Whitaker v. MZM Fakhouri, Inc.

Background

Brian Whitaker’s counsel sent MZM Fakhouri, Inc. a settlement demand of $24,000 plus remediation. During later discussions, MZM Fakhouri offered $6,500 to settle the matter and requested a summary of fees and costs, as required by General Order 56. Whitaker’s counsel later stated that the $24,000 demand was revoked and proposed settling for $4,000, with fees to be determined by motion. No fee or cost documentation had been provided to MZM Fakhouri.

MZM Fakhouri filed a motion for administrative relief asking the court to require Whitaker to provide the documentation and seeking reimbursement for the costs of bringing the motion. Whitaker filed a motion to strike that motion, arguing that it improperly disclosed confidential settlement negotiations.

Motion to Strike

The court denied Whitaker’s motion to strike. It explained that Federal Rule of Evidence 408 generally protects settlement communications when they are offered to prove liability, fault, or the amount of a disputed claim. But the rule did not bar MZM Fakhouri from referring to the settlement discussions here because the references were used to show noncompliance with General Order 56, not to prove liability or apportion fault.

Administrative Relief and Fees

The court granted MZM Fakhouri’s motion for administrative relief. General Order 56(5b) provides that when a plaintiff makes a monetary demand, the defendant may request an itemization of costs and a summary of the work performed, hours spent, and billing rates, or detailed time records. The court held that MZM Fakhouri became entitled to request that information when Whitaker made the settlement demand. Whitaker’s later withdrawal of the demand did not change that result.

The court also rejected Whitaker’s attorney-client privilege argument. It stated that, because the parties had agreed to settle the injunctive and damages aspects of the case and only the amount of attorneys’ fees remained unresolved, the fee information could be disclosed without revealing litigation strategy or legal advice.

The court ordered Whitaker to provide MZM Fakhouri with the required fee and cost summary by December 13, 2021. It separately granted MZM Fakhouri’s request for $4,950 in fees associated with bringing the motion, finding that the hours and hourly rate were reasonable.

Disposition

The court granted Defendant’s Motion for Administrative Relief, denied Plaintiff’s Motion to Strike, ordered the fee and cost disclosure, and granted MZM Fakhouri $4,950 in fees related to the motion.