Janice Leaman v. Gregg Wolfe
17-1467
3rd Cir.Nov 17, 2017Background
- Janice Leaman and Gregg Wolfe were former business partners who entered a 2012 settlement agreement; dispute over Wolfe’s payments led to litigation.
- This Court previously held Wolfe breached the 2012 settlement; case remanded to the District Court to determine damages and attorney’s fees.
- District Court awarded Leaman $38,873.32: $10,523.97 prejudgment interest and $28,349.35 in attorney’s fees (after reducing lodestar).
- District Court found Wolfe’s February 2013 default triggered an acceleration clause, making Wolfe liable for interest on the unpaid balance as reduced by subsequent payments.
- District Court adjusted attorney fees: reduced plaintiff’s former-counsel hourly rate and then cut the lodestar by 50% based on relative success and intertwined claims.
- Leaman’s consequential-damages claim denied because the noncompete was nullified by Wolfe’s default, so she could have worked without a court ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Prejudgment interest: scope and calculation | Leaman: acceleration clause allowed interest on entire unpaid balance (reduced by monthly payments) from default | Wolfe: only interest on the single late payment (13 days on $12,500) and/or waiver by his letter | Court: Acceleration was triggered; interest on entire unpaid balance (reduced by payments) awarded ($10,523.97) |
| Waiver of acceleration/right to interest | Leaman: no waiver; Wolfe’s continued payments don’t negate acceleration | Wolfe: his letter and continued payments show waiver/estoppel | Court: Letter not properly before district court on summary judgment and insufficient even if considered; no waiver found |
| Attorney’s fees: entitlement | Leaman: prevailing party entitled to full lodestar ($70,505.92) | Wolfe: minimal fees only (~$265.13) | Court: Leaman prevailed; lodestar adjusted (reduced hourly rate for first counsel), then cut 50% for partial success, awarding $28,349.35 |
| Consequential damages (lost ability to work) | Leaman: she couldn’t work as a court reporter until breach was judicially declared | Wolfe: default already voided noncompete; she could work | Court: Noncompete was void upon Wolfe’s default; consequential damages claim fails |
Key Cases Cited
- Benefit Tr. Life Ins. Co. v. Union Nat’l Bank of Pittsburgh, 776 F.2d 1174 (3d Cir. 1985) (prejudgment interest is allowable from time payment is due after breach)
- Palmer’s Garage, Inc. v. Palmgreen, 117 A.2d 721 (Pa. 1955) (interest arises on breach where damages are ascertainable by computation)
- Cresci Constr. Servs., Inc. v. Martin, 64 A.3d 254 (Pa. Super. Ct. 2013) (prejudgment interest recoverable as a matter of law and reduced by deductions to which breaching party is entitled)
- Hensley v. Eckerhart, 461 U.S. 424 (1983) (lodestar and adjustment for degree of success in fee awards)
- Rode v. Dellarciprete, 892 F.2d 1177 (3d Cir. 1990) (district court’s discretion in awarding fees reviewed for abuse)
- Washington v. Philadelphia Cty. Court of Common Pleas, 89 F.3d 1031 (3d Cir. 1996) (appellate deference to district court’s factual findings and application of correct criteria)
- Mancini v. Northampton Cty., 836 F.3d 308 (3d Cir. 2016) (review of fee determinations and district court discretion)
- Lazaridis v. Wehmer, 591 F.3d 666 (3d Cir. 2010) (standards for motions for reconsideration under Rule 59)
- Bailey v. United Airlines, 279 F.3d 194 (3d Cir. 2002) (district court may refuse evidence in reconsideration that was available earlier)