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Tramp v. Associated Underwriters, Inc.

United States District Court, D. Nebraska

July 12, 2019

MARJORIE TRAMP, Plaintiff,
v.
ASSOCIATED UNDERWRITERS, INC., Defendant.

          MEMORANDUM AND ORDER

          LAURIE SMITH CAMP, SENIOR UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the Motion for Attorney Fees and costs in Aid of Execution on the Judgment, ECF No. 183, filed by Plaintiff Marjorie Tramp, [1] and the Motion for Rule 11 Sanctions, ECF No. 187, filed by Defendant Associated Underwriters, Inc. Tramp's Motion will be granted in part, and the Motion for Sanctions will be denied.

         BACKGROUND

         Plaintiff brought this action seeking damages for harassment, retaliation, and termination based on age, race, disability, and sex, in violation of Title VII of the Civil Rights Act (42 U.S.C. § 2000e-5), the Americans with Disabilities Act, 42 U.S.C. §§ 12102. (ADA), 42 U.S.C. § 1981, and the Age Discrimination in Employment Act (ADEA) (29 U.S.C. § 626, et seq.). After motion practice and an appeal, Tramp proceeded to trial on her ADEA claim under theories of discrimination and retaliation. On June 19, 2015, the jury returned a verdict in favor of Associated Underwriters on Tramp's ADEA discrimination claim, but in Tramp's favor on her ADEA retaliation claim in the amount of $128, 680.78. ECF No. 130. The jury also determined that Associated Underwriters' conduct was willful. Id. The Court entered Judgment, ECF No. 135, in Tramp's favor in the amount of $257, 361.56, plus post-judgment interest at the rate of .27 percent per annum. ECF No. 135. On October 16, 2015, the Court awarded attorney's fees in the amount of $132, 198.80 and costs in the amount of $6, 522.12. Thus, the total award to Tramp was $396, 082.48, plus post-judgment interest.

         In December of 2015, Associated Underwriters sold the entirety of its assets to Farmers National Co., and Tramp was unable to collect her Judgment from Associated Underwriters. After unsuccessful execution, Tramp requested leave to perform some post-judgment discovery with respect to the formation of a nonparty, Relinco, Inc. Tramp alleged that Associated Underwriter's sole shareholder, Greg Gurbacki, may have transferred some or all Associated Underwriter's assets to Relinco with intent to hinder, delay, or defraud Associated Underwriter's creditors. While the Court permitted Tramp to conduct limited post-judgment discovery relevant to Tramp's allegations, the Court did not conclude that Tramp was able to execute judgment against any nonparties.

         On October 27, 2016, Tramp filed a complaint in the District Court of Sarpy County, Nebraska, against Associated Underwriters; Relinco, Inc.; C-Tek Insurance Agency, LLC; Roll the Bones, LLC; C-Notes, LLC; and Gurbacki (the “State Court Litigation”).[2] In the State Court Litigation, Tramp sought to set aside several transfers under the Nebraska Fraudulent Transfer Act, Neb. Rev. Stat. §§ 36-701 to 36-712, and to pierce the corporate veils of the corporate defendants. After trial, the District Court of Sarpy County entered judgment against Associated Underwriters; Relinco, Inc.; C-Tek Insurance Agency, LLC; Roll the Bones, LLC; and Gurbacki[3] on Tramp's claims to pierce the corporate veil, but not on Tramp's fraudulent transfer claims. See State Court Order at 7, ECF No. 185-2, PageID.2149. The state court entered judgment against each defendant, jointly and severally, in the amount of $396, 082.48, the amount of the Judgment in this case.

         In her pending Motion, Tramp seeks attorney's fees and costs incurred in the State Court Litigation because she had to bring the State Court Litigation to collect on the Judgment in this case. Associated Underwriters argues that Tramp's Motion is frivolous and merits sanctions under Rule 11 of the Federal Rules of Civil Procedure.

         DISCUSSION

         I. Tramp's Right to Recover Additional Fees and Costs

         The Court must determine whether Tramp may seek additional attorney's fees and costs incurred in bringing the State Court Litigation to collect her ADEA Judgment. There is no dispute that an award of attorney's fees and costs are mandatory under the ADEA. See 29 U.S.C. § 626(b), incorporating 29 U.S.C. § 216(b). The statute states that “in addition to any judgment awarded to the plaintiff or plaintiffs, [the court shall] allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.” 29 U.S.C. § 216(b). The Court awarded Tramp fees and costs because she prevailed in the underlying litigation. Tramp seeks an additional fee award for expenses incurred to collect on the original judgment, including expenses for the State Court Litigation.

         Neither this Court nor the parties have identified any Eighth Circuit precedent or any decision of another court addressing this precise issue. However, several courts have indicated that fees incurred in post-judgment collection efforts are recoverable under a variety of statutes. See, e.g., Jenkins by Jenkins v. State of Mo., 127 F.3d 709, 716 (8th Cir. 1997) (“Reimbursement for post-judgment litigation fees can be as important as reimbursement for pre-judgment fees in accomplishing the purpose of section 1988.”).[4]The Seventh Circuit reasoned that “the entry of judgment is not the end of the litigation; in this case, it may not even be the beginning of the end.” Free v. Briody, 793 F.2d 807, 809 (7th Cir. 1986) (ERISA case).

         The Eighth Circuit has provided some guidance as to when a post-judgment fee award is appropriate. In Jenkins, the court explained that “[s]ome types of post-judgment activities are readily seen to be necessary adjuncts to the initial litigation, whereas other types of activities are more like a new, separate lawsuit and require a fee determination independent of the underlying case.” 127 F.3d at 716-17. “Thus, monitoring the defendant's compliance with court orders and enforcing the remedy are generally compensable as part of the underlying case.” Id. at 717. If “the plaintiff's claim in the post-judgment litigation is inextricably intertwined with the underlying claims, ” then a fee award is appropriate. Id. at 718.

         While there is no bright line rule for determining whether post-judgment litigation is “inextricably intertwined” with the underlying case, the Eighth Circuit has recognized some instances where a fee award for post-judgment litigation is appropriate. In Gilbert v. Monsanto Co., 216 F.3d 695, 702 (8th Cir. 2000), a plaintiff settled his ADEA claims with his employer but brought an ancillary action to enforce the settlement agreement. Id. The district court found that the employer breached the settlement agreement but denied the plaintiff's request for attorney's fees incurred to bring the ancillary enforcement action because attorney's fees were not permitted for a successful breach of contract claim. Id. at 702. The Eighth Circuit agreed that the employer breached the settlement agreement but concluded that the plaintiff was entitled to fees under the ADEA for the enforcement action. Id. The court reasoned that the plaintiff had to litigate the enforcement action to a successful conclusion to receive the benefit of the ADEA settlement. Id. The plaintiff did not merely prevail on a separate breach of contract claim. Id. Rather, the plaintiff succeeded in enforcing his ADEA judgment. Id. at 703 (reasoning that “monitoring the defendant's compliance with court orders and enforcing the remedy are generally compensable as part of the underlying case.”) (quoting Jenkins, 127 F.3d at 717).

         Similarly, Associated Underwriter's actions forced Tramp to bring the State Court Litigation to receive the benefit of Tramp's successful ADEA claim. Although the State Court Litigation involved additional parties and was a separate lawsuit, it was intertwined with Tramp's lawsuit in this Court. The state court expressly recognized that the State Court Litigation arose out of Tramp's lawsuit in this case. State Court Order at 1, ECF No. 185-2, PageID.2143. The State Court concluded that the corporate veil must be pierced to “avoid injustice” and entered judgment in Tramp's favor in the exact amount of the judgment in this case. Id. at 6, PageID.2148. Further, at least some of the evidence supporting the State Court Litigation came to light when this Court permitted Tramp to conduct additional discovery to determine whether Associated Underwriters acted with the intent to hinder or delay creditors. See Mem. and Order at 5, ECF No. 173, ...


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