on the matters otherwise at hand. The
amount expended on legal research was entirely reasonable,
considering the nature of the issues and the magnitude of the
Counsel who describe dissimilar services without adequate
breakdown to determine what was done and whether it was
reasonable run the risk that the court may reduce such
services. Welch v. Metro. Life Ins. Co., 480 F.3d
942, 948 (9th Cir. 2001). But often quantity of the services
can fairly be known from the similar services with which they
are associated. For example, writing a response brief and
legal research on the same need not be broken down to
ascertain that the whole is reasonable. The admonition
against block billing is not a game of gotcha, regardless of
whether reasonableness can be determined. Here the Court has
reviewed all Zounds' objections and concludes some of the
so-called block billing is not block billing at all and,
whether it is or not, the entries do not prevent
determination of reasonableness.
the Ohio litigation, the Franchisees sued additional
defendants, the brokers who sold them the franchises. Those
parties were among those transferred to Arizona. To the
extent time was expended solely on negotiating settlements
with those brokers, fees should not be awarded against
Zounds. But work relevant to Zounds does not become
unawardable because it also served the claims against the
brokers. Therefore, 10.75 hours of Mr. Dub's time devoted
solely to the brokers will be reduced from the award.
incurred on unsuccessful legal theories and strategies should
be awarded when the successful party has achieved the result
sought in the litigation. Schweiger, 138 Ariz. at
189, 673 P.2d at 939. The Franchisees wholly prevailed on the
points on which Zounds brought the Arizona lawsuits. The fees
incurred in resisting the transfer of the Ohio case to
Arizona have now been fully vindicated.
Zounds contends that some fees were excessive, redundant, or
unreasonable. Some of those objections are based on
miscounting of time. (Doc. 67 at 7-9.) Having examined the
questioned time entries, the Court squarely rejects those
contentions. The times expended were eminently reasonable.
The Franchisees are not required to do perfunctory work when
their businesses are put to life or death litigation.
Court awards Defendants (the Franchisees) $42, 000.00 in
attorney's fees for Mr. Dub's services for 210 hours
at the agreed rate of $200/hour. The Court awards $6, 240.00
in attorney's fees for Mr. Greenfield's services of
41.6 hours at the agreed rate of $150/hour. Attorneys'