2000 CLEMENTS BRIDGE, LLC v. OFFICEMAX NORTH AMERICA, INC.
Filing
109
OPINION. Signed by Judge Joseph E. Irenas on 7/23/2013. (dmr)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
2000 CLEMENTS BRIDGE, LLC,
Plaintiff,
HONORABLE JOSEPH E. IRENAS
v.
CIVIL ACTION NO. 11-0057
(JEI/KMW)
OFFICEMAX NORTH AMERICA, INC.,
OPINION
Defendant.
APPEARANCES:
PATRAS WILLIAMS, LLC
Amy Marie Williams, Esquire
14 Countryside Lane, Suite 100
Ringwood, NJ 07456
Counsel for Plaintiff
REILLY, JANICZEK & MCDEVITT PC
Susan Valinis, Esquire
2500 McClellan Boulevard, Suite 240
Merchantville, NJ 08109
Counsel for Defendant
IRENAS, Senior District Judge:
This is a breach of contract case.
Plaintiff 2000 Clements
Bridge, LLC (“Clements Bridge”) brought suit against Defendant
OfficeMax North America, Inc. (“OfficeMax”), claiming that
OfficeMax had breached the terms of a commercial lease agreement
between the parties.
Presently before the Court is Plaintiff’s
Motion for Summary Judgment Awarding Damages, Attorneys’ Fees
1
and Legal Expenses (Dkt. No. 103). 1
For the reasons given below,
the Motion will be granted in part in favor of Clements Bridge.
Summary judgment will also be granted in part in favor of
OfficeMax.
I.
There are no material facts in dispute.
As the Court has
previously ruled on the issue of liability, see 2000 Clements
Bridge, LLC v. Officemax North America, Inc., No. 11-0057, 2012
WL 3600285 (D.N.J. Aug. 21, 2012), the Court will recount only
those facts relevant to the disposition of the instant Motion.
Plaintiff 2000 Clements Bridge, LLC owns the Deptford Landing
Shopping Center (“Shopping Center”), which consists of retail
space.
Defendant OfficeMax North America, Inc., was a tenant of
the Shopping Center.
On September 13, 2007, OfficeMax entered into a lease
(“Lease”) with the Shopping Center’s previous owner, AIG Baker
Deptford, LLC.
(SUMF 2 ¶ 1)
On July 16, 2010, Clements Bridge
acquired title to the Shopping Center and took over the Lease.
(SUMF ¶ 2)
The Lease contains three articles relevant to the
1
This Court has subject matter jurisdiction pursuant to 28 U.S.C.
§ 1332(a)(1).
2
SUMF refers to OfficeMax’s Statement of Material Undisputed Facts in Support
of OfficeMax’s Opposition to Plaintiff’s Motion for Summary Judgment on
Damages (Dkt. No. 107).
2
matter at hand.
Article 23, which sets forth the landlord’s
remedies, provides,
If Tenant shall be in default of any monetary
obligation under this lease . . . , or shall be in
default under any other provision of this
lease . . . , then Landlord may, by giving written
notice to Tenant, at any time thereafter during the
continuance of such default, either (a) terminate this
lease or (b) re-enter the Demised Premises by summary
proceedings or otherwise, expel Tenant and remove all
property therefrom, relet the Demised Premises at the
best possible rent readily obtainable (making
reasonable efforts therefor) and receive the rent
therefrom; provided, however, Tenant shall remain
liable for the equivalent of the amount of all rent
reserved herein less the avails of reletting, if any,
after deducting therefrom the reasonable cost of
obtaining possession of the Demised Premises and the
reasonable cost of any repairs and alterations
(excluding tenant improvements for any replacement
tenant or tenants thereof) necessary to prepare it for
reletting, or (c) exercise any other remedy permitted
at law or equity other than acceleration of
rents. . . . Except for the legal remedy of damages
(provided Landlord shall in all instances be required
to mitigate damages) as set forth herein and remedies
of Landlord expressly set forth herein, Landlord’s
remedies shall be exclusive of other remedies.
(Id. at Ex. 1 (“Lease”), art. 23, at 27-28)
Article 35 of the
Lease also specifies, “Unless otherwise provided, upon the
termination of this lease under any of the Articles hereof, the
parties hereto shall be relieved of any further liability
hereunder as to acts, omissions or defaults occurring prior to
such termination.”
(Id. art. 35, at 34)
Finally, Article 40
delineates the parties’ responsibilities with respect to
attorneys’ fees:
3
If either party hereto be made or becomes a party to
any litigation commenced by or against the other party
involving the enforcement of any of the rights and
remedies of such party, or arising on account of the
default of the other party in the performance of such
party’s obligations hereunder, then the prevailing
party in any such litigation, or the party becoming
involved in such litigation because of a claim against
such other party, as the case may be, shall receive
from the other party all costs and reasonable
attorneys’ fees incurred by such party in such
litigation.
(Id. art. 40, at 35)
Beginning in October 2010, OfficeMax stopped making monthly
rent payments to Clements Bridge, who sent default notices to
OfficeMax on October 12, 2010, November 5, 2010, and December 7,
2010.
(Williams Cert. ¶ 4, Exs. 2, 3, 4)
In each notice,
Clements Bridge reserved “the right to exercise any or all of
those remedies as set forth in Article 23 of the Lease . . . ,
which may include, but shall not be limited to, the right to
commence legal proceedings.”
(Id. at Exs. 2, 3, 4)
In
addition, the November 5 letter stated that Clements Bridge had
the right “to exercise any and all of the remedies set forth in
Article 23 of the Lease or elsewhere, which may include, but
shall not be limited to, the right to commence legal proceedings
against [OfficeMax] to obtain all appropriate legal and
equitable remedies.”
(Id. at Ex. 3)
On November 23, 2010, Clements Bridge filed the Complaint
in New Jersey State Court, alleging breach of contract, unjust
4
enrichment, breach of the covenant of good faith and fair
dealing, and tortious interference.
a declaratory judgment.
Clements Bridge also sought
(Notice of Removal Ex. A, Dkt. No. 1)
On December 7, 2010, OfficeMax sent Clements Bridge a written
notice that it was terminating the Lease as of February 28,
2011.
(SUMF ¶ 3)
OfficeMax removed the action to this Court on
January 6, 2011 (Dkt. No. 1) and filed an Answer and Crossclaims
on January 20, 2011.
(Dkt. No. 7)
OfficeMax closed its store.
On January 22, 2011,
Clements Bridge sent a letter to
OfficeMax on February 25, 2011 stating that it was exercising
“the remedy specifically set forth in Section 23(b),” which
allows Clements Bridge to re-enter the property.
Ex. A)
(Valinis Cert.
Clements Bridge took possession of the store on February
28, 2011.
(SUMF ¶¶ 6-7)
Between April and December 2011, Clements Bridge negotiated
a retail lease with DSW Shoe Warehouse, Inc. (“DSW”) to replace
the Lease it had with OfficeMax.
(Williams Cert. ¶ 9)
On
December 19, 2011, Clements Bridge sent OfficeMax a letter
indicating that it was terminating the Lease.
(SUMF ¶ 20)
Clements Bridge entered into a lease with DSW (“DSW Lease”) that
same day.
DSW took possession of the store on January 13, 2012,
and began paying rent on April 10, 2012.
(“Damages Stipulation”), ¶ 5)
5
(Williams Cert. Ex. 1
On August 21, 2012, this Court found that OfficeMax had
breached the Lease and granted summary judgment to Clements
Bridge on that claim.
(Dkt. Nos. 84-85)
The Court denied
summary judgment on Clements Bridge’s remaining claims and on
all of OfficeMax’s crossclaims.
(Id.)
On November 21, 2012, Clements Bridge and OfficeMax entered
into a Stipulation of Facts Regarding Damages (“Damages
Stipulation”).
(Damages Stipulation ¶ 4)
The parties agreed to
the amounts of all categories of damages that Clements Bridge
seeks but disagreed on the categories of damages to which
Clements Bridge is entitled.
The five undisputed categories of
damages are as follows:
1)
Fixed Rent for the period from December 1, 2010 through
December 19, 2011 (“Undisputed Fixed Rent Damages”) in
the amount of $419,600.41, subject to prejudgment
interest at a rate of 6%;
2)
Common area maintenance costs (“CAM”) for the period
from January 1, 2009 through December 19, 2011
(“Undisputed CAM Damages”) in the amount of
$107,980.51, subject to prejudgment interest at a rate
of 6%;
3)
Taxes for the period from January 1, 2010 through
December 19, 2011 (“Undisputed Tax Damages”) in the
amount of $132,914.56, subject to prejudgment interest
at a rate of 6%;
4)
Premises utility charge amounts for the period of March
1, 2011 through December 19, 2011 (“Undisputed Carrying
Cost Damages”) in the amount of $9,553.79, subject to
prejudgment interest at a rate of 6%; and
5)
Costs and expense that Clements Bridge paid to third
parties to repair damage to the Premises after
6
OfficeMax vacated it (“Undisputed Repair Damages”) in
the amount of $1,006.80, subject to prejudgment
interest at a rate of 6%.
(Id. ¶¶ 9, 11, 13, 15, 17)
In addition, there are six categories of damages on which
the parties disagree.
For three of the categories – Fixed Rent,
CAM, and Taxes – the disputed amounts concern the period of time
after Clements Bridge entered into the DSW Lease.
The disputed
damages are as follows:
1)
Fixed Rent for the period from December 20, 2011
through January 31, 2018 (“Disputed Fixed Rent
Damages”) in the amount of $622,700.33, with future
Disputed Fixed Rent Damages to be discounted to
present value at 6%;
2)
CAM amounts for the period from December 20, 2011
through April 9, 2012 (“Disputed CAM Damages”) in the
amount of $10,109.56;
3)
Taxes for the period of December 20, 2011 through
April 9, 2012 (“Disputed Taxes Damages”) in the amount
of $27,560.93;
4)
Premises utility charges for the period from December
20, 2011 through January 12, 2012 (“Disputed Carrying
Cost Damages”), the date on which DSW took possession
of the Premises, in the amount of $876.26;
5)
Commissions that Clements Bridge paid to third party
brokers in connection with the DSW Lease (“Commission
Damages”) in the amount of $127,088.90; and
6)
A construction allowance that Clements Bridge paid to
DSW pursuant to the DSW Lease (“Construction Allowance
Damages”) in the amount of $600,420.00.
(Id. ¶¶ 10, 12, 14, 16, 18-19)
7
Clements Bridge now moves for summary judgment on damages,
attorneys’ fees, and legal expenses.
(Dkt. No. 103)
II.
Summary judgment is proper if “the movant shows that there
is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.”
Fed. R. Civ. P.
56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986).
In deciding a motion for summary judgment, the Court
must construe the facts and inferences in a light most favorable
to the non-moving party.
Pollock v. Am. Tel. & Tel. Long Lines,
794 F.2d 860, 864 (3d Cir. 1986).
“‘With respect to an issue on which the non-moving party
bears the burden of proof, the burden on the moving party may be
discharged by ‘showing’ – that is, pointing out to the district
court – that there is an absence of evidence to support the
nonmoving party’s case.’”
Conoshenti v. Public Serv. Elec. &
Gas, 364 F.3d 135, 145-46 (3d Cir. 2004) (quoting Celotex, 477
U.S. at 323).
The role of the Court is not “to weigh the
evidence and determine the truth of the matter, but to determine
whether there is a genuine issue for trial.”
Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
Anderson v.
“Only disputes
over facts that might affect the outcome of the suit under the
8
governing law will properly preclude the entry of summary
judgment.”
Id. at 249.
Where the meaning of contract language is at issue, a party
is entitled to summary judgment “only if the contract language
is unambiguous,” such that it “is subject to only one reasonable
interpretation.”
Arnold M. Diamond, Inc. v. Gulf Coast Trailing
Co., 180 F.3d 518, 522 (3d Cir. 1999).
While “the threshold
inquiry as to whether contract terms are ambiguous is a legal
question,” the interpretation of an ambiguous contract term is
left to the factfinder.
Teamsters Indus. Employees Welfare Fund
v. Rolls-Royce Motor Cars, Inc., 989 F.2d 132, 135 n.2 (3d Cir.
1993).
III.
A.
The threshold dispute question before the Court is which
remedy Clements Bridge elected under Article 23.
OfficeMax
argues that Clements Bridge ultimately chose to terminate the
Lease pursuant to Article 23(a) and is therefore barred from
recovering damages for the period from December 20, 2011,
onwards under Article 35.
The Court disagrees.
First, the Court finds that the remedies listed in Article
23 are not exclusive.
Article 23 states, “Landlord may . . .
either (a) terminate this lease or (b) re-enter the Demised
9
Premises . . . , or (c) exercise any other remedy permitted at
law or equity . . . .”
(Lease art. 23, at 27-28)
Nothing in
this language indicates that Clements Bridge could pursue only
one of the listed remedies.
Rather, Clements Bridge was
entitled to exercise any and all remedies in Article 23,
including termination, re-entry, and litigation.
Second, even if the Article 23 remedies were exclusive, the
Court finds that Clements Bridge elected to re-enter, retake,
and relet under Article 23(b).
Thus, Clements Bridge’s
purported termination of the Lease pursuant to Article 23(a) on
December 19, 2011 was invalid.
As such, Article 35, which
limits the parties’ liability after the Lease is terminated,
does not apply.
(Id. art. 35, at 34)
The Court now turns to
the question of damages.
B.
“Judicial remedies upon breach of contract fall into three
general categories:
performance.”
1982).
restitution, compensatory damages and
Donovan v. Bachstadt, 453 A.2d 160, 165 (N.J.
The purpose of compensatory damages is to put the
nonbreaching party in the position it would have been in absent
the breach.
Totaro, Duffy, Cannova & Company, L.L.C., 921 A.2d
1100, 1107-08 (N.J. 2007).
“What that position is depends upon
what the parties reasonably expected.”
10
Donovan, 453 A.2d at
165.
Thus, a defendant is liable only for losses that were
foreseeable result of a breach when the contract was made.
Id.
In this case, the parties’ expectations are clear:
Clements Bridge expected that OfficeMax would pay it a certain
amount of Fixed Rent until the Lease expired on January 31,
2018.
The parties also expected that for the duration of the
Lease, OfficeMax would cover common area maintenance (“CAM”)
costs, real estate taxes, and utility charges.
Therefore,
Clements Bridge is entitled to the following damages:
1)
Disputed Fixed Rent Damages in the amount of
$622,700.33, 3 which is the difference between the
amount of rent Clements Bridge now receives from DSW
and the amount of rent it would have received from
OfficeMax for the duration of the Lease;
2)
$10,109.56 in Disputed CAM Damages for the period from
December 20, 2011, through April 9, 2012, the date on
which DSW began paying rent;
3)
$27,560.93 in Disputed Taxes Damages for the period of
December 20, 2011, through April 9, 2012; and
4)
Disputed Carrying Cost Damages in the amount of
$876.26, which is the amount that Clements Bridge paid
in utility charges from December 20, 2011, the date on
which Clements Bridge entered into the Lease with DSW,
through January 12, 2012, the date on which DSW
accepted possession of the Premises.
(Damages Stipulation ¶¶ 10, 12, 14, 16)
Clements Bridge also asserts that it can recover brokers’
commissions that it paid in connection with the DSW Lease under
3
Per the parties’ Damages Stipulation, any future Disputed Fixed Rent Damages
will be discounted to present value at 6%.
11
a compensatory damages theory.
The Court agrees.
The purpose
of compensatory damages is to put the plaintiff in the position
it would have been in but for the defendant’s breach.
921 A.2d at 1107-08.
Totaro,
Here, Clements Bridge would not have had
to pay these fees absent OfficeMax’s breach.
Further, the
commission was a foreseeable consequence of the breach,
particularly given the Lease’s express requirement that Clements
Bridge mitigate its damages in order to pursue remedies at law
or equity.
(Lease art. 23(c), at 28)
However, the Court does not agree that Clements Bridge is
entitled to the full amount of the Commission Damages.
Lease was to expire on January 31, 2018.
Lease will expire on January 31, 2022. 4
The
By contrast, the DSW
The commission that
Clements Bridge paid covers the full term of the DSW Lease,
which lasts four years beyond when the OfficeMax Lease would
have expired.
Allowing Clements Bridge to recover Commission
Damages for the years beyond the expiration of the OfficeMax
Lease would result in a windfall for Clements Bridge.
Therefore, the Court will reduce the Commission Damages by 40%
from $127,088.90 to $76,253.34.
This reduction is proportional
to the number of years that the DSW Lease lasts beyond the
expiration of the OfficeMax Lease.
4
For the purposes of the damages calculation, the Court assumes that DSW will
not exercise its option to extend the DSW Lease to either fifteen or twenty
years.
12
Finally, Clements Bridge seeks damages for $600,420.00 in
Construction Allowance damages for money it paid to DSW under
the terms of the DSW Lease.
Clements Bridge contends that these
costs were a foreseeable consequence of OfficeMax’s breach and
thus recoverable under a compensatory damages theory.
OfficeMax
argues that Article 23(b) bars recovery for these costs because
it provides that OfficeMax is responsible for “the reasonable
cost of any repairs and alterations (excluding tenant
improvements for any replacement tenant[)].”
(Id. art. 23(b),
at 28)
In this case, the Lease bars Clements Bridge from
recovering these costs as compensatory damages.
“Under [New
Jersey] law, when the terms of a contract are clear and
unambiguous, there is no room for construction and the court
must enforce those terms as written.”
Orange, 815 A.2d 956, 959 (N.J. 2003).
Watson v. City of E.
Article 23(b) explicitly
excludes tenant improvements for the replacement tenant as a
category of damages for which Clements Bridge may recover.
Accordingly, the Court finds that Clements Bridge is not
entitled to Construction Allowance Damages.
In sum, summary judgment will be granted in favor of
Clements Bridge with regard to the Disputed Fixed Rent Damages,
Disputed CAM Damages, Disputed Taxes Damages, Disputed Carrying
Cost Damages, and Commission Damages in part.
13
Summary judgment
will be granted in favor of OfficeMax with respect to the
Construction Allowance Damages.
Clements Bridge will be awarded
damages in the following amounts:
Undisputed Damages 5
$671,056.07 6
Disputed Fixed Rent Damages
$622,700.33 7
Disputed CAM Damages
$10,109.56
Disputed Taxes Damages
$27,560.93
Disputed Carrying Cost Damages
$876.26
Commission Damages
$76,253.34
Total
$1,408,556.49
IV.
Clements Bridge also seeks attorneys’ fees and costs and
divides those fees into three categories:
litigation attorneys’
fees pursuant to Article 40, pre-litigation fees in connection
with OfficeMax’s default, and mitigation of damages fees in
connection with the negotiation of the DSW Lease.
Cert. ¶ 14)
(Williams
OfficeMax opposes these fees for two reasons.
First, OfficeMax argues that Article 40 does not permit Clements
Bridge to recover attorneys’ fees for pre-litigation and lease-
5
See supra pp. 6-7 for a breakdown of the Undisputed Damages; see also
Damages Stipulation ¶¶ 9, 11, 13, 15, 17.
6
This amount is subject to the assessment of prejudgment interest at a rate
of 6%, per the Damages Stipulation. (Damages Stipulation ¶¶ 9, 11, 13, 15,
17)
7
As agreed in the Damages Stipulation, this amount will be discounted to
present value at 6%. (Id. ¶ 10)
14
negotiation work.
Second, OfficeMax contends that the fees
sought are unreasonable.
The Court addresses these arguments in
turn.
A.
In recognition of New Jersey’s strong public policy against
shifting attorneys’ fees and costs, the New Jersey Supreme Court
has adopted “the ‘American Rule,’ which prohibits recover of
counsel fees by the prevailing party against the losing party.”
In re Niles, 823 A.2d 1, 7 (N.J. 2003) (citing In re Estate of
Lash, 766 A.2d 765, 771 (N.J. 2001)).
“However, ‘a prevailing
party can recover those fees if they are expressly provided for
by statute, court rule, or contract.’”
Litton Indus., Inc. v.
IMO Indus., Inc., 982 A.2d 420, 427 (N.J. 2009) (quoting
Packard-Bamberger & Co., Inc. v. Collier, 771 A.2d 1194, 1202
(N.J. 2001)).
“[E]ven where attorney-fee shifting is controlled
by contractual provisions, courts will strictly construe that
provision in light of the general policy disfavoring the award
of attorneys’ fees.”
N. Bergen Rex Transp., Inc. v. Trailer
Leasing Co., 730 A.2d 843, 848 (N.J. 1999) (citing McGuire v.
City of Jersey City, 593 A.2d 309, 417 (N.J. 1999)).
There is no dispute in this case that the parties
contracted for shifting attorneys’ fees and costs to the
prevailing party.
OfficeMax instead challenges Clements
15
Bridge’s request for attorneys’ fees and costs outside of this
litigation.
The Court agrees that Clements Bridge may not
recover for this work.
Article 40 of the Lease provides,
If either party hereto be made or becomes a party
to any litigation commenced by or against the other
party involving the enforcement of any of the rights
and remedies of such party, or arising on account of
the default of the other party in the performance of
such party’s obligations hereunder, then the
prevailing party in any such litigation . . . shall
receive from the other party all costs and reasonable
attorneys’ fees incurred by such party in such
litigation.
(Lease art. 40, at 35)
This provision plainly limits attorneys’
fees and costs to those sustained as part of any litigation
around the Lease.
Fees and costs for attorney work performed in
connection with the pre-litigation default notices and
negotiation of the DSW Lease are therefore outside the scope of
Article 40, especially in light of New Jersey’s directive to
construe the language strictly.
Clements Bridge argues that it should be awarded these fees
and costs as compensatory damages on the theory that but for
OfficeMax’s breach, there would have been no need for Clements
Bridge to send default notices or negotiate a new lease.
While
that may be true as a matter of fact, the argument fails as a
basis for awarding attorneys’ fees.
As noted above, New Jersey
has a strong public policy against shifting attorneys’ fees and
16
costs.
Allowing Clements Bridge to recover fees and costs for
work relating to OfficeMax’s default and the DSW Lease would
controvert that policy, especially because the parties expressly
contracted around the presumption against fee-shifting and
limited fee-shifting to fees incurred in litigation.
Accordingly, Clements Bridge may not recover attorneys’ fees and
costs for any work related to OfficeMax’s default prior to the
commencement of litigation or the negotiation of the DSW Lease.
B.
OfficeMax next argues that the fees incurred in litigation
are unreasonable.
“In determining the reasonableness of an
attorneys’ fee award, the threshold issue ‘is whether the party
seeking the fee prevailed in the litigation.’”
at 428 (quoting N. Bergen, 730 A.2d at 848).
Litton, 982 A.2d
After making that
determination, the Court must use the lodestar method, which
involves multiplying the total number of hours reasonably
expended by a reasonable hourly rate, to decide what constitutes
a reasonable fee.
Rendine v. Pantzer, 661 A.2d 1202, 1226 (N.J.
1995); see also Hensley v. Eckerhart, 461 U.S. 424, 433-37
(1983).
The Court must consider the following factors in
determining the reasonableness of the fee:
(1) the time and labor required, the novelty and
difficulty of the questions involved, and the skill
requisite to perform the legal service properly;
17
(2) the likelihood, if apparent to the client, that
the acceptance of the particular employment will
preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for
similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by
the circumstances;
(6) the nature and length of the professional
relationship with the client;
(7) the experience, reputation, and ability of the
lawyer or lawyers performing the services;
(8) whether the fee is fixed or contingent.
Furst v. Einstein Moomjy, Inc., 860 A.2d 435, 447 (N.J.
2004) (citing RPC 1.5(a)).
“The computation of the lodestar mandates that the trial
court determine the reasonableness of the hourly rate of the
prevailing attorney in comparison to rates for similar services
by lawyers of reasonably comparable skill, experience, and
reputation in the community.”
Litton, 982 A.2d at 429 (internal
quotation marks and citations omitted).
The Court must also
determine whether the time expended to achieve the result is
“equivalent to the time ‘competent counsel would have expended
to achieve a comparable result.’”
Furst, 860 A.2d at 447
(quoting Rendine, 661 A.2d at 1227).
The Court should exclude
hours that are not reasonably expended, including those that are
18
excessive, redundant, or otherwise unnecessary.
A.2d at 1226.
Rendine, 661
Finally, the Court must consider the degree of
success when deciding whether the time expended is reasonable.
Litton, 982 A.2d at 429.
The Court may reduce an award only “in
response to specific objections made by the opposing party.”
Interfaith Cmty. Org. v. Honeywell Int’l, Inc., 426 F.3d 694,
711 (3d Cir. 2005).
1.
Reasonable Rate
Clements Bridge seeks an hourly rate of $405.00 per hour
for legal services performed by partners in connection with
litigation and an hourly rate of $150.00 per hour for work
performed by paralegals in connection with litigation.
(Williams Cert. ¶ 19)
The party seeking fees bears the burden
“of producing sufficient evidence of what constitutes a
reasonable market rate for the essential character and
complexity of the legal services rendered in order to make out a
prima facie case.”
225 (3d Cir. 1997).
Smith v. Phila. Hous. Auth., 107 F3d 223,
“This burden is normally addressed by
affidavits prepared by other attorneys in the relevant legal
community.”
Access 4 All, Inc. v. Boardwalk Regency Corp., No.
08-3817, 2012 WL 3627775, at *4 (D.N.J. June 28, 2012).
To support the reasonableness of its requested rate,
Clements Bridge submits a certification from lead counsel, Amy
19
Williams, regarding the nature of the work performed (Williams
Cert.); a profile of the firm, Patras Williams, LLC, and its
partners, Ms. Williams and Anna Patras (id. Ex. 9); and
certifications from four partners from four different law firms
who practice in the District of New Jersey stating that the
requested rates are commensurate with the prevailing rates in
this legal community (Bundy Cert.; Kaller Cert.; Vales Cert.;
Argiropoulous Cert.).
these submissions.
Clements Bridge has met its burden with
As OfficeMax has not opposed the
reasonableness of the hourly rates, the Court finds the proposed
rates to be reasonable.
2.
Reasonable Hours
OfficeMax raises several objections to Clements Bridge’s
request for fees.
The Court addresses them in turn.
a.
First, OfficeMax argues that the award should be reduced to
reflect the fact that Clements Bridge succeeded on only one of
its claims.
(Valinis Cert. ¶ 31(a))
The Court disagrees.
Although the Court granted summary judgment in favor of Clements
Bridge on only its breach of contract claim, the remaining
claims for unjust enrichment, breach of the covenant of good
faith and fair dealing, tortious interference, and a declaratory
20
judgment were clearly pled in the alternative.
Further,
Clements Bridge’s success on its breach of contract claim
allowed it to recover almost all of the damages that it sought.
Cf. N. Bergen, 730 A.2d at 850 (holding that the attorneys’ fee
award should be reduced where plaintiff recovered only fiftyeight percent of the damages it sought).
Accordingly, the Court
will not reduce the award on this basis.
b.
OfficeMax next argues that Clements Bridge cannot recover
for time that its counsel block billed because the time entries
are too vague.
“A fee petition is required to be specific
enough to allow the district court ‘to determine if the hours
claimed are unreasonable for the work performed.’”
Rode v.
Dellarciprete, 892 F.2d 1177, 1191 (3d Cir. 1990) (quoting
Pawlak v. Greenawalt, 713 F.2d 972, 978 (3d Cir. 1983)).
Courts
in this district have repeatedly held that block billing can
meet this requirement.
See, e.g., Fed. Trade Comm’n v. Circa
Direct LLC, No. 11-2712, 2012 WL 6568417, at *9 (D.N.J. Dec. 17,
2012) (not yet published); Ill. Nat. Ins. Co. v. Wyndham
Worldwide Operations, Inc., No. 09-1724, 2011 WL 2293334, at *4
(D.N.J. June 7, 2011); United States v. NCH Corp., Nos. 98-5268,
05-0881, 2010 WL 3703756, at *4 (D.N.J. Sept. 10, 2010).
21
In
this case, the entries are specific enough for the Court to
determine whether the time expended was reasonable.
c.
OfficeMax also claims that Patras Williams spent excessive
amounts of time drafting and reviewing pleadings.
OfficeMax
argues that it was unreasonable for counsel to bill 10.2 hours
on its Complaint, 5.1 hours reviewing OfficeMax’s Answer and
Counterclaims, and 35.3 hours on its moving papers for its
motion for summary judgment on liability.
¶ 31(c))
(Valinis Cert.
OfficeMax also objects to 18.2 hours of time that
counsel spent preparing and responding to discovery requests. 8
First, 10.2 hours is a reasonable amount of time to spend
drafting a 17-page Complaint comprising 97 paragraphs and
several claims.
Second, 5.1 hours spent reviewing and analyzing
OfficeMax’s Answer and Counterclaims appears reasonable in light
of the length of Clements Bridge’s Complaint and the
counterclaims that OfficeMax asserted.
Third, the Court cannot
say that it was unreasonable for counsel to spend 35.3 hours
preparing Clements Bridge’s moving papers for its motion for
summary judgment on liability given that Clements Bridge
submitted a 34-page brief, a 17-page Rule 56.1 statement, and a
8
OfficeMax has not explained why any of these hours are excessive, nor has it
offered suggested reductions.
22
120-page certification in support of its motion.
Fourth, 18.2
hours spent on preparing and responding to discovery requests
seems reasonable, as those hours cover “the exchange of initial
disclosures, the production of more than 3,000 pages of
documents between the parties, preparation of requests for
admissions and documents, as well as interrogatories propounded
by [Clements Bridge], and responses to requests for documents
and interrogatories propounded by [OfficeMax].”
Cert. ¶ 15)
(Williams Reply
Therefore, the Court will not reduce these hours.
d.
OfficeMax also asks the Court to exclude 8.2 hours that Ms.
Williams billed because they are administrative tasks that could
have been completed by a paralegal.
(Valinis Cert. ¶ 31(d))
Specifically, OfficeMax seeks to exclude the following entries:
(1)
(2)
(3)
(4)
November 22, 2010 — “Prepare Summons and Case
Information Statement re: OMX Complaint; draft
filing letter; facilitate filing of OMX Complaint
w/ court; t/c w/ REDACTED” – 1.3 hours
December 7, 2010 — “Coordinate service of OMX
Complaint on OMX registered agent; finalize and
coordinate delivery of OMX December rent default
notice; electronic correspondence w/ C. Lents re:
same; review and analysis of OMX lease
termination letter” – 0.8 hours
December 29, 2010 — “Electronic correspondence w/
REDACTED; finalize file and serve track
assignment motion” – 1.1 hours
May 4, 2011 — “T/c w/ REDACTED; finalize and
serve discovery requests on OMX counsel;
preliminary review and analysis of OMX discovery
23
(5)
requests; electronic correspondence w/ REDACTED;
t/c w/ REDACTED” – 1.3 hours
June 5, 2011 — “Finalize initial draft of written
discovery responses; t/c w/ REDACTED; prepare
service copies and serve same on OMX counsel” –
3.7 hours
(Valinis Cert. ¶ 31(d))
In reply, Ms. Williams certifies that Patras Williams did
not employ any paralegals or administrative staff with
litigation experience during the period covered by three of the
challenged entries (November 22, 2010, December 7, 2010, and
December 29, 2010).
(Williams Reply Cert. ¶ 10)
Be that as it
may, the Court agrees with OfficeMax that administrative tasks
should not be billed at partner rates.
See Tenafly Eruv Ass’n,
Inc. v. Borough of Tenafly, 195 F. App’x 93, 101 (3d Cir. 2006)
(reducing an award where an attorney performed administrative
tasks).
The Court will therefore reduce Ms. Williams’s billing
rate by approximately fifty percent to $200.00 per hour for 5.2
of these hours.
As the Court agrees with Ms. Williams that some
of the challenged hours are not administrative, the Court will
exclude 3.0 hours from the lower rate.
e.
OfficeMax argues that several fees and costs should be
excluded as pre-litigation expenses, which would be barred under
Article 40.
(Valinis Cert. ¶ 31(e))
24
However, all of the
disputed fees and costs were incurred after litigation in this
matter had already begun.
Thus, there is no basis for excluding
these hours.
f.
OfficeMax’s next argument is that certain fees and costs
for a reassignment of track designation in New Jersey Superior
Court should be excluded because it was the result of counsel’s
error.
(Valinis Cert. ¶ 31(f))
In reply, Ms. Williams argues
that Clements Bridge sought a reassignment of track designation
because subsequent to Clements Bridge filing the Complaint,
OfficeMax defaulted on its December rent and indicated that it
was both terminating the Lease and planning to close the store
immediately.
(Williams Reply Cert. ¶¶ 21-26, Ex. A)
Given
these actions, Clements Bridge sought to accelerate discovery to
facilitate the “prompt resolution” of the case.
¶¶ 14-15)
(Id. Ex. A
As OfficeMax has not provided any evidence suggesting
that the motion to change the track designation was submitted to
correct counsel’s error rather than being submitted in response
to the changing factual circumstances, the Court will not
exclude these hours.
25
g.
OfficeMax also seeks to exclude time spent on Clements
Bridge’s Motion to Strike OfficeMax’s amended counterclaims, as
the Motion was denied.
(Valinis Cert. ¶ 31(g))
But as Clements
Bridge points out, this Court ultimately found that OfficeMax’s
counterclaims were without merit.
Further, the fact that a
prevailing party lost a nondispositive motion does not mean that
it is not is not entitled to fees for that motion.
Therefore,
the Court will not exclude these hours.
h.
OfficeMax next argues that 52.2 hours should be excluded or
reduced because Ms. Williams and her partner, Ms. Patras,
conducted excessive research for those tasks based on their
claimed level of expertise.
(Valinis Cert. ¶ 31(h))
The Court
cannot say that it was unreasonable for Ms. Williams and Ms.
Patras to spend 52.2 hours on research over the course of over a
year of litigation during which time the parties engaged in
extensive discovery and filed dispositive motions.
i.
Finally, OfficeMax contends that the request should be
denied “for charges related to unnecessary overnight mail and
overhead costs (i.e., bates labeling and duplication costs).”
26
(Id. ¶ 31(i))
Once again, OfficeMax provides no explanation for
why these costs were unnecessary.
The Court is satisfied with
Ms. Williams’s explanations for these costs (Williams Reply
Cert. ¶¶ 40-47, Ex. B) and deems these costs reasonable.
Accordingly, they will not be reduced.
3.
Lodestar
For the reasons discussed above, the Court finds that the
lodestar calculation is as follows:
Legal Professional
Reasonable
Hourly Rate
Total Fee
$405
$200
Reasonable
Hours
Expended
468.3
5.2
Amy Williams, Esquire
Amy Williams –
Administrative
Anna Patras, Esquire
Paralegal
$405
$150
8.2
36.8
$3,321.00
$5,520.00
These fees total $199,542.50.
to recover costs of $5,323.00.
$189,661.50
$1,040.00
Clements Bridge is also entitled
Thus, the total award for
attorneys’ fees and costs is $204,865.50.
V.
For the reasons stated above, Plaintiff Clements Bridge’s
Motion for Summary Judgment Awarding Damages, Attorneys’ Fees
and Legal Expenses is granted in part.
Summary judgment is
granted in favor of OfficeMax with respect to the Commission
Damages in part, Construction Allowance Damages, pre-litigation
27
attorneys’ fees, and lease-negotiation attorneys’ fees.
Summary
judgment is granted in favor of Clements Bridge in all other
respects.
Clements Bridge is awarded a total of $1,613,421.99,
with $671,056.07 subject to the assessment of prejudgment
interest at a rate of 6%, and $622,700.33 subject to discount to
present value at a rate of 6%.
The Court will issue an
appropriate Order.
Date:
July 23, 2013
/s/ Joseph E. Irenas ______
Joseph E. Irenas, S.U.S.D.J.
28
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