Western Sur. Co. v. Bradford Elec. Co., Inc. ( 2007 )

483 F. Supp. 2d 1114 (2007)

WESTERN SURETY COMPANY, Plaintiff,
v.
BRADFORD ELECTRIC CO., INC., et al., Defendants.

No. CV-06-J-183-NE.

United States District Court, N.D. Alabama, Northeastern Division.

April 23, 2007.

Brian A. Dodd, L. Graves Stiff, III, Thomas L. Selden, Starnes & Atchison LLP, Birmingham, AL, for Plaintiff.

Stacy Linn Moon, Allen L. Anderson, Michael L. Fees, Fees & Burgess PC, Ashley E. Swink, G. Bartley Loftin, III, Balch & Bingham, Huntsville, AL, David Wanhatalo, L. Griffin Tyndall, Burr & Forman LLP, Michael J. Douglas, Friedman Leak & Bloom PC, Christopher J. Zulanas, Friedman Leak Dazzio Zulanas & Bowling PC, John M. Laney, Jr., Laney & Foster PC, Birmingham, AL, Jefferson C. Orr, Vic L. McConnell, Smith Cashion & Orr PLC, Nashville, TN, for Defendants.

MEMORANDUM OPINION

JOHNSON, District Judge.

In accordance with the settlement agreement of the parties, plaintiff Western Surety Company ("Western") and defendants Bradford Electric Co., Inc., and Richard T. Bradford (collectively "Bradford")^[1] submitted briefs to the court on the issue of indemnification and attorney fees. The court held a hearing on that issue on December 12, 2006, at which the aforementioned parties were present by and through their respective counsel of record. Based on the briefs, the arguments of the parties, the pleadings in the record, and the applicable law, the court finds as follows:

Western issued performance and payment bonds on behalf of Bradford for electrical work Consolidated Construction Company ("Consolidated") subcontracted to Bradford at the Columbia High School project in Huntsville, Alabama. The performance bond was issued in favor of Consolidated for $1,607,756.00, the full amount of the subcontract. Complaint, ¶ 4; Cross-Claim and Counterclaim, ¶¶ 8-9; Bradford Cross-Claim, ¶ 3; exhibit A to the Complaint. Bradford issued a General Agreement of Indemnity (GM) in favor of Western, by which Bradford agreed to indemnify plaintiff from any and all loss or anticipated loss which might result from issuance of the performance bond. Affidavit of Joan Clements, ¶¶ 3-4. Due to disputes over the timeliness of the work being performed by Bradford, Consolidated terminated its contract with Bradford in August 2005 and notified Western it sought payment under the performance bond.

As of January 4, 2006, Western had paid $24,262.30 under the subcontractor payment bond based on claims from laborers and material suppliers. Affidavit of Clements, ¶ 11. No other sums have been paid under the payment bond. No amounts have been paid under the performance bond.^[2] On January 27, 2006, Western filed this action against Bradford, Consolidated, the architect who designed the school, and the electrical engineering company who designed the electrical plans for the school. All claims, cross-claims and counterclaims have been settled. The sole issue before the court is Western's claim for indemnification on attorney fees and related expenses it incurred in this suit. Western seeks a judgment in its favor for the amount paid under the payment bond as well as all attorney fees and costs incurred in this litigation. Bradford responds that the amount claimed by Western is simply not reasonable.^[3]

The General Agreement of Indemnity ("GAI") states in relevant part as follows:

2. The Indemnitors will indemnify and save the Company harmless from and against every claim, demand, liability, cost, charge, suit, judgment and expense which the Company may pay or incur in consequence of having executed, or procured the execution of such bonds, or any renewals or continuations thereof or substitutes therefore, including, but not limited, to fees of attorneys, whether on salary, retainer or otherwise, and the expense of procuring, or attempting to procure, release from liability, or in bringing suit to enforce the obligation of any of the Indemnitors under this Agreement. In the event the Company deems it necessary to make an independent investigation of a claim, demand, or suit, the Indemnitors acknowledge and agree that all expense attendant to such investigation is included as an indemnified expense. In the event of payments by the Company, the Indemnitors agree to accept the voucher or other evidence of such payments as prima facie evidence of the propriety thereof, and of the Indemnitors' liability therefore to the Company.

Plaintiff's exhibit C to the Complaint, ¶ 2. Defendant Bradford, through its president, Richard T. Bradford, signed this agreement on January 31, 2003. Defendant Richard T. Bradford also signed this agreement as an individual indemnitor on this same date.

Western seeks indemnification for its attorney fees and the sole payment made under the payment bond pursuant to this agreement. The parties do not dispute that the only sum Western paid prior to filing this action was the Automatic Control Devices, Inc., claim of $24,262.30.^[4] Western seeks reimbursement for fees and expenses in the total amount of $324,861.11.^[5] Despite Western's repeated demands that Bradford provide collateralization based on potential claims under the two bonds, Western has not paid any sums other than the $24,262.30.^[6] Thus, the court is troubled by the open season on billing which thereafter apparently occurred.

Western cites Frontier Insurance Company v. International, Inc., 124 F. Supp. 2d 1211 (N.D.Ala.2000), for the proposition that Western is entitled to "reimbursement from defendants, separately and severally, of all losses, costs, attorney's fees and expenses incurred as a result of the Consolidated claim." Brief of Western Surety (doc. 146) at 8. Frontier Insurance states "a surety is entitled to reimbursement pursuant to an indemnity contract for any payments made by it in a good faith belief that it was required to pay, regardless of whether any liability actually existed." Id., at 1213 (citations omitted).

However, pursuant to a contract of indemnity for attorney fees, the concept of good faith must be applied. In every contract "there exists an implied covenant of good faith and fair dealing." See Hunter v. Wilshire Credit Corporation, 927 So. 2d 810, 813 (Ala.2005) (quoting Sellers v. Head, 261 Ala. 212, 73 So. 2d 747, 751 (1954)); Lloyd Noland Foundation, Inc. v. City of Fairfield Healthcare Authority, 837 So. 2d 253, 267 (Ala.2002). An indemnitor can defeat a surety's right to recover under indemnity provisions by demonstrating lack of good faith on the part of the surety in discharging its obligations under the bond. Frontier Insurance Co., 124 F.Supp.2d at 1214; citing Fidelity and Deposit Co. of Maryland v. Bristol Steel and Iron Works, Inc., 722 F.2d 1160, 1163 (4th Cir.1983).

Thus, although not explicitly stated by the GAI, the court finds that the concept of "reasonableness" must be applied to any claim for indemnification of attorney fees. See e.g., Ideal Electronic Security Co., Inc. v. International Fidelity Insurance Company, 129 F.3d 143, 148-149 (D.C.Cir.1997)(courts in other jurisdictions have indicated that, as a general matter, a surety must show something akin to reasonable necessity when seeking attorney fees under an indemnity agreement (emphasis in original)); Neustrom v. Union Pacific Railroad Company, 156 F.3d 1057, 1068 (10th Cir.1998) ("a duty to act reasonably must be read into every contract, including the terms of indemnification clauses"). Olan Mills, Inc. v. Linn Photo Co., 23 F.3d 1345, 1348 (8th Cir.1994) citing Quinto v. Legal Times of Washington, Inc., 506 F. Supp. 554, 562 (D.D.C. 1981)(good faith entails both honesty in fact and reasonableness).

The Alabama Supreme Court dealt with this issue directly, many years ago, stating:

In construing indemnity covenants like that before us, it is everywhere recognized that the indemnitee must act in good faith. He cannot needlessly, in utter disregard of the burdens he is imposing on his indemnitor, incur attorney's fees, and in no case such as are excessive and unreasonable in amount. The rule is otherwise stated as requiring good faith and the exercise of a reasonable discretion. . . .

Good faith in such cases is that which obtains between persons standing in confidential or fiduciary relations; a good faith which carries a duty to have regard for the interests of his associate, an application of the principles of the golden rule.

Good faith implies the exercise of a reasonable discretion in the circumstances.

Kilgore v. Union Indemnity Co., 222 Ala. 375, 132 So. 901 (1931). See also Perkins v. Thompson, 551 So. 2d 204, 209 (Miss. 1989).^[7] Following these principles, the Fifth Circuit Court of Appeals held:

In sum, an indemnity agreement is not a blank check; it does not entitle the surety company to reimbursement for legal expenses which are unreasonable or unnecessary. To hold otherwise would allow bonding companies to retain counsel and to charge attorneys' fees against the indemnitor even when the surety company does not require a separate legal defense to protect its interests. The indemnity contract cannot reasonably be construed as requiring the indemnitee to bear the cost of such redundant representation. Thus, the weight of authority allows reimbursement for legal costs under the terms of an indemnity contract only if it is necessary for the surety to retain separate counsel, if the amount of the fees claimed is reasonable, and if the surety has acted in good faith toward the bond principal.

Jackson v. Hollowell, 685 F.2d 961, 966 (5th Cir.1982). Western has repeatedly represented to this court that retention of separate counsel by Western was both necessary and reasonable. See e.g., Brief of Western Surety Company (doc. 146) at 2. In fact, Western asserts that "Western, BECI and Richard T. Bradford have always been adverse in this case." Id.

With these legal tenets in mind, the court considers the reasonableness of the attorney fees and expenses claimed by Western. The court has also considered that, with the exception of a bad faith claim against Western by Consolidated, all other claims against Western were contingent on liability being found against Bradford. Without that, Western could have no liability. However, unlike many surety situations, Western was not content to rely on Bradford's defense counsel to protect its interests as well.

The court also considers the basic caveats set forth by the Eleventh Circuit for reasonableness of attorneys fees, such as that time billed must not be "excessive, redundant, or otherwise unnecessary . . ." ACLU v. Barnes, 168 F.3d 423, 428 (11th Cir.1999). Similarly, hours spent on purely clerical work or secretarial tasks are unrecoverable overhead expenses. Allen v. U.S. Steel Corp., 665 F.2d 689, 697 (5th Cir.1982). Paralegal expenses are recoverable only to the extent that the paralegal performs work traditionally done by an attorney. Otherwise, paralegal expenses are unrecoverable overhead expenses. Id.

During the hearing held on this claim, counsel admitted the following sums were erroneously included in this claim, and are therefore withdrawn:

7/25/2006    LGS    Preparation for                          2.80    560.00
hearing on Temporary
Restraining
Order request and
response to inquiry
from Judge Bowen.
11/28/2006   BAD    ... preparation of                       4.40    814.00
motion for summary
judgment[8]
11/29/2006   BAD    Preparation and revision                 4.20    777.00
of Memorandum
supporting
Motion for Summary
Judgment
11/29/2006   LGS    Review of correspondence                 3.40    680.00
from
mediator ... review
and revision of summary
judgment
motion (indemnity
issue)
11/30/2006   EMF    Strategic development                    3.60    522.00
with LGS and
BAD
11/30/2006   BAD    Research regarding                       4.10    758.50
reasonableness
argument in opposition
to surety's
rights ...
11/30/2006   LGS    Review and revision                      3.70    740.00
of Memorandum in
Support of Motion
for Summary Judgment
...
11/30/2006   JTW    Researched previous                       .60    45.00
memorandum Opinions
in favor of surety
regarding indemnity
claims.

Thus, the court deducts $4,896.50 from the amount sought by Western.

The court finds the following claims for reimbursement unreasonable as overhead or clerical expenses:

11/22/2005   JKH    Retrieval of documents,                   .50    37.50
and assembling
same for
review by LGS
11/22/2005    JKH   Review and organization                  2.80    210.00
of documents
from client.
12/2/2005     JKH   Continued creation                       2.30    172.50
of files for materials
received from client.

12/5/2005    JKH    Creation of index for                     .70     52.50
files produced by
client.
12/28/2005   JKH    Confirming location                       .70     52.50
of principal's office;
report to file regarding
the same; reviewing
contents of
Bradford Electric
Web page ...
1/3/2006     JKH    Retrieval of documents                   2.10    157.70
(sic) from file
for attorney review
1/4/2006     JKH    Retrieval of documents                   1.80    135.00
from file for
review by attorney
1/6/2006     JKH    Creation of file for                      .30     22.50
Summary of Report
by Draper &
Associates
1/12/2006    JKH    Correspondence to                         .30     22.50
opposing counsel enclosing
revised copy
of Bradford Electric
report.
3/7/2006     JKH    Conference with                           .30     22.50
Federal Court re:
filings and non-service
to counsel for O
& S Enterprises ...
3/10/2006    JKH    Conference with                           .40     30.00
copy service re: status
of documents
3/23/2006    JKH    Review of scheduling                      .50     37.50
order and report
to file ...
4/14/2006    JKH    Review and organization                   .50     37.50
of file....
4/27/2006    JKH    Correspondence to                         .30     22.50
copy service enclosing
invoice and
payment ...
6/13/2006    JKH    Correspondence                            .30     22.50
with client re:
invoice for copy of
Architect project file
7/6/2006     JKH    Conference with                           .30     22.50
mediator's office re:
invoices and prior
payment ...
8/2/2006     JKH    Review of scheduling                      .30     22.50
order re:
Expert disclosures
deadline; report to
file.
8/3/2006     JKH    Correspondence                            .30     22.50
with counsel for
general contractors
Enclosing payment
for Western Surety's
share of room
rental for mediation
8/9/2006     JKH    Conference with                           .30     22.50
court re: Response
to Motion to Intervene;
report to file
8/16/2006    JKH    Correspondence                            .30     22.50
with client enclosing
invoice for mediation
services.
8/23/2006    JKH    Correspondence                            .20     22.50
with court reporters
enclosing payment
for invoice
9/5/2006     JKH    Review of scheduling                      .90     67.50
order and report
to file re: compliance
with same
9/18/2006    JKH    Drafting of bill letters                  .40     30.00
to opposing
counsel for cost
of producing
documents.
9/19/2006    JKH    Converting deposition                     .50     37.50
transcripts to
portable document
format; correspondence
with electrical
engineer for review.
9/19/2006    JKH    Correspondence                            .40     30.00
with client enclosing
deposition transcript
and errata sheet for
review.
9/19/2006    JKH    Conference with                           .30     22.50
electrical engineering
expert re:
deposition transcripts
for review.
10/9/2006    JKH    Correspondence                            .30     22.50
with court reporter
enclosing executed
Errata sheet for distribution
to counsel.
10/13/2006   JKH    Preparation of documents                  .50     37.50
for transmittal
to counsel for
defendants.
10/16/2006   JKH    Correspondence                            .30     22.50
with Preferred Title
enclosing payment
for title search.
10/17/2006   JKH    Correspondence                            .60     45.00
with William Sealy
enclosing documents
for review.
10/17/2006   JKH    Correspondence                            .50     37.50
with Ken McLaughlin
re: documents
for review.
10/30/2006   JKH    Correspondence                            .40     30.00
with client enclosing
invoice from court
reporter for
payment.
11/9/2006    JKH    Correspondence                            .30        50
with Ken McLaughlin                        22
enclosing code of
professional conduct
from Board of
Registration of
Architects.
11/9/2006    JKH    Review of mail.                          1.00     75.00
11/22/2006   JKH    Correspondence                            .30     22.50
with court reporter
enclosing payment
for deposition
transcript.

Thus the court shall remove the amount of $1,665.20 from Western's claim.

The court finds the following claims for reimbursement duplicative:

1/4/2006     BAD    Preparation of Complaint                 5.80     928.00
for Exoneration
of Surety

1/4/2006     LGS    Continued preparation                    6.50  1,300.00
of declaratory
judgment ...
1/4/2006     TLS    Continued evaluation                     1.80    360.00
of grounds for
termination .... initial
preparation of
Declaratory Judgment/Exoneration
action.
1/5/2006     BAD    Revision of Complaint;                   1.10    176.00
Application
for Injunctive Relief
1/5/2006     LGS    Further review and                       1.80    360.00
revision of proposed
declaratory exoneration.
1/6/2006     LGS    Further review and                       3.70    740.00
revision of proposed
declaratory action
...
1/13/06      LGS    Conference with                          3.30    660.00
Joan Clements and
Ken McLaughlin;
review and revision
of suit papers ...
1/14/2006    TLS    Confirmation of                          1.60    320.00
plans for site visit
further preparation
of complaint
1/16/06      LGS    Further review and                       2.60    520.00
revision of exoneration/declaratory
judgment action....
1/17/06      LGS    Confirmation of                          1.80    360.00
plans for inspection/observation
further review and
revision of revised
declaratory judgment
complaint ...
1/24/2006    LGS    Conference with                          5.50  1,100.00
Joan Clements and
Ken McLaughlin;
final review and
revision of Complaint
for Declaratory
Relief ...
1/24/06      TLS    Conference with Mr.                      3.80    760.00
McLauglin
revised complaint
for Declaratory Relief
...
1/26/2006    BAD    Final preparation of                     1.90    351.50
Complaint ...

Because each of the attorneys involved in drafting the complaint "grouped" his hours, listing numerous activities in blocks, the court cannot ascertain with specificity how much of the above claimed time was actually spent drafting the complaint.^[9] Giving the attorneys the benefit of the doubt, the court deems one-third the claimed time to have been spent on other activities besides the drafting of the complaint. As the above hours total 41.20, the court deems 13.73 hours spent on other activities, leaving 27.47 hours drafting a complaint. The court finds 20.00 hours more than reasonable, and hence reduces the attorney fees recoverable under the GAI by 7.47 hours, which equals $1,456.65.^[10]

The court also finds that review of the contracts in question by multiple attorneys was duplicative and unnecessary. The following work by the fourth attorney to review those contracts is found unreasonably redundant:

1/9/2006     EMF    Strategic Development                     .20    32.00
with LGS re:
status and research
issues and review
contracts re: same.
1/10/2006    EMF    Continue review of                       3.0     480.00
contracts.
1/12/2006    EMF    Continue review of                       3.0     480.00
contracts and
research re: issues
concerning wrongful
termination
1/16/2006    EMF    Research and prepare                     5.0     800.00
memorandum
re: termination
issues and strategic
development with
LGS ...
1/19/2006    EM     Continue research                        3.30    528.00
... review contracts
re: latent defects
1/23/2006    EMF    Strategic development                    4.20    672.00
with LGS re:
research memo ...
1/24/2006    EMF    Strategic development                     .70    112.00
with LGS re:
termination memo
and revise memo
...

The court therefore deducts the amount of $3,104.00.

1/27/2006    BAD    Final preparation                        3.90    721.50
for hearing on
Application of Temporary
Restraining
Order; attendance
in Court for hearing
1/31/2006    BAD    Preparation for                          1.10    203.50
hearing on preliminary
injunction, conference
with counsel
for Bradford Electric
Company
regarding same.

The court finds these two claims, taken together, are redundant. The court did not have a hearing in this case on January 27, 2006, thus the attorney could not have spent time attending one. However, having prepared for the hearing on January 27, 2006, the court would hope he was still prepared on January 31, 2006, when the hearing was rescheduled for February 7, 2006. As other activities are claimed, the court finds reasonable one-half the time claimed, or 2.50 of the 5.0 hours claimed, a reduction in the amount recoverable of $426.50.

2/6/2006     TLS    Review of complaint;                     2.30    460.00
initial preparation
of Preliminary
Injunction Order
2/7/2006     TLS    Review of complaint;                     2.30    460.00
initial preparation
of Preliminary
Injunction Order

The court finds that the second identical entry Thomas L. Seldon, dated 2/7/2006, is surely in error, as the exact same entry was made the previous day, although the same appeared on the previous month's bill to Western. The court shall reduce the amount sought by $460.00.

1/20/2006    LGS    Travel to and lodging               334.20
expense in
Mobile, AL for
meeting with new
client
lawyer

The court is unable to decipher this expense claim. No lawyer in this case is in Mobile, nor does this case involve a lawyer-party. On this same date, Western's expert, Kenneth McLaughlin, submitted a charge, infra, for his expenses in traveling to Huntsville to meet with Attorney Stiff. In fact, on this same date, Attorney Stiff has billed $240.00 for meeting with Ken McLaughlin and Joan Clements. As Mr. McLaughlin claimed to be in Huntsville, and Attorney Stiff claimed to meet with him, the court concludes that the travel and lodging expenses for "meeting with new client lawyer" were erroneous, and deducts $334.20 from the amount sought.

2/16/2006   JKH     ... preparation of                       1.60    120.00
Alias Summons to
SKT Architects
2/17/2006   BAD     ... preparation of                       1.10    203.50
alias summons to
SKT Architects ...

Preparation of an alias summons simply does not take two people two days to prepare. This is especially true given that the court docket the summons received back from the post office and marked "NOT DELIVERABLE AS ADRESSED" until February 21, 2006, four days after Mr. Harred's claim of time spent preparing an alias summons. Thus, the claims of February 16 and 17, 2006, in the total amount of $323.50, shall be deducted from fees recoverable under the GAI.

3/9/2006     JKH    Initial review of                         .50     37.50
documents received
from City of Huntsville
...
3/9/2006     BAD    Review of documents                       .80    148.00
produced by
City of Huntsville
...

These two claims are clearly redundant. The court finds reasonable one half of each claim, resulting in a total reduction of $92.75 in the amount sought by Western.

4/5/2006     JKH    Review of order                           .20     15.00
from court setting
hearing on Motion
to Reconsider ...
4/5/2006     BAD    Review of order                           .20     37.00
setting Motion to
Reconsider for
hearing ...

These two claims are redundant. The court finds reasonable the time claimed by Mr. Harred only, resulting in a reduction of $37.00.

4/12/2006    LGS    Final Preparation                        4.50    900.00
for and attendance
in court on all pending motions ...
4/12/2006    LGS    Preparation for and                      4.80    960.00
attendance at argument
in Judge Johnson's
court ...

As the court held only one hearing on this date, only one of these entries is correct. As the second claim for the identical activity surely must have been charged by accident, the court will not allow Western to recover from Bradford the amount of $960.00.

4/4/2006     JKH    Review of financial                       .50     37.50
information submitted
by defendant
Richard Bradford
...
6/27/2006    JKH    Initial review of                         .40     30.00
Financial Information
from Bradford
...

As financial information documents from Bradford were first reviewed by Mr. Harred in April, his entry in June of an initial review of these documents must have been in error. The court reduced the amount recoverable under the GAT by $30.00.

5/11/2006    BAD    Review and analysis                      6.60  1,221.00
of SKT Architect's
project file ...
5/12/2006    JKH    Initial review of documents              1.40    105.00
from project
file...
5/12/2006    LGS    Review of key documents                  2.30    460.00
obtained from
SKT files ...
5/15/2006    JKH    Initial review and                       1.90    142.50
analysis of documents
produced by
SKT Architects;
report to file.
5/15/2006    JKH    Correspondence                            .20     15.00
with counsel for
SKT Architects re:
cd-rom version of
documents produced
...
5/17/2006    LGS    Further review of                        1.50    300.00
documents produced
by SKT
5/26/2006    JKH    Review and analysis                      1.40    105.00
of pay applications
from architects (Sic)
project file ...

Counsel and staff for Western spent 15.30 hours reviewing the same documents. The court finds that Mr. Harred could not have an initial review of the same documents two times. The court allows only Attorney Dodd's 6.60 hours reviewing this project file. The remainder of these charges, $1,127.50, are excessive.

6/7/2006     LGS    Prepare for and                         11.50  2,300.00
attend depositions
of CCC reps., Halbrooks
and Bradford
rep.

The court notes that the deposition of the "Bradford rep." would be Rick Bradford, whose deposition was attended by Attorney Dodd, but not Attorney Stiff, and which took place on June 8, 2006, and not June 7, 2006. The court therefore deducts one-half of the amount claimed, a reduction of $1,150.00.

7/11/2006    JKH    Review and analysis                       .90     67.50
of Motions to Compel
filed by defendant
Consolidated
...
7/11/2006    BAD    Review of Motions                         .70    129.50
to Compel filed by
Consolidated ...
7/12/2006    BAD    Continued evaluation                      .70    129.50
of Consolidated
... Motions to
Compel
7/12/2006    JKH    Review and revision                      1.10     82.50
of Response to Motions
to Compel and
electronic filing of
same with court....
7/12/2006    LGS    Review of Motions                        3.30    660.00
to Compel filed by
CCC; preparation
of response ...
7/13/2006    LGS    Review of Motions                        3.50    700.00
to Compel ...

These entries are highly redundant. The court finds the time spent by attorney Stiff on July 12, 2006, reviewing and responding to the motions to compel, and the time spent by Mr. Harred on the same date reviewing and revising the response to be reasonable. The remainder of time spent on this activity is excessive. The court believes the entry by attorney Stiff on July 13, 2006, the day after Western's response to these motions was filed with the court, must have been made in error. The court therefore is of the opinion the sum of $1,026.50 is excessive and not reasonably incurred.

8/10/2006   JKH     Correspondence                            .50     37.50
with all counsel confirming
upcoming
deposition schedule.
8/11/2006   JKH     Correspondence                            .40     30.00
with counsel for defendants
confirming
(sic) deposition
schedule.

The court finds the second charge for this activity redundant and subtracts $30.00.

8/25/2006    BAD    Conference with architect                 .70    129.50
for Alabama
Department of Education
regarding inspection
obligations
...
8/25/2006    LGS    ... conference with                      4.40    880.00
state architect re
procedures and policies
for electrical inspections
and confirmation
of status of
inspections by State
Building Commission ...
8/28/2006    BAD    Conference with                           .20     37.00
Alabama Building
Commission re inspection
of projection
file for Columbia
High School
project

These two entries seem to include some of the same activities. The court reduces the reasonable fee by .70 hours at 200.00/ hour, and an additional .20 at $185.00/hour, for a sum of $177.00.

9/25/2006    JKH    Drafting non-party                        .70     52.50
subpoena and deposition
notice for representative
of Building
Commission
9/25/2006    LGS    Preparation of                           1.80    360.00
notice of deposition
to John Vandiver
....
9/25/2006    BAD    ... conference with                      1.10    203.50
John Vandiver confirming
availability
for deposition;
review of deposition
notice and subpoena;
correspondence to
Mr. Vandiver
enclosing same
9/26/2006    JKH    Review and revision                       .80     60.00
of deposition subpoena
to Building
Commission
official....

Both Mr. Harred and attorney Stiff claim to have prepared the subpoena to John Vandiver, who was deposed as the representative from the Building Commission. The court allows the time claimed by Mr. Harred only. The court also allows the time claimed by attorney Dodd to confirm and mail the subpoena to John Vandiver on September 25, 2006, but finds Mr. Harred's claim of reviewing and revising the same subpoena the following day to be unreasonable. The court deducts the total amount of $420.00.

1/13/2006    LGS    Preparation for and                      9.80   1960.00
attendance at deposition
of Robert
Walker; meeting
with all defense
counsel re proposed
rescheduling of mediation
and meeting
of defense counsel
prior thereto; review
and revision of
mediators statement
and report to Joan
Clements
11/13/2006   LGS    Preparation for and                      9.80   1960.00
attendance at deposition
of Robert
Walker; meeting
with all defense
counsel re proposed
rescheduling of mediation
and meeting
of defense counsel
prior thereto; review
and revision of
mediators statement
and report to Joan
Clements.

When questioned about the first of these charges during the hearing, attorney Stiff related that "1/13/2006" was obviously a wrong date and that it was either November or October 13, 2006. The court notes that the proper date must have been November 13, 2006, as this attorney performed these exact activities again on that date. Therefore, finding that this entry was erroneously made two times due to the date being entered improperly the first time, the court deducts the sum of $1,960.00.

The court finds the following claims for reimbursement excessive for the reasons set forth thereafter:

12/1/2005    JKH    Continued creation                       1.30     97.50
of.
3/31/2006    TLS    Further evaluation                       2.10    420.00
fo (sic) arguments
advanced by plaintiff
in support of "bad
faith" claim ....
10/26/2006   JKH    Review and analysis                       .40     30.00
of deposition notices
for.

The court cannot determine what may have been created for 1.30 hours. This sum shall be deducted as unreasonable. Unless Western argued in support of the claim against it, the entry of March 31, 2006, is nonsensical, as Western is the plaintiff. The entry of October 26, 2006, is unintelligible. The court shall deduct the additional sum $547.50.

11/21/05     LGS    Lunch meeting with                               746.78
expert

The court is of the opinion that lunch should never cost this much. If this disbursement was for something other than the cost of food, this information is not reflected in Western's claim of indemnity for attorney fees and expenses. The sum of $746.78 shall be deducted as unreasonable.

1/30/06      LGS    General preparation                      5.40  1,080.00
for hearing ...
1/31/2006    LGS    Conference with                          3.80    760.00
Joan Clements and
continued preparation
for preliminary
injunction hearing
...

The court finds these two claims to be excessive, given that the preliminary injunction hearing never occurred. Rather, the surety obtained a consent order against its principal restraining Bradford from disposal of its assets (doc. 11). The court therefore finds 4.20 hours of these claims to be excessive, reducing the amount recoverable under the GAI by $840.00.

2/14/2006    TLS    Review and analysis                      2.40    480.00
of counterclaim filed
by Consolidated
against surety; evaluation
of recent case
law ... and confirmation
of plans of
seeking early dismissal
of "bad faith"
claim.
2/15/2006    LGS    Review and analysis                      5.50  1,100.00
of CCC Counterclaim
...
2/16/2006    LGS    ... review of Answer                     1.80    360.00
and Counterclaim
and confirmation
of client
instructions re:
Motion to Dismiss
bad faith claim,
etc.
2/17/2006    LGS    Further evaluation                       2.50    500.00
of Counterclaim and
defense strategy
2/21/2006    LGS    Further review of                        3.30    660.00
CCC counterclaim
and proposed response
thereto....
3/2/2006     TLS    Further review of                         .80    160.00
Counterclaim filed
by Consolidated ...

A total of 16.3 hours were spent by these attorneys in solely the review of the counterclaim against Western. This was not a complex or novel counterclaim, but rather basic contract claims under Alabama law, including a bad faith failure to pay claim against Western. At most, "review," "analysis," "evaluation" and crafting a proposed response should have taken no more than 4 hours. The court deducts 12.30 hours, for a monetary reduction of $2,460.00.

4/3/2006     BAD    ... review and evaluation                1.60    296.00
of Order
(denying motion to
strike bad faith
claim).
4/3/2006     TLS    Receipt of Order                          .60    120.00
denying Motion to
Dismiss ...
4/4/2006     BAD    Continued analysis                       2.70    499.50
of Order denying
Motion to Strike ...

The Order in question was one and a half pages and concluded that the law on the issue was unsettled. The court allows one hour for Attorney Dodd to review and evaluate this Order, a reduction of $730.50.

3/8/2006     BAD    Review of Order setting                   .90    166.50
briefing schedule
on Motion to
Dismiss bad faith
count of counterclaim
...
3/8/2006     TLS    Receipt of Order                          .80    160.00
directing Consolidated
to response (sic)
to Motion to Dismiss
"bad faith" claim

This "briefing schedule" was a one page order allowing defendant Consolidated twenty-one days to respond to Western's motion to dismiss one of Consolidated's counter-claims against it. It should not have taken two attorneys 1.70 hours total time to review a one page order which did not require them to do anything. The court finds a total of .2 hours for reviewing this Order reasonable, reducing the attorneys' time .80 for attorney Dodd and .70 for attorney Seldon. This amounts to a reduction of $288.00.

3/10/2006    LGS    Conference with                          2.30    460.00
client ... preparation
for planning
conference.
3/13/2006    BAD    Conference with all                      1.90    351.50
counsel of record
... preparation of
Report of Parties
Planning Meeting
...
3/13/2006    LGS    Preparation for and                      2.80    560.00
participation in planning
meeting;
report to client ...
3/13/2006    TLS    General preparation                      1.10    220.00
for mandatory
parties' planning
meeting ...
3/14/2006    BAD    Review of revised                         .20     37.00
Report of Parties
Planning Meeting;
conference with
counsel for Consolidated
Construction
Company regarding
same.
3/14/2006    LGS    Review of final planning                 1.60    320.00
meeting report
and confirmation of
status of document
delivery.
3/16/2006    JKH    Conferences with                          .30     22.50
opposing counsel re:
Report Parties Planning
Meeting and
filing of same.

The court is of the opinion that 9.90 hours for preparation of a Report of Parties' Planning Meeting is excessive, especially given that it was filed by counsel for Consolidated Construction Company, and not Western. The court notes that attorneys use a "fill in the blank form" for such reports. Even given that these attorneys did not file the report with the court, the court finds a reasonable amount of time to be 3 hours for preparation of the report and 2 hours for the planning meeting itself, a reduction of 4.9 hours, which the court finds to be $955.50.^[11] The court finds the claim for filing of the same completely unreasonable, and disallows its entirety, a reduction of $22.50.

3/20/2006    LGS    ... confirmation of                      2.50    500.00
status of document
production from
parties and non-parties
and further
evaluation of discovery
plan.
4/13/2006    LGS    Review of status of                      2.80    560.00
document production
from parties
and non-parties;
evaluation of discovery
plan.
4/19/2006    LGS    Further review and                       1.20    240.00
evaluation of discovery
plan in light of
mediation schedule.
5/1/2006     LGS    Review of correspondence                 1.40    280.00
further review and
evaluation of discovery
plan required
before mediation
5/10/2006    LGS    Report to client ...                     1.50    300.00
confirmation of status
of documents
received from all
parties; outline of
discovery plan.

The court finds that Attorney Stiff spent 9.4 hours confirming documents produced and evaluating a discovery plan. The court cannot ascertain what exactly these activities might entail. Presumably, before the parties submitted a Report of Parties Planning Meeting to this court, the need for discovery and a plan therefore was evaluated, analyzed and reviewed. The court allows one hour for confirming the status of document production, resulting in a deduction of $1,680.00.

3/17/2006    JKH    Review and downloading                    .30     22.50
of documents
served electronically
by federal
court.

The court "served" no documents on this date.

4/5/2006     JKH    Confirming status                         .40     30.00
of pending motions
in assistance to
attorney.

On April 5, 2006, the sole motion pending in this case was Western's motion for reconsideration. Looking at CM/ECF for a ruling on this one motion should not take anyone 24 minutes. The court allows .10 for this activity, a reduction of $22.50.

6/1/2006     TLS    ... evaluation of                         .80    160.00
filing Partial Summary
Judgment
Motion re: claims
for exoneration
6/26/2006    JKH    Review and analysis                       .90     67.50
of Motion for Partial
Summary Judgment
6/26/2006    BAD    ... preparation of                       4.10    758.50
Motion for Partial
Summary Judgment
and Supporting
Memorandum Brief
6/27/2006    JKH    Assisting attorney                        .60     45.00
with drafting Motion
for Summary
Judgment
6/27/2006    BAD    Continued preparation                    2.30    425.00
of revision of
Motion for Partial
Summary Judgment
... preparation of
First Amended
Complaint
6/27/2006    LGS    Review and revision                      1.80    360.00
of Motion For Partial
Summary Judgment
... preparation
of Amended
Complaint
6/28/2006    BAD    Continued preparation                    1.30    240.50
and revision of
First Amended
Complaint ...
6/28/2006    LGS    ... further review                       3.40    680.00
and revision of Proposed
Amendment
to Complaint and
Motion for Partial
Summary Judgment
6/29/2006    JKH    Assisting attorney                        .30     22.50
with drafting of
Amended Complaint
6/29/2006    BAD    Continuing preparation                    .90    166.50
and revision of
First Amended
Complaint.
6/29/2006    LGS    ... review and continued                 4.70    940.00
preparation
of First Amended
Complaint ...
6/30/2006    LGS    Final review and                         3.30    660.00
revision of First
Amended Complaint
...
7/3/2006     LGS    ... evaluation of                        3.50    700.00
collateralization
needs; continued
preparation of
Amended Complaint
7/5/2006     JKH    Assisting attorney                       1.20     90.00
with revisions to
amended complaint
....
7/5/2006     BAD    Review of revised                         .30     55.50
First Amended
Complaint.
7/5/2006     LGS    ... final review and                     3.20    640.00
revision of proposed
Amended Complaint
...
7/7/2006     JKH    Review of Amended                         .90     67.50
Complaint ...
7/7/2006     BAD    Final review and                         1.10    203.50
revision of Motion
for Leave to file
First Amended
Complaint ...
7/10/2006    BAD    Review of Order                           .40     74.00
granting Motion for
leave to file ... final
preparation of
Amended Complaint
for filing
7/10/2006    LGS    Confirmation of                          1.70    340.00
entry of Order
granting Motion for
Leave to File ...
conference with all
counsel regarding
service of Amended
Complaint and compliance
with Court
Order ...
8/14/2006    JKH    Review and revision                       .60     45.00
of motion and memorandum
brief in assistance
to attorney.
8/14/2006    BAD    ... revision of                          2.60    481.00
Motion for Partial
Summary Judgment
and supporting
Memorandum brief
...
8/15/2006    JKH    Continued review                          .90     67.50
and revision of Motion
for Summaru
(sic) Judgment in
assistance to
attorney
8/15/2006    BAD    ... continuing preparation               4.10    758.50
and revision
of Motion for Partial
Summary Judgment
and supporting
Memorandum Brief
...
8/15/2006    TLS    Conference with Ms.                      1.50    280.00
Clements re deposition
testimony, etc;
review of terms of
General Agreement
of Indemnity and
finalized Memorandum
Brief in Support
of Motion for
Partial Summary
Judgment[12]
8/18/2006    BAD    Conference with                          3.10    573.50
client ... execution
of affidavit supporting
Motion for Partial
Summary Judgment
... review of
response from Bradford
Electric Company
to collateralization
demand.[13]
10/16/2006   BAD    ... Revision of                          5.10    943.50
motion for partial
summary judgment
and supporting
memorandum ...
Review of property
report prepared by
Preferred Title.
Revision of demand
note, mortgage and
seculity (sic) agreement.
Report to
file.
10/18/2006   JKH    Assisting attorney                        .40    30.00
with preparation of
motion for sumary
(sic) judgment.
10/18/2006    LGS   Continuing revision                      3.10    620.00
of Motion for Partial
Summary Judgment
and supporting
Memorandum Brief;
conference with
counsel for Bradford
Electric Company
regarding execution
of demand note,
mortgage and security
agreement ....
confirmation of
license status of
expert retained by
Bradford Electric
Company; report to
file
10/18/2006   LGS    Review of recent                         2.30    460.00
cases of holding
surety's rights of
exoneration; revised
Memorandum Brief
and Evidentiary
Submission in support
of Partial Summary
Judgment
10/23/2006   JKH    Drafting Notice of                        .80     60.00
Evidentiary Submission
for filing with
court.
10/23/2006   JKH    Preparation of                           1.40    105.00
Motion and Brief for
filing with court and
electronic filing of
same.
10/23/2006   JKH    Assisting attorney                        .50     37.50
with selection of
documents for use
as exhibits to
Motion.

The only motion for partial summary judgment filed by Western was filed on October 23, 2006. The Amended Complaint was filed July 10, 2006. However, Western's counsel managed to lump together billing for both of these activities. The time spent collectively on these two activities is 63.1 hours, which is excessive.^[14] The court allows forty hours as reasonable for preparing a motion for summary judgment, and ten hours for preparation of the amended complaint. The court therefore shall deduct 13.1 hours for the sum of $2,323.30^[15]

7/15/2006    WDB    Researching caselaw                      1.10    176.00
regarding joint
attorney-client privilege
between principal
and surety.
7/17/2006    WDB    Drafting report to                        .60     96.00
file regarding
research for joint
defense privilege
between principal
and surety.
7/17/2006    BAD    Preparation off (sic)                    1.40    259.00
responses to Consolidated
Construction
Company's second
document request;
research regarding
privilege between
principal and surety
in defense of claim.
7/18/2006    WDB    Continuing to                            2.28    448.00
research law regarding
joint attorney-client
privilege ...
7/18/2006    BAD    Continuing research                      1.30    240.50
regarding claim of
privilege between
principal and surety
...

7/16/2006    Westlaw search                                          374.58

Western has repeatedly informed this court that it had to bring this litigation and incur the attorney fees in issue because its position was always adverse to that of Bradford. As such, the court finds the above research concerning a joint defense privilege to have been unreasonably undertaken. Western's claim is reduced by $1,594.08.

4/5/2006     JKH    Research of Tennessee                     .50     37.50
Code re: Homestead
Exemption
...
4/6/2006     JKH    Research of court                        1.10     82.50
records re: divorce
case of Richard T.
Bradford ...
4/6/2006     JKH    Purchased of money                                 5.79
order to obtain copy
of Mr. Bedford's
divorce decree
4/11/2006    JKH    Review of request                         .40     30.00
for information from
accounting consultant;
report to file
re: divorce decree
and settlement
agreement.
4/11/2006    JKH    Research Secretary                        .50     37.50
of State website re:
real estate partnerships
owned by
principal ...
4/13/2006    JKH    Review of Settlement                     1.80    135.00
Agreement
from divorce of
Richard and Pamela
Bradford ...
4/18/2006    LGS    Review of mediator's                     2.60    520.00
statement for
service ... conference
... regarding
collateralization
issues raised by
divorce decree and
property settlement
4/26/2006    JKH    Review of memorandum                      .30     22.50
from accounting
consultant ...
documentation of
divorce settlement
5/10/2006    JKH    Review of memorandum                      .80     60.00
from accounting
consultant ...
8/21/2006    LGS    Review of collateralization               .70    140.00
proposal and
report to Joan
Clements.
9/27/2006    LGS    Further review and                       2.30    460.00
analysis of expert licensure
requirement
for engineering testimony
and exceptions
thereto ...
preparation and
transmittal of collateral
demand to
plaintiff's counsel[16]
10/6/2006    BAD    Preparatoin (sic) of                     2.10    388.50
demand note, mortgage
and security
agreement; correspondence
to counsel
for Bradford
Electric Company
enclosing same
10/9/2006    BAD    ... continuing revision                   1.70   314.50
of demand note,
mortgage and security
agreement;
conference with title
company confirming
agreement to perform
title search on
principal's property.
10/9/2006    LGS    ... review and revision                   3.50   700.00
of Note and
Mortgage Security
Agreement;
response to Tyndal/
Zulanas re collateral
security issues
10/10/2006   JKH    Review of documents                       .60     45.00
from counsel
for Bradford; conference
with Preffered
(sic) Title re:
title search of
Winchester Road
property
10/10/2006   JKH    Review and revision                       .70     52.50
of Promissory Note
and Mortgage
Agreement.
10/10/2006   JKH    Correspondence                            .40     30.00
with counsel for
principal re: Promissory
Note and
Mortgage
Agreement.
10/10/2006   BAD    Final revision of demand                  .90    166.50
note mortgage
and security agreement;
confirmation
of status of title
search on commercial
property;
report to file
10/13/2006   JKH    Correspondence                            .40     30.00
with title company
re: Title search of
property owned by
principal.
10/13/2006   JKH    Correspondence                            .30     22.50
with title company
enclosing legal Description
of property
for completion of
title search.
10/13/2006   BAD    Continuing conference                    1.70    314.50
with Preferred
Title regarding
Status of title
search....
10/16/2006   JKH    Assisting attorney                        .70     52.50
with selection of

exhibits for enclosure
with letter to
counsel for principal.
10/16/2006   JKH    Review and revision                       .30     22.50
of mortgage and
security agreement
10/17/2006   JKH    Review and analysis                       .30     22.50
of title search;
report to file.
10/17/2006   BAD    Continuing conference                     .30     55.50
with counsel
for Bradford Electric
Company
regarding status of
execution of note
...
10/17/2006   LGS    Conference with                          5.50   1100.00
clients .... review
and revision of motion
for deposit for
collateral.
10/20/2006   BAD    Revision of note,                        2.30    425.50
security, agreement
and mortgage;
correspondence to
client enclosing
same; conference
with counsel for
Bradford Electric
Company regarding
10/20/2006   LGS    Review and revision                      4.70    940.00
of letter to attorneys
Zulanas and Tyndall
re collateral demand
and unilateral settlement
options; conference
with Joan
Clements; review of
order from Judge
Johnson on all pending
motions and
repot (sic) to client
... execution of
note...
10/20/2006   LGS    Conference with                          4.50    900.00
Ken McLaughlin
... confirmation of
status of Note and
Mortgage Security
Agreement ...
10/23/2006   BAD    Continuing preparation                   5.80   1073.00
and revision of
note, security agreement
and mortgage
... final preparation
of Motion for Partial
Summary Judgment
and supporting
Memorandum Brief
...
10/23/2006   TLS    Evaluation of bankruptcy                  .50    100.00
and related
issues; report re
same.
10/23/2006   LGS    Conference with                          5.80   1160.00
Joan Clements;
review and revision
of Note and Security
Agreements ....
review and revision
of Note and Security
Agreement as
directed by Joan
Clements and transmittal
to opposing
counsel
10/24/2006   BAD    ... conference                           2.90    536.00
with counsel for
Bradford Electric
Company regarding
status of note and
security agreement
...
10/24/2006   LGS    Review of expert                         6.50    1300.00
reports ... report
to Joan Clements
re revised Note and
Security Agreement
and continued negotiation
with opposing
counsel re
execution thereof.
10/25/2006   JKH    Assisting attorney                        .40     30.00
with review of documents
re: promissory
note and agreement;
report to file.
10/25/2006   LGS    Continued review                         4.30    860.00
and revision of Note
and Security Agreement;
conference
with attorney Tyndall
regarding same;
review and revision
of Motion to Compel
Collateral Deposit
...
10/26/2006   BAD    Review of file in                        5.20    962.00
preparation for
meeting of Scott
Cole ... conference
with counsel for
Bradford Electric
Company regarding
status of none (sic)
security agreement
and mortgage
11/6/2006    BAD    Conference with                          4.70    869.50
counsel for Bradford
Electric Company
regarding collateralization
demand ...
11/17/2006   LGS    Continued review                         4.50    900.00
and analysis of
effect of mediation
and conference ...
re unilateral settlement
options ...
and analysis of
collateralization
requirements.
11/20/2006   LGS    Review and revision                      4.70    940.00
of letter to attorneys
Zulanas and Tyndall
re collateral demand
and unilateral settlement
options ...
review of order from
Judge Johnson on
all pending motions
and report to client;
preparation of physician's
summary for
pretrial order and
confirmation of discovery
schedule.[17]

The court finds these activities unnecessary as Western already had a Consent Restraining Order in place protecting its interest in its principal's assets. Therefore, delving into Richard Bradford's divorce could not assist Western in this litigation. Similarly, in spite of the vast amounts of time spent obtaining title searches of Bradford's property, preparing a mortgage and note and talking about "unilateral settlements," Western never paid any amount of money out under the performance bond. It paid one claim of approximately $24,000.00 under the payment bond. In exchange, its counsel billed Western the sum of $15,843.79 solely on investigating and attempting to tie up Bradford's assets. This too was in spite of the fact that Bradford had already entered into a consent order preventing either the business or the individual from disposing of their respective assets. The court finds the entire sum of $15,843.79 unnecessarily incurred.

7/30/2006    LGS    Review of order on                       2.70    540.00
Motion to Compel
and Motion to
Reconsider by CCC
counsel; report to
client and preparation
for status conference
with Judge
Johnson — confirmation
of discovery
status.

The court issued an Order granting a motion to compel filed by Consolidated (CCC) on July 12, 2006. On July 21, 2006, Bradford filed a motion to reconsider. The court did not enter any Order on this motion to reconsider until July 31, 2006. Consolidated did not file any motion to reconsider the court's granting of Consolidated's motion. As the court cannot ascertain what Attorney Stiff actually did for 2.70 hours, and Attorney Stiff spend at least another 6.80 hours preparing for the status conference with this court (entries dated 7/25/2006 and 7/31/2006), the court finds this $540.00 charge unreasonable.

11/28/2006   JKH    review and analysis                       .40    $30.00
of court order setting
briefing schedule
for indemnity
claim; report to file

The court notes this Order was a grand total of five lines, which should have taken less than thirty seconds to read. It contained one deadline. It was also issued November 29, 2006, the day after this review and analysis took place. The court finds a reasonable amount of time to be .10 hours, reducing the sum allowable by $22.50.

8/18/2006    JKH    Confirming state                          .30     22.50
licensure status of
electrical expert;
report to file.
8/23/2006    BAD    Analysis of recent                       1.40    259.00
Alabama case law
regarding disqualification
of nonlicensed
engineers
from providing
expert testimony;
conference with architect
license board
confirming status of
potential expert;
report to file.
8/24/2006    LGS    Conference with                          2.50    500.00
possible architectural
experts and confirmation
of Ken
McLaughlin position
re engineering
negligence.
9/14/2006    LGS    Review of expert                         3.30    660.00
issue; conference
wiht (sic) Ken
McLaughlin re qualifications/licensure
issue ...
9/18/2006    BAD    Conference with                          2.10    388.50
expert regarding
availability for deposition;
continuing
evaluation of effect
of recent Alabama
Supreme Court
opinion regarding
license requirements
for proposed engineering
experts.
9/19/2006    BAD    Conference with                          1.70    314.50
counsel regarding
status of proposed
mediation ... continuing
evaluation of

recent case law
regarding qualifications
of non-licensed
experts.
9/28/2006    JKH    Preparation of documents                  .40    30.00
re; Qualification
of Expert Witnesses
in Alabama
...
9/28/2006    JKH    Correspondence                            .40    30.00
with engineering
consultant re:
Supreme Court
decision and advisory
opinion
9/28/2006    LGS    Conference with                          3.80    760.00
Ken McLaughlin re
licensure issue; conference
with Joan
Clements; further
evaluation of exceptions/applicability
to
licensure requirement
as condition
precedent to expert
testimony ...
10/27/2006   JKH    Review and analysis                       .50     37.50
of Motion to Strike
Expert Witness
by counsel for
architect.
10/27/2006   BAD    Review and analysis                      2.20    407.00
of Motion to Strike
(sic) ...
10/30/2006   TLS    Review of Motion to                       .80    160.00
Strike Expert Designation
and Brief
filed in support
thereof; review of
case law and confirmation
of deadline
for responding to
same.
11/6/2006    WDB    Researching law                          5.40    864.00
regarding admissibility
of expert testimony
in federal
court and whether
state law applies to
such admissibility;
researching the Alabama
disciplinary
rules for architects
...
11/6/2006    LGS    Preparation and                          5.60    1120.00
repsonse (sic) to
SKT Motion to
Strike McLaughlin
... comprehensive
discussion with
attorneys Zulanas
and Tyndall re
indemnity issues
and collateral issues
...

As this was the expert of Western's choosing, Bradford should not be liable for Western's decision to select an expert from outside the state of Alabama, who was not licensed in the state of Alabama. The sum of $5,553.00 is excessive.

9/6/2006     BAD    Conference with                          1.60    296.00
counsel for all parties
regarding ...
proposed extension
of discovery deadline
.... preparation
of draft unopposed
Motion to Extend
Discovery.
9/7/2006     JKH    Assisting attorney                        .80     60.00
with drafting of
Motion for Extension
of time.
9/7/2006     BAD    Final revision of                        2.10    388.50
unopposed Motion
to Extend Discovery;
correspondence
to counsel enclosing
same for review ...
9/8/2006     JKH    Preparation of document                   .50     37.50
and electronic
filing of same with
Federal Court.

The motion to extend discovery was one page plus one line long. Any attorney should have been able to prepare the motion, proofread the motion, discuss the motion and file the motion in under one and a half hours. The court deducts 3.50 hours from the 5.0 hours claimed. Hence, the court finds a reasonable sum for this activity to be $185.00 (1 hour) for attorney Dodd, and $37.50 (½ hour) for Mr. Harred, a reduction of $559.50.

9/26/2006    LGS    Preparation for                          2.40    480.00
meeting with expert
Bill Sealy; general
preparation for
deposition of John
Vandiver....
9/29/2006    LGS    Outline of areas for                     1.60    320.00
coverage for Vandiver
deposition.

The deposition of John Vandiver reflects that it was attended by attorney Dodd. The court can find no reasonable basis for an attorney to charge for 4 hours work to prepare for a deposition he was not going to attend. The sum of $800.00 is subtracted.

10/30/2006   JKH    Review and analysis                       .40     30.00
of court order on
briefing schedule for
Motion; report to
file

This court order was four lines long. It could not have required more than thirty seconds to read. The court finds charging 24 minutes to read a four line order is excessive. Billing .10 hour for this activity would have been reasonable. The court eliminates .30 hours, for a reduction of $22.50.

11/20/06     JKH    Review and analysis                      .40     30.00
of order denying
motion for partial
summary judgment

This Order was one and a half pages long. It may have taken two minutes to read. Billing .10 for this activity would have been reasonable. The court eliminates .30 hours, for a reduction of $22.50.

Counsel for Western also billed thousands of dollars in expenses. Considering the reasonableness of these charges, the court finds as follows:

Ikon Invoice of 3/9/2006:     $791.83 for office supplies.
Ikon Invoice of 5/14/2006:     658.68 for office supplies.

Office supplies are out of pocket expenses that are simply law firm overhead. The items purchased include folders, labels and binders. The court will deduct the sum of $1,450.51.

Dominick, Fletcher Invoice of 6/29/2006:          $584.00

This amount was incurred by Western because all of the parties agreed to attempt mediation in an effort to resolve this case. Each party to the mediation was to pay an equal share of the cost of the mediation. The court is of the opinion that Western is not entitled to recoup this expense from Bradford, as Bradford has already paid its fair share for the cost of this mediation, necessitated by Western's filing of this lawsuit. The court shall deduct this amount.

Cypress Consulting Invoice of 3/31/2006     $2,263.12
Bradford Electric Invoice of 3/27/2006         224.06
Allied Photocopy Invoice of 3/10/2006          217.30
Cypress Consulting Invoice of 5/31/2006        812.50[18]

These amounts were incurred by Western in its review of Bradford's financial condition. Bradford's financial condition was never an issue in this lawsuit. No evidence, argument, letter, statement or thought that Bradford might enter bankruptcy over the issues in this lawsuit has ever been brought up by any party to this litigation, other than by Western in trying to justify why it spent tens of thousands of dollars researching Bradford's financial condition. The court finds the amount of $3,516.98 unreasonably incurred.

McLaughlin invoices from 9/25/2005 through 9/8/2006 include the following:

9/25/2005     Travel to Huntsville                  $1,040.00
9/25/2006     Milage                                   465.60
9/25/2006     Hotel                                    388.50
9/28/2005     Travel from Huntsville                 1,040.00
9/28/2005     Travel Expense Reimbursement             465.60
10/24/2005    Travel to Huntsville                   1,040.00
10/24/2005    Travel Expense Reimbursement             933.09
10/26/2005    Travel from Huntsville                 1,040.00
1/20/2006     Trip to Huntsville                     1,560.00
1/20/2006     Airfare                                  521.20
6/25/2006     Arbitration Meeting — Huntsville      1,040.00
(Travel & Meet)
6/25/2006     Hotel                                    191.21
6/26/2006     Mileage                                  358.90
6/27/2006     Arbitration Meeting — Huntsville        780.00
(Travel Day)

Western hired an engineering consultant from Louisiana. This individual was not qualified to give expert testimony under Alabama law. While Western was entitled to hire the expert of its choosing, Bradford should not have to pay for that expert to travel to Alabama. Western could have retained experts within the State of Alabama, as there has been no showing that a qualified engineering expert already licensed in this state was unobtainable, or that all engineering consultants in Alabama were unqualified. The court subtracts the amount of $10,864.10. Similarly, the court deducts the amount of $1,546.63, which attorney Stiff claimed for travel expenses on October 17, 2006, to New Orleans, Louisiana, for the deposition of Mr. McLaughlin.

In sum, the court finds the amount of $73,236.47 not reasonably incurred. Because it was not reasonably incurred, it is not recoverable under the surety agreement. Therefore, the amount of fees and expenses reasonably recoverable by Western from Bradford under the GAI is $178,384.18. The amount paid under the payment bond, $24,262.30 is also due to Western from Bradford. The court shall so rule by separate Order.

NOTES

[1] Richard Bradford is the sole owner of Bradford Electric Co., Inc. Depo. of Richard Bradford (submitted as Consolidated's exhibit 4) at 12.

[2] The court notes that in settlement of this litigation, Western did pay a sum under the performance bond. However, as part of that settlement agreement, Western does not seek indemnification of this amount.

[3] At the hearing, Bradford asserted that any liability Western had was contingent solely on Bradford's liability. Bradford both hired construction counsel and had additional counsel from its insurance company to defend against Western's suit. Thus, Bradford argues that Western's attorney fees were vastly excessive, given the posture of this case.

[4] Bradford actually agreed to pay the amount of $23,403.40 on this claim, because it disputed $889.00 of it. See exhibits A and B to Exhibit 1 to Bradford's opposition to Western Surety's motion for summary judgment (doc. 107).

[5] The attorney fee and expense records provided to the court show a "Billed to Date" amount of $251, 620.65. Adding the $24,262.30 paid under the payment bond, the court finds the total sum to be $275,882.95. This is $48,978.16 less than the amount sought by Western.

[6] These requests for collateralization were in spite of the Consent Order restraining Bradford from disposing of any assets worth more than $2,500.00 (doc. 11). Had Bradford deposited with Western $1,500,000.00, the restraints of the Consent Order would have terminated. Id.

[7] In Perkins, the Court adopted the principles set forth by the Alabama Supreme Court in Kilgore. The Mississippi Supreme Court then concluded, "here the surety is entitled to reimbursement for legal costs only if it is necessary for the surety to retain separate legal counsel, if the amount of the fees claimed is reasonable, and if the surety has acted in good faith toward the principal." Id., at 210. After remand, the Court stated that "in Perkins I, we affirmed that the indemnity agreement was enforceable but held that it did not represent a blank check which enabled [Western] Surety to incur any expense and send the bill to [the indemnitor]." Perkins v. Thompson, 609 So. 2d 390, 399 (Miss.1992). The Court concluded that "[Western] Surety is entitled to recover only fees and expenses incurred ``by reason of having been surety on this bond.' Such fees and expenses and the reasonableness and necessity of same are thus function's of Western Surety's interest in the case and the risks to which it was exposed." Id., at 400.

[8] This time claim actually includes other activities, all of which were billed by other counsel as well. Therefore, the court deducts the entire amount.

[9] This habit of "grouping" activities pervades the entire billing record, creating difficulties in determining the reasonableness of all charges. The court has considered each of the activities claimed in each "group" and, where possible, allowed time for clearly compensable activities.

[10] The court has arrived at this amount by averaging the rates charged by counsel. As two attorneys bill at $200.00 per hour, and a third at $185.00 per hour, the court has added these rates ($200.00 + $200.00 + $185.00), divided by 3 and arrived at the sum of $195.00 per hour for each hour reduced.

[11] Again, because of the "grouping" of blocks of time, the court has added the total time disallowed and averaged the rate charged for the three attorneys who claimed time for this activity. Hence $200/hr. + $200/hr. + $185.00/hr. ÷ 3 = 195.00 × 4.90 hours disallowed = $955.50.

[12] Joan Clements' deposition was attended by attorney Stiff, not attorney Seldon. The court notes attorney Stiff spent no less than 20 billed hours preparing for that deposition, which resulted in a 129 page transcript.

[13] See infra regarding Western's fees incurred on the collateralization issue.

[14] The court notes this calculation is actually low, as there are further hours spent by Western's counsel on these motions, but grouped with other activities on the collateralization attempts, and discussed there.

[15] The court determined each individual's share of the total time worked based on percentages and multiplied that for each of his proportional share of the 13.1 hour reduction, as follows:

Mr. Harred    1.64 hours @ $75/hr =  $  123.00
Attorney      0.44 hours @ 200/hr =      88.00
Selden
Attorney      5.78 hours @ 185/hr =    1068.30
Dodd
Attorney      5.22 hours @ 200/hr =    1044.00
Stiff
_________
$2,323.30

[16] For reasons stated infra, the court finds none of these activities reasonable. Additionally, this is a charge by plaintiff's counsel for sending something to plaintiff's counsel.

[17] Although Western's counsel reference activities relating to "unilateral settlement options" in numerous entries, the term "unilateral settlement" appears to be an oxymoron. The court cannot discern what "physician's summary for pretrial order" attorney Stiff may have worked on, as no medical claims or issues are in this case.

[18] This invoice includes a $250.00 charge for Western's accounting expert from Connecticut to review Mr. Bradford's divorce documents.