TD AUTO FINANCE LLC v. CINEMA CAR II, INC.
OPINION. Signed by Judge John Michael Vazquez on 9/25/17. (sr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
TD AUTO FINANCE LLC,
Civil Action No. 13-cv-04230
CINEMA CAR II, [NC.,
John Michael Vazguez, U.S.D.J.
This matter comes before the Court on Plaintiff TD Auto finance LLC’s (“TDAf” or
“Plaintiff’) Motion for Attorney Fees. D.E. 84. Defendant filed opposition, D.E. 88, to which
Plaintiff replied, .D.E. 90.1 The Court reviewed all submissions and considered the motion without
oral argument pursuant to Fed. R. Civ. P. 78(b) and L. Civ. R. 78.1(b). for the reasons that follow,
Plaintiffs motion is GRANTED.
BACKGROUND AND PROCEDURAL HISTORY
Plaintiff commenced this action against Defendant Cinema Car II, Inc. (“Cinema” or
“Defendant”) on July 10, 2013. D.E. 1. from approximately June 4, 2012 to January 2, 2013,
Cinema “participated in the TDAF Retail Installment Contract and Lease Program” which was
governed by the Retail Installment Contract and Lease Program Agreement (the “Program
‘In this Opinion Plaintiffs Angelo A. Stio’s declaration of counsel detailing attorney’s fees and
costs in support of Plaintiffs motion for attorneys’ fees (D.E. $5) will be referred to as “Stio
Decl.” Defendant’s Thomas A. Lodato’s declaration in opposition to the motion of TD Auto
finance for award of legal fees (D.E. $8) will be referred to as “Lodato Decl.” Plaintiffs reply
brief to Defendant’s opposition will be referred to as “P1. Rep.” (D.E. 90).
Agreement”). Plaintiffs Statement of Undisputed Material F acts in Support of Plaintiffs Motion
for Partial Summary Judgment (“PSOMF”) ¶ 3-4; D.E. 55. Pursuant to the Program Agreement,
Cinema “originate[d] motor vehicle retail installment contracts” (“RIC5”),2 through vehicle sales
to individual purchasers, and then sold “RICs that complied with the express terms and conditions
of the Program Agreement” to TDAF. Id.
5. As noted, Plaintiff later filed suit, alleging that
Cinema materially breached the Program Agreement. Complaint ¶ 21; D.E. 1.
On December 14, 2016, the Court granted Plaintiffs motion for partial summary judgment
and denied Defendant’s cross-motion for summary judgment. D.E. 80. In doing so, the Court
found that Plaintiff is entitled to reasonable attorneys’ fees and costs pursuant to the express terms
of the Program Agreement. Id. The current motion followed. The question before the Court is
whether Plaintiffs requested amount of attorneys’ fees, $184,844.78, is reasonable.
LAW AND ANALYSIS
This case involves an exception the American rule, where each legal party bears its own
fees and expenses. Alyeska Pteline Serv. Co. v. Wilderness Socy, 421 U.S. 240, 247 (1975).
Here, the parties agree that the Program Agreement is governed by New Jersey law, see PSOMF
¶ 13, and while New Jersey law generally disfavors fee-shifting, “a prevailing party can recover
[attorneys’] fees if they are expressly provided for by statute, court rule, or contract.” Packard
Bamberger & Co., Inc. v. Collier, 167 N.J. 427, 440 (2001). When a contract provides for fee
shifting, the applicable contractual provision “should be strictly construed in light of [New
Jersey’s] general policy disfavoring the award of attorneys’ fees.” Litton Indus., Inc. v. IMO
Indus., Inc., 200 N.J. 372, 385 (2009). In granting Plaintiffs motion for partial summary
A RIC is a “contract entered into between a consumer and a car dealer, whereby the consumer
agrees to purchase a vehicle and pay over time.” PSOMF ¶ 5 n. 1.
judgment, the Court found that the Program Agreement expressly states that if TDAF is required
to retain an attorney to protect its rights under the contract, it would be entitled to recover
reasonable attorneys’ fees and costs associated with enforcing the terms of the Program
Agreement. D.E. 80; PSOMF
Under New Jersey law, a court determining the reasonableness of an attorneys’ fees
award first looks to see whether the party entitled to attorneys’ fees prevailed in the litigation and
whether the litigation “was causally related to securing the relief obtained; a fee is justified if
[the party’s] efforts are a necessary and important factor in obtaining relief.” Litton Indus., Inc.,
200 N.J. at 386 (internal quotations omitted). Here, the Court found that TDAF was the
prevailing party and that its litigation efforts were effectuated to protect its rights pursuant to the
Program Agreement. D.E. 80.
Once the threshold issue has been resolved, a court considers the non-exhaustive factors
provided by the New Jersey Rules of Professional Conduct to determine reasonableness,
(1) the time and labor required, the novelty and difficulty of the
questions involved, and the skill requisite to perform the legal
(2) the likelihood, if apparent to the client, that the acceptance of the
particular employment will preclude other employment by the
(3) the fee customarily charged in the locality for similar legal
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the
(6) the nature and length of the professional relationship with the
(7) the experience, reputation, and ability of the lawyer or lawyers
performing the services;
(8) whether the fee is fixed or contingent.
N.J. Rules Prof 1 Conduct R. 1.5(a). Litton Indus., Inc., 200 N.J. at 386 (finding that Rule of
Professional Conduct 1.5(a) requires a court to consider these factors in determining the
reasonableness of an attorneys’ fees award).
In addition, a court compares the requested attorneys’ fees award against the Court’s own
fee calculation pursuant to the “lodestar” method. The lodestar method is the “number of hours
reasonably expended by the successful party’s counsel in the litigation, multiplied by a
reasonable hourly rate.” Litton Industries, Inc., 200 N.J. at 3 86. Specifically, in conducting a
lodestar method analysis, a court considers the degree “of [the prevailing party’s] success in
determining the reasonableness of the time expended” as well as the “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.” Id. at 387 (quoting
Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 21(2004) (internal quotations and citation omitted)).
Here, Cinema opposes TDAF’s requested amount of attorneys’ fees as being excessive
and duplicative. Lodato Decl. ¶3. Cinema provides several specific examples4 of why the Court
should reject and decrease TDAF’s requested amount of attorneys’ fees.
a. Reasonableness of Hours Expended
The Third Circuit also favors the use of the lodestar method for calculating attorneys’ fees. The
“most useful starting point for [a court] determining the amount of a reasonable fee is the number
of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” Rode v.
Dellarciprete, 892 f.2d 1177, 1183 (3d Cir. 1990) (quoting Hensley v. Eckerhart, 461 U.S. 424,
Cinema acknowledges that the Court imposed sanctions on it for the late production of a 2014
discovery response. At that time the Court ordered Cinema to reimburse Plaintiffs counsel for
$2,988. Cinema in its opposition to Plaintiffs motion for attorneys’ fees claimed that the
payment was already made to Plaintiff, but that Plaintiff was, nonetheless, including the $2,988
its attorneys’ fees request. Lodato DecI. ¶ 26. Plaintiff in its reply brief agreed with Defendant
and reduced the amount of attorneys’ fees it requested by $2,988. P1. Rep. at 3, 8. Thus, this
claim is now moot.
The Court will first address Cinema’s claims that the number of hours Plaintiff billed are
excessive and duplicative. Cinema opposes awarding attorneys’ fees to more than one attorney
for working on this matter. Lodato Deci.
¶J 4-6. Plaintiff in response provides information on
which Pepper Hamilton attorneys worked on particular portions of the litigation and how long
the tasks took. P1. Rep. at 3. Specifically, Plaintiff explains that one partner, Angelo Stio, and
one associate, Chad Holtzman, were the primary attorneys on this case and that four other
attorneys seeking fees did minimal work, “totaling less than 23 hours and $9,840.75 in fees.” Id.
Plaintiff also provides invoices that further detail the dates, times, and work performed by the
Pepper Hamilton lawyers. Stio Decl. Ex. A-C. Pepper Hamilton’s records and explanation
demonstrate that it was reasonable for more than one attorney to work on the matter and that the
total hours worked were reasonable.
Cinema next claims that Plaintiffs bill of 30.95 hours for draffing, revising, and editing
the Complaint is excessive. Lodato Decl.
¶J 7-10. Plaintiff, in turn, argues that 30.95 hours is
not an excessive amount of time to bill for the Complaint since “[tjhe Complaint relates to 52
separate [RIC5] whose files had to be reviewed and whose relevant information had to be
condensed into a simplified pleading.” P1. Rep. at 4. Given Plaintiffs explanation of the
number of contracts involved, the Court finds that 30.95 hours is a reasonable amount of time to
drafi the Complaint.
Cinema takes further issue with the attorneys’ fees requested in preparing the subpoena
and motion to compel the deposition of Robert Marchiani5 (“Marchiani”) and the amount of time
billed for the preparation and taking of Marchiani’s deposition. Lodato Decl.
¶ 11-19. Prior to
Defendant and Plaintiff submit different spellings of Marchiani s last name, Marchiani as
opposed to Marchioimi.
the deposition, Plaintiff spent 6.6 hours drafting two document subpoenas, which requested
documents relevant to 52 RICs, from Marchiani and 12.8 hours drafting a motion to compel. P1.
Rep. at 5. Plaintiff also billed a total of 20.6 hours for the time spent preparing for and taking the
deposition of Marchiani. Cinema contends that these fees are excessive and duplicative.
Plaintiff, however, claims that the document subpoenas were of a complex nature and
that the motion to compel was necessitated “by Aftermarket sales’ failure to comply with the
subpoena and unreasonable delay.”6 Id.7 Further, Plaintiff argues that Defendant ignores “that
the deposition of Mr. [Marchiani] was unilaterally cancelled four times by either [Marchiani] or
by counsel for Cinema,” and that the deposition was held more than 90 minutes away from
Pepper Hamilton’s office to accommodate Marchiani. Id. at 4-5. Plaintiff adequately explains
the time spent traveling to and from the deposition, the time spent arranging the deposition (and
the need to do so on multiple occasions), and the time spent taking the deposition, as well as
detailing why the motion to compel were necessary. In light of this information and the Court’s
own knowledge of the case and normal litigation practices, Plaintiff is entitled to all requested
fees connected to the Marchiani deposition as they are reasonable.
Cinema next argues that Plaintiffs bill of 106.3 hours (15.5. of which are redacted)
relating to its summary judgment motion is excessive. Cinema also takes issue with Plaintiff
billing eight times for editing and reviewing its summary judgment motion. Lodato Decl.
The company After Market Sales are Profitable was the warranty administrator for each vehicle
in the Schedule A and C contracts under the Program Agreement. Statement of Undisputed F acts
of [Cinema] in Support of Cross-Motion for Partial Summary Judgment (“DSOMF”) ¶J 6, 7;
In fact, Plaintiff contends that “Cinema’s strategy throughout this litigation has been one of
delay and conceal.” P1. Rep. at 5.
21. Plaintiff did not respond in any detail to these claims, so the Court’s analysis is based on a
review of the lodestar calculation in light of the time that might reasonably be necessary to
prepare the summary judgment papers. As noted, Plaintiffs motion included a memorandum in
support, D.E. 56, a statement of material facts in support of the motion, D.E 55, two declarations
with a total of 16 exhibits, D.E. 57-58, and the text of a proposed order, D.E. 54. Of course, it
cannot be overlooked that in accumulating the information submitted, Plaintiffs counsel had to
perform a thorough review of all discovery following more than three years of litigation. As
noted, Plaintiff prevailed on its summary judgment motion. Given the heft of the motion and the
detailed breakdown of hours spent and tasks performed by Plaintiffs counsel, D.E. 85, the Court
finds the 106.3 hours to be reasonable.
Cinema also takes issue with Plaintiffs redacting 15.5 hours of billed time related to its
summary judgment motion. Lodato Decl.
¶ 32. The Court ordered that un-redacted invoices be
provided for an in camera review, and Plaintiff complied. D.E. 95. After reviewing the un
redacted invoices, the Court finds that the redactions were appropriate pursuant to the attorneyclient privilege8 and that the 15.50 hours expended were reasonable.
Cinema further argues that Plaintiffs claim for attorneys’ fees for 5.6 hours of strategy
calls is unreasonable. Lodato Decl.
¶ 30. Plaintiff counters with case law supporting the merit of
strategy calls as a litigation tool, Apple Coips. V. International Collectors Soc y, 25 F. $upp. 2d
480, 488 (D.N.J 199$), and argues that 5.6 hours of strategy calls over a three and a half year
period is not excessive. Plaintiff points out that the “5.6 hours spent on calls over the life of the
Cf Montgomen’ County v. Micro Vote Corp., 175 F.3d 296, 304 (3d Cir. 1999) (discussing
when attorney billing records may contain information protected by the privilege) (citation
case equates to less than two hours per year discussing strategy with the client.” P1. Rep. at 7.
The Court agrees. This case involved over three years of active litigation. It is reasonable that
during this time Plaintiff counsel would (at a minimum) occasionally consult with its client,
TDAF, concerning strategy. Therefore, Plaintiffs requested attorneys’ fees for hours spent on
strategy calls are reasonable.
The Court, therefore, finds that the total hours Plaintiffs counsel expended on the case,
as well as the specific hours spent on the contested areas, are reasonable. The Court must next
decide whether the Pepper Hamilton rates were reasonable.
b. Reasonableness of Rates Charged
As explained above, in determining the reasonableness of counsel’s hourly rate, the Court
must compare the prevailing attorneys’ rates to the “rates for similar services by lawyers of
reasonably comparable skill, experience, and reputation in the community.” Litton Indus., Inc.,
200 N.J. at 387 (internal quotations and citation omitted). This “determination need not be
unnecessarily complex or protracted, but the trial court should satisfy itself that the assigned
hourly rates are fair, realistic, and accurate, or should make appropriate adjustments.” Rendine v.
Pantzer, 141 N.J. 292, 337 (1995).
In this matter, Plaintiffs billing rates are reasonable. Plaintiff provides the billing rates
and titles for the Pepper Hamilton attorneys who worked on this matter.9 Plaintiffs lead partner
on the case, Angelo Stio (“$tio”), declared that these rates “represent Pepper Hamilton’s
standard discounted rates for TDAF throughout the time this matter has been pending.” Stio
Those rates are as follows: March 2013 January 2014: Stephen G. Harvey, Partner, $445.50;
Angelo A. Stio III, Partner $396.00; Jeffrey Carr, Associate $378.00; Chad Holtzman, Associate
$207.00. February 2014— February 2016: Angelo A. Stio III, Partner $460; Chad Holtzman,
Associate $290. February 2016 Present: Angelo A. Stio III, Partner $460; Frank Griffin IV, Of
Counsel $470; Chad Holtzman, Associate $350; Francis Weber, Associate $250.
¶J 12-15. further, Stio attested that based on his knowledge of the “relevant New York
and New Jersey market, these rates are in line with, if not less than, rates charged by similar New
York and New Jersey based law firms of Pepper Hamilton’s size.” Id.
¶ 15. Finally, Stio
provided each relevant attorney’s date of bar admission and date ofjoining Pepper Hamilton. Id.
Defendant argues that Plaintiffs declaration is insufficient because Stio “state[s] what
[Pepper Hamilton’s] normal billing rates are, not what the reasonable hourly rate is for
competent counsel to handle this type of case.” Lodato Decl.
¶ 29. While, the Court agrees that
it would have been better practice for Plaintiff to include an affidavit from a non-interested party
attesting to the reasonableness of the requested rates, it is not necessary here. Defendant fails to
raise a specific complaint about the billing rates or provide comparative information to
strengthen its argument that the requested hourly rates are unreasonable. Stio wrote his
declaration as an officer of the court and provided sufficient information for this Court to do its
own analysis and determine that the hourly billing rates are reasonable. Moreover, based on the
Court’s own knowledge of counsel rates in federal commercial litigation in this area, the Court
agrees that Pepper Hamilton’s hourly charges are reasonable.
For the foregoing reasons, Plaintiffs motion is GRANTED in the amount of $1 $4,844.78
for attorneys’ fees and costs associated with litigating this matter. An appropriate Order
accompanies this Opinion.
Dated: September 25, 2017
John Michael Vazquez()JJ&
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