The opinion of the court was delivered by: Matsumoto, United States District Judge:
On June 4, 2009, plaintiff/counterclaim defendant Abraham Leser ("Leser") commenced this action for declaratory judgment that certain personal guaranties for two real estate loan development projects are not enforceable against him. (ECF No. 1, Complaint.) Defendant/counterclaim plaintiff U.S. Bank National Association ("USB") counterclaimed, alleging two claims for breach of contract and one claim of unjust enrichment against Leser based on the same development projects. (ECF No. 11, Answer and Counterclaim.) On January 14, 2013, after an eight-day trial, a jury returned a verdict in favor of USB in the amount of $38,289,575.66, finding Leser liable for breach of two personal guaranties (the "Guaranties") executed in connection with two real estate development loans known as the "Philadelphia Loan" and the "Seattle Loan."*fn1 (See ECF No. 189, Jury Verdict.) Because the parties intended to submit post-trial briefing regarding the amount of interest, attorney's fees, and costs (see ECF Nos. 199-201; Order dated 1/31/13 (extending briefing schedule)), judgment was not entered in this case immediately after trial and the jury's verdict. The court notes that, pursuant to Federal Rule of Procedure 58(e), ordinarily the entry of judgment may not be delayed in order to tax costs or award fees, however, the parties agreed that all submissions, including the amount of interest due, would be fully submitted by March 18, 2013. (See Order dated 1/31/13.)
On January 28, 2013, USB submitted its initial motion for interest, attorneys' fees, and costs (ECF No. 196, USB's Memorandum of Law in Support of Motion ("Mem.")), as well as the supporting affidavit of Steven Cooper, Esq., USB's lead counsel from the firm of Reed Smith, dated January 28, 2013 (ECF No. 197, Affidavit of Steven Cooper, Esq. ("Cooper 1/28/13 Aff.")), and the affidavit of Gregg Gehrke, USB's vice president, dated January 28, 2013 (ECF No. 198 ("Gehrke 1/28/13 Aff.")). With the court's permission, USB also submitted a first supplemental affidavit from Mr. Cooper, dated February 8, 2013 (ECF No. 202, Supplemental Affidavit of Steven Cooper, Esq. ("Cooper 2/8/13 Aff.")) and a first supplemental affidavit from Mr. Gehrke, also dated February 8, 2013 (ECF No. 203, Supplemental Affidavit of Gregg Gehrke ("Gehrke 2/8/13 Aff.")).
On March 8, 2013, Leser timely submitted a memorandum in opposition to USB's motion for interest, attorneys' fees, and costs. (ECF No. 216, Leser's Memorandum in Opposition to USB's Motion ("Opp.").)
On March 18, 2013, USB filed a reply memorandum (ECF No. 217, USB's Reply Memorandum ("Reply")), and a second supplemental affidavit from Mr. Cooper, dated March 18, 2013 (ECF No. 219, Second Supplemental Affidavit of Steven Cooper, Esq. ("Cooper 3/18/13 Aff.")), and a second supplemental affidavit from Mr. Gehrke, dated March 18, 2013 (ECF No. 218, Second Supplemental Affidavit of Gregg Gehrke ("Gehrke 3/18/13 Aff.")).
Pursuant to the court's order dated May 1, 2013, USB also filed a letter on May 3, 2013 setting forth USB's updated amounts for the principal and interest due on both loans as well as the amount of a recent advance to the receiver for the Seattle Property (ECF No. 226, USB's Letter dated 5/3/13), and a third supplemental affidavit of Gregg Gehrke in support (ECF No. 227, Third Supplemental Affidavit of Gregg Gehrke dated 5/3/13 ("Gehrke 5/3/13 Aff.")). Leser filed a letter in response to USB's May 3, 2010 submission later that same day. (ECF No. 228, Leser's Letter dated 5/3/13.)
Lastly, pursuant to the court's order dated May 9, 2013, USB also filed a letter with the court on May 10, 2013, providing the updated amounts for the principal and interest due on both loans without the addition of the advance to the Seattle receiver. (ECF No. 299, USB's Letter dated 5/10/13 ("Updated Interest Ltr.").)
In support of its motion, USB argues that it is entitled to pre- and post-judgment interest, fees, and costs based on the personal Guaranties Leser executed in relation to the Philadelphia and Seattle Loans. (See Mem. at 1.) Each Guaranty at issue provides that Leser "unconditionally guarantees and becomes surety for the full and timely payment, whether by declaration, acceleration or otherwise, by Borrower of all principal, interest, and all fees and costs of [USB] now or hereafter to be paid by Borrower pursuant to the documents and instruments that evidence and secure the Loan, including without limitation, the Note ('the Loan Documents')." (Def. Trial Exhibits X4 and Y4 (Philadelphia Guaranty), at 1; Def. Trial Exhibits T8, U8 and V8 (Seattle Guaranty), at 1.) USB contends that the loan agreement documents executed in connection with each loan (the "Philadelphia Loan Agreement" and the "Seattle Loan Agreement," respectively) provide for various types of interest amounts: "loan" interest, default interest, a per diem interest amount, and late charges. (Mem. at 1-4.) As of May 10, 2013, USB's calculation of the Loans' respective principal plus requested interest was $23,435,780.94 for the Philadelphia Loan, and $27,582,192.77 for the Seattle Loan.*fn2
(Updated Interest Ltr. at 1-2.)
The jury also determined that USB is entitled to attorneys' fees. (See ECF No. 189, Jury Verdict.) USB thus requests attorneys' fees in the total amount of $3,471,418.65 for services rendered by Reed Smith. (Reply at 10 (reflecting total amount of legal fees and costs sought by USB for services rendered through March 18, 2013).) The contemporaneous time records supporting USB's fee request for Reed Smith's attorneys are attached to Mr. Cooper's Affidavits dated January 28, 2013, February 8, 2013, and March 18, 2013. (See Cooper 1/28/13, Ex. B; Cooper 2/8/13 Aff., Ex. B; and Cooper 3/18/13 Aff., Ex. B.) USB also requests attorneys' fees and costs in connection with the Seattle Loan foreclosure proceeding in the amount of $8,560.80, for services rendered by the firm of Miller Nash LLP. (Cooper 2/8/13 Aff. ¶ 11.)
Leser's principal challenge to USB's request for interest is that USB "does not adequately explain its calculation of interest." (Opp. at 2-4.) Additionally, according to Leser, the Guaranties at issue only obligate him to pay the "principal, interest and all fees and costs of the Bank," which should not be interpreted to include USB's requested "late charges." (Id. at 4.) Instead, Leser asks the court to view USB's requested late charges "in essence, as liquidated damages," which are not appropriate in this case because the amount of actual damages suffered by USB has been calculated. (Id. (citing Truck Rent-A-Center, Inc. v. Putnam Farms 2nd Inc., 41 N.Y.2d 420, 423-24 (1977).)
Leser also argues that USB's application for attorneys' fees should be denied because (1) USB did not attach a retainer agreement to its motion, as purportedly required by New York law (id. at 5-6); (2) it is unclear what USB actually paid to its counsel (id. at 6-7); (3) USB failed to provide sufficient information to satisfy the Johnson factors for the court to determine a reasonable hourly rate (id. at 7-10); (4) USB's motion seeks fees for its "missteps," such as USB's unsuccessful motions for summary judgment, a motion to compel, and USB's efforts to serve non-party Robert Lovy with a subpoena in 2010 (id. at 10-13); (5) USB seeks fees for overstaffed work (id. at 13-14); (6) USB seeks fees for billed work whose descriptions contain "critical words" that are redacted (id. at 14-15); and (7) USB's overall failure to carry its burden to demonstrate its entitlement to fees because it used block billing and "unilaterally" redacted certain work descriptions, after unsuccessfully asking the court for permission to file its application under seal (id. at 15-16). Leser further argues that USB has failed to provide adequate documentation or "backup" for its requested expenses, such as transcript costs and courier services. (Id. at 16.)
Lastly, Leser contends that granting USB's motion would result in USB enjoying an improper "double-dip" recovery. (Id. at 17.) Leser asserts that USB has commenced foreclosure proceedings against the Borrowers for both Loans and that a Washington state court has appointed a receiver of rents for the Seattle property, but USB has "fail[ed] to concede or advise this court that any rents received, or any proceeds of a foreclosure sale (if it has not occurred) would be credited against any judgment" against Leser. (Id.) According to Leser, USB "cannot be permitted to receive rents without credits being applied to any judgment entered and, if and when either or both of the subject properties are sold, additional credits against any judgment against [Leser] must be recognized." (Id.)
USB's reply in support of its fees motion emphasizes that USB's interest calculations, which Leser claims are unexplained, are in fact provided in the series of monthly commercial loan invoices attached to the Affidavit of Gregg Gehrke dated January 28, 2013 (the "loan invoices"). (Reply at 2-3.) The monthly loan invoices demonstrate what LIBOR rate was in effect and how the resulting interest was compounded onto the balances due and owing. (Id.) With respect to Leser's insistence that USB's requested "late charges" are disguised liquidated damages, USB argues that the late charges are indeed "fees" that come within the meaning of the relevant Guaranties' provision for payment by Leser of "all principal, interest and all fees and costs of the Bank." (Id. at 3-4.) USB also observes that the Loan Agreements provide for liquidated damages, even if the court accepts Leser's characterization of the late charges as liquidated damages. (Id. at 4.)
Furthermore, USB asserts that Leser's general objection to USB's requested fees and hourly rates is too vague and conclusory to justify a reduction in its requested fees. (Id. at 4-5 (citing cases).) USB also argues that the lack of a retainer agreement in its motion has no significance where, as here, the relevant state law rules requiring submission of a retainer agreement expressly do not apply to "'representation where the attorney's services are of the same general kind as previously rendered to and paid for by the client.'" (Id. at 5 (quoting 22 N.Y.C.R.R. § 1215.2(2)).) Because USB is a longstanding client of Reed Smith and its previous counsel in this case, Miller Nash, neither of these firms has retainer agreements with USB. (Id. (citing Gehrke 3/18/13 Aff. ¶ 15).) Moreover, contrary to Leser's suggestion in his opposition, USB denies an arrangement between USB and its counsel such that USB's counsel would only seek attorneys' fees for this case from Leser himself, and not from USB. (Id. at 5-6 (citing Gehrke 3/18/13 Aff. ¶ 17).)
USB's reply brief also rebuts Leser's argument that the nature of this litigation does not justify USB's requested hours and rates for its attorneys. According to USB, this case was commenced by Leser, who "strenuously fought this case every step of the way, and to the very end," and which required labor-intensive discovery, a total of 22 depositions, including two expert witness depositions, pretrial motions, and several discovery motions. (Id. at 6.) Additionally, the court's denial of USB's summary judgment motion does not preclude awarding fees and costs for USB's unsuccessful summary judgment motion where, as here, USB ultimately prevailed at trial. (Id. at 6 n.6 (citing cases).) USB further observes that Leser's arguments regarding Reed Smith's supposed overstaffing and partial redactions of its time entries are vague, devoid of specific reference to any particular time entries, and are generally unsupported by the applicable law in New York, which permits a fee award even when billing records are partially redacted. (Id. at 7-9 (citing cases).)
Moreover, with respect to Leser's argument that the instant judgment amount should be offset by the amount of any rents or sale proceeds received by the court-appointed receivers for the Philadelphia and Seattle properties, USB argues that only those receivers are authorized to collect those rents, not USB, and thus Leser's "contentions of 'double-dipping' on collection of rent or proceeds of sales is fabricated." (Id. at 9.) Finally, USB's reply brief provides the documentation or "back-up" for the costs of various disbursements, e.g., court filing fees and duplicating costs, which Leser complains were not attached to USB's initial motion papers. (Id.)
A federal district court sitting in diversity must apply the choice of law rules of the forum in which it sits. See Bakalar v. Vavra, 619 F.3d 136, 139 (2d Cir. 2010). Under New York law, where a case involves a contract with a clear choice-of-law provision, "[a]bsent fraud or violation of public policy, a court is to apply the law selected in the contract as long as the state selected has sufficient contacts with the transaction." Hartford Fire Ins. Co. v. Orient Overseas Containers Lines (UK) Ltd., 230 F.3d 549, 556 (2d Cir. 2000). This principle, however, occasionally contradicts the general rule that where neither party raises the issue of choice-of-law and cite exclusively to New York law, such "'implied consent' . . . is sufficient to establish choice of law'" in the Second Circuit. Arch Ins. Co. v. Precision Stone, Inc., 584 F.3d 33, 39 (2d Cir. 2009) (quoting Golden Pac. Bancorp v. FDIC, 273 F.3d 509, 514 n. 4 (2d Cir. 2001)).
Here, both the Philadelphia and Seattle Guaranties specify that
Virginia law should apply in "matters of construction, validity and
performance." (USB Trial Exhibits X4, Y4, T8, U8, and V8.) Neither
party's legal memoranda submitted in connection with USB's motion for
fees and costs addresses which state's laws should be applied to
resolve the instant motions, but both parties cite exclusively to New
York law in their legal memoranda. Under these circumstances, courts
in this circuit have applied the law of a state other than the one
specified in a contract's choice-of-law provision where the parties
have failed to address the issue and also cited exclusively to the
alternative state's laws. See, e.g., Berkshire Bank v. Tedeschi, No.
11-cv-0767, 2013 WL 1291851, at *4, 13 (N.D.N.Y. Mar. 27, 2013)
(applying New York law to prevailing summary judgment movant's request
for attorneys' fees
provided by contract at issue, where neither party had explicitly
addressed choice-of-law but the "parties' briefs assume that New York
law controls the issues presented in this case"); Prince of Peace
Enters., Inc. v. Top Quality Food Mkt., LLC, 760 F. Supp. 2d 384,
396-97 (S.D.N.Y. 2011) (finding that parties "consented to application
of New York law by briefing all issues under New York law," despite
evidence that disputed contract was executed in California); see also
Lehman v. Dow Jones & Co., 783 F.2d 285, 294 (2d Cir. 1986) (noting
that court was not obliged to undertake an investigation of potential
differences between New York and California law and may instead apply
New York law when that is the sole law cited by the parties). Because
neither party has cited to anything other than New York law or
addressed the choice-of-law issue in their legal memoranda,*fn3
the court finds that the parties have consented to the
application of New York law to this motion.
II.USB's Request for Interest
Under New York law, prejudgment interest is typically recoverable, as a matter of right, in an action for breach of contract. Graham v. James, 144 F.3d 229, 239 (2d Cir. 1998) (citing Adams v. Lindblad Travel, Inc., 730 F.2d 89, 93 (2d Cir. 1984)); Gussack Realty Co. v. Xerox Corp., 224 F.3d 85, 93 (2d Cir. 2000) ("[S]section 5001 [of the N.Y. C.P.L.R.] imposes an affirmative mandate on trial courts; they have no discretion not to award prejudgment interest under New York law."); see also
N.Y. C.P.L.R. § 5001(a) ("Interest shall be recovered upon a sum awarded because of a breach of performance of a contract.").
N.Y. C.P.L.R. § 5004 provides that the rate of interest "shall be 9 per centum per annum, except where otherwise provided by statute." Parties may agree, however, by contract to a different rate of interest than that provided for in section 5004. See Astoria Fed. Sav. & Loan Ass'n v. Rambalakos, 49 A.D.2d 715 (2d Dep't 1975) (holding that "the contract rate, rather than the statutory rate, governs the rate of interest after maturity and before judgment"); Neura Commc'ns, Inc. v. Telron Commc'ns USA, Inc., No. 00--cv--9167, 2002 WL 31778796, at *3 (S.D.N.Y. Nov. 15, 2002) ("If the contract provides a rate at which interest is to be calculated, then the contractual rate, rather than the statutory rate of nine percent per year as set forth in [N.Y. C.P.L.R.] Section 5004, governs.").
i.Prejudgment Interest: Loan Interest, Default Interest, and Per Diem Rates
As noted above, Leser's main contention in opposition to USB's motion seeking prejudgment interest in the amounts prescribed by the Philadelphia and Seattle Loan Agreements is that USB's interest calculations are not adequately explained. (Opp. at 2-4.) The court agrees with USB, however, that the commercial loan invoices attached to Mr. Gehrke's Affidavit dated January 28, 2013 plainly track the application of particular LIBOR interest rates and the resulting compounding of that interest onto the Loans' respective principal amounts. (See Gehrke 1/28/13 Aff., Exs. A, B; see also Reply at 2-3.) There is thus no merit to Leser's criticism that USB's calculation of its requested interest amounts under the Loan Agreements is unclear or unascertainable.*fn4
Further, as specified in the Agreements, the loan interest rate was calculated at LIBOR plus 2.5% and, after the Loans were in default, the default interest rate was calculated at the "loan interest rate" plus 5%, or, put another way, LIBOR plus 7.5%. (See Gehrke 1/28/13 Aff., Exs. A, B; see also Mem. at 2-3; Reply at 2-3.) Therefore, as of May 10, 2013, applying the foregoing interest rate, USB seeks $23,432,853.27 for the Philadelphia Loan, and $27,564,088.83 for the Seattle Loan, representing the principal of the two loans plus the applicable loan and default interest amounts calculated in the manner discussed above. (Def. Updated Interest Ltr. at 1-2.)
After reviewing USB's submissions and invoices detailing the compounding and calculation of these amounts, the court finds them to be accurate and USB will be awarded a total of $50,996,942.10, representing the principal and interest on both loans as of May 10, 2013. Additionally, as discussed infra, interest will accrue on each loan at the per diem rates set forth in USB's May 10, 2013 letter and late charges will also be added to the overall amounts due and owing on each loan.
As discussed above, Leser objects to USB's inclusion of late charges in the Guaranties' provision obligating Leser to pay USB, inter alia, the "fees and costs of the Bank." (Opp. at 4.) Leser asserts that USB's requested late charges should not be viewed as a type of fee or cost specified in the Guaranties, and also that the late charges at issue are actually liquidated damages in disguise. (Id.)
As an initial matter, there is nothing remarkable about USB's request for late charges as part of the fees and costs to which it is entitled from Leser according to the Guaranties' express terms. Courts in the Second Circuit have readily awarded late charges of the type sought by USB where, as here, the contract at issue provides for the recovery of fees and costs and the party seeking recovery submits sufficient documentary support. See, e.g., Red Line Air, LLC v. G. Howard Assocs., Inc., No. 09-cv-3928, 2010 WL 2346299, at *5 (E.D.N.Y. May 11, 2010), adopted by, No. 09-cv-3928, 2010 WL 2348643 (E.D.N.Y. June 8, 2010); Coated Fabrics Co. v. Mirle Corp., No. 06-cv-5415, 2008 WL 163598, at *6 (E.D.N.Y. Jan. 16, 2008) (magistrate judge's award of late charge adopted by district judge); Orix Fin. Servs., Inc. v. Thunder Ridge Energy, Inc., No. 01-cv-4788, 2006 WL 587483, at *22 (S.D.N.Y. Mar. 8, 2006) (same); Phoenixcor, Inc. v. Izzy Pnini, No. 03-cv-7590, 2005 WL 2063829, at *1-2 (S.D.N.Y. Aug. 26, 2005).
Moreover, Leser's assertion that USB's requested late charges are "in essence, liquidated damages," is wholly unsupported by citation to law or any facts adduced at trial or in USB's instant motion. (See Opp. at 4.) While Leser's recitation of when liquidated damages are appropriate under New York law may be correct (see id. at 4-5), Leser's blanket statement that the late charges are "in essence" liquidated damages is unpersuasive.
Therefore, as set forth in USB's letter dated May 10, 2013, USB is awarded $2,927.67 in late charges with respect to the Philadelphia Loan, and $18,103.94 in late charges with respect to the Seattle Loan. (Updated Interest Ltr. at 1-2.) Additionally, the per diem rate of interest for the Philadelphia Loan after May 10, 2013 is $3,754.19431. (Id. at 1.) The per diem interest rate for the Seattle Loan after May 10, 2013 is $4,433.61. (Id. at 2.)
After adding the late charges and per diem interest as described above, and after calculating loan interest and default interest as previously discussed, the court awards USB (i) $23,435,780.94, representing the total amount due and owing on the Philadelphia Loan as of May 10, 2013; and (ii) $27,582,192.77, representing the total amount due and owing on the Seattle Loan as of May 10, 2013.
III.USB's Request for Attorneys' Fees
A determination of the appropriate award for attorneys' fees rests soundly within the discretion of the district court. See Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). "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)).
In Arbor Hill Concerned Citizens Neighborhood Association v. County of Albany, the Second Circuit explained that, when determining the reasonableness of attorneys' fees, the preferred course is: for the district court, in exercising its considerable discretion, to bear in mind all of the case-specific variables that [the Second Circuit] and other courts have identified as relevant to the reasonableness of attorney's fees in setting a reasonable hourly rate. The reasonable hourly rate is the rate a paying client would be willing to pay. In determining what rate a paying client would be willing to pay, the district court should consider, among others, the Johnson factors;*fn5 it should also bear in mind that a reasonable paying client wishes to spend the minimum necessary to litigate the case effectively. The district court should also consider that such an individual might be able to negotiate with his or her attorneys, using their desire to obtain the reputational benefits that might accrue from being associated with the case. The district court should then use that hourly rate to calculate what can properly be termed the "presumptively reasonable fee." 484 F.3d 162 (2d Cir. 2007), as amended, 522 F.3d 182, 190 (2d Cir. July 12, 2007). "After determining the amount of the presumptively reasonable fee, the court may use its discretion to increase or reduce the amount based on the particular circumstances of the case." Chan v. Sung Yue Tung Corp., No. 03-cv-6048, 2007 WL 1373118, at *1 (S.D.N.Y. May 8, 2007). In addition, "[t]he Supreme Court directed that district courts should use the prevailing market rates in the community in calculating the lodestar, or what the Second Circuit is now calling the 'presumptively reasonable fee.'" Lynch v. Town of Southampton, 492 F. Supp. 2d 197, 210-11 (E.D.N.Y. June 27, 2007) (citing Blum v. Stenson, 465 U.S. 886, 895 (1984)). The community is defined as the district in which the court sits. See Arbor Hill, 522 F.3d at 190; Lynch, 492 F. Supp. 2d at 211.
In the Eastern District of New York, depending on the nature of the action, extent of legal services provided, and experience of the attorney, hourly rates range from approximately $300 to $400 per hour for partners, $200 to $300 per hour for senior associates, and $100 to $200 per hour for junior associates. See Konits v. Karahalis, 409 F. App'x 418, 422-23 (2d Cir. 2011) (affirming district court decision holding that prevailing rates for experienced attorneys in the Eastern District of New York range from approximately $300 to $400 per hour); Pilitz v. Inc. Vill. of Freeport, No. 07-cv-4078, 2011 WL 5825138, at *4 (E.D.N.Y. Nov. 17, 2011) (noting hourly rates of $300-$450 for partners, $200-$300 for senior associates, and $100-$200 for junior associates); Szczepanek v. Dabek, No. 10-cv-2459, 2011 WL 846193, at *8 (E.D.N.Y. Mar. 7, 2011) (noting that recent prevailing hourly rates in the Eastern District are $200-$400 for partners and $100-$295 for associates); Crapanzano v. Nations Recovery Ctr., Inc., No. 11-cv-1008, 2011 WL 2847448, at *2 (E.D.N.Y. June 29, 2011) (noting hourly rates of $200-$350 for partners, $200-$250 for senior associates with four or more years of experience, and $100-$150 for junior associates with one to three years of experience), adopted by 2011 WL 2837415 (E.D.N.Y. July 14, 2011); Gutman v. Klein, No. 03-cv-1570, 2009 WL 3296072, at *2 (E.D.N.Y. Oct. 13, 2009) (approving hourly rates of $300-$400 for partners, $200-$300 for senior associates, and $100-$200 for junior associates).
USB's present fee request includes fees and services performed by two law firms, Reed Smith and Miller Nash. With respect to the services performed by Reed Smith, USB requests an award of $3,274,683.63 in attorney's fees (Cooper 3/18/13 Aff. ¶ 6) based on the following hourly rates: