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Diaz v. Paragon Motors of Woodside

September 28, 2007

EDDIE M. DIAZ, PLAINTIFF,
v.
PARAGON MOTORS OF WOODSIDE, INC. AND AMERICREDIT FINANCIAL SERVICES, INC. DEFENDANTS.



The opinion of the court was delivered by: Sifton, Senior Judge.

MEMORANDUM OPINION AND ORDER

Eddie Diaz brings this action against Paragon Motors of Woodside, Inc. ("Paragon") and Americredit Financial Services, Inc. ("Americredit") to recover attorneys' fees and disbursements in the amount of $86,569.52, pursuant to Rule 54(d) of the Federal Rules of Civil Procedure*fn1 .

This motion for fees stems from an action Diaz commenced against Paragon Motors alleging that defendant Paragon Motors violated (1) the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq.,*fn2 (2) the Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691,*fn3 (3) New York's Vehicle & Traffic Law § 417-a*fn4 (4) New York's "Used Car Lemon Law," New York General Business Law § 198-b,*fn5 (5) the Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. § 2310,*fn6 by breaching (a) express warranties (b) implied warranties and (c) revocation of acceptance, and (6) New York General Business Law § 349 by its deceptive sales practices.*fn7 In addition, plaintiff alleged that (7) co-defendant Americredit should be held liable for damages on claims which plaintiff asserts against co-defendant Paragon, pursuant to 16 C.F.R. § 433.2 (the "Holder Rule"), as a provider of consumer credit.

On March 29, 2006, I issued a Memorandum Opinion and Order with respect to plaintiff's motion for partial summary judgment on liability with respect to the TILA, ECOA and N.Y. Veh. & Traf. Law § 417-a claims and defendants' cross motions for summary judgment on all claims. The March decision granted plaintiff summary judgment on liability with respect to its claims under TILA and N.Y. Veh. & Traf. Law § 417-a, and on N.Y. Gen. Bus. Law § 349 to the extent that such claim was premised on violations of TILA and N.Y. Veh. & Traf. Law § 417-a.*fn8 I granted defendants' summary judgment on all other claims with the exception of the MMWA breach of implied warranty claim and the MMWA revocation of acceptance claim. In June, the parties filed a joint stipulation voluntarily discontinuing the MMWA claim.

I held a bench trial on October 11, 2006 to determine whether the plaintiff was entitled to damages as a result of defendants' violations of TILA and N.Y. Veh. & Traf. Law § 417-a and N.Y. Gen. Bus. Law §349. In my January 29, 2007 Memorandum Opinion and Order following the trial, I awarded plaintiff $1000 in damages against Paragon Motors for violations of TILA, and $7,890 in damages against both Paragon Motors and Americredit for violations of N.Y. Veh. & Traf. Law § 417-a. I also concluded that defendants violated New York General Business Law § 349, but I did not award Diaz any damages for prevailing on this claim because the damages were duplicative of the damages recovered under TILA and N.Y. Veh. & Traf. Law § 417-a. Plaintiff thereafter applied for attorney's fees and disbursements.

For the reasons set forth below, I conclude that plaintiff is entitled to attorneys fees and disbursements in the total amount of $67,353.52.

What follows sets forth the findings of fact and conclusions of law on which these determinations are based as required by Rule 58 of the Federal Rules of Civil Procedure. Fed. R. Civ. P. 58(a)(1).

BACKGROUND

Familiarity with this Court's earlier decisions, findings and conclusions is assumed.*fn9

DISCUSSION

Amount of Fees and Disbursements Requested Plaintiff requests an award of $72,665.50 in fees and $13,914.02 in disbursements pursuant to Rule 54(d) of the Federal Rules of Civil Procedure for attorneys fees and disbursements. Defendants argue that the amount of fees requested is unwarranted because of plaintiff's limited success. In addition, defendants object to the billing of clerical work at attorney and paralegal rates, the billing of the expert witness fee above the $40.00 daily witness fee provided by 28 U.S.C.A. §1821 and §1920, the inclusion of Federal Express fees and the inclusion of pre-litigation fees. Defendants also object to calculating attorney fees using hourly rates for attorneys practicing in the Southern District of New York (as requested by plaintiff's counsel) rather than using Eastern District rates.

TILA Under 15 U.S.C. §1640, a prevailing plaintiff can recover reasonable costs and attorney fees*fn10 as determined by the court. I awarded Diaz $1000 in damages against defendant Paragon Motors*fn11 for prevailing on this cause of action, as stated in my March 29, 2006 Memorandum Opinion and Order.

N.Y. Veh. & Traf. Law § 417-a

New York Vehicle and Traffic Law § 417-a also allows the court to award a prevailing plaintiff reasonable attorney fees*fn12.

In my January 29, 2007 Memorandum Opinion and Order, I found that Diaz suffered a loss of $2,630 (the price Diaz paid, $16,590, minus the retail value at the time Diaz purchased the vehicle -6-). (Trial Transcript, 27-28.) Accordingly, I awarded Diaz $7,890, which is three times the damage figure of $2,630, in damages against both Paragon and Americredit. which was $13,960*fn13

New York General Business Law § 349

In my January 29, 2007 Memorandum Opinion and Order, I found that Diaz was injured as a result of defendants' deceptive acts at the time the TILA and N.Y. Veh. & Traf. Law § 417-a violations occurred. Plaintiff showed that defendants' acts met all three elements needed for violating N.Y. Gen. Bus. Law § 349. Thus, defendants were liable for violations of N.Y. Gen. Bus. Law § 349. However, I denied awarding additional damages under N.Y. Gen. Bus. Law § 349 because I already awarded Diaz actual damages for these same injuries under TILA and N.Y. Veh. & Traf. Law § 417-a. Compensatory damages can only be awarded one time for an injury. Gentile v. County of Suffolk, 926 F.2d 142, 153 (2d Cir. 1991); Wickham Contracting Co. v. Board of Education, 715 F.2d 21, 28 (2d Cir. 1983).

Fees

The Second Circuit uses the "presumptively reasonable fee," known as the "lodestar figure" (or "lodestar") in other circuits, to determine reasonable attorneys fees for federal claims. See Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 493 F.3d 110 (2d. Cir. July 12, 2007); Cruz v. Local Union No. 3 of the International Brotherhood of Electrical Workers, 34 F.3d 1148, 1159 (2d Cir. 1994); Heng Chan v. Sung Yue Tung Corp., No. 03-CV-6048, 2007 WL 1373118 (E.D.N.Y. May 8, 2007). Accordingly, the presumptively reasonable fee award is the appropriate method to determine fees for the TILA claim. In addition, the presumptively reasonable fee award, or lodestar, is used to make a fee determination in cases concerning claims of N.Y. Gen. Bus. Law § 349 and N.Y. Veh. & Traf. Law § 417-a. See, e.g., Independent Living Aids, Inc. v. Maxi-Aids, Inc., 25 F.Supp.2d 127, 131-32 (E.D.N.Y. 1998) (awarding attorney fees on a N.Y. Gen. Bus. Law § 349 claim based on the lodestar calculation); General Motors Corp. v. Villa Martin Chevrolet, Inc., 240 F.Supp.2d 182 (E.D.N.Y. 2002) (using the lodestar calculation to award attorney fees in a case involving N.Y. Veh. & Traf. Law § 496 because "New York courts typically apply a 'lodestar' analysis when setting fees pursuant to a fee-shifting statute") (internal citations omitted).

The presumptively reasonable fee "is arrived at by multiplying the number of hours reasonably expended on the litigations . . . by an hourly rate." Kirsch v. Fleet Street, Ltd., 148 F.3d 149, 172 (2d Cir. 1998). In the Second Circuit "any attorney . . . who applies for court-ordered compensation . . . must document the application with contemporaneous time records." These records should specify, for each attorney, the date, the hours expended and the nature of the work. New York State Ass'n for Retarded Children, Inc., v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983). However, "[i]t is not required that counsel describe in great detail how billable time was spent; it is sufficient to identify the general subject matter of time expenditures." Aiello v. Town of Brookhaven, No. 94-CV-2622, 2005 WL 1397202, *9 (E.D.N.Y. 2005)(citing Perdue v. City Univ. of New York, 13 F.Supp.2d 326, 345 (E.D.N.Y. 1998).

Plaintiff seeks an award of attorney fees and costs in the amount of $86,569.52 pursuant to Fed. R. Civ. P. 54 (d) for prevailing on his claims against the defendants under the Truth in Lending Act, New York Vehicle and Traffic Law § 417-a and New York General Business Law § 349. Plaintiff has submitted contemporaneous time records in support of this fee motion. In addition, plaintiff has submitted attorney and paralegal affirmations as to the truthfulness of the time submissions and an affidavit from the office manager and bookkeeper of plaintiff's lawyer's firm to substantiate the payments for costs and expenses. Plaintiff has also submitted an affidavit from Allen J. Charne, the executive director of the New York City Bar Association's Legal Referral Service stating that his organization was unable to find qualified attorneys in the boroughs of Queens, Brooklyn or the Bronx willing to handle consumer protection cases relating to automobile sales issues*fn14 .

Plaintiff's memorandum in support of this fee motion discusses the appropriate hourly rates for attorneys in both the Eastern and Southern Districts of New York. It also discusses the qualifications and experience of each staff member from Sadis & Goldberg who worked on this case in order to support their requested hourly rates.

Applicable Community and Prevailing Market Rates

Plaintiff believes his attorneys should be compensated at the rates of attorneys practicing in the Southern District of New York, which are higher hourly rates than those found in the Eastern District. Defendants, in their initial Memorandum of Law in Opposition to Plaintiff's Motion for Attorneys' Fees did not oppose plaintiff's request for attorney compensation at Southern District rates. However, after the Second Circuit's decision in Arbor Hill was issued, defendants submitted a supplemental ...


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