843-000-0000

Public warning: Do your research on anyone you intend to do business with, especially these folks...

LIBERTY MUT. INS. v. EMPLOYEE RESOURCE MANAGEMENT
No. C/A NO. 2-98-2205-18.
176 F.Supp.2d 510 (2001)
LIBERTY MUTUAL INSURANCE COMPANY, Plaintiff,
v.
EMPLOYEE RESOURCE MANAGEMENT, INC.; William Attaway, Jr.; Robert Berman; William E. King, III; Robert T. Rand; and Kelli Yountz, Defendants.
United States District Court, D. South Carolina, Charleston Division.
March 29, 2001.
W. Howell Morrison, Charleston, SC, Lynn E. Szymoniah, Boca Raton, FL, for plaintiff.
Timothy Bouch, O. Grady Query, W. Jefferson Leath, Charleston, SC, for defendants.
ORDER
NORTON, District Judge.
This matter is before the court on a veritable plethora of post-trial motions following a June 2000 jury trial in this matter.1
I. Factual Background
Plaintiff commenced this action on July 28, 1998, asserting state law causes of action against Employee Resource Management, Inc. ("ERM") for breach of contract and violation of the South Carolina Unfair Trade Practices Act ("SCUTPA"). Plaintiff also asserted federal question causes of action against defendants Attaway, Berman, King, Rand, and Yountz ("Individual Defendants") for violation of 42 U.S.C. § 1962(a) and (c) of the Racketeering Influenced and Corrupt Organization Act ("RICO").
Pre-trial discovery in this case was extensive. The parties exchanged or reviewed an estimated thirty thousand (30,000) documents and took depositions of no less than twenty-five (25) fact and expert witnesses. Similarly, the parties' case-dispositive motions proved to be voluminous and complex.
A jury trial was held on June 12-19 and June 26-28, 2000. On June 27, 2000, this court granted the individual defendants judgment as a matter of law on the RICO § 1962(c) cause of action, but submitted the breach of contract and SCUTPA causes of actions against ERM to the jury on June 28, 2000. Later that same day, the jury returned verdicts for plaintiff on both causes of action, including a finding that ERM willfully violated the SCUTPA. The jury awarded plaintiff actual damages in the amount of $956,953.08 on both counts.
The deputy clerk entered a judgment in the amount of $956,592.08 on June 29, 2000. On July 6, 2000, plaintiff filed a Notice of Election of Remedy and Request for Additional Relief. In this Notice, plaintiff requested that this court treble
[176 F.Supp.2d 514]
the actual damages award and enter judgment accordingly for plaintiff in the amount of Two Million Eight-Hundred Sixty-Nine Thousand Seven Hundred Seventy-Six and 24/100 ($2,869,776.24) Dollars. In response, ERM filed motions for judgment as a matter of law, or in the alternative for a new trial, and in the alternative for a new trial nisi remittitur.
II. Defendant's Post-Trial Motions
A. Employee Resource Management's Motion for Judgment as a Matter of Law, or in the alternative, For a New Trial, and in the alternative, For a New Trial Nisi Remittitur
ERM moves pursuant to Rules 50(b) and 59 for an Order granting judgment as a matter of law, or in the alternative, for a new trial and/or new trial nisi remittitur.
1. ERM's Motion for Judgment as a Matter of Law Pursuant to Rule 50(b)
At the conclusion of plaintiff's case, defendants moved for Judgment as a Matter of Law pursuant to Rule 50(a) to dismiss Count II of plaintiff's Amended Complaint, which alleged violations of the South Carolina Unfair Trade Practices Act ("SCUTPA") against ERM. This court denied the motion. ERM now moves pursuant to Rule 50(b) for judgment as a matter of law on Count II of the Amended Complaint.
Rule 50(b) provides that: "[i]f, for any reason, the court does not grant a motion for judgment as a matter of law made at the close of all the evidence, the court is considered to have submitted the action to the jury subject to the court's later deciding the legal questions raised by the motion." A party is entitled to judgment as a matter of law "if the nonmoving party failed to make a showing on an essential element of his case with respect to which he had the burden of proof." Price v. City of Charlotte, 93 F.3d 1241, 1249 (4th Cir.1996) (quoting Bryan v. James E. Holmes Regional Med. Ctr., 33 F.3d 1318, 1333 (11th Cir.1994)). If there is any evidence on which a reasonable jury could return a verdict in favor of the nonmoving party, judgment as a matter of law should not be granted. See id. However, judgment as a matter of law is appropriate when the evidence can support only one reasonable conclusion. See Chaudhry v. Gallerizzo, 174 F.3d 394, 405 (4th Cir. 1999), cert. denied, 528 U.S. 891, 120 S.Ct. 215, 145 L.Ed.2d 181 (1999); Singer v. Dungan, 45 F.3d 823, 827 (4th Cir.1995); Persinger v. Norfolk & Western Ry. Co., 920 F.2d 1185, 1189 (4th Cir.1990) (holding that JNOV [now Judgment as a Matter of Law]2 "should not be granted unless the evidence is so clear that reasonable men could reach no other conclusion than the one suggested by the moving party.").
The court must review the evidence and all reasonable inferences in the light most favorable to the nonmoving party. See Price, 93 F.3d at 1249. In considering a motion for judgment as a matter of law, the court must not re-weigh the evidence, make credibility determinations, or substitute its own judgment for the jury's. See id.; see also Anheuser-Busch, Inc. v. L & L Wings, Inc., 962 F.2d 316, 318 (4th Cir.1992), cert. denied, 506 U.S. 872, 113 S.Ct. 206, 121 L.Ed.2d 147 (1992). A party moving for judgment as a matter of law,
[176 F.Supp.2d 515]
bears a heavy burden to establish that the jury's verdict should be invalidated. See Thompson v. Direct Impact, Co., 63 F.Supp.2d 721, 723 (E.D.Va.1998), aff'd 188 F.3d 503 (4th Cir.1999). In ruling on a renewed motion for judgment as a matter of law, a court may allow the jury's verdict to stand, order a new trial, or direct entry of judgment as a matter of law. See Fed. R.Civ.P. 50(b). In sum, "[a] renewed motion for judgment as a matter of law is not an occasion for the Court to usurp the jury's authority to weigh the evidence and gauge the credibility of witnesses." See Thompson, 63 F.Supp.2d at 723 (citing Taylor v. Home Ins. Co., 777 F.2d 849, 854 (4th Cir.1985)). "The defendant bears a `heavy burden' in establishing that the evidence is insufficient to uphold the jury's verdict." Thompson, 63 F.Supp.2d at 723 (citing Price, 93 F.3d at 1249).
2. ERM's Argument that the SCUTPA Only Applies to Consumer Protection or Antitrust Activity
In its Rule 50(b) motion, ERM reasserts an argument it made in its Rule 50(a) motion. It argues that the SCUTPA is limited solely to instances of consumer protection or antitrust activity, because the FTC Act [15 U.S.C. § 45(1)(n)] is so limited. ERM premises this argument on § 39-5-20(b) of the SCUTPA, which provides:
[I]t is the intent of the Legislature that in construing paragraph (a) of this section [declaring unlawful unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce] the courts will be guided by the interpretations given by the Federal Trade Commission and the Federal Courts to § 5(a)(1) of the Federal Trade Commission Act (15 U.S.C. 45(a)(1)), as from time to time amended.
Contrary to ERM's argument, § 39-5-20(b) merely provides that the courts shall be guided by the FTC and federal court interpretation.3 The language of the SCUTPA itself declares unlawful "unfair methods of competition and unfair or deceptive acts or practices within the conduct of any trade or commerce." S.C.Code Ann. § 39-5-209(a). The South Carolina Supreme Court recently held that "the provisions of any services constitutes commerce within the meaning of the UTPA." Taylor v. Medenica, 324 S.C. 200, 479 S.E.2d 35, 44 (1996). In at least two cases, the South Carolina Supreme Court affirmed the applicability of the SCUTPA in contexts that fall outside of the "usual" consumer protection and antitrust actions. See, e.g., Taylor v. Medenica, 479 S.E.2d at 44 (holding that both physician and laboratory medical services fell within the expansive commerce definition of the SCUTPA); Prestwick Golf Club, Inc. v. Prestwick, Ltd. Partnership, 331 S.C. 385, 503 S.E.2d 184, 187 (1998) (holding that abrogation of tee time schedule by defendant could give rise to a SCUTPA cause of action). Moreover, a federal district court in South Carolina has specifically held that the SCUTPA is not constrained solely to consumer protection:
[176 F.Supp.2d 516]
[t]he UTPA does not expressly apply only to consumer transactions. Judicial interpretation of the UTPA, by requiring that a transaction must affect the public interest to be cognizable, may have given a de facto consumer orientation to it. But the South Carolina UTPA also includes transactions between businesses or commercial entities such as the parties to these actions. That this interpretation of South Carolina's UTPA is correct is necessarily implied by South Carolina decisions involving only non-consumer parties such as Noack Enterprises, Inc. v. Country Corner Interiors, 290 S.C. 475, 351 S.E.2d 347 (1986) and Key Co., Inc. v. Fameco Distributors, 292 S.C. 524, 357 S.E.2d 476 (1987). If a dispute between non-competing businesses or commercial entities were not within the UTPA's scope, the court would never have reached the issue of required involvement of the public interest in Noack or the issue of the insufficiency of a mere breach of contract in Fameco. Consequently, the fact the parties' transaction is not a consumer transaction does not prevent it from giving rise to a UTPA claim.
McTeer v. Provident Life & Accident Ins., 712 F.Supp. 512, 515 (D.S.C.1989). Based on the foregoing discussion, this court rejects ERM's argument that the SCUTPA is limited solely to instances of consumer protection or antitrust activity because the FTC Act [15 U.S.C. § 45(1)(n)] is so limited.
a. Liberty Mutual Proved that the Unfair/Deceptive Act Had An Impact Upon the Public Interest
In order for an unfair or deceptive act or practice to be covered under the SCUTPA, the unfair or deceptive act or practice must impact the public interest. See York v. Conway Ford, Inc., 325 S.C. 170, 480 S.E.2d 726, 728 (1997); Global Protection Corp. v. Halbersberg, 332 S.C. 149, 503 S.E.2d 483, 487 (1998). ERM argues in its Memorandum in Support of its Motion for Judgment as a Matter of Law that Liberty Mutual failed to establish the effect on the "public interest."
ERM's unfair acts or practices satisfy the public interest requirement of the SCUTPA. The holding in Burbach v. Investors Management Corp. Int'l, 326 S.C. 492, 484 S.E.2d 119, 120 (1997), can be read for the proposition that where the government regulates an economic relationship, the fact that the parties' relationship is also governed by a contract will not preclude a finding of "public interest" under the SCUTPA if the government regulation imposes on the parties a framework of duty without regard to their contractual arrangements. Following Burbach, the framework of statutory duties and obligations existing between an employer and a workers' compensation insurance carrier, especially the duties established under the Assigned Risk Plan and the South Carolina Staff Leasing Services Act (S.C.Code Ann. § 40-68-10, et seq.), place the relationship of the parties in this case clearly within the public domain.
The SCUTPA's "public interest" requirement may be satisfied in South Carolina if the alleged unfair or deceptive acts or practices have the potential for repetition. See York v. Conway Ford, Inc., 325 S.C. 170, 480 S.E.2d 726, 728 (1997); Global Protection Corp. v. Halbersberg, 332 S.C. 149, 503 S.E.2d 483, 487 (1998). Potential for repetition may be shown in two ways: "(1) by showing the same kind of actions occurred in the past, thus making it likely they will continue to occur absent deterrence; or (2) by showing the company's procedures create a potential for repetition of the unfair and deceptive acts." Daisy Outdoor Advertising Co., Inc. v. Abbott, 322 S.C. 489, 473 S.E.2d 47, 49-50 (1996). Further, the plaintiff in a SCUTPA action is required only to allege and prove those facts sufficient to demonstrate potential for repetition; at that point, plaintiff has proven an adverse effect on the public interest sufficient to recover under the SCUTPA. See Crary v. Djebelli, 329 S.C. 385, 496 S.E.2d 21, 23 (1998). Liberty Mutual presented evidence at trial of ERM's conduct in violation of the "public interest" requirement of the SCUTPA, as evidenced by the jury's specific finding of a willful violation of the SCUTPA. Bearing in mind the axiom that
[176 F.Supp.2d 517]
the whole is often greater than the sum of its parts, this court cannot overstate the importance of the legal weight of the specific jury finding. The following evidence from the trial record supports the jury's verdict.
b. ERM'S Failure to Pay What It Owed Under the Assigned Risk Plan Adversely Affected Other Insurers, Companies, and Their Insureds by Way of Increased Premium Rates
In its Memorandum in Support of its Motion for Judgment as a Matter of Law, ERM references the testimony of Liberty Mutual witness Dean Kruger to support its argument that its actions did not satisfy the public interest requirement of the SCUTPA. Reference to the record of Mr. Kruger's testimony is given below. If the jury believed any of Mr. Kruger's testimony in this regard, even if they believed nothing else regarding impact on the "public interest," this testimony alone would be sufficient to sustain the verdict of willful violation of the SCUTPA.4
Witness Vol. Page/Line Testimony/Exhibit

Dean Kruger II p. 313, l. 15-18; Cost of insurance fraud borne by all
p. 316, l. 1-17 employers in South Carolina

Dean Kruger II p. 331, l. 10-18 Premium losses are charged back to
South Carolina employers

Dean Kruger II p. 331, l. 7-25; The harm to Liberty Mutual is loss of
p. 332, l. 1-2 premium due
c. ERM's Actions Enabled It to Compete Within the Employee Leasing Industry With the Unfair Advantage of Having Low Workers' Compensation Premiums
Liberty Mutual's continuing theme throughout the trial of this case was the accelerated growth of ERM towards its ultimate sale to SES. As an employee leasing company, one of the largest cash outlays or overhead expenditures for ERM was workers' compensation insurance. Liberty Mutual argued and proved that ERM engaged in a continuing pattern of activity designed to withhold premiums due to Liberty Mutual and that these activities lowered ERM's overhead/liabilities and made it appear more profitable, and therefore, more valuable to SES. Using this scheme, ERM was able to compete unfairly with other employee leasing companies. It is this conduct which establishes both an adverse impact on the "public interest," as well as the potential for repetition required by Daisy Outdoor. The following excerpts of trial testimony support this finding:
[176 F.Supp.2d 518]

Witness Vol. Page/Line Testimony/Exhibit

Dennis Kokulak III p. 551, l. 6-17 Final premiums for workers' comp. are
tallied at year-end, but should indicate
"significant changes" affecting premium
within the year.

Jeff Tipton III p. 558, l. 19 — How workers' compensation premiums
p. 559, l. 13 are calculated

Jeff Tipton III p. 562, l. 21 — Non-disclosure of payroll by ERM
p. 563, l. 18

Jeff Tipton III p. 680, l. 18 — Deceit in application for workers' comp.
p. 681, l. 5 insurance by ERM

Ex. 173 (ERM application for W.C.
insurance dated 12/26/90)

Robert Rand VI p. 1028, l. 4-17 Discussion of ERM's practice of paying
"band-aid" claims out-of-pocket to
control workers' compensation costs

Robert Rand VI p. 1097, l. 3-17 ERM client Fisk Farms billed for workers'
comp. when Fisk Farms had no coverage

Robert Barrow VI p. 1153, l. 22 — Adding ERM Charleston location to
p. 1159, l. 11 Cincinnati Insurance policy resulted in
non-disclosure of payroll/premium
increases

Billie Attaway V p. 898, l. 13 — ERM sought to lower its workers' comp.
p. 900, l. 7 premiums by decreasing the claims it
filed by handling "band-aid" claims
in-house through Kelly Yountz, per B.
Attaway's direction

(1). ERM Misled Some Clients As To Whether They Had Workers' Compensation Insurance Coverage Placing Liberty Mutual and the Uninsured Clients At Risk
Another focus of Liberty Mutual at the time of trial was ERM's deception of some clients as to whether they had workers' compensation insurance, thereby placing Liberty Mutual and the uninsured clients at risk for uncovered claims. Liberty Mutual submitted credible evidence that a subsidiary of ERM, At Once Temporary Services, ("AOTS") was concealed from Liberty Mutual from its inception through the 1994 audit; was initially not charged workers' compensation premiums by ERM; and then later was overcharged workers' compensation premiums for coverage it did not in fact have.
Additionally, clients such as St. Louis Beer Sales ("SLBS"), Bullet Deliveries, and Fisk Farms, had their accounts charged by ERM for workers' compensation premiums which ERM did not pay to Liberty Mutual, nor was there coverage in place from Liberty Mutual for these client companies. This pattern of conduct also satisfies the public interest component of the SCUTPA because these practices of ERM were in fact repeated, and thus capable of repetition. Moreover, in addition
[176 F.Supp.2d 519]
to Liberty Mutual, innocent third party clients and their employees were placed at significant risk of non-coverage by the deceptive conduct of ERM. The testimony supporting this finding will be subdivided into two smaller categories, as follows:
(a). ERM Misled Some Clients as to Whether They Had Workers' Compensation Insurance
....

d. ERM Deceived the Cincinnati Insurance Co., Fireman's Fund & the Georgia Assigned Risk Plan When it Tried to Obtain New Coverage in Georgia
Liberty Mutual showed that after its relationship with ERM soured in the wake of the 1994 audit, ERM began to search for alternative means to satisfy its workers' compensation insurance requirements, including the retainer of an insurance agent in Georgia. This agent, Robert Barrow, recommended that ERM form a Georgia corporation. The purpose of forming this corporation, as explained by Liberty Mutual witness Dean Kruger, was to "back-door" the substantial payroll reporting requirements of ERM's Charleston operation and clients in other states into Georgia by setting up a shell corporation in Georgia initially, and then moving additional payroll/clients on the Georgia policy at a later date. According to Liberty Mutual, the net result of the scheme was that ERM, through ERM of Georgia, deceived the Cincinnati Insurance Company, Fireman's Fund Insurance Company, and the Georgia Assigned Risk Plan by establishing the shell corporation and misrepresenting over $20,000,000 of payroll liability from ERM's South Carolina operation, in addition to its clients in other states. Citations to the record supporting the foregoing are given below.
Witness Vol. Page/Line Testimony/Exhibit....

Billie Attaway V p. 927, l. 23 Plan to set up Georgia "shell corporation"

Billie Attaway V p. 939, l. 19-23; ERM to set up shell Georgia corporation

Billie Attaway V p. 949, l. 15 Further discussions on ERM setting up
shell Ga. corporation through Robert
Barrow; voted on by all principals of
ERM........

This case was complex. Plaintiff reconstructed an audit of the 1994 Policy that ERM had attempted to frustrate. Because ERM was a staff leasing company with diverse clients in numerous states, in order to verify (or complete) ERM's records, plaintiff sought extensive document production from ERM's clients and former agents which included having to obtain records held by the FBI. Plaintiff also reviewed and categorized an estimated 30,000 documents in order to prepare for trial.......

 In the instant case, the amount in controversy has always approached one million dollars in actual unpaid premiums. On September 22, 1995, Liberty Mutual calculated the final amount of earned premium due on the 1994 Policy to be $1,377,934 and invoiced ERM for this amount; because ERM made two payments of $42,538.75 each during the 1994 Policy year, Liberty Mutual calculated that ERM owed Liberty Mutual a balance of $1,293,551.50. This was the amount of actual damages sued upon in Count I of the Complaint. During the course of litigation, plaintiff adjusted its this figure downward — in effect, giving ERM credit after plaintiff finally was able to review records which ERM withheld during the audit on the 1994 Policy. Before trial, Liberty Mutual filed and served an amended complaint seeking $957,128.00 plus pre-judgment interest. Moreover, at trial Liberty Mutual asked for — and received — a verdict of $956,953.08.
Likewise, the favorable result obtained by plaintiff's counsel is obvious; Liberty Mutual received an actual damages award $956,953.00, which was only $174.92 less than requested in the amended complaint's prayer for relief. Plaintiff not only recovered on its breach of contract claim, but succeeded in convincing the jury that ERM had willfully violated the SCUTPA's prohibition against unfair and deceptive methods, acts, and trade practices, allowing plaintiff to recover treble damages and its attorney's fees and costs. In light of the facts that ERM: (1) refused to pay Liberty Mutual more than $85,077.50 in premiums on the 1994 Policy; (2) engaged in a scheme to deprive Liberty Mutual of premiums due; (3) forced Liberty Mutual to engage in months of investigation and almost two years of federal court litigation to protect its rights; and (4) never admitted that it owed Liberty Mutual more than $250,000.00, plaintiff's counsel clearly obtained a favorable result.
(7) Experience, reputation and ability of the attorney
The ninth Johnson factor requires the Court to consider the reputation, experience and ability of the attorneys involved. Affidavits submitted by plaintiff's principal attorneys, Mr. Morrison and Ms. Szymoniak, regarding their biographical information; reveal these attorneys' experiences, reputations, and abilities.
(8) Undesirability of the case
While this was an difficult case, in terms of both complexity and preparation, it was not per se undesirable. Thus, the tenth Johnson factor will be deemed a neutral factor that will not affect the award of fees in this case.
B. Analysis of Reasonable Number of Hours
After determining the reasonable hourly rate, the Court must next determine what constitutes a reasonable number of hours. See Trimper, 58 F.3d at 76. In so doing, it has been held that the court will pay close attention to the detailed bill submitted by plaintiff's counsel recognizing that:
[176 F.Supp.2d 537]
[c]ounsel for a party statutorily entitled to recover attorney's fees must exercise billing judgment and exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary. Hours that are not properly billed to one's client also are not properly billed to one's adversary pursuant to statutory authority.
Lucas, 901 F.Supp. at 1058 (quoting Hensley, 461 U.S. at 434, 103 S.Ct. 1933). This court has previously found that Johnson factors one, two, three, seven, eight, nine, eleven and twelve are relevant to the analysis of the reasonable number of hours billed. See id. The court again notes that defendant has not objected to the number of hours billed by plaintiff's attorneys.
(1) Time and labor required
Plaintiff submitted affidavits from Mr. Morrison, as well as Ms. Szymoniak and the managing partner of her firm, Mr. Cullen, that they personally reviewed their bills. Two independent attorneys, Mr. Wills (Charleston, SC) and Mr. Hutchison (Boca Raton, FL) also reviewed the invoices and deemed them to be consistent with the demands of the case. This court finds that the hours charged by plaintiff's attorneys and their staffs are reasonable expenditures of time.
(2) Novelty and difficulty of questions
This case presented some novel and difficult questions of law and fact. The invoices submitted by plaintiff adequately reflect the hours spent in research, drafting and trial preparation necessary to demonstrate this point.
(3) Skill required to properly perform the legal services
The hours expended by plaintiff's counsel are reasonable for attorneys of their respective levels of skill and experience.
(4) Time limitations imposed by the client or circumstances
Plaintiff conceded that there were no unduly burdensome or extraordinary time constraints imposed by the litigation in this case. Thus, the seventh Johnson factor is neutral to the instant analysis and there is no basis to adjust the requested fees upward or downward.
(5) Amount in controversy and results obtained
The amount in controversy in this case has always been significant — as demonstrated by the jury's actual damages award and finding of a willful violation of the SCUTPA by ERM. The requested attorney's fees are reasonable in light of the results obtained on the SCUTPA cause of action. Plaintiff is entitled to treble damages in this case pursuant to the provisions of S.C.Code Ann. § 39-5-140(a). Thus, plaintiff will recover damages in the amount of $2,870,859.00, exclusive of prejudgment interest. Plaintiff's fee request is less than one-third of the entire judgment amount due and owing by ERM to plaintiff, which would be in line with a contingency award had plaintiff and its counsel entered into such an agreement.
(6) Experience, reputation and ability of the attorney
The hours spent on this case by plaintiff's attorneys are commensurate and reasonable in light of their respective levels of experience as compared to those that would have been spent by other attorneys of comparable experience.
(7) Nature/length of the professional relationship between attorney & client
This was the first time the attorney at both Holmes & Thomson and Moore &
[176 F.Supp.2d 538]
Van Allen represented Liberty Mutual. The Eastern District of Virginia has opined that a new attorney-client relationship permits the reasonable assumption, that, in general, significant time be devoted to trial preparation. See Estes v. Meridian One Corp., 77 F.Supp.2d 722, 728 (E.D.Va.1999).
By contrast, Ms. Szymoniak and the attorneys at her firm have a long-standing professional relationship with Liberty Mutual. Regardless of the differences in their relationship with Liberty Mutual, this was a difficult case to prepare and prosecute to verdict.
At bottom, there is nothing unusual about the length of counsels' respective relationship with Liberty Mutual that would warrant a downward adjustment from their requested hourly rates. Moreover, at least one district court has found that when an attorney has performed work for a client in the past, and the client has previously paid the same customary rates charged by the attorney, that evidence weighs in favor of a finding that the fees sought are reasonable. See ABC, Inc. v. Primetime, 67 F.Supp.2d 558, 565 (M.D.N.C.1999). This court finds that the requested fees are reasonable in light of the fees charged in Charleston and the relationship Szymoniak had with Liberty Mutual.
(8) Awards in Similar Cases
There are few reported South Carolina decisions, either from state or federal courts, which would demonstrate comparable awards in the relevant community on SCUTPA claims. In 1998, the South Carolina Supreme Court affirmed an award of $500,000.00 in attorney's fees in a SCUTPA claim against a medical laboratory, where the plaintiff's trebled damages were $108,726.00. See Taylor v. Medenica, 331 S.C. 575, 503 S.E.2d 458, 460-1 (1998). Also, in Global Protection Corp. v. Halbersberg, 332 S.C. 149, 503 S.E.2d 483, 489 (1998.), the Court awarded attorney's fee in the amount of $311,819.89 where actual damages (before they were trebled) were $354,207.05.
......

[176 F.Supp.2d 540]
This court finds that the fees charged to the client for summer associate billing at Moore & Van Allen, PLLC are excessive. Accordingly, this court reduces the $90.00 rate charged to Liberty Mutual to $65.00 for summer associate research and analysis, the average rate of a paralegal in this community. Thus, the amount awarded to plaintiff for the costs of summer associate billing is reduced from $4,311.00 to $3113.50. Thus, the total amount of attorney's fees awarded to plaintiff is $885,133.70
(D) COSTS
Plaintiff also seeks recovery of its costs pursuant to S.C.Code Ann. § 39-5-140(a). Documentary support for costs in the amount of $41,127.30 billed to plaintiff by were submitted to the court.8 While ERM has generally objected to any SCUTPA damages being awarded to plaintiff in this case, it has not specifically objected to plaintiff's submission of costs. Accordingly, this court awards plaintiff $41,127.30 in costs.
(E) PREJUDGMENT INTEREST
Liberty Mutual Insurance Company requests that this court award prejudgment interest at the rate of 8.75% per annum, in accordance with S.C.Code Ann. § 34-31-20.
State law governs an award of prejudgment interest in a diversity action. See Hitachi Credit America Corp. v. Signet Bank, 166 F.3d 614, 633 (4th Cir.1999) "The law allows prejudgment interest on obligations to pay money from the time when, either by agreement of the parties or operation of law, payment is demandable, if the sum due is certain or capable of being reduced to certainty." APAC Carolina, Inc. v. Town of Allendale, South Carolina, 41 F.3d 157, 165 (4th Cir.1994) (citing Babb v. Rothrock, 310 S.C. 350, 426 S.E.2d 789, 791 (1993)). Specifically, South Carolina Code § 34-31-20(a) provides for an award of prejudgment interest on obligations to pay money, "in all cases of accounts stated and in all cases wherein any sum or sums of money shall be ascertained and, being due, shall draw interest according to law, the legal interest shall be at the rate of eight and three-fourths percent per annum." (Law Co-Op 2000). This court has held that under South Carolina law, "[o]rdinarily, the use of the word `shall' in a statute means that the action referred to is mandatory." Holt v. State Farm Mut. Auto. Ins. Co., 870 F.Supp. 658, 664 (D.S.C.1994) (citing South Carolina Dep't of Highways and Public Transp. v. ***inson, 288 S.C. 189, 341 S.E.2d 134, 135 (1986)). When a statute is clear and explicit, there is no room for construction by the court, and the court "must therefore apply it literally. Taken literally, the word `shall' is mandatory." Holt, 870 F.Supp. at 664 (citing State v. Foster, 277 S.C. 211, 284 S.E.2d 780 (1981)). The General Assembly used the word "shall" twice in § 34-31-20(a). A plain reading of the statute indicates that prejudgment interest shall be awarded on ascertainable amounts of money that are due and owing, and that the rate shall be at 8.75%. The statutory language is unambiguous and, accordingly, mandates an award of prejudgment interest in this matter.
"As a general rule, prejudgment interest is not appropriate when a plaintiff seeks to recover unliquidated
[176 F.Supp.2d 541]
damages." APAC Carolina, Inc. v. Town of Allendale, South Carolina, 41 F.3d 157, 165 (4th Cir.1994). However, "the fact that the sum due is disputed does not render the claim unliquidated for the purposes of an award of prejudgment interest." Babb v. Rothrock, 310 S.C. 350, 426 S.E.2d 789, 791 (1993); Wayne Smith Construction Co., Inc. v. Wolman, Duberstein and Thompson, 294 S.C. 140, 363 S.E.2d 115 (1987). "The proper test for determining whether prejudgment interest may be awarded is whether or not the measure of recovery, not necessarily the amount of damages, is fixed by conditions existing at the time the claim arose." Babb, 426 S.E.2d at 791 (citing 47 C.J.S. Interest & Usury § 49 at 124-25 (1982)). When an otherwise unliquidated claim is capable of being reduced to certainty by a simple mathematical calculation, it can be considered liquidated for the purpose of awarding prejudgment interest. See Builders Transport, Inc. v. South Carolina Prop. & Cas. Ins. Guar. A**'n, 307 S.C. 398, 415 S.E.2d 419, 424 (1992).
ERM claims that the premium amounts it admittedly owed Liberty Mutual were not demandable, primarily because ERM claims Liberty Mutual intermingled its breach of contract and SCUTPA claims. However, at trial, ERM conceded that (i) that the 1994 policy was a binding contract of insurance between ERM and Liberty Mutual; and (ii) that ERM owed Liberty Mutual additional premium as a result of that insurance policy.
Under the terms of the 1994 policy, ERM owed Liberty Mutual an obligation to pay the full amount of premium, as calculated by the audit. There is no question that premium was demandable under the 1994 Policy. Liberty Mutual clearly proved that the measure of recovery was fixed by conditions existing at the time the claim arose.
As to the requirement that the demandable amount was certain or capable of being reduced to certainty, plaintiff proved that the amount was capable of being reduced to certainty. Liberty Mutual's expert, Robert Tipton, testified that the formula by which a workers' compensation premium is calculated is fairly simple: following audit by the carrier, the NCCI mandated rate for each employee classification is factored in against the employer's total payroll, and then adjusted up or down based on the employer's recent claims experience ("experience modifier"). In the case of assigned risks, there is an additional modifying factor, the ARAP. The actual calculation involves simple arithmetic.
At trial, the parties did not dispute Mr. Tipton's methodology. Accordingly, this court finds that the amount of premium due and owing to Liberty Mutual was capable of being reduced to certainty. Thus, under the provisions of S.C.Code § 34-31-20, interest would accrue from October 22, 1995 to June 28, 2000 at the rate of 8.75% per annum. Thus, this court awards Liberty Mutual prejudgment interest in the amount of Three Hundred Eighty-Five Thousand One Hundred Forty-Five and 00/100 ($385,145.00) Dollars.
III. Individual Defendants' Post-Trial Motion
Defendants Attaway, Berman, King, Rand, & Yountz's request their costs and attorneys' fees for defense of the RICO actions brought by Liberty Mutual against them. Counts III and IV of the Complaint set forth causes of action against the individual Defendants, William F. Attaway, Robert Berman, William E. King, III, Robert T. Rand, and Kelli Yountz ("Individual
[176 F.Supp.2d 542]
Defendants") under § § 1962(a) and 1962(c) of the Racketeering Influenced and Corrupt Organizations Act ("RICO"). On February 23, 2000, ERM and the Individual Defendants filed on Offer of Judgment Pursuant to Rule 68. ERM and the Individual Defendants offered "to allow judgment to be taken against them in this action" in the amount of $100,000. Plaintiff rejected the offer.
On February 25, 2000, Individual Defendants moved for summary judgment on Counts III & IV of Plaintiff's Complaint. At the May 18, 2000 hearing on the parties' cross-motions for summary judgment, the Court granted Individual Defendants' summary judgment motion as to the § 1962(a) RICO cause of action. (May 23, 2000 Order, at pp. 2-3) The trial commenced on June 12, 2000. At the conclusion of Defendants' case-in-chief, the Court granted the Individual Defendants' Rule 50 motion with regard to the § 1962(a) RICO cause of action. (Judgment Dated 6/29/2000). The Individual Defendants now move pursuant to Federal Rules of Civil Procedure 54(d) and 68 and 18 U.S.C. § 1964(c) for an Order awarding them attorney's fees and costs incurred in their defense of this case.
(A) Costs
Plaintiff concedes that the Individual Defendants are "prevailing parties" with respect to the RICO causes of action. Accordingly, the Individual Defendants are entitled to recover their taxable costs pursuant to Rule 54(d)(1). Individual Defendants incurred costs in the defense of this matter in the total amount of $32,625.50. Plaintiff has not objected to this amount.
(B) Attorney's Fees
Individual Defendants contend that as the "prevailing parties" on the RICO cause of action, they are entitled to recover attorney's fees alternatively under (i) § 1964(c) of the RICO statute; (ii) Rule 54(d); and/or (iii) Rule 68. This court finds that Individual Defendants are not entitled to recover attorney's fees under any of these theories.
(1) Section 1964(a) of the RICO Statute
Section 1964(a) provides that "any person injured in his business or property by reason of a violation of section 1962(a) of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of suit, including a reasonable attorney's fees." 18 U.S.C. § 1964(c). Applying the plain language of the statute, a RICO defendant cannot recover its attorney's fees because a defendant cannot be a person injured in his business or property by racketeering activity. See 18 U.S.C. § 1964(c). As stated by one RICO commentator, Section 1964(c) is a "mandatory, one-way fee-shifting provision", in which "only plaintiffs who obtained judgments on the merits may receive fees." Berger, Civil Rico: A Definitive Guide 153 (2d ed. ABA 2000).
The Ninth Circuit has held that "prevailing defendants cannot recover attorneys' fees pursuant to § 1964(c) of the RICO statute because they were prevailing defendant in this action. That provision only permits prevailing plaintiffs to recover fees." Chang v. Chen, 95 F.3d 27, 28 (9th Cir.1996) (citing 18 U.S.C. § 1964(c); Religious Technology Ctr. v. Wollersheim, 796 F.2d 1076, 1082-83 (9th Cir.1986), cert. denied, 479 U.S. 1103, 107 S.Ct. 1336, 94 L.Ed.2d 187 (1987)). Although there are no Supreme Court or Fourth Circuit Court of Appeals cases addressing the issue raised in Chang, the Ninth Circuit's reasoning is applicable to the instant case. In
[176 F.Supp.2d 543]
spite of the fact that the Individual Defendants are prevailing parties in the RICO action, § 1964(c) does not warrant granting them attorney's fees. They are not precluded, however, from asserting other grounds for recovery of attorney's fees as long as those grounds are independent of the RICO statute. See 95 F.3d at 28 ("Courts have never construed [Section 1964(c)] of the RICO statute as precluding a prevailing defendant from recovering attorneys' fees when authorized elsewhere.").
(2) Rule 68
Individual Defendants contend that they are entitled to recover costs under Rule 68 because plaintiff rejected their February 23, 2000, offer of judgment and failed to win a "more favorable" RICO award. (Individual Defendants' Memo at p. 2) The Individual Defendants have been awarded costs under Rule 54(d)(1), therefore, their Rule 68 arguments for costs are now rendered moot.
As to their arguments for recovery of attorney's fees under Rule 68, Rule 68 provides that "[i]f the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer." The Offer of Judgment dated February 23, 2000, read as follows:
Now come Defendants Employee Resource Management, Inc.; William Attaway, Jr., Robert Berman, William E. King, III, Robert T. Rand, and Kelli Yountz, by and through their attorneys, and submit the following offer of judgment: Pursuant to Rule 68 of the Federal Rules of Civil Procedure, Defendants hereby offer to allow judgment to be taken against them in this action, in the amount of One Hundred Thousand Dollars ($100,000.00) which sum shall be include attorney's fees, together with costs accrued to date. This offer is made for the purposes specified in Rule 68 and is not to be construed as an admission that the Defendants are liable in this action or that the Plaintiff has suffered any damage.
ERM and the Individual Defendants collectively made an Offer of Judgment to plaintiff. At trial, plaintiff obtained a judgment that was $856,592.08 more favorable to it than the February 23, 2000. Once trebled, this judgment was $ 2,770,859.00 more favorable than the Offer of Judgment. Thus, this court denies Individual Defendants' motion for attorney's fees under Rule 68.
IV. CONCLUSION
It is therefore,
ORDERED, for the foregoing reasons that defendant's Motions for a Judgment as a Matter of Law, or in the alternative New Trial, and in the alternative, for a New Trial Nisi Remittitur are DENIED.
IT IS FURTHER ORDERED that,
Plaintiff's Request for an Election of Remedy is DENIED.
IT IS ORDERED that,
Plaintiff's Motion for Relief from Judgment is GRANTED.
IT IS ALSO ORDERED that,
Plaintiff's Motion for Attorney's Fees and Costs is GRANTED.
IT IS ORDERED that,
Plaintiff's Motion for an award of prejudgment interest is GRANTED.
IT IS FURTHER ORDERED that,
Individual Defendants' Motion for Attorney's Fees and Costs is GRANTED IN
[176 F.Supp.2d 544]
PART AND DENIED IN PART.9
V. JUDGMENTS
IT IS ORDERED that judgment be and the same is hereby entered for plaintiff in the amount of $2,870,859.00 for damages under the SCUTPA.
IT IS FURTHER ORDERED that judgment be and the same is hereby entered for plaintiff in the amount of $ 885,133.70 for attorney's fees.
IT IS ORDERED that judgment be and the same is hereby entered for plaintiff in the amount of $41,127.30 for costs incurred in this litigation.
IT IS FURTHER ORDERED that judgment be and the same is hereby entered for plaintiff in the amount of $385,145.00 for prejudgment interest.
Plaintiff's TOTAL AWARD IS $4,182,265.00
IT IS ORDERED that judgment be and the same is hereby entered for Individual Defendants in the amount of $32,625.50 for their costs incurred as a result of this litigation.
Individual Defendants' TOTAL AWARD IS $32,625.50.
AND IT IS SO ORDERED.....

3. The FTC does not provide a private cause of action, while the SCUTPA does. See generally, Plowman v. Bagnal, 316 S.C. 283, 450 S.E.2d 36 (1994).

4. This court has carefully reviewed the trial excerpts submitted by Liberty Mutual and has not merely rubber-stamped the excerpts submitted by plaintiff in support of its arguments. This court omitted those excerpts that are not applicable to the public interest analysis and also those that were superfluous. These excerpts clearly bolster the jury's determination that ERM willfully violated the SCUTPA.........

6. The damages verdict form read: If you answered no to question I on the breach of contract verdict form or you answered yes to question 2 on the South Carolina Unfair Trade Practices Act Verdict Form, then please answer the following question: What is the total amount of actual damages to which Plaintiff is entitled as a result of its claims against Defendant? * The jury answered the question with a damages award in the amount of $956,592.08.

7. Plaintiff cites South Carolina case law for the proposition that it is entitled to elect its remedies post-trial in this case. While this court posits that this is a procedural issue, properly governed by federal law, it finds that if South Carolina case law governed the issue, plaintiff's request would also be denied. The doctrine of election of remedies involves a choice between two or more different and coexisting modes of procedure and relief afforded by law for the same injury. Its purpose is to prevent double redress for single wrong. Use of the doctrine is limited to cases where a double recovery by the plaintiff is threatened. When one set of facts entitles the plaintiff to alternative remedies, he may plead and prove his entitlement to both; however, the plaintiff may not recover both. The plaintiff should have a full opportunity to prove his claim to some form of relief, but he should not receive a double recovery. Cowart v. Poore, 337 S.C. 359, 523 S.E.2d 182, 185 (1999) (citing Tzouvelekas v. Tzouvelekas, 206 S.C. 90, 33 S.E.2d 73 (S.C 1945)); Save Charleston Foundation v. Murray, 286 S.C. 170, 333 S.E.2d 60 (1985). The election of remedies doctrine may be used by the defendant or the trial judge. See id. In the case at bar, Liberty Mutual was given the opportunity to prove its breach of contract and SCUTPA claims. It is important to note that ERM conceded that there had been a breach of contract and only challenged the breach of contract cause of action as being barred by the statute of limitations and the amount of damages due to plaintiff. The jury found that this claim was not barred on statute of limitations grounds and also found for plaintiff on the unfair trade practices cause of action. There is no danger of a double recovery in this case. Moreover, the doctrine is to be used by defendants or judges, but not plaintiffs. Accordingly, it is not proper for this court to grant plaintiff's request for election.

8. Holmes & Thomson billed plaintiff $557.70 for costs. Moore & Van Allen billed plaintiff $8,660.95 for costs. Szymoniak & Ridge billed plaintiff $31,908.65 for costs.

9. This court grants Individual Defendants' motion with regard to costs as proper under Rule 54, but denies their motion as to attorney's fees incurred in the defense of this action.

* The jury answered the question with a damages award in the amount of $956,592.08.

Wow, scammers who run scams on big companies, crazy stuff ERM had the guts to scam a big company. Glad Liberty Mutual got justice though. I wonder if any of the defendants ended up with jail time or something for their fraud and deceit scam they ran on Liberty Mutual.

Billie Attaway, Jr of Mount Pleasant, SC & Charleston, SC is a fraudster scam artist crook who engages in mortgage fraud, real estate fraud & has been at this for over 30 years therefore he has perfected his craft to avoid getting caught. In his early years, his former company lost a big lawsuit to Liberty Mutual.

Another resurrected vendetta thread.