BAPU CORP. et al v. CHOICE HOTELS INTERNATIONAL,INC.

Filing 69

LETTER OPINION. Signed by Judge William J. Martini on 6/1/10. (gh, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
M A R T I N LU T H E R KIN G JR . FED E R A L BLD G . & U . S . C O U R T H O U S E 5 0 W A L N U T STR E E T , P.O . BO X 419 N E W A R K , N J 07101-0419

[phone]

WILLIAM J. MARTINI JUDGE

L E T T E R OPINION J u n e 1, 2010

M ic h a e l R. Curran E -4 Greenbriar Court C lif to n , New Jersey 07012 (Attorney for Plaintiffs) D a v id A. Haworth B a lla rd , Spahr, Andrews & Ingersoll, LLP P la z a 1000, Suite 500, Main Street V o o rh e e s, New Jersey 08043 (Attorneys for Defendant) RE: B a p u Corp., et al. v. Choice Hotels International, Inc. C iv . No. 07-5938 (WJM)

D e a r Counsel: T h is matter comes before the Court on Defendant Choice Hotels International's (" C h o ic e " ) motion for attorneys' fees, post-judgment interest and costs. Defendant C h o ic e seeks to enforce the fee provision contained in its franchise agreement with P la in tif f s Bapu Corp. and Harshad Patel. After consideration of the moving papers and P la in tif f s ' opposition, Defendant's motion is GRANTED. I. BACKGROUND S in c e the Court writes solely for the benefit of the parties, only a brief summary of th e most relevant facts follows. Plaintiffs entered into a franchise agreement with D e f e n d a n t Choice Hotels, which allowed them to operate a hotel under the name Quality In n . Under the agreement, Plaintiffs were to complete all renovations on the facility by N o v e m b e r 2000. When they failed to do so, a long back-and-forth began between the p a rtie s , which culminated in Choice terminating the franchise agreement in 2004. Choice

then served Plaintiffs with a demand for arbitration. After a contested arbitration hearing, th e arbitrator awarded damages to Choice in the amount of $142,560 and costs in the a m o u n t of $7,975 on January 9, 2008. P la in tif f s then moved to vacate the arbitration award before this Court. That m o tio n was first granted and then denied on a motion for reconsideration. Bapu Corp. v. C h o ic e Hotels Int'l, Inc., Civ. No. 07-5938, 2008 WL 2559306 (D.N.J. June 24, 2008). When this Court denied Plaintiff's motion to vacate, it also granted Defendant's motion to c o n f irm the arbitration award. Id. at *7. Following confirmation of the award, Defendant f ile d the instant motion attorneys' fees and costs under the franchise agreement. While th is motion was stayed pending Plaintiffs' appeal to the Third Circuit, that appeal has e n d e d and the Court now turns to Defendant's fee request. II. D ISC U S S IO N D e f e n d a n ts base their request for fees on the language of the franchise agreement. The attorneys' fees provision of Plaintiffs' contract with Choice is clear. This provision re q u ire s that on termination, Plaintiffs must pay all "damages, costs, and expenses, in c lu d in g reasonable attorneys' fees" incurred in enforcing any section of the franchise a g re e m e n t. See Declaration of John P. Mueller, Ex. 1 ¶ 11(d); see also id. ¶ 17 (same). Finding a contractual basis for Defendant's request, the Court next turns to the s u b s ta n c e of Defendant's motion. A party seeking an award of attorneys' fees bears the b u rd e n of establishing the reasonableness of the number of hours and the hourly rate b ille d . Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). Defendant has submitted a tto rn e y time sheets as evidence of the reasonableness of the hours billed and the billing ra te . (Mueller Decl., Ex. G.) Having set forth the reasonableness of the request, the b u rd e n then shifts to "the party opposing the fee to contest the reasonableness of the h o u rly rate requested or the reasonableness of the hours expended." Apple Corps v. Int'l C o lle c to rs Soc'y, 25 F. Supp. 2d 480, 485 (D.N.J. 1998); Shafer v. United Gen. Ins. Co., C iv . No. 08-2884, 2010 WL 743983, at *3 (D.N.J. Mar. 3, 2010). Plaintiffs' objections n o tw ith s ta n d in g , the Court finds more than sufficient basis to grant Defendant's fee re q u e s t as reasonable. F irs t, Plaintiffs argue that the motion does not comport with Local Rule 54.2(b). This argument has no merit. Defendant submitted time sheets with its motion, and D e f e n d a n t's attorney explained Choice's fee arrangement in a supplemental affidavit. (M u e lle r Decl. Ex. G; Mueller Supp. Decl.) There is nothing out of the ordinary or c o n tra ry to the rule here.

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Next, Plaintiffs contend that the time sheet records are too heavily redacted for re v ie w . Plaintiffs do not object to any particular redactions; instead, they allege that "the tim e s h e e ts are unfairly and grossly redacted so that the legitimacy of costs cannot be e v a lu a te d ." (Pls.' Opp. Br. 3.) After review of the time sheets, I found a number of re d a c tio n s , but they appear to relate to attorney-client communications. Regardless, even th o u g h certain entries are redacted, the type of work done is still clear. For example, here is one representative redacted entry: 6/26/08 3.30 [hours] ... Conduct research on [redacted]; Conduct meeting with M. Shapiro re: strategy going forward; Prepare and draft memorandum to client re: [redacted]; Conduct teleconference with S. Tier [in house counsel] re: [redacted].

S e e Mueller Decl. Ex. G at 81 (June 2008 timesheet). From this entry, it is clear that c o u n s e l spent 3.3 hours conducting legal research, writing a memo, meeting with a c o lle a g u e and the client. These redactions do not prevent meaningful review of the fee re q u e s t. In addition, Plaintiffs also object to the billing rate used by Defendant's law firm, B a lla rd Spahr; however, the hourly rates assessed fall squarely within the prevailing m a rk e t rates in the District of New Jersey. See, e.g., Pub. Interest Research Group of N e w Jersey, Inc. v. Windall, 51 F.3d 1179, 1187 (3rd Cir. 1995) (affirming district court's o rd e r adopting the entire District of New Jersey as the relevant market for legal rates). As s u c h , the Court these rates appear reasonable. F u rth e r, Plaintiffs contend that attorneys' fees should not be awarded for the work d o n e on the first motion to vacate, since Defendant did not prevail on that motion. This a s s e rtio n , however, is belied by the case law. See, e.g., Butler v. Frett, Civ. No. 99-4367, 2 0 0 6 WL 1806412, at *8 (D.N.J. June 29, 2006) (awarding attorneys' fees to Plaintiff for tim e spent on first trial and appeal following second trial). Finally, Plaintiffs allege that Defendant's attorneys have "unclean hands" due to th e ir clerkships in this District and a phone call made to chambers. Plaintiffs argue that th e re is an inherent favortism shown toward former law clerks, and that this somehow m a k e s the awarding of fees improper. As Defendant aptly notes, this Court was unaware o f these attorneys' clerkships with Judge Rodriguez until Plaintiffs discussed them in th e ir brief. Further, the "improper" ex parte communication to chambers was a standard c a ll to inquire about this Court's individual preferences. Such calls are permissible under th e Court's Individual Rules. See ALLYN Z. LITE, NEW JERSEY FEDERAL PRACTICE RULES 3

677 (2010) ("Communications with Judge's law clerks are permitted."). Thus, this " u n c le a n hands" attack on the fee petition has no merit whatsoever. F in d in g the fees requested reasonable and Plaintiffs' objections unavailing, the C o u rt grants Defendant's request for attorneys' fees, as well as the request for postju d g m e n t interest, which begins to accrue as of the date of this letter opinion and a c c o m p a n yin g Order. See Eaves v. County of Cape May, 239 F.3d 527, 527-28 (3d Cir. 2 0 0 1 ) ( "[P]ost-judgment interest on an attorneys' fee award runs from the date that the D is tric t Court actually quantifies the award."). The post-judgment interest rate was set by th e parties in the franchise agreement at 1.5%. See Mueller Decl., Ex. A ¶ 4(e). The Court a ls o finds that Defendant is entitled to an award of costs, which may be pursued under L o c a l Rule 54.1. III. C O N C L U S IO N

F o r the foregoing reasons, Defendant Choice Hotels International's motion is G R A N T E D . Defendant Choice Hotels International is hereby awarded $67,983.00 in a tto rn e y's fees plus post-judgment interest and costs.

/s/ William J. Martini WILLIAM J. MARTINI, U.S.D.J.

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