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June 23, 2004.


The opinion of the court was delivered by: HAROLD BAER, JR.[fn1], District Judge [fn1] Sonia Wadhwa, a Summer 2004 intern in my Chambers and second-year law student at the George Washington University Law School, provided substantive assistance in the research and drafting of this opinion.


Following a bench trial held on January 6, 2004, the Court held that pursuant to a guaranty agreement between the parties, defendants Venez Textiles USA, Inc. ("Venez USA"), Rami and his brother Abe Kattan (collectively, "the Kattans") were liable for $276,472.97 plus interest and reasonable attorneys' fees. Thereafter, the defendants moved for reconsideration pursuant to the Federal Rules of Civil Procedure ("Fed.R. Civ. P.") 54(e) and 60 and Local Rule 6.3 of the Local Rules of the United States District Courts for the Southern and Eastern Districts of New York ("Local Rules"). After a review, this motion was denied on April 15, 2004. Southern Industries of Clover, Ltd. ("Southern") now applies for an award of attorneys' fees and disbursements in the amount of $29,463.65 plus interest, which defendants oppose. Fee shifting motions, for one reason or another, appear on the increase, and because some of the more frequent arguments are presented here, it seems valuable to explore these issues. In the case at bar, Southern's application is granted in part and denied in part and the defendants are ordered to pay Southern $27,561.85 in attorneys' fees and disbursements.


  The facts are set out in the Court's January 20, 2004 Opinion & Order, S. Indus. of Clover, Ltd. v. Zenev Textiles S.A., 02 Civ. 8022, 2004 WL 193176 (S.D.N.Y. Feb. 2, 2004), familiarity with which is presumed. Briefly, Southern is a wholesaler of yarn. Southern's president, Lawrence Kryger, had a 20-year business relationship with the Kattans. The Kattan brothers have been in the textile industry for more than 33 years, during which time they owned and operated several companies in the industry, including Tropical Textiles, Sunlight Trading Company, Inc. ("Sunlight"), Venez USA and Zenev Textiles, S.A. ("Zenev").*fn2 Southern and Sunlight transacted some $30 to $40 million in business over the course of 15 years. Towards the end of that period, Sunlight went into debt and Southern experienced difficulty in its collections. Partly because of this history, Southern refused to do business with Zenev without a "Cross Corporate Customer Guaranty" from the Kattans which included a clause specifying that in the event of a default and the retention of lawyers, defendants would be liable for attorneys' fees.*fn3 Southern began selling yarn to Zenev in late 1999. Eventually, Zenev fell behind in its account and failed to pay eight invoices, which totaled $276,472.97. Southern then brought suit to recover these monies from Zenev, Venez USA, and the Kattans.

  Following the January 6, 2004 bench trial, I concluded that on its face, the guaranty was ambiguous as to whether it provided for both corporate and individual guaranties. However, the parties' course of dealings, including letters sent by Southern's president to the Kattans and the testimony of Abe Kattan himself, demonstrated that the guaranty was intended to bind both Venez USA and the Kattans individually. Accordingly, the Kattans and Venez USA were held liable to Southern for Zenev's debt of $276,472.97, interest, and reasonable attorneys' fees. Following denial of the defendants' motion for reconsideration, Southern's attorney, Walter F. Ciacci ("Ciacci"), submitted a proposed judgment reflecting the amount of damages, attorneys' fees, and disbursements, as well as his timesheets and a sworn statement detailing his attorneys' fees and disbursement application. II. DISCUSSION

  Defendants oppose the award of attorneys' fees on four grounds: (1) Southern did not plead attorneys' fees in its complaint; (2) Ciacci's timesheets lack the requisite degree of specificity; (3) Ciacci's timesheets contain inappropriate and excessive entries; and (4) Southern's conduct during the course of the litigation warrants a reduction in the amount of attorneys' fees awarded. In addition, defendants argue that Southern is not entitled to disbursements because it did not affirm that the disbursements were necessarily incurred. I address defendants' objections seriatim.

  A. Failure to Plead Attorneys' Fees

  Defendants first argue that Southern did not specifically seek attorneys' fees in its complaint and therefore it is not entitled to an award of attorneys' fees. Defendants rely on a line of cases from other Circuits that hold that attorneys' fees are special damages that must be specifically pled under Fed.R. Civ. P. 9(g). E.g., Maidmore Realty Co., Inc. v. Maidmore Realty Co., Inc., 474 F.2d 840, 843 (3d Cir. 1973); W. Cas. & Sur. Co. v. Southwestern Bell Tel Co., 396 F.2d 351, 356 (8th Cir. 1968); see also Bensen v. Am. Ultramar Ltd., No. 92 Civ. 4420, 1997 WL 317343, at *11 (S.D.N.Y. June 12, 1997) ("Attorney's fees have been deemed special damages by numerous Circuits, including the Third, Fourth, Fifth, Sixth, and Eighth."). This, however, is not the law of this Circuit. Some courts in this District have similarly classified attorneys' fees as special damages. E.g., id.; Marshall v. New Kids on the Block P'ship, No. 91 Civ. 3905, 1993 WL 350063, at *1 (S.D.N.Y. Sept. 8, 1993). These decisions turn on whether the opposing party had notice or would be prejudiced by a tardy claim for attorneys' fees, not whether such relief was pled in the complaint. The Bensen court, for example, based its decision largely on the fact that defendants' English law counterclaim on which it sought attorneys' fees was "completely novel . . . and . . . had never been brought in any American jurisdiction." 1997 WL 317343, at *11. This, together with the fact that defendants previously moved to prohibit plaintiff from recovering attorneys' fees, resulted in a complete lack of notice to plaintiff of defendants' attorneys' fees claim. Id. Likewise, in Marshall, the court held that plaintiff was entitled to recover attorneys' fees even though the request was raised for the first time in a post-trial motion because defendants were not prejudiced. 1993 WL 350063, at *1-2. In so holding, the court noted that defendants were well aware of a potential claim for attorneys' fees because its own counterclaim was premised on a licensing agreement that contained an attorneys' fee provision. Id. The cases on which the defendants rely only further support the fact that notice, not pleading, is the critical inquiry. For example, in United Indus., Inc. v. Simon-Hartley, Ltd., 91 F.3d 762, 765 (5th Cir. 1996), the Fifth Circuit explained that, "as a general rule . . . we find nothing inappropriate with requiring a party to put its adversaries on notice that attorneys' fees are at issue in a timely fashion or waive that claim." Id. (emphasis supplied).

  The defendants cannot seriously argue that they did not have notice of plaintiff's attorneys' fees claim. First, both parties were on notice that attorneys' fees were included should a dispute arise by virtue of the language, clear and unambiguous, in the guaranty. Second, the pleadings, motion practice, and prior proceedings in this case raised the issue of attorneys' fees on a number of occasions. The complaint explicitly mentions attorneys' fees in the background facts section, which reads, in pertinent part: "The Guaranty also provided that the guarantors would be liable to SOUTHERN for attorneys' fees and related charges if there was a default in payment." Compl. ¶ 20. While attorneys' fees were not explicitly sought in Southern's demand for judgment, subsection (b) demanded, inter alia. "costs of this action." Moreover, the issue of attorneys' fees was addressed in both the January 20, 2004 Opinion & Order and the parties' submissions on the defendants' motion for reconsideration. Third, courts in this District have permitted the issue of attorneys' fees to be raised for the first time in post-trial submissions under Fed.R.Civ.P. 54(c). which provides, in pertinent part, that "every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in the party's pleadings." (emphasis supplied); see also Morse/Diesel, Inc. v. Trinity Indus., Inc., 875 F. Supp. 165, 178 (S.D.N.Y. 1994) (ruling that where the agreement between the parties provided for recovery of attorneys' fees and costs and where defendant was not prejudiced, plaintiff was entitled to recover even though it had not plead for such relief in its complaint). Finally, it is appropriate to award Southern reasonable attorneys' fees because "[a]s a general matter of New York law . . . when a contract provides that in the event of litigation the losing party will pay the attorneys' fees of the prevailing party, the court will order the losing party to pay whatever amounts have been expended by the prevailing party, so long as those amounts are not unreasonable." F.H. Krear & Co. v. Nineteen Named Trs., 810 F.2d 1250, 1263 (2d Cir. 1987). Therefore, the defendants' first objection is without merit.

  B. Vague Timesheets

  Defendants further contend that Ciacci's timesheets are too vague to meet the Second Circuit standard for court-ordered compensation. "Applications for fee awards should generally be documented by contemporaneously created time records that specify, for each attorney, the date, the hours expended, and the nature of the work done." Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998). While defendants argue that Ciacci's timesheets are insufficiently detailed and specific, Ciacci has some 31 entries for the work he completed in connection with this case. Affirmation in Support of Counsel Fee Application ("Pl. Aff."), Exhibit ("Ex.") A. These entries are broken down into as small as one-tenth hour increments. E.g., Pl. Aff. Ex. A at 1 ("Sign Stipulation extending time to Answer to 12/18/03; Correspondence to Defense Counsel Re: Same.2 hour"). In addition to identifying the specific topic of his correspondence, conferences, and telephone calls, Ciacci references specific motions on which he worked and topics of research. Id. This degree of detail of tasks performed over the course of litigation is sufficient. See Hensley v. Eckerhart, 461 U.S. 424, 437 n. 12 (1983) ("Plaintiff's counsel, of course, is not required to record in great detail how each minute of his time was expended. But at least counsel should identify the general subject matter of his time expenditures."). While the defendants may object to Ciacci's grouping of several activities in one line item, such grouping has not created an impermissibly vague timesheet, although complete itemization is certainly the better practice.

  C. Inappropriate and Excessive Entries

  The defendants argue that Ciacci's timesheets include inappropriate entries in that Ciacci has billed for clerical tasks, such as filing papers and the preparation of two deposition notices, and that his travel time was billed at the fully hourly rate. The defendants further contend that the time Ciacci spent on certain items was excessive, such as the 30 hours he expended on the preparation of the Joint Pre-Trial Order and the Pre-Trial Memorandum of Law. The defendants' arguments are not persuasive. For example, defendants argue that the 3.5 hours Ciacci spent to prepare his attorneys' fees application was excessive because his timesheets, which must be prepared contemporaneously, should have already been prepared. The defendants overlook the fact that in addition to preparation of the fee application, this entry also includes "Review all time sheets; Correspondence to Court and Client." Pl. Aff. Ex. A at 4. Given these additional tasks, the time spent by Ciacci is reasonable.

  The defendants also call attention to the fact that Ciacci did not specifically itemize travel time and billed it at the full hourly rate. It appears from Ciacci's time sheets, however, that he has not billed defendants for travel time, or if he has, the time expended on travel was minor. Of the 31 entries, Ciacci's timesheets contain only three court appearances other than trial. The time billed for two of these three entries seem entirely reasonable give that Ciacci listed additional tasks. E.g., Pl. Aff. Ex. A at 1 ("Review file; Meet with client, prepare Summons & Complaint; Appear U.S. District Court for the Southern District of NY; File Summons & Complaint; Correspondence to Client Re: Same; Correspondence to Process Server Disbursement: $150.00 Civil Action Number Fee; 6.5 Hours"). Only one entry, wherein Ciacci bills 2.5 hours for filing his opposition to defendants' motion to dismiss, Pl. Aff. Ex. A at 2, seems excessive and it will therefore be deducted ...

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