Court Opinion

ID: 9927370
Source: CourtListenerOpinion
Date Created: 2024-01-26 21:07:33.462788+00
Date Added: 2024-06-11T09:25:49.009525
License: Public Domain

Pacific Western Bank v 919 Old Winter Haven Realty,
                          LLC
               2024 NY Slip Op 30291(U)
                    January 23, 2024
           Supreme Court, New York County
        Docket Number: Index No. 652216/2020
                  Judge: Louis L. Nock
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
                                                                                                                      INDEX NO. 652216/2020
  NYSCEF DOC. NO. 64                                                                                            RECEIVED NYSCEF: 01/23/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. LOUIS L. NOCK                                               PART                              38M
                                                                                      Justice
            ---------------------------------------------------------------------------------X    INDEX NO.          652216/2020
             PACIFIC WESTERN BANK,
                                                                                                  MOTION DATE         12/02/2022
                                                         Plaintiff,
                                                                                                  MOTION SEQ. NO.         002
                                                 -v-
             919 OLD WINTER HAVEN REALTY, LLC, 2055 PALMETTO
             REALTY, LLC, 703 SOUTH 29TH ST REALTY, LLC, 1650
             FOURAKER REALTY, LLC, 3663 15TH ST REALTY, LLC,
             ATLANTIC CARE ACQUISITION, LLC, WEST
                                                                                                    DECISION + ORDER ON
             JACKSONVILLE CARE ACQUISITION, LLC,
             AUBURNDALE OAKS CARE ACQUISITION, LLC, LAUREL                                                MOTION
             POINT CARE ACQUISITION, LLC, CLEAR WATER CARE
             ACQUISITION, LLC, and LEOPOLD FRIEDMAN,

                                                         Defendants.
            ---------------------------------------------------------------------------------X

            The following e-filed documents, listed by NYSCEF document numbers (Motion 002) 50, 51, 52, 53, 54,
            55, 56, 57, 58, 59, 60, 61, 62, and 63
            were read on this motion for                                                         DEFENSE COSTS                      .

            LOUIS L. NOCK, J.

                      By decision and order dated June 9, 2022, the court granted plaintiff’s motion for

            summary judgment as to liability on its claims that defendants must reimburse its defense costs

            in several actions pending in the State of Florida (NYSCEF Doc. No. 47). The reader is referred

            to that decision for a fuller discussion of the underlying facts of the case. Following the

            decision, the parties requested to resolve the issue of plaintiff’s defense costs in the Florida

            actions by submission of papers rather than a damages hearing, which the court allowed. Upon

            the above listed documents, plaintiff’s instant damages application is granted in accordance with

            the following memorandum.

                      In its prior order, the court held that defendants were “obligated to pay plaintiff’s defense

            costs while the claims against plaintiff are being litigated” (NYSCEF Doc. No. 47 at 8). As the

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             Motion No. 002

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  NYSCEF DOC. NO. 64                                                                       RECEIVED NYSCEF: 01/23/2024

            prior order further noted, “[f]unds that have been advanced must be repaid if ultimately it is

            determined that the recipient is not entitled to indemnification” (id.) – in this case, upon a finding

            by the Florida courts of gross negligence, willful misconduct, or any intentional behavior by

            plaintiff (see, id., at 6-8). It is undisputed that the Florida actions have now been dismissed

            against plaintiff without any such finding (Cohn affirmation, NYSCEF Doc. No. 51, ¶ 17).

            Therefore, as per the court’s previous order, defendants herein are obligated to indemnify

            plaintiff for its defense costs.

                    Defendants assert that the amount of fees and costs claimed by plaintiff is inappropriately

            excessive for multiple reasons, claiming that: plaintiff’s attorneys charged rates in excess of the

            reasonable rates for the relevant legal community; the hours expended by counsel were not

            reasonable; and plaintiff overstaffed the case, as the dispute did not require the involvement of as

            many attorneys and staff as counsel billed for.

                    “An award of attorneys' fees pursuant to . . . a contractual provision may only be enforced

            to the extent that the amount is reasonable and warranted for the services actually rendered”

            (Kamco Supply Corp. v Annex Contr. Inc., 261 AD2d 363, 365 [2d Dept 1999]). “[T]he court

            must possess sufficient information upon which to make an informed assessment of the

            reasonable value of the legal services rendered” (SO/Bluestar, LLC v Canarsie Hotel Corp., 33

            AD3d 986, 988 [2d Dept 2006]). In determining the reasonable amount of attorneys’ fees, courts

            look to several factors: “the time and labor required; the difficulty of the questions involved; the

            skill required to handle the issues presented; the experience, ability and reputation of counsel; the

            proposed amount of fees; the benefit resulting to the putative class from the services; the

            customary fee charged for similar services; the contingency or certainty of compensation; the

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             Motion No. 002

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  NYSCEF DOC. NO. 64                                                                         RECEIVED NYSCEF: 01/23/2024

            results obtained; and the responsibility involved” (Gordon v Verizon Communications, Inc., 148

            AD3d 146, 165 [1st Dept 2017]).

                    Here, the fees incurred by plaintiff in the Florida action are reasonable. Defendants do

            not meaningfully question the skill required to litigate these matters, nor the experience, ability,

            and reputation of retained counsel. Given the number of lawsuits, the amount potentially at

            stake, the novel legal position taken by the Florida plaintiffs – which even defendants herein

            initially attested to (Def.’s memorandum of law, NYSCEF Doc. No. 35 at 2-3, 8, 16), the amount

            of pleadings and motion practice that took place in the Florida actions (Cohn affirmation,

            NYSCEF Doc. No. 51, ¶¶ 6-16), and the complete victory for plaintiff obtained upon dismissal

            of the Florida actions (id., ¶ 17), all of the factors set forth above weigh in plaintiff’s favor

            (Gordon, 148 AD3d at 165).

                    Defendants object to the rates charged by plaintiff’s counsel. There is no dispute in the

            record that counsel’s fees are comparable to those of other lawyers of similar expertise and

            experience in New York. While defendants argue that the relevant rate is that charged in Florida,

            this argument is inadequately supported. Generally, the relevant rate is the one in the area in

            which the reviewing court sits (Simmons v New York City Tr. Auth., 575 F3d 170, 174 [2d Cir

            2009], citing Blum v Stephens, 465 U.S. 886 [1984]; Matter of Gamache v Steinhaus, 7 AD3d

            525, 527 [2d Dept 2004] [“As a general rule, the reasonable hourly rate [for an attorney] should

            be based on the customary fee charged for similar services by lawyers in the community with

            like experience and of comparable reputation to those by whom the prevailing party was

            represented”] [internal quotation marks and citation omitted; brackets in original]). Moreover,

            defendant presents only the affidavit of one Florida attorney, who does not have personal

            knowledge of the Florida actions, and attests to the prevailing rates for medical malpractice cases

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             Motion No. 002

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  NYSCEF DOC. NO. 64                                                                       RECEIVED NYSCEF: 01/23/2024

            (Humphrey aff., NYSCEF Doc. No. 60). As the court’s prior decision demonstrates, the Florida

            actions as alleged against plaintiff herein were not simple medical malpractice cases. To the

            extent that defendants argue that plaintiff retained out-of-state counsel for purely Florida matters

            unnecessarily, litigants generally have the right to be represented by counsel of their own

            choosing (see Ferolito v Vultaggio, 99 AD3d 19, 27 [1st Dept 2012]). Here, where plaintiff

            chose to be represented by counsel who have represented it for more than 20 years (Cohn reply

            affirmation, NYSCEF Doc. No. 62, ¶ 3), the court will not penalize it for doing so. As set forth

            in its prior decision, the court also notes that defendants have effectively waived this argument

            by not objecting to plaintiff’s choice of counsel in the Florida actions, and paying, for a time,

            plaintiff’s legal fees without objection (NYSCEF Doc. No. 47 at 8-10).

                   Defendants next argue that plaintiff’s counsel accrued unreasonable hours due to the

            decision: to staff the case with attorneys from outside Florida who were not admitted to the

            Florida Bar; to hire two local law firms to act as local counsel; and to have numerous attorneys

            and staff from each office working on the cases. As plaintiff points out, however, it initially

            retained William Dorsey, Esq., and Kenneth Ottaviano, Esq., when they were at Katten Muchin

            Rosenman LLP (“Katten”) (Cohn reply affirmation, NYSCEF Doc. No. 62, ¶ 3). Katten did not

            then and does not now have any offices in Florida, necessitating the hiring of local counsel (id., ¶

            4). Moreover, the geographical distance between the courthouses in which the Florida actions

            were brought necessitated the hiring of two separate firms (id., ¶ 5). After Messrs. Dorsey and

            Ottaviano moved to Blank Rome LLP, the case transitioned away from one of the local firms and

            to Blank Rome’s Tampa, Florida, office for local support (id., ¶¶ 6, 10). As for the number of

            attorneys and non-attorney staff billing on the cases, an analysis of the billing records, and the

            explanatory gloss provided by counsel, shows that the vast majority of the work was billed by

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             Motion No. 002

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  NYSCEF DOC. NO. 64                                                                         RECEIVED NYSCEF: 01/23/2024

            one partner, Mr. Dorsey, one associate at a time (Adam Florek, Esq., overlapping briefly with

            Rachel L. Cohn, Esq. ), and one paralegal at a time (id., ¶¶ 6-10; Blank Rome billing records,

            NYSCEF Doc. No. 55). Michelle Gervais, Esq., of Blank Rome’s Florida office, provided local

            assistance beginning in April 2020 (Cohn reply affirmation, ¶ 10). The other billers had much

            more limited involvement with the matter, which is not an unusual staffing pattern (id., ¶¶ 11-12;

            Blank Rome billing records, NYSCEF Doc. No. 55).

                   Finally, defendants also challenge plaintiff’s bills due to counsel’s use of “block billing,”

            or including multiple tasks in a single time entry. “Block billing . . . is common practice among

            law firms and does not render the invoiced amounts per se unreasonable” (Freidman v Yakov,

            138 AD3d 554, 556 [1st Dept 2016] [internal quotation marks and citations omitted]). Here, the

            entries are sufficiently detailed to evaluate the individual tasks vis-à-vis the aggregate time billed

            for them, and Ms. Cohn’s affirmation testimony is sufficiently explanatory as to allow the court

            to determine the reasonableness and necessity of the services rendered (546-552 W. 146th St.

            LLC v Arfa, 99 AD3d 117, 123 [1st Dept 2012] [“(T)he law firm's block billing did not render

            the invoiced amounts per se unreasonable and the allocations of work billed between this case

            and related cases were adequately explained by the billing attorney's unrebutted and credible

            testimony and the spreadsheet he prepared to assist in understanding the invoices”]). While

            plaintiff did not proffer the affidavit of an attorney from either of its local co-counsel firms, their

            invoices and billing records are sufficiently detailed, and the nature and procedural history of the

            Florida actions is sufficiently set forth in the record, to allow the court to evaluate the records

            (local counsel billing records, NYSCEF Doc. Nos. 53-54). The court notes that while defendants

            object to the practice of block billing, they do not challenge the reasonableness of the services

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             Motion No. 002

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            actually provided (except in the manner of their previous objections as to how counsel staffed the

            case, which objection is addressed above).

                       Accordingly, it is hereby

                       ORDERED that the motion is granted, and it is further

                       ORDERED that the Clerk of the Court is directed to enter judgment in favor of plaintiff

            and against defendants, jointly and severally, in the amount of $828,213.68, with interest thereon

            at the statutory rate from October 16, 2019,1 through entry of judgment, as calculated by the

            Clerk, together with costs and disbursements as taxed by the Clerk upon submission of an

            appropriate bill of costs.

                       This constitutes the decision and order of the court.

                                                                                     ENTER:

                       1/23/2024                                                                       $SIG$
                         DATE                                                                   LOUIS L. NOCK, J.S.C.
                CHECK ONE:                  X   CASE DISPOSED                       NON-FINAL DISPOSITION

                                            X   GRANTED               DENIED        GRANTED IN PART                 OTHER

                APPLICATION:                    SETTLE ORDER                        SUBMIT ORDER

                CHECK IF APPROPRIATE:           INCLUDES TRANSFER/REASSIGN          FIDUCIARY APPOINTMENT           REFERENCE

            1
                The date defendants ceased making ongoing attorney fee advances to plaintiff.
                652216/2020 PACIFIC WESTERN BANK vs. 919 OLD WINTER HAVEN REALTY,                                Page 6 of 6
                Motion No. 002

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