Opinion
07 Civ. 4109 (DLC) (KNF).
January 23, 2009
REPORT AND RECOMMENDATION
TO THE HONORABLE DENISE L. COTE, UNITED STATES DISTRICT JUDGE
INTRODUCTION
The plaintiff, DB Structured Products, Inc. ("DBSP"), brought this diversity action against the defendant, Baltimore American Mortgage Corporation, Inc. ("BAMC"), seeking legal and equitable relief in connection with 15 residential mortgage loans BAMC sold to DBSP, all of which are alleged to be in default. DBSP asserted claims for: (1) breach of contract; (2) unjust enrichment; (3) indemnification; and (4) specific performance. Through this action, the plaintiff sought the following relief: i) damages, of not less than $1.87 million; ii) specific performance of various contractual terms and conditions; and iii) attorneys' fees and related disbursements incurred by DBSP, together with interest accrued since May 21, 2008. BAMC failed to have its counsel file a notice of appearance timely, and your Honor determined that a default judgment should be entered against it. The matter was referred by your Honor to the undersigned so that an inquest may be held to determine what amount of damages, if any, should be awarded to the plaintiff.
BACKGROUND
By an Order, the Court directed DBSP to submit proposed findings of fact and conclusions of law, as well as an inquest memorandum, accompanied by supporting affidavits and exhibits, setting forth its proof of damages and the costs of this action, including any applicable interest and attorney's fees. BAMC was directed to make a responsive inquest submission(s).
DBSP complied with the order. BAMC did not make an inquest submission, but did assert, in an untimely responsive pleading, that, inter alia: (a) it did not repurchase the pertinent loans due to DBSP's failure to comply with its contractual obligations; (b) one or more of the loans was not in default; and (c) DBSP failed to tender properly the loan(s) it seeks to have repurchased.
The plaintiff's inquest submissions indicate that, as of May 21, 2008, an aggregate amount of $2,030,166.35 is owed to it by the defendant, plus interest, accruing at a daily rate of $434.70. DBSP alleges 15 residential mortgage loans it purchased from the defendant are subject to the parties' contractual default provisions. According to the plaintiff, a directive from the court requiring the defendant to perform specifically under the parties' loan agreements would entitle it to receive $1,991,036.86 from the defendant: the repurchase price for the 15 defaulted mortgage loans. The $1,991,036.86 are comprised of: (i) an unpaid principal balance for the 15 loans of $1,767,732.19; (ii) unpaid accrued interest of $202,878.28; and (iii) a purchase premium of $20,426.39. DBSP also seeks attorneys' fees of $39,129.49, inclusive of certain disbursements.
Findings of Fact
At an inquest, the complaint's well-pleaded material factual allegations must be accepted as true, except those that relate to damages. See Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). The plaintiff is also entitled to all reasonable inferences from the evidence presented. See id. Based upon the submissions made by the plaintiff, the complaint and answer filed in the instant action, and the record of the case, the following findings of fact are made.
DBSP is a corporation that, inter alia, purchases residential mortgages from mortgage lenders and sells them to financial institutions. DBSP's parent corporation is Deutsche Bank, AG. BAMC makes first or second residential mortgage loans to consumers. On July 29, 2004, DBSP and BAMC entered into a contract entitled Seller Loan Purchase Agreement ("Purchase Agreement"), which provided, inter alia, that BAMC would sell to DBSP certain residential mortgage loans. The Purchase Agreement and the Deutsche Bank Correspondent Lending Seller Guide ("Seller Guide"), which was incorporated by reference into the Purchase Agreement, govern the disputed transactions between DBSP and BAMC that are germane to the instant action.
The terms and conditions of the Purchase Agreement and Seller Guide define a circumstance that the parties have agreed to designate an "Early Payment Default" ("EPD"). EPD includes an instance where a mortgagor of a loan sold by BAMC to DBSP defaults on various borrower obligations, such as failing to make a repayment within the first few months of the mortgage loan term. DBSP maintains that, upon the occurrence of such a repayment default, it may demand that BAMC repurchase the mortgage loan(s). As a result of the EPD status of 15 mortgage loans DBSP purchased from BAMC, the plaintiff demanded, in a writing dated May 3, 2007, that BAMC repurchase the loans. BAMC failed to do so.
DISCUSSION
The parties to this action, through a contractual choice-of-law provision, selected New York law to govern any dispute(s) arising from the promises exchanged in the Purchase Agreement. "A federal trial court sitting in diversity jurisdiction must apply the law of the forum state to determine the choice-of-law." Fieger v. Pitney Bowes Credit Corp., 251 F.3d 386, 393 (2d Cir. 2001). Although the parties' agreements contain choice-of-law provisions, directing that disputes be resolved in accordance with New York law, "the parties' contract[s] [do] not automatically settle the choice-of-law question. For although, New York courts generally defer to the choice of law made by the parties to a contract . . . New York law allows a court to disregard the parties' choice when the most significant contacts with the matter in dispute are in another state." Cap Gemini Ernst Young, U.S., L.L.C. v. Nackel, 346 F.3d 360, 365 (2d Cir. 2003) (citations and quotations omitted).
In New York, a contractual choice-of-law provision is to be enforced by a court, as long as the selected state has sufficient contacts with the transaction. See Finucane v. Interior Constr. Corp., 264 A.D.2d 618, 620, 695 N.Y.S.2d 322, 324-25 (App.Div. 1st Dep't 1999). The record establishes that DBSP has its principal place of business in New York. Therefore, the Court finds it has significant contacts to the state, which makes the choice of New York law, by the parties, reasonable. See id. at 620, 695 N.Y.S.2d at 325.
A default judgment in an action establishes liability, but is not a concession of damages. See Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974) (citation omitted); see also Greyhound Exhibitgroup v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992) (citation omitted), cert. denied, 113 S. Ct. 1049, 506 U.S. 1080 (1993) (citation omitted) ("While a party's default is deemed to constitute a concession of all well pleaded allegations of liability, it is not considered an admission of damages"). Pleading allegations, "with respect to the amount of the damages," are not presumed to be true. Credit Lyonnais Secs. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999) (citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 [2d Cir. 1981]). All other "factual allegations are taken as true in light of the general default judgment. . . ." See Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993) (citations omitted).
Damages must be established by the plaintiff in a post-default inquest, "unless the amount is liquidated or susceptible of mathematical computation." Flaks, 504 F.2d at 707. In conducting an inquest, a court need not hold a hearing "as long as it ensured that there was a basis for the damages specified in the default judgment." Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (quotingFustok v. Conti-Commodity Services, Inc., 873 F.2d 38, 40 [2d Cir. 1989]). A court may rely on detailed affidavits or documentary evidence while evaluating the fairness of the sum requested. See Fustok, 873 F.2d at 40. The plaintiff is also entitled to the benefit of all reasonable inferences derived from the evidence presented. See Au Bon Pain, 653 F.2d at 65 (citation omitted).
Breach of Contract — Damages
To prevail on a claim for breach of contract under New York law, DBSP must prove: (1) a contract; (2) performance of the contract by DBSP; (3) breach by the defendant; and (4) damages. See, Harsco Corp. v. Segui, 91 F.3d 337, 348 (2d Cir. 1996). "[D]amages for breach of contract should put the plaintiff in the same economic position he would have been in had the defendant fulfilled the contract," Lucente v. Int'l Bus. Mach. Corp., 310 F.3d 243, 262 (2d Cir. 2002) (citing Indu Craft, Inc. v. Bank of Baroda, 47 F.3d 490, 495 [2d Cir. 1995]); and should be measured as of the date of the breach. See id. (citing Simon v. Electrospace Corp., 28 N.Y.2d 136, 144-47, 320 N.Y.S.2d 225, 232-33; Sharma v. Skaarup Ship Mgmt. Corp., 916 F.2d 820, 825 [2d Cir. 1990]) cert. denied 499 U.S. 907, 111 S. Ct. 1109 (1991) (citation omitted).
"It is well-settled under New York law that [a] plaintiff seeking compensatory damages has the burden of proof and should present to the court a proper basis for ascertaining the damages [it] seeks to recover." ESPN, Inc. v. Office of Comm'r of Baseball, 76 F. Supp. 2d 416, 418 (S.D.N.Y. 1999) (citation and internal quotations omitted). However, "the determination of damages upon default does not require mathematical precision." In re Crazy Eddie Securities Litig., 948 F. Supp. 1154, 1171 (E.D.N.Y. 1996); see also Boyce v. Soundview Tech. Group, Inc., 464 F.3d 376, 391-92 (2d Cir. 2006) (citations omitted) (Noting the guiding principle for determining damages is "the amount [] need only be proved with reasonable certainty").
An unsworn declaration, pursuant to 28 U.S.C. § 1746, of James Campbell, Esq., a DBSP director, was submitted on behalf of the plaintiff, in an attempt to support the plaintiff's claim for damages. See Declaration of James Campbell, Esq. ("Campbell Decl."). The Campbell Decl. is not dated, as required by 28 U.S.C. § 1746. Therefore, the Court determined not to consider it in support of DBSP's damages request. Without this declaration, the record is barren of competent evidence upon which the Court may rely in determining what amount of damages, beyond nominal damages, the plaintiff is entitled to recover from the defendant.See T N PLC v. Fred S. James Co. of N.Y., 29 F.3d 57, 60 (2d Cir. 1994) ("[N]ominal damages are always available for breach of contract").
Specific Performance
DBSP also seeks specific performance, by the defendant, of certain breached terms and conditions of the parties' Purchase Agreement, and by incorporation the Sellers Guide. Specifically, the plaintiff seeks an order directing BAMC to repurchase, for $1,991,036.86, the EPD loans it bought from BAMC.
Under New York law, "[s]pecific performance is an equitable remedy for a breach of contract[.] [It is not] a separate cause of action." Cho v. 401-403 57th St. Realty Corp., 300 A.D.2d 174, 175, 752 N.Y.S.2d 55, 57 (App.Div. 1st Dep't 2002); Champion Motor Group, Inc. v. Visone Corvette of Massachusetts, 992 F. Supp. 203, 209 (E.D.N.Y. 1998). The Court notes that, in its complaint, DBSP asserts the remedy of specific performance improperly, as a discrete cause of action.
Whether to order specific performance, when a contract has been breached, is a matter left to the sound discretion of a trial court. See Van Wagner Advertising Corp. v. S M Enterprises, 67 N.Y.2d 186, 191-192, 501 N.Y.S.2d 628, 631 (1986). Your Honor's order of reference limited the scope of the Court's assignment to conducting an inquest on damages. Consequently, DBSP's request for equitable relief, in the context of an inquest on damages, is inappropriate. This is so because the Supreme Court has "long recognized the distinction between an action at law for damages — which are intended to provide a victim with monetary compensation for an injury to his person, property, or reputation — and an equitable action for specific relief. . . ." Bowen v. Massachusetts, 487 U.S. 879, 893, 108 S. Ct. 2722, 2732 (1988) (citation and quotations omitted). Simply because "a judicial remedy may require one party to pay money to another is not a sufficient reason to characterize the relief as 'money damages.'"Id.
In any event, "[b]efore the 'extraordinary' equitable remedy of specific performance may be ordered, the party seeking relief must demonstrate that remedies at law are incomplete and inadequate to accomplish substantial justice." Lucente, 310 F.3d at 262 (citations omitted); see also Leasco Corp. v. Taussig, 473 F.2d 777, 786 (2d Cir. 1972) (citing Erie R. Co. v. City of Buffalo, 180 N.Y. 192; 11 Williston on Contracts § 1418 [3d ed. 1968]). If a plaintiff has an adequate remedy at law, specific performance is not available. T.F. Demilo Corp. v. E.K. Constr. Co., 207 A.D.2d 480, 481, 616 N.Y.S.2d 240 (App.Div. 2d Dep't 1994) (citations omitted). In New York, various factors must be considered by a court in assessing whether money damages are an adequate remedy barring an order for specific performance. Among the factors to be considered are: "the difficulty of proving damages with reasonable certainty and of procuring a suitable substitute performance with a damages award. [Furthermore,] [s]pecific performance is an appropriate remedy for a breach of contract concerning goods that are unique in kind, quality or personal association where suitable substitutes are unobtainable or unreasonably difficult or inconvenient to procure." Sokoloff v. Harriman Estates Dev. Corp., 96 N.Y.2d 409, 415, 729 N.Y.S.2d 425, 429 (2001) (citations and quotations omitted).
The remedy of specific performance is appropriate upon a showing that "the subject matter of the particular contract is unique and has no established market value." Id.; see also Van Wagner, 67 N.Y.2d at 193, 501 N.Y.S.2d at 632 ("The point at which breach of contract will be redressable by specific performance thus must lie not in any inherent physical uniqueness of [a loan] but instead in the uncertainty of valuing it."). DBSP asserted a claim for money damages equal to the amount it seeks to have BAMC compelled to tender to repurchase the EPD loans. This suggests no uncertainty exists in valuing the damages related to the 15 defaulted loans.
DBSP has not established it lacks an adequate legal remedy for the contractual breaches it ascribes to BAMC or that a suitable substitute performance(s) does not exist or is impracticable or inconvenient to procure reasonably. DBSP has not demonstrated circumstances exists that warrant the court in ordering specific performance as a remedy, inasmuch as DBSP asserts it is entitled to a sum certain as a remedy for BAMC's failure to perform under the parties' contracts. DBSP identified a precise figure it contends is the amount necessary to repurchase the EPD loans, debt obligations that are neither unique nor lack measurable market value. Since the plaintiff's application indicates money damages will suffice to protect its interests in the 15 disputed mortgage loan transactions, awarding an equitable remedy is not appropriate. Moreover, although the plaintiff "seeks [to recover] for the same damages under different legal theories, only a single recovery is allowed." Conway v. Icahn Co., Inc., 16 F.3d 504, 511 (2d Cir. 1994) (citations omitted).
Unjust Enrichment
A claim for unjust enrichment includes the following elements: "(1) that the defendant benefitted; (2) at the plaintiff's expense; and (3) that equity and good conscience require restitution." Beth Israel Medical Center v. Horizon Blue Cross and Blue Shield of New Jersey, Inc., 448 F.3d 573, 586 (2d Cir. 2006) (quotations omitted). The doctrine of unjust enrichment does not impose on DBSP a requirement that it demonstrate wrongful conduct by BAMC. See ESI, Inc. v. Coastal Power Prod. Co., 995 F. Supp. 419, 436 (S.D.N.Y. 1998) (citations omitted).
The plaintiff alleged, in its complaint, that the defendant "wrongfully refused to repurchase the [EPD] Loans, causing DBSP to lose the use of those moneys due and owing, and requiring DBSP to incur attorneys' fees to recover these costs due under the Agreements and the Seller Guide. It would be unjust and inequitable to allow [BAMC] to benefit in this manner." According to DBSP, BAMC was "unjustly enriched at the expense of DBSP, and DBSP has suffered damages. . . ." As discussed above, DBSP failed to submit competent evidence to establish its entitlement to more than nominal damages in connection with the 15 loans that are the subject of this action.
A plaintiff may recover for unjust enrichment only if no valid contract exists, since unjust enrichment is a quasi-contractual theory, see Beth Israel Medical Center, 448 F.3d at 586-87 (citing Goldman v. Metro. Life Ins. Co., 5 N.Y.3d 561, 572, 807 N.Y.S.2d 583) ("It is an obligation the law creates in the absence of any agreement"); yet DBSP makes citation to contractual provisions under "the Agreements and the Seller Guide," as grounds for such relief. "The existence of a valid and enforceable written contract[(s)] governing" the transactions between the parties is not disputed by DBSP, and it is the existence of the contracts that "precludes recovery in quasi contract for events arising out of the same subject matter." Beth Israel Medical Center, 448 F.3d at 587 (citation omitted). Furthermore, DBSP did not establish the loan transactions occurred under circumstances in which "equity and good conscience" would require BAMC to make restitution to DBSP. Id. at 579. Moreover, as explained previously, DBSP is entitled to a single recovery only, when various theories for recovery are asserted based on the same set of operative facts. Accordingly, DBSP is not entitled to recover damages from BAMC based on its claim of unjust enrichment.
Attorneys' Fees
DBSP seeks $39,129.49 for attorneys' fees it incurred in connection with the instant action pursuant to, inter alia, provisions of the Purchase Agreement and Seller Guide, which are entitled "Indemnification." The Supreme Court has stated that "[t]he party seeking an award of fees should submit evidence supporting the hours worked and rates claimed." Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S. Ct. 1933, 1939 (1983). An application for an award of attorneys' fees, which is supported by inadequate documentation, may result in a reduced award. Id. When fixing an appropriate amount to be awarded for attorney fees, the Second Circuit Court of Appeals requires that the "presumptively reasonable fee" method be employed. Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182, 183-84 (2d Cir. 2008). While "exercising its considerable discretion," a court should assess "all of the case-specific variables that [the Second Circuit] and other courts have identified as relevant to the reasonableness of attorney's fees," in order to determine what is a presumptively reasonable fee. Id. at 190 (discussing "case-specific variables").
When determining what is a reasonable rate for attorneys' fees, it is appropriate for a court to consider and apply the "market rates prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation."Garden City Boxing Club, Inc. v. Hernandez, No. 04 Civ. 2081, 2008 WL 4974583, at *6 (S.D.N.Y. Nov. 24, 2008) (citingGierlinger v. Gleason, 160 F.3d 858, 882 (2d Cir. 1998) [quotation omitted]). A court may also utilize its "knowledge of private firm hourly rates in the community" when fixing a reasonable hourly rate for attorneys' fees. Id. (citing Miele v. New York State Teamsters Conference Pension Ret. Fund, 831 F.2d 407, 409 [2d Cir. 1987]). The relevant community is typically "the district in which the court sits." Id. (citing Cruz v. Local Union No. 3 of the Int'l Bhd. of Elec. Workers, 34 F.3d 1148, 1159 (2d Cir. 1994) [citation and quotations omitted]). However, a relevant community may also be defined by attributes other than geography, such as "practice area." Id. (citing Arbor Hill, 522 F.3d at 192).
It is "the fee applicant [who] bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates."Cruz, 34 F.3d at 1160 (citing Hensley, 461 U.S. 437, 103 S. Ct. at 1941). In this judicial circuit, a party's application for attorney fees must be supported by detailed contemporaneous time records, which specify "the date, the hours expended, and the nature of the work done," for each attorney. New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983). Those applications that do not contain these data "should normally be disallowed." Id. at 1154. "[T]he 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." Monaghan v. SZS 33 Assocs., L.P., 154 F.R.D. 78, 83-84 (S.D.N.Y. 1994) (citation and quotation omitted).
In the case at bar, DBSP submitted a declaration from its counsel and an exhibit detailing attorneys' fees it incurred in prosecuting this action. See May 21, 2008 Declaration of John P. Doherty, Esq. ("Doherty Decl."). Exhibit A to the Doherty Decl. contains attorney billing statements pertaining to the legal services rendered and expenses incurred by the plaintiff's counsel in connection with this litigation. The billing statements appear to have been created contemporaneously with the work performed. The Doherty Decl. describes the experience and specialized expertise of Mr. Doherty, but it fails to provide any information regarding the skill, experience and reputation of any of the eight associate attorneys or other law-office personnel who are identified in the billing statements as having assisted in providing legal services to the plaintiff. Many of the Exhibit A entries employ vague terms to describe the activities performed such as: "emails;" "status meeting;" "meet with team;" "discovery issues; "Ocwen issues;" "settlement issues;" "mediation issues;" and "case strategy."
Exhibit A to the Doherty Decl. includes various items described as "disbursements" which total $1,517.99 (see Taxable Costs discussion, infra) and comprise a portion of the $39,129.34 characterized therein as "attorneys' fees."
Courts have reduced attorney's fee requests due to "flawed billing records [] contain[ing] entries which were vague, redundant, or [which] improperly described multiple events in single block entries, making it difficult for [a] [c]ourt to determine the reasonableness of the time spent on each task." Doe v. Mattingly, No. 06 CV 5761, 2007 WL 2362888, at *4, n. 4 (E.D.N.Y. Aug. 14, 2007) (citation omitted). In order to determine whether the attorneys' fees sought by DBSP are reasonable, the Court considered "'what a reasonable paying client would be willing to pay' for the legal services, in other words, the appropriate market rate for counsel over the course of the number of hours appropriately worked." Moreno v. Empire City Subway Co., No. 05 Civ. 7768, 2008 WL 793605, at *2 (S.D.N.Y. Mar. 26, 2008) (citingTorres v. City of New York, No. 07 Civ. 3473, 2008 WL 419306, at *1 (S.D.N.Y. Feb. 14, 2008) [quoting Arbor Hill v. Concerned Citizens Neighborhood Ass'n v. County of Albany, 493 F.3d 110, 112 n. 2 (2d Cir. 2007)]). In addition, the Court considered appropriate staffing levels, the complexity of the case at bar, the resources that would be needed to prosecute the action efficiently and effectively, counsel's interest in achieving the ends of the litigation and the skill and experience-to the extent the record contained such evidence-of the personnel who provided legal services to the plaintiff in connection with this action.
Having considered all these factors, the Court finds the vagueness of many billing-statement entries describing the litigation-related tasks performed, as well as the lack of information provided by the plaintiff respecting the qualifications and experience of all personnel who performed those tasks, impedes its ability to assess accurately (a) the reasonableness of the attorneys' fees sought and (b) what a reasonable client might be willing to pay for the legal services rendered to the plaintiff. In a circumstance such as this, as noted above, courts have determined to reduce the fee request to account for the fee application's deficiencies. See Doe, supra;see also, Marisol A. ex rel. Forbes v. Giuliani, 111 F. Supp. 2d 381, 401 (S.D.N.Y. 2000) (collecting cases). Therefore, based on the vague and inadequate submission made by the plaintiff in connection with its request for an award of attorneys' fees, a 20% reduction in DBSP's attorneys' fee request is warranted.
Taxable Costs
A court may not award costs that are not established in a contractual provision or authorized by statute. United States of America, for the Use and Benefit of Evergreen Pipeline Constr. Co., Inc. v. Merritt Meridian Constr. Corp., 95 F.3d 153, 171 (2d Cir. 1996) (citingCrawford Fitting Co. v. J. T. Gibbons, Inc., 482 U.S. 437, 439, 107 S. Ct. 2494, 2496). According to the complaint, DBSP seeks to recover "related costs, and all other costs, fees and expenses that DBSP has incurred, is incurring and will incur in this action in connection with [BAMC's] failure to observe and perform its obligations under the Agreements and Seller Guide; . . ."
The Indemnification provision of the Purchase Agreement permits DBSP to recover "all reasonable costs and expenses" that are related to the instant case. A writing submitted as Exhibit B to the Declaration of Brendan Zahner, Esq., counsel to DBSP, dated June 22, 2006, and executed by the parties, states, at paragraph 10: "[e]ach party shall be responsible for their fees and expenses in connection with this transaction unless explicitly set forth herein." See May 21, 2008 Declaration of Brendan Zahner, Esq. ("Zahner Decl.").
DBSP identifies various costs in its inquest submissions which are denominated "disbursements." The disbursements are embedded in the $39,129.34 sought for attorneys' fees by DBSP. According to the Doherty Decl., these disbursements, which total $1,517.99, "include, but are not limited to: court fees, photocopying charges, telephone charges, mailing charges and ground transportation." The plaintiff has not submitted any additional documentation, beyond the Doherty Decl. and the exhibit annexed to it, which would permit the Court to perform an analysis of the reasonableness of the disbursements.
A district court does not have discretion, under Fed.R.Civ.P. 54(d), to tax as costs fees and disbursements beyond those specified in 28 U.S.C. § 1920. See Whitfield v. Scully, 241 F.3d 264, 269 (2d Cir. 2001); see also Crawford Fitting, 482 U.S. at 444-45, 107 S. Ct. 2499.
The only entries in Exhibit A to the Doherty Decl. that appear to fall within the scope of permissible taxable costs are the following: (a) "duplicating" fees, see 28 U.S.C. § 1920(3), or copies of papers necessarily obtained for use in the case under 28 U.S.C. § 1920(4); (b) a "miscellaneous filing fee," see 28 U.S.C. § 1920(1); (c) "process service" fee, see 28 U.S.C. § 1920(1); and (d) "outside duplicating," see 28 U.S.C. § 1920(3), or copies of papers necessarily obtained for use in the case, see 28 U.S.C. § 1920(4). The remaining entries identified by the plaintiff as "disbursements" are not taxable "costs" within the meaning of Fed.R.Civ.P. 54(d) or 28 U.S.C. § 1920. See, e.g.,Evergreen Pipeline, 95 F.3d at 172-73 ( 28 U.S.C. § 1920 does not permit fee shifting for tasks not included in the statute as compensable within an application for attorney's fees); see also Crawford Fitting, 482 U.S. at 444-45, 107 S. Ct. at 2499.
Entries for "duplicating" fees and "outside duplicating" fees are found in the billing statements that comprise Exhibit A to the Doherty Decl. No information has been provided by the plaintiff to explain the distinction, if any, which exists between these entries.
A party seeking an order awarding costs must provide the court "a detailed accounting of the expenses which ties the purported expenses with a specified legal product." Monaghan, 154 F.R.D. at *86 (citing F.H. Krear Co. v. Nineteen Named Trustees, 810 F.2d 1250, 1269 [2d Cir. 1987]). While various disbursement amounts are noted in the billing statements that comprise Exhibit A to the Doherty Decl., DBSP neither provided a precise breakdown of its expenses nor tied the various disbursements to any particular legal service(s) its counsel rendered to it. When a party fails to provide suitable documentation to substantiate the costs it claims to have incurred and a "precise breakdown of expenses" is lacking, a court may decline to award the party costs. Carrero v. New York City Hous. Auth., 685 F. Supp. 904, 909-10 (S.D.N.Y. 1988) (modified on other grounds, 890 F.2d 569 [2d Cir. 1989]);Lide v. Abbott House, No. 05 Civ. 3790, 2008 WL 495304, at *2 (S.D.N.Y. Feb. 25, 2008).
Furthermore, Local Civil Rule 54.1 of this court requires that "[t]he bill of costs shall include an affidavit that the costs claimed are allowable by law, are correctly stated and were necessarily incurred. Bills for the costs shall be attached as exhibits." Local Civ. R. 54.1(a). The requisite affidavit was not provided by the plaintiff. In addition, many of the "disbursements" cited by DBSP are not within the categories of allowable "Items Taxable as Costs" found in Local Civ. R. 54.1(c). Moreover, Local Civil Rule 54.1(c)(7) states that "[a]ttorney fees and disbursements and other related fees and paralegal expenses are not taxable except by order of the court." In the circumstance of the instant case, the Court finds the submission made by the plaintiff, as it relates to its request for costs, wanting. This militates against granting the request.
Pre-Judgment Interest
DBSP has not directed the Court to any provision of the Purchase Agreement, or the Seller Guide, that provides a method for calculating prejudgment interest. "New York law [] governs the substantive issues in [a] diversity action, including, [] "the availability of prejudgment interest." Campbell ex rel. Campbell v. Metropolitan Property and Cas. Ins. Co., 239 F.3d 179, 187 (2d Cir. 2001). In New York, prejudgment "[i]nterest shall be recovered upon a sum awarded because of a breach of performance of a contract." New York Civil Practice Law and Rules ("CPLR") Section 5001(a). The mandatory language in CPLR § 5001(a) "does not permit [a] trial court to exercise any discretion with regard to prejudgment interest determinations."United Bank Ltd., v. Cosmic Int'l, Inc., 542 F.2d 868, 877-78 (2d Cir. 1976) (citations omitted). The statute directs that "[i]nterest shall be computed from the earliest ascertainable date the cause of action existed." CPLR § 5001(b) (2008).
In a writing dated May 3, 2007, DBSP advised BAMC the 15 loans at issue here were in default. Since this is the earliest date of record on which the parties knew or had reason to know a breach of contract cause of action existed respecting the EPD loans, it is reasonable to conclude that is the date from which prejudgment interest may be calculated.
Under New York law, prejudgment interest cannot exceed the statutory rate of nine per centum per annum, unless the parties have agreed to a higher rate of interest. See Levy, King White Adver., Inc. v. Gallery of Homes, Inc., 177 A.D.2d 967, 968, 577 N.Y.S.2d 1012, 1013 (App.Div. 4th Dep't 1991) (citations omitted); CPLR § 5004. The record is barren of any evidence establishing the parties agreed either to a rate for or a method of calculating prejudgment interest for damages in the event of a breach of the parties' agreements. However, DBSP contends it is entitled to recover "accrued unpaid interest of $202,878.28," but has not explained: (a) how this amount of interest was derived; or (b) what principal sum served as a basis for the calculation that resulted in this figure. Therefore, the Court finds that DBSP is entitled to prejudgment interest on the damages awarded to it, at the rate of nine percentum per annum, accruing from May 3, 2007, the earliest date on which its cause of action existed, through April 11, 2008, the date a judgment by default was entered against BAMC.
Post-Judgment Interest
"Interest shall be allowed on any money judgment in a civil case recovered in a district court." 28 U.S.C. § 1961(a). A plaintiff is "entitled to post-judgment interest on the award of attorneys' fees [and] costs." Gamble v. East Bronx N.A.A.C.P. Day Care Center, Inc., No. 04 Civ. 1198, 2008 WL 2115237, at *3 (S.D.N.Y. May 15, 2008); Alston v. Wall St. Garage Parking Corp., No. 03 Civ. 5418, 2004 WL 1194595, at *2 (S.D.N.Y. May 28, 2004) ("'plaintiff is entitled to post[-]judgment interest under 28 U.S.C. § 1961 on all sums awarded' including attorneys' fees, costs, and interest"). Interest is calculated from the date of the entry of judgment, at a rate equal to the weekly average one-year constant maturity United States Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment.
The plaintiff requested an award of post-judgment interest, for all damages, costs, fees and expenses sought, and proposed a per diem interest rate of $434.70, accruing from May 21, 2008, the date of its inquest submissions. DBSP did not explain how it determined the per diem post-judgment interest rate it proposed. Notwithstanding that fact, DBSP is entitled to post-judgment interest, at the rate prescribed by the above-noted statute, commencing from April 11, 2008, the date your Honor awarded judgment by default.
RECOMMENDATION
For the reasons set forth above, the Court recommends that the plaintiff be awarded: (1) nominal damages of $1.00; (2) pre-judgment interest from May 3, 2007, until April 11, 2008, on the principal sum of $1.00, to be calculated by the Clerk of Court, at the statutory rate of nine percentum per annum; (3) attorneys' fees of $30,089.20; and (4) post-judgment interest accruing from April 11, 2008, on a principal sum of $30,090.20, to be calculated by the Clerk of Court, pursuant to 28 U.S.C. § 1961.