CAPITAL ONE, NATIONAL ASSOCIATION v. KHAN
Filing
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OPINION AND ORDER granting 54 Motion for Attorney Fees. ORDERED that Plaintiff is awarded interest on the Richmond judgment for a total of for a total of $269,897.88 amassed as of May 15, 2013, plus a per diem amount of $1,836.04 for 22 9 days from May 16, 2013 to and including December 30, 2013 for $420,453.16, for a total interest accrual of $690,351.04; and it is further ORDERED that Plaintiff is awarded reasonable attorneys fees of $182,735.50 and litigation-related expenses of $48,796.09, for a total of $231,531.59. Signed by Magistrate Judge James B. Clark on 12/30/13. (sr, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
CAPITAL ONE, NATIONAL
ASSOCIATION,
Civil Action No. 12-7731 (FSH)
Plaintiff,
ORDER AND OPINION
ON PLAINTIFF’S MOTION
FOR ATTORNEYS’ FEES
AND EXPENSES
v.
SAQUIB KHAN,
Defendant.
THIS MATTER comes before the Court by way of motion by Plaintiff, Capital One,
National Association, seeking an Order granting Plaintiff interest and attorneys’ fees and
expenses against Defendant, Saquib Khan (“Khan”). Docket Entry No. 54. The motion is
unopposed. The Court reviewed the papers pursuant to Fed.R.Civ.P. 78. For the reasons stated
below, Plaintiff’s motion is granted.
Background and Procedural History 1
The underlying case is an action to enforce a guaranty for indebtedness on overdrawn
business accounts serviced by Plaintiff. The accounts were in the name of Richmond Wholesale
Company, Inc. (“Richmond”), of which Khan is the president. By executing signature cards for
the accounts, Richmond was bound by certain rules and provisions, including those on
overdrafts. Further, as a condition of obtaining a line of credit for Richmond, Khan executed a
guaranty (“Guaranty”). The Guaranty includes, inter alia, an obligation to cover the
indebtedness of Richmond and any collection efforts of that amount. The “Indebtedness”
provision states:
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The background facts recited here are taken from the Court’s May 2, 2013 Opinion on Plaintiff’s Motion for
Summary Judgment. See Docket Entry No. 52 at 1-4. As noted in footnote 1, those facts were taken from the
parties’ Rule 56.1 Statements and are not in dispute unless otherwise noted.
The word “Indebtedness” as used in this Guaranty means all of the
principal amount outstanding from time to time and at any one or
more times, accrued unpaid interest thereon and all collection costs
and legal expenses related thereto permitted by law, attorneys’
fees, arising from any and all debts, liabilities and obligations of
every nature and form, now existing or hereafter arising or
acquired, that [Richmond Wholesale] individually or collectively
or interchangeably with others, owes or will owe [Capital One].
See Plaint.’s Br. at 2; see also Exhibit D, copy of Guaranty, at Docket Entry No. 54-3.
Richmond overdrew its accounts, and then failed to cover the funds when demanded by
Plaintiff. Plaintiff instituted an action to recoup the overdrawn funds in the Supreme Court of
New York, County of New York. Richmond executed and delivered a Confession of Judgment,
executed by Khan as president of Richmond, for the amount of $7,685,695.93. The Supreme
Court in New York entered the judgment on December 19, 2012. Due to offsets, adjustments,
and clearance of items, the total overdrawn amount was reduced to $7,446,153.65.
Pursuant to its options under the Guaranty, Plaintiff elected to recover the overdraft funds
from Khan and filed this action on December 19, 2012. Plaintiff filed its motion for summary
judgment on or about March 8, 2013. Defendant opposed the motion on the grounds that it was
premature. The Court, however, found no genuine issue of material fact and entered summary
judgment for Plaintiff for the amount of $7,446,153.65. The Court instructed Plaintiff to file the
instant motion for interest and attorneys’ fees and costs, which was filed on or about May 15,
2013. On June 7, 2013, Khan filed a Notice of Appeal of the District Court’s entry of summary
judgment. The appeal is currently pending.
Discussion
As a threshold matter, the Court recognizes Khan has filed an appeal which transfers
jurisdiction on substantial matters to the Court of Appeals. However, a district court retains the
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power to adjudicate collateral matters such as applications for attorneys’ fees. See West v. Keve,
721 F.2d 91 (3d Cir. 1983). Thus, this Court will entertain the instant motion.
Interest
Plaintiff argues that under the Guaranty, Khan is liable for any indebtedness of
Richmond, including any “other obligations, and liabilities of [Richmond Wholesale], and any
present or future judgments against [Richmond Wholesale].” See Plaint.’s Br. at 5. Under those
terms, Khan is liable for the interest that has accrued on the underlying judgment against
Richmond entered by the Supreme Court of New York on December 19, 2012. Per §§ 5003 and
5004 of the New York Civil Practice Law and Rules, judgment creditors in New York are
entitled to interest on a money judgment from the date of its entry, at an set rate of 9% per
annum. N.Y. C.P.L.R. §§ 5003 & 5004 (McKinney 2013). The Confession of Judgment was
entered for $7,685,659.93, but adjusted to $7,446,153.65. At 9% per annum on the amount of
$7,446,153.65, the year’s interest would be $670,153.83, with a per diem accrual amount of
$1,836.04. As stated by Plaintiff, as of May 15, 2013 when Plaintiff filed the motion, the total
interest amount was $269,897.88.
The Court finds that Khan is liable for the interest accrued on the judgment under the
terms of the Guaranty. The Court relies on the parties’ undisputed statement of facts and the
Court’s May 2, 2012 Opinion granting Plaintiff’s Motion for Summary Judgment (“May 2 Op.”).
The Court found that by Khan’s own admission he signed the Guaranty as a condition of
obtaining a line of credit for Richmond and held him liable for the underlying funds of
$7,446,153.65. See May 2 Op. at 8-9. The same logic applies here: Khan signed the Guaranty
which includes the provision for indebtedness of the outstanding principal and “accrued unpaid
interest thereon.” The Court notes it has received no indication that the judgment has been pain
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in whole or in part. Consequently, the Court finds Khan is liable for the interest accrued on the
judgment against Richmond Wholesale, for a total of $269,897.88 amassed as of May 15, 2013,
plus a per diem amount of $1,836.04 for 229 days from May 16, 2013 to and including
December 30, 2013 for $420,453.16, for a total interest accrual of $690,351.04.
Attorneys’ Fees
Per the terms of Guaranty, Khan is also liable for “all collection costs and legal expenses
related thereto permitted by law, attorneys’ fees, arising from any and all debts, liabilities and
obligations of every nature and form.” See Exhibit D at Docket Entry No. 54-3. Attorneys’ fees
may be equal to 25% of the underlying judgment. 2 See id. As stated above, the Court relies on
the party’s undisputed statements of facts and the Court’s May 2 Opinion to find that Khan is
bound by the terms of the Guaranty.
Courts may award attorneys’ fees in federal litigation where authorized by statute, court
rule, or contract. See Apple Corps Limited, MPL v. International Collectors Society, 25
F.Supp.2d 480, 484 (3d Cir. 1998). Courts determine reasonable attorneys’ fees by the lodestar
approach, multiplying the reasonable time spent by the reasonable hourly rate. Apple Corps, 25
F.Supp.2d at 484. The party seeking the fees has the burden of establishing the reasonableness
of the fees requested. Id. at 484-85. Any application must be accompanied by documentation
supporting the reasonableness of the hours worked and the rates charged. Id. at 485; see
L.Civ.R. 54.2. Additionally, in this District, applications must have an affidavit of counsel
setting forth items such as the nature of services rendered, the results obtained, and the level of
novelty or difficulty of the matter. See L.Civ.R. 54.2(a).
Once reasonableness is established, the burden shifts to the opposing side to challenge the
fees claimed. Apple Corps, 25 F.Supp.2d at 485. If the opposing party objects to either the rates
2
For reference, 25% of the underlying judgment of $7,446,153.65 would be $1,861,538.41
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charged or the hours expended, that party must set forth its objections “‘by affidavit or brief with
sufficient specificity’” so as to put the fee-requesting party on notice. Id. at 485 (quoting Rode v.
Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1997)). After objections are lodged, courts then have
discretion in modifying the award for any inadequately supported claims. “However, the court
may not ‘decrease a fee award based on factors not raised by the adverse party.’” Id. (citing
Rode, 892 F.2d at 1183).
Plaintiff seeks an award of $182,735.50 as of May 11, 2013 and in support of its
application submitted a Certification by Joseph C. Savino, which set forth the hours worked,
rates charged, the experience of the attorneys, and nature of the services rendered. See id.
(“Savino Cert.”) at Docket Entry No. 54-2. Plaintiff states that as a result of a continued working
relationship between the law firm of Plaintiff’s counsel and Plaintiff, counsel charges “a blended
hourly rate of $315.00 for work performed by attorneys and an hourly rate of $125.00 for work
performed by paralegals.” See Savino Cert. ¶ 16. Plaintiff claims that because of the established
working relationship, these rates are below market average. Id. Further, in support of its
application, Plaintiff submitted counsels’ timesheets setting forth the hours worked and services
rendered, for a total of 566.7 attorney hours and 33.8 paralegal hours. See Exhibits to Savino
Cert. at Docket Entry No. 54. Plaintiff’s certification also explained the scope of counsel’s
representation and delineated those services rendered on the related actions including the
prosecution of the New York Supreme Court action, this enforcement action, and counsels’
involvement in representing Plaintiff’s interests as implicated in ancillary matters such as
Richmond’s bankruptcy proceedings. See Savino Cert. ¶¶ 11-23. Plaintiff has also set forth
which activities for which it is not seeking fees. See id. at ¶ 22.
The Court notes that Khan has not opposed Plaintiff’s application.
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The Court has reviewed the timesheets and exhibits as well as the certification of counsel,
and finds the hours expended on the services for which fees are requested are reasonable.
Furthermore, the Court finds the rates charged are also reasonable, and adopts the lodestar
amount of $315.00 per hour for work by attorneys and $125.00 per hour for work completed by
paralegal staff. Thus, the Court grants Plaintiff’s request for attorneys’ fees in the amount of
$182,735.50.
Litigation-related expenses
In addition to attorneys’ fees, Plaintiff also seeks non-taxable litigation expenses. See
Plaint.’s Br. at 7. Applications for litigation expenses are also governed by L.Civ.R. 54.2.
“Litigation expenses not taxable as costs pursuant to 28 U.S.C. §1920 and L.Civ.R. 54.1 may be
awarded as part of a ‘reasonable attorney’s fee.’” Apple Corps., 25 F.Supp.2d. at 497; see also
Comment 2, L.Civ.R. 54.2. Not all litigation expenses may be awarded, however, and courts
will award only those expenses “that are incurred in order for the attorney to be able to render his
or her legal services.” Apple Corps., 25 F.Supp.2d. at 497 (citing Abrams v. Lightolier, Inc., 50
F.3d 1204, 1225 (3d Cir. 1995)); see also Comments to L.Civ.R. 54.2.
As stated above, pursuant to the terms of the Guaranty, Khan is liable for costs associated
with the collection of the overdraft funds and the enforcement of the Guaranty. Plaintiff
submitted a Bill of Costs on May 30, 2013, for costs taxable pursuant to L.Civ.R. 54.1. See
Docket Entry No. 55. Plaintiff here seeks non-taxable costs for services including costs for the
recording and the transcript of Khan’s deposition, the fees associated with the Richmond actions
including filing fees, process fees, and transcripts related to hearings, and fees related to the
accounting of Richmond’s books and records. See Savino Cert. ¶¶ 24-29. Plaintiff seeks a total
of $48,796.09 for litigation-related expenses.
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The Court has reviewed Plaintiff’s affidavit and supporting material and finds the costs
Plaintiff seeks to be reimbursed are reasonable. The bulk of the costs sought, $44,839.50, are for
the accounting of Richmond Wholesale’s books and records. Plaintiff has provided time sheets
and invoices from the professional accounting service for the Court’s review. See Docket Entry
No. 54-5. Many of the line items involve analysis of the banking records and cross-referencing
with other financial records. As the underlying action is based entirely on the recoupment of the
overdraft funds, the costs associated with determining the amount at issue are reasonably related
to the provision of legal services. Thus, the Court awards Plaintiff litigation-related costs of
$48,796.09.
Conclusion
Per the terms of the Guaranty, the Court finds Khan liable for the post-judgment interest
that has accrued on judgment entered by the New York Supreme Court against Richmond. As of
May 15, 2013, the interest accrued was $269,897.88. From May 16, 2013 to and including
December 30, 2013, or 229 days, interest has further accrued in the amount of $420,453.16, for a
total amount of interest owed of $690,351.04. Furthermore, per the terms of the Guaranty, Khan
is also liable for the reasonable attorneys’ fees of $182,735.50 and litigation-related expenses of
$48,796.09.
For the reasons set forth above,
IT IS on this 30th day of December, 2013,
ORDERED that Plaintiff’s Motion for Interest and Attorneys’ Fees is GRANTED; and it
is further
ORDERED that Plaintiff is awarded interest on the Richmond judgment for a total of for
a total of $269,897.88 amassed as of May 15, 2013, plus a per diem amount of $1,836.04 for 229
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days from May 16, 2013 to and including December 30, 2013 for $420,453.16, for a total interest
accrual of $690,351.04; and it is further
ORDERED that Plaintiff is awarded reasonable attorneys’ fees of $182,735.50 and
litigation-related expenses of $48,796.09, for a total of $231,531.59.
s/ James B. Clark
JAMES B. CLARK, III
United States Magistrate Judge
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