L.E.K. Consulting v. Amicus Capital Partners, LLC

L.E.K. CONSULTING LLC, Plaintiff, v. AMICUS CAPITAL PARTNERS, LLC, Defendant.

No. 19 Civ. 10648 (KPF)

United States District Court, S.D. New York

September 14, 2021

ORDER

KATHERINE POLK FAILLA, DISTRICT JUDGE

This Order resolves the request for attorneys' fees filed by counsel for Plaintiff L.E.K. Consulting LLC. While the request is unopposed and seemingly straightforward, its resolution requires examination of the unusual procedural history of this case. For the reasons set forth in the remainder of this Order, the Court awards attorneys' fees in the amount of $13, 500 and costs of suit in the amount of $226.60. Separately, this Court orders that judgment be issued in the aggregate amount of $570, 664.99, comprising $472, 250 in damages, $84, 688.39 in accrued interest to date, $13, 500 in attorneys' fees, and $226.60 in costs of suit.

PROCEDURAL BACKGROUND

Plaintiff filed its complaint on November 18, 2019, raising contract and quasi-contract claims stemming from its provision of consulting services to Defendant Amicus Capital Partners LLC. (Dkt. #1 (the “Complaint”)). Defendant was served with the Complaint on December 28, 2019, and its response was due on or before January 21, 2020. (Dkt. #7). Defendant did not respond by that date, and Plaintiff sought a certificate of default on January 29 and 30, 2020. (Dkt #8-11). The Clerk of Court issued a certificate of default on January 31, 2020. (Dkt. #12).

By letter motion dated February 12, 2020, Plaintiff asked the Court to adjourn the initial pretrial conference in the matter, which had been set for February 20, 2020, so that Plaintiff could either discuss settlement with Defendant or follow through on its plans to move for a default judgment. (Dkt. #13). The Court granted Plaintiff's motion, and directed Plaintiff “to either inform the Court of a settlement in this action or file for an entry of default judgment on or before March 30, 2020.” (Dkt. #14). The following week, on February 17, 2020, Plaintiff submitted a declaration from its counsel in support of the entry of a default judgment, as well as a proposed order to show cause and a proposed judgment. (Dkt. #15-17). On February 18, 2020 the Court issued an Order to Show Cause why default judgment should not be entered against Defendant, and set a hearing in the matter for April 3, 2020. (Dkt. #18). The hearing was subsequently adjourned until April 6, 2020 (Dkt. #20), and then converted to a telephonic hearing because of the ongoing COVID-19 pandemic (Dkt. #22).

Counsel for Defendant appeared at the April 6, 2020 hearing, and after hearing from both sides, the Court directed the parties to file a joint letter concerning the status of settlement discussions within two weeks. (Minute Entry for April 6 2020). One week later, on April 13, 2020, Plaintiff requested that the Court reschedule the show-cause hearing, expressing concerns that Defendant “[ha]s engaged in delay tactics so that it can continue to avoid the substantial, undisputed debt.” (Dkt. #23 at 1). The Court rescheduled the hearing for April 29, 2020. (Dkt. #24). That day, the parties jointly advised the Court of a settlement in principle of the matter, and requested the Court file an order of discontinuance that specified a 77-day period within which the matter could be restored to the Court's active docket; that day was sought specifically because one of the terms of the parties' settlement agreement was a lump-sum payment from Defendant to Plaintiff by noon on July 15, 2020. (Dkt. #26; Minute Entry for April 29, 2020).

Unfortunately, Defendant did not comport with its obligations under the settlement agreement, and on July 15, 2020, Plaintiff again requested that the Court restore the matter to its active calendar and enter a default judgment against Defendant. (Dkt. #27). The Court issued an order reopening the case and scheduling a show-cause hearing for August 14, 2020. (Dkt. #28). At the August 14, 2020 hearing, counsel for Defendant represented that her client had no objection to the entry of a default judgment. (Dkt. #31 at 4 (transcript of August 14, 2020 hearing)). What the parties disputed, however, was whether the default judgment damages figure was the sum of the outstanding fees and costs listed in Plaintiff's original default judgment submissions or the figure listed in the parties' settlement agreement. (Id. at 5-10). After hearing argument from the parties, the Court ordered supplemental briefing on the issue of the proper damages figure for the default judgment. (Id. at 16-18).

The parties filed their submissions on September 4, 2020, and the Court issued an order resolving the damages component of the default judgment figure on September 15, 2020. (Dkt. #33-36). See L.E.K. Consulting LLC v. Amicus Cap. Partners, LLC, No. 19 Civ. 10648 (KPF), 2020 WL 5535191 (S.D.N.Y. Sept. 15, 2020). In relevant part, the Court found that “the settlement agreement provides the relevant amount for the default judgment, ” because that document was plainly intended by the parties to supersede the original consulting agreement. Id. at *1. Accordingly, the Court ordered that Plaintiff be awarded $475, 000 in damages, as well as interest at 18% per annum, the rate specified in the settlement agreement. Id. at *2.^[1] Because the settlement agreement also specified that the aggrieved party would be entitled to recover attorneys' fees and costs relating to the enforcement of the judgment, the Court scheduled briefing on that issue. Id. Plaintiff submitted its fee petition materials on October 13, 2020 (Dkt. #37), as well as a supplemental notice on January 22, 2021 (Dkt. #38). Defendant filed no opposition to Plaintiff's request.

DISCUSSION

A. Applicable Law

Under the American Rule, there is a presumption that each party is responsible for its own attorneys' fees unless a statute or contract provides otherwise. See Local 1180, Commc'ns Workers of Am., AFL-CIO v. City of New York, 392 F.Supp.3d 361, 377 (S.D.N.Y. 2019). Of particular significance to the instant motion, the American Rule provides that “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.” Id. (citing U.S. Fid. & Guar. Co. v. Braspetro Oil Servs. Co., 369 F.3d 34, 74 (2d Cir. 2004)). Contract provisions addressing the recovery of attorneys' fees are valid and enforceable under New York law, and courts “will order the losing party to pay whatever amounts have been expended ... so long as those amounts are not unreasonable.” F.H. Krear & Co. v. Nineteen Named Trs., 810 F.2d 1250, 1263 (2d Cir. 1987); accord Metro Found. Contractors, Inc. v. Arch Ins. Co., 551 Fed.Appx. 607, 610 (2d Cir. 2014) (summary order); NetJets Aviation, Inc. v. LHC Commc'ns, LLC, 537 F.3d 168, 175 (2d Cir. 2008).

Attorneys' fees are typically awarded by determining the “‘presumptively reasonable fee, '” often (if imprecisely) referred to as the “lodestar.” Millea v. Metro-North R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011) (quoting Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany, 522 F.3d 182, 183 (2d Cir. 2008)); see also Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 552-53 (2010). This fee is calculated by multiplying the “reasonable hourly rate and the reasonable number of hours required by the case.” Millea, 658 F.3d at 166. Courts may, only after the initial calculation of the presumptively reasonable fee, adjust the total when it “does not adequately take into account a factor that may properly be considered in determining a reasonable fee.” Lilly v. City of New York, 934 F.3d 222, 230 (2d Cir. 2019) (quoting Millea, 658 F.3d at 167). The Second Circuit has recognized that a district court exercises considerable discretion in awarding attorneys' fees. See Millea, 658 F.3d at 166; see also Arbor Hill, 522 F.3d at 190.

The Second Circuit clarified the process by which a district court determines the reasonable hourly rate in Lilly v. City of New York, a case involving a fee-shifting statute:

[T]he district court, in exercising its considerable discretion, [should] bear in mind all of the case-specific variables that we and other courts have identified as relevant to the reasonableness of attorney's fees in setting a reasonable hourly rate. The reasonable hourly rate is the rate a paying client would be willing to pay. In determining what rate a paying client would be willing to pay, the district court should consider, among others, the Johnson factors; it should also bear in mind that a reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively. The district court should also consider that such an individual might be able to negotiate with his or her attorneys, using their desire to obtain the reputational benefits that might accrue from being associated with the case. The district court should then use that reasonable hourly rate to calculate what can properly be termed the “presumptively reasonable fee.”

Lilly, 934 F.3d at 230 (quoting Arbor Hill, 522 F.3d at 190).^[2] In this setting, “the district court does not play the role of an uninformed arbiter but 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.” Bliven v. Hunt, 579 F.3d 204, 213 (2d Cir. 2009) (quoting DiFilippo v. Morizio, 759 F.2d 231, 236 (2d Cir. 1985)).

“To determine the reasonable hourly rate for each attorney courts must look to the market rates ‘prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation.'” Heng Chan v. Sung Yue Tung Corp., No. 03 Civ. 6048 (GEL), 2007 WL 1373118, at *2 (S...