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Pharmerica Drug Systems, LLC v. Magnum Health and Rehab of Monroe, LLC

United States District Court, E.D. Michigan, Southern Division

July 27, 2018

PHARMERICA DRUG SYSTEMS, LLC, d/b/a PHARMERICA and PHARMERICA CORPORATION d/b/a PHARMERICA, Plaintiffs,
v.
MAGNUM HEALTH AND REHAB OF MONROE, LLC, d/b/a MAGNUMCARE OF MONROE, LLC, et al., Defendants.

          OPINION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR ATTORNEY'S FEES [48]

          STEPHEN J. MURPHY, III UNITED STATES DISTRICT JUDGE

         On September 28 and 29, 2017, the Clerk of Court entered default judgment against Defendants. ECF 41-45, 47. On October 25, 2017, pursuant to Civil Rule 54(d)(2), Plaintiffs filed a timely motion for attorney's fees and costs. ECF 48; E.D. Mich. LR 54.1.2(a). Plaintiffs seek $47, 437.50 in attorney's fees and $2, 061.39 in costs. ECF 48, PgID 233. Defendants had fourteen days to object to the request; they did not. E.D. Mich. LR 54.1.2(b). For the reasons below, the Court will grant the motion.

         BACKGROUND

         PharMerica provides goods and services to nursing facilities. On March 15, 2012, PharMerica entered into a services agreement ("2012 Agreement") with Defendants Magnum Health and Rehab centers in Monroe ("Monroe"), Saginaw ("Saginaw"), Adrian ("Adrian"), and Hastings ("Hastings") (collectively "Facility Defendants"). ECF 1-1, PgID 37. Defendants Beyond Healthcare, LLC and Beyond Healthcare Management, LLC control the Facility Defendants (collectively "Defendants").

         In September 2014, PharMerica retained Fultz Maddox Dickens PLC ("FMD") to address Defendants' defaulted payments. FMD sent demand letters to Defendants. Defendants' attorney negotiated with FMD to settle Defendants' outstanding debt and Defendants ultimately made payments exceeding $610, 000. But Defendants still owed further payment.

         In October and December 2015, and May 2016, PharMerica and Defendants entered into new contracts ("2015 Agreements"). See ECF 1-1, PgID 50, 73, 98, and 119.

         On August 1, 2017, PharMerica filed its complaint seeking $598, 234.50 in delinquent payments. At the end of September 2017, the Court entered default judgment against the Defendants. The Court must determine whether the Agreements entitle PharMerica to an award of reasonable attorney's fees.

         STANDARD OF REVIEW

         In the United States, parties ordinarily bear their own attorney's fees absent explicit statutory authority or an enforceable contract allocating attorney's fees. Travelers Cas. & Sur. Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443, 448 (2007). When considering an award of attorney's fees in a diversity action, the Court must apply state substantive law and federal procedural law. Hunt v. Hadden, 159 F.Supp.3d 800, 805 (E.D. Mich. 2016) (collecting cases).

         DISCUSSION

         I. The Service Agreements

         A. 2012 Agreement

         The Court must first determine whether the 2012 Agreement entitles PharMerica to attorney's fees for any action taken by its attorneys before the effective dates of the 2015 Agreements. It does not.

         Because of the 2012 Agreement's choice-of-law provision, the Court analyzes the question pursuant to Florida law. See ECF 1-1, PgID 35, § 14.11. In general, Florida law allows contract provisions requiring payment of ...


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