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Sandra C. Barkley v. United Homes

July 30, 2012

SANDRA C. BARKLEY, PLAINTIFF,
v.
UNITED HOMES, LLC, UNITED PROPERTY GROUP, LLC, YARON HERSHCO, GALIT NETWORK, LLC, OLYMPIA MORTGAGE CORP., AND BENJAMIN TURNER, DEFENDANTS. MARY LODGE, PLAINTIFF,
v.
UNITED HOMES, LLC, UNITED PROPERTY GROUP, LLC, YARON HERSHCO, GALIT NETWORK, LLC, OLYMPIA MORTGAGE CORP., BAYVIEW LOAN SERVICING, LLC, BAYVIEW ASSET MANAGEMENT, LLC, U.S. BANK, N.A., AS TRUSTEE FOR BAYVIEW ASSET-BACKED SECURITIES TRUST SERIES 2007-30, AND BAYVIEW FINANCIAL MANAGEMENT CORP., DEFENDANTS.
DEWITT MATHIS, PLAINTIFF,
v.
UNITED HOMES, LLC, UNITED PROPERTY GROUP,LLC, YARON HERSHCO, GALIT NETWORK, LLC, AND ALLIANCE MORTGAGE BANKING CORP., DEFENDANTS. SYLVIA GIBBONS AND SYLVIA GIBBONS, AS ADMINISTRATOR OF THE ESTATE OF RODNEY GIBBONS, PLAINTIFFS,
v.
UNITED HOMES, LLC, UNITED PROPERTY GROUP, LLC, YARON HERSHCO, GALIT NETWORK, LLC, AND OLYMPIA MORTGAGE CORP., DEFENDANTS. MILES MCDALE AND LISA MCDALE, PLAINTIFFS,
v.
UNITED HOMES, LC, UNITED PROPERTY GROUP,LLC, YARON HERSHCO, GALIT NETWORK, LLC, ALLIANCE MORTGAGE BANKING, CORP., AND BENJAMIN TURNER, DEFENDANTS.
CHARLENE WASHINGTON, PLAINTIFF,
v.
UNITED HOMES, LLC, UNITED PROPERTY GROUP, LLC, YARON HERSHCO, GALIT NETWORK, LLC, AND ALLIANCE MORTGAGE BANKING CORP., DEFENDANTS.



The opinion of the court was delivered by: Matsumoto, United States District Judge:

MEMORANDUM AND ORDER

Pending before this court is a motion by plaintiffs Sandra C. Barkley; Mary Lodge; Dewitt Mathis; Miles and Lisa McDale; Charlene Washington; and Sylvia Gibbons in her individual capacity and as Administrator of the Estate of Rodney Gibbons (collectively "plaintiffs") to recover $3,750,890.69 in attorneys' fees and $116,902.09 in costs from defendants United Homes, LLC; United Property Group, LLC; Galit Network, LLC; Yaron Hershco (the "UH Defendants"); Olympia Mortgage Corp.; Bayview Loan Servicing, LLC; Bayview Asset Management, LLC; U.S. Bank, N.A., as trustee for Bayview Asset-Backed Securities Trust Series 2007-30; Bayview Financial Management Corp.; and Benjamin Turner (collectively "defendants"). The requested fees and costs arise from the legal work performed on behalf of plaintiffs in the consolidated actions, which commenced more than seven years ago.

For the reasons set forth below, the court grants plaintiffs' applications for fees and costs, but reduces the requested amounts.

BACKGROUND

Plaintiffs commenced these actions in 2004 and 2005 under the Fair Housing Act, 42 U.S.C. §§ 3604-05, U.S.C. §§ 1981, 1982, and 1983(3), and state and local anti-discrimination laws, including New York State Executive Law § 296(5) ("NYHRL") and Title 8 of the New York City Administrative Code ("NYCHRL"). Plaintiffs also brought state law claims for fraud and conspiracy to commit fraud, and for violations of New York General Business Law § 349 ("GBL § 349"). Plaintiffs alleged that they were victims of a property-flipping scheme whereby defendants deceived plaintiffs into purchasing defective homes financed with predatory loans. (See generally ECF No. 1,*fn1 Complaint*fn2 ("Compl.").) In essence, plaintiffs alleged that the UH Defendants acquired distressed, damaged, and defective residential properties in predominantly minority neighborhoods, made substandard and superficial repairs, and used racially targeted marketing strategies to sell the properties as "newly renovated" at substantially inflated prices, primarily to members of racial and ethnic minorities with little or no experience with homeownership and minimal financial acumen. Plaintiffs further alleged that the UH defendants conspired with appraisers, attorneys, and mortgage lenders in order to perpetrate the fraudulent scheme.

The protracted litigation in these consolidated cases required the expenditure of significant time, money, and resources by all parties. (See generally ECF No. 635-1, Plaintiffs' Memorandum of Law in Support of Attorneys' Fees and Costs ("AARP/SBLS Mem.") at 2-3.) Plaintiffs have amended their complaints during the pending actions, primarily to name the proper defendants. (See generally Compl.) There were multiple rounds of discovery and discovery disputes, extensive and numerous settlement conferences and mediation sessions, and multiple unsuccessful motions to dismiss and for summary judgment. (Id.) Furthermore, the parties expended significant time preparing for and participating at trial when attempts at settlement failed. (Id.)

On June 11, 2011, following a three-week trial, the jury found defendants liable for engaging in deceptive business practices in violation GBL § 349, fraud, and conspiracy to commit fraud, and awarded compensatory and punitive damages. (ECF Minute Entry dated 6/1/2011; ECF No. 566, Jury Verdict ("Verdict").) The jury found defendants not liable on plaintiffs' federal discrimination claims. (Verdict.)

Two groups of attorneys represented plaintiffs during the course of this litigation. The first group was composed of attorneys from AARP Foundation Litigation ("AARP"), South Brooklyn Legal Services ("SBLS"), and the law firm Cowan, Leibowitz & Latman, P.C. ("CLL"). With the exception of CLL, which appeared more recently in January 2011, when the trial date was established, this group (collectively "AARP/SBLS Attorneys") has represented plaintiffs throughout the duration of the instant actions. The second group was composed of attorneys from the law firm Scarola, Malone & Zubatov, LLP ("SMZ Attorneys"). The SMZ Attorneys began representing plaintiffs in 2007, but withdrew as counsel of record on March 17, 2009. (See Order dated March 17, 2009.) Both groups of attorneys move for an award of attorneys' fees on behalf of plaintiffs, and the court considers their motions in tandem.

The AARP/SBLS Attorneys moved for an award of attorneys' fees on April 16, 2012. (AARP/SBLS Mem. at 3 (requesting fees for Jean Constantine-Davis, Rachel Geballe, J. Christopher Jensen, Pavita Krishnaswamy, Jennifer Light, Sarah Manaugh, and Nina Simon).) Based on their requested hourly rates, the AARP/SBLS Attorneys seek $2,887,911.19 in fees, plus $85,449.38 in costs, for a total of $2,973,360.57, which includes $2,887,911.19 in fees and $85,449.38 in costs. (Id. at 2.)

The SMZ Attorneys separately moved for attorneys' fees on April 16, 2012. (See generally Memorandum of Law in Support of Scarola, Malone & Zubatov LLP's Motion for Attorneys' Fees and Costs ("SMZ Mem.").) Based on their requested hourly rates, the SMZ Attorneys seek $894,431.20, which includes 862,979.50 in fees and $31,451.70 in costs. (Id. at 5.)

DISCUSSION

As an initial matter, the court notes that plaintiffs are entitled to recover reasonable attorneys' fees because they prevailed on their deceptive practices claim pursuant to GBL § 349. See N.Y. Gen. Bus. L. § 349(h).

A determination of the appropriate award for attorneys' fees rests soundly within the discretion of the district court. See Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany, 522 F.3d 182, 190 (2d Cir. 2008) (concluding that "the district court, in exercising its considerable discretion [should] bear in mind all of the case-specific variables . . . relevant to the reasonableness of attorney's fees in setting a reasonable hourly rate"). "A district court should consider the rate a reasonable, paying client would pay, and use that rate to calculate the presumptively reasonable fee." Id. at 193. "The party seeking reimbursement bears the burden of proving the reasonableness and necessity of hours spent and rates charged." Morin v. Nu-Way Plastering Inc., No. 03-CV-405, 2005 WL 3470371, at *2 (E.D.N.Y. Dec. 19, 2005) (citing New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136 (2d Cir. 1983)).

I. Reasonable Hourly Fee

After determining that a party is entitled to fees, the court, in considering a motion for attorneys' fees and costs, must first determine the presumptively reasonable fee for the legal services performed. See Arbor Hill, 522 F.3d at 183-84. The presumptively reasonable fee "boils down to what a reasonable, paying client would be willing to pay, given that such a party wishes to spend the minimum necessary to litigate the case effectively." Simmons v. N.Y.C. Transit Auth., 575 F.3d 170, 174 (2d Cir. 2009) (citing id. at 190) (internal quotations omitted).

The Second Circuit held in Simmons that "a district court must first apply a presumption in favor of application of the forum rule," under which "district courts are directed to calculate attorneys' fees based on the rates prevalent in the forum in which the litigation was brought." Id. at 175. "[T]o overcome that presumption, a litigant must persuasively establish that a reasonable client would have selected out-of-district counsel because doing so would likely (not just possibly) produce a substantially better net result." Id. In addition, in considering the presumptively reasonable fee, the court must consider factors such as the labor and skill required, the difficulty of the legal issues presented, the attorney's customary hourly rate, and the attorney's experience and expertise. Id.

II. Reasonable Hourly Rates

A. Requested Rates for AARP/SBLS Attorneys

The AARP/SBLS Attorneys request hourly rates for two sets of attorneys: two attorneys seek hourly rates that prevail in Washington, D.C. Five attorneys seek hourly rates that prevail in New York, although one of the attorneys, J. Christopher Jensen, seeks compensation based on the hourly rates awarded in the Southern District of New York, where his office is located. (AARP/SBLS Mem. at 7.)

1. Washington, D.C. Attorneys

Jean Constantine-Davis and Nina F. Simon, two of AARP's Washington, D.C.-based attorneys, have represented plaintiffs as counsel of record in this action since the actions were commenced. (See Declaration of Jean Constantine-Davis ("Constantine-Davis Decl.") ¶ 6; Declaration of Nina F. Simon ("Simon Decl.") ¶ 1; ECF No. 635, Exhibit A to Plaintiffs' Memorandum of Law in Support of Attorneys' Fees and Costs ("AARP/SBLS Ex. A").)

a. Jean Constantine-Davis

Ms. Constantine-Davis is a senior attorney at AARP, where she has worked since 1998. (See Constantine-Davis Decl. ¶ 6; AARP/SBLS Ex. A.) She has more than twenty-five years of experience as an attorney and specializes in mortgage lending litigation. (Id. ¶¶ 5-6.)

b. Nina F. Simon

Ms. Simon was a senior attorney at AARP from 1997 until March 2009. (See Simon Decl. ¶ 5; AARP/SBLS Ex. A.) She is currently the Director of Litigation at the Center for Responsible Lending. (Id. ¶ 6.) She has more than thirty years of experience as an attorney, including more than fifteen years of experience in mortgage and lending law at AARP. (Id. ¶ 4.)

Plaintiffs request an hourly rate of $500 for both Ms. Constantine-Davis and Ms. Simon. (AARP/SBLS Mem. at 7.) In support of this rate, plaintiffs argue that Washington, D.C.-based attorneys with similar experience "are regularly [awarded] fees ranging from $600-740 per hour[.]" (Id. at 11.)

2. New York Attorneys

a. J. Christopher Jensen

J. Christopher Jensen is the Chairman and partner at CLL. He has considerable experience in New York City housing law and civil litigation and significant experience litigating cases in the United States District Courts for the Southern District of New York and the Eastern District of New York. (See Declaration of J. Christopher Jensen ("Jensen Decl.") ¶¶ 1, 5; AARP/SBLS Ex. A.) After graduating law school in 1973, he worked as staff counsel for Suburban Action Institute. (AARP/SBLS Mem. at 12.) He later served in the United States Attorney's Office in the Eastern District of New York, eventually becoming Chief of the Civil Division. (Id. at 12.) Based on this experience, plaintiffs request an hourly rate of $600-625 for Mr. Jensen. (Id. at 7.)

b. Pavita Krishnaswamy

Pavita Krishnaswamy is the Deputy Director of Litigation at SBLS. (See Declaration of Pavita Krishnaswamy ("Krishnaswamy Decl.") ¶ 1, AARP/SBLS Ex. A.) She has worked at SBLS for more than ten years in that capacity and as part of the Comprehensive Rights Unit. Ms. Krishnaswamy has experience litigating family law, housing law, and public benefits cases in New York City. (AARP/SBLS Mem. at 17-18.) Plaintiffs request an hourly rate of $375 for Ms. Krishnaswamy, but they do not seek fees for Ms. Krishnaswamy's legal services at trial. (Id. at 3, 7.)

c. Jennifer Light

Jennifer Light is a staff attorney at SBLS, where she has worked since 2000. (See Declaration of Jennifer Light ("Light Decl.") ΒΆ 1; AARP/SBLS Ex. A.) Since 2009, Ms. Light has worked ...


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