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America Condominium Association, Inc. v. Mardo

Superior Court of Rhode Island, Newport

September 5, 2019

STEFANIA M. MARDO, as Trustee of the Constellation Trust-2011, Defendant, and HARBOR HOUSES CONDOMINIUM ASSOCIATION, INC., Intervenor.

          For Plaintiff: Thomas W. Lyons, III, Esq.

          For Defendant: Robert D. Wieck, Esq. Edmund A. Allcock, Esq. for Intervenor


          THUNBERG, J.

         The within Motion for Attorneys' Fees and Costs was filed by Plaintiffs, America Condominium Association, Inc. (America), and Capella South Condominium Association, Inc. (Capella) (collectively, Plaintiffs), following our Supreme Court's Opinion and remand in American Condominium Association, Inc., v. Mardo, 140 A.3d 106 (R.I. 2016). Jurisdiction is pursuant to G.L. 1956 § 8-2-14.


         Facts and Travel

         The Rhode Island Supreme Court succinctly described the condominium associations involved in this dispute as follows:

'"Goat Island South Condominium [GIS] is comprised of three sub-condominium residential areas-Harbor Houses Condominium, America Condominium, and Capella South Condominium. Of the 154 total units, there are nineteen stand-alone townhouse residence units located in Harbor Houses Condominium, forty-six residence units in America Condominium, and eighty-nine residence units in Capella South Condominium. Each of these sub-condominiums is governed by a separate association and declaration and must also adhere to the provisions of the master declaration."' American Condominium Association, Inc., 140 A.3d at 109 (quoting Sisto v. American Condominium Association, Inc., 68 A.3d 603, 606 (R.I. 2013)) (Sisto I).

         Defendant Stefania M. Mardo is the Trustee of a Trust that owns a condominium unit located in the Harbor Houses complex. On April 19, 2011, Plaintiffs filed a four-count Verified Complaint for Injunctive Relief against Ms. Mardo, as Trustee, alleging that she unlawfully had expanded the unit and thereby impermissibly had intruded onto GIS's limited common elements. The Complaint alleged: (1) a violation of Rhode Island's Condominium Act, G.L. 1956 chapter 36.1 of title 34 (the Act) (Count I); (2) breach of the Goat Island South Second Amended and Restated Declaration of Condominium Goat Island South (GIS SAR) and the Second Amended and Restated Declaration of Condominium, Harbor Houses Condominium (the HH SAR) (Count II); (3) a violation of restrictive covenants (Count III); and (4) common law trespass (Count IV). On May 9, 2011, Harbor Houses filed a Motion to Intervene to protect its interests, which motion the Court granted. As there were no allegations against Harbor Houses, it did not file an answer to the Complaint.

         Following a six-day bench trial, the Court issued a written Decision on August 22, 2012, finding a violation of the Act, breach of the condominium declarations, and a continuing trespass. In view of the latter finding, the Court declared Count III-violation of restrictive covenants-to be moot. Thereafter, the Court entered Final Judgment in favor of Plaintiffs on Counts I, II, and IV, and deemed Count III to be moot. The Court denied Plaintiffs' request for a mandatory permanent injunction requiring the removal of the trespass, enjoined the Trust from further expansion, and denied Plaintiffs' request for attorneys' fees and court costs.

         The Plaintiffs timely appealed the Final Judgment to the Rhode Island Supreme Court. They raised three issues on appeal; namely, that this Court (1) erred in failing to order a mandatory permanent injunction requiring removal of the trespass; (2) erred in declaring Count III of the Complaint moot; and (3) erred in failing to award attorneys' fees and court costs pursuant to the GIS SAR. The Trust cross-appealed, contending that this Court erred in finding that the Trust had breached the GIS SAR and in finding that there existed a continuing trespass.

         In its subsequent Opinion, our Supreme Court held that the GIS SAR unequivocally prohibited unit expansion without the unanimous consent of the unit owners. The Supreme Court further held that although the Trust had committed a continuing trespass, the Superior Court had acted within its discretion when it both declined to order a mandatory permanent injunction requiring removal of said trespass and declared that Count III of the Complaint was moot. The Supreme Court additionally held that because the Trust had breached § 11.1(b) of the GIS SAR, the Superior Court erred in failing to award attorneys' fees and court costs pursuant to § 11.3 of the GIS SAR. The court denied the Trust's cross-appeal, vacated the attorneys' fees portion of the Final Judgment, and remanded the matter to the Superior Court for a determination of attorneys' fees and court costs.

         On January 20, 2017, the Trust filed a Motion to Amend Answer and Defenses and to Add Counterclaims. On the same day, it filed an objection to an award of attorneys' fees and court costs, and it requested the Court to only award nominal attorneys' fees and court costs to Plaintiffs. The Plaintiffs objected.

         On March 31, 2017, Plaintiffs' new counsel, Thomas W. Lyons (Attorney Lyons), made a joint demand for payment of the entirety of Plaintiffs' attorney fees and court costs in the underlying matter, as well as a request for reimbursement of reasonable fees and court costs incurred in collecting said payment. (Demand Letter, Mar. 31, 2017.) Thereafter, on April 12, 2017, Plaintiffs filed a Motion for Attorneys' Fees and Costs with this Court, as well as reimbursement of their reasonable costs and attorneys' fees incurred in pursuing those fees. In response, on May 25, 2017, Harbor Houses filed a Motion to Assert Counterclaims against Plaintiffs.

         On June 7, 2017, the Trust deposed the attorney who was Plaintiffs' only proposed sole expert witness (expert attorney). During the deposition, the following colloquy took place:

"Q. You claim that there are $233, 000 in attorneys' fees that are reasonably assessed - or I think reasonably and necessarily assessed against [the Trust]; correct?
"Q. That was the number you said?
"A. The number is right. I don't know who is responsible for paying. I haven't gotten into that, who is responsible for paying.
"Q. Do you think it's relevant to figure out whether or not Harbor Houses had affirmative relief sought against it in the Trial Court in order to arrive at that $233, 000 figure?
"A. I don't have an opinion on that.
"Q. So if Harbor Houses did not have any affirmative relief sought against it, and there were time entries relating to Harbor Houses, would it be your opinion that they would still be properly included in the $233, 000 total?
"A. I don't have an opinion . . . I won't give an opinion on what should be allocated, what should be excised from it, whether there are more or less." (Expert Attorney Dep. Tr. 119-121, June 7, 2017.)

         The expert attorney later stated that he included "whatever is listed in the bills[, ]" and that he "didn't make the allocation or separation." Id. at 121 and 122. Counsel for the Trust then asked the expert attorney: "You don't even know whether or not any claims have been asserted against Harbor Houses in this case?" Id. at 122. The expert attorney responded: "I didn't review that, no." Id.

         On June 19, 2017, Harbor Houses objected to Plaintiffs' Motion for Attorneys' Fees, asserting that Plaintiffs never raised any affirmative claims against Harbor Houses; consequently, it averred that judgment did not, and could not, enter against Harbor Houses as to any of the counts contained in the Complaint. It additionally contended that because attorneys' fees only were available as a result of the Trust's breach of the GIS SAR, in which Harbor Houses played no part, Plaintiffs are not entitled to attorneys' fees and court costs from Harbor Houses. Accordingly, Harbor Houses requested an award of attorneys' fees from Plaintiffs for defending Plaintiffs' motion.

         This Court commenced a hearing on the matter on August 22, 2017. The first order of business was for the Court to declare that the remand proceedings would strictly be limited "to a determination of what amount of attorney's fees should be awarded to the plaintiffs based on the Trust's breach of the GIS SAR[.]" (Hr'g Tr. at 13, Aug. 22, 2017) (Tr. I.) In so determining, the Court impliedly denied the Motions to Assert Counterclaims and the Motions for Attorneys' Fees filed by the Trust and Harbor Houses. On August 25, 2017, Plaintiffs filed a Motion to Withdraw Their Motion for Attorneys' Fees Against Harbor Houses.

         At the hearing, Plaintiffs presented its expert attorney to testify about the reasonableness of the attorneys' fees from the law firm Barton Gilman, LLP, formerly Taylor, Duane, Barton and Gilman LLP (Barton Gilman, LLP). He testified that he has been practicing condominium law since approximately 1973, and that he currently represents approximately sixteen condominium associations. Id. at 17 and 18. He further testified that he reviewed all the legal invoices that he received from Plaintiffs' attorneys, dated approximately March 2010, to December 12, 2016. Id. at 23-24. He stated that although he charges $295 per hour, his informal survey of other attorneys in the same field of practice revealed that the going rates varied between $300 to $365 per hour. Id. at 22. Thus, he concluded that [t]here was nothing unusual or unreasonable" about the rates charged by Plaintiffs' attorneys, and that in fact their rates of $130-$250 per hour "were really quite modest." Id. at 24.

         The expert attorney testified that he omitted from consideration any invoice amounts that were unrelated to the case, such as charges for lobbying on a proposed house bill before the General Assembly, as well as charges for a tangential issue involving another unit owner. Id. at 27. He subtracted $24, 416.55 in unrelated charges and concluded that the fair and reasonable fee in this matter amounted to $233, 688.44. Id. at 30-31. He then testified:

"I was impressed with three things, not only the rates, which I thought were fair, I thought [the main attorney's] rate was probably half of what the value of his work was. He was up against a team of a number of prestigious, experienced trial attorneys, and from what I could read from the invoices, he was standing his ground alone and responded well, so I was impressed with that." Id. at 31.

         The hearing reconvened on August 29, 2017. Before Plaintiffs' expert attorney resumed his testimony, the Court accepted a proposed Order from Plaintiffs' counsel granting Plaintiffs' Motion to Withdraw their Motion for Attorneys' Fees against Harbor Houses. (Hr'g Tr. at 34, Aug. 29, 2017) (Tr. II). The Order was duly entered on the same day.

         The Plaintiffs' expert attorney testified that, in calculating reasonable attorneys' fees, he considered the factors contained in Rule 1.5 of the Supreme Court Rules of Professional Conduct, entitled "Fees."[1] Id. at 35. In doing so, he graded each factor on a basis of one to five, with five being the most difficult. Id. He testified that being familiar with condominium law, he basically is aware of its complexities and how much time would be necessary to address a particular issue. Id. at 37. He concluded that the total amount of compensable attorneys' fees in this case (i.e., without the deductions) amounted to $258, 104.95, and that his own fees up until the previous week totaled $5522. Id. at 39-40. However, during cross-examination, the expert attorney acknowledged that affidavits filed by the attorneys who had actually worked on the case stated that their fees amounted to $224, 960, which was nearly $9000 lower than the final fee that the expert attorney calculated. Id. at 53-54; see also Affidavit of Robert C. Shindell and Affidavit of Timothy J. Groves.

         During subsequent cross-examination, the expert attorney admitted that he did not read any of the pleadings in this case, including the Complaint. (Hr'g Tr. at 73, 99, 104, Nov. 1, Dec. 4 and Dec. 7, 2017) (Tr. III.). He stated that he relied upon the findings of fact contained in this Court's August 22, 2012 Decision, as affirmed by the Supreme Court in American Condominium Association, Inc. 140 A.3d 106. (Tr. III at 76.)[2] In addition, he stated that he had "focused almost exclusively on the Supreme Court's directive in this particular case that remanded it to this Court." Id. at 92. The expert attorney also admitted that when he made his calculations, he had not been familiar with the term "lodestar," as it pertains to calculating reasonable attorneys' fees; however, he believed that he satisfied lodestar requirements when he established and analyzed fair and reasonable fees in this case. Id. at 86, 89; see also id. at 212 ("During [my] deposition, when the lodestar concept was explained, I said that is exactly what I did.").

         The expert attorney further testified that he did not delete any fees or services related to the counts for trespass, statutory violation, or restrictive covenant, because he believed that all four of the counts were intermingled, and it would be "unrealistic" to specifically allocate fees on a count-by-count basis. Id. at 98-99; 102; see also id. at 133 (stating "I made no distinction between the various claims, the various counts, and the billings. I did not segregate based on a particular claim or a particular count in the complaint").[3] Counsel for the Plaintiffs stipulated that the expert attorney did not think it necessary to distinguish or identify which services were related to any given count. Id. at 103. The expert attorney admitted that he did not delete block billing or lumping entries; rather, the only fees that he eliminated were those that he considered not directly involved in the case. Id. at 136-37. Accordingly, he considered all of the remaining invoices to be reasonable. Id. at 214.

         The Court has before it multiple exhibits, including affidavits from counsel for Barton Gilman, LLP; an affidavit and deposition testimony from the expert attorney; and multiple invoices submitted by the parties. After carefully considering the evidence and the testimony presented at the hearing, the Court makes the following determinations.


         Standard of Review

         Our Supreme Court has declared that

'"When a case has been once decided by this court on appeal, and remanded to the [Superior Court], whatever was before this court, and disposed of by its decree, is considered as finally settled. The [Superior Court] is bound by the decree as the law of the case, and must carry it into execution according to the mandate. That court cannot vary it, or examine it for any other purpose than execution; or give any other or further relief; or review it, even for apparent error, upon any matter decided on appeal; or intermeddle with it, further than to settle so much as has been remanded. * * * But the [Superior Court] may consider and decide any matters left open by the mandate of this court."' Sisto v. American Condominium Association, Inc., 140 A.3d 124, 128 (R.I. 2016) (Sisto II) (quoting Pleasant Management, LLC v. Carrasco, 960 A.2d 216, 223 (R.I. 2008)).

         What our Supreme Court discussed above is the "mandate rule." Pursuant to such rule, this Court must first determine exactly what the Supreme Court mandated in the opinion it issued in American Condominium Association, Inc., 140 A.3d 106 before assessing attorneys' fees and court costs.



         The Trust contends that Plaintiffs are entitled only to those fees that specifically relate to the breach of the GIS SAR; namely, the unopposed $900 worth of fees. The Trust further maintains that, due to the inherent deficiencies in Plaintiffs' Motion for Attorneys' Fees, coupled with the failure of Plaintiffs to provide competent evidence to support their motion, the Court should award only those unopposed fees.

         The Plaintiffs counter that the factual and legal issues of their four-count Complaint are so closely interrelated that Plaintiffs are entitled to an award of all of their attorneys' fees and court costs. Specifically, they seek the Court to award $225, 235.23 in attorneys' fees and $3, 685.15 in costs for litigating the underlying matter, as well as an additional $38, 165 in attorneys' fees and $12, 175.38 in costs for litigating the fee motion. The Plaintiffs also seek post-judgment interest on the entire amount.


         Attorneys' Fees

         It is settled law that Rhode Island has "'staunch[ly] adhere[d] to the 'American rule' that requires each litigant to pay its own attorney's fees absent statutory authority or contractual liability."' Tri-Town Construction Company, Inc. v. Commerce Park Associates 12, LLC, 139 A.3d 467, 478 (R.I. 2016) (quoting Shine v. Moreau,119 A.3d 1, 8 (R.I. 2015)). Generally, "[g]iven a proper contractual, statutory, or other legal basis to do so, the award of attorney's fees rests within the sound discretion of the trial justice." Women's Development Corp. v. City ofCentral Falls, 764 A.2d 151, 162 (R.I. 2001). In this case, the Rhode Island Supreme Court determined that Plaintiffs are entitled to fees under the GIS SAR. See Mardo, 140 A.3d at 117. However, even "if there is a contractual basis for awarding attorney's fees," this ...

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