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United Parcel Service, Inc. v. Lexington Insurance Co.

United States District Court, Second Circuit

January 15, 2014

UNITED PARCEL SERVICE, INC., Plaintiff,
v.
LEXINGTON INSURANCE COMPANY, Defendant.

Stefanie Ann Bashar, Esq., Stephen P. McLaughlin, Esq. Ansa Assuncao, LLP White Plains, NY. For Plaintiff:

J. Gregory Lahr, Esq. Sedgwick, LLP New York, NY.

Ryan Christopher Chapoteau, Esq. Sedgwick, LLP New York, NY. For Defendant:

OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge.

I. INTRODUCTION

United Parcel Service, Inc. ("UPS") brought this action seeking a declaration that Lexington Insurance Company ("Lexington") is obligated to defend and indemnify UPS against a Complaint filed against it in an underlying personal injury action.[1] In an Opinion and Order dated October 16, 2013, I granted UPS's motion for partial summary judgment and held that (1) Lexington owed a duty to defend the Underlying Action; and (2) Lexington must reimburse UPS for reasonable attorneys' fees and litigation expenses incurred in defending the Underlying Action, plus interest at a rate of nine percent per year.[2] The Opinion, however, did not address when Lexington's duty to defend was triggered and therefore when the damages period began. UPS was directed to file a request for fees and costs within twenty-one (21) days of receipt of the Opinion. On November 7, 2013, UPS submitted a request for attorneys' fees in the amount of $35, 269.00, and costs of $2, 503.73, totaling $37, 772.73. I hereby grant UPS's request for fees and costs albeit in a reduced amount.

II. LEGAL STANDARD

Where an insurer breaches the duty to defend, it must pay damages in the form of attorneys' fees and litigation expenses reasonably incurred by the insured in defending the underlying action.[3] The insurer must also pay interest at a rate of nine percent from the date of each legal bill[4] "[T]he fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates."[5] "The district court retains discretion to determine.. what constitutes a reasonable fee.'"[6] In determining the amount of a fee award, courts must calculate the "lodestar" figure which represents the "presumptively reasonable fee."[7] "In reducing the lodestar' amount, the court may exclude the excessive and unreasonable hours from its calculation by making an across the board reduction, or percentage cut, in the amount of hours."[8]

A reasonable rate is generally the "prevailing market rate[] for counsel of similar experience and skill to the fee applicant's counsel."[9] In making this determination, a court may consider "rates awarded in prior cases and the court's own familiarity with the rates prevailing in the district."[10] "The reasonable hourly rate for such calculation is determined by the rates prevailing in the community in which the action or proceeding arose for the kind and quality of services furnished."[11] The burden is on the movant to show "by satisfactory evidence - in addition to the attorney's own affidavits - that the requested hourly rates are the prevailing market rates."[12]

In calculating the reasonable number of hours expended "the court takes account of claimed hours that it views as excessive, redundant, or otherwise unnecessary.'"[13] In doing so, the court "may look to its own familiarity with the case and its experience generally as well as to the evidentiary submissions and arguments of the parties."[14]

III. DISCUSSION

A. Hourly Rates

In support of UPS's request for reimbursement for attorneys' fees and litigation expenses, UPS's counsel submits invoices for services it rendered in defending the Underlying Action.[15] Lexington does not dispute the proposed hourly rates for Steven Orlowski, UPS's lead attorney, or supporting partner, counsel, associates and paralegals from which he received assistance. The Court finds that, in light of factors including the time and labor required, experience ...


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