U.S. Home Corporation v. Settlers Crossing, L.L.C.

                                   UNPUBLISHED

                      UNITED STATES COURT OF APPEALS
                          FOR THE FOURTH CIRCUIT


                                      No. 19-1485



U. S. HOME CORPORATION; LENNAR CORPORATION,

                    Plaintiffs – Appellants,

             v.

SETTLERS CROSSING, L.L.C.; WASHINGTON PARK ESTATES, LLC;
BEVARD DEVELOPMENT COMPANY; STEVEN B. SANDLER; ISTAR
FINANCIAL, INCORPORATED; DANIEL I. COLTON,

                    Defendants – Appellees.


Appeal from the United States District Court for the District of Maryland, at Greenbelt.
Paula Xinis, District Judge. (8:08-cv-01863-PX)


Argued: September 8, 2020                                   Decided: October 22, 2020


Before KING and FLOYD, Circuit Judges, and Thomas S. KLEEH, United States District
Judge for the Northern District of West Virginia, sitting by designation.


Affirmed by unpublished per curiam opinion.


ARGUED: David Marroso, O’MELVENY & MYERS LLP, Los Angeles, California, for
Appellants. Colin E. Wrabley, REED SMITH LLP, Pittsburgh, Pennsylvania; Geoffrey
Chepiga, PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLC, New York, New
York, for Appellees. ON BRIEF: Daniel M. Petrocelli, Jeffrey Gurrola, O’MELVENY
& MEYERS LLP, Los Angeles, California, for Appellants. Timothy F. Maloney, Veronica
Nannis, JOSEPH GREENWALD & LAAKE P.A., Greenbelt, Maryland; Brent R. Gary,
REED SMITH LLP, McLean, Virginia, for Appellees Steven B. Sandler, Settlers Crossing,
L.L.C, Washington Park Estates, LLC, and Bevard Development Company. Eric A.
Kuwana, COOLEY LLP, Washington, D.C., for Appellee iStar, Inc.


Unpublished opinions are not binding precedent in this circuit.




                                            2
PER CURIAM:

       In April 2017, we affirmed the judgment in this District of Maryland civil action

concerning a failed real estate transaction in Prince George’s County. By that judgment,

the district court ruled against plaintiffs Lennar Corporation and U.S. Home Corporation

(collectively, “Lennar”) and in favor of defendants, including iStar Financial, Incorporated,

and Steven B. Sandler. In March 2019, following our affirmance of its judgment, the court

awarded iStar and Sandler their costs, fees, and expenses as prevailing parties under

contractual fee-shifting provisions. Lennar now appeals the court’s awards of expert

witness fees to iStar and attorneys’ fees to Sandler. As explained herein, we affirm those

awards.



                                             I.

                                             A.

       The background of this dispute is relevant and therefore summarized. In November

2005, Lennar entered into a pair of agreements (the “Contract”) with three entities ––

defendants Settlers Crossing, L.L.C., Washington Park Estates, LLC, and Bevard

Development Company (collectively, the “Seller Companies”). The Contract included a

Purchase and Services Agreement (the “Purchase Agreement”) and a Contract for Services.

Pursuant to the Contract, Lennar agreed to purchase 1,250 acres of prime land in Prince

George’s County (the “Property”) from the Seller Companies for $200 million. Lennar

then delivered the Seller Companies the sum of $20 million in deposits to secure the

Contract. A month later, Sandler –– sole owner of the three Seller Companies –– signed

                                             3
two Guaranty Agreements, personally guaranteeing the return of Lennar’s $20 million in

deposits in the event the Seller Companies breached the Contract.

       Beginning around late 2006, Lennar sought to renegotiate the Contract because of a

decline in the residential housing market. Lennar and the Seller Companies agreed to

amend the Purchase Agreement on May 16, 2007, and thereby reduced the purchase price

of the Property from $200 million to $134 million. Lennar and the Seller Companies

further agreed to a guarantee of specific performance by Lennar.

       During that period of time, the Seller Companies obtained financing assistance from

iStar in exchange for a mortgage on the Property. More specifically, iStar made a $100

million loan to the Seller Companies, secured in part by the Property and in part by the

Seller Companies’ assignment of their rights under the Purchase Agreement (the

“Collateral Assignment”).      Under the Collateral Assignment, the Seller Companies

retained the “exclusive right and license to exercise all rights in, to and under” the Contract

absent an “Event of Default.” See J.A. 1303. 1 “[U]pon the occurrence and during the

continuance of such Event of Default,” the Seller Companies would “neither have nor

exercise any further rights” under the Contract. Id.

       Because the housing market continued to decline, Lennar began seeking a partner

to join in its real estate venture. Lennar was unsuccessful in that search and, in late 2007,

began to develop strategies to delay the December 5, 2017 settlement date or to avoid



       1
          Citations herein to “J.A. __” refer to the contents of the Joint Appendix filed by
the parties in this appeal.

                                              4
closing altogether. On November 21, 2007, Lennar notified the Seller Companies that they

had failed to satisfy conditions precedent for closing the transaction. However, Lennar

would not identify any unsatisfied conditions precedent that were a barrier to closing.

Thereafter, on December 5, 2007, Lennar failed to appear for settlement.

          In January 2008, Lennar sought permission from the Seller Companies to enter the

Property to conduct investigations, studies, and tests, which Lennar asserted the Contract

gave it the right to do. The Seller Companies, however, were suspicious of Lennar’s

intentions and denied access. Between January and March of 2008, the Seller Companies

continued to work to resolve questions regarding whether the conditions precedent to the

Contract were satisfied so that settlement could occur. In April 2008, Lennar called for the

settlement to occur on May 27, 2008. On May 16, 2008, however, Lennar served a notice

of default on the Seller Companies, relying on their denial of access to the Property. That

notice of default triggered the Seller Companies’ and iStar’s cure periods under the

Purchase Agreement and a separate Consent and Estoppel Agreement. Under the latter

agreement, iStar had until July 2, 2008, to cure any alleged breach relating to the default

notice.

          Lennar did not attend the proposed May 27, 2008 settlement proceedings. As a

result, the Seller Companies served their own notice of default on May 30, 2008. Lennar

was subsequently granted access to the Property but made no attempt to enter it. On July

3, 2008, Lennar notified the Seller Companies that it had elected to terminate the Contract.

Lennar then demanded a refund of its $20 million in deposits, but Sandler and the Seller

Companies refused. Further, because the May 27, 2008 settlement date had passed, the

                                              5
Seller Companies defaulted on the iStar loan on July 18, 2008. The default required iStar

to exercise its rights under the Collateral Assignment. As a result, iStar stepped into the

shoes of the Seller Companies under the agreements and foreclosed on the Property.

                                            B.

      On July 17, 2008, after notifying the Seller Companies of its election to terminate

the Contract, Lennar initiated this civil action in the District of Maryland against iStar,

Sandler, and the Seller Companies. By its operative First Amended Complaint of May 18,

2009, Lennar asserted seven claims, including breach of contract against Settlers Crossing

and Washington Park Estates (Count I), breach of contract against Bevard Development

(Count II), breach of guaranty against Sandler (Count III), fraudulent inducement against

Settlers Crossing and Washington Park Estates (Count IV), fraud by concealment against

Settlers Crossing and Washington Park Estates (Count V), and breach of environmental

representations and warranties against Settlers Crossing and Washington Park Estates

(Count VI). The seventh and final claim was for a declaratory judgment against iStar,

Sandler, and the Seller Companies (Count VII). On June 30, 2009, iStar and the Seller

Companies filed a joint counterclaim against Lennar for declaratory relief and specific

performance of the Contract.

       Following pretrial proceedings, two primary issues remained for trial: (1) whether

the Seller Companies’ denial of Lennar’s access to the Property constituted a breach of

contract (Counts I and II); and (2) whether Settlers Crossing and Washington Park Estates

had breached the environmental representations and warranties provision in the Purchase

Agreement (Count VI). If the Seller Companies were in breach of contract under either

                                            6
theory, Lennar would be entitled to the return of its $20 million in deposits, which Sandler

–– as guarantor of the Seller Companies –– would be responsible for (Count III). A bench

trial was conducted in Greenbelt from March 31 to April 15, 2014. The bulk of the trial

focused on the environmental representations claim.         Lennar presented three expert

witnesses in support of that claim, and iStar called four experts to counter Lennar’s

evidence.

       Following the bench trial, the district court filed a comprehensive opinion,

concluding that Lennar had failed to satisfy its burdens at trial and that iStar — standing in

the shoes of the Seller Companies — was entitled to specific performance. See U.S. Home

Corp. v. Settlers Crossing, L.L.C., No. 8:08-cv-01863 (D. Md. July 18, 2014), ECF No.

707. With regard to the environmental representations, the court ruled that Lennar had not

proved that the source of hazardous materials on the Property was something other than

what was disclosed in the environmental reports provided by the Seller Companies. The

court found that two of Lennar’s experts on that issue were not persuasive and that one of

them was not credible, whereas iStar’s experts were highly credible and informative. The

court concluded that the Seller Companies’ denial of access was not a breach of contract

because Lennar’s request for access was made in bad faith to delay purchasing the Property.

Thus, the court further ruled that Sandler had not breached the Guaranty Agreements. 2




       2
         The district court also dismissed the joint counterclaim as moot, concluding that
the November 2009 foreclosure meant that the Seller Companies no longer had an interest
in the Property.

                                              7
       After additional proceedings, the district court entered judgment in favor of iStar

and against Lennar. See U.S. Home Corp. v. Settlers Crossing, L.L.C., No. 8:08-cv-01863

(D. Md. Jan. 22, 2015), ECF No. 731. The court directed Lennar to proceed to settlement

within thirty days. Lennar did not, however, proceed to settlement but instead appealed

the judgment to this Court. In April 2017, we affirmed the judgment, concluding in

relevant part that the Seller Companies’ environmental representations were adequate

under the Contract. See U.S. Home Corp. v. Settlers Crossing, L.L.C., 685 F. App’x 173

(4th Cir. 2017), cert. denied, 138 S. Ct. 503 (2017).

                                             C.

                                              1.

       Following our affirmance of the judgment against Lennar, iStar sought

reimbursement in the district court of its costs, fees, and expenses, pursuant to the fee-

shifting provision of the Purchase Agreement. 3         More specifically, iStar requested

$14,880,227.82 in attorneys’ fees incurred from July 21, 2008, through the pendency of

the proceedings, plus $656,002.12 in expert witness fees and $553,712.56 in costs and




       3
           As set forth in the Purchase Agreement, the fee-shifting provision relating to
iStar’s claim for costs, fees, and expenses provides:

       In the event of any litigation arising under or pursuant to this agreement . . .
       the parties hereby agree that . . . the prevailing party in such matter shall be
       entitled to recover from the non-prevailing party[] such party’s costs, fees
       and expenses incurred in such litigation, including actual and reasonable
       attorneys’ fees and court costs.

See J.A. 591.

                                              8
expenses. In response, Lennar challenged, inter alia, the reasonableness of the number of

hours iStar’s attorneys had billed and iStar’s entitlement to expert witness fees.

       In October 2018, the magistrate judge issued a Report and Recommendation that

addressed iStar’s fee application. See U.S. Home Corp. v. Settlers Crossing, L.L.C., No.

8:08-cv-01863 (D. Md. Oct. 16, 2018), ECF No. 860 (the “iStar R&R”). The iStar R&R

recommended awarding iStar $10,848,353.84 in attorneys’ fees and $553,712.56 in costs

and expenses. It recommended denying iStar’s request for expert witness fees because the

Purchase Agreement’s fee-shifting provision did not explicitly mention such fees. Lennar

did not object to the iStar R&R, but iStar did object –– specifically, to the recommended

denial of its expert witness fees.

       By Memorandum Opinion and Order of March 22, 2019, the district court adopted

the iStar R&R in part, but also awarded iStar its expert witness fees, ruling that the plain

language of the fee-shifting provision authorized such an award. See U.S. Home Corp. v.

Settlers Crossing, L.L.C., No. 8:08-cv-01863 (D. Md. Mar. 22, 2019), ECF No. 876 (the

“Fees Decision”). The Fees Decision alternatively concluded that iStar’s expert witness

fees were recoverable as “expenses incurred in litigation” because they were crucial to

iStar’s success in the litigation. Id. at 16.




                                                9
                                              2.

       As a prevailing party in the underlying litigation, Sandler also petitioned the district

court for his attorneys’ fees and costs under the Guaranty Agreements. 4 Sandler sought

the attorneys’ fees he had incurred successfully defending the claims against him and the

Seller Companies, supported by hundreds of pages of detailed billing records, declarations

from counsel, and other evidence. Lennar opposed Sandler’s request for fees. Lennar

claimed that Sandler was not entitled to fees for defending the Seller Companies that did

not directly relate to defending Sandler against the breach of guaranty claim.

       After briefing, the magistrate judge filed a separate Report and Recommendation

that recommended awarding Sandler his attorneys’ fees. See U.S. Home Corp. v. Settlers

Crossing, L.L.C., No. 8:08-cv-01863 (D. Md. Oct. 1, 2018), ECF No. 855 (the “Sandler

R&R”). The Sandler R&R largely rejected Lennar’s objections — specifically, Lennar’s

objection to Sandler recovering fees incurred in defending the Seller Companies. On that

issue, the magistrate judge –– applying the factors set forth in Rule 1.5(a) of the Maryland

Attorneys’ Rules of Professional Conduct and the “common core of facts doctrine” as set

out by the Supreme Court in Hensley v. Eckerhart, 461 U.S. 424 (1983) –– concluded that


       4
        The fee-shifting provisions in the two Guaranty Agreements, which underlie
Sandler’s request for attorneys’ fees and costs, are identical and provide as follows:

       In the event of any litigation between [Sandler] and [Lennar] under this
       Guaranty, the party prevailing in such preceding such [sic] be entitled to an
       award against the nonprevailing party for reasonable attorney fees and costs
       of suit.

See J.A. 1433, 1435.


                                              10
such fees were not “unreasonable” under the Guaranty Agreements’ fee-shifting

provisions. 5

       Lennar objected to the Sandler R&R. Later, following a status conference at which

the district court raised the issue of the Seller Companies’ right to attorneys’ fees under the

Purchase Agreement, the court directed Lennar, Sandler, and the Seller Companies to

analyze and brief that issue. By its Fees Decision of March 22, 2019, the court adopted the

Sandler R&R and rejected Lennar’s objection to the award of fees to Sandler that were

incurred defending the Seller Companies. The court determined that the plain language of

the fee-shifting provisions in the Guaranty Agreements authorized the recovery of fees

defending claims against the Seller Companies. Thus, the court believed that it was not

necessary to decide the issue based on the common core of facts doctrine. In the court’s

view, it was undisputed that Sandler was the prevailing party as to the claim in which

Lennar attempted to invoke its entitlement to recover the $20 million in deposits from

Sandler, so all that remained for the court to resolve was the reasonable amount of fees to

which Sandler was entitled for defending against Lennar’s lawsuit.

       In analyzing the meaning of “reasonable attorney fees” under the Guaranty

Agreements, the district court took into consideration that for Sandler to prevail on the


       5
         Rule 1.5 of the Maryland Attorneys’ Rules of Professional Conduct specifies eight
factors that are used to determine the reasonableness of attorneys’ fees. See Md. R.
Attorneys, R. 19-301.5(a). Further, under the common core of facts doctrine, where a party
is partially successful — prevailing on some claims but not others — a court may in its
discretion deem all fees “reasonable” and recoverable if all claims “are based on a common
core of facts or related legal theories.” See Ochse v. Henry, 88 A.3d 773, 785 (Md. Ct.
Spec. App. 2014) (citing Hensley, 461 U.S. at 434-37).

                                              11
claim against him, he had to show that the Seller Companies were not liable for breaching

the Contract. See Fees Decision 7. In other words, as a guarantor, Sandler’s defense

required that he prove that the Seller Companies did not breach the Contract. Looking to

Rule 1.5(a) of the Maryland Attorneys’ Rules of Professional Conduct, as required by

Maryland law, the court concluded that the time and labor required to perform such legal

services properly had to include mounting Seller Companies’ defense against the breach of

contract claims — had those attorneys done otherwise, they could have committed

malpractice. Alternatively, the Fees Decision determined that, even if Sandler could not

recover fees incurred on behalf of the Seller Companies, the Seller Companies could

recover their attorneys’ fees directly. Thus, the court awarded Sandler $2,369,375.87 in

attorneys’ fees.

       Lennar timely noted this appeal from the Fees Decision, contesting the district

court’s awards of attorneys’ fees to Sandler and expert witness fees to iStar. We possess

jurisdiction pursuant to 28 U.S.C. § 1291.



                                             II.

       We review a district court’s interpretation of a contract de novo. See Sky Angel

U.S., L.L.C. v. Discovery Commc’ns, L.L.C., 885 F.3d 271, 278 (4th Cir. 2018). We also

assess de novo a district court’s conclusions of law. See Belk v. Charlotte-Mecklenburg

Bd. of Educ., 269 F.3d 305, 379 (4th Cir. 2001) (en banc).




                                             12
                                             III.

                                              A.

       We will first address and resolve whether iStar can recover its expert witness fees

under the Purchase Agreement. Maryland adheres to “the common law ‘American Rule,’

which states that, generally, a prevailing party is not entitled to recover its attorney fees.”

See Nat’l Cas. Co. v. Lockheed Martin Corp., 799 F. Supp. 2d 537, 542 (D. Md. 2011)

(citations and internal quotations omitted). Nonetheless, although the default rule is that

parties to lawsuits bear their own costs and fees, contractual fee-shifting provisions “are

valid and enforceable in Maryland, subject to a trial court’s examination of the prevailing

party’s fee request for reasonableness.” See Nova Rsch., Inc. v. Penske Truck Leasing Co.,

952 A.2d 275, 283 (Md. 2008) (citation omitted).

       Further, Maryland adheres to and applies “the law of objective interpretation of

contracts.” See Weichert Co. of Md. v. Faust, 19 A.3d 393, 404 (Md. 2011). That rule

means that Maryland courts “give effect to the plain meaning of an unambiguous term[]

and will evaluate a specific provision in light of the language of the entire contract.” Id.

A court “must first determine from the language of the agreement itself what a reasonable

person in the position of the parties would have meant at the time it was effectuated.” Id.

(citation and internal quotation marks omitted). “[A]bsent fraud, duress, mistake, or some

countervailing public policy, courts should enforce the terms of unambiguous written

contracts without regard to the consequences of that enforcement.” Id. (internal quotation

marks omitted).



                                              13
                                             1.

       Lennar’s appellate argument relies primarily on two district court cases, maintaining

that, under Maryland law, iStar is not entitled to its expert witness fees under the fee-

shifting provision of the Purchase Agreement. In Berkley Trace, L.L.C. v. Food Lion,

L.L.C., the fee-shifting provision permitted the plaintiff Landlord to recover “from Tenant

all costs incurred by the Landlord, including reasonable attorneys’ fees and such costs and

reasonable attorneys’ fees which the Landlord incurred on any appeal.” See No. 1:11-cv-

03207, at 6 (D. Md. Oct. 18, 2013), ECF No. 115. The court concluded that, although the

agreement provided for the recovery of “all costs,” it did “not provide for the recovery of

expert witness fees”; thus, in the absence of an explicit contractual specification of expert

fees, there was “no legal basis upon which to award those fees.” Id. at 6, 22. Similarly, in

Natures Way Marine, L.L.C. v. Everclear of Ohio, Ltd., the agreement provided for the

recovery of “all of the costs and expenses [a party] incurs in enforcing this [agreement] and

protecting its interests, including its reasonable attorneys’ fees and expenses.” See No.

1:12-cv-316, at 2 (S.D. Ala. Apr. 17, 2015), ECF No. 225. The Alabama court also ruled

that “nothing in the contract” suggested the parties “contemplated awarding expert witness

fees to the prevailing party when they negotiated the contract.” Id. at 18-19.

       Neither Berkley Trace nor Natures Way Marine is helpful here. In Berkley Trace,

the phrase “including reasonable attorney’s fees” modified “all costs incurred by the

Landlord.”   Similarly, in Natures Way Marine, the phrase “including its reasonable

attorneys’ fees” modified “all of the costs and expenses.” Importantly, neither fee-shifting

provision included the word “fees” separate from “attorney’s fees.”          Thus, in both

                                             14
situations, the modifier “including reasonable attorney’s fees” was necessary for attorneys’

fees to be recoverable because, as courts have recognized, attorneys’ fees are not part of

the costs or expenses of a suit. See, e.g., Cook v. Nationwide Ins. Co., 962 F. Supp. 2d 807,

822-23 (D. Md. 2013); see also Singer v. Fid. & Deposit Co. of Md., 54 A. 63, 63 (Md.

1903).

         Here, however, the relevant fee-shifting provision is broader than either of those in

Natures Way Marine or Berkley Trace. The Purchase Agreement’s fee-shifting provision

allows for the recovery of “costs, fees and expenses incurred in such litigation, including

actual and reasonable attorneys’ fees and court costs.” See J.A. 591 (emphasis added).

Unlike the decisions Lennar relies on, the language here does include the term “fees”

separate from “attorneys’ fees.” In specifically providing that “fees” includes attorneys’

fees, the Purchase Agreement plainly indicates that attorneys’ fees are only a subset of the

fees that may be recovered. Lennar’s contrary contention would read out the plain meaning

of the phrase “costs, fees, and expenses incurred in litigation.” Courts are obliged to “give

meaning to each word used and avoid constructions that render language meaningless,

superfluous, or contradictory.” See Rota-McLarty v. Santander Consumer USA, Inc., 700

F.3d 690, 701 (4th Cir. 2012). Thus, for our Court to give meaning to the word “fees,” we

must interpret “fees” to include more than just attorneys’ fees.

         Our conclusion is bolstered by the fact that Maryland law does not “strictly require

the phrase ‘attorney’s fees’ in a contract to override the American rule,” see Nova Rsch.,

Inc., 952 A.2d at 285, which is not true as to the law of other jurisdictions. Put another

way, in Maryland, the use of the word “fees” in a fee-shifting provision would be enough

                                              15
to allow the recovery of attorneys’ fees. Thus, “fees” must mean more here than just

attorneys’ fees. And because Maryland does not strictly require the phrase “attorneys’

fees” for attorneys’ fees to be recoverable, we are satisfied that the Maryland courts would

not require the phrase “expert witness fees” for expert witness fees to be recoverable.

Therefore, the district court’s award of expert witness fees to iStar was proper and must be

sustained. 6

                                            B.

       Next, we will decide whether Sandler was eligible for attorneys’ fees under the

Guaranty Agreements and Maryland law. Lennar does not dispute that the relevant

fee-shifting provisions allow for Sandler to recover his own attorneys’ fees. Rather, Lennar

contends that Sandler is improperly recovering fees related to the Seller Companies’ ––

and not his own –– defense. For his part, Sandler acknowledges that he is recovering fees

related to the Seller Companies’ defense, but argues that such fees are proper in these

circumstances because Sandler and the Seller Companies had the same attorneys and they

all had to prove the same thing –– that Lennar had breached the Contract –– for Sandler to

be a prevailing party.




       6
          The district court also awarded iStar its expert witness fees on the alternative
ground that “[b]ecause the expert testimony, and the experts’ preparation for such
testimony[,] was ‘essential’ to the [c]ourt’s ultimate determination, [recovery of expert
witness fees] is reasonable and allowable under the fee-shifting provision.” See Fees
Decision 17. Nonetheless, because Maryland adheres to the American rule regarding fee
shifting, it is unlikely that the Maryland courts would infer a right to recover expert fees
regardless of the language in the fee-shifting provision.

                                            16
                                             1.

       The fee-shifting provisions of the Guaranty Agreements grant the prevailing party

in a proceeding “between the Guarantor and the Purchaser under this Guaranty” the right

of recovery of reasonable attorneys’ fees and costs of suit. See J.A. 1433, 1435. It is

undisputed that Sandler and Lennar are the “Guarantor” and “Purchaser” respectively.

Further, it is undisputed that Sandler was the “prevailing party,” because the district court

concluded that Sandler did not need to return the $20 million in deposits –– and that Sandler

only became a prevailing party by proving that the Seller Companies were not liable for

breaching the Contract. If the Seller Companies had been in breach of contract, Sandler

would have been liable, as guarantor, for Lennar’s $20 million in deposits. For that reason,

the Fees Decision concluded that it was appropriate for Sandler to recover fees technically

incurred on the Seller Companies’ behalf. We agree with the district court. To rule

otherwise would be irrational –– the only reason Sandler is recovering fees for services

incurred on behalf of the Seller Companies is because he owned them and thus had control

of their legal strategy. Thus, the district court did not err when it authorized Sandler to

recover fees related to work incurred on behalf of the Seller Companies.

                                             2.

       Although the district court’s reasoning is sound, it can only go so far. As argued on

appeal, it is unclear whether Sandler’s recovery of attorneys’ fees includes fees incurred

on the Seller Companies’ counterclaims against Lennar. According to Lennar, if we accept

the district court’s logic, Sandler cannot recover fees related to the Seller Companies’



                                             17
counterclaims because the outcome of such counterclaims would not affect Sandler. And

Lennar may be correct.

       In particular, Lennar claims that it is “puzzled by Sandler’s assertion that he does

not seek fees in connection with the Seller Companies’ counterclaims” because, according

to Lennar, “[t]he bills themselves (which were submitted under seal) include dozens of

entries relating to ‘counterclaims.’” See Reply Br. of Lennar at 6 n.3 (citing U.S. Home

Corp. v. Settlers Crossing, L.L.C., No. 8:08-cv-01863 (D. Md. June 29, 2018), ECF No.

804-3). According to Sandler, however, he excluded any requests for “fees and costs not

connected to the claims against him, or to claims for which he could not be found liable,

including fees relating to the defendants’ joint counterclaim.” See Br. of Sandler at 22

(citing J.A. 402).

       Nonetheless, to the extent that Sandler is in fact recovering fees for the Seller

Companies’ counterclaims, Sandler was entitled to recover such fees under the magistrate

judge’s logic. The Sandler R&R recognized that Sandler was entitled to attorneys’ fees for

work done on behalf of the Seller Companies under the common core of facts doctrine

specified in Hensley v. Eckerhart, 461 U.S. 424 (1983). That doctrine is particularly

applicable where, as here, the claims at issue “ar[i]se out of the same transaction and

require[] proof or denial of essentially the same facts.” See Reisterstown Plaza Assocs. v.

Gen. Nutrition Ctr., Inc., 597 A.2d 1049, 1056 (Md. Ct. Spec. App. 1991). Applying the

common core of facts doctrine, the Sandler R&R reasoned that Sandler’s success in

defending against Lennar’s claim was necessarily dependent on the “same common core



                                            18
of facts” as the claims against the Seller Companies. The Sandler R&R, therefore, did not

seek to parse fees between Sandler and the Seller Companies.

       The district court did not specifically adopt the Sandler R&R’s use of the common

core of facts doctrine, apparently because the court believed there was a simpler resolution

to the issue. In any event, because Sandler may be recovering fees related to the Seller

Companies’ counterclaims, application of the common core of facts doctrine has merit ––

the theory permits Sandler to recover fees related to the Seller Companies’ counterclaims.

Thus, to the extent that Sandler is recovering fees for the Seller Companies’ counterclaims,

the common core of facts doctrine authorizes his recovery of such fees.



                                              IV.

       Pursuant to the foregoing, we affirm the district court’s awards of iStar’s expert

witness fees and Sandler’s attorneys’ fees.

                                                                               AFFIRMED




                                              19