United States District Court, W.D. Kentucky, Louisville Division
MEMORANDUM OPINION & ORDER
N. Stivers, Judge.
matter is before the Court upon Plaintiffs' Motion for
Attorney Fees (DN 25). For the reasons discussed below, the
motion is GRANTED IN PART and DENIED
IN PART. Plaintiffs are GRANTED
leave to file additional documentation.
action arises out of a billing dispute between Defendants
Concord Healthcare Group, LLC (“Concord”); Waco
Healthcare Residence, LLC d/b/a Crestview Healthcare
Residence; Fairview Operations, LLC d/b/a Fairview Healthcare
Residence; Manor Nursing & Rehab Center, LLC d/b/a The
Manor Healthcare Residence; Western Hills Nursing & Rehab
Center, LLC d/b/a Western Hills Healthcare Residence;
Groesbeck Healthcare Residence, LLC d/b/a Windsor Healthcare
Residence; Mesa Hills Healthcare Residence Operator, LLC
d/b/a Mesa Hills Healthcare Residence; Plano Healthcare
Residence Operator, LLC d/b/a Heritage Manor Healthcare
Center; Mesa Hills Specialty Hospital Operator, LLC; Plano
Specialty Hospital Operator, LLC; and Specialty Hospital of
Midwest City Operator, LLC (collectively,
“Defendants”) and Plaintiffs Pharmacy Corporation of
America d/b/a PharMerica; PharMerica Long-Term Care LLC d/b/a
PharMerica; and PharMerica Hospital Pharmacy Services, LLC
d/b/a PharMerica (collectively, “Plaintiffs” or
and 2015, Plaintiffs contracted with Concord, the SNF
Defendants, and the LTACH Defendants to provide
pharmacy-related goods and services to the residents of the
facilities operated by the SNF and LTACH Defendants (the
“Services Agreements”). (Tomassetti Aff.
¶¶ 3-4, DN 5-4). A billing dispute led Defendants
to stop paying Plaintiffs for goods and services provided
under the Services Agreements. The parties negotiated and,
ultimately, executed two settlement and forbearance
agreements: one between Plaintiffs, Concord, and the SNF
Defendants (the “SNF Settlement Agreement”) and
another between Plaintiffs, Concord, and the LTACH Defendants
(the “LTACH Settlement Agreement”).(Nueman Aff.
¶ 6, DN 15-1; Tomassetti Aff. ¶¶ 5-6; SNF
Settlement Agreement, DN 25-3; LTACH Settlement Agreement, DN
Section 5.01 of the SNF Settlement Agreement, Concord and the
SNF Defendants acknowledged and agreed that they owed
Plaintiffs $621, 998.07 for pharmacy goods and services
provided through December 31, 2015 (the “SNF
Balance”). (SNF Settlement Agreement § 5.01).
Under Section 5.01 of the LTACH Settlement Agreement, Concord
and the LTACH Defendants acknowledged and agreed that they
owed $1, 248, 980.00 for pharmacy goods and services provided
through March 31, 2016 (the “LTACH Balance”).
(LTACH Settlement Agreement § 5.01). In order to settle
the outstanding amounts with Concord, the SNF Defendants, and
the LTACH Defendants, Plaintiffs agreed to accept $559,
798.26 from Concord and the SNF Defendants and $1, 030,
408.50 from Concord and the LTACH Defendants; both balances
were to be paid in accordance with the payment schedules
attached to the Agreements. (SNF Settlement Agreement §
5.02; LTACH Settlement Agreement § 5.02). However, in
the event Defendants failed to make payments in accordance
with the payment schedules, the outstanding SNF Balance and
LTACH Balance, rather than the reduced amounts, would become
due. (SNF Settlement Agreement § 5.07; LTACH Settlement
Agreement § 5.07). Moreover, the Agreements contained
Agreed Orders of Judgment for the outstanding SNF and LTACH
balances that Plaintiffs were entitled to have entered
against Defendants upon default. (SNF Settlement Agreement
§ 5.04; LTACH Settlement Agreement § 5.04; Agreed
Orders J., DN 25-5).
repeatedly failed to make payments due under the Agreements.
(Stinnett Aff. 4-7, DN 25-2). When further attempts at
reconciliation proved fruitless, (See Stinnett Aff.
4-7), Plaintiffs filed this action, moving the Court to enter
the Agreed Orders of Judgment against Defendants, as well as
judgment against Concord, Mesa Hills LTACH, and Plano LTACH
for amounts allegedly owed for goods and services invoiced
after March 31, 2016. (See Compl. DN 1; Pls.'
Mot. Entry Agreed Orders J., DN 5). The Court partially
granted Plaintiffs' motion, entering the Agreed Orders of
Judgment against Defendants for the amounts still owed on the
SNF and LTACH balances ($361, 001.16 and $901, 448.44,
respectively) plus interest, but declining to grant relief at
that point on Plaintiffs claims against Concord, Mesa Hills
LTACH, and PLANO LTACH for goods and services invoiced after
March 31, 2016. (Mem. Op. & Order 13, DN 22; Order
Partial J., DN 24).
their present motion, Plaintiffs argue that, under the terms
of the Settlement Agreements and Agreed Orders of Judgment,
they are entitled to $72, 922.50 in attorney fees and $1,
685.38 in costs, which they incurred between October 2015 and
April 2017 in attempting to collect the amounts owed by
Defendants for goods and services provided under the Services
Agreements, i.e., the SNF and LTACH balances. Plaintiffs also
maintain that they are entitled to future attorneys' fees
and costs incurred as they attempt to enforce the judgment
entered by the Court. Defendants responded to Plaintiffs'
motion arguing that Plaintiffs are not entitled to recover
attorneys' fees and costs at all and, even if they were,
recovery is limited to fees and costs incurred in enforcement
and collection efforts following Defendants' default of
the Settlement Agreements. Additionally, Defendants argue
that, assuming Plaintiffs are even entitled to recover fees
and costs incurred post-default of the Settlement Agreements,
the amount of fees and costs they seek must be discounted.
Plaintiffs replied. The matter is ripe for decision.
Court has jurisdiction over Plaintiffs' claims because
there is diversity of citizenship among the parties and the
amount in controversy exceeds $75, 000, exclusive of interest
and costs. 28 U.S.C. § 1332(a)(1).
Settlement Agreements and corresponding Agreed Orders of
Judgment entitle Plaintiffs to all reasonable attorneys'
fees and costs incurred in attempting to collect the
outstanding SNF and LTACH balances. In Kentucky, a party can
recover attorneys' fees when a specific contractual
provision so provides. Aetna Cas. & Sur. Co. v.
Commonwealth, 179 S.W.3d 830, 842 (Ky. 2005) (citation
omitted); Secura Ins. Co v. Gray Constr., Inc., 717
F.Supp.2d 710, 722 (W.D. Ky. 2010). Here, the Settlement
Agreements contain identical provisions regarding the
recovery of attorneys' fees and costs from a defaulting
party, which provide as follows:
All parties shall pay their own costs and legal fees to date.
However, upon a Settlement Default, [Defendants] promise to
pay to PharMerica all reasonable costs and expenses of
collection, including but not limited to, reasonable
attorneys' fees and court costs. This includes any costs
and expenses in any action or proceeding, including but not
limited to, reasonable fees and disbursements of attorneys
incurred after a Settlement Default, but before such action
or proceeding is commenced, whether the action or proceeding
is at law, in equity or in any bankruptcy case or proceeding.
(SNF Settlement Agreement § 6.04; LTACH Settlement
Agreement § 6.04). Meanwhile, the Agreed Orders of
Judgment, which were attached to and a part of ...