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CalMat Co. v. Old Castle Precast, Inc.

United States District Court, D. New Mexico

April 14, 2017

CALMAT CO., Plaintiff,
v.
OLDCASTLE PRECAST, INC.; JOHN DOES 1-5; and KRAFT AMERICAS HOLDINGS, INCORPORATED, Defendants.

          MEMORANDUM OPINION AND ORDER

         This matter comes before the Court on Plaintiff CalMat Co.'s Amended Motion for Attorneys' Fees, Costs, and Expenses (Amended Motion), filed on January 6, 2017. (Doc. 82). Defendant Oldcastle Precast, Inc. (Oldcastle) filed a response on January 20, 2017, and Defendant Kraft Americas Holding, Inc. (KAHI) filed a response on February 1, 2017. (Docs. 88 and 97). Plaintiff CalMat Co. (CalMat) filed replies to these responses on February 6, 2017, and February 17, 2017. (Docs. 100 and 107). Having reviewed the Amended Motion and the accompanying briefs, the Court grants the Amended Motion in part in that it will award CalMat $25, 282.50 (plus the applicable gross receipts tax) in attorneys' fees and $738.75 in costs, which will both be payable from the interpleaded fund.

         A. Background

         In February 1999, American Building Supply, Inc. agreed to pay royalty payments to Defendant Kraft Americas, L.P. (Kraft L.P.) for aggregate mined in New Mexico. (Doc. 1) at ¶ 4); (Doc. 4-1). Days after entering into the royalty agreement with American Building Supply, Inc., Kraft L.P. apparently assigned its interest in the royalty agreement to KAHI, thereby allegedly making KAHI the sole beneficiary of the royalty agreement. (Docs. 1-3 and 1-4).

         In June 2011, Inland Concrete Enterprises, Inc. Employee Stock Ownership Plan (Inland Concrete) obtained a default judgment in the United States District Court for the Central District of California against Kraft L.P., and pro se Defendant Rune Kraft (Kraft) in the amount of $3, 808, 483.00 plus interest of 0.18% per annum. (Doc. 1) in MC No. 15-33 WJ; (Doc. 1) at ¶¶ 5 and 10.

         In May 2015, CalMat succeeded to the interests of American Building Supply, Inc. (Doc. 1) at ¶ 2; (Doc. 9) at 1. CalMat, therefore, is obligated under the 1999 agreement to pay royalty payments. CalMat contends that it, indeed, paid the royalty payments to “Kraft Americas.” (Doc. 9) at ¶ 2 in MC No.15-33 WJ.

         In July 2015, Inland Concrete filed in this District Court a Certification of Judgment for Registration in Another District. (Doc. 1) in MC No.15-33 WJ. Inland Concrete then assigned its interest in the default judgment to Oldcastle. (Doc. 1) at ¶ 1. In August 2015, the Court issued a Writ of Garnishment naming CalMat as garnishee and Kraft L.P. as the judgment debtor. (Docs. 3 and 4) in MC No.15-33 WJ.

         KAHI, who claims to be the sole beneficiary of the royalty agreement, contends that CalMat cannot garnish the royalty payments owed to KAHI because KAHI is not the judgment debtor. Oldcastle, however, argues that Kraft L.P.'s assignment of the royalty agreement interest to KAHI is invalid and fraudulent, and that KAHI and Kraft L.P. are, in fact, a single entity owned and managed by Kraft. Hence, Oldcastle concludes that the royalty agreement proceeds are subject to garnishment by virtue of Kraft L.P., as the judgment debtor, still being the sole beneficiary of the royalty agreement.

         CalMat, as a disinterested stakeholder at risk of suffering multiple liabilities from an erroneous distribution of the royalty proceeds, filed this interpleader action in January 2016, naming as Defendants Oldcastle, Kraft L.P., pro se Kraft, KAHI, and John Does 1-5. About two weeks after CalMat filed the interpleader action, the Court stayed the garnishment action pending the outcome of this interpleader action. (Doc. 8) in MC No.15-33 WJ.[1]

         On October 5, 2016, the Court (1) ordered that the royalty payments be interpleaded into the Court registry, (2) discharged CalMat from any liability in connection with the payment of the proceeds under the royalty agreement so long as CalMat pays those proceeds into the Court registry pursuant to the royalty agreement and the Court's order, (3) excused CalMat from further participation as a litigant except to make the recurring royalty payments into the Court registry, (4) granted CalMat's request for an award of reasonable attorneys' fees and costs incurred in bringing the interpleader lawsuit, and (5) determined that those fees and costs would be paid from the interpleaded funds. (Doc. 55) at 12. Because CalMat had not, at that time, filed any documentation from which the Court could determine the amount of reasonable attorneys' fees and costs CalMat incurred in bringing the interpleader action, the Court ordered CalMat to file a motion for attorneys' fees and costs with “a supporting brief, affidavits, and time records to support such an award….” Id. at 11.

         On October 31, 2016, CalMat filed its first motion for attorneys' fees and costs. (Doc. 61). On December 23, 2016, the Court denied that motion without prejudice to CalMat filing an amended motion for an award of attorneys' fees and costs. (Doc. 78). The Court denied the first motion for attorneys' fees and costs for two important reasons. First, CalMat did not support its assertion of reasonable attorney rates ($395 per hour for Douglas Vadnais and $205 per hour for Cristina Mulcahy) with a relevant affidavit. Id. at 3. Second, CalMat failed to provide time records to prove the expenditure of reasonable hours. Id. at 3-5.

         In discussing the first motion for attorneys' fees and costs, the Court also determined that CalMat is entitled only to attorneys' fees and costs associated with bringing the interpleader lawsuit, and not to attorneys' fees and costs associated with bringing the underlying garnishment case. Id. at 3. Moreover, to protect any privileged attorney-client information in the time records, the Court required that an amended motion for an award of attorneys' fees and costs provide “properly redacted time records….” Id. at 5.

         From the inception of the interpleader case to the October 5, 2016, order requiring that the royalty payments be interpleaded and excusing CalMat from further participation as a litigant, CalMat's activities in the interpleader case included responding to a motion to dismiss filed by Kraft and Kraft L.P., and to a motion for summary judgment filed by KAHI. (Docs. 16, 21, and 27). In addition, CalMat responded to various pro se filings by Kraft. (Docs. 38, 39, 47, and 53).

         After the Court excused CalMat from further participation as a litigant, CalMat, nonetheless, continued to participate as a litigant. Aside from the motions for attorneys' fees and costs, which the Court directed CalMat to file and brief, CalMat apparently participated in formulating the Joint Status Report and Provisional Discovery Plan (JSR), attended the Scheduling Conference, filed a motion to strike Kraft's “Notices, ” and attended a February 28, 2017, status conference.[2] (Docs. 64, 67, 111, 113, 117, and 118). The Court ultimately dismissed the interpleader complaint against Kraft, entered an adverse judgment against Kraft, L.P., and dismissed Kraft, L.P. (Doc. 57 and 126).

         B. The Amended Motion

         CalMat submitted with its Amended Motion an affidavit by William Keleher, a qualified Albuquerque, New Mexico, attorney, who attests that the hourly rate requested by Vadnais of $395 per hour and the hourly rate requested by Mulcahy of $205 per hour “are well within the scope of reasonable and prevailing market rates charged by attorneys in New Mexico with similar experience.” (Doc. 82-3) at ¶ 18. Like Keleher, Vadnais and Mulcahy are Albuquerque attorneys. CalMat also submitted redacted time records, an affidavit by Vadnais, and documentation related to costs.

         CalMat claims that from the inception of this interpleader lawsuit to the time it filed the first motion for attorneys' fees and costs on October 31, 2016, Vadnais reasonably worked 58.9 hours and Mulcahy worked 73.1 hours for a total of $38, 214.50 in attorneys' fees. (Doc. 82) at 3. CalMat further claims that it is entitled to attorneys' fees and costs incurred after it filed the first motion for attorneys' fees and costs to the present. Those attorneys' fees amount to an additional $14, 317.50 which represents 18.3 hours of work by Vadnais and 28.8 hours of work by Mulcahy. ...


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