Cont'l 332 Fund, LLC v. Albertelli
Cont'l 332 Fund, LLC v. Albertelli
2019 WL 9089587 (M.D. Fla. 2019)
November 21, 2019
McCoy, Mac. R., United States Magistrate Judge
Summary
The Court found that the non-parties were entitled to reimbursement of KLDiscovery's fees for the Electronically Stored Information collected, processed, hosted, and reviewed. The Court ordered Plaintiffs to remit payment to the non-parties in the amount of $14,935.00 for the reasonable fees and costs incurred.
Additional Decisions
CONTINENTAL 332 FUND, LLC, CONTINENTAL 298 FUND LLC, CONTINENTAL 306 FUND LLC, CONTINENTAL 326 FUND LLC, CONTINENTAL 347 FUND LLC, CONTINENTAL 355 FUND LLC, CONTINENTAL 342 FUND LLC, CONTINENTAL 245 FUND LLC and KMM CONSTRUCTION OF FLORIDA, LLC, Plaintiffs,
v.
DAVID ALBERTELLI, ALBERTELLI CONSTRUCTION INC., WESTCORE CONSTRUCTION, LLC, NATIONAL FRAMING, LLC, MFDC, LLC, TEAM CCR, LLC, BROOK KOZLOWSKI, JOHN SALAT, KEVIN BURKE, KERRY HELTZEL, AMY BUTLER, US CONSTRUCTION TRUST, FOUNDATION MANAGEMENT, LLC, KMM CONSTRUCTION, LLC, GEORGE ALBERTELLI, GREGORY HILZ, GREAT AMERICAN INSURANCE COMPANY, ANGELO EQUIZABAL, JAMES ALBERTELLI and ALBERTELLI LAW, Defendants
v.
DAVID ALBERTELLI, ALBERTELLI CONSTRUCTION INC., WESTCORE CONSTRUCTION, LLC, NATIONAL FRAMING, LLC, MFDC, LLC, TEAM CCR, LLC, BROOK KOZLOWSKI, JOHN SALAT, KEVIN BURKE, KERRY HELTZEL, AMY BUTLER, US CONSTRUCTION TRUST, FOUNDATION MANAGEMENT, LLC, KMM CONSTRUCTION, LLC, GEORGE ALBERTELLI, GREGORY HILZ, GREAT AMERICAN INSURANCE COMPANY, ANGELO EQUIZABAL, JAMES ALBERTELLI and ALBERTELLI LAW, Defendants
Case No. 2:17-cv-41-FtM-38MRM
United States District Court, M.D. Florida
Filed November 21, 2019
Counsel
Alvin D. Lodish, Duane Morris, LLP, Miami, FL, Benjamin A. Johnston, Jeffrey L. Hamera, Pro Hac Vice, Keith M. St. Aubin, Pro Hac Vice, Larry Selander, Pro Hac Vice, Duane Morris LLP, Christopher T. Grohman, Taft, Stettinius, & Hollister LLP, Chicago, IL, George D. Niespolo, Pro Hac Vice, Duane Morris LLP, San Francisco, CA, Michael J. Shuman, Duane Morris, LLP, Miami, FL, for Plaintiffs.Abbye Erika Alexander, Kaufman Dolowich & Voluck LLP, Callie Elizabeth Waers, Steven Edward Hermosa, Jeffrey Michael Partlow, Cole, Scott & Kissane, PA, Orlando, FL, Brooke E. Beebe, Cole, Scott & Kissane, PA, Bonita Springs, FL, Bruce S. Liebman, Kevin Patrick Yombor, Kaufman Dolowitch & Voluck, LLP, Ft. Lauderdale, FL, John D. Webb, John D. Webb P.A., St. Augustine, FL, Lynn Maynard Gollin, Gordon & Rees Scully Mansukhani, LLC, Miami, FL, Alan A. Greenberg, Thomas C. Rickeman, James P. Miller, Greenberg Gross LLP, Costa Mesa, CA, Alberta L. Adams, Robert Craig Graham, Mills Paskert Divers, PA, Tampa, FL, George Hayward Knott, Knott Ebelini Hart, Miesha Hewitt, Hewitt Law, Fort Myers, Fl, for Defendants
McCoy, Mac. R., United States Magistrate Judge
ORDER
*1 Plaintiffs filed an Objection to ALAW’s Invoice for Fees on September 6, 2019. (Doc. 439). Non-Parties James Albertelli and Albertelli Law, P.A. filed a response in opposition on September 20, 2019. (Doc. 478). Both filings were made pursuant to this Court’s order dated July 28, 2019 (Doc. 413) relating to certain subpoenas served by Plaintiffs to non-parties James Albertelli and Albertelli Law, P.A., whom Plaintiffs and the non-parties mutually refer to collectively as “ALAW” (see Doc. 439 at 1; Doc. 478 at 1). The matter is ripe for consideration.
The Court’s July 28 Order required, among other things, that Plaintiffs and these non-parties submit the issue of reimbursement for total costs incurred by the non-parties in complying with Plaintiffs’ subpoenas after the non-parties completed their production of documents responsive to the subpoenas. (Doc. 413 at 4-5). Following the procedures outlined in the Court’s Order, Plaintiffs timely objected to the costs demanded by the non-parties (see Doc. 439) and the non-parties timely responded to defend their invoice (see Doc. 478).
Plaintiffs summarize their objections as follows:
• Most of the fees on the invoice relate to defendant George Albertelli’s production (through the same counsel and document management service used by ALAW) of documents that he created and stored on ALAW’s servers while acting as an officer of Defendant, Albertelli Construction, Inc.;
• George Albertelli, not ALAW, produced the overwhelming majority of documents from ALAW’s servers that were relevant and responsive to Plaintiffs’ requests for documents;
• The fees requested, $57,677.44, are disproportionate and unreasonable compared to the number of documents produced by ALAW – 15 documents; and
• ALAW is an interested non-party who can and should bear the costs of its production.
(Doc. 439 at 1).
According to Plaintiffs, the non-parties’ net document production after a privilege review was 15 documents totaling 52 pages, which were produced on August 15, 2019. (Doc. 439 at 3). On August 19, 2019, ALAW submitted an invoice to Plaintiffs’ counsel for payment of $57,677.44 for costs incurred as a result of this production (less $12,377.94 in pre-paid costs required by the Court’s July 28 Order). (Doc. 439 at 3; Doc. 439-3). The total remaining balance originally demanded, therefore, was $45,299.50 (Doc. 493-3 at ECF p. 1), though the non-parties subsequently reduced the total amount down to $44,747.50 (Doc. 478 at 9 n.3).[1] According to Plaintiffs, the invoice and related materials reflect that ALAW incurred a total of 116.1 hours reviewing 2,478 documents. (See Doc. 439 at 3; 493-3). Plaintiffs argue that the detail in the invoice and supporting materials provided by the non-parties reflect that most of the fees billed by the non-parties were actually incurred in connection with Defendant George Albertelli’s document production in this case and, as such, George Albertelli and the non-parties are improperly seeking to shift the cost of George Albertelli’s document production to Plaintiffs. (Doc. 439 at 2-5).
*2 For their part, the non-parties disagree with Plaintiffs’ objections, arguing that Plaintiffs failed to meaningfully confer before filing their objection (Doc. 478 at 5-6), that the fees invoiced were not incurred in connection with George Albertelli’s document production (Doc. 478 at 6), that the fees are reasonable (Doc. 478 at 7-9), that Plaintiffs’ focus on the number of documents produced ignores the culling process the non-parties were required to undertake to identify those documents (Doc. 478 at 7-9), and that the non-parties are disinterested in this litigation and should be reimbursed for their costs (Doc. 478 at 7).
A review of the math informing the non-parties’ invoice is helpful. The invoice and supporting materials reflect a breakdown of the fees and costs sought as follows:
Attorneys’[2] Fees: $40,114.50
KLDiscovery[3] Fees: $17,562.94
Pre-Payment Received: ($12,377.94)[4]
Remaining Balance: $45,299.50
Post-Objection Adjustment: ($552.00)[5]
Adjusted Balance: $44,747.50
(See Doc. 478-1 at ECF pp. 2-3; Doc. 478 at 9 n.3).
Regarding the attorneys’ fees, the non-parties have not provided any information regarding the attorneys involved, their qualifications, or the reasons why attorneys with such high hourly rates were retained to assist the non-parties in complying with the subpoenas, including the document and privilege reviews. Additionally, the non-parties do not adequately explain why more than 100 hours were reasonably incurred to respond and to comply with the subpoenas. Perhaps more importantly, the Court’s own review of the attorneys’ time entries and the timing of the non-parties’ document production in relation to Defendant George Albertelli’s document production, as described by Plaintiffs, give rise to very real concerns that that those involved with these billed activities did not – and, in fact, could not – segregate the work they were performing for the benefit of Defendant George Albertelli from the work they were performing for the benefit of the non-parties. In other words, the Court finds sufficient cause for concern that the activities being billed by the non-parties here overlapped significantly with other activities meant to facilitate Defendant George Albertelli’s compliance with his own discovery obligations in this case. The Court cannot and will not permit those costs to be shifted to Plaintiffs under such questionable circumstances. The Court finds that these considerations require the total number of hours expended by the attorneys to be discounted to 50 hours total, or a discount of a little more than 50% of the total number of hours claimed.
*3 In light of all the concerns above, the Court finds that a reasonable amount of attorneys’ fees for the work performed in connection with the subpoenas at issue is $9,750.00, calculated as follows: 50 hours of attorney time x a reasonable hourly rate of $195.00 per hour = $9,750.00. Thus, the Court finds that the non-parties are entitled to reimbursement of attorneys’ fees in the total amount of $9,750.00 relating to the subpoenas.
Regarding vendor fees, the Court has carefully reviewed the invoices and the explanation of services provided by KLDiscovery and finds them to be reasonable in their entirety and necessarily incurred in this matter on behalf of the non-parties. Thus, the Court finds that the non-parties are entitled to reimbursement of KLDiscovery’s fees of $17,562.94 relating to the subpoenas.
Totaling the amount of attorneys’ fees and vendor fees to be reimbursed, the Court finds that the non-parties are entitled to reimbursement of $27,312.94, calculated as follows: $9,750.00 in attorneys’ fees + $17,562.94 in vendor fees = $27,312.94. Because Plaintiffs have already tendered a pre-payment of $12,377.94, the remaining balance owed – and the remaining amount the Court will require Plaintiffs to pay to the non-parties – is $14,935.00.
Accordingly, Plaintiffs’ Objection to ALAW’s Invoice for Fees (Doc. 439) is GRANTED IN PART and DENIED IN PART as detailed above. Plaintiffs are ordered to remit payment to the non-parties in the amount of $14,935.00 no later than December 6, 2019.
DONE AND ORDERED in Fort Myers, Florida on November 21, 2019.
Footnotes
The non-parties state in their opposition brief that the remaining balance for which they seek reimbursement is $44,747.50 (Doc. 478 at 2), but the actual invoices tendered by the non-parties to Plaintiffs clearly reflect a remaining balance of $45,299.50 (Doc. 439-3 at 1; see also Doc. 478-1 at ECF pp. 1-2). The non-parties explain this difference in a footnote of their opposition brief, stating:
The total amount of fees included in the Smith Hulsey & Busey invoices submitted on August 19, 2019 was $45,299.50. Upon review of the Plaintiffs’ Objection, the ALAW Non-Parties adjusted the total amount requested down to $44,747.50 after elimination of two small time entries made on 7/1 and 7/9 (totaling 1.6 hours), which the ALAW Non-Parties now agree should be excluded from their requested fee reimbursement.
(Doc. 478 at 9 n.3). Thus, the Court assumes that the balance at issue is $44,747.50. (Doc. 478 at 9 n.3).
The non-parties retained the law firm of Smith Hulsey & Busey to perform the review work, and the non-parties admit that the same firm performed work for Defendant George Albertelli. (Doc. 478 at 6). According to the law firm’s billing records, at least three timekeepers identified as Shareholder James H. Post (JHP), Shareholder R. Christopher Dix (RCD), and Associate Brandon A. Cook (BAC) worked on the matter. (Doc. 478-1 at ECF p. 20). Mr. Post billed at a rate of $455.00 per hour. (Doc. 478-1 at ECF p. 20). Mr. Dix billed at a rate of $345.00 per hour. (Doc. 478-1 at ECF p. 20). Mr. Cook billed at a rate of $195.00 per hour. (Doc. 478-1 at ECF p. 20). The non-parties do not provide the Court with any information regarding these attorneys or attempt to justify the attorneys’ hourly rates for a routine document production of this nature.
KLDiscovery is the third-party vendor employed to assist the non-parties with the defensible collection, processing, hosting, and review of responsive electronically stored information. (See Doc. 413 at 3; 478 at 6-9).
The pre-payment in this amount was required by the Court’s June 28, 2019 Order (Doc. 413 at 3).
The basis for this adjustment is explained in a footnote in the non-parties’ opposition brief. (Doc. 478 at 9 n.3).