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