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Receivables Exchange, LLC v. Advanced Technology Services, Inc.

United States District Court, E.D. Louisiana

April 29, 2015

THE RECEIVABLES EXCHANGE, LLC,
v.
ADVANCED TECHNOLOGY SERVICES, INC., ET AL

REPORT AND RECOMMENDATION

KAREN WELLS ROBY, Magistrate Judge.

Before the Court is Plaintiff's Motion for Determination of Professional Fees and Costs (R. Doc. 49). On November 7, 2014, the District Judge entered a default judgment in favor of the Plaintiff, The Receivables Exchange, LLC ("TRE"), with the attorney's fees to be determined by the Magistrate Judge. See R. Doc. 48. The Plaintiff now seeks to recover $10, 367.00 in attorney's fees and $1, 076.66 in costs, for an hourly rate of $340.00. The motion is unopposed and was heard on the briefs.

I. Background

This action arises out of the breach of a contract between the Plaintiff, TRE, and the Defendant, Advanced Technology Services, Inc. ("ATS"). TRE is a Louisiana limited liability company with its principal place of business in New York. It operates an exchange business in New Orleans, Louisiana where businesses can sell their accounts receivable[1] over an electronic auction. The buyer of the receivable becomes the owner and the seller is paid a sum of money as consideration for the receivable.

A business wishing to sell their receivables through TRE must enter into a contract that governs the sale of the receivables. As a seller, ATS executed a seller agreement contract, granting TRE, in its individual capacity and as an agent for the buyers, a continuing security interest in its accounts and general intangibles, which was perfected on February 6, 2013. The contract also provided that ATS, as the seller, may be obliged to repurchase a receivable sold through TRE if the account debtor fails to make timely payment after the receivable is sold.

Several of ATS's receivables were sold through TRE but the account debtors on the receivables failed to tender timely payment to the buyers. Thus, under the contract, ATS was obligated to repurchase the unpaid receivables but failed to do so. On March 24, 2014, TRE filed the instant action to collect the repurchase price of the receivables. Initially, TRE named as defendants the eight account debtors on the receivables but voluntarily dismissed those parties without prejudice on July 31, 2014.

The complaint was served upon ATS on March 27, 2014 and ATS's answer was due on April 17, 2014. See R. Doc. 6. ATS failed to answer or otherwise respond and a default judgment was entered against ATS on November 7, 2014. The default judgment was in the amount of $1, 418, 526.26, plus the costs of the proceeding and attorney's fees as determined by the Magistrate Judge. See R. Doc. 48.

TRE filed the subject motion pursuant to the Court's Order issued on November 7, 2014. Upon receipt of the motion, the Court noted that the submission did not comply with Local Rule 54.2 and Blum v. Stenson, 465 U.S. 886, 896 (1984), which requires the submission of satisfactory proof of education, background or experiences. See R. Doc. 54. The Court ordered that TRE (1) submit satisfactory proof of education, background and experience; (2) provide the Court with sufficient evidence of rates charged in similar cases by other local attorneys with similar experience, skill and reputation; and (3) provide the Court with a copy of the fee agreement, no later than January 19, 2015. Id. at 2. TRE complied with the Order and filed a supplemental memorandum on January 16, 2015. See R. Doc. 55.

II. Standard of Review

In diversity actions such as this, state law controls both the award of and the reasonableness of attorney's fees awarded. See Alyeska Pipeline Services Co. v. Wilderness Society, 421 U.S. 240, 259 n.31 (1975); Mathis v. Exxon Corp., 302 F.3d 448, 461 (5th Cir. 2002). "[A]s a general rule attorney fees are not allowed except when authorized by statute or contract." Killebrew v. Abbott Laboratories, 359 So.2d 1275, 1279 (La. 1978).

In assessing the reasonableness of attorney's fees, ten factors are taken into account. State of Louisiana Dep't of Transportation and Development v. Williamson, 597 So.2d 439, 442 (La.1992). These factors are (1) the ultimate result obtained; (2) the responsibility incurred; (3) the importance of the litigation; (4) the amount of money involved; (5) the extent and character of the work performed; (6) the legal knowledge, attainment, and skill of the attorneys; (7) the number of appearances made; (8) the intricacies of the facts involved; (9) the diligence and skill of counsel; and (10) the court's own knowledge. Id. at 442.

The Williamson factors are in turn derived from Rule 1.5(a) of the Rules of Professional Conduct. Id. at 442 n. 9. These Rules "have the force and effect of substantive law." Gulf Wide Towing, Inc. v. F.E. Wright (U.K.) Ltd., 554 So.2d 1347, 1354-55 (La.App. 1 Cir. 1989) (citation omitted). Under Rule 1.5(a), the Court should consider the following when determining the reasonableness of any attorney's fee motion:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent.

Id. Both the Williamson factors, as well as those under Rule 1.5(a), are permissive and consideration of all of them is not necessary in any one case. Fourchon Docks, Inc. v. Milchem Inc., 849 F.2d 1561, 1568 (5th Cir. 1988); GMAC Commercial Mortgage Corp. ex rel. Lasalle National Bank v. Chateau Deville Apartments Partnership, No. 02-1845, 2003 WL ...


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