FROM JEFFERSON CIRCUIT COURT HONORABLE BRIAN C. EDWARDS,
JUDGE ACTION NO. 12-CI-402375
FOR APPELLANT: Charles G. Middleton III Thomas W. Frentz
FOR APPELLEE: Robert W. “Tad” Adams III Andrew M.
Noland Lee Wilson Daley Louisville, Kentucky
BEFORE: TAYLOR, K. THOMPSON AND L. THOMPSON, JUDGES.
THOMPSON, K., JUDGE
appeal concerns attorney fees and expenses to legal counsel
hired by a court-appointed receiver in a foreclosure action.
VP Louisville, LLC, argues that while the Jefferson Circuit
Court properly decided the issue of attorney fees and
expenses in an April 2016 order, its subsequent orders were
inconsistent with that order in that it did not specify the
amount of attorney fees owed.
2012, NBH Bank, N.A. filed a foreclosure action against VP
Louisville after VP Louisville defaulted on a $4.2 million
dollar loan secured by a hotel known as Value Place. Upon NBH
Bank's motion, the trial court appointed Smiling
Hospitality, Inc. as receiver for the hotel on July 12, 2012.
The receiver order specifically stated:
That the Receiver and those agents and any property managers
acting under its control shall have no personal liability in
connection with their actions undertaken in furtherance of
the Receiver's duties except for damages arising from
their gross negligence, willful misconduct, and/or willful
failure to comply with the orders of this Court.
order also permitted Smiling Hospitality to retain attorneys
with all reasonable expenses incurred to be expenses of the
receivership. Smiling Hospitality and NBH Bank entered into
an indemnity letter stating that Smiling Hospitality would
have no liability as a result of acting as receiver.
Hospitality hired attorney Lewis J. Rotman, and the firm of
Hinshaw & Culbertson, LLC (H&C), a Minnesota law
firm, as its counsel. The Louisville, Kentucky, firm of Adams
Law Group was hired as local counsel. The attorneys at
H&C billed an hourly rate of $750 for Mr. Rotman, $315
for Shushanie Liesinger, and $220 for Jessica Nelson. The
attorneys at the Adams Law Group billed at an hourly rate of
$285-$300 for Tad Adams and $225 for Carolyn Bauer.
Hospitality filed its first receiver report on July 20, 2012,
wherein it described deplorable conditions at the hotel,
including a methamphetamine lab. Thereafter, Smiling
Hospitality filed monthly reports detailing its actions
during that month. During the five months the receivership
was in place, VP Louisville filed more than thirty motions,
including objections to every receiver report, alleging
Smiling Hospitality had engaged in misconduct as receiver.
The trial court at no time found Smiling Hospitality engaged
in any misconduct.
October 29, 2012, the parties executed a settlement agreement
which provided that operation of the hotel would be returned
to VP Louisville. Smiling Hospitality remained as receiver
until December 14, 2012, and operation of the hotel was then
returned to VP Louisville.
January 11, 2013, Smiling Hospitality filed a final report
and a supplemental report on August 13, 2013. VP Louisville
objected to the attorney fees and expenses billed by H&C
to Smiling Hospitality in the amount of $206, 203.52. There
was no objection to any of the Adams Law Group's attorney
fees. The trial court held an evidentiary hearing on the
attorney fees and expenses billed by H&C, which the trial
court stated was the "sole remaining issue[.]"
Louisville presented expert testimony from attorney Michael
Gosnell who testified he had represented numerous receivers
appointed for properties that he had foreclosed on for
lenders. He testified the standard hourly rate for attorneys
representing receiverships in Jefferson County ranges from
$200-$250 per hour. His opinion was that any fees exceeding
$250 per hour do not ...