Court Opinion

ID: 3185131
Source: CourtListenerOpinion
Date Created: 2016-03-14 15:04:52.885603+00
Date Added: 2024-06-11T14:08:33.553635
License: Public Domain

15-1808
     Exec. Risk Indem., Inc. v. Fieldbridge Assocs. LLC

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
     ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Thurgood Marshall United
 3       States Courthouse, 40 Foley Square, in the City of New York,
 4       on the 14th day of March, two thousand sixteen.
 5
 6       PRESENT: DENNIS JACOBS,
 7                DENNY CHIN,
 8                CHRISTOPHER F. DRONEY,
 9                              Circuit Judges.
10
11       - - - - - - - - - - - - - - - - - - - -X
12       EXECUTIVE RISK INDEMNITY, INC., as
13       subrogee of Andrews International,
14       Inc. and Copstat Security, LLC,
15                Plaintiffs-Appellants,
16
17                    -v.-                                               15-1808
18
19       FIELDBRIDGE ASSOCIATES LLC,
20                Defendant-Appellee.1
21       - - - - - - - - - - - - - - - - - - - -X
22

                1
               The Clerk of the Court is directed to amend the
         caption as above.
                                                  1
 1   FOR APPELLANTS:            Andrew I. Hamelsky, White and
 2                              Williams LLP, New York, New York.
 3
 4   FOR APPELLEE:              Dara L. Rosenbaum, Rosenbaum &
 5                              Taylor, P.C., White Plains, New
 6                              York.
 7
 8        Appeal from two orders of the United States District
 9   Court for the Southern District of New York (Fox, M.J.).
10
11        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
12   AND DECREED that the May 29, 2015, final order of the
13   district court be AFFIRMED.
14
15        Executive Risk Indemnity Inc. (“Executive Risk”) as
16   subrogee of its insureds Andrews International, Inc. and
17   Copstat Security, LLC appeals from two orders of the United
18   States District Court for the Southern District of New York
19   (Fox, M.J.).2 At issue are the amount of attorneys’ fees
20   expended by Executive Risk in the defense of the underlying
21   tort litigation, and whether Executive Risk can recover fees
22   incurred in this subrogation action. We assume the parties’
23   familiarity with the underlying facts, the procedural
24   history, and the issues presented for review.
25
26        1.  The district court declined to award attorneys’
27   fees for work performed in the underlying tort action by any
28   person other than the main partner, Barry Jacobs. Under New
29   York law, “[a]n award of attorneys’ fees pursuant to [] a
30   contractual provision may only be enforced to the extent
31   that the amount is reasonable and warranted for the services
32   actually rendered.” Kamco Supply Corp. v. Annex Contracting
33   Inc., 689 N.Y.S.2d 189, 190 (App. Div. 1999) (citing, e.g.,
34   In re First Nat’l Bank of E. Islip v. Brower, 368 N.E.2d
35   1240 (N.Y. 1977)); see also F.H. Krear & Co. v. Nineteen
36   Named Trustees, 810 F.2d 1250, 1263 (2d Cir. 1987) (fees
37   awarded pursuant to contract must be “not unreasonable”).
38   “A variety of factors informs the court’s determination of
39   whether a requested amount of attorneys’ fees is reasonable

         2
            We have appellate jurisdiction even though the
     district court did not enter a separate final judgment
     because the May 29, 2015, order “clearly represents a final
     decision and the appellees do not object to the taking of an
     appeal.” Selletti v. Carey, 173 F.3d 104, 109-10 (2d Cir.
     1999).
                                  2
 1   or unreasonable, including ‘the difficulty of the questions
 2   involved; the skill required to handle the problem; the time
 3   and labor required; the lawyer’s experience, ability and
 4   reputation; the customary fee charged by the Bar for similar
 5   services; and the amount involved.’” F.H. Krear, 810 F.2d
6   at 1263 (quoting In re Estate of Schaich, 391 N.Y.S.2d 135,
 7   136 (App. Div. 1977)). With the exception of Mr. Jacobs,
 8   Executive Risk failed to provide the district court with
 9   sufficient information as to one factor that bears on
10   reasonableness: the lawyer’s experience, ability and
11   reputation. New York courts put the burden of establishing
12   fees’ reasonableness on the party seeking fees. See, e.g.,
13   Potts v. Hines, 534 N.Y.S.2d 507, 508 (App. Div. 1988);
14   Marine Midland Bank v. Roberts, 424 N.Y.S.2d 671, 673 (Civ.
15   Ct. 1980). Since Executive Risk did not carry that burden,
16   the court did not abuse its discretion in determining that
17   it could not find the requested fees of lawyers (and
18   paralegals) other than Mr. Jacobs to be reasonable and
19   declining to award any fees for their services. See
20   SO/Bluestar, LLC v. Canarsie Hotel Corp., 825 N.Y.S.2d 80,
21   82 (App. Div. 2006) (reversing award of attorneys’ fees
22   where the trial court did not “possess sufficient
23   information upon which to make an informed assessment of the
24   reasonable value of the legal services rendered” (quoting
25   Bankers Fed. Sav. Bank FSB v. Off W. Broadway Developers,
26   638 N.Y.S.2d 72, 74 (App. Div. 1996))); Potts, 534 N.Y.S.2d
27   at 508 (affirming denial of fees because former attorney
28   “failed to satisfy his burden of establishing the value of
29   the legal services performed”).
30
31        When a New York State trial court lacks sufficient
32   information from which to determine whether fees requested
33   pursuant to a contractual provision are reasonable, the
34   court must hold a hearing (or otherwise obtain additional
35   information), rather than rejecting that portion of the
36   request outright. See SO/Bluestar, 825 N.Y.S.2d at 82;
37   Bankers Fed., 638 N.Y.S.2d at 74-75; Cmty. Sav. Bank v.
38   Shaad, 482 N.Y.S.2d 162, 163 (App. Div. 1984). However,
39   that procedural rule does not apply in this diversity
40   action. See Gasperini v. Ctr. for Humanities, 518 U.S. 415,
41   427 (1996) (“Under the Erie doctrine, federal courts sitting
42   in diversity apply state substantive law and federal
43   procedural law.”); Pls.-Appellants’ Br. at 25 (“[U]nder New
44   York law, if the district court could not ascertain the
45   reasonable fees to be awarded after receiving Executive
46   Risk’s submission, the proper procedure was to set the
47   matter down for a hearing.” (emphasis added)). Since this

                                  3
 1   state procedural rule does not apply, acceptance of
 2   additional evidentiary submissions in connection with
 3   Executive Risk’s motion for reconsideration was a matter
 4   within the district court’s discretion. Williams v.
 5   Citigroup, Inc., 659 F.3d 208, 214 n.3 (2d Cir. 2011) (per
 6   curiam). It did not abuse discretion in declining to accept
 7   and consider these materials.
 8
 9        2.   Executive Risk argues that the district court
10   erred in declining to award attorneys’ fees incurred in
11   prosecuting this subrogation action, because contemporaneous
12   time records are not required under New York law. We need
13   not decide whether Executive Risk’s submission was
14   sufficient in this respect because New York law does not
15   authorize an award of attorneys’ fees incurred in an action
16   to recover on a contract, unless provided for by the
17   contract. See Doyle v. Allstate Ins., 136 N.E.2d 484, 487
18   (N.Y. 1956); Swiss Credit Bank v. Int’l Bank, Ltd., 200
19 N.Y.S.2d 828, 830-31 (Sup. Ct. 1960).3 And “[u]nder New
20   York law, ‘the court should not infer a party’s intention’
21   to provide counsel fees as damages for a breach of contract
22   ‘unless the intention to do so is unmistakably clear’ from
23   the language of the contract.” Oscar Gruss & Sons, Inc. v.
24   Hollander, 337 F.3d 186, 199 (2d Cir. 2003) (quoting Hooper
25   Assocs., Ltd. v. AGS Computs., Inc., 548 N.E.2d 903, 905
26   (N.Y. 1989)); see also Swiss Credit Bank, 200 N.Y.S.2d at
27   830-31 (“A general agreement for the payment of counsel fees
28   does not generally include counsel fees in the suit to
29   collect those fees.” (citing Doyle, 136 N.E.2d 484)). The
30   contract between Fieldbridge and Executive Risk’s insureds
31   does not clearly provide for recovery of attorneys’ fees
32   incurred in an action to collect on a breach of the
33   contract.
34
35
36
37
38

         3
           Executive Risk attempts to read Johnson v. General
     Mutual Insurance Co., 246 N.E.2d 713 (N.Y. 1969), to hold
     otherwise. However, the New York Court of Appeals has been
     exceedingly clear that legal fees incurred in an action to
     recover legal fees are noncompensable. See Chapel v.
     Mitchell, 642 N.E.2d 1082, 1083-84 (N.Y. 1994) (discussing
     Johnson, 246 N.E.2d 713, and Doyle, 136 N.E.2d 484).
                                  4
1        For the foregoing reasons, and finding no merit in
2   Executive Risk’s other arguments, we hereby AFFIRM the May
3   29, 2015, final order of the district court.
4
5                              FOR THE COURT:
6                              CATHERINE O’HAGAN WOLFE, CLERK
7

                                 5