IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY
December 1, 2003
JOHN R. ANDREWS, ET AL., PLAINTIFFS,
GREGORY HOLLOWAY A/K/A GREG HOLLOWAY, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Simandle, District Judge
NOT FOR PUBLICATION
This matter comes before this Court upon the application of plaintiffs for an order determining the amount of reasonable counsel fees and costs which plaintiffs may collect pursuant to this Court's Order of September 29, 2003 which found that the appropriate sanction for non-party witness Laura Andre's unilateral refusal to obey this Court's Order requiring her deposition was the shifting of plaintiffs' reasonable attorney fees and costs incurred in connection with their appearance at the August 7, 2003 deposition that Ms. Andre did not attend, their appearance for an August 11, 2003 telephone conference call about Ms. Andre's non-appearance, their opposition papers submitted for a reconsideration request that Ms. Andre faxed to the Court minutes prior to the August 11, 2003 telephone conference, and their appearance in Court on September 8, 2003.
The Court has reviewed plaintiffs' submissions concerning the amount of fees and expenses incurred, and Laura Andre's opposition and finds that the reasonable fees and cost which Ms. Andre must pay are $10,650.00 in attorney fees and $579.57 in costs to the law firm of Mette, Evans & Woodside, and $5,925.00 in attorneys fees and $402.14 in costs to the law firm of Teich, Groh, Frost & Zindler, for the reasons now discussed.
In a September 29, 2003 Opinion and Order, this Court found that non-party witness, Laura Andre acted in direct violation of this Court's Order which directed her to be deposed when she unilaterally refused to continue her deposition on August 7, 2003. The Court had ordered Ms. Andre, the current spouse and business partner of judgment debtor Gregory Holloway, to be deposed about plaintiff's new post-judgment allegations that Mr. Holloway, with Ms. Andre's assistance, fraudulently transferred or concealed assets to avoid payment of a $6,097,015.00 consent judgment entered in June 1997. Ms. Andre was a co-defendant in this case, but settled all claims against her in June 1997, prior to her marriage to defendant Gregory Holloway.
Mr. Holloway appeared for three days of deposition in March 2003. Ms. Andre then appeared for deposition on August 6, 2003, but she objected to, or refused to answer, almost all questions presented to her. The Court heard her objections by telephone that day and ruled orally, finding that the deposition must proceed and directing Ms. Andre to answer all relevant questions within the defined scope.
Counsel for Ms. Andre then requested that the deposition be adjourned for the day, and continue on August 7, 2003. On August 7th, though, Ms. Andre unilaterally decided that she would not continue her deposition.
The Court scheduled another telephone conference with the parties on August 11, 2003. Minutes prior to the conference, Ms. Andre's attorney sent a reconsideration request to the Court by facsimile, urging the Court to again determine "[t]he threshold question [which] is the scope of discovery that's allowable for Ms. Andre." (Andre 8/11/03 Ltr.) The request was not filed with the Court.
The Court decided to provide the parties an opportunity to support their positions with record evidence and to appear at a September 8, 2003 hearing. Counsel for plaintiffs filed opposition and also moved for sanctions for Ms. Andre's failure to appear at the deposition and for her use of the reconsideration request to further delay her deposition.
This Court considered the positions of the parties, and ruled on September 29, 2003, again detailing the scope of permissible discovery from non-party witness Andre and finding that Laura Andre acted in direct violation of the Court's Order when she failed to appear at the August 7, 2003 deposition. The Court determined that the appropriate sanction was a shifting to her of plaintiffs' fees and costs associated with their appearance at the August 7, 2003 deposition, their appearance at the August 11, 2003 telephone conference call, their opposition to Ms. Andre's reconsideration request, and their September 8, 2003 appearance.
Plaintiffs then submitted their fee applications on October 10, 2003, and counsel for Ms. Andre filed her opposition on October 23, 2003. The Court has considered the submissions and finds that a total of $17,556.71 in fees and costs were reasonably incurred in connection with the August and September proceedings detailed in the Court's September 29, 2003 Opinion and Order.
II. DISCUSSION *fn1
The "starting point" for determining what attorneys' fees are reasonable in any case is to calculate a "lodestar" amount; "that is, the number of hours reasonably expended multiplied by a reasonable hourly rate." Blakey v. Cont'l Airlines, Inc., 2 F. Supp. 2d 598 (D.N.J. 1998) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). When calculating the lodestar, the district court must "carefully and critically evaluate the hours and the hourly rate set forth by counsel." Blakey, 2 F. Supp. 2d at 602. Then, the lodestar formula is presumed to yield a reasonable attorneys' fee which is "adequate to attract competent counsel, but which does not produce a windfall to attorneys." Washington v. Philadelphia County Court of Common Pleas, 89 F.3d 1031, 1035 (3d Cir. 1996) (citing Burlington v. Dague, 505 U.S. 557, 112 S. Ct. 2638, 120 L.Ed.2d 449 (1992)); Public Interest Research Group of N.J., Inc. v. Windall, 51 F.3d 1179, 1185 (3d Cir. 1995).
The party seeking the attorneys' fees has the burden to prove that the request is reasonable. Rode v. Dellaciprete, 892 F.2d 1177, 1183 (3d Cir. 1990). The party must submit evidence to support the hours worked and the rates claimed so that the court does not need to speculate as to how the attorneys used their time. Keenan v. City of Philadelphia, 983 F.2d 459, 473 (3d Cir. 1992). The court has great discretion in deciding what attorneys' fees are reasonable in a case, but cannot "decrease a fee award based on factors not raised at all by the adverse party." Rode, 892 F.2d at 1183 (quoting Bell v. United Princeton Props., Inc., 884 F.2d 713, 720 (3d Cir. 1989)). Yet, while the adverse party's objections must be clear, they do not need to challenge every specific time entry believed to be unreasonable or unnecessary. Bell, 884 F.2d at 720.
The lodestar method thus requires the Court to undertake a three-step analysis here: (a) determine a reasonable hourly rate, multiply it by (b) the number of hours reasonably expended, considering plaintiff's objections, and (c) decide whether any final adjustment is warranted. See Hensley, 461 U.S. at 433.
A. Reasonable Hourly Rate
The first step in applying the lodestar formula is to determine the appropriate hourly rate. Cityside Archives, Ltd. v. N.Y. Health and Hosp. Corp., 37 F. Supp. 2d 652, 658 (D.N.J. 1999). The party seeking the rate, here the plaintiffs, bears the burden of producing sufficient evidence of what constitutes a "reasonable market rate for the essential character and complexity of the legal services rendered." Evans v. Port Auth. of N.Y. and N.J., 273 F.3d 346, 361 (3d Cir. 2001) (quoting Smith v. Philadelphia Housing Auth., 107 F.3d 223, 225 (3d Cir. 1997)). A reasonable market rate also depends on the "experience and skill of the attorneys" and on the rates for "similar services by lawyers of reasonably comparable skill, experience, and reputation." Rode, 892 F.2d at 1183. Once the applicant has made a prima facie showing of a reasonable hourly rate, the opponent may contest the rate, "but only with appropriate record evidence." Evans, 273 F.3d at 361. With such evidence, the court has great discretion to adjust the rate. Id. Without such evidence, the applicant "must be awarded attorneys' fees at [its] requested rate." Id.
Here, David A. Fitzsimons, Esquire, attorney for plaintiff Louis Larson, seeks payment for his time at a $170.00 hourly rate, and for time spent by paralegal Pamela Miller Lupo at a $75.00 hourly rate. (Fitzsimons Cert.) Counsel for Ms. Andre agrees that Mr. Fitzsimons' hourly rate is reasonable. (Lipshutz Aff. ¶9.) Though he disputes payment of any fees for paralegal work because his "client is already being ordered to pay fees for two attorneys" and because the Court did not explicitly provide that paralegal fees would be awarded, he does not dispute the $75.00 hourly rate. (Id. ¶10.) The Court finds that the $75.00 hourly rate for the paralegal is reasonable and that reasonable paralegal fees are included within the scope of "attorneys fees and costs" allowed under this Court's September 29, 2003 Order. Indeed, the use of a paralegal to bill necessary work at a lesser rate is to be encouraged. Thus, this Court finds that Mr. Fitzsimons' and Ms. Lupo's rates are reasonable and customary for the services rendered. Ms. Andre will be required to pay for time reasonably spent by Mr. Fitzsimons at $170.00 per hour and by Ms. Lupo at $75.00 per hour.
Michael A. Zindler, Esquire, attorney for all plaintiffs except Louis Larson, seeks payment for his time at a $395.00 hourly rate, and for time spent by associate Brian W. Hofmeister, Esquire at a $250.00 hourly rate. (Zindler Aff.) Counsel for Ms. Andre disputes the reasonableness of these rates, especially when compared to Mr. Fitzsimons' $170.00 hourly rate. (Lipshutz Aff. ¶7.) The Court agrees that the rates are high, considering that this work was primarily office work, rather than courtroom work, and was not particularly complicated. Although Mr. Zindler is an experienced practitioner in commercial fields such as bankruptcy law, the issues underlying his present efforts involved discovery of assets rather than more difficult areas of legal specialization. Stated differently, where the issues surrounding this discovery dispute are not complicated and required little legal analysis as such, and where the services of an attorney of Mr. Zindler's experience are not necessary to obtain such discovery sanctions, an adjustment of the rates for Mr. Zindler and for Mr. Hofmeister is warranted, for purposes of this motion only. As a result this Court will require Ms. Andre to pay for time reasonably spent by Mr. Zindler at $250.00 per hour and by Mr. Hofmeister at $170.00 per hour.
B. Time Reasonably Expended
The second step in the calculation of the lodestar requires the court to determine what time was reasonably expended on the matter. Cityside, 37 F. Supp. 2d at 658 (citing Windall, 51 F.3d at 1188). Hours that are not reasonably expended -- those which are excessive, redundant, or otherwise unnecessary -- are not compensated by the court. Hensley, 461 U.S. at 433; Rode, 892 F.2d at 1183. In contrast, time is compensated if it is reasonably expended for work that is "useful and of a type ordinarily necessary to secure the final result obtained from the litigation." Cityside, 37 F. Supp. 2d at 658 (quoting Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 478 U.S. 546, 560-61 (1986)).
1. Time expended by Mette, Evans & Woodside for plaintiff
Mr. Fitzsimons, counsel for Louis Larsen, requests payment for 43.6 hours of his time and for 46.8 hours of paralegal Pamela Miller Lupo's time. Counsel for Ms. Andre disputes the reasonableness of certain time entries, *fn2 asserting that Ms. Andre should not have to pay for time that Mr. Fitzsimons spent "conferencing" with co-counsel Mr. Zindler. (Lipshutz Aff. ¶11.)
The Court has authority to reduce a fee award for duplication of effort among attorney and, in a case where counsel conferences extensively, may question "whether many of these activities, communications and conference calls were necessary at all" or were the product of overstaffing. Maldonado v. Houstoun, 256 F.3d 181, 187 (3d Cir. 2001). In so doing, though, the Court must understand that "careful preparation often requires collaboration and rehearsal." Planned Parenthood v. Atty. Gen'l of N.J., 297 F.3d 253, 272 (3d Cir. 2002).
Here, Ms. Andre disputes 24.5 hours of time that Mr. Fitzsimons and Mr. Zindler conferenced about this matter. *fn3 The Court finds that these time entries are reasonable and were necessarily incurred. This case does not present the situation where one party is represented by multiple counsel who conference and strategize together. Instead, Mr. Fitzsimons and Mr. Zindler represent different clients. The Court is satisfied that their conferencing actually reduced the time spent on this matter, as it made it possible for them to coordinate their efforts and to submit joint opposition to Ms. Andre's motion. The Court will thus allow recovery of fees for this 24.5 hours of time. Along with the 17.5 hours of undisputed time, which the Court also finds was reasonable, Mr. Fitzsimons is entitled to $7,140.00 for his efforts.
The Court also finds that the time spent by paralegal Pamela Miller Lupo was reasonably incurred. *fn4 Ms. Andre has not submitted opposition to these entries, except to assert that she should not have to pay for a paralegal's time. The Court finds, though, that Mr. Fitzsimons appropriately utilized the services of a paralegal to assist in this matter and to compile the vast documentation that was required to oppose Ms. Andre's reconsideration request. By delegating the tasks to Ms. Lupo, Mr. Fitzsimons was able to reduce the overall cost of the litigation as Ms. Lupo's hourly rate is $95.00 less than Mr. Fitzsimons. Thus, the Court finds that the 46.8 hours of time spent by Ms. Lupo was reasonable and necessary. At her $75.00 hourly rate, this totals $3,510.00.
Therefore, the total amount incurred by the law firm of Mette, Evans & Woodside in conjunction with the matters for which this Court awarded fees in the September 29, 2003 Order is $7,140.00 for Mr. Fitzsimon's time and $3,510.00 for Ms. Lupo's time, totaling $10,650.00.
2. Time expended by Teich, Groh, Frost and Zindler for all
plaintiffs except Louis Larsen
Mr. Zindler, counsel for all plaintiffs except Louis Larsen, request payment for 15.2 hours of his time and for 12.5 hours of Mr. Hofmeister's time. Of this time, Ms. Andre does not dispute 6.6 hours of time spent by Mr. Zindler. *fn5 This Court finds that the undisputed 6.6 hours were reasonably spent and will allow plaintiffs to recover payment at the $250.00 rate established in Section II(B) supra for such time, at a total of $1,650.00.
Ms. Andre disputes other entries for three basic reasons. First, she argues, as she did with regard to Mr. Fitzsimons' fees, that she should not have to pay for time spent in conferences with other attorneys. For the same reasons explained above, this Court finds that Mr. Zindler reasonably conferenced with other counsel and will allow recovery of fees for the 2.6 hours he spent in conferences, for a total of $650.00. *fn6
Second, Ms. Andre argues that no fees should be charged for time incurred by Mr. Hofmeister because Mr. Hofmeister did not file his own certification for the fees. Local Civil Rule 54.2, though, does not require that each individual attorney who has worked on a case file a certification, provided one attorney files an affidavit in which the identity of each person who has performed services is disclosed. Here, that has been done, and this Court will allow payment for the 12.5 hours spent on this matter by Brian Hofmeister, Esquire. At the Court's $170.00 approved rate, this totals $2,125.00. *fn7
Third, Ms. Andre objects to certain entries as being unreasonable in length. She asserts that Mr. Zindler's attendance at the deposition on August 7th should not have lasted five hours because it should have taken him no more than one hour to travel to Voorhees, NJ from Trenton, NJ, and because the deposition, which was scheduled for 10:00 a.m. and began at 11:00 a.m., only lasted eight minutes. (Lipshutz Aff. ¶8a.) According to Ms. Andre's calculation, therefore, the time for the August 7th deposition should have lasted no longer than 3.2 hours. This Court, however, finds that 5 hours is a reasonable length of time. Counsel is permitted reasonable time for rush-hour travel and for preparation prior to a deposition, and this Court finds that the additional 1.8 hours spent on such matters is reasonable. Ms. Andre also disputes time spent on August 13, 2003 on correspondence to the Court which lasted .3 hours, asserting that the "letter was one sentence in length and probably took less than a minute to dictate." (Lipshutz Aff. ¶8h.) The Court finds that .3 hours is a reasonable length of time to prepare (dictate, review and sign) a letter to the Court. Thus, for time disputed as unreasonably spent, this Court will allow recovery of fees for 5.3 hours, for a total of $1,325.00.
Finally, Ms. Andre objects to payment of Mr. Zindler's fees for a telephone call that he had with Ms. Andre's counsel, asserting that she "should not have to pay for a call to her own attorney." (Lipshutz Aff. ¶8x.) This objection is specious as the call was necessitated by Ms. Andre's conduct in this matter. Indeed, prudent practice and the Court's rules themselves (see L. Civ. R. 37.1(a)(1)), require that counsel fist confer to resolve any discovery dispute. This meet-and-confer requirement for discovery disputes, when observed, is fully compensable. The Court will allow recovery of fees for Mr. Zindler's 0.3 hour phone call to Ms. Andre's attorney, for a total of $75.00.
As a result, the total fees recoverable by Teich, Groh, Frost & Zindler, prior to consideration of any necessary adjustments is $5,925.00 for 27.7 hours of work. *fn8
C. Final Adjustments
Having decided that $10,650.00 of the fees incurred by the law firm of Mette, Evans & Woodside and $5,925.00 of the fees incurred by the law firm of Teich, Groh, Frost & Zindler were for time reasonably spent, this Court has the discretion to make adjustments to the fee award at the third step of the lodestar formula. Hensley, 461 U.S. at 434-37. At this stage, the district court may consider "the relationship between the degree of success and the amount of the award," and adjust the award accordingly. Pa. Envtl. Def. Found. v. Canon-McMillan Sch. Dist., 152 F.3d 228, 231 (3d Cir. 1998) (quoting Windall, 51 F.3d at 1190).
Here, plaintiffs obtained the maximum possible success which they sought. They successfully convinced the Court that Ms. Andre had acted in direct violation of this Court's prior discovery orders, and that she should be subject to a broader scope of post-judgment discovery in this matter. As a result, no downward departure is warranted based on the success obtained.
Ms. Andre, though, requests and adjustment because she is "also paying her own attorney for these proceedings," because her refusal to answer questions was based on her confusion about the scope of discovery, and because her counsel believed that the Court had inappropriately ruled based on inaccurate information during the August 6, 2003 telephone hearing. These objections provide no basis for a fee departure. First, Ms. Andre's need to pay her own counsel has no bearing on the appropriate of fee-shifting sanctions in this case. Were it to have an effect, the sanction provided by fee shifting would be lost. Second, as explained by the Court in its September 29, 2003 Opinion, Ms. Andre's confusion about the scope of discovery provided no basis for her to unilaterally refuse to attend deposition. Fed. R. Civ. P. 30(d)(1) does allow a refusal to answer at a deposition "to enforce a limitation directed by the Court," but it does not authorize a refusal to attend the deposition. Third, also explained in the Court's September 29, 2003 Opinion, counsel's "belief" that the Court ruled incorrectly on August 6, 2003 does not warrant a reduction of the plaintiffs' lodestar when, upon reconsideration, the court reaffirms its prior ruling.
As a result, this Court finds that the reasonable counsel fees which plaintiffs may collect pursuant to this Court's Order of September 29, 2003 are $10,650.00 to the law firm of Mette, Evans & Woodside and $5,925.00 to the law firm of Teich, Groh, Frost & Zindler.
The Court has also considered the costs incurred in this matter, which Ms. Andre has not contested. The law firm of Mette, Evans & Woodside incurred $579.57 for travel costs, photocopying, postage, and delivery services. (Fitzsimons Cert.) The law firm of Teich, Groh, Frost & Zindler incurred $402.14 for facsimile services, legal research, transcripts, photocopying, and delivery services. (Zindler Cert.) The Court finds that these costs were reasonably and necessarily incurred and will also require payment of such costs in the accompanying Order.
This Court has considered the fee petitions submitted by plaintiffs' counsel, and Ms. Andre's objections to them, and finds, for the foregoing reasons that the amount of reasonable counsel fees and costs which Ms. Andre must pay plaintiffs pursuant to this Court's Order of September 29, 2003 are:
Mette, Evans & Woodside:
Attorney fees 10,650.00
Teich, Groh, Frost & Zindler:
Attorney fees 5,925.00
Thus, Ms. Andre will be required to pay a total of
$17,556.71 in connection with this discovery dispute. This payment is due within twenty (20) days.
The accompanying order is entered.
JEROME B. SIMANDLE
United States District Judge
This matter having come before the Court upon the application of plaintiffs for an order determining the reasonable fees and costs which they may recover from non-party witness Laura Andre pursuant to this Court's Order of September 29, 2003 and directing Ms. Andre to pay such amounts; the Court having reviewed plaintiffs' submissions and Ms. Andre's objections;
IT IS this 1st day of December, 2003 hereby
ORDERED that $10,650.00 in attorney fees and $579.57 in costs incurred by the law firm of Mette, Evans & Woodside are reasonable; and
IT IS FURTHER ORDERED that Laura Andre shall pay to the law firm of Mette, Evans & Woodside $11,229.57 for such fees and costs within twenty (20) days of the date of this Order; and
IT IS FURTHER ORDERED that $5,925.00 in attorneys fees and $402.14 in costs incurred by the law firm of Teich, Groh, Frost & Zindler are reasonable; and
IT IS FURTHER ORDERED that Laura Andre shall pay to the law firm of Teich, Groh, Frost & Zindler $6,327.14 for such fees and costs within twenty (20) days of the date of this Order.
JEROME B. SIMANDLE
United States District Judge