Orthopedic Assoc. v. Sedor, et al
MEMORANDUM-DECISION and ORDER - That Breen's motion to alter and remove language (00-cv-238, Dkt. No. 278) from the court's March 30, 2010 Order is DENIED. That the Plan's motion to amend the costs awarded to Milgram (02-cv-255, Dkt. No. 54) is GRANTED insofar as Milgram is ordered to supplement and/or amend his bill of costs as it relates to witness fees and "other" fees, but is otherwise DENIED as to the remainder of Milgram's bill of costs. That the Plan's motion to amend the costs awarded to Sedor and Upstate (00-cv-238, Dkt. No. 291) is GRANTED insofar as the Clerk is directed to strike Sedor and Upstate's bills fo costs (00-cv-238, Dkt. Nos. 287, 289) from the record, but is otherwise DENIED w ith leave to renew. That Sedor and Upstate are GRANTED leave to file new bill of costs. That Milgram's mtoion for attorneys' fees and costs against the Plan (02-cv-255, Dkt. No. 28) is GRANTED in the amount of $350,807.59. That the Plan's motion for attorneys' fees and costs against Breen (00-cv-283, Dkt. No. 271) is GRANTED in the amount of $364,060.50). That Sedor and Upstate's motion for attorneys' fees against Bree (02-cv-255), Dkt. No. 34; 00-cv-238, Dkt. No. 267) is GRANTED in the amount of $27,964.53. Signed by Judge Gary L. Sharpe on 9/12/2011. (jel, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
ORTHOPEDIC ASSOCIATES OF 65
PENNSYLVANIA AVENUE, BINGHAMTON,
NEW YORK, P.C., as Plan Administrator
of the Orthopedic Associates Defined
Contribution Pension Plan,
ROBERT M. SEDOR, JR., CFP, RFC;
UPSTATE MANAGEMENT ASSOCIATES,
INC. d/b/a THE BAY RIDGE GROUP; and
NORAH A. BREEN,
ROBERT W. MILGRAM, M.D.,
ORTHOPEDIC ASSOCIATES OF 65
PENNSYLVANIA AVENUE, BINGHAMTON,
NEW YORK, P.C., as Plan Administrator
of the Orthopedic Associates Defined
Contribution Pension Plan; ROBERT M.
SEDOR, JR., CFP, RFC; UPSTATE
MANAGEMENT ASSOCIATES, INC.
d/b/a THE BAY RIDGE GROUP; and
NORAH A. BREEN,
For Orthopedic Associates:
Hancock, Estabrook Law Firm
1500 AXA Tower I
Syracuse, NY 13221
JAMES E. HUGHES, ESQ.
For Robert W. Milgram:
Mackenzie, Hughes Law Firm
101 South Salina Street
Syracuse, NY 13221
CARTER H. STICKLAND, ESQ.
DAVID M. GARBER, ESQ.
For Robert M. Sedor, Jr. and
Costello, Cooney Law Firm
205 South Salina Street
Syracuse, NY 13202
PAUL G. FERRARA, ESQ.
For Norah A. Breen:
Sapir, Frumkin Law Firm
399 Knollwood Road, Suite 310
White Plains, NY 10603
WILLIAM D. FRUMKIN, ESQ.
Gary L. Sharpe
District Court Judge
MEMORANDUM-DECISION AND ORDER
On March 30, 2010, following a non-jury ERISA1 trial, the court
Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq.
issued a Memorandum-Decision and Order finding, among other things, Dr.
Robert Milgram entitled to recover a money judgment in the amount of
$1,571,723.73 against the Orthopedic Associates Defined Contribution
Pension Plan (the Plan). (See Mar. 30, 2010 Order at 12-13, 63-64, 02-cv255, Dkt. No. 12.) The court subsequently denied the Plan’s motion to stay
the enforcement of the judgment and issuance of a writ of execution. (02cv-255, Dkt. Nos. 51, 52.) Pending are: (1) Norah Breen’s motion to alter
and remove certain language from the March 30, 2010 Order, (00-cv-238,
Dkt. No. 278); (2) the Plan’s motions to amend the costs awarded to
Milgram, (02-cv-255, Dkt. No. 54), and to Sedor and Upstate, (00-cv-238,
Dkt. No. 291); (3) Milgram’s motion for attorneys’ fees and costs against
the Plan, (02-cv-255, Dkt. No. 28; see also Letter Mot., 00-cv-238, Dkt. No.
273); (4) the Plan’s motion for attorneys’ fees against Breen, (00-cv-238,
Dkt. No. 271); and (5) Robert Sedor and Upstate Management’s motion for
attorneys’ fees and costs against Breen, (02-cv-255, Dkt. No. 34; 00-cv238, Dkt. No. 267).2 For the reasons that follow, Breen’s motion to alter is
denied; the Plan’s motions to amend costs are granted in part and denied
Sedor and Upstate’s motion for attorneys’ fees and costs against the Plan, (see 02-cv255, Dkt. No. 36; 00-cv-238, Dkt. No. 268), was withdrawn on June 14, 2011, by letter and
order, (see 00-cv-238, Dkt. Nos. 364, 365).
in part with leave to renew; Milgram’s motion for attorneys’ fees and costs
is granted; and the Plan and Sedor and Upstate’s motions for attorneys’
fees and costs are granted with reductions.
Motion to Alter the Language of the Order
Upon review of its March 30, 2010 Order, the court discerns no
factually unsupported statement or conclusion regarding Breen’s past
actions and present legal obligations, and therefore denies Breen’s June
22, 2010 letter motion seeking alteration and removal of certain language
from the Order. (See 00-cv-238, Dkt. No. 278.)
Motions to Retax Costs
On April 29, 2010, Milgram filed a bill of costs to be taxed, (02-cv-
255, Dkt. No. 22), which the court awarded against the Plan on August 10,
2010, (02-cv-255, Dkt. No. 53). Likewise, Sedor and Upstate submitted a
bill of costs on May 4, 2010, (00-cv-238, Dkt. No. 262; 02-cv-255, Dkt. No.
27), which were also awarded on August 10, (00-cv-238, Dkt. No. 287).
On August 17, 2010, the Plan moved to amend certain costs awarded to
Milgram, (02-cv-255, Dkt. No. 54), and to Sedor and Upstate, (00-cv-238,
Dkt. No. 291).
Milgram’s Bill of Costs
The Plan challenges the appropriateness of Milgram’s $7,110.11
expert witness fee and the adequacy of Milgram’s itemization of
photocopying costs and “other costs.” (See Plan Mem. of Law at 2-4, 02cv-255, Dkt. No. 54:1.) In response, Milgram, without addressing the
merits of his costs, simply argues that the Plan’s bill of costs is substantially
similar to Milgram’s and that the Plan should consequently be estopped
from challenging his claimed costs. (See Milgram Resp. Mem. of Law at 36, 00-cv-238, Dkt. No. 301.) By a supplemental letter, Milgram offers a
more specific breakdown of costs and also seeks additional costs in the
amount of $10,407.83 for computer legal research and online searches.
(See 00-cv-238, Dkt. No. 273.)
At the threshold, the court rejects Milgram’s estoppel arguments for
several reasons, not least of which are (1) that the Plan’s itemizations are
sufficiently distinct from and more specific and defined than Milgram’s,
(compare Plan Bill of Costs, 00-cv-238, Dkt. No. 264, with Milgram Bill of
Costs, 02-cv-255, Dkt. No. 22); and (2) that such arguments are irrelevant3
Essentially, Milgram’s argument seems to be that he should be allowed to submit an
inaccurate or unreasonable bill of costs because the Plan did so without objection from Breen.
The court refuses to adopt such a sophism.
and misperceive the applicability of estoppel, particularly since there is
nothing patently inconsistent between the positions taken by the Plan in
seeking costs and in challenging Milgram’s costs.
Moving on to the merits of the Plan’s challenge, Milgram concedes,
and the court finds, that “the Plan is correct that expert witness fees are not
ordinarily recoverable as taxable costs.” (Milgram Resp. Mem. of Law at 5
n.1, 00-cv-238, Dkt. No. 301.) Furthermore, the court concurs with the
Plan insofar as Milgram has failed to sufficiently itemize and delineate the
“other costs” he claims. Therefore, the court grants the Plan’s motion
insofar as Milgram is ordered to supplement and/or amend his bill of costs
as it relates to “fees for witnesses” and “other costs.” However, because
Milgram’s photocopying costs and other categorized costs are reasonable
and sufficiently supported and itemized, the court denies the Plan’s motion
as to the remaining costs identified in Milgram’s bill of costs.
Sedor and Upstate’s Bill of Costs
The Plan further challenges several aspects of Sedor and Upstate’s
bill of costs, including the filing of identical bills of costs against both the
Plan and Breen; the appropriateness of the $6,648.75 expert witness fee;
the reasonableness of photocopying costs; the availability of research,
travel, and conference call costs; and the general adequacy of Sedor and
Upstate’s itemization of costs. (See Plan Mem. of Law at 2-4, 00-cv-238,
Dkt. No. 291:1.) In response, Sedor and Upstate first acknowledge that
they are not entitled to the expert witness fees set forth in their bill of costs
and accordingly agree to a $6,648.75 reduction. (See Ferrera Aff. ¶ 6, 02cv-255, Dkt. No. 58.) However, Sedor and Upstate otherwise contend that
their bill of costs is accurate, reasonable, and sufficiently specific, and that
they “are not attempting to recover duplicate amounts” and that the Plan
and Breen are jointly responsible for all costs incurred. (Id. at ¶¶ 8-21.)
Putting aside Sedor and Upstate’s conceded reduction based on the
unavailability of expert witness fees, the court discerns no problems
regarding the recoverability or reasonableness of the remainder of Sedor
and Upstate’s claimed costs.4 However, the court is not presently in a
position to evaluate the extent of Sedor and Upstate’s entitlement to costs
due to the stipulation of partial discontinuance between them and the Plan.
(See 00-cv-238, Dkt. No. 357.) Thus, while the court credits Sedor and
Upstate’s asserted good faith in filing duplicate bills of costs and rejects as
Notwithstanding Milgram’s failed estoppel argument, the court looks with suspicion
upon certain of the Plan’s challenges, since the Plan seems to have sought similar types of
costs, including extensive travel, photocopying, and witness fees. (See 00-cv-238, Dkt. No.
unfounded and unwarranted the Plan’s suggestion that Sedor and Upstate
are attempting to “recover twice for the same expenses,”5 (Plan Mem. of
Law at 2, 00-cv-238, Dkt. No. 291:1), the overlapping nature of the
evidence and resultant overlapping nature of costs arising from the ERISA
and state-law actions render premature any conclusive resolution of what
costs each party is liable for and whether and how such costs should be
apportioned consistent with both the court’s March 30, 2010 Order and the
parties’ stipulation. Accordingly, the court orders that Sedor and Upstate’s
bills of costs be stricken from the record; that Sedor and Upstate be
granted leave to file a new bill of costs; and that the Plan’s motion to
amend costs be otherwise denied with leave to renew.
Motions for Attorneys’ Fees
In an ERISA action, the court has the discretion to award “a
reasonable attorney’s fee and costs of action to either party.” 29 U.S.C. §
1132(g)(1). Importantly though, a party seeking attorneys’ fees “must show
some degree of success on the merits.” Hardt v. Reliance Standard Life
Ins. Co., 130 S.Ct. 2149, 2158 (2010) (internal quotation marks and citation
“Any such award [for costs] ... is subject to the usual limitation that the prevailing party
may receive only one satisfaction of costs; that is, he cannot recover more than his total
entitlement.” Ortho-McNeil Pharm., Inc. v. Mylan Labs. Inc., 569 F.3d 1353, 1357 (Fed. Cir.
2009) (internal quotation marks and citation omitted).
omitted). When determining the amount of attorneys’ fees to award, courts
within the Second Circuit must evaluate five factors:
(1) the degree of the offending party’s culpability or bad faith,
(2) the ability of the offending party to satisfy an award of
attorney’s fees, (3) whether an award of fees would deter other
persons from acting similarly under like circumstances, (4) the
relative merits of the parties’ positions, and (5) whether the
action conferred a common benefit on a group of pension plan
Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869, 871
(2d Cir. 1987) (citation omitted). “[F]ailure to satisfy [one of the] Chambless
factor[s] does not preclude an award of attorneys’ fees.” Locher v. Unum
Life Ins. Co. of Am., 389 F.3d 288, 299 (2d Cir. 2004) (citation omitted);
see also Chapman v. ChoiceCare Long Island Long Term Disability Income
Plan, No. 05-0687, 2005 WL 3556194, at *2 (2d Cir. Dec. 29, 2005).
When determining the amount of attorneys’ fees to award, courts
within the Second Circuit apply a “presumptively reasonable fee analysis.”
Porzig v. Dresdner, Kleinwort, Benson, N. Am. LLC, 497 F.3d 133, 141 (2d
Cir. 2007). This analysis “involves determining the reasonable hourly rate
for each attorney and the reasonable number of hours expended, and
multiplying the two figures together to obtain the presumptively reasonable
fee award.” Id. (citations omitted). 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, 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)). The court may also consider any independent interest counsel had
in the case’s outcome or any expected returns from the representation,
such as reputational benefits that might accrue from being associated with
the case. See id. at 184, 190.
In addition to guiding the court in determining what constitutes a
reasonable award, the Arbor Hill and Johnson factors “may lead the district
court to adjust the fee upward or downward.” Hensley v. Eckerhart, 461
U.S. 424, 434 & n.9 (1983). For instance, where a plaintiff brings two
distinct claims based on different facts and legal theories, and is ultimately
successful on only one, the court may decline to award fees for services
provided regarding the unsuccessful claim. See id. at 434-35. However,
the court may not reduce a fee solely because counsel relies on alternative
legal bases to achieve the same outcome, for “[t]he result is what matters.”
See id. at 435. Thus, “[w]here a plaintiff has obtained excellent results, his
attorney should recover a fully compensatory fee.” Id. Moreover, “in some
cases of exceptional success an enhanced award may be justified.” Id.;
see also Green v. Torres, 361 F.3d 96 (2d Cir. 2004). But, the party
advocating an upward or downward departure bears the burden of
establishing that “an adjustment is necessary to the calculation of a
reasonable fee.” Grant v. Martinez, 973 F.2d 96, 101 (2d Cir. 1992) (citing
U.S. Football League v. Nat’l Football League, 887 F.2d 408, 413 (2d Cir.
Absent delay caused by the party seeking fees, the “reasonable
hourly rate” to be relied on by the court in making its calculations “should
be ‘current rather than historic hourly rates.’” Gierlinger v. Gleason, 160
F.3d 858, 882 (2d Cir. 1998) (quoting Missouri v. Jenkins, 491 U.S. 274,
284 (1989)). The rationale behind using current hourly rates is that
“compensation received several years after the services were rendered ...
is not equivalent to the same dollar amount received reasonably promptly
as the legal services are performed, as would normally be the case with
private billings.” Jenkins, 491 U.S. at 283; see also LeBlanc-Sternberg v.
Fletcher, 143 F.3d 748, 764 (2d Cir. 1998).
Milgram’s Motion for Attorneys’ Fees
Pursuant to 29 U.S.C. § 1132(g)(1), Milgram moves for attorneys’
fees in the amount of $325,062.26. (See 02-cv-255, Dkt. No. 28.) Milgram
also seeks $15,337.50 in non-taxable costs based on services provided by
Scolaro, Shulman, Cohen, Felter & Burstein, P.C. in advising Milgram’s
counsel about the reasonableness of legal fees, and $10,407.83 for
computer and online legal research. (See Letter Mot., 00-cv-238, Dkt. No.
273; Milgram Mem. of Law at 17, 02-cv-255, Dkt. No. 28:14.) Finding
misguided the Plan’s attempt to blame Dr. Milgram for its own erroneous
and obstructive conduct, (see Plan Resp. Mem. of Law at 2-4, 02-cv-255,
Dkt. No. 44), the court grants Milgram’s motion for attorneys’ fees in the
amount of $325,062.26, and additional costs in the amount of $25,745.33.
At the threshold, there is no question that Milgram is entitled under
ERISA to attorneys’ fees from the Plan. As made clear in the court’s March
30, 2010 Order, the Plan has consistently attempted to shirk its
responsibilities and refuse to account for its obvious—and
admitted—mistakes. (See Mar. 30, 2010 Order at 16-20, 28-31, 00-cv-238,
Dkt. No. 237.) In fact, even in its opposition to Milgram’s motion for
attorneys’ fees, the Plan continues to make arguments wholly unsupported
by the factual and legal record. Thus, the Plan’s culpability is substantial.
Second, the court has repeatedly outlined at length the Plan’s ability, and
obligation, to satisfy Milgram’s entitlements, which in the court’s view
includes an award of attorneys’ fees. (See id. at 37; see also Aug. 10,
2010 Order at 3, 02-cv-255, Dkt. No. 51.) As to the third factor, deterrence,
although the facts underlying this case are unique, an award against the
Plan would likely serve to deter plan administrators from ignoring or
unlawfully assigning their fiduciary duties, and from unreasonably and
inequitably delaying the issuance of benefits. Fourth, the merits favor
Milgram entirely. And fifth, while the court’s rulings were generally limited
to the unique factual predicates, the court is satisfied that these rulings
have at least conferred a Pyrrhic benefit on the other Plan participants
insofar as the Plan and its participants are now on notice of the Plan’s
responsibilities and obligations, the participants’ rights, and the relationship
between the Plan and its agents. Accordingly, the Chambless factors
overwhelmingly weigh in Milgram’s favor.
As to the actual reasonableness of attorneys’ fees and costs that
Milgram is seeking, the court rejects the Plan’s attempt to broadly label
Milgram’s demand as unreasonable. True, Milgram prevailed on only one
claim; however, that claim, pursuant to 29 U.S.C. § 1132(a)(1), was the
central claim, and the success of that claim allowed Milgram to recover a
judgment in the amount of $1,571,723,73. Milgram’s other two claims
under § 1132(a)(2) and (a)(3) were abandoned by him voluntarily and
merely constituted two other tines on the same fork, as all three claims
derived from the same set of facts and sought to vindicate the same rights.
Therefore, to the extent the Plan seeks a reduction of Milgram’s attorneys’
fee demand based on the argument that Milgram prevailed on only one of
his claims, that request is denied.
Turning to the Arbor Hill and Johnson factors, the amount of time,
labor, and skill devoted to litigating and succeeding in this action was both
substantial and justified. The substantiality of the time expended by
Milgram’s attorneys in this action was compounded by the dilatory actions
taken—though not necessarily taken in bad faith—by the Plan. And given
the novelty and difficulty of the questions presented, which even the court
found particularly so, the 365.05 attorney hours tallied by Melvin & Melvin
and the 1366.55 attorney and paralegal hours by Mackenzie Hughes were
reasonable. A review of the supporting documentation supports the
accuracy and reasonableness of these hour totals. (See Strickland Decl.,
Exs. 2, 4, 8, 9, 02-cv-255, Dkt. Nos. 28:3, 28:5, 28:9, 28:10.) The court
reaches the same conclusion with regard to the 65.7 hours spent by
Scolaro, Shulman, Cohen, Fetter & Burstein, P.C. in providing consultation
and expert advice about the reasonableness of Melvin & Melvin and
Mackenzie Hughes’s legal fees. (See id., Ex. 6, Dkt. No. 28:7; McGough
and Jaffe Affs., 02-cv-255, Dkt. Nos. 28:8, 28:11.)
Additionally, as Milgram correctly points out, the reasonableness of
his attorneys’ fees demand is further bolstered by the money amount
involved and the fact that Milgram’s counsel was successful in obtaining a
judgment in his favor totaling $1,571,723,73; by the fact that both Melvin &
Melvin and Mackenzie Hughes assigned experienced, reputable, and able
attorneys to handle this case, (see Strickland Decl. ¶¶ 8, 12, 02-cv-255,
Dkt. No. 28:1); by the length of counsel’s professional relationship with
Milgram as a result of the drawn out nature of this matter; and by the
complex, convoluted, and ultimately undesirable nature of this case. On
the other hand, while Milgram’s counsel’s reputations may be enhanced by
the results achieved in this case, these gains are not unique in legal
practice and are of no consequence here. See Arbor Hill, 522 F.3d at 190.
Nor does the court find of consequence any other independent interests of,
expected returns to, or preclusion of employment by Milgram’s counsel.
Now, as to the hourly rates set forth by Milgram’s counsel, the court
finds his requests reasonable based on counsel’s typical rates, the rates
relied upon in other contemporary cases, and the above-discussed factors.
Melvin & Melvin charged $170 per hour for partners and $140 per hour for
associates. Mackenzie Hughes charged $220 per hour for partners,
between $125 and $165 for associates, and $80 for paralegals. Scolaro,
Shulman charged between $250 and $275 per hour, with a significantly
lesser amount for legal research. As to the rates charged by Melvin &
Melvin, these rates, when viewed in the light of recent case law emerging
from this district, are not only reasonable, but possibly less than rates that
would be reasonable at this point in time. See Price v. N.Y. State Bd. of
Elections, No. 1:06-CV-1083, 2009 WL 4730698, at *3 (N.D.N.Y. Dec. 4,
2009) ($275 per hour); Martinez v. Thompson, No. 9:04-CV-440, 2008 WL
5157395, at *15 (N.D.N.Y. Dec. 8, 2008) ($275 per hour); Trudeau v.
Bockstein, No. 05-CV-1019, 2008 WL 3413903, at *5 (N.D.N.Y. Aug. 8,
2008) (finding reasonable local hourly rates of $345, $275, $250, and $190
depending on counsel’s experience and expertise); Luessenhop v. Clinton
Cnty., N.Y., 558 F. Supp. 2d 247, 267 (N.D.N.Y. 2008) ($235 per hour);
Overcash v. United Abstract Grp., Inc., 549 F. Supp. 2d 193, 197 (N.D.N.Y.
2008) ($250 per hour); Doe v. Kaiser, No. 6:06-CV-1045, 2007 WL
2027824, at *10 (N.D.N.Y. July 9, 2007) ($250 per hour); Hoblock v. Albany
Cnty. Bd. of Elections, No. 1:04-CV-1205, 2006 WL 3248402, at *3
(N.D.N.Y. Nov. 7, 2006) ($225 per hour). The same goes for the hourly
rate charged by Mackenzie Hughes, which is well within the range of
reasonableness. Moreover, the reasonableness of this hourly rate is
reinforced by the terms contained in the letter of engagement that Dr.
Milgram and Mackenzie Hughes agreed to, (see Strickland Decl., Ex. 3, 02cv-255, Dkt. No. 28:4), since it is “presume[d] ... that a reasonable, paying
client would in most cases hire counsel from within his district, or at least
counsel whose rates are consistent with those charged locally.” Arbor Hill,
522 F.3d at 191; see also B.R. v. Lake Placid Cent. Sch. Dist., No. 07-CV1195, 2009 WL 667453, at *3 n.5 (N.D.N.Y. Mar. 10, 2009); Pugach v. M &
T Mortg. Corp., 564 F. Supp. 2d 153, 157 (E.D.N.Y. 2008). And in light of
their particular, specialized expertise, and in consideration of the
“professional discount” afforded to Mackenzie Hughes, (see id., Ex. 6, Dkt.
No. 28:7), the fees charged by Scolaro, Shulman were equally reasonable.
Therefore, given the above analysis and findings, the success of
Milgram’s counsel in this case, and the relevant case law, the court
concludes that Milgram’s request for attorneys’ fees, non-taxable costs,
and expenses is reasonable, and awards him fees and costs against the
Plan in the total amount of $350,807.59.
The Plan Motion for Attorneys’ Fees
The Plan moves for attorneys’ fees against Breen in the amount of
$504,166.50, with additional costs amounting to $21,759.85. (See Hughes
Aff. ¶ 24, 00-cv-238, Dkt. No. 271:1.) Notwithstanding the Plan’s patent
fault in this matter, it is Breen who bears the most culpability. Thus, Breen
appears to concede the Plan’s entitlement to attorneys’ fees and costs, but
seeks a substantial reduction based on what she perceives as inaccurate
billing entries and inappropriate billing methods. (See Breen Resp. Mem.
of Law at 1-5, 00-cv-238, Dkt. No. 279.) Breen offers several legitimate
bases for a reduction of the Plan’s demand. First, the relevant case law of
the Northern District and the Second Circuit supports a 50% reduction of
the hourly rate for travel time. See Dotson v. City of Syracuse, No. 5:04CV-1388; 2011 WL 817499, at *28 (N.D.N.Y. Mar. 2, 2011); Lee v. City of
Syracuse, No. 5:03-CV-1329, 2010 WL 2834910, at *1 (N.D.N.Y. July 16,
2010); Lewis v. City of Albany Police Dep’t, 554 F. Supp. 2d 297, 299
(N.D.N.Y. 2008); see also Estrella v. P.R. Printing Corp., 596 F. Supp. 2d
723, 726 (E.D.N.Y. 2009); Anderson v. Rochester-Genesee Reg’l Transp.
Auth., 388 F. Supp. 2d 159, 169 (W.D.N.Y. 2005); Tlacoapa v. Carregal,
386 F. Supp. 2d 362, 372-73 (S.D.N.Y. 2005). Second, Breen contends
that she should not be held liable for the costs incurred by the Plan in
prosecuting its claims against Sedor and Upstate, since the Plan was
ultimately unsuccessful on those claims. While it is true that Breen is
primarily responsible for this litigation and that but for her misconduct the
Plan would not have brought suit against Sedor and Upstate, it was the
Plan who chose to initiate the action against Sedor and Upstate.
Accordingly, the costs incurred in that aspect of the action fall at the Plan’s
doorstep, not Breen’s. Thus, the court concurs with Breen that she is not
liable for any work performed by the Plan’s counsel, Hancock & Estabrook,
LLP, with respect to the case against Sedor. Additionally, to the court’s
chagrin, a portion of fees sought by the Plan against Breen are fees that
derive from work done in defense of the Milgram action. These fees are
certainly not recoverable against Breen or any other party. Breen’s third
basis for a reduction is that the Plan’s counsel (1) regularly billed at
quarter-hour increments, rather than tenth-of-an-hour increments, and (2)
repeatedly used the block-billing method, rather than specifically breaking
down the time spent on each discrete item. Because the court agrees that
these billing methods are generally disfavored, and in this case have made
it extremely difficult for both the court and counsel to evaluate the accuracy
of the Plan’s attorneys’ fees, the court finds that a 10% reduction of the
award is warranted, which amounts to $50,416.65. In addition, the court
has scoured the Plan’s counsel’s invoices and attempted to make the
appropriate reductions for travel time fees, costs incurred regarding Sedor,
Upstate, and Milgram, and other non-germane items.6 Having done so, the
court finds that $111,449.20 should be subtracted from the award. As to
Breen’s final contention, that costs incurred by the Plan in moving for
summary judgment should be excluded from the award, the court rejects
this contention because the motion was tactically advisable in light of the
This task was made considerably easier by Breen’s counsel’s exhaustive rundown of
potentially unwarranted billing entries. (See Frumkin Aff., Exs. A, B, Dkt. Nos. 280:1, 280:2.)
underlying facts, the questions at issue, and the potential to expedite the
resolution of the matter. Therefore, in light of the above, the court reduces
the Plan’s request by $161,865.85, and for the following reasons, awards
the Plan $364,060.50 in attorneys’ fees and costs.
The Chambless factors obviously support the Plan’s claim to
attorneys’ fees against Breen. This action, for the most part, derives from
Breen’s bad faith retention of money to which she knew she was not
entitled. Simply put, the degree of her culpability is high. Second, as to
whether Breen can presently satisfy an attorneys’ fee award, the court
credits the Plan’s identification of significant assets in Breen’s possession
that could satisfy an award of attorneys’ fees, though the extent to which
these assets would be subject to attachment is not entirely certain.
Regardless, the remaining Chambless factors heavily outweigh any such
uncertainty. An award of fees would undoubtedly serve as a warning to
persons who receive an excessive disbursement from an ERISA-governed
plan. A comparison of the meritoriousness of the Plan’s position with
Breen’s meritless position overwhelmingly supports an award against
Breen. And perhaps most importantly, the Plan’s action ultimately
conferred a common benefit on the Plan and its remaining participants,
namely a judgment ordering the return of the entirety of her ill-gotten gains
with interest. Consequently, the Chambless factors heavily favor the Plan.
As to the reasonableness of the Plan’s attorneys’ fee demand, the
court is confident that the bulk of the Arbor Hill and Johnson factors that
support Dr. Milgram’s award equally support the reasonableness of the
Plan’s award. The only three factors that must be evaluated distinctly with
regard to the Plan’s counsel are the attorneys’ customary hourly rates, the
results obtained, and the experience, reputation, and ability of the
individual attorneys. Each of these factors further support the award’s
reasonableness. First, keeping in mind the hourly rates that this court and
others within the Northern District have found reasonable, Hancock &
Estabrook’s following rates were reasonable: in 1999, $175 for partners
and $90 for summer clerks; from 2000 to 2005, $190 to $260 for partners,
$110 to $185 for associates, and $90 to $100 for summer clerks and
paralegals; from 2006 to 2010, $225 to $330 for partners, $120 to $145 for
associates, and $105 to $120 for summer clerks and paralegals. (See
Hughes Aff., Ex. C, 00-cv-238, Dkt. No. 271:4.) Second, notwithstanding
the Plan’s unsuccessful summary judgment motion, the result obtained on
their claims against Breen was a complete success. Third, upon review of
the biographies of the attorneys who represented the Plan, (see id., Ex. D,
Dkt. No. 271:5), the court is fully satisfied with their experience, reputation,
and ability in both the general field of litigation and the specific field of
ERISA law. Therefore, the court concludes that an award to the Plan in the
amount of $364,060.50 accounts for these factors.
Sedor and Upstate’s Motion for Attorneys’ Fees
Sedor and Upstate move for attorneys’ fees and costs in the sum of
$32,951.19 against Breen. (See Ferrara Aff. ¶ 83, 00-cv-238, Dkt. No.
267:1.) Again, while conceding Sedor and Upstate’s entitlement to
attorneys’ fees and costs, Breen seeks a reduction for inaccurate and
inappropriate billing. (See Breen Resp. Mem. of Law at 5-7, 00-cv-238,
Dkt. No. 279.) As to three of Breen’s contentions, the court concurs that:
(1) the single-block entries for the period from January to October 2001
render a meaningful evaluation of their reasonableness impossible, which
warrants a 10% reduction of the fees from that period; (2) a 50% reduction
of the hourly rate for travel time is called for; and (3) conferring
telephonically and setting up dates for depositions, though often done
between attorneys, is sufficiently administrative in nature to warrant a
reduction to the paralegal rate, see Peterson v. Foote, No. 83-CV-153,
1995 WL 118173, at *8 (Mar. 13, 1995). On the other hand, the court
rejects Breen’s remaining contentions regarding the fees associated with
Sedor and Upstate’s unsuccessful summary judgment motion, and
regarding any block-billing entries found in the November 2001 to March
2010 invoices or any quarter-hour billing increments, both of which the
court deems negligible. And for the following reasons, the court finds that
Sedor and Upstate are entitled to a reasonable award of attorneys’ fees,
costs, and disbursements in the amount of $27,964.53.7
As Breen concedes, Sedor and Upstate are entitled to attorneys’ fees
under ERISA. Without discussing the Chambless factors ad infinitum, the
court simply points out again that Breen’s culpability is central, that had she
not retained in bad faith money that was not hers this entire action could
have been averted, and that the same factors that entitle the Plan to
attorneys’ fees entitle Sedor and Upstate to attorneys’ fees. Similarly, the
majority of the Arbor Hill and Johnson factors that support the
reasonableness of an award in both Milgram and the Plan’s favor also
This total represents $32,951.19 minus the following reductions: (1) a 10 % reduction
of $20,442.19, (see Ferrara Aff. ¶ 46, 00-cv-238, Dkt. No. 267:1), which amounts to $2,044.22;
(2) a 50% reduction of 33.5 hours of travel time charged at $5532.50, (see id., Exs. 13, 15, 27,
28, 38, 50, 53, Dkt. Nos. 267:6-10), which amounts to $2766.25; and (3) a reduction of the
hourly wage from $165 to $85 for certain time, 2.2 hours, spent on the telephone setting up
depositions, (see id., Exs. 14, 15, 25, 26, 29, Dkt. Nos. 267:6-8), which amounts to $176.00.
support the reasonableness of the court’s award to Sedor and Upstate.
The three distinct factors, again, are Sedor and Upstate’s counsel’s
customary hourly rates, the results they obtained, and their experience,
reputation, and ability. The court is confident that these party-specific
factors each support the attorneys’ fee amount. First, in light of the
relevant case law setting forth reasonable hourly rates, the following rates
of Costello, Cooney & Fearon, PLLC were certainly reasonable: from
January 2001 to January 2005, $165 for partners, $150 for associates, and
$85 for paralegals; from January 2005 to January 2009, $175 for partners,
$150 for associates, and $85 for paralegals; and after January 2009, $250
for partners, $175 for associates, and $110 for paralegals. (See Ferrara
Aff. ¶¶ 40, 41, 49, 00-cv-238, Dkt. No. 267:1.) Second, despite Sedor and
Upstate’s unsuccessful motion for summary judgment—which, like the
Plan’s motion, was factually, legally, and procedurally advisable—the
ultimate results obtained by their counsel vis-a-vis Breen’s claims can
definitively be labeled a successful defense. And third, the experience,
reputation, and ability of Sedor and Upstate’s lead counsel, Mr. Paul
Ferrara, is considerable, particularly in the field of ERISA. (See id. at ¶¶
78-80.) Therefore, the court finds that an award in the amount of
$27,964.53 is both warranted and reasonable.
WHEREFORE, for the foregoing reasons, it is hereby
ORDERED that Breen’s motion to alter and remove language (00-cv238, Dkt. No. 278) from the court’s March 30, 2010 Order is DENIED; and
it is further
ORDERED that the Plan’s motion to amend the costs awarded to
Milgram (02-cv-255, Dkt. No. 54) is GRANTED insofar as Milgram is
ordered to supplement and/or amend his bill of costs as it relates to witness
fees and “other” fees, but is otherwise DENIED as to the remainder of
Milgram’s bill of costs; and it is further
ORDERED that the Plan’s motion to amend the costs awarded to
Sedor and Upstate (00-cv-238, Dkt. No. 291) is GRANTED insofar as the
Clerk is directed to strike Sedor and Upstate’s bills of costs (00-cv-238,
Dkt. Nos. 287, 289) from the record, but is otherwise DENIED with leave to
renew; and it is further
ORDERED that Sedor and Upstate are GRANTED leave to file a new
bill of costs; and it is further
ORDERED that Milgram’s motion for attorneys’ fees and costs
against the Plan (02-cv-255, Dkt. No. 28) is GRANTED in the amount of
$350,807.59; and it is further
ORDERED that the Plan’s motion for attorneys’ fees and costs
against Breen (00-cv-238, Dkt. No. 271) is GRANTED in the amount of
$364,060.50; and it is further
ORDERED that Sedor and Upstate’s motion for attorneys’ fees
against Breen (02-cv-255, Dkt. No. 34; 00-cv-238, Dkt. No. 267) is
GRANTED in the amount of $27,964.53; and it is further
ORDERED that the Clerk provide a copy of this MemorandumDecision and Order to the parties.
IT IS SO ORDERED.
September 12, 2011
Albany, New York
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