Schoolcraft v. The City Of New York et al
Filing
632
MEMORANDUM OF LAW in Opposition re: 559 MOTION for Attorney Fees , Costs and Disbursements., 564 FINAL MOTION for Attorney Fees Levine &. Surreply Memorandum of Law With Leave of Court. Document filed by The City Of New York. (Scheiner, Alan)
Index No. 10-CV-6005 (RWS)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ADRIAN SCHOOLCRAFT,
Plaintiff,
-againstTHE CITY OF NEW YORK, et al.,
Defendants.
SURREPLY MEMORANDUM OF LAW IN
OPPOSITION
TO
PLAINTIFF’S
FEE
APPLICATION
ZACHARY W. CARTER
Corporation Counsel of the City of New York
Attorney for Defendants
100 Church Street - Room 3-174
New York, NY 10007
Of Counsel: Alan Scheiner
Tel: (212) 356-2344
Matter No. 2010-033074
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES .......................................................................................................... ii
PRELIMINARY STATEMENT .................................................................................................... 1
POINT I
PLAINTIFF IS NOT ENTITLED TO ‘FEES ON
FEES’ .......................................................................................................... 1
POINT II
PLAINTIFF IS NOT ENTITLED TO 9%
INTEREST ON ANY FEE-AWARD ......................................................... 4
POINT III
PLAINTIFF MAY NOT RECOVER FEES FROM
THE CITY INCURRED IN CLAIMS AGAINST
THE MEDICAL DEFENDANTS UNDER THE
OFFER OF JUDGMENT ........................................................................... 6
POINT IV
THE COURT SHOULD CONSIDER THE AUDIT
REPORT OF JUDITH BRONSTHER ..................................................... 11
POINT V
THE ADDITIONAL EVIDENCE OFFERED BY
SMITH
REGARDING
HIS
RATES
IS
IRRELEVANT ......................................................................................... 13
CONCLUSION ............................................................................................................................. 14
TABLE OF AUTHORITIES
Cases
Pages
Aiello v. Town of Brookhaven,
2005 U.S. Dist. LEXIS 11462 (E.D.N.Y. June 13, 2005) .........................................................5
Albahary v. City & Town of Bristol,
96 F. Supp. 2d 121 (D. Conn. 2000) ..........................................................................................6
Albany Sav. Bank v. Halpin,
117 F.3d 669, 674 (2d Cir. 1997)...............................................................................................7
In re Am. Int’l Group, Inc.,
2014 U.S. Dist. LEXIS 143375 (S.D.N.Y. Sept. 29, 2014) .......................................................9
Barile v. Allied Interstate, Inc.,
2013 U.S. Dist. LEXIS 32483 (S.D.N.Y. Jan. 30, 2013)...........................................................2
Blum v. Stenson,
465 U.S. 886, 104 S. Ct. 1541, 79 L. Ed. 2d 891 (1984) .........................................................14
Brady v. Wal-Mart Stores, Inc.,
2010 U.S. Dist. LEXIS 115380 (E.D.N.Y. Oct. 29, 2010) ......................................................14
Brown v. City of New York,
2012 U.S. Dist. LEXIS 24365 (E.D.N.Y. Jan. 30, 2012) ..........................................................5
Cabral v. City of New York,
2015 U.S. Dist. LEXIS 105392 (S.D.N.Y. Aug. 11, 2015) .....................................................10
CARCO GROUP, Inc. v. Maconachy,
718 F.3d 72 (2d Cir. 2013).....................................................................................................4, 5
Cavada v. City of Chicago,
2014 U.S. Dist. LEXIS 116089 (N.D. Ill. Aug. 18, 2014).......................................................14
Cob Shipping Canada, Inc. v. Trans Mktg. Houston, Inc.,
1993 U.S. Dist. LEXIS 10795 (S.D.N.Y. Aug. 4, 1993) ...........................................................9
Cohen v. Brown University,
2001 U. S. Dist. Lexis 22438 (D.R. I. 2001) ...........................................................................12
Collins v. Stolzenberg,
970 F. Supp. 303 (S.D.N.Y. 1997) ............................................................................................6
Columbia Cas. Co. v. Neighborhood Risk Mgmt. Corp.,
2015 U.S. Dist. LEXIS 85014 (S.D.N.Y. June 29, 2015)...................................................... 7-8
-ii-
Cases
Pages
Commercial Union Assurance Co. PLC v. Milken,
17 F.3d 608 (2d Cir. 1994).........................................................................................................5
Computer Sys. of Am., Inc. v. Unum Life Ins. Co.,
975 F.2d 922 (1st Cir. 1992) ......................................................................................................8
Cronin v. Executive House Realty,
1982 U.S. Dist. LEXIS 12662 (S.D.N.Y. May 5, 1982)............................................................4
Ekeberg v. Shook-Brown,
2010 U.S. Dist. LEXIS 70947 (N.D. Ga. Apr. 14, 2010) ..........................................................2
Espinosa v. Wells Fargo Bank, N.A.,
2014 Bankr. LEXIS 1017 (Bankr. D. Or. Mar. 14, 2014) .........................................................4
Fein v. Chi. Ins. Co.,
2003 U.S. Dist. LEXIS 12374 (S.D.N.Y. July 16, 2003) ..........................................................7
Foster v. Kings Park Cent. Sch. Dist.,
174 F.R.D. 19 (E.D.N.Y. 1997) .................................................................................................2
Galli v. Metz,
973 F.2d 145 (2d Cir. 1992).......................................................................................................8
Guerrero v. Cummings,
70 F.3d 1111 (9th Cir. 1995) .....................................................................................................1
Hargroves v. City of New York,
2014 WL 1270585 (E.D.N.Y. 2014),
report and recommendation adopted, 2014 WL 1271039 (E.D.N.Y. 2014) .............................3
Hunt Ltd. v. Lifschultz Fast Freight, Inc.,
889 F.2d 1274 (2d Cir. 1989).....................................................................................................7
Jordan v. Equifax Information Svcs.,
LLC, 549 F. Supp. 2d 1372 (N.D. Ga. 2008) ........................................................................ 1-2
King v. JCS Enters.,
325 F. Supp. 2d 162 (E.D.N.Y. 2004) .......................................................................................6
Lane v. Grant County,
2013 U.S. Dist. LEXIS 139659 (E.D. Wash. Sept. 20, 2013) .................................................10
Lee v. Santiago,
2013 WL 4830951 (S.D.N.Y. 2013) ..........................................................................................3
-iii-
Cases
Pages
Long v. City of New York,
2010 U.S. Dist. LEXIS 81020 (S.D.N.Y. Aug. 6, 2010) (Hellerstein, J.) .............................2, 3
McCord v. Jaspan Schlesinger Hoffman, LLP,
390 B.R. 493, 504 (Bankr. E.D.N.Y. 2008) ............................................................................11
Mercury Partners LLC v. Pac. Med. Bldgs., L.P.,
2007 U.S. Dist. LEXIS 55855 (S.D.N.Y. July 30, 2007) ..........................................................8
Montanez v. Simon,
755 F.3d 547 (7th Cir. 2014) ...................................................................................................14
In re Nat’l Basketball Ass’n,
630 F. Supp. 136 (S.D.N.Y. 1986) ............................................................................................8
Natural Organics, Inc. v. Nutraceutical Corp.,
2009 U.S. Dist. LEXIS 71077 (S.D.N.Y. Aug. 6, 2009) ...........................................................6
Palmer v. Rice,
2005 U.S. Dist. LEXIS 13677 (D.D.C. July 11, 2005) ............................................................12
Palmieri v. Allstate Ins. Co.,
445 F.3d 179 (2d Cir. 2006).......................................................................................................5
Penley v. City of New York,
2015 U.S. Dist. LEXIS 119808 (S.D.N.Y. Sept. 8, 2015) (Koeltl, J.)...................................2, 5
Petrovits v. New York City Transit Auth.,
No. 95 Civ. 9872 (DFE), 2004 U.S. Dist. LEXIS 174, 2004 WL 42258
(S.D.N.Y. Jan. 7, 2004)..............................................................................................................6
Playtex Prods. v. Procter & Gamble Co.,
2003 U.S. Dist. LEXIS 8913 (S.D.N.Y. May 28, 2003)..........................................................11
Rosado v. City of New York,
955510 (S.D.N.Y. 2012) ............................................................................................................3
Said v. Va. Commonwealth Univ.,
130 F.R.D. 60 (E.D. Va. 1990) ..................................................................................................2
Seiden Assocs. v. ANC Holdings, Inc.,
959 F.2d 425 (2d Cir. N.Y. 1992) ..............................................................................................7
Spegon v. Catholic Bishop,
175 F.3d 544 (7th Cir. 1999) ...................................................................................................14
-iv-
Cases
Pages
Statler v. Buffalo-Bodega Complex, Inc.,
2008 U.S. Dist. LEXIS 87685 (D.S.D. Oct. 23, 2008) ............................................................10
Sussman v. Patterson,
108 F.3d 1206 (10th Cir. 1997) .................................................................................................1
Takeda Chem. Indus. v. Mylan Labs., Inc.,
2007 U.S. Dist. LEXIS 19614 (S.D.N.Y. Mar. 21, 2007) .......................................................11
Torres v. Walker,
356 F.3d 238 ..............................................................................................................................9
United States Naval Inst. v. Charter Communications, Inc.,
875 F.2d 1044 (2d Cir. 1989).....................................................................................................9
Valdez v. Squier,
676 F.3d 935 (10th Cir. 2012) ...................................................................................................9
Walk-In Medical Centers, Inc. v. Breuer Capital Corp.,
818 F.2d 260 (2d Cir. 1987).......................................................................................................7
Zavodnick v. Gordon & Weisberg, P.C.,
Civ. No. 10-7125, 2012 U.S. Dist. LEXIS 78868, 2012 WL 2036493
(E.D. Pa. June 6, 2012) ..............................................................................................................2
Statutes
28 U.S.C. § 1961 ..............................................................................................................................4
28 U.S.C. § 1961(a) .........................................................................................................................5
42 U.S.C. § 1988 ..............................................................................................................................4
Rule 68 ...............................................................................................................1, 2, 3, 4, 5, 8, 9, 10
Other Authorities
13 Moore’s Federal Practice § 68.05[5] (1997) ...............................................................................2
-v-
PRELIMINARY STATEMENT
The City of New York (the “City”) hereby submits this Surreply Memorandum of Law in
Opposition to Plaintiff’s Fee Application.1
POINT I
PLAINTIFF IS NOT ENTITLED TO ‘FEES ON
FEES’
Some of the plaintiff’s counsel now press a claim for ‘fees on fees’ – i.e., the fees
incurred in prosecuting their fee application – which they declined to assert in their moving
papers. Smith Reply Mem. 35-36 (Docket No. 620). This claim is barred by the plain terms of
the Rule 68, which plaintiff accepted, and on which plaintiff now heavily relies in other respects:
“Should plaintiff accept this offer of judgment, plaintiff shall be entitled to reasonable attorneys’
fees, expenses, and costs to the date of this offer for plaintiff’s federal claims.” Accepted Rule 68
Offer of Judgment (“Offer of Judgment”), Docket No. 531-1 at 3 (emphasis added).
The restriction of the offer of attorneys fees’ “to the date of this offer” – ignored by
plaintiff– is sufficient in and of itself to bar any claim for fees on fees, which are of course
incurred after the date of issuance of the Rule 68 Offer of Judgment. See Sussman v. Patterson,
108 F.3d 1206, 1210-11 (10th Cir. 1997) (offer of judgment provided for "costs of suit to date
and attorneys' fees to date" limited fees to the date of acceptance of the offer); Guerrero v.
Cummings, 70 F.3d 1111, 1113-14 (9th Cir. 1995) (offer of judgment providing for costs
“incurred by this plaintiff prior to the date of this offer in amount to be set by the court” cut off
1
The City previously requested an adjournment of the oral argument of May 12, 2016 to allow additional time to
prepare a Surreply of 14 pages and oral response to the plaintiff’s oversized Reply submission. Plaintiff objected to
an adjournment, but allowed that if a Surreply were permitted it could be filed “at any time.” Fitch May 3, 2016
Letter at 2. The Court denied the request for an adjournment, but granted leave for the City to submit a Surreply,
without setting a due date. Docket No. 629. Since then, plaintiff submitted two more memoranda in support of his
motion to strike, to which the City does not here respond. Docket No. 630, 631. The City respectfully notes its
continuing objection to the short time-frame permitted to prepare its response to plaintiff’s oversize, multiple
submissions on both motions.
fees as of time of offer); Jordan v. Equifax Information Svcs., LLC, 549 F. Supp. 2d 1372, 1377
(N.D. Ga. 2008) (offer of judgment providing for "accrued to the date hereof and plaintiff's
reasonable attorney's fees, through the date of this offer," allowed costs only through the date of
the offer); Said v. Va. Commonwealth Univ., 130 F.R.D. 60, 64 (E.D. Va. 1990) (offer of
judgment "with costs accrued to this date" limited costs to those that had accrued through the
date of the offer); 13 Moore's Federal Practice § 68.05[5] (1997) ("a Rule 68 offer accepted by
the plaintiff may contain language, either the Rule's ‘costs then accrued’ as of the time of the
offer, or other terms, that can be interpreted to exclude any fees incurred after the time of the
offer. . ."). Accordingly, Judge Koeltl of this district held that a Rule 68 with language identical
to that here barred ‘fees on fees,’ in a decision relied upon by plaintiff. See Penley v. City of New
York, 2015 U.S. Dist. LEXIS 119808, *5 (S.D.N.Y. Sept. 8, 2015) (Koeltl, J.), cited by Smith
Reply Mem. 35 n. 47 ); see also Barile v. Allied Interstate, Inc., 2013 U.S. Dist. LEXIS 32483,
*76-79 (S.D.N.Y. Jan. 30, 2013) (Freeman, M.J.) (plaintiff who accepted offer of judgment
setting fees as of date of offer could not recover for additional time on the fee application) (also
cited by plaintiff here); Foster v. Kings Park Cent. Sch. Dist., 174 F.R.D. 19, 29 (E.D.N.Y. 1997)
(finding “that by accepting the offer, the plaintiff has waived any right to attorney's fees incurred
after such acceptance”); Zavodnick v. Gordon & Weisberg, P.C., Civ. No. 10-7125, 2012 U.S.
Dist. LEXIS 78868, 2012 WL 2036493, at *4 (E.D. Pa. June 6, 2012) (same); Ekeberg v. ShookBrown, 2010 U.S. Dist. LEXIS 70947, *6-7 (N.D. Ga. Apr. 14, 2010) (same).
Plaintiff argues that “equitable” considerations call for fees on fees. Smith Mem. 38. But
the few cases allowing ‘fees on fees’ on equitable grounds require some showing of “bad faith”
to overcome the terms of the Rule 68. Long v. City of New York, 2010 U.S. Dist. LEXIS 81020,
*5-6 (S.D.N.Y. Aug. 6, 2010) (“If the City's dispute over recoverable fees were in bad faith, than
-2-
compensation for the work necessary for plaintiffs fee application may be justified. No such
showing has here been made.”) (Hellerstein, J.). Even plaintiff’s authorities – which are not
binding on this Court – call for a justification to depart from the terms of the Rule 68 terms. See
Lee v. Santiago, 2013 WL 4830951 at *10, *13 (S.D.N.Y. 2013) (Acknowledging that “[w]hen a
plaintiff accepts an offer of judgment that includes fees "up to the date" of the offer, the Court, as
a general matter, should not award fees for work performed on the plaintiff's claims after that
date, citing Long v. City of New York, 2010 U.S. Dist. LEXIS 81020, at *5); Rosado v. City of
New York, 955510, at *6 (S.D.N.Y. 2012) (the City by “refusing to settle” the fee dispute
justified fees on fees). 2 Where, as here, plaintiff failed to even attempt to negotiate the fee
dispute before filing its fee application (Scheiner Dec. ¶ 21),3 plaintiff can hardly claim that the
City should have settled fees before the plaintiff’s motion was brought. Moreover, it was the
City that first requested a settlement conference in this matter at oral argument on February 11,
2016, and the City participated in the conference with Magistrate Judge Freeman, making a
substantial submission and settlement offers in good faith. Scheiner Dec.¶ 21. 4 Nor should the
Court punish the City with fees on fees merely for defending itself.
2
Plaintiff misleading cites Hargroves v. City of New York, 2014 WL 1270585, at *23 (E.D.N.Y. 2014), report and
recommendation adopted, 2014 WL 1271039 (E.D.N.Y. 2014). That case did not decide whether to allow ‘fees on
fees’ since they were not claimed; the decision only noted Long and Rosado in dicta.
3
Citation abbreviations herein generally conform to those used in the City’s prior memoranda on both pending
motions.
4
Although the parties agreed to keep their settlement talks strictly confidential, because plaintiff insists on putting
the City’s settlement position in issue, should the Court deem the City’s settlement position relevant, the City would
propose to disclose settlement discussions to the Court by in camera conference.
-3-
POINT II
PLAINTIFF IS NOT ENTITLED TO 9%
INTEREST ON ANY FEE-AWARD
Plaintiff’s counsel now argue that plaintiff is entitled to 9% post-judgment interest on
attorneys’ fees and costs from the date of entry of Judgment fails on several grounds.
Norinsberg Reply Mem. at 58 n. 31 (“the interest rate on any fee award in this case must apply
the New York statutory rate of 9% from October 16, 2015”); Smith Reply Mem. at 37, n. 51.
There is no such entitlement.
First, if there were a valid claim for post-judgment interest, since it is based on a federal
judgment it would necessarily be governed by 28 U.S.C. § 1961, which provides for postjudgment interest based on federal Treasury bill market rates – not the state law artificial 9%
statutory rate. 28 U.S.C. § 1961. Second, plaintiff’s claim for interest is inconsistent with the
Offer of Judgment, which expressly bars any claim for interest except for interest on backpay, in
terms that plaintiff chooses to ignore: “Acceptance of this offer of judgment also shall operate to
waive plaintiffs rights to any claim for judgment interest on the amount of the Judgment. other
than pre-judgment interest on any backpay amounts.” Offer of Judgment at 3. Plaintiff does not
even attempt to explain why the Court should ignore this plain language of the Judgment.
Of necessity, plaintiff reaches far afield and cites invalid cases law in attempting to
justify a state law statutory rate of 9% to its claim made under 42 U.S.C. § 1988 and a federal
Judgment. Plaintiff relies on Cronin v. Executive House Realty, 1982 U.S. Dist. LEXIS 12662,
*42-43 (S.D.N.Y. May 5, 1982), which relies on a prior version of 28 U.S.C. § 1961 which had
incorporated the state law rate, but no longer does.5
5
Espinosa v. Wells Fargo Bank, N.A., 2014 Bankr. LEXIS 1017, *2 (Bankr. D. Or. Mar. 14, 2014), on which
plaintiff relies, is a Bankruptcy Court decision from a Ninth Circuit district court in Oregon, relying on California
law, does not concern interest rates at all.
-4-
Plaintiff then mixes apples and oranges, citing a case involving pre-judgment interest
rather than post-judgment interest, despite the Norinsberg group dating the accrual of the interest
on the date of entry of the Judgment. In CARCO GROUP, Inc. v. Maconachy, 718 F.3d 72, 75
(2d Cir. 2013), the court considered interest on attorneys’ fees that were owed under business
contracts – an Employment Agreement and Asset Purchase Agreement – not any Rule 68,
federal claim, or fee shifting statute. 718 F.3d 72 at 76. Because that claim arose from a private
contract that pre-existed the Judgment, the Court applied state law pre-judgment interest under
that contract, finding that pre-judgment interest was owed on attorneys-fees pursuant to the
contract from the date that plaintiff prevailed.6
That is a distinction with an important difference: the Offer of Judgment is just that – an
offer to allow entry of a federal Judgment – and it is not enforceable except as a federal
Judgment pursuant to Fed. R. Civ. P. 68. As a Judgment, any interest on it is governed by
federal law; even plaintiff’s own authorities support this point. See Smith Reply Mem. at 37 n.
51, citing Aiello v. Town of Brookhaven, 2005 U.S. Dist. LEXIS 11462, *29-31 (E.D.N.Y. June
13, 2005) (holding that the federal statutory rate applies to such interest from the date that it
accrues). The Smith group, while dating its interest claim from before the Judgment was entered
(and well before any fee was even demanded, let alone due), nevertheless cites post-judgment
interest cases as authority for an interest award. Smith Reply Mem. 37 n. 5.7
6
See also Commercial Union Assurance Co. PLC v. Milken, 17 F.3d 608, 614 (2d Cir. 1994), cited by plaintiff,
holding that whether or not to award pre-judgment interest under a contract and the rate of such interest is a matter
of equitable discretion. There is no such discretion here, since the contract bars such interest, and no payment is due
absent a Judgment.
7
Brown v. City of New York, 2012 U.S. Dist. LEXIS 24365, *5 (E.D.N.Y. Jan. 30, 2012) is inapplicable here. In
Brown, the Magistrate considered whether a New York statute concerning payment of a settlement with the City
governed a claim for amounts due under a settlement agreement, not a Rule 68 Offer of Judgment or a federal
Judgment. First, as the district court in the S.D.N.Y. observed in Penley v. City of New York, 2015 U.S. Dist. LEXIS
119808, *5 (S.D.N.Y. Sept. 8, 2015), the Brown settlement agreement did not expressly bar interest, and where, as
here, it does bar interest. Id. Second, plaintiff seeks here to enforce a claim pursuant to a Rule 68 Offer of Judgment
embodied in a federal Judgment, which necessarily implicates federal law. The court in Brown acknowledged that
-5-
Moreover, the accrual rule that plaintiff urges on the Court – dating the interest from
when the Rule 68 was accepted or entered into a Judgment, rather than when the amount is
adjudicated – is deemed fair only because it incorporates the federal statutory rate reflecting the
Treasury bill market determined time-value of money. See Albahary v. City & Town of Bristol,
96 F. Supp. 2d 121, 123 (D. Conn. 2000) ("[W]hile the fee-paying party is under no legal
compulsion to satisfy its obligation before quantification, it also 'suffers no prejudice from any
delay in quantifying the award because it has use of the money in the interim and because the
statutory interest rate is tied to the U.S. Treasury Bill rate.'")(quotation and citations omitted),
cited by Smith Reply Mem. 37, n. 51; accord Natural Organics, Inc. v. Nutraceutical Corp.,
2009 U.S. Dist. LEXIS 71077, *34 (S.D.N.Y. Aug. 6, 2009); King v. JCS Enters., 325 F. Supp.
2d 162, 175 (E.D.N.Y. 2004).8
Accordingly, the Court should deny plaintiff’s claim for interest on the attorneys’ fees claim
in its entirely, and certainly deny any claim at the state statutory rate of 9%.
POINT III
PLAINTIFF MAY NOT RECOVER FEES
FROM THE CITY INCURRED IN CLAIMS
AGAINST THE MEDICAL DEFENDANTS
UNDER THE OFFER OF JUDGMENT
Plaintiff now argues that notwithstanding the law under Section 1988, it may as a matter
of contract recover from the City the fees and expenses incurred in prosecuting “federal claims”
“‘federal common law . . . .generally adopts the relevant state law rule unless there is a significant conflict between
the state rule and a federal interest.’” Id. at *9-10 (quoting Palmieri v. Allstate Ins. Co., 445 F.3d 179, 188-89 (2d
Cir. 2006)) (emphasis added). Here there is a contrary federal interest, embodied in the federal interest rate under 28
U.S.C. § 1961(a) applicable to federal judgments.
8
Several district courts within the Second Circuit have ruled that post-judgment interest, where available, runs from
the date that the amount due is determined by the Court, even while also using the federal interest rate. See, e.g.,
Petrovits v. New York City Transit Auth., No. 95 Civ. 9872 (DFE), 2004 U.S. Dist. LEXIS 174, 2004 WL 42258
(S.D.N.Y. Jan. 7, 2004); Collins v. Stolzenberg, 970 F. Supp. 303, 305 (S.D.N.Y. 1997);
Natural Organics, Inc. v. Nutraceutical Corp., 2009 U.S. Dist. LEXIS 71077, *34 (S.D.N.Y. Aug. 6, 2009).
-6-
against the private medical defendants, who separately settled the claims against them with
plaintiff.
Plaintiff’s argument puts basic principles of contract interpretation on their head, but
claiming that because the Offer of Judgment should be construed against the drafter, single
phrase (“federal claims”) is ambiguous and can be imbued with an unreasonable meaning: that
is, federal claims against other defendants not named in the Offer of Judgment. As an initial
matter, the Offer of Judgment is not ambiguous: it offers attorneys’ fees for “federal claims”
against the parties named in the Offer of Judgment and the parties released by the Offer of
Judgment, and no one else. Only “ambiguous contract language is to be construed against the
drafter.” Fein v. Chi. Ins. Co., 2003 U.S. Dist. LEXIS 12374, *16-18 (S.D.N.Y. July 16, 2003);
see Albany Sav. Bank v. Halpin, 117 F.3d 669, 674 (2d Cir. 1997)(construing bank release)).
The Offer of Judgment, like any other instrument, is only ambiguous if it is “‘capable of
more than one meaning when viewed objectively by a reasonably intelligent person who has
examined the context of the entire integrated agreement and who is cognizant of the customs,
practices, usages and terminology as generally understood in the particular trade or business.’”
Seiden Assocs. v. ANC Holdings, Inc., 959 F.2d 425, 428 (2d Cir. N.Y. 1992) (emphasis added)
(quoting Walk-In Medical Centers, Inc. v. Breuer Capital Corp., 818 F.2d 260, 263 (2d Cir.
1987)). Conversely, language is not ambiguous when it has “‘a definite and precise meaning,
unattended by danger of misconception in the purport of the [contract] itself, and concerning
which there is no reasonable basis for a difference in opinion.’” Id. (quoting Hunt Ltd. v.
Lifschultz Fast Freight, Inc., 889 F.2d 1274, 1277 (2d Cir. 1989)).
“To determine whether a contract is ambiguous, a court should examine the entire
contract and consider the relation of the parties and the circumstances under which it was
-7-
executed. Particular words should be considered, not as if isolated from the context, but in the
light of the obligation as a whole and the intention of the parties as manifested thereby. Form
should not prevail over substance and a sensible meaning of words should be sought.” Columbia
Cas. Co. v. Neighborhood Risk Mgmt. Corp., 2015 U.S. Dist. LEXIS 85014, *17-18 (S.D.N.Y.
June 29, 2015) (quotations and citations omitted); see also Mercury Partners LLC v. Pac. Med.
Bldgs., L.P., 2007 U.S. Dist. LEXIS 55855, *22-24 (S.D.N.Y. July 30, 2007) (A “contract must
be interpreted as a whole, with regard to all of its provisions; provisions should not be selected
and interpreted in isolation, without regard to other provisions of the contract which bear upon
them.”) (citing Galli v. Metz, 973 F.2d 145, 149 (2d Cir. 1992); Computer Sys. of Am., Inc. v.
Unum Life Ins. Co., 975 F.2d 922, 925 (1st Cir. 1992) ("The intention of the parties must be
gleaned from all corners of the document, rather than from sentences or clauses viewed in
isolation." (quotations omitted)). In addition, “[i]n construing the provisions of a contract, courts
are to give due consideration ‘to the circumstances surrounding its execution, to the purpose of
the parties in making the contract and, if possible, . . . give the agreement a fair and reasonable
interpretation.’” Id. at 23-24 (quoting In re Nat'l Basketball Ass'n, 630 F. Supp. 136, 140
(S.D.N.Y. 1986)).
Here the Offer of Judgment is unambiguously limited to attorneys’ fees for “federal
claims” against the parties who issued the Offer of Judgment (the municipal defendants, not the
private medical defendants), which are the same parties whom plaintiff released by the plaintiff’s
acceptance of the Offer of Judgment; the medical defendants are not mentioned at all. See Offer
of Judgment. Limiting the attorneys’ fees to those recoverable in claims against the defendants
named in the Offer of Judgment is consistent with the entire agreement and standard practice in
Section 1983 cases. There is no rational reason for any defendant to offer attorneys’ fees that
-8-
were not otherwise recoverable from it, and accordingly, no reasonable attorney offering or
accepting a Rule 68 would construe it to cover claims against third parties.
Moreover, even if there were any ambiguity, the agreement taken as a whole and other
extrinsic evidence would trump the rule that language should be interpreted against the drafter.
“The Second Circuit, applying New York law, has repeatedly held that rules of construction,
such as contra proferentum, should only be applied when all other guides to interpretation of the
contract have failed to resolve the ambiguity.” Cob Shipping Canada, Inc. v. Trans Mktg.
Houston, Inc., 1993 U.S. Dist. LEXIS 10795, *13-14 (S.D.N.Y. Aug. 4, 1993) (citing United
States Naval Inst. v. Charter Communications, Inc., 875 F.2d 1044, 1050 (2d Cir. 1989)); accord
In re Am. Int'l Group, Inc., 2014 U.S. Dist. LEXIS 143375, *16 (S.D.N.Y. Sept. 29, 2014).
Accordingly, where, as here, the “the document . . . in the light of the contract as a whole” is
contrary to plaintiff’s interpretation, that interpretation must be rejected as contrary to the
parties’ intent. Id.9
Plaintiff’s authorities are off point. Torres v. Walker, 356 F.3d 238, 243 (2d Cir. 2004
did not involve a Rule 68 Offer of Judgment, or any Judgment at all. There the Court held only
that the PLRA did not apply of its own force to the parties’ stipulation of voluntary dismissal,
and that the stipulation did not invoke the PLRA of its own force, based in part on extrinsic
evidence. Id. at 243, 246 (“[W]e see no reason to apply the PLRA fee caps to this action, in
which a money judgment never was entered.”). This has nothing to do with whether a Judgment
pursuant to Rule 68 covers claims against third parties.
9
The absence of any pending federal claims against the medical defendants at the time of the Offer of Judgment is
strong extrinsic evidence against plaintiff’s construction. In addition, plaintiff’s moving papers did not even
mention this extraordinary theory when discussing the medical claims. Plf. Mem. 4. Rather plaintiff relied on
Section 1988. Plf. Mem.15-16. In any event, if the Court were to find the Offer of Judgment ambiguous on this
issue, discovery and a hearing should be permitted on the issue.
-9-
Valdez v. Squier, 676 F.3d 935, 948 (10th Cir. 2012) is also off point (as well as nonbinding on this Court). That case concerned a global settlement agreement made and signed by
several defendants – not a separate Rule 68 Offer of Judgment that did not even mention other
defendants – where two of the three jointly-settling defendants later made a separate agreement
on attorneys’ fees with plaintiff. Id. The court held that the amount paid by the other defendants
should be deducted from the remaining fee claim (i.e., each defendants was not responsible for
fees against all others), but that the remaining claim could not be rejected in toto because
plaintiff failed to allocate fees amongst the defendants. Id. Here, in contrast, there is no joint
settlement with the medical defendants, and here it is possible here to segregate fees arising
solely from the claims against medical defendants where, as the City has done in the Audit
Report, Exhibit 3 (Docket No. 598-4) at 127-143.
Plaintiff’s alternative argument that the work on the claims against the medical
defendants was “substantially related” or “inextricably intertwined” with its claims against the
City is also inapt, because the only hours deducted by defendants here was procedurally separate
from any claim against the City defendants. Id. Even plaintiff’s authorities support this point.
See Cabral v. City of New York, 2015 U.S. Dist. LEXIS 105392, *26-27 (S.D.N.Y. Aug. 11,
2015) (holding that fees incurred in plaintiff’s criminal defense proceeding were not substantially
related to prosecution of his civil rights claims).10 The work that the City proposes to deduct
10
Even the best authorities plaintiff finds, after reaching far afield, fail to address the circumstances here, where the
fees are procedurally segregable to litigation solely against the other defendants. In Lane v. Grant County, 2013
U.S. Dist. LEXIS 139659, *2 (E.D. Wash. Sept. 20, 2013), cited by plaintiff, only one defendant is ever mentioned
by the Court, so any mention of other defendants is dicta. In Statler v. Buffalo-Bodega Complex, Inc., 2008 U.S.
Dist. LEXIS 87685, *3-4 (D.S.D. Oct. 23, 2008) , cited by plaintiff, the South Dakota district court dealt with a
typical sexual harassment claim against an employer and an employee of that employer. Id. Those were obviously
intertwined claims, where liability of the employer depends on liability of the individual employee, which is not
comparable to claims against two distinct sets of defendants with different employers sued for different conduct.
- 10 -
simply would not have been necessary had the medical defendants not been sued in this
proceeding. See Audit Report, Exhibit 3 (Docket No. 598-4) at 127-143.
POINT IV
THE COURT SHOULD CONSIDER THE
AUDIT REPORT OF JUDITH BRONSTHER
In his Reply, plaintiff once again briefs his motion to strike the Audit Report of Judith
Bronsther, and the City responds here solely to the arguments set forth in the Reply submission
on the motion for fees (not the motion to strike).
Plaintiff fails to cite any apt legal authority. In Playtex Prods. v. Procter & Gamble Co.,
2003 U.S. Dist. LEXIS 8913, *31 (S.D.N.Y. May 28, 2003), mis-cited by plaintiff (Norinsberg
Reply at 7), the Court held that an expert could not rely on the party’s subjective assertions to the
expert – not that the expert could not give her own subjective opinions. Id. (expert “based her
opinion ‘entirely on what Playtex told [her] they did’” and “heavy reliance on Playtex's
subjective view, without analysis of the basis for that party's conclusion, is wholly insufficient”).
In Takeda Chem. Indus. v. Mylan Labs., Inc., 2007 U.S. Dist. LEXIS 19614, *24 (S.D.N.Y. Mar.
21, 2007), the Court found that the particular expert in that case lacked basis for their opinions
for reasons that are not applicable here: (i) their work was conducted over only nine days (the
scope of Bronsther’s Audit Report reflects far more effort); (ii) the expert “did nothing” to
familiarize himself with the case at hand (Bronsther read pleadings and decisions as well as the
docket, see Bronsther Dec. Ex. B, Docket No. 600 at 11; (iii) the expert had no prior experience
in the complex field of patent litigation (as compared to the relatively non-technical area of civil
rights litigation, where Bronsther does have experience (City Mem. in Opposition to Motion to
Strike, Docket No. 627, at 11-12); (iv) and the expert in Takeda made errors that plaintiff has not
argued occurred here: mistakes in allocating work among tasks, and criticizing the use of
- 11 -
contract attorneys. The Bankruptcy court decision in McCord v. Jaspan Schlesinger Hoffman,
LLP (In re Monahan Ford Corp.), 390 B.R. 493, 504 (Bankr. E.D.N.Y. 2008), held only that the
Bankruptcy Court did not require expert testimony to judge the quality of representation
provided to the estate by bankruptcy counsel, where the quality of plaintiff’s counsel’s
representation is not opined upon by Bronsther.11
Plaintiff also argues that Bronsther’s Audit Report should be rejected because it is “rife”
with errors (Norinsberg Reply Mem. 8), but plaintiff, in four separate briefs, fails to identify
more than a handful of purported mistakes. For example, Norinsberg asserts – without citation
to the Audit Report – that Bronsther erroneously deducts the Norinsberg team’s initial efforts to
get up to speed on the case. Norinsberg Reply Mem. 28. In fact, Bronsther carefully selected
entries relating specifically to counsel’s retainer agreements and dealings with prior counsel, not
general investigation at the outset of the case, which constituted nearly 480 hours. Compare
Audit Report 29-30 (56.9 hours) & Exhibit 4 (Docket No. 598-4) at 144, with Audit Report 76
(479.7 hours incurred from inception to initial complaint).
The Norinsberg team suggests that Bronsther erred by not reviewing counsel’s emails to
determine whether the Norinsberg team’s billings were excessive. This is nonsense. Bronsther is
not expected to review counsel’s emails, and plaintiff submits only a few handpicked emails,
while even now refusing to produce counsel’s original timesheets, which are far more relevant,
while offering to submit the timesheets only ex parte, without the benefit of the adversarial
11
Plaintiff misleadingly implies that the decision in Cohen v. Brown University, 2001 U. S. Dist. Lexis 22438 at *
32-33 (D.R. I. 2001) finds that Bronsther’s expert opinions are unreliable. Bronsther issued no expert report and
gave no testimony in that case. Rather, the court there found that summary charts appended to a party’s brief (which
Bronsther’s firm was involved as a consultant in preparing, although that is not mentioned in the decision) did not
confirm to plaintiff’s actual billing records. Id. Plaintiff has not and cannot find any comparable errors in the Audit
Report in this case, which is based on and reproduces plaintiff’s actual billing records. It is the evidence in this case
that must govern here. See Palmer v. Rice, 2005 U.S. Dist. LEXIS 13677, *21 (D.D.C. July 11, 2005) (holding that
any findings of errors in a Rhode Island case, “if true,” were “irrelevant” and “consider[ing]d those portions of
Bronsther’s testimony that [the court] find[s] to be both credible and persuasive.”).
- 12 -
system. Norinsberg Reply Mem. 42 n. 21. The timesheets should be submitted to the Court, and
fairness and the adversarial process requires that they be produced to the City for comment.12
Smith also asserts that the City concluded without basis that his team submitted expenses
for cash provided to plaintiff and an unknown person. 13 Bronsther correctly attributed those
expenses to the Norinsberg team, and they are set forth plainly in plaintiff’s submission. See
Audit Report at 16, 17; 111-12; Docket No. 560-8 at 64-65. Among other things plaintiff’s
counsel seeks to charge the City for cash forwarded to “Yudelka Cepeda,” the unknown person
referenced in the City’s brief. Id. at 65. 14
POINT V
THE ADDITIONAL EVIDENCE OFFERED
BY SMITH REGARDING HIS RATES IS
IRRELEVANT
With respect to rates, the City responds here only to Smith’s new evidence which
provides fees that clients purportedly paid for legal services that are not comparable on their face
to the matter here. Smith asserts that an “asset management firm” has agreed to pay him $575
for a pre-litigation evaluation of a potential challenge to “certain out-of-state tax collection
authorities.” Smith Reply. Aff. ¶ 13. That is a business-motivated matter brought by a financial
12
Smith claims that Bronsther erroneously confused him with a paralegal using the initials “NB” on the Norinsberg
team. Smith Reply Aff. ¶ 9. This mischaracterizes the issue. The Audit Report contains a typographical error
referring to the Smith team where it was intended to refer to the Norinsberg team (and includes only one entry from
Nat Smith in a block of time otherwise billed solely by the Norinsberg team). Bronsther Dec. II, ¶ 11 n.1 (Docket
No. 627. The Audit Report clearly shows that Bronsther knows the different between the “NB” and “NBS”. Audit
Report 598-4 at 6. Plaintiff also curiously asserts that “the City Defendants and their expert do not provide any
foundation for the conclusory claims about the existence and magnitude of block billing.” Smith Reply Mem. 28. In
fact, the Audit Report contains every single block billing entry identified by Bronsther. Audit Report Ex. 9 (Docket
No. 598-4) at 214-51.
13
The City’s memorandum mistakenly and regrettably referred to the Smith team as charging those improper
expenses, and counsel’s misstatement cannot reflect poorly upon Bronsther. City Opp. Mem. at 2. Nevertheless,
this is plaintiff’s claim and it must stand or fall as a single claim; it is not a claim made by individual lawyers.
14
Plaintiff’s additional contentions on the merits of Bronsther’s opinions and the City’s arguments will be
addressed at oral argument.
- 13 -
firm – not a civil rights matter seeking damages to vindicate an individual’s civil rights.
Moreover, that agreement (which ought to be submitted to the Court and the City) does not
involve actual litigation of a claim, which is a far more costly undertaking. Smith also cites a
“corporate litigation between former shareholders” where a client agreed to pay $550 per hour –
which is even further afield and obviously irrelevant. Id. ¶ 14.
This reliance on rates charged in dissimilar matters is insufficient. “[T]he burden is on the
fee applicant to produce satisfactory evidence ... that the requested rates are in line with those
prevailing in the community for similar services by lawyers of reasonably comparable skill,
experience, and reputation." Brady v. Wal-Mart Stores, Inc., 2010 U.S. Dist. LEXIS 115380, *89 (E.D.N.Y. Oct. 29, 2010) (quoting Blum v. Stenson, 465 U.S. 886, 895 n.11, 104 S. Ct. 1541,
79 L. Ed. 2d 891 (1984)).15
CONCLUSION
For the reasons stated above and in the City’s prior submissions, the Court should
consider the Audit Report of Judith Bronsther and should adjust the plaintiff’s fee claim as
requested by the City.
Dated:
New York, New York
May 10, 2016
ZACHARY W. CARTER
Corporation Counsel of the
City of New York
Attorney for Defendants
100 Church Street, Room 3-174
New York, New York 10007
By:
15
___/s/___________________
Alan Scheiner
See also Montanez v. Simon, 755 F.3d 547, 554 (7th Cir. 2014) ("[C]onclusory affidavits from attorneys merely
opining on the reasonableness of another attorney's fee—unlike affidavits describing what comparable attorneys
charge for similar services—have little probative value."); Spegon v. Catholic Bishop, 175 F.3d 544, 556 (7th Cir.
1999) (same); Cavada v. City of Chicago, 2014 U.S. Dist. LEXIS 116089, *9-10 (N.D. Ill. Aug. 18, 2014) (same).
- 14 -
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?