Opinion ID: 482811
Heading Depth: 3
Heading Rank: 2

Heading: Appropriate Time and Labor

Text: 76 In determining whether a requested fee is justified by the time and labor expended, the New York courts make their own assessments of the reasonableness of the amount of time spent on the case. Zauderer v. Barcellona, 130 Misc.2d at 236, 495 N.Y.S.2d at 882-83. The burden is on counsel to keep and present records from which the court may determine the nature of the work done, the need for it, and the amount of time reasonably required; where adequate contemporaneous records have not been kept, the court should not award the full amount requested. See, e.g., Jordan v. Freeman, 40 A.D.2d 656, 656-57, 336 N.Y.S.2d 671, 671-72 (1st Dep't 1972) (reducing award from $12,000 to $6,000, stating that [t]he record le[ft] much to be desired regarding the actual time spent since [the attorney] testified that he did not keep a diary nor did he keep time records and his estimate of time spent was based upon a review of his files); In re Ury, 108 A.D.2d 816, 816-17, 485 N.Y.S.2d 329, 330 (2d Dep't 1985) (reduction of attorney's fee from $30,000 to $13,000 upheld in a surrogate proceeding because there was no categorical breakdown of services); In re Schaich, 55 A.D.2d at 914, 391 N.Y.S.2d at 136 (fee reduction in surrogate proceeding upheld where there existed no written day-by-day record of the time spent); cf. New York State Association for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1147 (2d Cir.1983) (announcing a requirement for statutory attorneys' fee cases, similar to that of New York law for contractual fee cases, that accurate and contemporaneous time records are a prerequisite for attorney's fees in this Circuit). 77 There are two principal respects in which Krear's attorneys' record-keeping practices impeded a precise calculation of the hours reasonably spent in representation of Krear in the present action. 78 First, the time records submitted to the district court by Levy, Katz, and Baden did not contain sufficient detail to reveal what proportion of their time was spent in pursuit of Krear's own claim and what was devoted to defense of the counterclaims. Katz's time sheets, for example, customarily described his activities in no more than two or three words for any given day, such as Rev. Docs or Clients re testimony. Baden's records are little better. 79 For a number of reasons, we assume that a substantial amount of time was spent by the attorneys in connection with the counterclaims. Krear's breach of contract claim against the Trustees was relatively straightforward. Suit was commenced, discovery was initiated, and Krear moved for summary judgment less than a year later. The Trustees asserted, inter alia, that there were material issues of fact in connection with their defenses and counterclaims, and the motion was denied; discovery continued for more than three years. A substantial amount of trial time was devoted to the Trustees' efforts to prove that the Contracts had resulted from a conspiracy among Krear, Grauso, and Mozer. In awarding fees, the district judge was extremely critical of the Trustees for protracting the litigation; one of the facts she mentioned was interposition of the counterclaims. Thus, it appears that the counterclaim issues required a not insignificant amount of time, though doubtless not all of the time by which the litigation was prolonged, for the court mentioned other factors as well. In the absence of more informative record-keeping by Krear's attorneys, we ascribe to the defense of the counterclaims one-third of the total hours (after deducting time spent in connection with the fee application, see Part II.C.3. below) recorded by Krear's attorneys. 80 The second respect in which the record-keeping was deficient concerns only the pre-1984 services of the Baden firm, which was originally retained by Krear on a contingent fee basis to represent it in a related action involving these Contracts, Krear v. Pitta, 80 Civ. 6557 (S.D.N.Y.) (dubbed Krear II in the depositions relating to the fee application), and later began working on the present case (Krear I ) on a time-spent fee basis. The Trustees argued that Krear was not entitled to recover any fees for Baden prior to the Trustees' being given notice that Baden was becoming counsel in Krear I. While we reject this notion, we are nonetheless concerned by the fact that, according to Kramer's deposition, Baden did not follow anything terribly consistent in distinguishing the hours spent in connection with the present case from those spent on Krear II. The coexistence of two related matters, one accepted on a contingent fee basis and one on a time-spent basis, creates the possibility that counsel may enjoy a windfall if it has billed a disproportionate amount of the common time to the case in which it is to receive the hourly rate. The potential for such a windfall in the present case was vividly established by the Kramer deposition. Kramer testified that the retainer agreement in Krear II provided that Baden would not receive payment for time spent on that case but would receive one-third of any recovery therein, or in any event a minimum of $20,000 or $30,000. Thereafter, in connection with motion practice and pretrial discovery that was pertinent to both cases, Baden proceeded to ascribe most of its services to Krear I, not to Krear II. For example, when it moved to consolidate the two cases, all time was billed to Krear I, none to Krear II; when Kramer attended depositions that were pertinent to both cases, all time was billed to Krear I, none to Krear II. Kramer testified candidly as follows: 81 I didn't tend to keep much Krear II time because it was a contingency case. It didn't make much difference what time I spent on it. 82 Baden sought compensation in the present case for all of the time it had ascribed to Krear I, much of which was applicable to both cases. Indeed, some of this time was revealed at the Kramer deposition to be applicable only to Krear II. The district court thus erroneously rejected the Trustees' contention that some of Baden's charges in the present case included time more appropriately ascribable to Krear II as sheer speculation. The Trustees' objection was strongly justified by Kramer's deposition testimony. To the extent that any work was devoted to the prosecution of more than one case, New York law, which discourages any sort of manipulation to increase the fee burden of the losing party, must be construed as requiring that only the pertinent fraction of the time charges for that work be compensated by a fee award in the case in which the parties have agreed that the loser will pay the victor's attorneys' fees. 83 Accordingly, we conclude that Baden may properly be compensated in the present action for no more than one-half of its non-counterclaim services rendered prior to 1984. The remaining non-counterclaim time, which is properly ascribable to Krear II, is not compensable in this lawsuit.