The opinion of the court was delivered by: Emmet G. Sullivan United States District Judge
Before the Court is judgment creditor Bruce E. Mones' ("Mones") Motion to Reject the Special Master's Interim Report [Dkt. No. 269], Mones' Motion to Reject the Special Master's Final Report [Dkt. No. 277], judgment debtor Mobile Telecommunications Company's ("MTC") Motion to Adopt the Special Master's Final Report [Dkt. No. 278], MTC's Motion to Quash Subpoena Duces Tecum [Dkt. No. 281], and Mones' Motion for Hearing on MTC's Motion to Quash Subpoena Duces Tecum or, Alternatively, for Leave to File Surreply [Dkt. No. 287]. Magistrate Judge Alan Kay served as Special Master, pursuant to Rule 53 of the Federal Rules of Civil Procedure, to determine whether any monies are owed to Mones under the judgments entered in this case. Upon consideration of the motions, the responses and replies thereto, the applicable law, and the entire record, the Court concurs with the Special Master's ultimate recommendation that there are no additional sums owed to Mones by any judgment debtor, albeit for slightly different reasons. Accordingly, Mones' Motion to Reject the Special Master's Final Report is DENIED and MTC's Motion to Adopt the Special Master's Final Report is GRANTED. Mones' Motion to Reject the Special Master's Interim Report is DENIED AS MOOT. Finally, MTC's Motion to Quash Subpoena Duces Tecum is GRANTED and Mones' Motion for Hearing on MTC's Motion to Quash Subpoena Duces Tecum or, Alternatively, for Leave to File Surreply is DENIED.
On December 12, 2001, the Court entered judgment in favor of defendant Mones for the arbitral award amount of $500,000. See Judgment (Dec. 12, 2001); see also Minute Order (Dec. 12, 2001).*fn1 On June 19, 2003, when payment of the Judgment had yet to be completed by the plaintiff judgment debtors, the Court entered an Agreed Judgment. The Agreed Judgment states that the amount still owed to Mones by the debtors who signed onto the Agreed Judgment is "$287,166.68, plus interest at the rate of twenty-one percent (21%) and reasonable attorneys' fees and expenses incurred by Mr. Mones until this Agreed Judgment is paid in full." Agreed Judgment (June 19, 2003) [Dkt. No. 226]. On April 30, 2004, the Court requested that the parties submit pleadings regarding the amount, if any, still owed by the judgment debtors to defendant judgment creditor. On July 20, 2004, the Court sua sponte appointed Magistrate Judge Alan Kay to serve as Special Master to determine what sum, if any, is still owed to Mones.
The Special Master submitted an Interim Report on February 28, 2005, in which he laid out the calculation method for determining how much, if any, is still owed to Mones. See Special Master Interim Report (Feb. 28, 2005) [Dkt. No. 265]. The Special Master encouraged the parties to undertake a joint calculation of any amounts owed based upon his proposed formula in satisfaction and final discharge of the Judgment. In response to the Interim Report, Mones filed a motion [Dkt. No. 269] with this Court on March 21, 2005 to reject the Interim Report and vacate the Special Master's order to submit calculations in accordance with the formula in the Interim Report. Mones and MTC also submitted calculations as ordered by the Special Master. [Dkt. Nos. 271 and 272].
On April 13, 2005, prior to any decision on the motion to reject the Interim Report and in accordance with the calculations submitted by the parties, the Special Master issued his Final Report [Dkt. No. 275]. He concluded that judgment creditor Mones received a total of $766,648.25 and that this amount is $251,301.89 in excess of the amount to which Mones is entitled under the Judgment and/or Agreed Judgment. Accordingly, the Special Master recommends that the Court find that there are no additional sums owed to Mones by any judgment debtors, including MTC.
A. Special Master's Interim Report
In his Interim Report, the Special Master provided the basic formula that would govern how payments from the judgment debtors would be allocated to the outstanding debt. He instructed the parties to start with $500,000 as the total amount of the net principal payments to be made by the judgment debtors. The $500,000 figure is based on the December 12, 2001 Judgment entered by the Court and the language in the Agreed Judgment that states that "Mones is only entitled to receive a total of $500,000 in net principal payments from the jointly and severally liable plaintiffs/judgment debtors." Agreed Judgment at 5. Further, the Special Master instructed the parties that no interest on unpaid principal balances between December 1, 2001 (the date of the original Judgment) and June 19, 2003 (the date of the Agreed Judgment) should be counted. Any remaining principal balances after June 19, 2003, however, would be subject to the 21% interest rate pursuant to the Agreed Judgment. The Special Master also concluded that interest should not be calculated as compounding.
As for expenses and attorneys' fees, the Special Master concluded that only those expenses and fees incurred between June 19, 2003 and the date when the Judgment was paid off should count and debtors should not be liable for any attorneys' fees incurred after the principal amount of the Judgment was paid in full. The Special Master rejected the argument that the contingency fee charged by Mones' attorney should serve as a basis for calculating reasonable attorneys' fees. Instead, the Special Master stated that reasonable attorneys' fees "are based on the reasonable billable hours at appropriate hourly rates, necessary to effect collection of the judgment." Special Master's Interim Report at 5. The Special Master also informed the parties that attorneys' fees should be calculated based on the lodestar valuation of the time spent by Mones' attorney.
B. Special Master's Final Report
The Special Master concluded that under the June 13, 2003 Agreed Judgment, Mones was entitled to receive $515,346.36, which included the $500,000 principal judgment, plus interest of $5,556.81, expenses of $2,889.55, and legal fees of $6,900. The Special Master arrived at his final figure in the following manner. He started with the total net principal payment due to Mones -- $500,000 under the original Judgment. Then, he calculated that between December 12, 2001 and June 19, 2003, which is the period between when the Judgment was entered and the Agreed Judgment was entered, judgment debtors paid a total of $378,856.23 to Mones. Also, for that same time period, the Special Master concluded that no interest had accrued on the $500,000 Judgment because there was no indication from either the December 12, 2001 Judgment or the June 19, 2003 Agreed Judgment that interest accrued on the $500,000 Judgment before June 19, 2003. Therefore, he subtracted the payments of $378,856.23 from $500,000 to get $121,143.77. Interest began to accrue on that amount beginning June 19, 2003, at 21% annum. In other words, on June 19, 2003, when the Agreed Judgment was entered, the principal balance due to Mones was $121,143.77, and the 21% interest began accruing on that amount as of that date.
Between June 19, 2003 and October 15, 2004, judgment debtors paid Mones $387,792.02.*fn2 The Special Master first applied the payments to interest then to the principal.*fn3 After those payments were applied accordingly, the Special Master concluded that the judgment debtors overpaid Mones by $261,091.44 after full satisfaction of the Judgment.
Turning to expenses, the Special Master observed that the June 19, 2003 Agreed Judgment required the judgment debtors to pay expenses, but the December 12, 2001 Judgment did not. Therefore, he concluded that judgment debtors should be responsible for expenses incurred by Mones after June 19, 2003 until October 31, 2003, when the judgment was fully satisfied. The expenses for that time period as calculated by Mones total $2,889.55. ...