CAMMARATA ASSOCIATES v. KELLY CAPITAL LLC et al

Filing 30

MEMORANDUM OPINION & ORDER denying 23 Motion for Attorney Fees. Signed by Judge Noel L. Hillman on 4/26/2017. (tf, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

FRANK S. CAMMARATA,
as successor to MHP II
Corporation,
doing business as
CAMMARATA ASSOCIATES,

1:16-cv-00322-NLH-AMD
MEMORANDUM OPINION & ORDER

Plaintiff,
v.
KELLY CAPITAL LLC and MICHAEL
R. KELLY,
Defendants.

APPEARANCES:
THOMAS J. BURNS, III
LINDSEY HOUSMAN
BUDD LARNER
150 JOHN F. KENNEDY PARKWAY
SHORT HILLS, NJ 07078
On behalf of plaintiff
JONATHAN DAVID HENRY
SHAWN LUNNEY KELLY
DENTONS US LLP
101 JFK PARKWAY
SHORT HILLS, NJ 07078-2708
On behalf of defendants
HILLMAN, District Judge
WHEREAS, on October 14, 2016, the Court dismissed the
claims of plaintiff, Frank S. Cammarata, who does business as a
sole proprietor under the name Cammarata Associates, against
defendants, Kelly Capital LLC and Michael Kelly, for lack of

personal jurisdiction (Docket No. 21); and
WHEREAS, plaintiff had alleged that defendants failed to
pay him a commission for his role in connecting defendants with
a Virginia-based tobacco company that sold escrow release funds;
and
WHEREAS, when assessing defendants’ motion to dismiss for
lack of personal jurisdiction, the Court found that defendants
did not deliberately engage in significant activities in New
Jersey, or create a continuing obligation between them and
plaintiff, or manifestly avail themselves of the privilege of
conducting business in New Jersey, and, as a result, this Court
could not exercise personal jurisdiction over defendants to
resolve plaintiff’s claims against them (Docket No. 21 at 23);
and
WHEREAS, the Court dismissed without prejudice plaintiff’s
complaint, and noted that plaintiff was not left without a forum
in which to prosecute his claims against defendants – e.g., in
California where defendants are citizens (Docket No. 21 at 19
n.9 and 23 n.11); and
WHEREAS, defendants have filed the instant motion 1 for

1

Defendants have also filed a motion to seal portions of their
billing records in support of their motion for attorney’s fees
and costs contending that those portions are privileged because
they contain attorney mental impressions and work product. (See
Docket No. 24.) The Court finds that defendants’ redactions
meet the requirements of Local Civil Rule 5.3(c), and,
2

attorney’s fees and costs, arguing that they are entitled to
their fees and costs because they are the prevailing party in
this case, as provided in their agreement:
8) ATTORNEY'S FEES: In any litigation, arbitration or other
legal proceedings which may arise between the parties
hereto, the prevailing party shall be entitled to recover
its costs, including costs of arbitration, and reasonable
attorney's fees in addition to any other relief to which
such party may be entitled.
(Docket No. 24-1 at 2); and
WHEREAS, plaintiff has opposed defendants’ motion, arguing
that in addition to defendants’ motion being untimely, it is
substantively unavailing because they cannot be deemed as the
“prevailing party” when the Court dismissed plaintiff’s
complaint for lack of personal jurisdiction, rather than on its
merits, and because plaintiff did not agree to the attorney’s
fees provision as it is being interpreted by defendants 2; and
WHEREAS, plaintiff further argues that defendants’ motion
is premature because on February 21, 2017, he refiled his
complaint against defendants in the Southern District of
California (Docket No. 28); and

accordingly, defendants’ motion to seal will be granted.
separate Order will be entered.
2

A

Plaintiff also argues that $130,000 in fees for a motion to
dismiss for lack of personal jurisdiction in a case where the
amount in controversy is $680,000 is palpably unreasonable and
objectionable. Defendants disagree that their fees are
unreasonable and objectionable. Because defendants’ motion will
be denied, the Court does not need to address this argument.
3

WHEREAS, defendants counter that their motion is timely,
and that plaintiff cannot dispute the clear and unambiguous
language of the attorney’s fees provision that makes defendants
the prevailing party; and
WHEREAS, even accepting that defendants’ motion was timely
filed, 3 the Court must deny defendants’ motion; and
WHEREAS, if the Court were to substantively consider
defendants’ motion, the Court would need to construe the
attorney’s fees provision in the parties’ agreement, which would
necessitate a choice-of-law analysis because the agreement is
silent as to which state’s law should apply to it, and that
undertaking would be in direct contravention of the Court’s
finding that it could not exercise personal jurisdiction over
defendants to resolve plaintiff’s claims against them; and
WHEREAS, in their motion to dismiss plaintiff’s complaint
for lack of subject matter jurisdiction, defendants argued that

3

See Fed. R. Civ. P. 54(d) (“A claim for attorney's fees and
related nontaxable expenses must be made by motion unless the
substantive law requires those fees to be proved at trial as an
element of damages. . . . [T]he motion must . . . be filed no
later than 14 days after the entry of judgment . . . .”); and
Local Civil Rule 54.1(a) (“Within 30 days after the entry of a
judgment allowing costs, or within 30 days of the filing of an
order dispositive of the last of any timely-filed post-trial
motions, whether or not an appeal has been filed, the prevailing
party shall serve on the attorney for the adverse party and file
with the Clerk a Bill of Costs and Disbursements, together with
a notice of motion when application will be made to the Clerk to
tax the same.”).
4

it would violate their due process rights if the Court exercised
personal jurisdiction over them, but they are now effectively
asking the Court to exercise that jurisdiction to interpret the
parties’ contract and determine that they are prevailing parties
entitled to attorney’s fees under that contract; and
WHEREAS, defendants cannot have it both ways, see Ruhrgas
AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999) (citation
omitted) (explaining that personal jurisdiction “represents a
restriction on judicial power . . . as a matter of individual
liberty,” and “[t]herefore, a party may insist that the
limitation be observed, or he may forgo that right, effectively
consenting to the court's exercise of adjudicatory authority”);
and
WHEREAS, it is fundamental that personal jurisdiction is
“‘an essential element of the jurisdiction of a district . . .
court,’ without which the court is ‘powerless to proceed to an
adjudication,’” id. (quoting Employers Reinsurance Corp. v.
Bryant, 299 U.S. 374, 382 (1937)); and
WHEREAS, if defendants’ motion means to suggest that
plaintiff’s case was filed in this forum in violation of Fed. R.

5

Civ. P. 11 4 or 28 U.S.C. § 1927 5, defendants should have pursued
that relief 6; and
WHEREAS, defendants’ request for attorney’s fees pursuant
to the attorney’s fees provision in the parties’ agreement is
more akin to an affirmative claim for the enforcement of a
contractual provision, which defendants could raise as a
counterclaim in plaintiff’s currently pending action in the
Southern District of California, or as a separate action where
personal jurisdiction over them exists;

4

Rule 11 provides, in relevant part, “A sanction imposed under
this rule must be limited to what suffices to deter repetition
of the conduct or comparable conduct by others similarly
situated. The sanction may include nonmonetary directives; an
order to pay a penalty into court; or, if imposed on motion and
warranted for effective deterrence, an order directing payment
to the movant of part or all of the reasonable attorney's fees
and other expenses directly resulting from the violation.”
5

28 U.S.C. § 1927 provides, “Any attorney or other person
admitted to conduct cases in any court of the United States or
any Territory thereof who so multiplies the proceedings in any
case unreasonably and vexatiously may be required by the court
to satisfy personally the excess costs, expenses, and attorneys’
fees reasonably incurred because of such conduct.”
6

The Court notes that there has not been a showing of the
requisite conduct by plaintiff or his counsel for Rule 11 or §
1927 sanctions to apply. See In re Cendant Corp. Derivative
Action Litigation, 96 F. Supp. 2d 403, 406 (D.N.J. 2000)
(explaining that “sanctions cannot be applied as a penalty
against a losing party merely for losing: ‘[L]itigants misuse
the Rule when sanctions are sought against a party or counsel
whose only sin was being on the unsuccessful side of a ruling or
judgment.’” Princeton Economics Group v. AT & T, 768 F. Supp.
1101, 1116 (D.N.J. 1991) (quoting Gaiardo v. Ethyl Corp., 835
F.2d 479, 483 (3d Cir. 1987))).
6

THEREFORE,
IT IS on this

26th

day of

April

, 2017

ORDERED that the MOTION for Attorney’s Fees Pursuant to
Fed. R. of Civ. P. 54(d) and Local Civil Rule 54.1 by MICHAEL R.
KELLY, KELLY CAPITAL LLC [23] be, and the same hereby is,
DENIED.

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

At Camden, New Jersey

7