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BANCA DELLA SVIZZERA ITALIANA v. COHEN

February 13, 1991

BANCA DELLA SVIZZERA ITALIANA, PLAINTIFF,
v.
BRAD S. COHEN AND LARRY J. COHEN, DEFENDANTS.



The opinion of the court was delivered by: Sweet, District Judge.

OPINION

Defendants Brad S. Cohen and Larry J. Cohen ("the Cohens") have moved for a hearing to determine the reasonableness of the $37,547.70 in fees and expenses sought by plaintiff Banca Della Svizzera Italiana ("BSI") in its application for attorney's fees in the above action. For the reasons set forth below, the Cohens' motion is denied, and BSI's fee application is granted in part and denied in part.

The Parties

BSI is a corporation organized under the laws of Switzerland, with its head office located in Lugano, Switzerland, and a branch office located in New York City. The Cohens are citizens of the Commonwealth of Pennsylvania.

Prior Proceedings

On June 8, 1990, BSI filed its action for monies due under a promissory note (the "Note") payable to BSI and executed jointly by the Cohens on June 12, 1989. On August 31, 1990, BSI filed a motion for default judgment, which was denied by order issued that same day. On September 21, 1990, BSI filed a summary judgment motion, which motion was granted in an order of October 29, 1990.

In response to BSI's papers setting forth attorney's fees and expenses in conjunction with its proposed judgment, the Cohens moved for an order (1) denying BSI's application for attorney's fees; (2) setting a hearing to determine BSI's entitlement to and the reasonableness of attorney's fees; and (3) for such other relief as the court deems proper. On November 19, 1990 oral argument was heard, and the motion was considered fully submitted as of that date.

The Facts

Pursuant to the terms of the Note, BSI extended to the Cohens a line of credit in the amount of $1.5 million. The Note provided that the Cohens would pay "all losses, costs and expenses (including, without limitation, counsel fees and expenses) incurred by the Lender in connection with the enforcement of this note."

After the Cohens failed to make their first interest payment on May 7, 1990, BSI, pursuant to the terms of the Note, offset the Cohens' cash collateral in the amount of $989,381.52 against the amount of the Cohens' indebtedness, reducing the amount of indebtedness to $620,790.32, plus interest, counsel fees and expenses. BSI then prepared and filed the complaint.

The Cohens first responded to the complaint by engaging BSI in settlement negotiations. As part of the negotiations, BSI drafted detailed restructuring agreements to reschedule the interest and principal payments. When negotiations fell through, BSI continued litigation of the dispute, filing the series of motions as recounted above.

BSI is seeking attorney's fees and expenses of $37,547.70, of which $2,202.30 are expenses. This figure is based upon the hourly rates of the several attorneys who worked on the matter multiplied by the number of hours spent working on this matter. BSI seeks attorney's fees for the time its attorneys spent a) negotiating in the expectation of a settlement; (b) preparing and filing the complaint, the default motion, and the summary judgment motion; and (c) responding to the Cohens' motion that is currently in front of the court.

BSI supports the application with an affidavit, a record of the time spent on the matter, a copy of a 40 page Mortgage Security Agreement drafted in anticipation of settlement, and information on the educational and professional background of the attorneys, including degrees received, publications and professional honors. The affidavit states that the hourly rates are the standard ...


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