The court held a hearing on March 27, 2008 to consider the application by

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1 STATE OF MAINE CUMBERLAND, ss. SUPERIOR COURT CIVIL ACTION Do.cket Nos. cv d. AP ' I ',, '.', ',1-- I I. C\ J. ELIZABETH NIITCHELL, et al., v. Plaintiffs, PORTLAND FINE FURNITURE and DESIGN INC., et ai., Defendants. DONALD L.<;ARBRECHT LAWUBRARY JUN ~~ LV\!i~ The court held a hearing on March 27, 2008 to consider the application by plaintiffs Elizabeth Mitchell and Alexander Krieckhaus for a default judgment against defendants Portland Fine Furniture and Design Inc. and Jerry Cerhardt.' At that hearing, Portland Fine Furniture was represented by Gerhardt (an officer of the corporation") and Gerhardt represented himself. At the hearing the court stated that it was inclined to grant the default judgment but gave defendants until April 17 to file any additional materials or argument. At the hearing, defendants raised certain objections to the ability of plaintiffs to recover attorney's fees and the court gave them the same deadline to supplement their opposition if they wished to.! This case involves two consolidated actions, AP-06-56, a small claims appeal in which Portland Fine Furniture was the plaintiff and Mitchell and Krieckhaus were defendants, and CV-07-10, an Unfair Trade Practices action in which Mitchell and Krieckhaus are plaintiffs and Portland Fine Furniture and Gerhardt are defendants. In this order Mitchell and Krieckhaus shall be referred to as the plaintiffs and Portland Fine Furniture and Gerhardt shall be referred to as the defendants. 2 See 4 M.R (3)0).

2 Since the hearing Gerhardt has filed an additional written opposition to the default judgment which essentially restated the arguments previously raised. He did not supplement his opposition on the attorneys fees issue. 1. Default Judgment The court adheres to its view that a default judgment should be entered against defendants Portland Fine Furniture and Gerhardt. The record reflects that after plaintiffs' counsel moved to withdraw on January 25, 2008, a trial management conference was held on January 29,2008, after which the court concluded that it needed further information on the motion to withdraw. At the same time it expressly ordered (1) that defendants respond to plaintiffs' outstanding discovery requests by February 22 and (2) that Gerhardt must appear for a deposition "in no event subsequent to February 29,2008." Order dated January 30, 2008 and filed January 31, 2008, ~~ 1-3. In that order the court also put defendants on notice that (whether they were represented by counselor not), they should be prepared for the possibility that they would be called to trial during the month of March, January 30, 2008 order ~ 7. Defendants had also filed a motion for a continuance which the court denied without prejudice on January 30,2008. In a subsequent order on February 6, 2008, the court granted the pending motion to withdraw by defendants' counsel but directed counsel to advise his clients to review the court's January 30 order with respect to defendants' outstanding discovery obligations. On February 20, 2008 Gerhardt wrote a letter to the court (received and filed February 21, 2008) seeking a continuance of the trial. That letter did not request a continuance of the existing discovery deadlines. The file reflects that counsel for 2

3 plaintiffs then wrote to Gerhardt on February 21, 2008 reminding him of his obligation to appear for deposition no later than February 29. On March 10, 2008 plaintiffs moved for a default judgment, noting that defendants had not responded to the outstanding discovery requests by February 22, 2008 and that Gerhardt had not appeared for his deposition on February 29, Defendants' failure to provide discovery is not disputed. In opposing the entry of default, Gerhardt argues that because he did not immediately receive a response to his February 20, 2008 letter, he assumed that a continuance of the trial had been granted," Even if true, this offers no excuse whatsoever for his failure to comply with the outstanding discovery orders - which under the court's existing orders did not depend in any way on whether a continuance of trial would be granted. Moreover, any purported expectation on Gerhardt's part that a continuance would be granted is directly contrary to the court's January 30, 2008 order. The record also reflects that when the court attempted to convene a conference to discuss trial scheduling, Gerhardt advised opposing counsel and that clerk's office that he could not make himself available. Under the above circumstances, the court concludes that defendants have no excuse for their failure to comply with the court's discovery order. Moreover, the court has reviewed plaintiffs' interrogatories and document request and the central role played by Gerhardt in the litigation and agree that the discovery sought is so fundamental that a default judgment is the appropriate sanction for defendants' willful 3 The record reflects that a deposition of Gerhardt had been sought for some time and that Gerhardt had previously refused to appear for deposition on January 24, 2008 (the same date as ADR) even though his then counsel had previously agreed to a deposition on that date. 4 On February 29, 2008, the court endorsed Gerhardt's February 20, 2008 letter with a notation that the existing orders remained in effect and that it appeared the case would be reached during the week of March 24. However, this endorsement apparently was not sent out immediately. Gerhardt's submissions suggest that he received it on March 11. 3

4 noncompliance.f This is at least true with respect to plaintiffs' claims arising out of the events that occurred in the course of the sale of the table.' In addition, the court was not required to warn defendants that they faced a default judgment if they failed to comply with the outstanding discovery orders. See St. Paul Insurance Co. v. Hayes, 2001 ME 71 CJ[ 14, 770 A.2d 611, 615. In any case, defendants have known that since approximately March 10, 2008 that plaintiffs were seeking a default judgment and have known since the March 27 hearing that the court was inclined to grant one. Nevertheless, defendants have not tendered the discovery that was ordered on January 30,2008 nor has Gerhardt offered to submit to a deposition. Based on the findings and proceedings set forth on the record at the March 27, 2008 hearing and in this order, a default judgment is entered against defendants based on their willful failure to comply with discovery. 2. Damages and Attorneys Fees The damages sought by plaintiffs are $435. Although they do not agree that they owe anything, defendants have not contended that $435 figure is unjustified. The real dispute here concerns plaintiffs' entitlement to attorney's fees under the default judgment because the judgment finds defendants to be in violation of the Unfair Trade Practices Act. There is no dispute as to the hourly rates sought by plaintiff. Nor can an argument be made that the small amount of actual damages precludes an attorney's fee 5 If the only issue were the requests for admissions that have not been responded to, a default judgment would be unwarranted although some other sanction might be appropriate. 6 The court is not necessarily convinced that the specific discovery sought would justify a default on plaintiffs' additional theory that defendants committed an unfair trade practice with respect to their conduct during the small claims case. Because the court concludes for other reasons that attorneys fees are not available for the time spent in litigating the small claims case, the court does not have to reach this issue. 4

5 award. The goverrung statute, 5 M.R.S. 213(2), specifically authorizes fees "irrespective of the amount in controversy."? The disputed issues are (1) whether attorneys fees under 5 M.R.S. 213(2) should be reduced or eliminated when the attorney is a member of the prevailing party's immediate family; (2) whether attorneys fees are recoverable for the time spent litigating the small claims case; and (3) whether there is any overkill as to the amount of time spent. On the issue of whether attorneys fees are recoverable by parties represented by family members, attorney James Mitchell, who represents plaintiffs, is the father of plaintiff J. Elizabeth Mitchell and the father-in-law of plaintiff Alexander Krieckhaus. If the policy argument for statutory attorneys fees is to provide an incentive for attorneys to represent parties in cases where the dollar value of the dispute is small but rights should still be vindicated, then it can be argued that attorneys fees should not be available to close family members who may not need an incentive to protect the rights of their own children. To the court's knowledge, however, there is no authoritative precedent on this issue. In a somewhat analogous situation, the U.S. Supreme Court has held that a party representing himself (even if he is an attorney) is not entitled to statutory attorneys fees. Kay v. Ehrler, 499 Ll.S. 432 (1991). In that case the court noted that the purpose of the statute was to enable potential plaintiffs to obtain the assistance of counsel. See 499 U.S. at 436. However, the basis of the court's ruling was not that it was unnecessary to award attorney's fees to a lawyer representing himself because the lawyer already had a sufficient incentive to litigate his own case. Rather the court concluded that the statute contemplated the use of separate counsel who could provide more dispassionate and 7 In this case defendant Portland Fine Furniture originally recovered a small claims judgment against plaintiffs in the amount of $1,753 - so the total amount in controversy (representing the difference between plaintiffs' and defendants' view of the case) is at least $2,188. 5

6 independent judgment. See 499 Ll.S, at 438 (citing the adage that a lawyer who represents himself has a fool for a client). How this cuts in the instant case is unclear. It can be argued that a father representing his daughter will not necessarily provide dispassionate judgment. On the other hand, just because a lawyer is related to a party does not mean the lawyer is not capable of exercising independent judgment. Recognizing that this is a close question, the court concludes that statutory attorneys fees are not barred when the attorney is a family member," The court reaches a different conclusion with respect to plaintiffs' request for attorney's fees arising out of the small claims action that preceded this case. Although plaintiffs argue that defendants' actions in the small claims action constituted an unfair trade practice (which they contend is now established by virtue of the default judgment), the court is constrained to note that the small claims case went to a hearing, which plaintiffs 10st. 9 Plaintiffs had every right under the rules to appeal that decision and seek a jury trial. To the extent they are arguing that defendants' conduct in the small claims case was somehow fraudulent, however, that is an issue that should have been raised in the small claims court itself. Respect for the decisions of a sister tribunal preclude this court from concluding, even in a default judgment, that there was an impropriety as to the small claims court judgment. In this connection, the court notes that as trial in this case approached, plaintiffs filed a motion in limine to exclude evidence of any unconsummated settlement agreements and to exclude the result of the small claims hearing. Plaintiffs' motion in 8 In addition, if fees were barred for close family members, where should the line be drawn? Uncles? Cousins? 9 Filing small claims cases that are without merit may constitute an unfair trade practice. A different conclusion obtains with respect to the filing of a small claims case that is found to be meritorious, at least in part, by the court hearing the case. 6

7 limine dated January 25, The court can see no reason why that motion would not have been granted. However, the only practical way to exclude the result of the hearing would have been to exclude any mention of the proceeding. Under these circumstances, plaintiffs would not have been able to prove that the small claims case somehow constituted an unfair trade practice, and they cannot recover attorney's fees for that proceeding." In reviewing the timesheets submitted by plaintiffs, the court finds that $4,500 of the attorneys fees and $383 of the costs sought by plaintiff relate to the small claims case, as opposed to plaintiffs' unfair trade practice case, and those amounts shall be deducted from plaintiffs' fee request. Looking at the remainder of plaintiffs' fee request, the court concludes that while there was some overkill and unnecessary work that should be excluded, the bulk of plaintiffs' fee request is reasonable." The court will include 3.5 hours of plaintiffs' counsel's time to account for the trip to Portland and the hearing on March 27, Accordingly, after these adjustments, the total amount of fees awarded shall be $13,600 along with costs of $1, for a total award of fees and costs equaling $15, The entry shall be: Judgment shall be entered in favor of plaintiffs Elizabeth Mitchell and Alexander Krieckhaus and against defendants Portland Fine Furniture and Design Inc. and Jerry Gerhardt jointly and severally in the amount of $435. Attorney's fees and costs are assessed against defendants Portland Fine Furniture and Gerhardt jointly and severally in the amount of $15, Awarding attorneys fees for the small claims proceeding would put plaintiffs in a better Rosition on a default judgment than if they had won at trial. 1 The court will not approve $5 in costs requested for every cell phone call made by counsel for plaintiffs. Telephone charges, unless extraordinary, are part of overhead and are not separately compensable. 7

8 The clerk is directed to incorporate this order in the docket by reference pursuant to Rule 79(a). DATED: MayJO /2008 Thomas D. Warren Justice, Superior Court 8

9 FCOURTS md County 30x 287 ne JAMES MITCHELL ESQ 86 WINTHROP STREET AUGUSTA ME OF COURTS rland County Box 287 aine PORTLAND FINE FURNITI1RE~AND DESING~I'NC: JERRY GERHARDT 280 WESTERN AVENUE SOUTH PORTLAND ME 04106

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