Free Brief in Support of Motion - District Court of Colorado - Colorado

Case 1:04-cv-01258-LTB-BNB

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 04-cv-1258-LTB-BNB STUDENT MARKETING GROUP, INC., Plaintiff, v. COLLEGE PARTNERSHIP, INC., f/k/a COLLEGE BOUND STUDENT ALLIANCE, INC., Defendant. ______________________________________________________________________________ REPLY BRIEF IN SUPPORT OF MOTION FOR NEW TRIAL OR TO ALTER OR AMEND JUDGMENT ______________________________________________________________________________ Defendant College Partnership, Inc. ("College Partnership"), by and through its counsel, Rosemary Orsini and Brian K. Matise of Burg Simpson Eldredge Hersh & Jardine, P.C., respectfully submits the following Reply Brief in support of its Motion for New Trial or to Alter or Amend Judgment. I. THE PARTIES AGREE THAT THE JUDGMENT MUST BE ALTERED, AMENDED, OR "CORRECTED" TO CORRECT CLEAR ERROR IN THE CALCULATION OF COSTS AND FEES. Plaintiff agrees with Defendant that the Judgment is incorrect and should have been reduced to $279,547.06 because $5,169.32 in costs already had been taxed by the Clerk and paid by College Partnership. Plaintiff's only dispute on this point is largely one of semantics: whether the Judgment should be corrected pursuant to Fed. R. Civ. P. 60(a) as a "clerical error" or

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pursuant to a Fed. R. Civ. P. 59(e) Motion to Alter or Amend Judgment. The primary difference between motions under Fed. R. Civ. P. 59(e) and 60(a) is one of timing: motions brought under Rule 59(e) must be brought within ten days of entry of judgment (as computed according to Fed. R. Civ. P. 6) unless extended by the Court, while motions brought pursuant to Fed. R. Civ. P. 60(a) can be made at any time. A secondary difference concerns the effect on appeal: Fed. R. Civ. P. 59(e) motions extend the time required to file a notice of appeal until the Court disposes of the last such motion, while Rule 60(a) motions brought more than ten days after entry of judgment do not extend the deadline. Fed. R. App. P. 4(a)(4)(A) The Tenth Circuit holds that motions filed under either Rule 59 or Rule 60 that are filed within 10 days are routinely treated as motions to alter or amend judgment under Rule 59 in order to avoid unnecessary disputes over characterization of the motion. Dalton v. First Interstate Bank, 863 F.2d 702, 703-04, superseded by appellate rule change on other grounds, Grantham v. Ohio Cas. Co., 97 F.3d 434 (10th Cir. 1996). The Motion was filed within the requisite period for Rule 59 motions, and accordingly should be treated as one. Rule 60(a) motions are appropriate "to correct what is erroneous because the thing spoken, written, or recorded is not what the person intended to speak, write or record." McNickle v. Bankers Life & Casualty Co., 888 F.2d 678, 682 (10th Cir. 1989). "Rule 60(a) may not be used to change something that was deliberately done, even though it was later discovered to be wrong." Id. The Court, in its Order, awarded the full amount of attorney fees without taking the additional step of subtracting the amounts previously taxed. The Clerk entered judgment as ordered by the Court. Certainly the Clerk did not err when entering judgment as ordered by the -2-

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Court. SMG subsequently has attempted to execute on the full amount of the judgment, including the amount it admits to be in error. See, e.g. Docket Entry 177, Return of Writ of Garnishment. Fed. R. Civ. P. 59(e) is a proper mechanism to permit the Court to correct its own errors, "sparing the parties and the appellate courts the burden of unnecessary appellate proceedings." Russell v. Delco Remy Div. of General Motors Corp., 51 F.3d 746, 749 (7th Cir. 1995); Pacific Ins. Co. v. American Nat'l Life Ins., 148 F.3d 396, 403 (4th Cir. 1998). Accordingly, the Court should grant the motion to alter or amend. II. AN EVIDENTIARY HEARING IS REQUIRED WHERE THE COURT DECIDED THE PERSUASIVENESS OF THE EVIDENCE BASED IN PART ON LACK OF DEVELOPMENT OF THE RECORD. The Court, in its Order awarding attorney fees, decided the issue of the reasonableness of SMG's hourly rates for partner-level attorneys and paralegals based on the persuasiveness of conflicting expert affidavits. The Court explained that it found Mr. Aisenberg's affidavit "too conclusory" and further questioned: 1) whether Mr. Aisenberg's opinion related to Colorado generally or Denver specifically; 2) whether Mr. Aisenberg incorrectly assumed that a senior associate was a legal assistant; and 3) whether rates charged rose to the level of being "unreasonable" as opposed to merely well in excess of the prevailing rates. SMG does not dispute this, but contends that the failure to develop the record should be held against College Partnership. Although in many cases the Court may have discretion whether to hold a hearing, the Tenth Circuit has held that it is an abuse of discretion to deny a hearing where the record is not fully developed. Michael A. Cramer, MAI, SRPA, Inc. v. United States, 47 F.3d 379, 384 (10th -3-

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Cir. 1995). SMG contends that College Partnership had the opportunity to reply to SMG's arguments that: 1) Mr. Aisenberg was not challenging the rates charged by the KLNG associates; 2) Mr. Reilly addressed the hourly rates in the Denver area. However, these issues are fundamentally different from the questions raised by the Court in its order. Until the Court issued its order, there was never a suggestion that Mr. Aisenberg improperly considered KLNG associates to be paralegals, or that Mr. Aisenberg was not referring to Denver rates. Similarly, Mr. Reilly's affidavit is as conclusory as Mr. Aisenberg's: Mr. Reilly refers only to rates charged by "boutique litigation" firms and identifies only two attorneys whose actual rates are similar to those charged in this matter. An evidentiary hearing was necessary to develop the record and resolve these issues.

Similarly, SMG does not dispute that neither party submitted affidavits on whether certain costs claimed by Plaintiff and lumped into categories such as "employee overtime," "overtime expenses," "word processing" without explanation were appropriate. The Court determined that the lack of evidence (i.e., an undeveloped record) meant that Plaintiff was automatically entitled to recover these amounts. The Court did not request any explanation from Plaintiff as to what these amounts were for, or how they were calculated, and therefore decided the issue on an undeveloped record. An evidentiary hearing would have allowed the record to be developed; accordingly, an evidentiary hearing should have been granted. III. COLORADO LAW REQUIRES AN EVIDENTIARY HEARING UNDER THESE CIRCUMSTANCES AS A MATTER OF DUE PROCESS. SMG does not dispute that a federal court's award of attorney fees in a diversity case -4-

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should not contravene state law. However, it disputes whether a hearing is mandatory under Colorado law, citing the discretionary language of Practice Standard 1-22, C.R.C.P. Rule 121. Colorado courts have consistently ruled that parties presenting a bona fide dispute over an issue of attorney fees that request a hearing have a due process right to a hearing. In re Marriage of Mockelman, 944 P.2d 670, 672 (Colo. App. 1997) ("When a hearing is requested to determine the reasonableness and necessity of attorney fees, due process requires that the trial court hold such a hearing."); Zarlengo v. Farrer, 683 P.2d 1208, 1210 (Colo. App. 1984) (where party raises an issue as to attorney fees, a trial court has a duty to conduct a hearing and the litigant has a right to a hearing); Rogers v. Westerman Farm Co., 986 P.2d 967, 976 (Colo. App. 1998), rev'd on other grounds, 29 P.3d 887 (Colo. 2001) ("If a party makes a claim for attorney fees, the court must hold an evidentiary hearing on the claim, if such a hearing is requested."). SMG contends that Roberts does not require a hearing and that Roberts does not apply to contractually based awards. SMG is incorrect. Roberts v. Adams, 47 P.3d 690 (Colo. App. 2001), specifically involved a contractually based award of attorney fees. See Roberts, 47 P.3d at 69899. The Roberts decision also considered whether the discretionary language of practice standard 1-22 made a hearing unnecessary: "Thus, we hold that notwithstanding the discretionary language in C.R.C.P. 121 § 1-22(2)(c), a party is entitled to an evidentiary hearing to determine the reasonable amount of attorney fees at least, when here, it presents the affidavit of an expert on attorney fees raising disputed issues of fact and a significant amount of attorney fees has been requested." Id. at 700. Because the award of attorney fees in this case was made under Colorado state law, and Colorado state law provides as a matter of due process that a hearing is required, -5-

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the Court should have conducted a hearing. IV. ATTORNEY FEES SHOULD NOT BE AWARDED TO SMG WHERE COLLEGE PARTNERSHIP WAS REQUIRED TO BRING THIS MOTION TO CORRECT ERROR. SMG contends that it should be awarded attorney fees although it admits that the Judgment entered January 3, 2006 was incorrect. SMG did not bring this matter to the Court's attention prior to College Partnership's motion; in fact, SMG attempted to execute on the full judgment amount, including amounts to which it was not entitled. Under these circumstances, it would be unjust and unreasonable to require College Partnership to pay SMG's attorney fees in order to correctly protect its substantive rights and correct error. WHEREFORE, College Partnership respectfully requests that the Court alter or amend the Judgment entered January 3, 2006 to correct the double award of costs, vacate the Judgment and Order, and grant College Partnership a new trial in the form of an evidentiary hearing to resolve factual disputes. DATED this 27th day of February, 2006. Respectfully submitted, BURG SIMPSON ELDREDGE HERSH & JARDINE, P.C. /s Brian K. Matise Brian K. Matise 40 Inverness Drive East Englewood, Colorado 80112 Telephone: (303) 792-5595 Facsimile: (303) 708-0527 ATTORNEYS FOR DEFENDANT COLLEGE PARTNERSHIP, INC. -6-

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CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 27th day of February, 2006, I electronically filed the foregoing with the Clerk of Court using the CM/ECF System which will send notification of such filing to the following at their email address on file with the Court: Gary Parish, Esq. R. Daniel Scheid, Esq. Sander, Scheid, Ingebretsen, Miller & Parish P.C. 700 17th St., Suite 2200 Denver, CO 80202 [email protected] Patrick J. McElhinny, Esq. Dianna S. Karg, Esq. Kirkpatrick & Lockhart LLP 535 Smithfield St. Henry W. Oliver Building Pittsburgh, PA 15222 [email protected]

/s Maureen Gedeon Maureen Gedeon, Legal Assistant

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