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Danaher Corporation v. Travelers Indemnity Co.

United States District Court, S.D. New York

April 14, 2015



J. PAUL OETKEN, District Judge.

Danaher Corporation ("Danaher") brought this suit in 2010 against, among others, the Travelers Indemnity Company ("Travelers Indemnity") and Travelers Casualty and Surety Company ("Travelers C&S") (collectively, "Travelers"), to resolve disputes concerning insurance coverage for underlying silica- and asbestos-related claims against Chicago Pneumatic Tool Company ("Chicago Pneumatic"). Travelers later impleaded Atlas Copco North America LLC ("Atlas Copco"), seeking a declaratory judgment on insurance coverage. On September 6, 2012, the Court held that Travelers has a duty to defend Danaher and Atlas Copco against such claims "in the past and in the future." (Dkt. No. 98; Dkt. No. 117, Ex. D at 8.)

Now before the Court is Magistrate Judge Francis's Report and Recommendation (Dkt. No. 283 (the "Report")) regarding two subsequent motions by Danaher and Atlas Copco seeking reimbursement for attorney's fees and costs. The Report recommends granting the motions. Travelers objects to the amount of the fee awards recommended by the Report. For the reasons that follow, Travelers' objections are overruled and Judge Francis's thorough and well-reasoned Report is adopted in full.

I. Background[1]

On March 21, 2014, the Court referred two issues to Magistrate Judge Francis for a report and recommendation: first, the question of the reasonableness of the amount of attorney's fees incurred by Danaher and Atlas Copco, both in obtaining the duty to defend ruling and in the underlying actions; and second, whether statutory prejudgment interest should run on those fees. (Dkt. No. 189, at 14-15.) Danaher and Atlas Copco filed motions for attorney's fees on August 1, 2014. (Dkt. Nos. 225, 230.) On September 30, 2014, Judge Francis filed a memorandum and order in which he directed the parties to file additional briefing on the motions. (Dkt. No. 245.)

On January 16, 2015, Judge Francis issued the Report, which recommends that the Court conclude that the fees and costs sought by Danaher and Atlas Copco are reasonable. (Dkt. No. 283.) Judge Francis issued a clerical correction to the Report on January 29, 2015. (Dkt. No. 285.) Travelers objected to the Report on the same day. (Dkt. No. 286.) Danaher and Atlas Copco have responded to Travelers' objections. (Dkt. Nos. 288, 289.)

II. Standard of Review

Pursuant to 28 U.S.C. ยง 636(b)(1), a district court reviewing a magistrate judge's report and recommendation may "accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." The district court reviews a magistrate judge's report "strictly for clear error when no objection has been made, " but "will make a de novo determination regarding those parts of the Report to which objections have been made." Coach, Inc. v. O'Brien, No. 10 Civ. 6071 (JPO) (JLC), 2012 WL 1255276, at *1 (S.D.N.Y. Apr. 13, 2012) (citing McDonaugh v. Astrue, 672 F.Supp.2d 542, 547 (S.D.N.Y. 2009)). "In order to merit de novo review, a party's objections must be specific rather than conclusory or general." DeJesus v. Comm'r of Soc. Sec., No. 13 Civ. 2251 (AJN) (HBP), 2014 WL 5040874, at *1 (S.D.N.Y. Sept. 29, 2014).[2]

III. Discussion

A. Reasonableness of Attorney's Fees[3]

Judge Francis's Report, as amended, recommends an award to Atlas Copco of $234, 490.45 for the fees and costs arising from the duty to defend litigation, and to both Atlas Copco and Danaher of $8, 720, 181.85 arising from the underlying claims, each sum accompanied by statutory prejudgment interest. (Report at 39; Dkt. No. 285.) Travelers objects to both of these recommendations. (Dkt. No. 286 ("Objection") at 1.) According to Travelers, Atlas Copco is owed only $117, 647.58 for fees and costs relating to the duty to defend litigation, and Atlas Copco and Danaher are owed $7, 840, 181.55 stemming from the underlying claims. (Objection at 7, 9.)

1. Duty to Defend

Atlas Copco seeks fees and costs incurred during its defense of the declaratory judgment action brought against it in this suit as a third-party action by Travelers, in the amount of $234, 490.45. (Dkt. No. 243, at 10 & n.4.) In its initial brief, Travelers asserted that Atlas Copco should be awarded "no more than $60, 000 in legal fees and costs" incurred in litigation leading up to the duty to defend decision. (Dkt. No. 236, at 17.) After Judge Francis ordered supplemental briefing and clarified the scope of the Court's prior decision regarding the duty to defend, see Danaher Corp. v. Travelers Indem. Co., No. 10 Civ. 121 (JPO) (JCF), 2014 WL 4898754, at *5 (S.D.N.Y. Sept. 30, 2014), Travelers now takes the position that Atlas Copco is owed "no more than $117, 647.58 in legal fees and costs." (Dkt. No. 269, at 12.)

The Report comprehensively details the experience and practice specialization of all of the attorneys and support staff who billed hours relating to the duty to defend decision. (Report at 6-9.) It also notes, on the basis of evidence submitted by Atlas Copco, that these rates are in line with those of attorneys and staff of "roughly comparable" law firms. (Id. at 9-10). Travelers does ...

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