Airlines Reporting Corp. v. Sarrion Travel, Inc.
2012 U.S. Dist. LEXIS 24044
E.D. Va.2012Background
- ARC filed suit on Sept 2, 2011 against Sarrion Travel, Inc. and Edith Vargas for breach of an Agent Reporting Agreement and related tort/fiduciary claims.
- ARC alleges Sarrion breached the ARA by failing to pay for airline tickets; also alleges conversion and fiduciary breach.
- Defendants did not answer or participate; ARC obtained default and sought default judgment including costs and attorney’s fees.
- Magistrate Judge recommended judgment on the merits but denied attorney’s fees; ARC objected to the fee award seeking $60,856.62.
- This is a Virginia-choice-of-law contract and a diversity case; fee-shifting provision in the ARA governs attorney’s fees; district court determines reasonableness.
- Court ultimately awards a reduced attorney’s fee, finding $13,980.00 reasonable for fees incurred and anticipated collection efforts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ARC may recover attorney’s fees under the ARA in a default/diversity action. | ARC | Sarrion | ARC entitled to some fees; not the full requested amount. |
| What is the proper interpretation of the ARA’s 'actually incurred' language for fee shifting. | ARC | Sarrion | 'Actually incurred' extends to fees incurred or to be incurred in collection, not limited to fees paid at judgment. |
| What is a reasonable attorney’s fee under Virginia law for this record. | ARC | Sarrion | Contingency-fee amount is not controlling; reasonableness turns on Mullins/Robinson factors; record supports $13,980.00. |
| Should future collection-related fees be factored into the award given sparse record of anticipated hours. | ARC | Sarrion | Court may consider future services, but record insufficient; award limited to present and reasonably estimated future value, totaling $13,980.00. |
Key Cases Cited
- Globalsantafe Corp. v. Globalsantafe.Com, 250 F. Supp. 2d 610 (E.D. Va. 2003) (admissions effect of default; court assesses relief on the merits)
- Ryan v. Homecomings Financial Network, 253 F.3d 778 (4th Cir. 2001) (default does not resolve conclusions of law; analyze pleadings for relief)
- Mullins v. Richlands National Bank, 241 Va. 447 (1991) (fee-shifting contracts; reasonable fees based on factors; future services may be estimated)
- Robinson v. Equifax Information Services, LLC, 560 F.3d 235 (4th Cir. 2009) (twelve Johnson factors for reasonableness; lodestar framework)
- City of Burlington v. Dague, 505 U.S. 557 (1992) (risk of nonpayment not a consideration under fee-shifting statutes but may inform reasonableness)
- In re Abrams & Abrams, P.A., 605 F.3d 238 (4th Cir. 2010) (contingency-fee considerations; relevance to reasonableness in fee awards)
- Colgan Air, Inc. v. Raytheon Aircraft Co., 507 F.3d 270 (4th Cir. 2007) (Virginia law factors generally align with federal guides on reasonableness)
- G.S. v. U.S. v. Butts, 2011 WL 4971424 (D.S.C. 2011) (contingency-fee agreement not controlling for reasonable fees)