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Kerr v. John Thomas Financial

United States District Court, S.D. New York

January 31, 2017

DR. EUBULUS J. KERR, III, Plaintiff,
v.
JOHN THOMAS FINANCIAL, et al ., Defendants.

          HONORABLE KATHERINE B. FORREST, United States District Judge.

          REPORT AND RECOMMENDATION

          HENRY PITMAN United States Magistrate Judge.

         I. Introduction

         By notice of motion dated November 15, 2016, plaintiff moves for summary judgment on his application for attorneys' fees and costs pursuant to Fed.R.Civ.P. 56 (D.I. 211). For the reasons set forth below, I respectfully recommend that plaintiff's motion be granted in part and denied in part.

         II. Facts

         The facts that give rise to this action are set forth in detail in the Opinion and Order of the Honorable Katherine B. Forrest, United States District Judge, dated July 16, 2015 (D.I. 88), granting plaintiff's motion to confirm a Financial Industry Regulatory Authority ("FINRA") arbitration award against the defendants. Familiarity with that opinion is assumed. I recite the facts here only to the extent necessary for an understanding of the dispute before me.

         On August 5, 2014, a FINRA arbitration resulted in an award of $920, 107.96 in favor of plaintiff and against the defendants (the "Award") (Amended Petition to Confirm Arbitration Award and Entry of Judgment thereon, dated Jan. 8, 2015 (D.I. 12) ("Petition") ¶ 13). Defendant Anastasios Belesis and two other defendants were found to be liable, jointly and severally, for $915, 107.96 of the Award; defendant Joseph Castellano was found to be liable for $5, 000.00 of the Award (Petition ¶ 13). On October 20, 2014, plaintiff commenced an action in Supreme Court, New York County, seeking to confirm the Award (Notice of Removal, filed Nov. 18, 2014 (D.I. 1) ("Notice of Removal") ¶ 1). The defendants removed the action to this court on November 18, 2014 (Notice of Removal).

         On July 16, 2015, Judge Forrest granted plaintiff's motion to confirm the Award (Opinion and Order, dated July 16, 2015 (D.I. 88)), and judgment confirming the Award was entered on July 22, 2015 (the "Judgment") (Judgment, dated July 22, 2015 (D.I. 89)).

         After approximately a year of unsuccessful efforts to collect the Judgment, plaintiff and defendant entered into a General Release Agreement on June 10, 2016 (Motion for Sanctions and Contempt, filed Oct. 12, 2016 (D.I. 151) ("Motion for Sanctions"), Ex. G, at 1). The agreement provided that defendant was to pay plaintiff $1 million -- an amount slightly smaller than the Judgment plus accrued interest -- by June 30, 2016 (Motion for Sanctions, Ex. G ¶ 1). In exchange, plaintiff agreed to release all claims against defendant (Motion for Sanctions, Ex. G ¶ 2). The agreement also contained the following provision regarding attorneys' fees and costs:

In the event of any judicial or arbitral proceeding to construe or enforce any provision of this Agreement or resulting from an alleged breach, default or misrepresentation in connection with any of the provisions of this Agreement, or to enforce or collect upon the Award or any judgment thereupon or any award or judgment resulting from any judicial or arbitral proceeding to construe or enforce any provision of this Agreement, the prevailing party shall recover from the non-prevailing party reasonable attorneys' fees and other costs in addition to all other amounts and relief the prevailing party is entitled to recover. To the extent that this provision imposes upon the non-prevailing party an obligation to pay the attorneys' fees of the prevailing party in a dispute arising from the enforcement and collection of the Award or any judgment thereupon, the Parties acknowledge that this is a post-dispute attorneys' fee provision and agree to be bound thereby.

         (Motion for Sanctions, Ex. G ¶ 4). The agreement also provided that it "shall be in all respects interpreted, enforced and governed by and under the laws of the State of New York" (Motion for Sanctions, Ex. G ¶ 9).

         Defendant did not pay $1 million to plaintiff by June 30, 2016. Following that breach, plaintiff moved for an amended judgment stating a sum certain on July 1, 2016 (Letter from Brian J. Neville, Esq., to Judge Forrest, dated July 1, 2016 (D.I. 99)). On July 6, 2016, Judge Forrest granted plaintiff's motion (Order, dated July 6, 2016 (D.I. 102)), and the Clerk of the Court subsequently entered an amended judgment in the amount of $1, 017, 140.75 (Amended Judgment, dated July 7, 2016 (D.I. 103)). Defendant finally paid the full amount owed, plus interest, in November 2016 (Order, dated Nov. 14, 2016 (D.I. 209)).

         Plaintiff now seeks his attorneys' fees and costs incurred since the start of this action, pursuant to the General Release Agreement.[1] Specifically, plaintiff seeks a total of $216, 575 in fees and $25, 108.02 in costs and has submitted an "invoice listing the fees charged daily by each attorney and firm member, as well as each individual cost" (Lax Aff. ¶ 5).

         III. Analysis

         A. Applicable Principles

         1. Summary Judgment

         The standards applicable to a motion for summary judgment are well-settled and require only brief review.

Summary judgment may be granted only where there is no genuine issue as to any material fact and the moving party . . . is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). In ruling on a motion for summary judgment, a court must resolve all ambiguities and draw all factual inferences in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986-). To grant the motion, the court must determine that there is no genuine issue of material fact to be tried. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine factual issue derives from the "evidence [being] such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. The nonmoving party cannot defeat summary judgment by "simply show[ing] that there is some metaphysical doubt as to the material facts, " Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), or by a factual argument based on "conjecture or surmise, " Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir. 1991). The Supreme Court teaches that "all that is required [from a nonmoving party] is that sufficient evidence supporting the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial." First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288-89, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968); see also Hunt v. Cromartie, 526 U.S. 541, 552, 119 S.Ct. 1545, 143 L.Ed.2d 731 (1999). It is a settled rule that "[c]redibility assessments, choices between conflicting versions of the events, and the weighing of evidence are matters for the jury, not for the court on a motion for summary judgment." Fischl v. Armitage, 128 F.3d 50, 55 (2d Cir. 1997).

McClellan v. Smith, 439 F.3d 137, 144 (2d Cir. 2006) (ellipsis added; brackets in original); accord Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150-51 (2000)[2]; Estate of Gustafson ex rel. Reginella v. Target Corp., 819 F.3d 673, 675 (2d Cir. 2016); Cortes v. MTA N.Y.C. Transit, 802 F.3d 226, 230 (2d Cir. 2015); Deep Woods Holdings, L.L.C. v. Savings Deposit Ins. Fund of Republic of Turk., 745 F.3d 619, 622-23 (2d Cir. 2014); Hill v. Curcione, 657 F.3d 116, 124 (2d Cir. 2011).

         "Material facts are those which 'might affect the outcome of the suit under the governing law' . . . ." Coppola v. Bear Stearns & Co., 499 F.3d 144, 148 (2d Cir. 2007), quoting Anderson v. Liberty Lobby, Inc., supra, 477 U.S. at 248. "'[I]n ruling on a motion for summary judgment, a judge must ask himself not whether he thinks the evidence unmistakably favors one side or the other but whether a fair-minded jury could return a verdict for the [non-movant] on the evidence presented[.]'" Cine SK8, Inc. v. Town of Henrietta, 507 F.3d 778, 788 (2d Cir. 2007) (second alteration in original), quoting Readco, Inc. v. Marine Midland Bank, 81 F.3d 295, 298 (2d Cir. 1996).

         2. Attorneys' Fees

         Although the prevailing party in litigation is not ordinarily entitled to recover its attorneys' fees under the "American Rule, " it may do so when there is a contractual provision authorizing such recovery. United States Fid. & Guar. Co. v. Braspetro Oil Servs. Co., 369 F.3d 34, 75 (2d Cir. 2004).

In federal practice the general rule -- known as the "American Rule" -- is that each party bears its own attorneys' fees. See, e.g., Chambers v. NASCO, Inc., 501 U.S. 32, ___, 111 S.Ct. 2123, 2133, 115 L.Ed.2d 27 (1991); Hensley v. Eckerhart, 461 U.S. 424, 429, 103 S.Ct. 1933, 1937, 76 L.Ed.2d 40 (1983); Alyeska Pipeline Service Co. v. Wilderness Soc'y, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975); 6 James W. Moore et al., Moore's Federal Practice ¶ 54.78[1] (2d ed. 1993). However, parties may agree by contract to permit recovery of attorneys' fees, and a federal court will enforce contractual rights to attorneys' fees if the contract is valid under applicable state law. See Alland v. Consumers Credit Corp., 476 F.2d 951, 956 (2d Cir. 1973); United States v. Carter, 217 U.S. 286, 322, 30 S.Ct. 515, 526, 54 L.Ed. 769 (1910). Although a district court has broad discretion in awarding attorneys' fees, and an award of such fees may be set aside only for abuse of discretion, see, e.g., ARP Films, Inc. v. Marvel Entertainment Group, Inc., 952 F.2d 643, 651 (2d Cir. 1991); Lerman v. Flynt Distributing Co., 789 F.2d 164, 166 (2d Cir.), cert. denied, 479 U.S. 932, 107 S.Ct. 404, 93 L.Ed.2d 357 (1986), where a contract authorizes an award of attorneys' fees, such an award becomes the rule rather than the exception. See Engel v. Teleprompter Corp., 732 F.2d 1238, 1241 (5th Cir. 1984) (reversing district court's denial of attorneys' fees with instructions to determine an appropriate award).

McGuire v. Russell Miller, Inc., 1 F.3d 1306, 1312-13 (2d Cir. 1993); see also Baker Botts L.L.P. v. ASARCO LLC, 135 S.Ct. 2158, 2164 (2015); Zurich Am. Ins. Co. v. Team Tankers A.S., 81 ...


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