The opinion of the court was delivered by: DOUGLAS EATON, Magistrate Judge
Plaintiff 601 West Associates LLC ("601 West" or "plaintiff") is the
owner of the Starrett Lehigh Building at 601 West 26th Street. (Compl.
Exh. 1A.) Defendant Kleiser-Walczak Construction Co. is a California
corporation that "specializes in the production of computer-generated
animation, visual effects and live action for feature films, special
venue attractions, television, advertising and interactive projects."
(2/13/04 Galano Aff. ¶ 3.) On May 1, 1999, defendant entered into an
8-year lease with plaintiff for part of the 17th floor of 601 West 26th
Street. (Compl. ¶ 5.) In February 2000, defendant stopped paying its
rent because of an economic downturn in its industry; eventually it laid
off its entire New York based staff and ceased occupying the premises.
(Compl. ¶ 6; 2/13/04 Galano Aff. ¶ 3.) In July 2002, plaintiff
re-rented the premises. (Compl. Exh. E.) After numerous attempts to
collect the outstanding rental arrears, plaintiff brought this action in
our Court. (Compl. ¶¶ 10-13.)
In December 2003, the parties consented to have the case assigned to me
for all purposes. On January 27, 2004, I held a settlement conference,
but the parties did not settle.
On February 5, 2004, plaintiff moved for summary judgment, alleging
that defendant owes it $172,037.65 in unpaid rent, plus interest at 9%
per annum from November 1, 2000, plus attorneys' fees of $57,333.00. It
characterizes the $57,333.00 as "33.33% of the principal sum due."
(2/4/04 Merlis Aff. ¶ 8.) By my arithmetic, the figure would be a few
On February 13, 2004, defendant served its opposition papers. In its
attorney's affidavit, defendant concedes that it owes plaintiff $172,037.65 plus interest at 9% per annum starting
from November 1, 2000. (The November 1, 2000 start date is not explained
to me, but it is undisputed.) Defendant says that the only disputed issue
is whether plaintiff's claim for $57,333.00 in attorneys' fees is
reasonable. Defendant says that the claimed amount "is an unreasonable
and excessive fee based on . . . the non-complexity of this case." Mr.
Galano's affidavit noted that the moving papers had submitted no time
entries from plaintiff's two attorneys (Mitchell Merlis and Vincent
Lentini), and no explanation of what work they had performed.
On February 23, 2004, Mr. Lentini submitted a 5-page reply affirmation,
which estimated that he and Mr. Merlis had worked a total of 100 hours,
and he described that work.
For the reasons discussed below, I award plaintiff $172,037.65, plus
interest at 9% per annum, starting from November 1, 2000, plus attorneys'
fees in the amount of $11,250.00.
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary
judgment will be granted only when there are no genuine issues of
material fact and the moving party is entitled to a judgment as a matter
of law. The Court will construe the evidence in the light most favorable
to the non-moving party and draw all reasonable inferences in its favor.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). The
moving party bears the burden of demonstrating that no genuine issues of
material fact exist, and all inferences and ambiguities will be resolved
in favor of the non-moving party. Once the moving party has provided
sufficient evidence to support a motion for summary judgment, the
non-moving party must set forth specific facts that show that there is a
genuine issue for trial. Jones v. New York City Housing
Authority, 2001 WL 406180, at *5 (S.D.N.Y. Apr. 20, 2001) (Kaplan,
J.)(Eaton, M.J.); Winkfield v. City of New York, 1999 WL
1191544, at *2 (S.D.N.Y. Dec. 15, 1999) (Baer, J.).
As noted above, the defendant concedes that the only disputed issue is
whether plaintiff's claim for $57,333.00 in attorneys' fees is
reasonable. I find that it is not.
Plaintiff's Notice of Motion annexes an affirmation from a Manhattan
attorney, Mitchell Merlis, and an affirmation from Vincent Lentini, a
Garden City attorney who says he was of counsel to Mr. Merlis. Mr.
Merlis's affirmation, at ¶ 4, says: The Plaintiff purchased the Building in 1998.
Since that time, my firm has handled all legal
matters for the Plaintiff regarding the Building
and its tenants which matters can be delineated in
two categories: (1) landlord-tenant and dispossess
actions for which my firm has billed the Plaintiff
at an hourly rate of between $250.00 to $300.00
per hour, and (2) collection matters regarding
collection of past due rents and/or damages for
breach of lease for which my firm has been
retained by the Plaintiff on a 33.33% contingency
fee basis plus costs and disbursements.
Annexed as Exhibit 6 is a June 4, 2003 retainer agreement that says:
This letter is to confirm that 601 West
Associates, LLC has retained the undersigned
Attorney [Mr. Merlis] to represent the Limited
Liability Company, Landlord/Owner with respect to
the outstanding rental arrears/collection matter
involving the above referenced Tenant. As you
know, I have been involved in this matter since
November of 2000 and have issued previous written
Demands and have had other correspondence and
contact with the Tenant and its representatives.
* * *
The Retainer in this matter is agreed upon in
the amount of a one third (33%) contingency
collection fee of the amount collected similar to
the ones we have had in the past for the other
collection cases in the building which I have
handled over the past four or five years.
* * *
Please be advised that in the event of
litigation which could result in an Appeal, that
my hourly billing rate will be $300 per hour for
Appellate work. . .
(Notice of Motion, Exh. 6.)
To support its argument that defendant is responsible for paying
plaintiff's legal fees, plaintiff refers to the lease's paragraphs 19, 57
and 70. Paragraph 57 merely discusses late fees. Paragraph 19 says (with
my emphasis underlined) :
If Owner, . . . in connection with any default by
Tenant: in the covenant to pay rent hereunder,
makes any expenditures or incurs any obligations
for the payment of money, including but not
limited to reasonable attorney's fees, in instituting,
prosecuting or defending any action or
proceedings, and prevails in any such action or
proceeding, then Tenant will reimburse Owner for
such sums so paid or obligations incurred with
interest and costs.
Paragraph 70.1 says (with my emphasis underlined) that in the event
of a legal action brought by the plaintiff against the defendant where
plaintiff prevails, the defendant:
hereby agrees to pay, as Additional Rental,
all reasonable attorneys' fees and
disbursements (and all other court costs or
expenses of legal proceedings) which Landlord may
incur. . .
Plaintiff claims that:
. . . [W]here an attorney is retained by a party
on a one third contingency fee basis, an award of
attorneys['] fees based on 33.33% of the amount
which the Defendant owes the Plaintiff is not
unreasonable and is in fact in "line with the kind
of fee that plaintiff would normally anticipate
paying for collecting a defaulted account".
See, Lake Steel Inc. v. Imperial Linen Supply
Co., Inc.[,] 60 A.D.2d 994 (4th Dept. 1978)
[, appeal denied 44 N.Y.2d 643, 405 N.Y.S.2d 1027
(N.Y. 1978)]. See, also A.S.L. Enterprises,
Inc. v. Venus Laboratories, Inc.[,] 298 A.D.2d 337
(2nd Dept. 2002).
(2/23/04 Lentini Reply Aff. ¶ 7.)
Since this is a diversity case, I will apply New York law concerning
attorney's fees, but it is very similar to federal law. The Appellate
Division decisions in Lake Steel and A.S.L. Enterprises
do not support plaintiff's argument that a fee of one-third is
"reasonable" regardless of the amount of work performed. In those cases,
a substantial amount of work had been performed, because both cases were
tried to verdict. In both cases, the court read in a requirement of
reasonableness, even though the equipment lease in Lake Steel
said "all its expenses, including attorney's fees" (with no mention ...