Harvey v. Home Savers Consulting Corp.

YVONNE and CHARLES HARVEY, Plaintiffs,

v. HOME SAVERS CONSULTING CORP.,GARTH CELESTINE, PHIL SIMON,OPHELIA RAY, KRISHNA MAHARAJ,COURTNEY CALLENDER, BLACKACRE TITLE AGENCY CORP.,NEW YORK MORTGAGE CO. LLC, MARVIN BLAKELY,RMS RESIDENTIAL PROPERTIES LLC, et al., Defendants

07-CV-2645 (JG)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

August 12, 2011

REPORT AND RECOMMENDATION

GOLD, S., United States Magistrate Judge:

INTRODUCTION

Pending before the Court is plaintiffs' motion for attorney's fees and costs. United States District Judge John Gleeson referred this motion to me for a Report and Recommendation as part of plaintiffs' motion for entry of default judgment. Plaintiffs, Yvonne and Charles Harvey, seek an award of attorney's fees and costs against defendants, the Home Savers Consulting Corporation ("Home Savers"), Garth Celestine, Phil Simon, and Marvin Blakely (collectively "the defaulting defendants"), in the amount of $219,138.24. For the following reasons, I respectfully recommend that plaintiffs be awarded $179,025.43 in fees and costs.

BACKGROUND

On March 3, 2011, I issued a report recommending entry of judgment against the defaulting defendants, jointly and severally, in the amount of $229,763.40, together with interest, attorney's fees and costs. Docket Entry 163. The facts and legal issues involved in this case areset forth in detail in that report and are not reiterated at length here. Briefly, plaintiffs allege that they were the victims of a fraudulent foreclosure rescue scheme that resulted in their loss of title to and significant equity in their home. Plaintiffs brought numerous claims against multiple defendants seeking damages and the restoration of their title. During the course of litigation, plaintiffs entered into settlement agreements with all defendants except for those now in default.¹ See Docket Entries 77, 128, 139, 143, 165. On May 27, 2010, plaintiffs renewed their motion for entry of a default judgment against the remaining defendants, which had been deferred until all of the defendants' liability could be conclusively adjudicated. Docket Entries 55, 147.

On March 23, 2011, Judge Gleeson adopted my report and recommendation, and (1) granted plaintiffs' motion for default judgment against Home Savers, Simon, and Celestine for violations of the Civil Rights Acts, 42 U.S.C. §§ 1981, 1982 and against all the defaulting defendants for violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq., and common law fraud; (2) dismissed plaintiffs' claims pursuant to the Truth in Lending Act ("TILA") and the Home Ownership and Equity Act ("HOEPA"), 15 U.S.C. § 1601, et seq.; (3) dismissed plaintiffs' claims pursuant to the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 et seq.; and (4) held the defaulting defendants jointly and severally liable for damages in the amount of $229,763.40. ² My report also recommended that plaintiffs be permitted to seek an award of reasonable attorney's fees and costs. Plaintiffs havenow submitted a motion specifically addressed to attorney's fees. Docket Entry 170. Defaulting defendants have not submitted any opposition to the motion.

DISCUSSION

Throughout this litigation, plaintiffs have been represented by attorneys from both Staten Island Legal Services ("SILS"), a non-profit organization located in Staten Island, New York, that provides free legal assistance to low-income individuals, and Emery Celli Brinkerhoff & Abady LLP ("ECBA"), a private litigation firm located in Manhattan, New York that specializes in complex federal litigation. Saylor Decl. ¶¶ 1-2, Docket Entry 171; Becker Decl. ¶¶ 2-3, 19; Docket Entry 172; Berk Decl. ¶ 8, Docket Entry 173. Initially, plaintiffs were represented solely by SILS. Becker Decl. ¶¶ 5-9. Subsequently, however, SILS determined that it did not have the resources to represent plaintiffs in a case of this size and complexity, and ECBA was retained as co-counsel. Id. ¶¶ at 9-11, 16. Plaintiffs seek fees only for the hours expended by ECBA attorneys. Id. at ¶ 24.³

My earlier report recommended imposing liability on Home Savers, Simon, and Celestine under 42 U.S.C. §§ 1981 and 1982, and on all the defaulting defendants, including Blakely, under RICO. Accordingly, plaintiffs are entitled to an award of attorney's fees and costs against Home Savers, Simon, and Celestine pursuant to the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988, and against all defaulting defendants pursuant to RICO's remedial provision, 18 U.S.C. § 1964(c). In determining the amount of fees under either statute, a court's analysis is "governed by the same standards which prevail in other types of equally complex Federal litigation." Hensley v. Eckerhart, 461 U.S. 424, 430 n.4 (1983) (internal quotations andalterations omitted). In the Second Circuit, courts determine a "presumptively reasonable fee" award by calculating the product of hours reasonably expended by a reasonable hourly rate, while bearing in mind "all of the case-specific variables that . . . courts have identified as relevant." Simmons v. New York City Transit Auth., 575 F.3d 170, 174 (2d Cir. 2009). See also Arbor Hill Concerned Citizens Neighborhood Assoc. v. County of Albany, 522 F. 3d 182 (2d Cir. 2008); McDonald v. Pension Plan of the NYSA-ILA Pension Trust Fund, 450 F.3d 91, 96 (2d Cir. 2006); Chambless v. Masters, Mates & Pilots Pension Plan, 885 F.2d 1053, 1058 (2d Cir. 1989). In addition, all requests for attorney's fees in the Second Circuit must comply with New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983), which requires that contemporaneous time records be submitted with all fee applications. Scott v. City of New York, 643 F.3d 56, 58-59 (2d Cir. May 24, 2011)

A. The Reasonable Hourly Rate

"The reasonable hourly rate is the rate a paying client would be willing to pay." Arbor Hill, 522 F.3d at 190. In making this determination courts consider factors such as the time and labor required, the novelty and difficulty of the issues, the level of skill needed to perform the legal services competently, the experience, reputation, and ability of the attorneys in the case, and awards in similar cases. See Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974); Weingarten v. Optima Commc'ns Sys., Inc., 544 F. Supp. 2d 193, 196 (S.D.N.Y. 2008). The Second Circuit has instructed that "district courts should award fees just high enough to attract competent counsel." Simmons, 575 F.3d at 174-75 (internal quotations omitted). The hourly rate, then, should be in line with rates "prevailing in the community for similar services by lawyers of reasonable comparable skill, experience and reputation." Sugarman v. Vill. of Chester, 213 F. Supp. 2d 304, 309 (S.D.N.Y. 2002) (quoting Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984)). In the Second Circuit, there is a rebuttable presumption that the relevant community is the "district in which the reviewing court sits." Simmons, 575 F.3d at 174 (internal quotations omitted). A court may take judicial notice of the prevailing market rates in a given district but must also evaluate any evidence of the prevailing rates proffered by the parties. Farbotko v. Clinton County of New York, 433 F.3d 204, 209 (2d Cir. 2005).

Plaintiffs' fee application seeks legal fees for five attorneys at the following rates: 1) Illann Maazel, a partner at ECBA with twenty-four years of legal experiences at $450 per hour; 2) Elizabeth Saylor, another partner at ECBA with ten years of experience at $400 per hour; 3) Elora Mukherjee, an associate at ECBA with six years of experience at $325 per hour; 4) Eisha Jain, an associate at ECBA with four years of experience at $300 per hour and 5) Samuel Shapiro, an associate at ECBA with three years of experience at $300 per hour. Saylor Decl. ¶ 22, Exs C-G, Docket Entries 171-3-171-7. In addition, plaintiffs seek fees for the services of six ECBA paralegals, all at $125 per hour. Saylor Decl. ¶ 22. These rates, especially as they relate to ECBA's associates, are higher than those generally considered reasonable for similar services in the Eastern District. See Todaro v. Siegel Fenchel & Peddy P.C., 697 F. Supp. 2d 395, 399-400 (E.D.N.Y. 2010) (in a Title VII case, awarding $400 an hour for a partner with seventeen years of experience but reducing associates' rates, noting that "[c]ourts within the E.D.N.Y typically award between $100 and $150 an hour for junior associates, and between $200 and $250 an hour for senior associates"); Olsen v. County of Nassau, 2010 WL 376642, at *3 (E.D.N.Y. Jan. 26, 2010) (noting that the range of appropriate billing rates in the Eastern District "is $200-$375 per hour for partners and $100-$295 per hour for associates") (internal quotations omitted).

i. The Local Forum Presumption

Plaintiffs argue that the Court should look to the somewhat higher prevailing market rates in the Southern District of New York in setting the reasonable hourly rate. A fee applicant may overcome the local forum presumption by establishing "that a reasonable client would have selected out-of-district counsel because doing so would likely (not just possibly) produce a substantially better net result." Simmons, 575 F.3d at 175. To satisfy this standard, the applicant "must make a particularized showing . . . predicated on experience-based, objective factors." Id. at 176. "Among the ways an applicant may make such a showing is by establishing that local counsel possessing requisite experience were unwilling or unable to take the case." Id. For the following reasons, I find that plaintiffs have adequately established their entitlement to out-of-district rates.

Plaintiffs were initially represented solely by attorneys from SILS. Becker Decl. ¶¶ 5-9. As plaintiffs' case progressed, however, SILS determined that it had neither the resources nor the experience to represent plaintiffs...