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Maureen Regan v. Paula W. Conway

March 14, 2011

MAUREEN REGAN, PLAINTIFF,
v.
PAULA W. CONWAY, DEFENDANT.



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

MEMORANDUM OF DECISION AND ORDER

Following the jury verdict in this case, the Court rendered a decision on May 10, 2010, in which the request by the plaintiff Maureen Regan to recover her reasonable attorneys' fees and court costs from the defendant Paula Conway, was granted. In response, in his motion for attorneys' fees and costs, plaintiff's counsel stated that "the fair and reasonable amount of plaintiff's attorneys fees and costs to be awarded in this matter is $203,617.40." This includes the attorneys' fees in the total amount of $195,857.50 plus costs of $7,759.90.

Plaintiff's counsel stated in his declaration that the amount of his fee "is based upon contemporaneous time records maintained by my office, entries made into my computer based Timeslips time billing software program, and a reconstruction of the extensive file maintained by my office in this matter." (Pltf's Declaration at 2).

Plaintiff's counsel also advised the court that "at various times I was assisted in this matter by Eric Evans and Zachary Kozak, two junior attorneys who worked under my supervision." (Pltf's Declaration at 2). Annexed to the plaintiff's attorney's motion are exhibits consisting of time records maintained in his office, together with a summary. Plaintiff's counsel also explained that not all the time spent on this matter was reflected in the time records. For example, while on this trial, he did not make entries in his time records.

It was also noted by plaintiff's counsel that his retainer agreement with Maureen Regan was set at $325.00 per hour, with a possible increase. He states that he is staying with the $325.00 per hour notwithstanding the extensive litigation and the trial that occurred in this case. Also, according to plaintiff's counsel, his hourly costs of $325.00 for an attorney of his experience in a Manhattan based practice, is, in his view, "far below current market value."

Plaintiff's counsel was admitted to practice in New York in 1982 and has "appeared in and tried cases before virtually all of the courts in New York City and the surrounding communities." He is admitted to practice in the United States District Courts for the Southern and Eastern Districts, in the Second Circuit Court of Appeals and before the United States Patent and Trademark Office. Currently, most of his practice is devoted to representing clients in the entertainment industry.

In opposition to the plaintiff's application for attorneys' fees, the defendant's counsel has asserted a three pronged defense. First, the defendant contends that the plaintiff should not be awarded any counsel fees because, although the plaintiff prevailed on her breach of the implied covenant of good faith and fair dealing cause of action, so did the defendant on her counterclaim for breach of fiduciary duty, and the net result was that the plaintiff owes Conway at least $25,000. Therefore, asserts the defendant, there was no recovery by the plaintiff, and under those circumstances the only award of attorneys' fees which is reasonable is "no fee at all." See Farrar v. Hobby, 506 U.S. 103, 115, 113 S.C. 566, 121 L.Ed.2d 494 (1992).

The second defense to the award of attorneys' fees to the plaintiff is the general rule -- asinterpreted by defense counsel -- that "it is rarely proper to award fees in an amount that exceeds the amount involved in the litigation." F.H. Krear & Co. v. Nineteen Named Trustees, 810 F.2d 1250, 1264 (2d Cir. 1987). Here, the jury awarded Conway the sum of $65,000 on her counterclaim for breach of fiduciary duty, $25,000 more than the jury awarded the plaintiff on her one successful claim. Further, asserts defense counsel, even if the Court declines to offset the defendant's recovery from the plaintiff's verdict, the plaintiff only received a verdict in the sum of $40,000 and now the plaintiff is requesting $203,617.40 in counsel fees and costs. In the defendant's view, an attorneys' fee of between 5% and 25% of the plaintiff's recovery, namely between $2,000 and $10,000, would be fair and reasonable.

The third contention raised by the defendant is a multiple factor: (1) There are no contemporaneous time records for those services involved in billings of $52,182.50; (2) the plaintiff seeks to recover a multitude of fees, in the sum of $72,554.50, which are unrelated to her claim for breach of the implied covenant of good faith and fair dealing; (3) the plaintiff improperly seeks compensation for fees, in the sum of $2,775.00, generated in connection with the taking of depositions not relied upon at trial; the issuing of trial subpoenas to witnesses never called at the trial; work on an expert report not used at the trial; and work on proposed jury instructions never filed with the court or served on opposing counsel; (4) plaintiff is requesting fees in connection with a small claims lawsuit between the parties filed prior to this action, in the sum of $877.50; and (5) finally, according to defendant's counsel, the plaintiff improperly seeks to recover for her attorney's time in making the instant fee application, in the sum of $3,737.50.

Summarizing the opposition to the plaintiff's fee application in the total sum of $203,617.40, defense counsel contends that this sum -- at the least -- should be reduced by the above named items, namely the sums of $52,182.50, $72,554.30, $2,775.00, $877.50 and $3,737.50. Deducting these sums from the plaintiff's fee request of $203,617.40 would leave the sum of $71,490.60. However, defendant's counsel also asserts that the net sum should be further reduced because many of the plaintiff's billing entries pertain to the litigation as a whole, as opposed to legal work for the plaintiff's only successful claim for breach of the covenant of good faith and fair dealing. The defendant's solution to this problem is to review the claims by the plaintiff that were involved in this lawsuit. There were (1) plaintiff's claim for breach of the covenant of good faith and fair dealing, (2) tortious interfering with contract and unjust enrichment, (3) injunctive relief, and (4) declaratory judgment. Also, there were defendant's counterclaims for breach of contract and breach of fiduciary duty. Defendant's counsel contends that the plaintiff prevailed on only one of these claims, namely the breach of the implied covenant of good faith and fair dealing. Therefore, says the defendant's counsel, the plaintiff should recover only one-sixth or (16%) of the remaining $71,490.60, which is the sum of $11,438.50, should the Court base its award on the plaintiff's submitted time entries.

In reply to the defendant's contentions, the plaintiff's counsel asserts that this is a case where a legal fee was agreed upon in a contract signed by the defendant. Therefore, in a non-contingent fee case, such as this, the amount recovered is just one of the criteria the Court should consider in setting the fee. See Diamond D. Enterprises USA, Inc. v. Steinsvaag, 979 F.2d 14 (2d Cir. 1992). In addition, the plaintiff's counsel complains that the defendant chose to litigate the case to the maximum extent, including the imposition of eight counterclaims. Also, the plaintiff's counsel asserts that he has furnished the required billing records, "which are the contemporaneous time records maintained by counsel," there being no requirement that the actual invoices be produced. (Plaintiff's Reply Memorandum at 5).

The attorney for the plaintiff has explained why he does not have time records as to all the legal services he has performed in this case. He states "That a significant amount of times I spent on this matter was not billed." (Reply Declaration at 6). He further explains that the defendant produced "over 30,000 pages of documents, which he personally reviewed at all hours and in different places, but did not keep track of such hours, nor am I making a claim for same." (Reply Declaration at 6). He concedes that "There was much time that was not recorded or recreated," and that his time records "May not be as certain as those maintained by a large law firm with staff devoted exclusively to such matters." (Reply Declaration at 7, 8). However, he also contends that he kept contemporaneous written time records and entered his time contemporaneously into his computer based billing system, "as the time was spent."

I. Discussion

A. The ...


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