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ORIX Capital Markets, LLC v. Cadlerocks Centennial Drive, LLC

United States District Court, D. Massachusetts

July 8, 2014

ORIX CAPITAL MARKETS, LLC, in its capacity as special servicer and attorney-in-fact for WELLS FARGO BANK, N.A., formerly known as Wells Fargo Bank Minnesota, N.A., as Trustee for the registered holders of Salomon Brothers Mortgage Securities VII, Inc., Commercial Mortgage Pass-Through Certificates, Series 2000 C-2, Plaintiff,
v.
CADLEROCKS CENTENNIAL DRIVE, LLC and DANIEL CADLE, Defendants.

MEMORANDUM & ORDER

NATHANIEL M. GORTON, District Judge.

Defendants Cadlerocks Centennial Drive, LLC and Daniel Cadle ("Cadle") (collectively, "defendants") move for reconsideration of the award of $50, 000 in attorneys' fees and $5, 609.75 in costs to plaintiff ORIX Capital Markets ("plaintiff"). VFC Capital Partners 26, LLC ("VFC"), which became the plaintiff-in-substitution in July, 2013, opposes the motion. For the reasons that follow, the motion will be allowed, in part, and denied, in part, and the Court will award plaintiff $20, 000 in attorneys' fees and $2, 272.05 in costs.

I. Background

In 2010, plaintiff brought suit against defendants for breach of a promissory note, a Guaranty and an Environmental Indemnity Agreement. In October, 2012, the Court entered partial summary judgment for plaintiff on the grounds that defendants had misappropriated rent payments worth $33, 484. Following a three-day bench trial in December, 2012, the Court found defendants liable under the Guaranty and Environmental Indemnity Agreement and awarded plaintiff $104, 106 in damages. Specifically, it awarded $102, 536 for damages associated with environmental testing and $1, 570 to account for defendants' failure to maintain the property. Thus, the total judgment against defendants amounted to $137, 590.

Following the trial, plaintiff sought $85, 095.50 in attorneys' fees and $6, 187.79 in costs pursuant to defendants' agreement to reimburse the holder of the Guaranty and Mortgage for reasonable attorneys' fees and costs incurred in enforcing their contractual obligations. The Court awarded $50, 000 in attorneys' fees and $5, 609.75 in costs.

Defendants appealed the finding of liability and award of damages under the Environmental Indemnity Agreement. The First Circuit Court of Appeals agreed that defendants were not liable for the costs of environmental testing under that agreement. It vacated the award of $102, 536 in damages and remanded for reconsideration of the award of attorneys fees and costs in light of that ruling.

II. Defendants' Motion for Reconsideration of Fees and Costs

Cadle is personally liable for attorneys' fees and costs based upon two contractual provisions. First, under the Guaranty, he agreed to

pay all costs and out-of-pocket expenses, including court costs and reasonable fees and disbursements of legal counsel, incurred on behalf of Lender in connection with the enforcement of Guarantors' obligations under this Guaranty.

Additionally, the Mortgage renders Cadle liable for

all costs and expenses incurred in pursuing such remedies [contained in the Loan Documents], including, but not limited to reasonable attorneys' fees and costs....

Defendants nevertheless contend that plaintiff is entitled to only $1, 068.22 in attorneys' fees and $822 in costs. Plaintiff argues that it is entitled to $31, 103 in fees and does not address the cost award.

A. Attorneys' Fees

1. Legal Standard for ...


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