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Judge derails ‘Vienna Metro’ fee standard for lease case

Peter Vieth//September 22, 2015

Judge derails ‘Vienna Metro’ fee standard for lease case

Peter Vieth//September 22, 2015//

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NRejecting the touchstone Vienna Metro attorney fee matrix widely used in Northern Virginia fee-shifting cases, U.S. District Judge T.S. Ellis III cut a fee request by one third for what he described as a “straightforward lease dispute.”

The decision came in Route Triple Seven LP v. Total Hockey Inc. (VLW 015-3-448). The case was in Alexandria federal court.

The dispute arose from a lease for a store selling hockey and lacrosse equipment at a Loudoun County shopping center. The property was owned by eight partners, including the three name partners at the Reston law firm of Odin, Feldman & Pittleman PC.

Under terms of a lease agreement drafted by the landlord, the store property was to be ready for move-in by June 1, 2013.

When the property was still not ready on that date, the tenant hockey store faced two or three options under the lease. One option appeared to allow the store to open after Sept. 1 of that year and avoid having to pay minimum rent for five months.

When the store took advantage of that option, the landlord company sued, asking a judge to declare that Total Hockey was in material breach of the lease and that allowing the store to skip minimum rent for almost half a year would produce an “unjust and inequitable penalty,” in the words of the judge.

None of the purported breaches of the lease was material, Ellis ruled last year. Each was cured by Total Hockey and the landlord accepted each cure without attempting to terminate the lease. The judge granted summary judgment for the store on all of the landlord’s claims.

The 4th U.S. Circuit Court of Appeals affirmed the ruling without analysis.

Fees teed up

That left Ellis to decide the fee petition from Total Hockey. A lease clause provided for payment of “a reasonable sum” to the “substantially prevailing party” for attorneys’ fees and court costs.

Ellis first rejected the landlord’s defense that Total Hockey had not specifically demanded attorney’s fees in its pleadings. The required plea for such “special damages” under Rule 9(g) of the Federal Rules of Civil Procedure does not apply when attorneys’ fees are sought as a recoverable cost pursuant to a contract, Ellis ruled.

“[N]otice by way of pleading is unnecessary because, as here, the contract itself provides notice,” Ellis reasoned.

Ellis readily agreed with Total Hockey that it had substantially prevailed in the case. The store won summary judgment on all three of the landlord’s breach of contract claims and also on the argument that the rent gap violated Virginia public policy.

Total Hockey’s only defeat was dismissal of its counterclaim on a minor issue.

Awarding fees “comports with the common sense intuition that a substantially prevailing party need not be a completely prevailing party,” Ellis wrote.

“Indeed, to say the defendant did not substantially prevail in this dispute is to deny that the San Francisco Giants won the 2014 World Series because they won only four of the seven games,” Ellis said.

Turning to the amount at stake, Ellis ruled Total Hockey’s claimed fees were not reasonable.

“Some hourly rates are excessive in the circumstances and the descriptions of many tasks are deficient, as many time entries lump multiple tasks together and contain vague task descriptions,” Ellis said.

Total Hockey asked for $224,428 in attorney’s fees. Ellis cut the amount to $150,527.35.

The glove doesn’t fit

Total Hockey submitted an affidavit from Craig C. Reilly. The Alexandria attorney is often called as a Northern Virginia fee expert.

He said the requested fees were within the “Vienna Metro Matrix” that sets a range of reasonable hourly rates based on an attorney’s experience level.

“To begin with, the Vienna Metro Matrix, which comes from a district court opinion, is not binding here,” Ellis wrote.

Moreover, the Vienna Metro case involved complex commercial real estate litigation, not a “straightforward lease dispute,” the judge said.

Ellis said he relied in part on his own “long and extensive experience in this district.”

“Many capable and experienced attorneys and paralegals litigate breach of contract cases like this case at rates lower than the rates submitted….,” Ellis said.

“At bottom, the Vienna Metro Matrix is a glove that does not fit here,” the judge wrote. The case did not present complex or novel legal issues or require extensive fact finding. The case “was more akin to a garden-variety commercial dispute over a lease for a single store.”

Ellis said he saw no reason to honor fees higher than $420 an hour for partners, $275 for experienced associates and $200 for inexperienced associates.

“These reduced rates comport with rates determined in recent fee petitions adjudicated in this district,” the judge wrote. He also knocked off 15 percent for lumped entries and vague task descriptions.

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