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BCI Construction, Inc. v. 797 Broadway Group, LLC

United States District Court, N.D. New York

May 3, 2017

BCI CONSTRUCTION, INC., Plaintiff,
v.
797 BROADWAY GROUP, LLC, Defendant. 797 BROADWAY GROUP, LLC, Plaintiff,
v.
BCI CONSTRUCTION, INC., Defendant.

          COUCH WHITE LLP Attorneys for BCI Construction, Inc.

          OFFICE OF DANIEL M. SLEASMAN Attorneys for 797 Broadway Group, LLC.

          JOEL M. HOWARD, III, ESQ.

          DANIEL M. SLEASMAN, ESQ.

          MEMORANDUM-DECISION AND ORDER

          Frederick J. Scullin, Jr. Senior United States District Judge.

         I. INTRODUCTION

         This Court issued a Memorandum-Decision and Order on March 15, 2017, granting Defendant's motions (1) to remand Case No. 1:16-CV-1113, to state Court; (2) to dismiss Case No. 1:16-CV-1077, for lack of subject matter jurisdiction; and (3) for attorney's fees pursuant to 28 U.S.C. § 1447(c). See Dkt. No. 41. Pending before the Court is Defendant's fee application, requesting $27, 625.00 in attorney's fees. See Dkt. No. 43. Plaintiff objects. See Dkt. No. 44.

         II. BACKGROUND

         This case involved a contract dispute between 797 Broadway Group, LLC ("Defendant") and BCI Construction, Inc. ("Plaintiff"). Defendant spent significant sums repairing the faulty siding on a project where Plaintiff was the general contractor. The dispute involved who was ultimately responsible for the cost of those repairs. The parties initiated arbitration to resolve the matter, and Defendant largely prevailed.

         Plaintiff commenced the current litigation in this Court on September 1, 2016, pursuant to 9 U.S.C. § 10(a)(2), seeking an order vacating the arbitration award based on its argument that the arbitrator, Mr. Phelan, was biased. See Dkt. No. 1, No. 1:16-CV-1077. Plaintiff further moved for leave to depose Mr. Phelan. See Dkt. No. 9.

         Meanwhile, Defendant filed, in the Supreme Court of the State of New York, County of Albany, a petition pursuant to CPLR 7511 to confirm its arbitration award. See Dkt. No. 11-1 at 3. Plaintiff removed that case to this District pursuant to 28 U.S.C. § 1441. See Dkt. No. 11-2 at 11, No. 1:16-CV-1113. The Court consolidated the two cases. See Dkt. No. 8.

         Defendant then moved to remand the action it originally filed in state court, 1:16-CV-1113, and simultaneously to dismiss Plaintiff's action to vacate the arbitration award, 1:16-CV-1077, based on lack of subject matter jurisdiction. See Dkt. No. 9. Defendant, thereafter, moved to confirm its arbitration award in the event that the Court determined that it had subject matter jurisdiction over this action. See Dkt. No. 23-1.

         In a Memorandum-Decision and Order, the Court held that the Federal Arbitration Act did not provide an independent basis for bestowing subject matter jurisdiction on the Court where the parties' underlying dispute involved a state-law issue, i.e., a contract dispute. See generally Dkt. No. 41. The Court further granted Defendant's motion for an award of attorney's fees and costs pursuant to 28 U.S.C. § 1447(c). See id. at 9. In that regard, the Court noted that it would "award attorney's fees and costs only to the extent that they [were] related to Defendant's motion to remand." See Id. at 9 n.6. Furthermore, the Court ordered "Defendant to file and serve documentation, including contemporaneous time records for each attorney and paralegal who expended any time with regard to its remand motion and a description of the work performed, to support its request for attorney's fees and costs[.]" See id at 10.

         As recounted above, Defendant has submitted an application requesting $27, 625.00 in attorney's fees. See Dkt. No. 43. Plaintiff opposes Defendant's application. See Dkt. No. 44.[1]

         III. DISCUSSION

         "In calculating attorney's fee awards, district courts use the lodestar method -- hours reasonably expended multiplied by a reasonable hourly rate." McDonald v. Pension Plan of NYSA-ILA Pension Trust Fund, 450 F.3d 91, 96 (2d Cir. 2006) (citations omitted).

         A. Hours reasonably expended

         To calculate the reasonable hours expended, the party submitting the fee application must support its request with "contemporaneous time records, affidavits, and other materials." Id. In support of its motion for fees, Defendant has produced three letters that its counsel allegedly prepared and sent as billing statements to Defendant. See Dkt. No. 43 at 4, 5, 6.

         1. September 28, 2016 letter

         Defendant labels the first letter "797 Broadway, Schenectady, New York -- Arbitration Façade Issue -- Federal Litigation." See Id. at 4. In total, the first letter accounts for 19.6 hours.[2]

         Plaintiff objects to the contents of the first letter because the letter includes work that was unrelated to Defendant's motion to remand. See Dkt. No. 44-2 at 5. According to Plaintiff, the majority of the entries in this letter relate to Defendant's work answering Plaintiff's action that was originally filed in federal court. Therefore, Plaintiff asserts that these entries do not comply with the Court's order regarding the scope of fees.

         By its terms, 28 U.S.C. § 1447(c) makes it clear that a party is only entitled to attorney's fees related to litigating a case that was improperly removed from state court pursuant to 28 U.S.C. § 1441.[3]See Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6 (2000) (stating that "we begin with the understanding that Congress 'says in a statute what it means and means in a statute what it says there'" (quotation omitted)). For example, the title of 28 U.S.C. § 1447 is "Procedure after removal generally." Furthermore, 28 U.S.C. § 1447(c) itself plainly states that "[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." Id. (emphasis added). The language "incurred as a result of the removal" clearly limits the scope of this fee-shifting provision to costs related to remanding an action that was originally filed in state court and then removed. In ...


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