Opinion
02 CV. 9916 (RLC).
May 3, 2006
PATRICK C. SCHMITTER NATHANIEL P.T. READ AKIN GUMP STRAUSS HAUER FELD LLP New York, New York, R. LAURENCE MACON Of Counsel Attorneys for Plaintiff.
RAYMOND L. VANDENBERG VANDENBERG FELIU, LLP New York, New York, MICHAEL S. GRUEN STEVEN S. DIEBERT Of Counsel Attorney for Defendants.
OPINION
BACKGROUND
In an opinion dated November 14, 2005, with which familiarity is assumed, the Court granted summary judgment to plaintiff LaSalle National Bank, N.A. ("LaSalle"). The court found that defendant Capco American Securitization Corporation ("Capco") had breached the warranties it provided in the Pooling Services Agreement (the "PSA") by providing LaSalle with a defective U.C.C. filing prior to the creation of the mortgage trust. Reconsideration of that opinion was denied on January 19, 2006.
Order Granting Mot. Summ. J., 2005 U.S. Dist. LEXIS 27781 (S.D.N.Y. Nov. 14, 2005) (hereinafter Opinion I).
Order Den. Recons., 2006 U.S. Dist. LEXIS 2600 (S.D.N.Y. Jan. 19, 2006) (hereinafter Opinion II).
LaSalle then submitted documents so that the court might calculate the aggregate damage award, which includes attorneys' fees. Capco moved to reopen discovery and to strike affidavits submitted by LaSalle, challenging the accuracy and admissibility of LaSalle's submissions and the ability of the court to specify the aggregate damage award without an inquest or hearing. LaSalle cross-moved to strike an affidavit submitted by Capco. While these motions were pending, Capco filed a notice of appeal. See Notice of Appeal, March 8, 2006.
DISCUSSION
I. The Pending MotionsThe threshold issue is whether Capco's notice of appeal deprives the court of jurisdiction to adjudicate these motions. "The filing of a [valid] notice of appeal is an event of jurisdictional significance — it confers jurisdiction of the circuit court and divests the district court of its control over those aspects of the case involved in the appeal." Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58 (1992). Consequently, the court must determine if the notice of appeal filed by Capco is valid. If so, the court must be satisfied that the resolution of the currently pending motions would not alter the status of the appeal before addressing the issues they raise.
The court's earlier opinions resolved the issues of liability and damages, and left open merely the calculation of the damage award pending the submission of affidavits establishing the updated value of the mortgage, the amount recovered from the debtor, and LaSalle's attorneys' fees. Despite the fact that the precise monetary value of the damage award was not specified when the court directed the clerk to enter final judgment in favor of LaSalle, this was still a valid and appealable final order. Capco's notice of appeal is not defective.
Opinion II at 8.
While the court's decision did not include a dollar value, it clearly specified the means for determining that amount: the repurchase clause found in § 1.01 of the PSA. Opinion I at 11;see Fiataruolo v. United States, 8 F.3d 930, 936 (2d Cir. 1993) (holding that "where other indicators are present, the lack of reference to a specific amount of money standing alone will not render a judgment non-final and hence non-appealable.")
By asking the court to reopen the issue for discovery, Capco implicitly asks this court to overturn its earlier order granting LaSalle summary judgment on the issue of damages. As such, Capco's request is tantamount to a second motion to reconsider. A district court can ordinarily reconsider any order, but after a party appeals a final judgment the court cannot. Capco should not have waited until after summary judgment was granted to contest LaSalle's evidence on how the mortgage's repurchase price should be calculated; by waiting, Capco waived its objections. Since the court relied upon this uncontested evidence when deciding the summary judgment motion, the transfer of jurisdiction after the notice of appeal was filed prevents the court from addressing this issue.
Additionally, as the court has already entertained such a motion, and this ruling is the law of the case. See Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992).
But see New York State NOW v. Terry, 886 F.2d 1339 (2d Cir. 1989) (holding that "if an appeal is taken from a judgment determining the entire action, the district court's hands are tied.")
Capco contends that the court cannot calculate LaSalle's damages without issuing further rulings. Were this true, the notice of appeal would not be valid, and the court would retain jurisdiction to hold the hearings that Capco argues are necessary to resolve the issue. See Firestone Tire Rubber Co. v. Risjord, 449 U.S. 368, 373 (1981). This is especially true given the fact that the damage calculation merely duplicates the steps affirmed by a circuit court of appeal in another case involving virtually identical facts and identical contractual provisions.See Resolution Trust Corp. v. Key Financial Services, 280 F.3d 12, 18 n. 15 (1st Cir. 2002).
There does not appear to be any precedent on the issue of whether the court has jurisdiction after a notice of appeal is filed to decide motions to strike affidavits. However, the principle that a district court has the power to control the record must be balanced against the Circuit Court of Appeal's "entitle[ment] to review a fixed, rather than a mobile, record."Kern Oil Refining Co. v. Tenneco Oil Co., 840 F.2d 730, 734 (9th Cir. 1988). In the interest of judicial efficiency, the court declines to alter the record by striking these affidavits. Finally, while the court declines to reach the merits of the issues presented in Capco's motions, the court notes that they are also meritless.
Capco's motion to strike the affidavit of Thomas F. Nealon III ("Nealon") and LaSalle's cross motion to strike the affidavit of Kenneth J. Lederer ("Lederer") were also pending when the notice of appeal was filed.
The evidence contained in the Nealon affidavit was plainly admissible under the business records exception to the hearsay rule, and the federal rules of evidence permit the submission of evidence in the form of a "calculation" (see Fed.R.Evid. 1006), provided the underlying data is also available in admissible form, as was true in the instant case. Therefore, any timely challenge by Capco would nevertheless have been futile. The special servicer of the mortgages was charged with the calculation of balances due, under the generous construal of business records applicable in this circuit, the affidavit is admissible under this exception. See United States v. Strother, 49 F.3d 869, 874 (2d Cir. 1995). Conversely, Capco's own submission contradicting LaSalle's purchase price calculation is inadmissible. The court had previously denied Capco's request to name another expert witness, (Endorsement, LaSalle Bank N.A. v. Capco American Securitization Co., No. 02 Civ. 9916 (August 13, 2003) and consequently all affidavits submitted by Capco must be based upon the personal knowledge of the affiant. While Lederer is a certified public accountant, he does not allege having any personal knowledge of the mortgage transactions at issue in general, or the proper calculation of damages under the agreement in particular. While the court has declined to strike this affidavit owing to the jurisdictional effect of the notice of appeal, the Lederer affidavit has no evidentiary value.
II. Calculation of the Damage Award and Attorneys' Fees
Updating the mortgage repurchase price by inserting new data into an undisputed calculation formula is a ministerial task, since this requires only mathematics and no legal judgment. See generally LaSalle Bank v. Lehman Bros., 237 F. Supp. 2d 618, 638 (D. Md. 2002). Since Capco waived its right to challenge the damage calculation formula, and its submissions contained no pertinent challenge to LaSalle's data or calculations, the court can perform this task on the basis of the documents submitted by LaSalle. Since the court had decided on the formula for that calculation, LaSalle's extensive submissions (including those provided before and after the motion for summary judgment) provide an adequate basis for the calculation of damages.
Opinion I, 2005 U.S. Dist. LEXIS 27781 at *20.
Similarly, LaSalle provided adequate documentation in support of its application for attorneys' fees. LaSalle's counsel is a competent witness to testify as to the market rate for legal services in New York City. Following the lodestar methodology, the court finds that the fees charged by LaSalle's attorneys were presumptively reasonable, and no factor that would encourage the court to reduce them applies here. See P.M.I Trading Limited v. Farstad Oil, Inc., 160 F. Supp. 2d 613, 614-15 (S.D.N.Y. 1996) (Carter, J.) (awarding attorney's fees at the rate charged by a leading New York firm.); Green v. Torres, 361 F.3d 96, 98-99 (2d Cir. 2004). There is also no evidence that any attorney or paralegal working for LaSalle expended any hours charged to the client unreasonably, and the results obtained by counsel evinces the quality of their efforts. The fact that LaSalle's attorneys billed more hours than Capco's is explained by the need to respond to frivolous and meretricious arguments. See e.g. Opinion I, 2005 U.S. Dist. LEXIS 27781 at *10 n. 14; Opinion II, 2006 U.S. Dist. LEXIS 2600 at *5 n. 7.
See Cruz v. Local Union No. 3 of the Int'l Bhd. Of Elec. Workers, 34 F.3d 1141, 1160 (2d Cir. 1994).
Furthermore, this circuit's case law contains no requirement that a third-party lawyer attest to the reasonableness of the attorney's fees, nor that contemporaneous documentation be provided when making the fee application. The appendices provided by LaSalle, which consist of summaries of the hours worked created by the firm's database (reflecting contemporaneous entries by those working on the matter) are sufficient. See Cruz v. Local Union No. 3 of the Int'l Bhd. Of Elec. Workers, 34 F.3d 1141, 1161 (2d Cir. 1994). These documents also demonstrate that there is no discrepancy between the statement of mortgage balance and the billing summary.
Capco's last frivolous argument is that LaSalle should not be able to recover fees for the hours spent pursuing its fee application, so called "fees on fees." These fees are recoverable, since the parties agreed that costs of enforcement should be part of any damage award. PSA § 1.01; Opinion I, 2005 U.S. Dist. LEXIS 27781 at *19-*20; see also Reed v. A.W. Lawrence Co., 95 F.3d 1170, 1183-84 (2d Cir. 1996). Just as the statutory principles that award attorney's fees are vindicated when the fees required to enter pursue these applications are awarded, so too will the contractual terms of the agreement between LaSalle and Capco be vindicated by awarding LaSalle these "fees on fees."
CONCLUSION
Capco's motion to reopen discovery, strike affidavits and the motion made in opposition to LaSalle's calculation of the repurchase price is DENIED. LaSalle's motion to strike affidavits is DENIED. Using the data ordered by our earlier opinion of January 26, 2006 (which held that Capco was obligated to repurchase the mortgage on August 12, 2003), the court calculates the aggregate damage award including attorney's fees to be $5,081,316.40, with interest following the date of this memorandum fixing the damages to be awarded at the statutory rate.
IT IS SO ORDERED.