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Firm Wins Fees in Marine Contract

In this litigation over a contract to supply marine engines, parts and services to a Louisiana shipbuilder for construction of nine patrol boats for the U.S. Navy, the court accepted defendants’ formal offer of judgment for a sum exceeding $5 million, and awards attorney’s fees and costs of $406,473.

In 2009, defendant Swiftships Shipbuilders LLC failed to pay $1,582,992 of the amount it owed to plaintiff MTU America Inc. Payment problems arose again over a 2010 contract, and plaintiff advised codefendant ICS Nett that it would stop shipping engines and parts under their contract. In May 2012, the U.S. Navy made a $2 million payment to Swiftships that was immediately transferred to plaintiff and applied against a portion of the balance owed by ICS Nett. ICS Nett remained expressly liable for the remaining balance it owed plaintiff. Plaintiff sued for ICS Nett for $3,778,879 of unpaid invoices and interest.

On Feb. 4, 2015, defendants made a formal offer of judgment under Fed. R. Civ. 68, and the court entered judgment for defendants’ joint and several liability for a total of $5,876,124, plus attorney’s fees and costs.

Plaintiff has submitted a petition seeking $406,473 in attorney’s fees and costs. This total represents less than 7 percent of the judgment to which defendants have stipulated.

Plaintiff used two law firms in this litigation. A Michigan firm, Honigman Miller Schwartz and Cohn LLP was plaintiff’s lead counsel and plaintiff engaged Clare Locke LLP as local counsel. Defendant did not challenge any of the lawyers’ hourly rates, ranging from $175 for a legal assistant to $710 for a partner, and the court finds that given the level of experience of the attorneys, the hourly rates charged are reasonable.

Defendants do contest the number of hours plaintiffs’ counsel spent on this civil action, arguing that this was a commonplace breach of contract lawsuit that plaintiff over-litigated. A review of the issues defendant raised in their motion to dismiss demonstrates why plaintiff had to expend so many resources in litigating this lawsuit. For example, defendants argues that ICS Nett was an improper party, that the breach of contract claims were barred by the applicable German statute of limitations and that the unjust enrichment claims did not satisfy the elements required by German law and were untimely under Virginia law.

Defendants had no meritorious basis to refuse timely paying plaintiff’s invoices. Had defendants initially agreed to the full amount of damages, had they initially done so when the complaint was first filed, they could have avoided being liable for the fees and costs at issue. Given defendants’ litigation strategy, they forced plaintiff to incur significant attorney’s fees and expenses.

Finding that the fees and expenses in this case were not excessive and that no pertinent factors support any reduction, plaintiff’s petition is granted.

MTU America Inc. v. Swiftships Shipbuilders LLC (Brinkema) No. 1:14cv773, July 8, 2015; USDC at Alexandria, Va. VLW 015-3-337, 9 pp.

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