Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

UNITED STATES v. BEDFORD ASSOCS.

July 23, 1982

UNITED STATES OF AMERICA, Plaintiff,
v.
BEDFORD ASSOCIATES, a Partnership, DORIS K. CARVER and SAMUEL ADES, individually and as partners of BEDFORD ASSOCIATES, and AMCAR MANAGEMENT CORP., Defendants, and THE BOWERY SAVINGS BANK, Intervenor; THE BOWERY SAVINGS BANK, Plaintiff, v. BEDFORD ASSOCIATES, a Partnership, DORIS K. CARVER and SAMUEL ADES, individually and as partners of BEDFORD ASSOCIATES, and UNITED STATES OF AMERICA, Defendants


Henry F. Werker, D.J.


The opinion of the court was delivered by: WERKER

HENRY F. WERKER, D.J.

These consolidated cases involve the adjudication of the rights and liabilities of Bedford Associates as owner-mortgagor, The Bowery Savings Bank as mortgagee, and the United States Government as tenant of the 21 story office building located at 120 Church Street, in New York City. The background of these cases is contained in the prior opinions of this court and the Court of Appeals for the Second Circuit. United States v. Bedford Associates, 618 F.2d 904 (2d Cir. 1980), on remand, 491 F. Supp. 848 (S.D.N.Y. 1980) and 491 F. Supp. 851 (S.D.N.Y. 1980), aff'd in part, rev'd in part and remanded, 657 F.2d 1300 (2d Cir. 1981), cert. denied, 456 U.S. 914, 102 S. Ct. 1767, 72 L. Ed. 2d 173 (1982), on remand, 548 F. Supp. 732 (S.D.N.Y. 1982). Reader familiarity with the opinions is assumed.

 After the plenary trial in these consolidated actions, this court entered judgment quieting title to the premises at 120 Church Street in Bowery, foreclosing Bowery's mortgage against Bedford and the United States and ordering the assignment of rents to Bowery. United States v. Bedford Associates, 491 F. Supp. at 870. This judgment was affirmed by the Court of Appeals. United States v. Bedford Associates, 657 F.2d at 1315.

 Pursuant to the judgment of this court filed on June 9, 1980 and order of this court filed on December 1, 1981, this matter was referred to Eugene P. Souther, Esq. to hear and compute the amounts due to Bowery in principal, interest and other charges due under Bedford's mortgage on 120 Church Street. The referee was further authorized to examine and report whether the mortgaged premises may be sold in parcels. Proceedings were duly held before the referee and his report was filed with the court on May 14, 1982. By motion returnable June 23, 1982, Bowery moved to confirm the Report of the Referee in all respects and for an order pursuant to 28 U.S.C. § 2001, directing the entry of an order and judgment of sale.

 In an opinion dated July 7, 1982, this court granted Bowery's motion to confirm with respect to the amounts due to Bowery for unpaid mortgage principal, interest and late charges. The court granted judgment for Bowery against Bedford in the amount of $10,742,543.06 for total unpaid mortgage principal, interest and late charges, less suspense credit and working capital, as of November 1, 1981. As both Bedford and the government vigorously objected to the referee's findings with respect to attorney's fees, disbursements, charges and expert witness fees, Bowery's motion to confirm the report of the referee with respect to reasonable attorney's fees, disbursements, charges and expert witness fees was to be the subject of a separate opinion.

 This is the opinion with respect to the fees to be allowed to Bowery under the terms of its mortgage with Bedford providing that it be allowed reasonable attorneys' fees and statutory costs, disbursements and allowances. Under Fed. R. Civ. P. 53(e)(2), the court must accept the Referee's findings of fact unless "clearly erroneous." After a review of Bowery's time sheets in this matter and the applicable statutory provisions with respect to costs, it is the judgment of this court that the findings of the Referee are clearly erroneous and cannot be sustained.

 Paragraph 12 of the mortgage agreement between Bedford and Bowery provides:

 
If any action or proceeding be commenced by or against the Mortgagee, including an action to foreclose said mortgage, affecting said premises or the lien of said mortgage, the Mortgagee may appear, defend, prosecute, retain counsel, and take such action as the Mortgagee shall deem advisable, and the costs thereof (including reasonable counsel fees and all applicable statutory costs, allowances and disbursements) together with interest thereon at the rate equal to the higher of (i) the legal rate or (ii) the mortgage rate set forth herein plus 1/2 of 1%, but in no event in excess of the maximum rate permitted by law, shall be paid by the Mortgagor to the Mortgagee on demand and shall be secured by said mortgage. *fn1" (1975 Mortgage Modification, A. 1523).

 Bedford argues that the language of para. 12 which limits an award of fees and expenses to actions or proceedings commenced by or against the mortgagee precludes recovery by Bowery of fees and expenses incurred in connection with its intervention in the government's action against Bedford since no claims were asserted against Bowery and since Bowery filed no pleadings in that action.

 In my opinion, the language of para. 12 contemplates an award of fees and expenses to Bowery in connection with its intervention in the government's suit against Bedford. Bowery's action against Bedford was commenced the day before the government's action against Bedford was commenced, and included both a quiet title claim and a foreclosure claim. Bowery alleged that the government had no leasehold interest in the premises and that even if such a leasehold interest existed, the United States' interest was subject and subordinate to Bowery's mortgage. Thus, Bowery's quiet title claim posed the same underlying issue with respect to the validity of the lease as the government's action for damages for breach of the alleged lease. Indeed, Bowery was permitted to intervene in the government's action in part because of the identity of these issues and these cases have been consolidated virtually from their commencement. Accordingly, under the circumstances presented here, it is the opinion of this court that an award of fees and expenses incurred by Bowery in connection with Bowery's intervention in the government's action against Bedford is contemplated under the terms of para. 12 of the mortgage and is fully justified.

 The fees, costs, disbursements and allowances claimed by Bowery through November 1, 1981 are $482,750.88. The Referee appointed to hear and compute allowed the claim in the amount of $420,535.44.

 Under the terms of para. 12, Bowery is entitled to recover from Bedford its reasonable counsel fees. Reasonable attorneys' fees in my opinion are such as are necessary to accomplish the end sought considering the skill and experience of counsel, the magnitude, complexity and novelty of the litigation, the respective positions of the parties in the litigation and the extent of responsibility legitimately undertaken by counsel. See generally City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974); National Commercial Bank v. Farina's Market, Inc., 95 Misc. 2d 284, 285, 406 N.Y.S.2d 979, 980 (Sup. Ct. Albany County 1978). After a review of the record before the Referee, I must conclude that both the amounts claimed by Bowery and those allowed by the Referee are excessive and not contemplated within the language of the mortgage instrument.

 In this case, the end sought by Bowery was the foreclosure of a mortgage free and clear of any cloud upon the title. The primary issues its counsel, the firm of Cadwalader, Wickersham & Taft ("Cadwalader") should have been concerned with and were required to assume active responsibility for during the course of the litigation are:

 
1. Jurisdiction under 28 U.S.C. § 2409a, Referee Tr. at 285-86;
 
2. The nature of Bowery's involvement in the negotiations between Bedford and the government for a new ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.