Jimico Enterprises, Inc. et al v. Lehigh Gas Corporation
Filing
157
DECISION & ORDER denying as moot # 139 Lehigh's Letter Requesting a stay of payment on the supersedeas bond; granting in part and denying in part # 142 Plaintiffs' Motion to enforce liability on the supersedeas bond as follows: Aegis Sec urity Insurance Corp. is directed to pay Plaintiffs $18,372; and granting in part and denying in part # 144 Plaintiffs' Motion for Attorney Fees. Plaintiffs are awarded $119,923.72 in attorney's fees. Signed by Judge Glenn T. Suddaby on 3/25/14. (lmw)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
____________________________________
JIMICO ENTERPRISES, INC.; and
BROWNSON ENTERPRISES, INC.,
Plaintiffs,
1:07-CV-0578
(GTS/RFT)
v.
LEHIGH GAS CORPORATION,
Defendant.
____________________________________
LEHIGH GAS CORPORATION,
Counter-Claimant,
v.
BROWNSON ENTERPRISES, INC.; and
PETER BROWNSON,
Counter-Defendants.
____________________________________
APPEARANCES:
OF COUNSEL:
FARUQI, FARUQI, LLP
Counsel for Plaintiffs Jimico and Brownson Enters.
and Counter-Defendant Brownson Enters.
101 Greenwood Avenue, Suite 600
Jenkintown, PA 19046
RICHARD D. SCHWARTZ, ESQ.
STEPHEN E. CONNOLLY, ESQ.
McNAMEE, LOCHNER TITUS & WILLIAMS, P.C.
Counsel for Plaintiffs Jimico and Brownson Enters.
and Counter-Defendant Peter Brownson
677 Broadway
Albany, NY 12207-2503
CHRISTOPHER MASSARONI, ESQ.
HARRITON & FURRER, LLP
Counsel for Defendant/Counter-Claimant
84 Business Park Drive, Suite 302
Armonk, NY 10504
URS BRODERICK FURRER, ESQ.
HON. GLENN T. SUDDABY, United States District Judge
DECISION and ORDER
Currently before the Court in this action brought by Jimico Enterprises, Inc. (“Jimico”),
and Brownson Enterprises, Inc. (“Brownson”) (collectively, “Plaintiffs”) against Lehigh Gas
Corporation (“Lehigh”) pursuant to, inter alia, the Petroleum Marketing Practices Act
(“PMPA”), 15 U.S.C. § 2805, are three motions. The first is a letter motion by defendant and
counter-plaintiff, Lehigh requesting a stay of payment on the supersedeas bond posted November
15, 2011 by Aegis Security Insurance Company (“Aegis”). See Dkt. Nos. 139, 131. Plaintiffs
oppose the motion. Second is Plaintiffs’ motion to enforce liability on the supersedeas bond,
which Lehigh opposes. See Dkt. No. 142. Third, and finally, is Plaintiffs’ motion for attorney’s
fees, which Lehigh also opposes. See Dkt. No. 144. For the following reasons, Lehigh’s letter
motion is denied as moot, Plaintiffs’ motion to enforce liability on the supersedeas bond is
granted in part and denied in part, and Plaintiffs’ motion for attorney’s fees is granted in part and
denied in part.
I.
RELEVANT BACKGROUND
On September 30, 2011, this Court issued a Memorandum-Decision and Order, which,
among other things, granted Lehigh’s breach of contract claim against plaintiff Brownson and
Peter Brownson as the guarantor and awarded Lehigh $84,889.72, to be offset by the Court’s
prior award to Brownson, yielding a net balance due to Lehigh of $33,458.34. The Court also
granted Lehigh’s request for attorney’s fees pursuant to the Temporary Franchise Agreement
(“TFA”). (See Dkt. No. 117.) In addition, the Court granted in part and denied in part Plaintiffs’
motion for attorney’s fees, expert fees, costs, pre-judgment interest and post-judgment interest.
(See id.) On October 14, 2011, the Court amended its September 30, 2011 MDO, at the request
of the parties, to correct a computational error in the calculation of prejudgment interest awarded
2
to plaintiff Jimico. Thereafter, Lehigh filed a timely notice of appeal regarding this Court’s prior
orders, including the October 14, 2011 amended MDO and judgment, awarding Plaintiffs
compensatory damages, punitive damages, attorney’s fees and costs, and interest. (See Dkt. No.
122.) On November 9, 2011, the Court issued an Order staying the enforcement of the October
14, 2011 amended MDO pending outcome of the appeal pursuant to Fed. R. Civ. P. 62(d), and
directed that Lehigh file and serve its supersedeas bond, which it did on November 15, 2011. On
February 20, 2013, the Court of Appeals for the Second Circuit affirmed this Court’s October 14,
2011 amended judgment and remanded the action to this Court for adjudication of attorney’s
fees. See Jimico Enters., Inc. v. Lehigh Gas Corp., 708 F.3d 106 (2d Cir. 2013). On March 27,
2013, this Court granted in part and denied in part Lehigh’s motion for attorney’s fees. (See Dkt.
No. 136.) The following day, judgment was entered awarding Lehigh $18,372 in attorney’s fees.
On April 30, 2013, the Court of Appeals for the Second Circuit issued the mandate on its
February 20, 2013 decision.
Two days after the mandate was issued, Lehigh filed its letter motion seeking a stay of
payment on the supersedeas bond. The following day, Plaintiffs filed their motion to enforce
liability on the bond. Plaintiffs later filed a motion for attorney’s fees related to their defense of
Lehigh’s appeal and post-judgment litigation. (Dkt. No. 144.)
A.
Lehigh’s Motion
Generally, in support of its motion to stay enforcement of the bond, Lehigh noted that a
motion to recall and stay the mandate was pending before the Court of Appeals and that Lehigh
intended to file a petition for a writ of certiorari with the United States Supreme Court.
Consequently, Lehigh argued, this Court’s enforcement of the bond would severely prejudice
3
Lehigh if its petition for certiorari were granted. (See generally Dkt. No. 139.)
Generally, in opposition to Lehigh’s motion, Plaintiffs assert the following five
arguments: (1) once the Court of Appeals issues its mandate, this Court no longer has
jurisdiction to implement a stay of the judgment, (2) even if this Court has jurisdiction, it should
decline to stay execution because Lehigh is essentially seeking the same relief from the Court of
Appeals, (3) there is no rule or authority which would permit the surety to abrogate its
responsibility to pay on the judgment now that the judgment is due, (4) the attorney for the
surety admits that the amended judgment in this case is immediately due and enforceable against
Lehigh, and (5) Lehigh’s petition for certiorari “would be truly far-fetched.” (See generally Dkt.
No. 141.)
B.
Plaintiffs’ Motion to Enforce Liability on the Supersedeas Bond
Generally, in support of their motion to enforce liability on the supersedeas bond,
Plaintiffs argue that (1) with the issuance of the mandate of the Court of Appeals, the stay of
execution of the amended judgment has lifted, (2) Rule 65.1 of the Federal Rules of Civil
Procedure provides for a summary proceeding to enforce a surety’s liability by the filing of a
motion, and (3) Lehigh’s motion to recall and stay the mandate is deficient. (See generally Dkt.
No. 142-1.)
Generally, in opposition to Plaintiffs’ motion, Lehigh notes that while it does not dispute
that the bond must be satisfied, it does dispute the amount that Plaintiffs are due. In support,
Lehigh argues that it is entitled to setoff such that any judgment in Plaintiffs’ favor should be
reduced to account for Lehigh’s judgment on its counterclaims against Brownson as well as
Lehigh’s judgment for attorney’s fees. Lehigh further argues that it has priority over any
4
attorney’s lien. Accordingly, Lehigh opposes any payment on the bond in excess of
$456,572.33. (See generally Dkt. No. 147-4.)
Generally, in its reply to Lehigh’s opposition, Plaintiffs inform the Court that Aegis has
paid them $456,572.33 and therefore, remaining for resolution is the appropriate disposition of
the $51,431.38 that Lehigh claims it is entitled to due to setoff. In support of its argument that
Lehigh is not entitled to setoff, Plaintiffs argue that (1) Lehigh waived its right to seek an
additional setoff beyond what is included in the October 14, 2011 amended judgment by failing
to raise the issue on appeal, (2) Lehigh failed to seek reconsideration of, or further amendment
to, the amended judgment and any request for such relief is now untimely, (3) courts bar setoffs
against fees awarded pursuant to federal remedial statutes such as the PMPA, and (4) there is no
equitable way to disaggregate the joint attorney fee award to account for Brownson’s sole debt.
(See generally Dkt. No. 148.)
C.
Plaintiffs’ Motion for Attorney’s Fees
Generally, in support of their motion for attorney’s fees, Plaintiffs argue that (1) the
hourly rates of their attorneys are reasonable and well-documented, (2) the number of hours
expended by counsel is reasonable and well-documented, (3) the factors enumerated in Johnson
v. Georgia Highway Express, Inc., 488 F.2d 714, 715 (5th Cir. 1974), establish that Plaintiffs’
attorney’s fees are reasonable, and (4) Plaintiffs’ fee request is typical of awards granted to
parties that successfully conduct appeals. (See generally Dkt. No. 144-1.)
Generally, in opposition to Plaintiffs’ motion, Lehigh argues that (1) Plaintiffs’ fee award
should be denied as insufficient, (2) Plaintiffs’ fee award should be denied as unreasonable, (3)
Lehigh is entitled to setoff, (4) Lehigh’s claim for setoff has priority over an attorney’s lien, and
5
(5) the fact that the fee award may be a joint award is irrelevant. (See generally Dkt. No. 150-4.)
Generally, in their reply to Lehigh’s opposition, Plaintiffs argue that (1) the Court of
Appeals has already held that Plaintiffs are entitled to reasonable attorney’s fees, (2) Lehigh
characterizes Plaintiffs’ success as nominal, contrary to the Second Circuit’s mandate, (3)
Lehigh’s interpretation of Luca v. County of Nassau, 698 F. Supp. 2d 296 (E.D.N.Y. 2010) is
erroneous, (4) Lehigh’s challenge to the fees for Christopher Massaroni are without merit, and
(5) Lehigh challenges billing for work that was necessitated by its own stubbornness and
gamesmanship. (See generally Dkt. No. 151.)
Generally, in its sur-reply, Lehigh argues that (1) it was entirely proper for it to address
the degree of Plaintiffs’ success in this matter in opposing their motion for attorney’s fees, (2)
Lehigh’s reliance on Luca is not misplaced, and (3) Plaintiffs’ refusal to acknowledge Lehigh’s
entitlement to setoff has been the basis of the most recent motion practice, and therefore, Lehigh
reserves the right to seek attorney’s fees in connection with this unnecessary motion practice.
(See generally Dkt. No. 152.)
II.
GOVERNING LAW
A.
Availability of Setoff
“[A] defendant’s right of setoff, i.e., the right to reduce the judgment to be entered for the
plaintiff by subtracting from the value of the plaintiff’s claim an amount owed to the defendant
by the plaintiff, . . . has its roots in common law.” Valley Disposal Inc. v. Cent. Vermont Solid
Waste Mgmt. Dist., 113 F.3d 357, 362 (2d Cir. 1997). “The right of setoff (also called ‘offset’)
allows entities that owe each other money to apply their mutual debts against each other, thereby
avoiding ‘the absurdity of making A pay B when B owes A.’” Citizens Bank of Maryland v.
6
Strumpf, 516 U.S. 16, 18, 116 S. Ct. 286, 289 (1995) (quoting Studley v. Boylston Nat’l Bank,
229 U.S. 523, 528, 33 S. Ct. 806, 808 (1913)). “The effect of a setoff, assuming the plaintiff
establishes [its] own claim, is to reduce the size of the judgment entered in the plaintiff’s favor.”
Valley Disposal Inc., 113 F.3d at 365. When deciding a claim for setoff, the district court must
first determine whether the setoff claim is disputed. If the claim is disputed, the court must next
decide whether it is meritorious. See id.
Where a claim of setoff is one that a defendant possesses at the time of its answer, it is
compelled to assert such a claim in its answer or risk vulnerability to a defense of estoppel. See
Valley Disposal Inc., 113 F.3d at 364. A court cannot timely decide such a claim that is asserted
after final judgment. See id., at 365.
Generally, courts decline to award setoff of attorney’s fees where the underlying statute
pursuant to which the opposing party received a judgment is remedial in nature. See, e.g.,
Schmidt v. Citibank, N.A., 677 F. Supp. 687, 691 (D. Conn. 1987) (concluding that “[s]uch a
result would thwart the statute’s individual enforcement scheme and its remedial objective.”)
(quoting Plant v. Blazer Fin. Serv., Inc. of Georgia, 598 F.2d 1357, 1366 (5th Cir. 1979)).
The PMPA “is remedial legislation that ‘must be given a liberal construction consistent
with its overriding purpose to protect franchisees.’” Koylum, Inc. v. Peksen Realty Corp., 223 F.
Supp. 2d 405, 406 (E.D.N.Y. 2002) (quoting Brach v. Amoco Oil Co., 677 F.2d 1213, 1221 (7th
Cir. 1982)). See also Bellmore v. Mobil Oil Corp., 783 F.2d 300, 304, n.3 (2d Cir. 1986)
(finding that, in enacting the PMPA, Congress intended “to protect the franchisee from arbitrary
and discriminatory acts of franchisors.”) (citing Brach v. Amoco Oil Co., 677 F.2d 1213, 1221
(7th Cir.1982) (recognizing the remedial nature of the PMPA, and noting that “the Act must be
7
given a liberal construction consistent with its overriding purpose to protect franchisees.”))).
B.
Attorney’s Fees
Pursuant to the PMPA, reasonable attorney’s fees are mandatory when a franchisee
“prevails” in its action against a franchisor. 15 U.S.C. § 2805(d)(1)(C). A franchisee “prevails”
in its action when it “recovers more than nominal damages.” Mac’s Shell Serv., Inc. v. Shell Oil
Prods. Co. LLC, 559 U.S. 175, 186, n.7, 130 S. Ct. 1251, 1260 (2010) (“The [PMPA] requires
courts to award attorney’s fees and expert-witness fees in any case in which a [franchisee]
recovers more than nominal damages.”).
Traditionally, courts have determined a “reasonable attorney’s fee” by calculating the
lodestar – the product of the number of hours required by the matter and a reasonable hourly
rate. See Millea v. Metro-North R. Co., 658 F.3d 154, 166 (2d Cir. 2011) (citing Perdue v.
Kenny A. ex rel. Winn, 559 U.S. 542, 130 S. Ct. 1662, 1673 (2010); Arbor Hill Concerned
Citizens Neighborhood Assoc. v. Cnty. of Albany, 522 F.3d 182, 183 (2d Cir.2008)). A
reasonable hourly rate is “what a reasonable, paying client would be willing to pay, given that
such a party wishes to spend the minimum necessary to litigate the case effectively.” Bergerson
v. New York State Office of Mental Health, 652 F.3d 277, 289-290 (2d Cir. 2011) (citations and
quotations omitted).1 The reasonable amount of time spent on a matter is dependent in part on
1
In determining what is reasonable, the following factors are useful:
(1) the time and labor required; (2) the novelty and difficulty of the
questions; (3) the level of skill required to perform the legal service
properly; (4) the preclusion of employment by the attorney due to
acceptance of the case; (5) the attorney's customary hourly rate; (6)
whether the fee is fixed or contingent; (7) the time limitations
imposed by the client or the circumstances; (8) the amount involved
in the case and the results obtained; (9) the experience, reputation,
8
the degree of difficulty of the factual and legal issues involved. See Hofler v. Family of
Woodstock, Inc., No. 07-CV-1055, 2012 WL 527668, at *5 (N.D.N.Y. Feb. 17, 2012). Courts
may reduce from the lodestar calculation hours that are “excessive, redundant, or otherwise
unnecessary” and consequently are not reasonable. See id. (citing Hensley v. Eckerhart, 461
U.S. 424, 434, 103 S. Ct. 1933, 1939-40 (1983).
Finally, it is important to note that the fee applicant bears the burden of documenting the
hours reasonably expended and the reasonable hourly rates. See Hensley, 461 U.S. at 437, 103
S. Ct. at 1941. To demonstrate that a fee request is reasonable, “a party seeking an attorney’s
fees award ‘must support that request with contemporaneous time records that show, for each
attorney, the date, the hours expended, and the nature of the work done.’” Kingvision
Pay-Per-View, Ltd. v. Castillo Rest. Corp., 06-CV-0617, 2007 WL 841804, at *6 (E.D.N.Y. Jan.
16 2007) (quoting Cablevision Sys. New York City Corp. v. Diaz, 01-CV-4340, 2002 WL
31045855, at *5 (S.D.N.Y. July 10, 2002)).
III.
ANALYSIS
A.
Whether Lehigh is Entitled to Setoff
Plaintiffs advise the Court that Aegis, the surety, paid Plaintiffs $456,572.38. Therefore,
the sole issue to decide regarding Plaintiff’s Rule 65.1 motion is whether the remaining amount
of the October 14, 2011 Amended judgment is subject to setoff. According to Plaintiffs, Lehigh
and ability of the attorneys; (10) the “undesirability” of the case; (11)
the nature and length of the professional relationship with the client;
and (12) awards in similar cases.
Arbor Hill Concerned Citizens Neighborhood Ass’n v. Cnty. of Albany and Albany Cnty. Bd. of
Elections, 522 F.3d 182, 186 n.3 (2d Cir. 2008) (citing Johnson v. Ga. Highway Express, Inc.,
488 F.2d 714, 717-19 (5th Cir. 1974)).
9
is seeking a $51,431.38 offset, representing the amount awarded to plaintiff Brownson against
Lehigh. However, as Lehigh makes clear in its opposition papers, it alleges that it is entitled to a
setoff of $51,830.34, representing its $33,458.34 award against Brownson on its breach of
contract claim as well as its $18,372 attorney’s fee award related to that claim.
Lehigh is entitled to setoff of $33,458.34 for two reasons. First, it asserted offset as an
affirmative defense in its Answer. (See Dkt. No. 22, at 8 [Lehigh’s Answer].) Second, this
Court, in its October 14, 2011 Amended MDO, offset Brownson’s $51,431.38 award by
Lehigh’s $84,889.72 award, resulting in a net award to Lehigh of $33,458.34. Therefore, in
order to avoid “the absurdity” of making Lehigh pay Plaintiffs $33,458.34 when Lehigh is owed
$33,458.34 from plaintiff Brownson, the Court denies Plaintiffs’ Rule 65.1 motion to that extent.
See Citizens Bank of Maryland, 516 U.S. at 18, 116 S. Ct. at 289.
Lehigh is not entitled to setoff of its $18,372 attorney’s fee award for two reasons. First,
and foremost, as indicated in Point II.A. of this Decision and Order, a setoff of attorney’s fees is
inappropriate where the underlying statute is remedial in nature, as is the PMPA. Second, in any
event, Lehigh’s assertion of setoff of its attorney’s fee award at this procedural juncture is clearly
untimely.
For these reasons, Plaintiffs’ Rule 65.1 motion to enforce liability on the remaining
$51,830.34 of the supersedeas bond is granted in part and denied in part. Further, Lehigh’s
motion requesting a stay of payment on the supersedeas bond is denied as moot.
B.
Attorney’s Fees
The Court of Appeals for the Second Circuit granted Plaintiffs’ request for attorney’s
fees and costs for defending Lehigh’s appeal. See Jimico Enters., Inc., 708 F.3d at 115. In doing
10
so, the Second Circuit noted that Plaintiffs have prevailed in this action and have been awarded
nominal damages. Accordingly, the Circuit concluded that Plaintiffs “are entitled to fees for
defending this appeal, in an amount to be determined on remand by the District Court.” Id.
Finally, the Circuit emphasized that Plaintiffs “are entitled only to reasonable fees.” Id.
(emphasis in original).
Accordingly, as indicated in Point II.B. of this Decision and Order, in order to determine
a reasonable fee in this case, the Court must decide the number of hours reasonably expended in
the litigation multiplied by a reasonable hourly rate.
By their motion for attorney’s fees, Plaintiffs seek a total of $194,197.60 in legal fees for
defense of Lehigh’s appeal and post-judgment litigation, which includes 403.35 hours of work at
a partner-level rate, 396.95 hours at an associate-level rate and 21.77 hours of paralegal time.2
1.
Reasonable Hourly Rate
As Plaintiffs acknowledge, this Court previously determined that hourly rates of $300 for
partner-level work, $180 for associate level work and $80 for paralegal work were reasonable,
which decision was affirmed on appeal. Nonetheless, Plaintiffs assert that “a modest increase in
the hourly rates awarded to Plaintiffs would be appropriate[,]” because “courts in this Circuit
grant increases in hourly rates for attorney’s fees incurred in the defense of an appeal” as well as
enhanced fees for post-judgment litigation due to counsel’s development of special expertise
over the course of the litigation. (Dkt. No. 144-1, at 8 [Pls.’ Mem. of Law] [citing Gonzalez v.
Bratton, 247 F. Supp. 2d 432, 435 (S.D.N.Y. 2003); David v. Sullivan, 777 F. Supp. 212, 219-
2
Plaintiffs’ calculation of the attorney fees for Christopher Massaroni’s work is
one half hour greater than is supported by the time records submitted. The Court has adjusted
Plaintiffs’ overall request, accordingly.
11
221 (E.D.N.Y. 1991)].) In Gonzalez, the Court noted that the attorneys’ rates increased postjudgment due to the increased cost of doing business, and therefore awarded fees based on those
higher rates, finding that they were within the range of those considered reasonable within the
Southern District of New York at that time. See Gonzalez, 247 F. Supp. 2d at 435. The Court
did not, as Plaintiffs imply, increase the hourly rate awarded due to the fact that the legal work
was related to an appeal. Moreover, in David, the Court awarded an enhanced fee for postjudgment litigation in a class action that spanned over twelve years where the fee petition before
the Court was being decided six years after the previous petition had been settled, and where the
Court noted that counsel was uniquely situated to handle the post judgment proceedings due to
“the highly-specialized legal and factual knowledge necessary to undertake them.” David, 777
F. Supp. 212, 221 (E.D.N.Y. 1991). Here, the appellate and post-judgment work for which
Plaintiffs seek an increased hourly rate occurred over the span of approximately two years from
this Court’s previous attorney fee award.
To be sure, Plaintiffs fail to specify the “modest[ly]” increased rate that they request. As
the movant, it is Plaintiffs’ “ burden to establish the prevailing market rate.” Spencer v. City of
New York, No. 06-CV-2852, 2013 WL 6008240, at *3 (S.D.N.Y. Nov. 13, 2013) (citing Blum v.
Stenson, 465 U.S. 886, 895, 104 S. Ct. 1541, n.11(1984)). Moreover, Plaintiffs calculate their
overall award at the hourly rates of $300 for partner-level work, $180 for associate level work,
and $80 for work performed by a paralegal. The Court finds that these rates continue to be
within the range of prevailing market rates in this District and continue to be reasonable hourly
rates, considering the level of expertise required, the results obtained, and the attorneys’
experience. (See Dkt. No. 120, at 20.) Accordingly, Plaintiffs are awarded fees of $300 per hour
12
for work performed by partners, $180 per hour for work performed by associates, and $80 per
hour for work performed by paralegals.
Plaintiffs argue that they should be awarded partner-level rates for 127.3 hours of work
performed by Kendall Zylstra, 97.75 hours of work performed by Christopher Massaroni, one
hour of work performed by Peter Kohn, and 177.80 of the hours of work performed by associate,
Richard Schwartz. Plaintiffs further argue that they should be awarded associate-level rates for
276.80 of the hours of work performed by Mr. Schwartz, 105.50 hours of work performed by
Gary Smith, seven hours of work performed by April Dalbec, 6.9 hours of work performed by
Stephen Connolly and .75 of an hour performed by Jacob Lamme. Finally, Plaintiffs argue that
they should be awarded paralegal fees for 21.77 hours of work performed by Jessica Jenks.
The Court finds that Plaintiffs have met their burden of establishing the experience and
skill of attorneys Zylstra, Schwartz, Smith, Massaroni, Dalbec and Lamme as well as paralegal,
Jenks. However, Plaintiffs have failed to submit any evidence regarding the experience and skill
of attorneys Connolly and Kohn. Accordingly, the Court denies Plaintiffs’ request for fees for
work performed by those attorneys.
Finally, Plaintiffs’ request for an award of fees for some work performed by associate
attorney, Richard Schwartz, at the hourly rate for work performed by partners is denied.
Plaintiffs do not meet their burden of establishing that their request is reasonable. Plaintiffs
assert that Mr. Schwartz, an associate with eight years of experience, principally handled their
appeal, and therefore, they should be awarded fees for this work at the hourly rate of a partner.
However, the sole case Plaintiffs cite in support of their assertion that “[i]n identical situations,
courts in this Circuit have awarded a partner rate for such tasks even though they are
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competently performed by an associate[,]” is readily distinguishable. (Dkt. No. 144-1, at 8-9
[Pls. Mem. of Law] citing Luca v. Cnty. of Nassau, 698 F. Supp. 2d 296, 304 (E.D.N.Y. 2010)).
In Luca, unlike here, the issue was whether the hourly rate for work performed by a sole
practitioner with twenty years of experience who was retained as lead counsel for purposes of
defending the plaintiff’s verdict on appeal, should be the hourly rate of a partner rather than that
of a senior associate. See Luca, 698 F. Supp. 2d at 302-304. There, the Court found that a
partner-level rate should be awarded for such work. See id., at 304. Here, however, Mr.
Schwartz was an associate with eight years of experience as a lawyer when he performed work
defending Plaintiffs on appeal, while being supervised by a partner. The Court finds that
Plaintiffs have failed to meet their burden of establishing that their fee award should be
calculated by assigning a partner-level hourly rate for any work performed by Mr. Schwartz.
Accordingly, the hourly rate to be awarded for the reasonable amount of hours of work
performed by Mr. Schwartz will be the $180 hourly rate for associate-level work.
2.
Reasonable Hours
Having determined the reasonable hourly rates, the court next addresses the issue of
whether the number of hours expended was reasonable.
As an initial matter, the Court disposes of Lehigh’s argument that Plaintiffs’ fee petition
is insufficient due to Plaintiffs’ failure to attach their contingency fee agreement. Lehigh
previously advanced this argument in opposition to Plaintiff’s petition for attorney fees regarding
their motion for summary judgment. (See Dkt. No. 90, at 4.) This Court disregarded Lehigh’s
argument as legally unsupported, which decision was affirmed by the Court of Appeals. (See
Dkt. No. 120 at 24, aff’d by Jimico Enters., Inc., 708 F.3d at 115.) Accordingly, Lehigh is
14
estopped from relitigating the issue.
The Court further disposes of Lehigh’s argument that the degree of success achieved in
this case by Plaintiffs was nominal. In support, Lehigh cites its award against plaintiff
Brownson and further argues that the awards Plaintiffs received were minimal compared to what
was originally sought. To be sure, Plaintiffs are seeking an award of attorney fees for postjudgment litigation as well as work defending against Lehigh’s appeal. Considering Plaintiffs
prevailed in defending against the appeal and that the Court of Appeals specifically found that
the amount of damages awarded to Plaintiffs was “more than nominal,” this Court declines to
reduce Plaintiffs’ award of attorney’s fees on this basis. See Jimico, 708 F.3d at 115.
Regarding the number of hours expended by Plaintiffs’ counsel, Plaintiffs have submitted
contemporaneous time records that show, for each attorney, the date, the hours expended and the
nature of the work done. Nonetheless, the Court finds that some of the hours worked were
excessive. For example, (1) attorney Schwartz spent 25 hours reviewing and outlining issues
regarding Lehigh’s appellate brief and 56.7 hours outlining and drafting Plaintiffs’ brief; (2)
attorney Schwartz spent over 60 hours preparing for and attending oral argument, while
attorneys Massaroni and Zylstra together spent over twenty hours on the same; and (3) attorney
Smith worked 18.6 hours from February 6 through February 8, 2013 researching and drafting
reports regarding post judgment interest, attorneys’ fees on appeal and collection on the
supersedeas bond, all prior to the Circuit’s decision on the appeal.
The Court also finds that some of the hours worked were unnecessary and/or duplicative.
For example, (1) on the day the Circuit issued its thirteen-page decision, attorneys Smith,
Schwartz and Zylstra together spent a total of eight hours reviewing it and conferring with one
15
another; (2) attorneys Zylstra, Schwartz and Massaroni together spent a total of twenty hours
preparing for and attending a Civil Appeals Management (CAMP) conference at the Court of
Appeals; and (3) approximately half of attorney Massaroni’s entries reflect conference calls with
co-counsel.
In addition, the Court finds that some of the descriptions for work performed are vague.
For example, (1) on November 5, 2010, November 19, 2010 and December 1, 2010 attorney
Dalbec’s entries reflect “legal research;” (2) on November 1, 2011 attorney Zylstra “reviewed
Judge’s order on execution; researched issue, discussed strategy with co-counsel;” (3) on
November 2, 2011, attorney Zylstra “reviewed various filings by Lehigh;” and (4) on December
6, 2011, attorney Schwartz spent 3.3 hours “review[ing] district court docket for designations;”
Finally, the Court finds that some of the work performed by attorneys and by paralegal
Jenks was clearly administrative in nature. For example, (1) paralegal Jenks spent almost twelve
hours of the 21.77 hours she worked on tasks such as drafting appearance and admission
documents for counsel as well as editing the table of contents of briefs; (2) attorney Schwartz
“completed and filed form re: oral argument dates and availability;” (3) attorney Smith placed a
phone call to the Second Circuit Clerk’s Office to confirm process regarding the issuance of a
mandate and that the mandate would issue that afternoon; and (4) attorney Smith drafted a
certificate of service for a motion.
For these reasons, the Court finds that it is appropriate to reduce the total hours billed by
thirty percent. See Legends Are Forever, Inc. v. Nike, Inc., No. 12-CV-1495, 2013 WL 6086461,
at *5 (N.D.N.Y. Nov. 18, 2013) (reducing hours by thirty percent after finding some entries to be
somewhat excessive); Levitian v. Sun Life and Health Ins. Co., No. 09-CV-2965, 2013 WL
16
3829623, at *11 (S.D.N.Y. July 24, 2013) (finding a thirty percent reduction in the hours billed
appropriate, after having reviewed the time charges in considerable detail).
Finally, for the reasons identified in Point III.A. of this Decision and Order, the Court
need not, and will not, address Lehigh’s argument in opposition to Plaintiffs’ motion for
attorney’s fees based on setoff.
Accordingly, Plaintiffs are entitled to an award of attorney’s fees of $119,923.72.3
ACCORDINGLY, it is
ORDERED that Lehigh’s letter motion requesting a stay of payment on the supersedeas
bond (Dkt. No. 139) is DENIED as moot; and it is further
ORDERED that Plaintiffs’ motion to enforce liability on the supersedeas bond is
GRANTED in part and DENIED in part, as follows: the surety, Aegis Security Insurance Corp.,
is directed to pay Plaintiffs $18,372; and it is further
ORDERED that Plaintiffs’ motion for attorney’s fees is GRANTED in part and
DENIED in part; and it is further
ORDERED that Plaintiffs are awarded $119,923.72 in attorney’s fees.
Dated: March 25, 2014
Syracuse, New York
3
This amount is calculated as follows: ($300.00 per hour times 224.55 hours for
attorneys Zylstra and Massaroni equals $67,365) plus ($180 per hour times 567.85 hours for
attorneys Schwartz, Smith, Dalbec and Lamme equals $102,213) plus ($80 per hour times 21.77
hours for paralegal Jenks equals $1741.60) equals $171,319.60. Seventy percent of $171,319.60
equals $119,923.72.
17
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