JTRE Manhattan Avenue LLC et al v. Capital One, N.A.

Filing 151

OPINION AND ORDER re: 145 MOTION for Attorney Fees , Costs and Expenses. filed by Capital One, N.A. For the foregoing reasons, the Court GRANTS Capital Ones unopposed motion for attorneys fees, costs, and expenses. Capital One is hereby awarded $992,248.48 in fees, costs, and expenses. The Clerk of Court is respectfully directed to close the motion at Dkt. 145. (Signed by Judge Jennifer L. Rochon on 11/25/2024) (jjc)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
JTRE MANHATTAN AVENUE LLC and JTRE 807
MANHATTAN AVENUE LLC,
Plaintiffs,
-against-

Case No. 1:21-cv-05714 (JLR)
OPINION AND ORDER

CAPITAL ONE, N.A.,
Defendant.
JENNIFER L. ROCHON, United States District Judge:
Plaintiffs/Counter-Defendants JTRE Manhattan Avenue LLC and JTRE 807
Manhattan Avenue LLC (collectively, “JTRE”) brought negligent misrepresentation and
breach of contract claims against Defendant/Counter-Claimant Capital One, N.A. (“Capital
One”) in connection with a high-value commercial lease. Dkt. 26 (“Second Am. Complaint”
or “SAC”). As a defense and counterclaim, Capital One asserted that JTRE breached the
lease by, among other things, failing to repair roof leaks in the building. Dkt. 52 (“Ans.”) at
¶¶ 33, 47, 54, 81, 88, 95, 101, 133-141. The Court ultimately dismissed all of JTRE’s claims
and entered final judgment in favor of Capital One on its breach of contract counterclaim
arising from JTRE’s failure to fix the roof. Dkts. 135, 143, 144.
Capital One now moves for an award of attorneys’ fees, costs, and expenses in the
amount of $992,248.48. Dkts. 145, 146 (“Mot.”). For the reasons set forth below, Capital
One’s motion is GRANTED.
BACKGROUND
The Court assumes the parties’ familiarity with the underlying facts. Briefly stated,
the underlying action arises out of a commercial lease between Capital One and JTRE. In
2018, JTRE purchased the subject premises at 807 Manhattan Avenue, Brooklyn, New York,

and assumed the role of landlord under an existing lease between JTRE’s predecessor-ininterest and Capital One. Dkt. 120 ¶¶ 4, 7, 15, 22; Dkt. 127-3 (the “Lease”). As relevant here,
the parties’ Lease includes a provision addressing attorneys’ fees. The Lease provides that:
In the event of any litigation related to this Lease, whether to enforce its terms,
recover for default, or otherwise, if either party receives a judgment, settlement,
or award in its favor (the “Receiving Party”) against the other party (the “Paying
Party”) in such litigation, the Paying Party will pay upon demand all of the
Receiving Party’s costs, charges, and expenses (including but not limited to
reasonable attorneys’ fees, court costs, and expert witness fees) arising out of
such litigation (including the costs of any appeal related thereto) . . . .
Lease § 33.17 (emphases omitted). The Lease also contains New York choice-of-law and
forum-selection clauses. Id. § 33.8.
The subject premises subsequently experienced several issues, including leaks in the
roof and inadequate heating. On June 3, 2021, JTRE brought claims for negligent
misrepresentation and breach of the commercial lease against Capital One in state court, and
Capital One removed the case to this district on July 1, 2021. Dkt. 1; see generally SAC. On
February 9, 2022, the Court dismissed JTRE’s negligent misrepresentation claim with
prejudice. See JTRE Manhattan Ave. LLC v. Cap. One, N.A., 585 F. Supp. 3d 474, 481
(S.D.N.Y. 2022). Capital One thereafter answered JTRE’s complaint, asserting a breach of
contract counterclaim for, among other things, JTRE’s failure to repair the roof leaks in the
building. Ans. ¶¶ 133-41.
On June 27, 2024, the Court granted summary judgment in favor of Capital One as to
JTRE’s claims against Capital One and awarded Capital One partial summary judgment on
liability as to its breach of contract counterclaim against JTRE for failure to fix the roof. Dkt.
135 at 32-34. The Court ordered the case to proceed to bench trial on the remaining portions
of Capital One’s breach of contract counterclaim, including whether JTRE was liable for

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allowing disruptive construction and the amount of compensatory damages owed to Capital
One. Id. at 34-35.
On August 21, 2024, Capital One withdrew its theory of liability relating to disruptive
construction and its claim for compensatory damages, citing the cost, time and effort of
proceeding to trial on those issues. Dkt. 138 at 2. Instead of proceeding to trial, Capital One
requested that the Court enter final judgment in favor of Capital One and against JTRE as to
JTRE’s liability for the roof leaks and approve nominal damages for that claim. Id. On
September 25, 2024, the Court entered final judgment in the case, thereby dismissing JTRE’s
claims against Capital One for the reasons set forth in Dkt. 135, and granted judgment in favor
of Capital One and against JTRE in the amount of one dollar as to JTRE’s breach of contract
counterclaim for JTRE’s failure to fix the roof of the property at issue. Dkt. 143.
On October 9, 2024, Capital One moved for attorneys’ fees, costs, and expenses in the
amount of $992,248.48 from JTRE. See generally Mot. On October 24, 2024, the Court
provided JTRE an extension until October 31, 2024, to file a response to Capital One’s
motion, and advised that failure to do so would result in the Court considering the motion
unopposed. Dkt. 148. JTRE has not filed any response to date. The Court therefore treats
Capital One’s motion for attorneys’ fees, costs, and expenses as unopposed and, for the
reasons set forth below, GRANTS the motion.
LEGAL STANDARD
Under the “bedrock principle known as the American Rule,” “[e]ach litigant pays his
own attorneys’ fees, win or lose, unless a statute or contract provides otherwise.” Peter v.
Nantkwest, Inc., 140 S. Ct. 365, 370 (2019) (quotation marks and citation omitted). Thus,
“parties may agree by contract to permit recovery of attorneys’ fees, and a federal court will
enforce contractual rights to attorneys’ fees if the contract is valid under applicable state law.”
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McGuire v. Russell Miller, Inc., 1 F.3d 1306, 1313 (2d Cir. 1993). By virtue of the Lease’s
choice-of-law clause, New York law applies. “Under New York law, a contract that provides
for an award of reasonable attorneys’ fees to the prevailing party in an action to enforce the
contract is enforceable if the contractual language is sufficiently clear.” NetsJets Aviation,
Inc. v. LHC Commc’ns, LLC, 537 F. 3d 168, 175 (2d Cir. 2008). When a prevailing party
seeks fee-shifting pursuant to a contract, the award of attorneys’ fees “must be reasonably
related to the fee arrangement that the prevailing party would have made with counsel absent
a fee-shifting agreement.” In Time Prods., Ltd. v. Toy Biz, Inc., 38 F.3d 660, 667 (2d Cir.
1994); see also H.W. v. N.Y.C. Dep’t of Educ., No. 21-cv-08604 (JLR), 2023 WL 5529932, at
*5 (S.D.N.Y. Aug. 28, 2023) (“Because a reasonable hourly rate is a rate a client would be
willing to pay, courts also should bear in mind that a reasonable, paying client wishes to spend
the minimum necessary to litigate the case effectively.” (quotation marks omitted) (quoting
Arbor Hill Concerned Citizens Neighborhood Ass’n v. County of Albany, 522 F.3d 182, 190
(2d Cir. 2008))).
A fee applicant “must . . . submit appropriate documentation to meet the burden of
establishing entitlement to an award.” Fox v. Vice, 563 U.S. 826, 838 (2011) (quotation
marks and citation omitted). “But trial courts need not, and indeed should not, become greeneyeshade accountants.” Id. “The essential goal” in calculating fee awards is “to do rough
justice, not to achieve auditing perfection. So trial courts may take into account their overall
sense of a suit, and may use estimates in calculating and allocating an attorney’s time.” Id.;
see U.S. Fid. & Guar. Co. v. Barspetro Oil Servs. Co., 369 F. 3d 34, 74 (2d Cir. 2004) (district
courts have “broad discretion” in “award[ing] attorneys’ fees under a valid contractual
authorization”).

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DISCUSSION
Capital One prevailed on all claims against it and obtained a partial judgment on
liability on its breach of contract counterclaim for JTRE’s failure to fix the roof. Dkt. 43 at
13; Dkt. 135 at 34-35; Dkt 143. Capital One is therefore entitled to recover reasonable
attorneys’ fees, court costs, and expert witness fees under the Lease. Lease § 33.17. Capital
One seeks $992,248.48 in attorneys’ fees, costs, and expenses. For the reasons set forth
below, the Court deems this unopposed request reasonable.
I.

Attorneys’ Fees
The Second Circuit applies the lodestar analysis to determine whether attorneys’ fees

sought are reasonable. Millea v. Metro-N. R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011). The
lodestar method determines a “presumptively reasonable fee” that is the “product of a
reasonable hourly rate and the reasonable number of hours required by the case.” Id. (citation
omitted).
A. Reasonable Hourly Rate
The Court first evaluates the hourly rates charged by Capital One’s counsel. The
Second Circuit’s “forum rule” generally requires use of the “hourly rates employed in the
district in which the reviewing court sits in calculating the presumptively reasonable fee.”
Bergerson v. N.Y. State Off. of Mental Health, Cent. N.Y. Psychiatric Cent., 652 F.3d 277, 290
(2d Cir. 2011) (citation and quotation marks omitted). “A court may determine the reasonable
hourly rate by relying both on ‘its own knowledge of comparable rates charged by lawyers in
the district,’ as well as on ‘evidence proffered by the parties.’” Adorno v. Port. Auth. of N.Y.
& N.J., 685 F. Supp. 2d 507, 511 (S.D.N.Y. 2010) (first quoting Morris v. Eversley, 343 F.
Supp. 2d 234, 245 (S.D.N.Y. 2005), and then quoting Farbotko v. Clinton County, 433 F.3d
204, 209 (2d Cir. 2005)). However, this analysis is ultimately “case-specific,” and courts
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“consider a variety of factors in assessing the reasonableness of a rate, including what are
known as the Johnson factors.” H.W., 2023 WL 5529932, at *4. The Johnson factors
include:
(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
attorneys’ 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.
Id. (quoting Lilly v. City of New York, 934 F. 3d 222, 228 (2d. Cir. 2019)). A Court “need not
recite and make separate findings as to all twelve Johnson factors, provided that it takes each
into account in setting the attorneys’ fee award.” Id. at *5 (citation omitted). The Court has
considered all the Johnson factors here.
Capital One initially retained the law firm of McCarter & English, LLP (“McCarter &
English”) to represent it in this matter, and subsequently retained McGuireWoods LLP
(“McGuireWoods”) as lead counsel, with McCarter & English staying on the matter as local
counsel. Mot. at 3. Proceedings in this matter lasted over three years, and Capital One faced
potential liability of more than $18 million. Id. The parties engaged in substantial discovery
practice and litigated the case through a motion to dismiss and summary judgment. See, e.g.,
Dkts. 23, 29, 42, 122, 134. Capital One therefore necessarily exerted substantial time and
effort toward defending against this action, a factor that weighs in favor of its requested fees.
Relatedly, because this was a multimillion-dollar dispute involving claims and counterclaims,
Capital One appropriately retained skilled and experienced commercial litigators to defend its
interests. This included John Wilburn, a McGuireWoods partner with more than twenty-eight
years of experience in commercial litigation, and Bryan Fratkin, a McGuireWoods partner
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with a long-standing relationship with Capital One and familiarity with its business
operations. Mot. at 4; Dkts. 147-11, 147-12.
Capital One asserts that its success in this litigation is a “strong indication of the
reasonableness of the attorneys’ fees sought.” Mot. at 3. The Court agrees. The “degree of
success,” while not by itself dispositive, is generally the “most critical factor in determining
the reasonableness of a fee award.” H.W., 2023 WL 5529932, at *6 (citation omitted).
Capital One successfully prevailed on all claims against it and obtained a partial judgment on
liability on its breach of contract counterclaim for JTRE’s failure to fix the roof. Dkt. 43 at
13; Dkt. 135 at 34-35; Dkt 143.
Moreover, Capital One’s legal counsel offers heavily discounted rates that fall well
within the range of hourly rates ordinarily approved for attorneys in the Southern District of
New York. For commercial partners, the “rate for partners is often between $500 and $850
per hour, and the rate for associates between $300 and $500 per hour.” PNC Bank, N.A. v.
Dana Transport, Inc., No. 16-cv-07797 (JLR), 2023 WL 5702165, at *6 (S.D.N.Y. Sept. 5,
2023), reversed and remanded on other grounds, No. 23-7272, 2024 WL 4662987 (2d Cir.
Nov. 4, 2024) (summary order); Fleisig v. ED&F Man Cap. Mkts., Inc., No. 19-cv-08217
(DLC), 2021 WL 4459120, at *3 (S.D.N.Y. Sept. 29, 2021) (rates ranging from $1000 per
hour for senior partners to $400 per hour for junior associates are “in line with the prevailing
rates” in this district). In fact, courts award upward of $1000 per hour in contracts disputes
for partners associated with large law firms. See, e.g., Vista Outdoor Inc. v. Reeves Fam. Tr.,
No. 16-cv-05766 (JSR), 2018 WL 3104631, at *6 (S.D.N.Y. May 24, 2018) (awarding hourly
rates of up to $1,260 for Gibson Dunn & Crutcher LLP partners for breach of contract and
tortious interference with contract claims); MSC Mediterranean Shipping Co. Holding S.A. v.
Forsyth Kownacki LLC, No. 16-cv-08103 (LGS), 2017 WL 1194372, at *3 (S.D.N.Y. Mar.
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30, 2017) (finding reasonable the rate of $1,048.47 charged by partners at large firm and
associate rates of $569.02 to $753.42); U.S. Bank Nat’l Assoc. v. Dexia Real Est. Cap. Mkts.,
12-cv-09412 (PAE), 2016 WL 6996176, at *8 (S.D.N.Y. Nov. 30, 2016) (“[P]artner billing
rates in excess of $1,000 an hour are by now not uncommon in the context of complex
commercial litigation.” (citation and brackets omitted)). As for paralegals and other litigation
support personnel, courts in this district typically approve paralegal rates between $150 and
$200. See, e.g., 1979 Fam. Tr. Licensor, LLC v. Darji, No. 19-cv-04389 (VEC), 2020 WL
9596279, at *1 (S.D.N.Y. Sept. 30, 2020).
Capital One’s lead counsel at McGuireWoods seeks fees based on the following rates:
from $610 per hour to $780 per hour for partners; approximately $625 per hour for counsel;
from $325 per hour to $565 per hour for associates; approximately $195 per hour for
paralegals; and $75 per hour for a research librarian. Mot. at 5-6, 6 n.3; see generally Dkt.
147-2. All these rates are fair, reasonable, and consistent with rates awarded in this District
for attorneys with comparable skills and experience. The rates for local counsel’s partners,
which range from $332 per hour to $580 per hour, are likewise well within reason, as are the
rates offered for McCarter & English’s associates (ranging from $325 per hour to $370 per
hour) and paralegals and research analysts (from $155 per hour to $179 per hour). Mot. at 5,
7 & n.5.
Notably, these rates reflect significant discounts from the attorneys’ and support staff’s
customary billing rates. As just one example, the lead attorneys on this case,
McGuireWoods’s John Wilburn and Bryan Fratkin ordinarily charge up to $1300 per hour.
Mot. at 5 n.1. Their billed rate of $780 in 2024 therefore constitutes a 40 percent discount
from their typical rates. See Angelo, Gordon & Co. v. MTE Holdings, LLC, No. 20-mc-00023
(AT), 2021WL 1353756, at *3 (S.D.N.Y. Apr. 12, 2021) (“[T]he best evidence of the
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reasonableness of the ‘market’ value of a particular law firm’s services (and therefore the
reasonableness of its fees) are the fees that the law firm normally charges its clients in other
matters.” (citation omitted)).
B. Reasonably Expended Hours
Having determined the reasonable rates for each timekeeper, the Court next considers
whether the hours expended were reasonable. When evaluating the reasonableness of hours
billed, courts must make a “conscientious and detailed inquiry into the validity of the
representations that a certain number of hours were usefully and reasonably expended.”
Haley v. Pataki, 106 F.3d 478, 484 (2d Cir. 1997) (quoting Lunday v. City of Albany, 42 F.3d
131, 134 (2d Cir. 1994)). “[T]he critical inquiry is ‘whether, at the time the work was
performed, a reasonable attorney would have engaged in similar time expenditures.’” Samms
v. Abrams, 198 F. Supp. 3d 311, 322 (S.D.N.Y. 2016) (quoting Grant v. Martinez, 973 F.2d
96, 99 (2d Cir. 1992)). “Hours that are excessive, redundant, or otherwise unnecessary, are to
be excluded,” and “in dealing with such surplusage, the court has discretion simply to deduct
a reasonable percentage of the number of hours claimed as a practical means of trimming fat
from a fee application.” Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998) (quotation
marks and citation omitted). To make this determination, a court reviews
“contemporaneously created time records that specify, for each attorney, the date, the hours
expended, and the nature of the work done.” Id. at 173.
The Court has reviewed the time entries submitted by Capital One and deems them
nonduplicative and reasonable. Capital One has properly itemized the tasks undertaken by its
counsel and provided sufficient detail and clarity to confirm the “reasonableness of the work
performed.” Barclays Cap. Inc. v. Theflyonthewall.com, No. 06-cv-04908 (DLC), 2010 WL
2640095, at *5 (S.D.N.Y. June 30, 2010). The present case involved mediation and
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settlement discussions, significant discovery involving thousands of documents and numerous
nonparty and party depositions, and substantial motion practice over a three-year period.
Discovery in the matter was extensive and involved documents dating back to the execution
of the underlying Lease in October 2015. Mot at 9. The case implicated complex engineering
and architectural issues related to the subject premises, requiring Capital One to retain
qualified experts to opine on the root causes of those issues. Id.; Dkts. 125-20, 125-21.
Moreover, Capital One filed two motions to dismiss (the second refiled after JTRE’s
amendment of its complaint), Dkts. 23, 29; a counterclaim for breach of contract related to
JTRE’s failure to maintain the premises, Dkt. 52; and a cross-motion for summary judgment,
Dkts. 122, 134. Considering the complex legal and technical issues involved, the number of
motions, and the duration of this litigation, the Court finds the hours expended by Capital
One’s attorneys reasonable.
It bears noting that Capital One’s expenditure of time, expenses, and efforts is at least
in part attributable to JTRE’s conduct in this litigation. Capital One was required, for
instance, to respond to JTRE’s motion practice during discovery, Dkts. 61-63 (JTRE’s motion
for leave to file requests for admission and supporting documents); Dkt. 84 (JTRE’s motion to
quash); JTRE’s multiple attempts to amend its complaint, Dkts. 26, 64; and JTRE’s vigorous
litigation of a fraud claim that was dismissed, Dkt. 43 at 13 (dismissing negligent
misrepresentation claim). As was its right, JTRE filed this lawsuit and aggressively litigated
it through trial. However, having “litigate[d] tenaciously,” JTRE cannot now “be heard to
complain about the time necessarily spent by [its adversary] in response.” Bleecker Charles
Co. v. 350 Bleecker St. Apartment Corp., 212 F. Supp. 2d 226, 229 (S.D.N.Y. 2002) (second
alteration in original) (citation and quotation marks omitted).

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II.

Expert Fees

The Courts likewise deems the $139,703.16 Capital One incurred in expert fees
reasonable. Mot. at 10. “Courts in this district assess the reasonableness of expert fees using
the same method they do for attorneys’ fees — by first multiplying the reasonable hourly rate
by the reasonable number of hours expended.” Themis Cap. v. Dem. Rep. of Congo, No. 09cv-01652 (PAE), 2014 WL 4379100, at *9 (S.D.N.Y. Sept. 4, 2014) (quoting Matteo v. Kohl’s
Dep’t Stores, Inc., No. 09-cv-07830 (RJS), 2012 WL 5177491, at *5 (S.D.N.Y. Oct. 19,
2012)). In evaluating the reasonableness of an expert’s rate, courts consider:
(1) the witness’s area of expertise; (2) the education and training that is required
to provide the expert insight that is sought; (3) the prevailing rates for other
comparably respected available experts; (4) the nature, quality, and complexity
of the discovery responses provided; (5) the cost of living in the particular
geographic area; (6) any other factor likely to be of assistance to the court in
balancing the interests implicated by Rule 26; (7) the fee being charged by the
expert to the party who retained him; and (8) fees traditionally charged by the
expert on related matters.
Bak v. Metro-N. R.R. Co., No. 12-cv-03220 (TPG), 2017 WL 496084, at *2 (S.D.N.Y. Feb. 7,
2017).
The rates requested by Capital One’s experts are reasonable when examined under the
relevant factors. To respond to JTRE’s claims, Capital One retained two expert firms that
reviewed thousands of documents, conducted site visits, and issued reports. Mot. at 10, 12.
Christopher J. Sheridan, P.E., LEED AP, of Thornton Thomasetti, is an experienced forensic
mechanical engineer who was retained to opine on the mechanical issues on the property. Id.
at 11; Dkt. 125-20 at 4-5. Richard J. Vivenzio, AIA, LEED AP, of Thornton Thomasetti, is a
forensic architect with over three decades of experience who Capital One retained to opine on
the architectural issues on the property, including with respect to the roof leaks. Mot. at 11;
Dkt. 125-21 app. A. DBI Construction Consultants LLC (“DBI”) was retained as a consulting

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expert to inspect and estimate the cost to remove two vaults at the property that JTRE
contended Capital One was responsible for removing under the Lease. Mot. at 11; Dkt. 1-1
¶ 95. Mr. Sheridan’s rates range from $375 to $400 per hour, and Mr. Vivenzio’s rate is $500
per hour. Mot. at 12. Alexander McDonald, a Director at DBI, and Emma Withers, a
Litigation and Appraisal Manager at DBI, charge $240 per hour and $215 per hour,
respectively. Id. These rates are comparable to those customarily charged in the field. See
Bak, 2017 WL 496084, at *2 (approving rates of $360 to $375 for engineers seven years ago).
The Court likewise deems the rates charged by Thornton Thomasetti and DBI employees
assisting with the preparation of expert reports in this matter reasonable. Mot. at 12. As for
the hours expended, the Court finds Thornton Thomasetti’s completion of 398 hours and
DBI’s completion of 89.8 hours reasonable given the voluminous documentary record in this
matter — including technical documents pertaining to the subject premises’ architecture —
the necessity of on-site visits, and the preparation of the expert reports themselves. See Mot.
at 12; see generally Dkts. 147-8, 147-9, 147-10.
III.

Costs and Expenses

Finally, Capital One seeks to recover costs and expenses for, among other things,
travel fees, court filing fees, and transcript fees. See generally Dkts. 147-6, 147-7.
“Attorney’s fees awards include those reasonable out-of-pocket expenses incurred by
attorneys and ordinarily charged to their clients.” LeBlanc-Sternberg v. Fletcher, 143 F.3d
748, 763 (2d. Cir. 1998) (alteration adopted) (citation omitted). These include, for instance,
charges for “photocopying, binding, shipping, travel, and filing fees.” Osterweil v. Bartlett,
92 F. Supp. 3d 14, 37-38 (N.D.N.Y. 2015). The Court has reviewed the disbursement records
and receipts submitted by Capital One’s counsel and has determined that the costs and
expenses charged are reasonable and compensable.
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CONCLUSION
For the foregoing reasons, the Court GRANTS Capital One’s unopposed motion for
attorneys’ fees, costs, and expenses. Capital One is hereby awarded $992,248.48 in fees,
costs, and expenses.
The Clerk of Court is respectfully directed to close the motion at Dkt. 145.
Dated: November 25, 2024
New York, New York
SO ORDERED.

JENNIFER L. ROCHON
United States District Judge

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