Halstead v. Mucklow (In re Mucklow)

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IN RE: WILLIAM WARREN MUCKLOW, Debtor.

JESSICA L. HALSTEAD, GENA L. ELLIOT, and TABITHA N. ADKINS, Plaintiffs, v. WILLIAM WARREN MUCKLOW, Defendant

No. 2:19-bk-20450

Adversary Proceeding Nos. 2:20-ap-02000, 2:20-ap-02001, 2:20-ap-02002

United States Bankruptcy Court, S.D. West Virginia, Charleston

August 29, 2023

MEMORANDUM OPINION AND ORDER

B MCKAY MIGNAULT JUDGE

Pending is Plaintiff Tabitha N. Adkins' Motion for Attorney Fees and Costs [dkt. 73] (the "Motion") and Memorandum in Support thereof [dkt. 74]. Ms. Adkins seeks entry of an order awarding her all attorney fees and costs incurred on her behalf to litigate this Adversary Proceeding. Defendant Mucklow failed to respond to the Motion.

As this request for attorney fees relates to this Court's prior Memorandum Opinion and Order [dkt. 71], this is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I). The Court has jurisdiction pursuant to 28 U.S.C. § 157 and 28 U.S.C. § 1334.

I.

William Warren Muckow filed his Chapter 7 bankruptcy case on October 10, 2019 (the "Petition Date").

Plaintiff Adkins commenced Adversary Proceeding No. 2:20-ap-02002 on January 10, 2002 (the "Adkins AP"). The Adkins AP was consolidated with the related adversary proceedings brought by Plaintiff Jessica Halstead and Plaintiff Gena L. Elliot by Order dated July 9, 2021, with the Halstead adversary proceeding, No 2:20-ap-02000, designated as the lead case (collectively, the "Consolidated Proceedings").

Each of the Plaintiffs were employees of Mr. Mucklow's business New Beginnings Drug Treatment Center, Inc., and sought a judgment that their unpaid wages were nondischargeable by Mr. Mucklow in his bankruptcy case. All three Plaintiffs had sued Mr. Mucklow in Kanawha County Circuit Court prior to the Petition Date. However, Plaintiffs were dissimilarly postured in that, on the Petition Date, Ms. Halstead and Ms. Elliot had received default judgments against Mr. Mucklow, but Ms. Adkins' motion for default judgment remained pending.

A trial was held in the Consolidated Proceedings on November 1, 2022 (the "Trial"). Post-trial briefing was completed January 17, 2023.

On April 4, 2023, the Court entered a Memorandum Opinion and Order [dkt. 71] (the "4/7/2023 Order") adjudicating the Consolidated Proceedings. With respect to Plaintiff Adkins, the 4/7/2023 Order found that Ms. Adkins holds a claim against Mr. Mucklow, individually, pursuant to the West Virginia Wage Payment and Collection Act ("WVWPCA") for $24,963.50.^[1] The 4/7/2023 Order further declared that Ms. Adkins' claim against Mr. Mucklow is not dischargeable in his bankruptcy case pursuant to 11 U.S.C. § 523(a)(2)(A).

On April 17, 2023, Ms. Adkins filed a Motion for Attorney Fees and Costs seeking "reasonable attorneys' fees, filing fees and reasonable costs of the action" pursuant to the WVWCPA, W.Va. Code § 21-5-5d(c). Specifically, she seeks $39,960.00 in attorney fees (for 88.8 hours of time spent on the matter by her counsel, Mr. Travis Griffith, at a rate of $450 per hour), plus $3,316.74 in expenses litigating the matter through trial. Additionally, Ms. Adkins seeks a contingency enhancement of 2.5 times the fees claimed due to "the nature of the [Defendant]'s actions and the obvious deceptions he attempted to level on this Court…." Adding in the contingency fee enhancement, the Plaintiff seeks $99,900.00 in attorney's fees (88.8 hours x $450/hour x 2.5 = $99,900.00).

II.

A. Attorneys Fees and Costs

Plaintiff cites to West Virginia Code § 21-5-5d(c) in support of her request for attorney fees in this case. That section provides that an employee may sue for violations of subsection 5(b) and, if they prevail, recover reasonable attorneys' fees, filing fees, and costs of the action. However, subsection 5b prohibits employers from requiring an employee to submit to a lie detector examination or similar "examination utilizing mechanical or electronic measures of physiological reactions to evaluate truthfulness…." W.Va. Code § 21-5-5b (entitled "Employer limitations on use of detection of deception devises or instruments; exceptions."). As the Plaintiffs did not sue Mr. Mucklow for a violation of West Virginia Code § 21-5-5b, the Court does not believe that Section 21-5-5d(c) can serve as a basis for granting an award of attorney's fees.

Plaintiff Adkins sued Mr. Mucklow for failing to pay wages in violation of West Virginia Code § 21-5-4(e), which provides:

If a person, firm, or corporation fails to pay an employee wages as required under this section, the person, firm, or corporation, in addition to the amount which was unpaid when due, is liable to the employee for two times that unpaid amount as liquidated damages….

Accordingly, the Court may award reasonable attorney fees and costs to Ms. Adkins pursuant to West Virginia Code § 21-5-12. That section provides:

(a)Any person whose wages have not been paid in accord with this article, or the commissioner or his designated representative, upon the request of such person, may bring any legal action necessary to collect a claim under this article. With the consent of the employee, the commissioner shall have the power to settle and adjust any claim to the same extent as might the employee.

(b)The court in any action brought under this article may, in the event that any judgment is awarded to the plaintiff or plaintiffs, assess costs of the action, including reasonable attorney fees against the defendant. . . .

W.Va. Code § 21-5-12 (emphasis added). Moreover, longstanding precedent of the West Virginia Supreme Court of Appeals recognizes that "[a]n employee who succeeds in enforcing a claim under W.Va. Code Chapter 21, article 5 should ordinarily recover costs, including reasonable attorney fees unless special circumstances render such an award unjust." Syl. pt. 6, Fairmont Tool, Inc. v. Davis, 246 W.Va. 258, 261, 868 S.E.2d 737, 740 (2021) (citing syl. pt. 3, Farley v. Zapata Coal Corp., 167 W.Va. 630, 631, 281 S.E.2d 238, 239 (1981)); Amick v. C&T Dev. Co., Inc., 187 W.Va. 115, 118, 416 S.E.2d 73, 76 (1992) (same).

In the present case, this Court is unaware of any special circumstances that would render awarding reasonable attorney fees unjust. To the contrary, the Court's 4/4/2023 Order recognized that Mr. Mucklow's actions were particularly egregious in this case:

It is clear that Mr. Mucklow intended to deceive the Plaintiffs. He brought them into his office and showed them documents to convince the Plaintiffs that he had adequate investor funding and grant funding to pay wages. He convinced some of the Plaintiffs to leave good paying, fulltime employment to work for him. He promised them repeatedly that they would be paid, and he knew that they were ethically compelled to continue working for New Beginnings and treating patients regardless of whether they were actually paid. He kept the Plaintiffs between the proverbial rock and a hard place. When Plaintiffs began to see through those false representations, he threatened them by announcing that he would file for bankruptcy protection and would discharge any monies he owed to them if they quit working for New Beginnings. Furthermore, by examining his background, Mr. Mucklow can be described as nothing short of duplicitous. The Court need not rehash the specifics of his various deceptions; it is enough that he had to spend the majority of his testimony trying to explain away his dishonest dealings. Even his own attorney had to clarify misstatements Mr. Mucklow made on the witness stand as being false.

4/4/2023 Order at 35.

To assess the reasonableness of an attorney's fee award, the Court must consider twelve factors (the "Pitrolo Factors"):

(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.

Syl. pt. 7, Fairmont Tool, 246 W.Va. at 274, 868 S.E.2d at 753 (citing syl. pt. 4, Aetna Cas. & Sur. Co. v. Pitrolo, 176 W.Va. 190, 196, 342 S.E.2d 156, 162 (1986)).

(1) Time and labor expended.

The Court has reviewed Mr. Griffith's itemization of time expended to represent Ms. Adkins in this matter, which was attached to the Motion as Exhibit B. As explained in his affidavit [dkt. 76], this itemization excludes staff time, although staff was asked to work weekends on a few occasions. The itemization details 88.8 hours or legal work performed over nearly a five-year period, which must be a very modest accounting of the work performed on this case, including a full-day Trial and post-trial briefing. Mr. Griffith's affidavit explains that the time itemization does not include all meetings and telephone calls with his clients. The itemization also excludes administrative time. The efforts detailed in Exhibit B appear to be reasonable both in terms of the efforts undertaken and the time expended. The Court is satisfied that this Pitrolo factor is fulfilled.

(2) Novelty and difficulty of the questions.

The Memorandum [dkt. 74] filed in support of the Motion details the various difficulties Mr. Griffith encountered in this case due to Defendant's refusal to cooperate in the Circuit Court and efforts to frustrate Plaintiff's ability to recover her wages. When Mr. Mucklow sought bankruptcy protection, Plaintiff was required to file an adversary...