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Hilfiker Square, LLC v. Thrifty Payless, Inc.

United States District Court, D. Oregon

April 30, 2018

HILFIKER SQUARE, LLC, an Oregon limited liability company, Plaintiff,
THRIFTY PAYLESS, INC., a California corporation, Defendant.


          Michael J. McShane United States District Judge.

         The Court entered summary judgment for Defendant, Thrifty Payless, Inc. (“Rite Aid”), on April 24, 2018. Judgment, ECF No. 58. Rite Aid now moves for its fees and costs pursuant to Section 6.10 of the Declaration of Restrictions and Grant of Easements (“Declaration”) at issue in the present action. Def.'s Mot. Fees & Costs, ECF No. 49. Plaintiff, Hilfiker Square, LLC (“Hilfiker”), has filed a memorandum in opposition to Rite Aid's motion, arguing that Rite Aid cannot benefit from the fee-shifting provision in Section 6.10 or, in the alternative, that the requested fees are unreasonable. Pl.'s Mem. Opp'n, ECF No. 52. Because Rite Aid is entitled to its attorneys' fees and costs under Section 6.10, but some of the requested rates and hours are unreasonable, Rite Aid's motion is granted in part and denied in part.[1], [2]


         There are currently three issues before the Court: (1) whether Rite Aid is entitled to its attorneys' fees under the Declaration, (2) whether, assuming Rite Aid is entitled to its attorneys' fees, the requested fees are reasonable, and (3) whether Rite Aid is entitled to its costs under the Declaration or federal law. The Court addresses each issue in turn.[3]

         I. Availability of Attorneys' Fees.

         Rite Aid argues that an award of attorneys' fees is appropriate based on the fee-shifting provision contained in Section 6.10 and under Or. Rev. Stat. § 20.096(1). Def.'s Mot. Fees & Costs 3-4. Since Or. Rev. Stat. § 20.096(1) merely provides that, in an action on a contract, the prevailing party is entitled to attorneys' fees under an otherwise non-reciprocal fee-shifting provision, the only issue is whether Section 6.10 allows for the award of attorneys' fees.

         Section 6.10 of the Declaration, titled “Attorneys' Fees, ” states that, “[i]n the event any entity which is entitled to the benefits of this Declaration brings an action . . . to enforce or interpret this Declaration, the prevailing party in such action shall be entitled to recover from the other party is reasonable attorneys' fees and all court costs.” Rubin Decl., Ex. 6 § 6.10. Rite Aid asserts that, because Hilfiker is “an entity entitled to the benefits” of the Declaration and is the party which initiated the present action for breach of contract, Section 6.10 allows it, as the prevailing party, to recover fees and costs. Def.'s Mot. Fees & Costs 3-4. The Court agrees.

         Hilfiker nevertheless contends that, because Rite Aid previously argued that Hilfiker was not “entitled to the benefits” of the Declaration, it is now “estopped” from asserting the inverse. Pl.'s Mem. Opp'n 2. Although Hilfiker is correct that the issue has already been litigated, it omits that the Court rejected Rite Aid's argument and specifically held that Hilfiker is a party to the contract and therefore entitled its benefits. Opinion & Order 5-6. Unless Hilfiker is suggesting that the Court is estopped from relying on its own holding, Rite Aid's unsuccessful argument at summary judgment is irrelevant. See also Or. Rev. Stat. § 20.083 (“A prevailing party in a civil action relating to an express or implied contract is entitled to an award of attorney fees that is authorized by the terms of the contract or by statute, even though the party prevails by reason of . . . a claim or defense asserting that the contract is unenforceable.”). Hilfiker is an “entity entitled to the benefits” of the Declaration and therefore subject to Section 6.10.

         Hilfiker also argues that, even if it is an entity covered by Section 6.10, the present action was for breach of an implied duty, not one to “enforce or interpret” the specific terms of the Declaration, and therefore falls outside the scope of Section 6.10. Pl.'s Mem. Opp'n 2. This argument is, at best, disingenuous, as Hilfiker's Complaint, which contained a single claim for “breach of contract, ” alleged that Hilfiker was “entitled to recover its reasonable costs and attorney fees in connection with this matter” because “Section 6.10 of the Declaration provides for an award of attorney fees in the event of litigation arising from the Declaration.” Complaint ¶ 15, ECF No. 1-1; see also First Amended Answer 6, ECF No. 20 (admitting ¶ 15).

         Setting aside Hilfiker's earlier statement, the present action is plainly one to “enforce or interpret” the Declaration. The analysis to determine whether a contract contains an implied covenant of good faith and fair dealing, as well as the related analysis to determine the contours of any such implied covenant, is inextricably linked to a contract's specific terms. The Court's Opinion & Order, which carefully walks through the Declaration's terms to find both that the Declaration contains an implied duty of good faith and that the duty does not obligate Rite Aid to modify the Declaration, clearly reflects this fact. See Opinion & Order 7-11. Because, under Section 6.10, Hilfiker is both a covered beneficiary and the plaintiff in a covered action, Rite Aid is entitled to its reasonable costs and attorneys' fees pursuant to Section 6.10.

         II. Reasonableness of Attorneys' Fees.

         Rite Aid moves for a total of $126, 305.50 in attorneys' fees. Def.'s Mot. Fees & Costs 6. Oregon courts generally award attorney fees based on the lodestar method, although there is room for adjustment based on the factors set forth in Or. Rev. Stat. § 20.075. See generally Strawn v. Farmers Ins. Co. of Or., 297 P.3d 439, 447-48 (Or. 2013). Under the lodestar method, courts multiply the reasonable hourly rate for each timekeeper by the reasonable number of hours the timekeeper worked on the case. Gonzalez v. City of Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013). Non-clerical work performed by paralegals and law clerks is also recoverable as attorneys' fees. See Missouri v. Jenkins, 491 U.S. 274, 285 (1989). A “strong presumption” exists that the lodestar figure represents a “reasonable fee, ” and it should therefore only be enhanced or reduced in “rare and exceptional cases.” Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 478 U.S. 546, 565 (1986).

         A. Rates.

         Hilfiker argues that the attorney and paralegal billing rates sought by Rite Aid are unreasonable. Pl.'s Mem. Opp'n 2-3. A reasonable billing rate is determined based on the “prevailing market rate” in the relevant community. Camachco v. Bridgeport Financial, Inc., 523 F.3d 973, 979 (9th Cir. 2008). “The burden is on the [fee applicant] to produce evidence that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation.” Blum v. Stenson, 465 U.S. 886, 895-96 (1984). To ascertain the prevailing market rate, courts in the District of Oregon use the most recent Oregon State Bar Economic Survey as an initial benchmark. LR 54-3. The market rate may also reflect, inter alia, the novelty ...

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