INSIGHT HEALTH CORP. v. MARQUIS DIAGNOSTIC IMAGING OF N.C., LLC, 2018 NCBC 66

Insight Health Corp. v. Marquis Diagnostic Imaging of N.C., LLC, 2018 NCBC 66.
STATE OF NORTH CAROLINA
BUNCOMBE COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
14 CVS 1783
INSIGHT HEALTH CORP. d/b/a
INSIGHT IMAGING,
Plaintiff,
v.
MARQUIS DIAGNOSTIC IMAGING
OF NORTH CAROLINA, LLC;
MARQUIS DIAGNOSTIC IMAGING,
LLC; JOHN KENNETH LUKE; and
GENE VENESKY,
Defendants.
ORDER AND OPINION ON MOTION
FOR PREJUDGMENT INTEREST,
ATTORNEYS’ FEES, AND COSTS
1. THIS MATTER is before the Court upon Plaintiff Insight Health
Corporation’s (“Insight”) Motion for Prejudgment Interest, Attorneys’ Fees, and Costs
(the “Motion”) in the above-captioned case.
2. On June 5, 2018, this Court entered judgment against Defendants Marquis
Diagnostic Imaging of North Carolina, LLC (“MDI-NC”), Marquis Diagnostic
Imaging, LLC (“MDI”), John Kenneth Luke (“Luke”), and Gene Venesky (“Venesky”
and collectively, with the other defendants “Defendants”). At that time, the Court
granted Insight’s Motion in part with regard to Insight’s request for prejudgment
interest while retaining jurisdiction for purposes of further considering Insight’s
request for attorneys’ fees and costs.
3. Briefing on Insight’s Motion is now complete, and the Court elects, in its
discretion and pursuant to Rule 7 of the General Rules of Practice and Procedure for
the North Carolina Business Court (“BCR”), to decide these issues without a hearing.

After considering the parties’ submitted materials and other appropriate matters of
record, the Court GRANTS Insight’s Motion as set forth herein.
Smith Moore Leatherwood, LLP, by Marcus C. Hewitt and Jeffery R.
Whitley, for Plaintiff Insight Health Corporation d/b/a Insight Imaging.
Roberts & Stevens, P.A., by Wyatt S. Stevens, Ann-Patton Hornthal, and
John D. Noor, for Defendants Marquis Diagnostic Imaging of North
Carolina, LLC, Marquis Diagnostic Imaging, LLC, John Kenneth Luke,
and Gene Venesky.
Bledsoe, Judge.
I.
FACTUAL AND PROCEDURAL BACKGROUND
4. The Court has reported the facts of this litigation multiple times. Insight
Health Corp. v. Marquis Diagnostic Imaging of N.C., LLC, 2018 NCBC LEXIS 56, at
*2–22 (N.C. Super. Ct. June 5, 2018); Insight Health Corp. v. Marquis Diagnostic
Imaging of N.C., LLC, 2017 NCBC LEXIS 91, at *1–5 (N.C. Super. Ct. Oct. 3, 2017);
Insight Health Corp. v. Marquis Diagnostic Imaging of N.C., LLC, 2017 NCBC LEXIS
14, at *2–11 (N.C. Super. Ct. Feb. 24, 2017). The following recitation is therefore
limited to matters relevant to Insight’s Motion.
5. This case primarily concerns a contract under which Insight leased an MRI
scanner to MDI-NC (the “MRI Agreement”). Insight Health Corp., 2018 NCBC LEXIS
56, at *3. After a series of events caused MDI-NC to sell its assets and close its doors,
MDI-NC stopped paying Insight monthly rental payments. Id. at *5. The present
lawsuit is the result of that nonpayment. Id. at *6.

6. Insight brought suit against MDI-NC, MDI—which wholly owns MDI-NC—
and Luke and Venesky—who each own a 49.5% interest in MDI. Id. at *3. On
November 15, 2017, a jury found MDI-NC liable to Insight for $3,014,925 for
breaching the MRI Agreement. Id. at *19. The jury also found Luke and Venesky
liable to Insight for breach of fiduciary duty and constructive fraud and made the
requisite factual findings for the Court to pierce MDI-NC’s and MDI’s corporate veils.
Id. at *19–20. Based on these findings, the Court ordered the parties to submit
further briefing on whether veil-piercing relief should be granted.
7. In conjunction with the requested post-trial briefs, Insight also filed the
present Motion, arguing that a reciprocal attorneys’ fees provision contained in the
MRI Agreement entitled Insight to an award of its attorneys’ fees.1 (Pl.’s Mot.
Prejudgment Interest, Att’ys’ Fees and Costs Ex. A ¶¶ 13, 21 [hereinafter “MRI
Agreement”], ECF No. 209.)
8. The Court’s entry of judgment against Defendants and decision on Insight’s
Motion was temporarily delayed after Defendants initiated proceedings in the United
States Bankruptcy Court for the Northern District of Georgia (the “Bankruptcy
Court”). (Pl.’s Reply Defs.’ Br. Opp’n Pl.’s Mot. Att’ys’ Fees, Interest and Costs Exs.
A, B, C, ECF. No. 227; Order Concerning Bankruptcy Stay ¶¶ 5–6, ECF No. 226.)
1 The Court notes that Insight’s Motion was not accompanied by a separate brief and thus
did not comply with BCR 7.2. Exercising its discretion, the Court will excuse this violation
in light of the unique limitations placed upon this case by Defendants’ bankruptcy
proceedings. The Court does not intend its decision in this instance to offer sanctuary to
future litigants who fail to comply with BCR 7.2.

9. On May 8, 2018, the Bankruptcy Court entered an order in each of
Defendants’ bankruptcy cases allowing this Court to rule on the issues pending in
this litigation. (Pl.’s Reply Defs.’ Br. Opp’n Pl.’s Mot. Att’ys’ Fees, Interest and Costs
Exs. A, B, C.) Accordingly, the Court pierced MDI-NC’s and MDI’s corporate veils
and entered judgment against all Defendants on June 5, 2018. Insight’s Motion is
the final matter before the Court.
10. In total, Insight’s Motion requests $929,254.10 in attorneys’ fees for an
asserted 3,308.2 hours of work performed by Insight’s counsel and counsel’s support
staff and $14,435.15 in costs. (Pl.’s Mot. Prejudgment Interest, Att’ys’ Fees and Costs
8 [hereinafter “Motion for Fees”], ECF No. 209.) Defendants dispute portions of these
requests. (Defs.’ Br. Opp’n Pl.’s Mot. Att’ys’ Fees and Interest 2, ECF No. 217.)
II.
LEGAL STANDARD
11. In North Carolina, a party may only recover attorneys’ fees “if such a
recovery is expressly authorized by statute.” Robinson v. Robinson, 210 N.C. App.
319, 336, 707 S.E.2d 785, 797 (2011) (internal quotation marks omitted). Where an
award of attorneys’ fees is authorized, the trial court’s determination as to the
amount of attorneys’ fees awarded “will not be disturbed without a showing of
manifest abuse of [the court’s] discretion.” Bryson v. Cort, 193 N.C. App. 532, 540,
668 S.E.2d 84, 89 (2008). The trial court “may also in its discretion consider and
make findings on the services expended by paralegals and secretaries acting as
paralegals if, in the trial court’s opinion, it is reasonable to do so.” United Labs., Inc.

v. Kuykendall, 335 N.C. 183, 195, 437 S.E.2d 374, 382 (1993) (internal quotation
marks omitted).
III.
ANALYSIS
12. Insight’s Motion presents the Court with three issues. First, the Court must
determine whether there is a statutory basis to award Insight attorneys’ fees. See
Furmick v. Miner, 154 N.C. App. 460, 461–62, 573 S.E.2d 172, 174 (2002). Second,
the Court must consider the appropriate apportionment of attorneys’ fees given the
nature of the issues in this case. Finally, the Court must assesses the reasonableness
of Insight’s requested award.
A. Statutory Basis for Award of Insight’s Attorneys’ Fees
13. Following our legislature’s enactment of N.C. Gen. Stat. § 6-21.6 in 2011,
“[r]eciprocal attorneys’ fees provisions in business contracts are valid and enforceable
for the recovery of reasonable attorneys’ fees and expenses” as long as the contract is
signed in a manner approved by statute. N.C. Gen. Stat. § 6-21.6(b); Kezeli v. Logan,
2015 NCBC LEXIS 31, at *18 n.40 (N.C. Super. Ct. Mar. 26, 2015). “If a business
contract governed by the laws of this State contains a reciprocal attorneys’ fees
provision, the court . . . in any suit . . . may award reasonable attorneys’ fees in
accordance with the terms of the business contract.” N.C. Gen. Stat. § 6-21.6(c).
Section 6-21.6 defines a business contract as “[a] contract entered into primarily for
business or commercial purposes.” Id. § 6-21.6(a)(1). A “reciprocal attorneys’ fees
provision” is a term by which each party agrees “to pay or reimburse the other parties

for attorneys’ fees and expenses incurred by reason of any suit, action, proceeding, or
arbitration involving the business contract.” Id. § 6-21.6(a)(4).
14. Both sides in this case agree that the MRI Agreement contains a reciprocal
attorneys’ fees provision that is enforceable under section 6-21.6. The Court agrees
with the parties based on the following facts:
a. The MRI Agreement documented the lease of an MRI scanner from
Insight to MDI-NC. (MRI Agreement ¶ 1.)
b. The MRI Agreement was entered into for business or commercial
purposes—the acquisition of an MRI scanner by MDI-NC for its imaging
facility and the stream of revenue generated for Insight. (MRI
Agreement 7.)
c. The MRI Agreement contains a provision reading, “If either party
engages an attorney for the purpose of enforcing this Agreement, or any
judgment based hereon in any court . . . the prevailing party shall be
entitled to receive its attorneys’ fees and costs, whether taxable or not,
in addition to all other relief.” (MRI Agreement ¶ 21.)
d. The MRI Agreement was hand-signed by authorized representatives of
Insight and MDI-NC. (MRI Agreement 6.)
15. The Court further finds that Insight succeeded on its claims for breach of
contract, breach of fiduciary duty, and constructive fraud, as well as its request to
pierce the corporate veils of MDI-NC and MDI. The Court thus concludes that Insight

is the “prevailing party” in this action and that section 6-21.6 authorizes this Court
to award Insight its attorneys’ fees under paragraph 21 of the MRI Agreement.
B. Award of Insight’s Attorneys’ Fees on All Claims
16. As a preliminary part of determining whether Insight’s requested fees
award is reasonable, the Court addresses an issue raised by Defendants’ opposition
to Insight’s Motion.
17. Defendants contend that Insight’s requested award is excessive because
Insight’s recovery of attorneys’ fees “should be limited to the reasonable attorneys’
fees associated with ‘enforcing the [MRI] Agreement’ against MDI-NC[.]” (Defs.’ Br.
Opp’n Pl.’s Mot. Att’ys’ Fees and Interest 2.) Because only MDI-NC signed the MRI
Agreement, and because Insight’s other claims in this action were not based directly
on the MRI Agreement, Defendants insist that Insight should not be permitted to
recover “attorneys’ fees associated [with] litigating the extra-contractual claims
against the non-signatory defendants” or MDI-NC’s previously dismissed
counterclaims. (Defs.’ Br. Opp’n Pl.’s Mot. Att’ys’ Fees and Interest 2.)
18. Controlling precedent in North Carolina has long-recognized that “[w]here
the plaintiff has failed to prevail on a claim that is distinct in all respects from his
successful claims, the hours spent on the unsuccessful claim should be excluded in
considering the amount of a reasonable fee.” Hensley v. Eckerhart, 461 U.S. 424, 440
(1983); see Morris v. Scenera Research, LLC, 229 N.C. App. 31, 58, 747 S.E.2d 362,
378 (2013) (noting that North Carolina appellate precedent concerning
apportionment of attorneys’ fees relies upon the reasoning in Hensley), rev’d on other

grounds, 368 N.C. 857, 788 S.E.2d 154 (2016). In contrast, “[w]here a lawsuit consists
of related claims, a plaintiff who has won substantial relief should not have his
attorney’s fee reduced simply because the [fact finder] did not adopt each contention
raised.” Hensley, 461 U.S. at 440.
19. Thus, where attorneys’ fees are not recoverable for litigating certain claims
in an action but are recoverable for other claims in that same action, “fees incurred
in [litigating] both types of claims are recoverable where the time expended on
[litigating] the non-recoverable and the recoverable claims overlap[s] and the claims
arise ‘from a common nucleus of law or fact.’” Philips v. Pitt Cty. Mem’l Hosp., Inc.,
242 N.C. App. 456, 459, 775 S.E.2d 882, 884 (2015) (quoting Okwara v. Dillard Dep’t
Stores, Inc., 136 N.C. App. 587, 595, 525 S.E.2d 481, 486 (2000)); Whiteside Estates,
Inc. v. Highlands Cove, L.L.C., 146 N.C. App. 449, 467, 553 S.E.2d 431, 443 (2001).
A common nucleus of law or fact exists where “each claim [is] ‘inextricably
interwoven’ with the other claims[.]” Whiteside Estates, Inc., 146 N.C. App. at 467,
553 S.E.2d at 443 (quoting Okwara, 136 N.C. App. at 596, 525 S.E.2d at 487).
20. Courts of this State apply the “reasonable relation test” to determine
whether claims are inextricably interwoven such that apportionment of fees is
unnecessary: “‘reasonableness, not arbitrary classification of attorney activity, is the
key factor under all our attorneys’ fees statutes’ in awarding fees for attorney activity
connected with . . . the statute.” Id. (quoting Coastal Prod. Credit Ass’n v. Goodson
Farms, Inc., 70 N.C. App. 221, 228, 319 S.E.2d 650, 656 (1984)). The trial court must
support its conclusions as to whether claims meet the reasonable relation test with

specific findings of fact. Messer v. Pollack, No. COA17-582, 2018 N.C. App. LEXIS
133, at *6–7 (N.C. Ct. App. Feb. 6, 2018) (remanding where trial court’s conclusion
that claims and counterclaims were “inseparable” lacked findings or explanation);
Morris v. Scenera Research, LLC, 2016 NCBC LEXIS 101, at *19–20 (N.C. Super. Ct.
Dec. 19, 2016) (explaining that to deny an award for unsuccessful claims, the trial
court must make “express findings that the unsuccessful claims did not arise from a
common nucleus of operative fact upon which the successful claims were based”
(citing Morris, 229 N.C. App. at 56, 747 S.E.2d at 377–78)).
21. In the case at bar, Insight brought a claim for breach of contract against
MDI-NC to recover its pecuniary losses arising from MDI-NC’s breach of the MRI
Agreement. Recovering damages for the MRI Agreement’s breach in this case
required pursuing relief that would help to ensure Insight recovered the money it was
due under the MRI Agreement. Part of this effort involved Insight’s request to pierce
MDI-NC’s and MDI’s corporate veils and hold all Defendants liable for MDI-NC’s
breach of the MRI Agreement. (See Am. Compl. ¶¶ 98–102(f), ECF No. 61.)
22. Our Supreme Court’s most recent opinion on corporate veil piercing clarified
that “piercing the corporate veil is not a theory of liability” but a means of seeking
relief from those “who would otherwise be shielded by the corporate form.” Green v.
Freeman, 367 N.C. 136, 146, 749 S.E.2d 262, 271 (2013). The purpose of piercing is
to “place the burden of the loss upon the party who should be responsible.” Glenn v.
Wagner, 313 N.C. 450, 458, 329 S.E.2d 326, 332 (1985).

23. Prior to the initiation of this lawsuit and throughout its duration,
Defendants represented that MDI-NC was completely insolvent. (Motion for Fees 10;
Trial Tr. 786:14–15.) What money MDI-NC had—the funds acquired from selling
MDI-NC’s assets—did not go to pay Insight for any remaining portion of the MRI
Agreement and was instead transferred to other creditors of MDI-NC and other
entities Luke and Venesky owned. For example, some of the funds generated from
the asset sale went to pay a debt owed by another LLC owned by MDI—Marquis
Diagnostic Imaging of Arizona, LLC. (Trial Tr. 542:14–543:25.) Enforcing the MRI
Agreement required Insight to request veil-piercing relief on its breach of contract
claim, and the Court entered judgment on that claim and granted Insight’s request
against all Defendants.
24. Because piercing the corporate veil is not a separate claim under the law of
this State but a means to recover on an underlying claim, the Court concludes that
Insight’s request to pierce the corporate veil in this case was inextricably interwoven
with Insight’s claim to enforce the MRI Agreement and arose from a common nucleus
of law or fact. See Green, 367 N.C. at 146, 749 S.E.2d at 271. Accordingly, because
Insight may recover reasonable fees associated with enforcement of the MRI
Agreement under section 6-21.6, Insight will be permitted to recover its reasonable
fees associated with litigating its requested veil-piercing relief. See Whiteside
Estates, Inc., 146 N.C. App. at 467, 553 S.E.2d at 443. All Defendants shall be subject
to the Court’s award of attorneys’ fees, as judgment on MDI-NC’s breach of contract

was entered against all Defendants. Insight Health Corp., 2018 NCBC LEXIS 56, at
*54–55.
25. The Court next addresses whether reasonable fees associated with Insight’s
extra-contractual claims should likewise be recoverable. In addition to its breach of
contract claim, Insight asserted claims against all Defendants for unfair or deceptive
trade practices in violation of N.C. Gen. Stat. § 75-1.1, fraudulent transfer under N.C.
Gen. Stat. § 39-23 et seq., and wrongful distribution and personal liability under N.C.
Gen. Stat. § 57D-406 et seq., and against Luke and Venesky individually for breach
of fiduciary duty and constructive fraud (collectively, the “extra-contractual claims”).
Id. at *6. Although only a subset of these claims proceeded to trial, and Insight was
not successful on all of its own claims, the Court finds that the time spent on all of
these claims overlapped with Insight’s recoverable claim and request for relief and
arose from a common nucleus of law or fact shared with Insight’s recoverable claim
and request for relief.
26. To prove that MDI-NC breached the MRI Agreement as a result of the
domination and control exerted by MDI, Luke, and Venesky, Insight submitted,
among other things, evidence of the following at trial:
a. Luke and Venesky transferred MDI-NC’s and MDI’s cash to other
entities they owned, and generally moved cash between their entities,
without proof of intercompany loans or other instruments to formalize
these transfers of funds. (Trial Tr. 506:14–511:16.)

b. The last of the funds MDI-NC received for the sale of its assets were, in
part, used to pay the debts of other LLCs owned by MDI and controlled
by Luke and Venesky instead of being used to pay Insight for any portion
of the remaining MRI Agreement’s term. (Trial Tr. 542:14–543:25.)
c. Other funds MDI-NC had remaining after selling all its assets and
ceasing business were used to pay debts owed to creditors who held
personal guarantees from Luke and Venesky. (Trial Tr. 457:7–10,
466:10–468:24.)
27. Insight’s extra-contractual claims were all based upon these same facts.
Specifically, the extra-contractual claims arose from allegations that Defendants
“caused the [d]istribution of the proceeds from [MDI-NC’s asset sale]” to MDI, Luke,
and Venesky; “entities affiliated with” MDI-NC, MDI, and Luke and Venesky; or
“other creditors on a preferential basis.” (See Am. Compl. ¶¶ 68, 79, 81, 85–97, 104–
09, 112–13.) The Court thus finds that the facts underlying Insight’s extra-
contractual claims were inextricably interwoven with those supporting Insight’s
claim for breach of contract and request to pierce the corporate veil and, further, that
the time spent litigating the extra-contractual claims overlapped with the time
expended on Insight’s recoverable claim and request for relief.
28. Moreover, Plaintiff has won substantial relief through this lawsuit,
including all of the compensatory damages it sought against Defendants. See
Hensley, 461 U.S. at 440 (noting that a plaintiff who wins substantial relief through

the pursuit of related claims “should not have his attorney’s fee reduced simply
because the [fact finder] did not adopt each contention raised”).
29. Consequently, the Court concludes that Insight shall be permitted to recover
reasonable attorneys’ fees incurred in prosecuting these extra-contractual claims.2
30. Turning to Insight’s fees associated with litigating MDI-NC’s counterclaims,
the Court reaches a similar conclusion. MDI-NC brought counterclaims for fraud in
the inducement and unfair or deceptive trade practices against Insight, both of which
the Court dismissed at summary judgment. Insight Health Corp., 2017 NCBC LEXIS
14, at *13–21.
31. MDI-NC’s fraud claim alleged that Insight fraudulently induced MDI-NC to
enter the MRI Agreement and sought damages and rescission of the MRI Agreement.
(Def. MDI-NC’s Am. Countercls. ¶¶ 33–39, ECF No. 127.) As such, the Court
concludes that defending against this counterclaim was a necessary part of enforcing
the MRI Agreement and that Insight’s fees associated with litigating this claim are
recoverable under the MRI Agreement and section 6-21.6. Furthermore, as this
counterclaim dealt directly with the MRI Agreement and its enforceability, the Court
concludes that it was inextricably interwoven with Insight’s breach of contract claim
and arose from the same common nucleus of law or fact. The time expended on this
counterclaim overlapped with that expended on Insight’s breach of contract claim.
2 In so ruling, the Court does not intend this decision to serve as precedent in cases where
the record clearly reflects significant amounts of non-overlapping time spent solely on non-
recoverable, but factually related, claims. See Philips, 242 N.C. App. at 459, 775 S.E.2d at
884 (stating apportionment is unnecessary where the time expended on recoverable and non-
recoverable claims overlaps and the claims arise form a common nucleus of law or fact).

Thus, Insight’s attorneys’ fees should be recoverable as to this counterclaim on this
additional basis.
32. MDI-NC’s unfair or deceptive trade practice claim alleged that Insight
engaged in deceptive and unfair behavior while negotiating and executing the MRI
Agreement. (Def. MDI-NC’s Am. Countercls. ¶¶ 40–43.) The alleged facts supporting
this counterclaim incorporated and were identical to those supporting MDI-NC’s
fraud in the inducement counterclaim. (Def. MDI-NC’s Am. Countercls. ¶¶ 40–43.)
The facts underlying the unfair or deceptive trade practices counterclaim were thus
the same facts that were pertinent to the enforceability of the MRI Agreement. The
Court therefore concludes that MDI-NC’s counterclaim for unfair or deceptive trade
practices arose from a common nucleus of law or fact and was inextricably interwoven
with Insight’s claim for breach of contract. The time expended on this counterclaim
overlapped with that expended on Insight’s breach of contract claim. Insight’s
attorneys’ fees shall thus be recoverable as to this counterclaim as well.
33. In sum, based on the found facts recited above, and for the reasons explained
herein, the Court concludes that all claims and counterclaims in this action were
inextricably interwoven and arose from the same common nucleus of law or fact.
Time expended litigating these claims and counterclaims overlapped significantly.
Apportionment of Insight’s fees is therefore “unnecessary and unrealistic.” Whiteside
Estates, Inc., 146 N.C. App. at 467, 553 S.E.2d at 443; see also Philips, 242 N.C. App.
at 459, 775 S.E.2d at 884. Insight shall be permitted to recover reasonable attorneys’
fees associated with litigating all claims and issues in this case.

C. Amount of Fees Awarded
34. An award for attorneys’ fees under section 6-21.6 must be reasonable, and
the trial court must make findings supporting any award. See WFC Lynnwood I LLC
v. Lee of Raleigh, Inc., No. COA18-562, __ N.C. App. __, 2018 N.C. App. LEXIS 564,
at *15 (N.C. Ct. App. June 5, 2018). “In order for the appellate court to determine if
the statutory award of attorneys’ fees is reasonable the record must contain findings
of fact as to the time and labor expended, the skill required, the customary fee for like
work, and the experience or ability of the attorney.” Id. The trial court must also
make any additional findings required by the particular circumstances that permit
an award of attorneys’ fees. See, e.g., N.C. Gen. Stat. § 6-21.6(c); N.C. Rev. R. Prof.
Conduct 1.5(a).
35. Specifically, under section 6-21.6(c), a trial court may consider the following
factors in determining the reasonableness of attorneys’ fees requested pursuant to a
reciprocal attorneys’ fees provision in a business contract:
(1) The amount in controversy and the results obtained.
(2) The reasonableness of the time and labor expended, and the billing rates
charged, by the attorneys.
(3) The novelty and difficulty of the questions raised in the action.
(4) The skill required to perform properly the legal services rendered.
(5) The relative economic circumstances of the parties.
(6) Settlement offers made prior to the institution of the action.
(7) Offers of judgment pursuant to Rule 68 of the North Carolina Rules of
Civil Procedure and whether judgment finally obtained was more favorable
than such offers.
(8) Whether a party unjustly exercised superior economic bargaining power
in the conduct of the action.
(9) The timing of settlement offers.
(10) The amounts of settlement offers as compared to the verdict.
(11) The extent to which the party seeking attorneys' fees prevailed in the
action.

(12) The amount of attorneys' fees awarded in similar cases.
(13) The terms of the business contract.
N.C. Gen. Stat. § 6-21.6(c).3
36. The Court begins by examining the reasonableness of the total number of
hours billed to Insight. In determining the number of hours reasonably expended on
the litigation, the Court will exclude those that are “excessive, redundant, or
otherwise unnecessary.” Out of the Box Developers, LLC v. Doan Law, LLP, 2014
NCBC LEXIS 39, at *24 (N.C. Super. Ct. Aug. 29, 2014) (quoting Hensley, 461 U.S.
at 434).
37. Insight’s counsel and support staff expended 3,308.2 hours pursuing this
litigation to its end. (Motion for Fees 8.) These hours are thoroughly detailed and
described in invoices Insight’s counsel submitted in connection with their client’s
Motion, located on the Court’s docket at ECF Nos. 214.1–214.5. The hours are also
summarized per month in the Affidavit of Marcus Hewitt (“Mr. Hewitt”), Insight’s
lead attorney. (Hewitt Aff. Ex. 1, ECF No. 209.)
38. Additionally, the Court has also reviewed the Affidavit of Gilbert C. Laite,
III (“Mr. Laite”), an attorney with the law firm of Williams Mullen, who, like Insight’s
attorneys, regularly practices complex civil litigation in the Raleigh, North Carolina
area. (Laite Aff. ¶ 2, ECF No. 209.) Mr. Laite affirms that the number of hours billed
by Insight’s counsel was “reasonable and necessary to litigate the types of claims,
3 The factors set out by our Court of Appeals in cases like WFC Lynnwood I LLC and those
factors listed in N.C. Gen. Stat. § 6-21.6(c) and Rule 1.5 of the North Carolina Rules of
Professional Conduct overlap significantly. The Court’s findings herein are meant to address
the relevant factors provided by each governing authority.

issues, and remedies in” this case over a multi-year period “resulting in a seven-day
jury trial.” (Laite Aff. ¶ 8.)
39. As of this date, this litigation has lasted over four years and has involved a
significant number of complicated legal issues. In order to pursue Insight’s claims
through trial, Insight’s attorneys were required to (i) research and argue complex and
novel questions of law, including evidentiary questions about breaches of fiduciary
duty, constructive fraud, and piercing the corporate veil; (ii) investigate a web of LLCs
and bank transfers; and (iii) lead a team of attorneys and paralegals that compiled,
organized, and presented evidence sufficient to convince a jury to find in favor of
Insight’s claims. Having reviewed appropriate matters of record, including Mr.
Laite’s affidavit and Insight’s attorneys’ fees invoices, the Court finds that the hours
expended on this case by Insight’s counsel are reasonable, with two caveats.
40. First, Insight’s invoice for March 2014 indicates Insight was billed a total of
41.2 hours for that month. The invoice only accounts for a portion of this time and
begins showing charges on March 10, 2014. The Court cannot discern what work the
remainder of these hours involved, and will thus exclude these hours from Insight’s
requested award. The Court also excludes 0.7 hours billed on October 30, 2017
because a redaction to Insight’s October 2017 invoice leaves the Court unable to
conclude that the billed time was related to this lawsuit. In total, the Court excludes
28.9 hours of billed time on these grounds.
41. Second, Insight’s invoices reflect hours billed by Insight’s counsel for
handling matters with State agencies or regulatory bodies and Insight’s Buncombe

County Certificate of Need—work associated with relocating the MRI scanner leased
to MDI-NC. While Insight was required to move the MRI scanner sooner than
expected following MDI-NC’s breach of the MRI Agreement, this work by counsel was
not associated with enforcing the MRI Agreement or litigating any other claim or
issue in this case. Insight would have had to relocate the MRI scanner at MDI-NC’s
facility even if MDI-NC had paid the rest of the MRI Agreement in full because MDI-
NC closed its business. The Court will exclude 11.8 hours from Insight’s fee request
on this basis.
42. Taking the above into consideration, the Court finds that a total of 40.7
hours should be excluded from Insight’s fee request. For the reasons stated above,
the Court finds the remaining 3,267.5 hours to have been reasonably expended in
litigating this case.
43. Turning to the hourly rates requested, Insight was charged hourly rates of
$375–$405 and $230–$275, respectively, by its two primary attorneys. (Motion for
Fees 8; Hewitt Aff. ¶¶ 9–11.) Litigation support staff and paralegals assigned to the
case charged Insight rates between $150 to $250 per hour. (Motion for Fees 9.) All
fees incurred after March 2016 were given a 20% discount. (Motion for Fees 9.)
44. The Court is aware of the range of hourly rates charged by law firms in
North Carolina for litigation of similar business contracts and litigation in other
complex civil cases and takes judicial notice of such rates for the purposes of this
decision. See Simpson v. Simpson, 209 N.C. App. 320, 328, 703 S.E.2d 890, 895 (2011)
(“[A] district court, considering a motion for attorneys’ fees . . . is permitted, although

not required, to take judicial notice of the customary hourly rates of local attorneys
performing the same services and having the same experience.”); see also In re Krispy
Kreme Doughnuts, Inc., S’holder Litig., 2018 NCBC LEXIS 61, at *21 (N.C. Super.
Ct. June 20, 2018) (holding an hourly rate of $300 reasonable); In re Newbridge
Bancorp S’holder Litig., 2016 NCBC LEXIS 91, at *46–47 (N.C. Super. Ct. Nov. 22,
2016) (finding rates charged in North Carolina for complex civil litigation range from
$250 to $475); Corwin v. British Am. Tobacco PLC, 2016 NCBC LEXIS 14, at *15
(N.C. Super. Ct. Feb. 17, 2016) (finding an average hourly rate of $325.04 reasonable);
In re Pike Corp. S’holder Litig., 2015 NCBC LEXIS 95, at *22–23 (N.C. Super. Ct.
Oct. 8, 2015) (finding hourly rates of $550, $375, and $250 to be within, but at the
higher end of, reasonable fees for complex business litigation in North Carolina); In
re PokerTek Merger Litig., 2015 NCBC LEXIS 10, at *23–24 (N.C. Super. Ct. Jan. 22,
2015) (concluding that fees “in the range of $250–$450 per hour” were “consistent
with the Court’s own experience” and finding “an average attorney rate of $226.83
per hour” to be “reasonable and clearly not excessive”).
45. The Court also considers Mr. Laite’s affidavit on this topic. See WFC
Lynnwood I LLC, 2018 N.C. App. LEXIS 564, at *18 (remanding case in part on
attorneys’ fees award because the record did not contain competent evidence of
comparable rates). Mr. Laite has reviewed the hourly rates charged by Insight’s
counsel, as reported by Mr. Hewitt’s affidavit, and affirms that they are “reasonable
and within the range of prevailing market rates charged by comparable law firms in

North Carolina for the type of attorneys with comparable levels of skill and
experience in complex civil litigation.” (Laite Aff. ¶ 7.)
46. On these grounds, the Court finds that the billing rates charged by Insight’s
attorneys were reasonable, appropriate, clearly not excessive, and commensurate
with customary rates charged by firms and attorneys of similar experience and skill
levels within and around Raleigh, North Carolina for like work. The Court will use
the submitted rates in calculating the attorneys’ fees to be awarded.
47. The Court next turns to the amount in controversy in this case, the results
obtained, and the extent to which the party seeking attorneys’ fees prevailed in the
action—the first and eleventh factors listed in section 6-21.6. The jury in this case
returned a verdict favorable to Insight on all submitted issues. (Verdict Sheet 1–3.)
Those claims that did not proceed to trial were, with one exception, voluntarily
dismissed by Insight.4 (Notice Partial Voluntary Dismissal and Withdrawal Certain
Claims Without Prejudice 1–2, ECF No. 182.) The jury determined that Insight was
entitled to $3,014,925 in damages for MDI-NC’s breach of contract. (Verdict Sheet
1.) The jury also determined that Luke and Venesky controlled MDI-NC and MDI
under the factors and elements of North Carolina’s instrumentality rule, (Verdict
4 The Court dismissed Insight’s claim for unfair or deceptive trade practices by directed
verdict. Insight Health Corp., 2018 NCBC LEXIS 56, at *10. As noted above, however, the
Court concludes that an apportionment of fees related to this claim, the voluntarily dismissed
claims, and Insight’s other claims is not required due to the common nucleus of facts or law
shared by all of the claims. See Hensley, 461 U.S. at 440 (“Given the interrelated nature of
the facts and legal theories in this case, the [trial court] did not err in refusing to apportion
the fee award mechanically on the basis of respondents’ success or failure on particular
issues.”); Morris, 229 N.C. App. at 58, 747 S.E.2d at 378; Whiteside Estates, Inc., 146 N.C.
App. at 467, 553 S.E.2d at 443.

Sheet 2), and the Court entered judgment piercing MDI-NC’s and MDI’s limited
liability veils and holding all Defendants liable for Insight’s breach of contract claim,
Insight Health Corp., 2018 NCBC LEXIS 56, at *54–55. These factors weigh in favor
of awarding Insight its requested attorneys’ fees.
48. The Court next considers the novelty and difficulty of questions raised in
this action, the skill required to properly perform the legal services rendered, and the
ability of Insight’s attorneys. Litigating Insight’s claims through trial required
counsel to research, brief, and argue questions of fact and law involving personal
jurisdiction over out-of-state defendants; mitigation of damages, including law
relating to lost-volume sellers and lessors; affirmative defenses, including fraud and
unclean hands; and piercing the corporate veil. See Insight Health Corp., 2018 NCBC
LEXIS 56, at *25–55; Insight Health Corp., 2017 NCBC LEXIS 91, at *10–13; Insight
Health Corp., 2017 NCBC LEXIS 14, at *21–28, *40–44; Insight Health Corp. v.
Marquis Diagnostic Imaging of N.C., LLC, 2015 NCBC LEXIS 7, at *5–22 (N.C.
Super. Ct. Jan. 21, 2015). These questions presented difficult issues for both counsel
and the Court and required a high degree of skill to litigate. Both of Insight’s counsel
possessed such skill. Mr. Hewitt is a partner at the law firm of Smith Moore
Leatherwood, LLP, has practiced in North Carolina for over sixteen years, and has
received recognition as a top attorney in his field. (Hewitt Aff. ¶¶ 3–6.) Attorney
Jeffrey Whitley (“Mr. Whitley”) is an associate with four years’ experience in complex
civil litigation. (Hewitt Aff. ¶ 9.) Mr. Hewitt and Mr. Whitley demonstrated great

ability in all aspects of this litigation.5 The Court finds that these factors weigh in
favor of awarding Insight its requested attorneys’ fees.
49. As to the relative economic circumstances of the parties, the record shows
that both sides possess a high degree of sophisticated business acumen. Insight is a
national corporation with considerable capital and revenue. Defendants Luke and
Venesky engaged in business in multiple fields, including medical imaging, fishing
tackle production, and real estate investment, and have operated multiple LLCs and
other entities to carry out that business—LLCs like MDI and MDI-NC. (Trial Tr.
736:11–20, 796:7–22.) The Court must also consider, however, that evidence
introduced at trial showed that Defendants lost a great deal of money while running
their imaging business in Asheville. After Insight filed its Motion requesting
attorneys’ fees, Defendants filed for bankruptcy. The record before the Court does
not reveal the exact economic circumstances of Defendants now, but Insight clearly
holds a superior economic position to Defendants. This factor does not weigh in favor
of awarding Insight its requested fees.
50. With regard to factors six, seven, nine, and ten of section 6-21.6(c), the Court
finds the following facts:
a. Defendants made no offers to settle before Insight began this lawsuit.
(Motion for Fees 10.)
b. Defendants have repeatedly represented that MDI-NC has no funds
with which to pay Insight. (Motion for Fees 10; Trial Tr. 786:14–15.)
5 This fact was particularly apparent given the experienced and able opponent Insight’s
counsel faced in Defendants’ counsel.

c. Both sides engaged in two mediations over the course of the case, and
only at the second did Defendants’ settlement offers exceed Insight’s
then-accrued attorneys’ fees. (Motion for Fees 10.)
d. Defendants made one offer of judgment in early 2015 in the amount of
$50,000, an amount significantly less than what the jury awarded
Insight at trial. (Motion for Fees 10.)
e. Luke and Venesky repeatedly refused to commit themselves to personal
liability for any portion of the settlement expense. (Motion for Fees 10.)
51. Defendants had multiple opportunities to avoid unnecessary expenses and
an ultimately unfavorable outcome in this case. Defendants did not seize these
opportunities. Defendants’ settlement offers were far below Insight’s contended
damages, and Luke and Venesky refused to personally take on any liability from
settlement despite repeatedly informing Insight that MDI-NC had no assets of its
own to pay Insight. The Court finds that factors six, seven, nine, and ten weigh in
favor awarding Insight its requested fees.
52. The Court has already considered factor twelve of section 6-21.6 in its
discussion of Insight’s counsel’s billed hours and rates. This factor also weighs in
favor of awarding Insight its requested attorneys’ fees.
53. With regard to the terms of the business contract in question, the Court has
already concluded that the terms of the MRI Agreement allow for Insight’s award.
The reciprocal attorneys’ fees provision contained within the MRI Agreement is

plainly worded and was agreed to by both sides. (MRI Agreement ¶ 21.) This factor
weighs in favor of awarding Insight its requested fees.
54. Finally, the Court also considers those factors listed by Rule 1.5(a) of the
North Carolina Revised Rules of Professional Conduct which have not yet been
addressed, particularly Rule 1.5(a)(2), (5), (6), and (8). The Court finds (i) that the
record does not suggest that acceptance of representation in this case precluded other
employment by Insight’s counsel, (ii) that the record does not indicate that time
limitations were imposed by Insight or by the circumstances of this case, (iii) that the
record does not indicate the nature and length of counsel’s professional relationship
with Insight, except that said relationship lasted more than four years over the course
of this case, and (iv) that Insight paid a fixed fee during this litigation.
55. Having considered the above, the Court excludes those hours deemed
excessive, redundant, or otherwise unnecessary from Insight’s request. In light of the
Court’s determination that the billing rates reflected in Insight’s invoices are
reasonable, the Court excludes the fees associated with these hours at the respective
rates at which each excluded hour was billed. Eliminating these charges results in a
total award of $917,553.80. Based on the foregoing discussion, the Court concludes
that this amount is reasonable and clearly not excessive.
D. Award of Costs
56. Insight seeks an award of its costs under N.C. Gen. Stat. §§ 6-1 and 7A-305.
Section 6-1 provides that “[t]o the party for whom judgment is given, costs shall be
allowed as provided in Chapter 7A and this Chapter.” N.C. Gen. Stat. § 6-1. This

mandate includes section 7A-305(d). Our Court of Appeals has determined that trial
courts are “afforded no discretion in determining whether or not to award those
costs enumerated under section 7A-305(d).” Khomyak v. Meek, 214 N.C. App. 54, 57,
715 S.E.2d 218, 220 (2011). These costs include mediator fees, “[r]easonable and
necessary fees of expert witnesses solely for actual time spent providing testimony at
trial, deposition, or other proceedings,” and “[r]easonable and necessary expenses for
stenographic and videographic assistance directly related to the taking of depositions
and for the cost of deposition transcripts.” N.C. Gen. Stat. § 7A-305(d).
57. Insight seeks the following amounts for costs:
a. For mediation costs:
i. $100 for a mediator’s administrative fee. (Hewitt Aff. Ex. 3.)
ii. $1,613.60 for Insight’s portion of the first mediation fee. (Hewitt
Aff. Ex. 3.)
iii. $968.75 for Insight’s portion for the second mediation fee. (Hewitt
Aff. Ex. 3.)
b. For deposition and transcript costs:
i. $748.25 for a court reporter and transcript of Luke’s deposition.
(Hewitt Aff. Ex. 3.)
ii. $2,002 for the deposition transcript of former Defendant Tom
Gentry. (Hewitt Aff. Ex. 3.)
iii. $1,491 for the deposition transcript of Venesky. (Hewitt Aff. Ex.
3.)

iv. $1,173.05 for the deposition transcript of Scott McKee. (Hewitt
Aff. Ex. 3.)
v. $597.50 for the deposition transcript of Lynn Henderson. (Hewitt
Aff. Ex. 3.)
vi. $1,703 for a court reporter and transcript for the deposition of
Defendants’ expert witness. (Hewitt Aff. Ex. 3.)
c. For Insight’s expert witness costs:
i. $1,350 for Defendants’ expert witness fee for deposition. (Hewitt
Aff. Ex. 3.)
ii. $2,688 for Insight’s expert witness fee for trial testimony. (Hewitt
Aff. Ex. 3.)
58. Defendants do not object to Insight’s requested costs “to the extent [the]
costs [are] related to Insight’s breach of contract action against MDI-NC” but do object
to these costs to the extent they relate to litigating extra-contractual claims. (Defs.’
Br. Opp’n Pl.’s Mot. Att’ys’ Fees and Interest 2.) The Court has considered this
argument and, in light of the statutes and case law cited herein, declines to engage
in such an apportionment.
59. This Court has entered judgment for Insight, and every cost Insight has
requested belongs to a category enumerated in section 7A-305(d). N.C. Gen. Stat.
§ 7A-305(d). The Court has reviewed each cost item Insight seeks to recover and the
evidence for each contained in Insight’s submitted documents. Based on this review,
the Court finds that the costs and expenses Insight incurred in litigating this action

were reasonable and necessary, customary in amount, and clearly not excessive. The
Court thus concludes Insight’s requested costs should be awarded.
IV.
CONCLUSION
60. WHEREFORE, the Court, in the exercise of its discretion, hereby
GRANTS Insight’s Motion as follows:
a. Defendants shall pay Insight its reasonable attorneys’ fees in the total
amount of $917,553.80.
b. Defendants shall pay Insight its recoverable costs in the total amount of
$14,435.15.
SO ORDERED, this the 6th day of July, 2018.
/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge