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Jamy Enterprises, LLC v. E&S Food Service Corp.

October 7, 2009

JAMY ENTERPRISES, LLC, A NEW JERSEY CORPORATION, PLAINTIFF,
v.
E&S FOOD SERVICE CORP., A NEW YORK CORPORATION, DEFENDANT
E&S FOOD SERVICE CORP., A NEW YORK CORPORATION, THIRD-PARTY PLAINTIFF,
v.
JEFFREY LEHMANN, A NEW JERSEY RESIDENT, AND LEHMANN COLORADO CORP., A NEW JERSEY CORPORATION, THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Peter G. Sheridan, U.S.D.J.

OPINION

This matter comes before the Court on Plaintiff Jamy Enterprises's ("Jamy's") motion for award of attorney's fees pursuant to Federal Rule of Civil Procedure 54(d)(2) and to alter the judgment pursuant to Rule 59(e) to include interest, costs, and contractual penalty charges. Defendant E&S Food Service Corporation ("E&S") cross-moved for costs as well. Additionally, E&S moved to set aside the verdict pursuant to Rule 50. The Court will address each of these motions in turn.

I. Motion for Legal Fees

Since this motion for legal fees implicates other actions which occurred before and during trial about the imposition of legal fees as an element of damages, some limited relevant facts are presented.

The trial occurred between May 11 and May 22, 2009 before a jury of eight persons. Among other things, the jury determined that Jamy was entitled to $262,538.47 from E&S for its breach of the Lease; but a second claim for breach of a shareholder agreement was "no caused" by the jury. Section 25.C of the Lease provides for fees. It states:

C. Landlord may sue for and collect any amounts which may be due pursuant to the provisions of Section 27.B from time to time as landlord may elect, but no such suit shall bar or in any way prejudice the rights of landlord to enforce the collection of amounts due at any time or time thereafter by a like or similar proceeding. All legal fees and expenses incurred by Landlord in enforcing its rights under this Lease shall be deemed Additional Rent and due and payable by Tenant upon demand. In the event Landlord brings any summary action for dispossession of Tenant for failure to pay rent, Landlord's attorney's fee and legal expenses shall be added to and included as part of the rent due and owing by Tenant with respect to the periods in default. Tenant expressly waives any and all rights to recover or regain possession of the Premises, or to reinstate or to redeem this Lease, or other right of redemption as permitted or provided by or under any statute, law or decision now or hereafter in force and effect.

As such a claim for legal fees by Jamy was always part of the case. In the Final Joint Pre-Trial Order (FPTO), legal fees were enumerated as part of the damages sought. In the FPTO, Jamy set forth its claim within the contested facts. At one point the FPTO reads:

Pursuant to Section 25.C of the Lease, E&S is liable to Jamy for its legal fees and costs incurred in connection with its lawsuit to collect both Annual Basic Rent and Additional Rent due and owing to Jamy. To date, Jamy's fees in connection with this lawsuit total $146,299.70. This amount will continue to increase as the matter proceeds to trial.

Thus, Jamy asserted that damages under the contract may include attorney's fees and that this was an issue to be presented at trial, if appropriate. Moreover, in another section of the FPTO, E&S disclaims legal fees are due. "E&S is not liable to Jamy for Jamy's legal fees and costs pursuant to 25.C [legal fee section] of the purported Lease." (FPTO 56.) Clearly, this was a contested issue that both parties understood was an element that went to damages under the Lease. Additionally, in Section 3 of the FPTO, both parties stipulated that section 25 [legal fees provision] of the Lease was germaine. At trial, the entire Lease was submitted to the jury as evidence.

Peculiarly, Plaintiff's counsel in his opening remarks advised the jury about legal fees. Mr. Strocco averred: "As I said, the Judge is going to instruct you again. Your purpose is to determine whether or not the defendant lied to Jamy, to Lehmann Colorado, for breach of a Lease, breach of good faith and the amount of money that is owed Mr. Lehmann. If you rule in favor of Jamy under the Lease, it also includes fees but the Court will address that." But for this one statement, there was no other discussion about legal fees at trial. The Court was never requested to "address" the issue during the jury trial. In addition, the Plaintiffs submitted to the jury a handwritten document (Exhibit P-161) of Mr. Lehman outlining his damages; however Mr. Lehman never mentioned legal fees in his testimony. The list of damages included:

Exhibit P-161

Insurance $8,307.77 PSE&G $13,385.73 United Water $843.37 Bldg Rental $24,485.60 yearly Value 40% E&S $677,000.00 Lost Pay $5000.00 Truck Rental Const. Leasing $1,800.00 Diesel Fuel $350.00 Payment (cash) to Employees $4,400.00 One would surmise if legal fees on the lease were at issue, Mr. Lehman would have itemized them in Exhibit 161 like the other expenditures. With regard to the legal fees, Plaintiff's counsel submitted an affidavit in favor of same. It asserts that $4,045.35 is directly attributable to fees assocated with collection of rent. In addition, the affidavit asserts that $462,839.88 for "overall case services" (OCS) refers to all fees related to the litigation other than fees related directly to the lease or the shareholder agreement.

Law

There are two independent reasons for denying the legal fees claim. They are (a) the fees are pursuant to the contract and do not fit within Rule 54(d)(2); ...


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