Friedman v. Landau et al

Filing 143

CORRECTED ORDER re 138 REPORT AND RECOMMENDATIONS: The court adopts Judge Orenstein's finding that both the number of hours expended and hourly rate are reasonable and that the Self Help Defendants' compensable attorney s' fees total $38,743.50. The court concludes that an award of the full amount of attorneys' fees and costs is not the proper measure of sanctions in this instance. The court imposes a sanction of $20,000 and ORDERS Richard D. Borzouye, Plaintiff's former counsel, to pay this amount to the Self Help Defendants. The Clerk of Court is respectfully requested to enter judgment accordingly. So Ordered by Judge Nicholas G. Garaufis on 2/17/2017. (c/m to plaintiff; fwd'd for jgm) (Lee, Tiffeny)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
X

ROBERT FRIEDMAN,
MEMORANDUM & ORDER

Plaintiff,

ll-CV-3210(NGG)
(JO)

-againstSELF HELF COMMUNITY SERVICES,INC., et al..
Defendants.
X

NICHOLAS G. GARAUFIS,United States District Judge.

On February 25, 2011,Plaintiff Robert Friedman,then acting with the assistance of
attorney Richard D. Borzouye ("Borzouye"), filed a complaint in the Supreme Court ofthe State
ofNew York, Kings County, containing numerous claims stemming from Plaintiffs
March 17, 2010,removal from his father's apartment and involuntary commitment to the Coney
Island Hospital. (Not. of Removal(Dkt. 1).) Defendants' removed the action to this court on
July 5,2011. (Id.) Plaintiff subsequently amended the complaint multiple times to include

numerous additional claims and defendants, including United Jewish Appeal, Inc.; United Jewish
Appeal-Federation of Jewish Philanthropies ofNew York; United Jewish Appeal Federation of
New York Charitable Fund LLC; and Self Help Community Services, Inc. and its employees
(collectively, the "Self Help Defendants"). (See Revised Second Am. Compl.(Dkt. 49).)

'
The original defendants in the case, Isaac Landau and Superior Realty Group LLC, were subsequently dismissed
from the action. (Stip. of Dismissal(Dkt. 10).) Plaintiff amended the Complaint to include the following
defendants: Self Help Community Services, Inc.; United Jewish Appeal, Inc.; United Jewish Appeal-Federation of
New York; United Jewish Appeal-Federation of Jewish Philanthropies ofNew York; United Jewish AppealFederation ofNew York Charitable Fund, L.L.C.; Stephanie Haik; Elisabeth Schneider; Svetlana Gitman; Stephanie
Zylberberg; Melissa Gardonyi; City ofNew York; City of New York Human Resources Administration; New York
City Department of Social Services; Adult Protective Services of Brooklyn; Brenda Perry; William Taiwo; Denise
Bumbery; Morris Friedman; Phyllis Friedman; New York City Health and Hospital Corporation; Coney Island
Hospital Research Institute; Unidentified Coney Island Hospital Psychiatric Ward Intake Counselor on Duty
3/17/2010; Joanne Abrams; Mary Schafer; Coney Island Hospital Psychiatric Chiefof Staff; Devitte Elverson,
M.D.; Lance Winslow, PhD.; New York City Comptroller's Office; Seven Unidentified NYPD Officers; and Two
Unidentified NYC EMS. (Revised Second Am. Compl.(Dkt. 49).)

The Self Help Defendants moved to dismiss the Complaint(Self Help Defs.' Mot. to
Dismiss(Dkt. 59))and, separately, moved for sanctions against Borzouye pursuant to Rule 11 of
the Federal Rules of Civil Procedure (Self Help Defs.' Mot. for Sanctions(Dkt. 68)). On
March 17,2015,the court granted the Motion to Dismiss, ordered sanctions in the form of
reasonable attorneys' fees against Borzouye and, pursuant to 28 U.S.C. § 636(b)and Rule 72(b)
ofthe Federal Rules of Civil Procedure, referred determination ofthe sanctions amount to

Magistrate Judge James Orenstein for a report and recommendation("R&R"). (See Order
Adopting R&R(Dkt. 121)at 9-11.)

On August 31,2016, Judge Orenstein issued an R&R recommending sanctions in the

amount of$38,906.45, comprised of$38,743.50 in attorneys' fees and $162.95 in costs.
(See R&R(Dkt. 138)at 1.) No party has objected to Judge Orenstein's R&R,and the time to do
so has passed. See Fed. R. Civ. P. 72(b)(2). (See also R&R at 5-6("Any objections to this
Report and Recommendation must be filed no later than September 19,2016.").)
A district court reviewing an R&R "may accept, reject, or modify, in whole or in part, the

recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1)(c). Where there is no

objection to the R&R,the court"need only satisfy itself that there is no clear error on the face of
the record." S^ Gesualdi v. Mack Excavation & Trailer Serv.. Inc.. No.09-CV-2502(KAM)

(JO),2010 WL 985294, at *1 (E.D.N.Y. Mar. 15, 2010)(quoting Urenav. New York. 160 F.
Supp. 2d 606,609-10(S.D.N.Y. 2001); see also Porter v. Potter. 219 F. App'x 112
(2d Cir. 2007)(summary order).
I.

DISCUSSION

Where a party violates Rule 11's requirements, courts may impose a sanction against the
offending party including, inter alia,"an order directing payment... of part or all ofthe

reasonable attorney's fees and other expenses directly resulting from the violation."
Fed. R. Civ. P. 11(c)(4). "When a court determines that attorneys' fees and costs should be used
as sanctions under Rule 11, the award should be based both on the total amount ofreasonable

attorneys' fees and costs attributable to the sanctioned party's misconduct and the amount
needed to serve the deterrent purposes of Rule 11."

Eastwav Const. Com,v. Citv ofNew

York. 821 F.2d 121,122-23(2d Cir. 1987). The court will address the total amount of attorneys'
fees and costs and the amount needed to serve Rule 11's deterrent purposes below.
A.

Calculation of Reasonable Fees and Costs

1.

Attorneys* Fees

In calculating reasonable attorneys' fees "the lodestar—^the product of a reasonable

hourly rate and the reasonable number of hours required by the case—creates a 'presumptively
reasonable fee.'" Millea v. Metro-North R. Co.. 658 F.Sd 154,166(2d Cir. 2011)(quoting
Arbor Hill Concerned Citizens Neighborhood Assoc. v. Ctv. Of Albanv. 522 F.Sd 182, 183(2d
Cir. 2008)). "[T]he party seeking [attorneys' fees]... bears the burden ofproving the

reasonableness and necessity of hours spent and rates charged.... supported by
contemporaneous time records that describe with specificity, by attorney, the nature ofthe work

done, the hours expended, and the dates." Tr. ofthe Sheet Metal Workers Local Union No.28
Ben. Fund, v. K&K Const, of Queens Ctv.. Inc.. No. lO-CV-392(ADS)
(ARL),2011 WL
4530145, at *2(E.D.N.Y. May 11, 2011)(citing New York State Ass'n for Retarded Children.
Inc. V. Carev. 711 F.2d 1136,1147-48(2d Cir. 1983)). Courts calculating the lodestar should
base their determination on "what a reasonable, paying client would be willing to pay," including
consideration of

the complexity and difficulty ofthe case,the available expertise and
capacity ofthe client's other counsel (if any),the resources required

to prosecute the case effectively (taking account of the resources
being marshaled on the other side but not endorsing scorched earth
tactics), the timing demands ofthe case, whether an attorney might
have an interest (independent of that of his client) in achieving the
ends of the litigation or might initiate the representation himself,
whether an attorney might have initially acted pro bono (such that a
client might be aware that the attorney expected low or non-existent
remuneration), and other returns (such as reputation, etc.) that an
attorney might expect from the representation.

Arbor Hill. 522 F.3d at 184. Courts in this district have generally "found reasonable hourly rates

to be approximately $300-$450 for partners, $200-$325 for senior associates, and $100-$200
for junior associates." See Sass v. MTA Bus Co..6 F. Supp. 3d 238,261 (E.D.N.Y. 2014).

While Judge Orenstein's R&R does not specifically address the noted considerations, the
court agrees with his conclusion that both the amount oftime expended and the hourly fees
charged are reasonable. The Self Help Defendants submitted detailed contemporaneous records

oftheir attorney's time spent in responding to Borzouye's frivolous Complaint and motions.^
These records list an hourly rate of$195 for partner Thomas A. Catalano and $75 for paralegal
assistant Yassed Baez. Examining these records in light of the factors articulated in Arbor Hill,
the court finds particularly relevant the "complexity and difficulty ofthe case" and "the

resources required to prosecute the case effectively." Even a cursory review ofPlaintiffs' nearly
150 page Complaint and myriad other filings reveals the numerous, complex, and often
confusing issues presented by Borzouye's frivolous submissions. Catalano's contemporaneous

billing reports do not demonstrate any inappropriate, wasteful, or needless work,and the hourly
rate sought falls well below the rates viewed as reasonable within this district. Borzouye offers
no challenge to the reasonableness of either the time expended or the rate charged, and the court

^ Judge Orenstein notes that the Self Help Defendants "seek the reimbursement ofonly those fees and expenses
incurred as a direct result of Borzouye's misconduct"(R&R (Dkt. 121)at 5), and so their submission satisfies Rule
11's requirement that only fees and costs directly attributable to the violation may be awarded.

finds none itself. Accordingly, the court adopts Judge Orenstein's finding that both the number
of hours expended and hourly rate are reasonable and that the Self Help Defendants'

compensable attorneys' fees total $38,743.50.^
2.

Other Compensable Costs

Courts awarding attorneys' fees in the context of Rule 11 sanctions generally also award
"those reasonable out-of-pocket expenses incurred by the attorney and which are normally

charged fee paying clients." Kirchner v. Zoning Bd. Of Anneals ofIncorporated Vilk of Valley
Stream. 159 F.R.D. 391, 397(E.D.N.Y. 1995)(citing Reichman v. Bonsignore. Brignati &
Mazzotta. P.O.. 818 F.2d 278,283(2d Cir. 1987)). The court agrees with Judge Orenstein's

assessment that the Self Help Defendants' claim for $162.95 incurred in copying and postage
costs are reasonable and should be included in the total calculation of attorneys' fees and costs.
B.

Meeting the Goals of Rule 11

Determination ofthe amount of Rule 11 sanctions does not necessarily end with

calculation ofreasonable attorneys' fees and costs. "[T]he purpose ofthe sanctioning
mechanism of Rule 11 'is not reimbursement but sanction''and [] accordingly. Rule 11

sanctions shall be limited to what is sufficient to deter repetition ofsuch conduct or comparable
conduct by others.'" Katzman v. Victoria's Secret Catalogue. 167 F.R.D. 649,661 (S.D.N.Y.

1996)(quoting Pavelic & LeFlore v. Marvel Entm't Grp.. 493 U.S. 120,126(1989). In the
context of awards of reasonable attorneys' fees and costs, courts must be mindful that "Rule 11

provides for sanctions, not simply fee shifting." Landmark Ventures. Inc.. v. Cohen. No. 13CIV. 9044(JGK),2014 WL 6784397 at *6(S.D.N.Y. Nov. 26, 2014). In exercising its

^ Judge Orenstein came to this number by multiplying Catalano's number of hours expended by his hourly rate
(198.3 hours times $195,totaling $38,668.50) and doing the same for Baez(one hour billed at $75). (R&R at 4.)

discretion to adjust the award, a court may consider the factors listed in the Advisory
Committee's notes to Rule 11:

Whether the improper conduct was willful, or negligent; whether it
was part of a pattern of activity, or an isolated event; whether it
infected the entire pleading, or only one particular count or defense;
whether the person has engaged in similar conduct in other
litigation; whether it was intended to injure; what effect it had on the
litigation process in time or expense; whether the responsible person
is trained in the law; what amount, given the financial resources of
the responsible person, is needed to deter that person from repetition
in the same case; what amount is needed to deter similar activity by
other litigants....
See Kirchner. 159 F.R.D. at 395-96(quoting Notes of Advisory Committee to Rule 11, 1993
Amendments).

The court concludes that an award ofthe full amount of attorneys' fees and costs is not

the proper measure of sanctions in this instance. To be sure, Borzouye's misconduct was

extreme. As Judge Joan M. Azrack"^ found,"[a]11 ofthe evidence indicates that Borzouye did not
have a good-faith basis for the various allegations and claims...that he asserted against the Self
Help defendants." (R&R(Dkt. 103)at 31.) This court also struck one of Borzouye's

submissions—a "cross-motion for sanctions"—^in part because it almost entirely plagiarized the
Self Help Defendants' motion for sanctions. (Sept. 27, 2013, Order(Dkt. 86).) This misconduct
infected every aspect ofthe case until Borzouye's removal, and the Self Help Defendants
incurred substantial attorneys' fees as a direct result of his actions. Despite this reprehensible
behavior,the court's discretion is bound by the guidance that its sanctions must be limited to the
amount necessary to prevent repetition ofthe offense. The Self Help Defendants have not made

^ This case was originally assigned to then-Magistrate Judge Azrack, and Judge Azrack wrote the initial R&R
recommending dismissal of all claims and sanctions as to Borzouye. (R&R(Dkt. 103).) The case was re-assigned
to Judge Orenstein on January 13,2015. (Jan. 13,2015, Case Reassignment.)

a showing that sanctions consisting ofthe full amount of attorneys' fees and costs is necessary to

deter future misconduct by Borzouye or other, similar parties,^ and the court concludes that
awarding all fees and costs incurred would inappropriately stray beyond deterrence into simple
fee shifting. In view ofthe findings and principles above, the court concludes that a sanction of
$20,000 adequately reflects the seriousness of Borzouye's misconduct and will deter similar
flagrant misconduct by him and others in the future.
IL

CONCLUSION

The court imposes a sanction of$20,000 and ORDERS Richard D. Borzouye, Plaintiffs
former counsel, to pay this amount to the Self Help Defendants. The Clerk of Court is
respectfully requested to enterjudgment accordingly.
SO ORDERED.

Dated: Brooklyn, New York

February/"y, 2017

s/Nicholas G. Garaufis
NICHOLAS G. GARAUFR

United States District Judge

^ Judge Orenstein credited the Self Help Defendants with tacitly taking into account "the need to provide only so
much reimbursement as will deter similar misconduct in the future" through their request for only those fees directly
attributable to Borzouye's misconduct and seeking an hourly rate far below that which is acceptable for Catalano's
work. (See R&R at 5). The court respectfully disagrees with Judge Orenstein's reasoned opinion on this matter. As
discussed above, a party can only seek sanctions with respect to actions attributable to the violations at issue.
Moreover, it would certainly have been improper to seek compensation at a higher hourly rate than that actually paid
to Catalano.