Opinion
21-CV-10519 (VSB) (RWL)
05-25-2022
SOURCECODE COMMUNICATIONS LLC, Plaintiff, v. IN-TELLIGENT LLC, Defendant.
REPORT AND RECOMMENDATION TO HON. VERNON S. BRODERICK: DAMAGES INQUEST
ROBERT W. LEHRBURGER UNITED STATES MAGISTRATE JUDGE
This is a breach of contract case in which Plaintiff SourceCode Communications LLC (“SoureCode” or “Plaintiff”) seeks recovery of a sum certain from Defendant Intelligent LLC (“In-telligent” or “Defendant”) for failing to pay for services provided pursuant to a written contract despite In-telligent's repeated assurances of payment. By orders dated April 19, 2022, the Honorable Vernon S. Broderick, U.S.D.J., granted a default judgment against Defendant and referred this matter to me to conduct an inquest on damages. For the reasons set forth below, I recommend that the Court award Plaintiff (1) $153,339.00 in damages, (2) prejudgment interest at the statutory rate of 9% as calculated by the Clerk of Court, (3) $30,108.32 in reasonable attorneys' fees, (4) $1,356.97 in costs, and (5) postjudgment interest at the statutory rate.
The facts are drawn from the Second Amended Complaint (Dkt. 23) (“SAC”); the Affidavit of Daniel C. Malone dated February 17, 2022 (Dkt. 20) (“Dkt. 20 Malone Aff.”); the Affidavit of Daniel C. Malone date March 17, 2022 (Dkt. 26) (“Dkt. 26 Malone Aff.); the Affidavit of Daniel C. Malone dated April 18, 2022 (Dkt. 30) (“Dkt. 30 Malone Aff.”), and the Declaration of Daniel C. Malone dated May 16, 2022 (Dkt. 37) (“Malone Decl.”).
SourceCode provides advice and services relating to communications, public relations, and marketing. (SAC ¶ 11.) It is a New York limited liability company based in New York with two members who are citizens of and reside in New York. (SAC ¶¶ 2-3.) In-telligent is an Illinois limited liability company based in Illinois whose sole member is a citizen of and resides in Illinois. (SAC ¶¶ 4-5.)
On September 29, 2020, SourceCode and In-telligent entered into an agreement pursuant to which SourceCode was obligated to provide advice and services relating to communications, public relations, and marketing. (SAC ¶¶ 8-9 and Ex. 1 (the “Agreement”).) The Agreement requires In-telligent to pay all invoices within ten days of receipt. (Agreement § II(3).) The Agreement also requires In-telligent to reimburse SourceCode for all fees, amounts and expenses, including attorneys' fees, incurred in the collection of any overdue and unpaid invoices. (Id.)
SourceCode performed as required by the Agreement and timely invoiced Intelligent in accordance with the Agreement. (SAC ¶ 11.) Although In-telligent initially paid some of the invoiced amounts (SAC ¶¶ 12, 16), it failed to make numerous payments for a total outstanding balance due and owing of $153,339. (SAC ¶ 16 and Ex. 2 (“Statement Of Account”).) SourceCode made numerous requests for payment during August 2021 through early November 2021. (SAC ¶¶ 17-19.) In response to those requests, Intelligent repeatedly stated its intent to “get all caught up” and gave assurances that payment would be made shortly; it also never disputed the amount due. (SAC ¶¶ 17-19, 21 and Ex. 5 (email exchanges).) Despite its assurances of payment, In-telligent never paid the outstanding balance due. (SAC ¶¶ 20, 22.)
PROCEDURAL HISTORY
The Court has subject matter jurisdiction because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000 (exclusive of interest and costs). 28 U.S.C. § 1332. Venue is proper in this District, and the Court has personal jurisdiction over the Defendant, pursuant to the Agreement. (Agreement § X (“[E]ach party may bring a claim solely in the State or Federal courts located in New York County, in the State of New York. Each party hereby submits to the exclusive jurisdiction of such courts”).
Plaintiff commenced this action on December 9, 2021. (Dkt. 1.) Plaintiff filed an Amended Complaint on December 14, 2021 (Dkt. 8), and served the Amended Complaint and summons on Defendant on December 27, 2021. (Dkt. 11.) On February 1, 2022, the Court issued an order directing Plaintiff to file for default judgment no later than February 15, 2022. (Dkt. 14.) At Plaintiff's request, the Clerk of Court entered default against In-telligent on February 10, 2022. (Dkt. 18.) A week later, Plaintiff moved by order to show cause for default judgment. (Dkts. 19-21.)
On February 22, 2022, the Court ordered Plaintiff to file a Second Amended Complaint alleging facts to establish subject matter jurisdiction. (Dkt. 22.) Plaintiff did so, filing the SAC on March 4, 2022. (Dkt. 23.) Plaintiff then moved on March 18, 2022 by order to show cause for default judgment based on the SAC. (Dkts. 25-27.) On March 21, 2022, the Court signed and entered the order to show cause (Dkt. 28), and Plaintiff served Defendant with the order to show cause and supporting papers on March 23, 2022. (Dkt. 29.) Defendant did not appear at the show cause hearing held on April 18, 2022 or at any previous time or thereafter. (See Dkt. 26 Malone Aff. ¶10.) Accordingly, on April 19, 2022, the Court entered default judgment of liability against In-telligent and referred the matter to me to determine damages. (Dkts. 32-33.)
LEGAL STANDARDS
When a defendant defaults, all well-plead facts alleged in the complaint, except those relating to the amount of damages, must be accepted as true. City Of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (“It is an ancient common law axiom that a defendant who defaults thereby admits all well-pleaded factual allegations contained in the complaint”) (internal quotations marks omitted); Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (trial court is “required to accept all of [the plaintiff's] factual allegations as true and draw all reasonable inferences in its favor”). “This principle applies regardless of whether default is entered as a discovery sanction or for failure to defend.” Walpert v. Jaffrey, 127 F.Supp.3d 105, 129 (S.D.N.Y. 2015) (citation omitted). The court may also rely on factual allegations pertaining to liability contained in affidavits and declarations submitted by the plaintiff. See, e.g., Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 54 (2d Cir. 1993); Fustok v. ContiCommodity Services, Inc., 873 F.2d 38, 40 (2d Cir. 1989). Nonetheless, the court “must still satisfy itself that the plaintiff has established a sound legal basis upon which liability may be imposed.” Shld, LLC v. Hall, No. 15-CV-6225, 2017 WL 1428864, at *3 (S.D.N.Y. April 20, 2017) (internal quotation marks omitted); see Finkel, 577 F.3d at 84.
Once liability has been established, a plaintiff must provide admissible evidence establishing the amount of damages with reasonable certainty. Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., Division Of Ace Young Inc., 109 F.3d 105, 111 (2d Cir. 1997); see also Lenard v. Design Studio, 889 F.Supp.2d 518, 527 (S.D.N.Y. 2012) (in an inquest following a default, “[a] plaintiff must ... substantiate a claim with evidence to prove the extent of damages”).
To assess whether the plaintiff has established a sufficient basis for damages, a court has the discretion, but is not required, to hold a hearing. See Fed.R.Civ.P. 55(b)(2); Fustok 873 F.2d at 40. An inquest into damages may be conducted on the papers, without an evidentiary hearing where there is a sufficient basis on which to make a calculation. See Bricklayers & Allied Craftworkers Local 2, Albany, New York Pension Fund v. Moulton Masonry & Construction, LLC, 779 F.3d 182, 189 (2d Cir. 2015); Tamarin 13 F.3d at 53-54 Maldonado v. La Nueva Rampa, Inc., No. 10-CV-8195, 2012 WL 1669341, at *2 (S.D.N.Y. May 14, 2012). There is sufficient basis to do so here; no party has requested a hearing; and the Court has determined that none is needed.
LIABILITY
The SAC asserts four causes of action: breach of contract, account stated, quantum meruit, and unjust enrichment. Accepting the well-plead allegations of the SAC as true, supplemented by the affidavits and declarations of record, the Court finds that Plaintiff has established Defendants' liability for breach of contract. As such, the Court does not address Plaintiff's three other theories of liability.
The SAC seeks essentially the same relief for each cause of action: $153,339.00 in principal due, prejudgment interest from accrual, postjudgment interest, attorney's fees, and costs. The one difference is that for its breach of contract claim, Plaintiff requests prejudgment interest at the contractual rate, which provides Plaintiff with the “the right to assess a 3%, or the highest rate allowable by law, per month, compounding finance charge for invoices that remain unpaid beginning the day following the invoice due date.” (Agreement § II(3).) Plaintiff specifically requests prejudgment interest on its breach of contract claim at “the highest rate allowable by law,” which Plaintiff contends is 25% per year, simple interest. (SAC ¶ 29; Dkt. 20 Malone Aff. ¶¶ 36-37.) “In the alternative, . Plaintiff seeks interest of 9% per annum pursuant to N.Y. C.P.L.R. §§ 5001, 5002, and 5004.” (Dkt. 20 Malone Aff. ¶ 42 n.1.) Prevailing on the claims other than for breach of contract thus would provide Plaintiff with no additional recovery. Determination of the appropriate calculation of prejudgment interest is discussed below.
The Agreement is governed by New York state law. (Agreement § XI.) To prevail on a breach of contract claim under New York law, a plaintiff must establish four elements: (1) the existence of a contract; (2) the plaintiff's performance of that contract; (3) the defendant's breach of that contract; and (4) that the plaintiff suffered damages as a result of the breach. Terwilliger v. Terwilliger, 206 F.3d 240, 246 (2d Cir. 2000) (applying New York law). All four elements are readily met here. Plaintiff and Defendant entered into the Agreement. (SAC ¶¶ 1, 8-10 and Ex. 1.) Plaintiff rendered services as it was obligated to under the Agreement. (SAC ¶ 11.) Plaintiff regularly invoiced Defendant for services rendered, yet Defendant breached the Agreement by failing to pay a balance due of $153,339. (SAC ¶¶ 16-21.) As a result, Plaintiff incurred damages of $153,339 plus interest owed. (SAC ¶ 35 and Ex. 2.) Plaintiff's well-plead allegations thus establish Defendant's liability for breach of contract.
DAMAGES
As Defendants' liability has been established, the Court turns to evaluating damages and other relief. Plaintiff seeks: (1) breach of contract damages totaling $153,339.00; (2) prejudgment interest at a contractual rate; (3) $33,453.69 in reasonable attorneys' fees, (4) 1,356.97 in costs, and (5) postjudgment interest at the statutory rate. Plaintiff has provided sufficient evidence to support each of those items, subject to a ten percent reduction in fees sought.
A. Breach of Contract Damages
The Court begins its analysis with the “fundamental principle that damages 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. International Business Machines 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)). In New York, damages for a breach of contract claim based on a failure to pay is generally limited to recovery of the unpaid contract amount and accrued interest. See Arch Insurance Co. v. Precision Stone, Inc., 584 F.3d 33, 40-41 (2d Cir. 2009) (“In a typical breach of contract case, a non-breaching party is entitled to the payment it is due under the terms of the contract, less the payment it has already received” (applying New York law)); Scavenger, Inc. v. GT Interactive Software Corp., 289 A.D.2d 58, 58-59, 734 N.Y.S.2d 141, 142 (1st Dep't 2001) (“where the breach of contract was a failure to pay money, plaintiff should be limited to a recovery of the contract amounts plus appropriate interest”).
The amount of damages here is easily determined. Based on Plaintiff's submissions, the amount due pursuant to the Agreement is $153,339. In support of its claim, Plaintiff submits copies of the executed Agreement, account statements, and related correspondence. (SAC Ex. 1-6.) That documentation demonstrates the fee schedule; each invoiced amount; payments made by Defendant; Plaintiff's repeated demands for payment of the balance; Defendant's assurances of payment; Defendant's non-payment; and the absence of any dispute by Defendant of the amount of due. Accordingly, the Court finds that damages due Plaintiff due to Defendant's non-payment is $153,339.
The Agreement contains a limitation on liability with several types of damages for which the parties are not responsible. None of those categories are applicable here. (See Agreement § IV(2) (“IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES INCLUDING, WITHOUT LIMITATION, LOST PROFITS OR BUSINESS OR LOSS OF DATA, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES”).
B. Prejudgment Interest
In a diversity case such as here, state law governs the award of prejudgment interest. Schipani v. McLeod, 541 F.3d 158, 164-65 (2d Cir. 2008). The Court thus applies New York law, which provides that that prejudgment interest “shall be recovered upon a sum awarded because of a breach of performance of a contract.” N.Y. C.P.L.R. § 5001(a); see also U.S. Naval Institute v. Charter Communications, Inc., 936 F.2d 692, 698 (2d Cir. 1991) (“a plaintiff who prevails on a claim for breach of contract is entitled to prejudgment interest as a matter of right”). The statutory rate of prejudgment interest prescribed by New York law is 9%. N.Y. C.P.L.R. § 5004.
Instead of the statutory rate, however, Plaintiff seeks interest at a rate of 25% simple interest based on the Agreement's “finance charge” provision. (Dkt. 26 Malone Aff. ¶¶ 39-40; see Agreement § II(3).) New York courts recognize that where parties contract for an interest rate, such as interest due on a debt, the contractual rate of interest prevails even if in excess of the statutory rate of prejudgment interest. See NML Capital v. Republic of Argentina, 17 N.Y.3d 250, 258, 928 N.Y.S.2d 666, 672 (2011) (“When a claim is predicated on a breach of contract, the applicable rate of prejudgment interest varies depending on the nature and terms of the contract. Most agreements associated with indebtedness provide a ‘contract rate' of interest that determines the value of the loan and that rate is used to calculate interest on principal prior to loan maturity or a default in performance”); NYCTL 1998-2 Trust. Wagner, 61 A.D.3d 728, 729, 876 N.Y.S.2d 522, 523 (2d Dep't 2009) (“when a contract provides for interest to be paid at a specified rate until the principal is paid, the contract rate of interest, rather than the legal rate set forth in CPLR 5004, governs until payment of the principal or until the contract is merged in a judgment”) (internal quotation marks and citation omitted).
The Court is not persuaded, however, that that principle is properly invoked here. The Agreement provides that Plaintiff “reserve[s] the right” to apply a “finance charge” of “3%, or the highest rate allowable by law, per month, compounding.” (Agreement §II(3).) The amount that Plaintiff seeks, however is neither of those; Plaintiff seeks not the highest allowable amount compounded monthly, but instead 25% simple annual interest (which according to Plaintiff is the actual highest interest rate permitted by law). (Dkt. 26 Malone Aff. ¶¶ 39-40.) Second, none of the many requests for payment sent by Plaintiff to Defendant included any reference to Plaintiff's exercise of its right to impose a finance charge nor any calculation or suggestion that it intended to impose any finance charge. (See SAC Ex. 4-5.) Even Plaintiff's official demand letter, sent by Plaintiff's lawyers, referenced only prejudgment interest generally without any invocation of or reference to the finance charge provision. In other words, even though Plaintiff “reserve[d] the right” to assess a contractual finance charge, it never did so. Perhaps recognizing the tenuous nature of that request, Plaintiff includes a footnote stating that, “[i]]n the alternative to contractual interest” it seeks interest at the 9% statutory rate. (Dkt. 26 Malone Aff. ¶ 42 n.1.) Accordingly, the Court finds that the appropriate prejudgment interest rate is the 9% statutory rate.
As for the time frame for calculating prejudgment interest, the New York rule directs that “[i]nterest shall be computed from the earliest ascertainable date the cause of action existed[.]” N.Y. C.P.L.R. § 5001(b). Based on the dates of the specific invoices sent by Plaintiff to Defendant, the amounts of the particular invoices, and the ten-day time period within which Defendant had to pay the invoices, prejudgment interest should be calculated as follows: (1) On $39,939.00 (Invoice 2078), interest accruing as of January 11, 2021; (2) on $37,800.00 (Invoice 2170) as of March 11, 2021; (3) on $37,800.00 (Invoice 2214) as of April 11, 2021; (4) on $37,800.00 (Invoice 2264) as of May 11, 2021. (Dkt. 26 Malone Aff. ¶ 40 and SAC Ex. 3.)
C. Attorneys' Fees
Plaintiff seeks to recover $33,453.69 in attorneys' fees. (See Proposed Default Judgment (Dkt. 31).) New York law does not permit recovery of attorneys' fees for breach of contract absent a contractual provision stating otherwise. Oscar Gruss & Son, Inc. v. Hollander, 337 F.3d 186, 199 (2d Cir. 2003) (“Under the general rule in New York, attorneys' fees are the ordinary incidents of litigation and may not be awarded to the prevailing party unless authorized by agreement between the parties, statute, or court rule”); Congel v. Malfitano, 31 N.Y.3d 272, 291, 76 N.Y.S.3d 873, 884 (2018) (“Attorneys' fees are treated as incidents of litigation rather than damages” (internal quotation marks and citation omitted)). Here, there is just such a contractual provision; the Agreement explicitly entitles Plaintiff to expenses and fees incurred in connection with collecting amounts owed. (Agreement § II(3).)
The traditional approach to determining a fee award is the “lodestar” calculation, which is the number of hours expended multiplied by a reasonable hourly rate. See Healey v. Leavitt, 485 F.3d 63, 71 (2d Cir. 2007). The Second Circuit has held that “the lodestar ... creates a ‘presumptively reasonable fee.'” Millea v. Metro-North Railroad Co., 658 F.3d 154, 166 (2d Cir. 2011) (quoting Arbor Hill Concerned Citizens Neighborhood Association v. County Of Albany, 522 F.3d 182, 183 (2d Cir. 2008); and then citing Perdue v. Kenny A. Ex Rel. Winn, 559 U.S. 542, 552, 130 S.Ct. 1662, 1673 (2010)); see also Stanczyk v. City Of New York, 752 F.3d 273, 284-85 (2d Cir. 2014) (reaffirming Millea). To arrive at a lodestar calculation, “[t]he party seeking an award of [attorneys'] 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). Plaintiff has submitted such evidence here, including affidavits from counsel and copies of contemporaneous records of time expended by specific attorneys and paralegals. (Dkt. 26 Malone Aff. ¶ 36 and Ex. L; Dkt. 30 Malone Aff. ¶¶ 2-7 (updating fees and expenses combined).)
Hourly Rates: Courts assess the reasonableness of a proposed hourly rate by considering the prevailing market rate for lawyers in the district in which the ruling court sits. Polk v. New York State Department Of Correctional Services, 722 F.2d 23, 25 (2d Cir. 1983). “The rates used by the court should be current rather than historic hourly rates.” Reiter v. Metropolitan Transportation Authority Of New York, 457 F.3d 224, 232 (2d Cir. 2006) (internal quotation marks omitted). “[C]ourts may conduct an empirical inquiry based on the parties' evidence or may rely on the court's own familiarity with the rates if no such evidence is submitted.” Wong v. Hunda Glass Corp., No. 09-CV-4402, 2010 WL 3452417, at *2 (S.D.N.Y. Sept. 1, 2010) (internal quotation marks omitted). Additionally, “the range of rates that plaintiff's counsel actually charges their clients ... is obviously strong evidence of what the market will bear.” Rozell v. Ross-Holst, 576 F.Supp.2d 527, 544 (S.D.N.Y. 2008); see also Lilly v. County Of Orange, 910 F.Supp. 945, 949 (S.D.N.Y. 1996) (“The actual rate that counsel can command in the market place is evidence of the prevailing market rate”).
Plaintiff is represented in this action by the law firm of McGrail & Bensinger LLP and seeks reimbursement of fees, primarily for the work of two attorneys: Daniel C. Malone, who billed at an hourly rate of $460 during 2021 and $495 during 2022. (See Malone Decl. ¶ 3 and Dkt. 26 Malone Aff. Ex. L.); and Kiernan O'Connell, who billed at an hourly rate of $345 during 2021 and $395 during 2022. The fees sought also include those for substantial work from a paralegal, who billed at an hourly rate of $150 during 2021 and $175 during 2022. (See Dkt. 26 Malone Aff. Ex. L.)
The fact that hourly rates for the same person increased at year end is not uncommon and does not render rates unreasonable. To the contrary, “it is reasonable for a lawyer's rate to increase as he or she gains experience.” City of Almaty, Kazakhstan v. Ablyazov, No. 15 Civ. 05345, 2020 WL 5440553, at *4 (S.D.N.Y. Sept. 10, 2020); see also Gulino v. Board of Education of City School District of City of New York, No. 96-CV-8414, 2021 WL 4463116, at *5 (S.D.N.Y. Sept. 24, 2021) (endorsing plaintiff's assertion that “[c]ourts in this District have increased the rates awarded in the same case over time because hourly rates continue to increase over time and more current rates should be used in setting reasonable hourly rates”). Of course, the Court needs to consider the reasonableness of each rate level for the respective time frame in which it was operable. The Court has done so here in concluding that the rates are reasonable.
The Court recommends approval of the requested rates as they are well within the reasonable range of rates for experienced attorneys performing similar works, and the rates are similar to those this Court has previously approved, even as of several years ago. See, e.g., Tabatznik v. Turner, No. 14-CV-8135, 2016 WL 1267792, at *11-12 (S.D.N.Y. Mar. 30, 2016) (approving partner rate of $650 per hour and associate rate of $425 per hour, in action to enforce a promissory note); Rubenstein v. Advanced Equities, Inc., No. 13-CV-1502, 2015 WL 585561, at *6-7 (S.D.N.Y. Feb. 10, 2015) (hourly rate of $525 was reasonable for partners with between 20 and 30 years' experience and that “blended” rate of $350 was reasonable for associates with experience ranging from one to nine years); Weiwei Gao v. Sidhu, No. 11-CV-2711, 2013 WL 2896995, at *6 (S.D.N.Y. May 7, 2013) (rate of $550 per hour was a reasonable rate for a breach-of-contract commercial litigation case where the attorney had primary responsibility for the matter), R. & R. adopted, 2013 WL 2896995 (S.D.N.Y. June 13, 2013).
The Court also has reviewed the qualifications of the attorneys and finds the rates charged appropriate for attorneys of their background and experience. Mr. Malone is special counsel at his present firm, having previously served as a partner at another firm. He has twenty-five years of experience, predominantly as a litigator in a wide variety of commercial cases. (Malone Decl. ¶ 3.) Mr. O'Connell's experience is not as straightforward. He has passed the New York bar examination and is awaiting admission. If that were the end of the story, his billing rate could be considered excessive. However, Mr. O'Connell is a qualified barrister admitted in 2013 to practice before the courts of the Republic of Ireland, where he represented clients at various stages of litigation through trial and performed many of the same tasks that American lawyers perform, including legal researching, drafting and filing pleadings and motions. (Malone Decl. ¶ 4.) The Court thus finds Mr. O'Connell's transferrable litigation experience sufficient to justify his hourly rate.
Finally, the paralegal hourly rate is within the range of acceptable paralegal rates for commercial litigation paralegals in this jurisdiction. See, e.g., Billybey Marina Services v. Bouchard Transportation Company, Inc., No. 20-CV-4922, 2021 WL 4950835 at *4 (S.D.N.Y. Oct. 25, 2021) (awarding paralegal rate of $265 per hour and citing cases awarding paralegal rates of $200 per hour and $290 per hour); TufAmerica Inc., v. Diamond, No. 12-CV-3529, 2016 WL 1029553 at *6 (S.D.N.Y. Mar. 9, 2016) (as of six years ago, “[r]ecent cases in this district suggest[ed] that the prevailing rate for paralegals [was] between $100 and $200 per hour.”) Accordingly, the Court finds the rates requested for Plaintiff's legal services to be reasonable.
Hours Worked: To determine the compensable hours, “the Court must examine the hours expended by counsel and the value of the work product of the particular expenditures to the client's case.” Tlacoapa v. Carregal, 386 F.Supp.2d 362, 371 (S.D.N.Y. 2005) (citing Gierlinger v. Gleason, 160 F.3d 858, 873, 876 (2d Cir. 1998)). “In making this examination, the district court does not play the role of an uninformed arbiter but may look to its own familiarity with the case and its experience generally as well as to the evidentiary submissions and arguments of the parties.” Gierlinger, 160 F.3d at 876 (internal quotation marks omitted). “The relevant issue ... is not whether hindsight vindicates an attorney's time expenditures, but whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures.” Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992); see also Mugavero v. Arms Acres, Inc., No. 03-CV-5724, 2010 WL 451045, at *6 (S.D.N.Y. Feb. 9, 2010) (same). A court thus should exclude from the lodestar calculation “excessive, redundant or otherwise unnecessary hours.” Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1999); see also Luciano v. Olsten Corp., 109 F.3d 111, 116 (2d Cir. 1997) (“If the district court concludes that any expenditure of time was unreasonable, it should exclude these hours from the lodestar calculation”).
A prevailing party can recover fees for several categories of work, including failed efforts otherwise reasonably pursued. See, e.g., Gortat v. Capala Brothers, Inc., 621 F. App'x. 19, 23 (2d Cir. 2015) (“there is no rule that [p]laintiffs need achieve total victory on every motion in pursuit of a successful claim in order to be compensated for the full number of hours spent litigating that claim”); Ni v. Bat-Yam Food Services Inc., No. 13-CV-7274, 2016 WL 369681, at *8 (S.D.N.Y. Jan. 27, 2016) (awarding attorneys' fees for hours spent on discovery, discovery-related motions, failed settlement negotiations, and summary judgment motions); Easterly v. Tri-Star Transportation Corp., No. 11-CV-6365, 2015 WL 337565, at *10 (S.D.N.Y. Jan. 23, 2015) (approving fees for time spent, inter alia, preparing pleadings prior to the commencement of the action, discovery, discovery disputes, summary judgment motions, and a damages inquest). Here, the Agreement's reimbursement provision is broad and permits Plaintiff to recover attorneys' fees incurred not only for the litigation itself, but also pre-litigation attempts to collect any overdue amounts. (Agreement § II(3) (“You also agree to reimburse us for all fees, amounts and expenses whatsoever, including attorneys' fees, incurred in the collection of any overdue and unpaid invoices”).)
The Court has reviewed the attorney billing records and finds most of the time spent to be reasonable. The work performed included drafting the initial formal demand letter, drafting the complaint, drafting default motion papers, preparing exhibits, meeting to discuss strategy, and various tasks attendant to those. A good portion of the hours spent, broken down by each individual and supported by contemporaneous documentation, were reasonably necessary for the litigation of Plaintiff's claims.
That said, it is apparent to the Court that the time spent on some tasks was excessive or the result of earlier lapses. This is a straight forward collection case in which the defendant defaulted from the outset. Yet, Plaintiff twice amended the pleadings and twice moved by order to show cause for default, the second time being necessitated as a result of newly amending the pleading. (See Dkt. 25.) In the right context, that might all be reasonable; but the second amended pleading was required because the previous pleading failed to include assertions of fact establishing federal subject matter jurisdiction. (See Dkt. 22.) And even though the only required change to the amended pleading was for that purpose, counsel expended more than 20 hours newly determining citizenship of the parties, revising the complaint, and resubmitting the motion for default.
Additionally, in general, there are a number of entries that are variously ambiguous or suggestive of work that was duplicative. The billing also suffers from “block” billing, which, for the larger blocks of time, makes it difficult to parse out reductions for specific tasks. See E.S. v. Katonah-Lewisboro School District, 796 F.Supp.2d 421, 432 (S.D.N.Y. 2011) (“the practice of block billing, although not forbidden, makes it difficult if not impossible for a court to determine the reasonableness of the time spent on each of the individual services or tasks provided”) (internal quotation marks and citation omitted). Accordingly, the Court finds it appropriate to reduce fees “across-the-board” by ten percent. See Luciano 109 F.3d at 117 (“a district court can exclude excessive and unreasonable hours from its fee computation by making an across-the-board reduction in the amount of hours”); Congregation Rabbinical College of Tartikov, Inc. v. Village of Pomona, 188 F.Supp.3d 333, 344 (S.D.N.Y. 2016) (“It is common practice in this Circuit to reduce a fee award by an across-the-board percentage where a precise hour-for-hour reduction would be unwieldy or potentially inaccurate”) (internal quotation marks and citation omitted).
In light of the foregoing analysis, the Court finds that Plaintiff should be awarded fees of $30,108.32.
D. Costs
Plaintiff seeks $1,356.97 in costs and expenses. The invoices reflect that those costs include expenses incurred mostly for court filing, overnight mailing services, and service of process (Dkt. 26 Malone Aff. Ex. L; Dkt. 30 Malone Aff. Ex. A-C.) Those expenses are routinely recoverable. See e.g., Malletier v. Artex Creative International Corp., 687 F.Supp.2d 347, 364-65 (S.D.N.Y. 2010) (costs such as filing fees, shipping costs, and research fees are “typically awarded when a defendant defaults”) (citing Arbor Hill, 369 F.3d at 98); Tips Exports, Inc. v. Music Mahal, Inc., No. 01-CV-5412, 2007 WL 952036, *11 (E.D.N.Y. Mar. 27, 2007) (reimbursing plaintiff for process servers and postage); Shannon v. Fireman's Fund Insurance Co., 156 F.Supp.2d 279, 305 (S.D.N.Y. 2001) (reimbursing plaintiff for filing fees and shipping costs). Costs associated with copying, docket fees, and other miscellaneous fees may also be recovered pursuant to Local Civil Rule 54.1.
The Court has reviewed Plaintiff's submissions and finds the costs set forth are recoverable. Accordingly, Plaintiff should be awarded $1,356.97 in costs.
E. Postjudgment Interest
Whereas prejudgment interest in a diversity case is governed by state law, postjudgment interest is governed by federal statute. Specifically, 28 U.S.C. § 1961(a) provides that “[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court ... [and] shall be calculated from the date of the entry of the judgment.” In light of the statute's imperative language, the Second Circuit has “consistently held that an award of postjudgment interest is mandatory.” Schipani, 541 F.3d at 165 (citing Westinghouse Credit Corp. v. D'Urso, 371 F.3d 96, 100 (2d Cir.2004)). Accordingly, postjudgment interest should be awarded.
CONCLUSION
For the foregoing reasons, I recommend awarding Plaintiff: (1) $153,339.00 in damages, (2) prejudgment interest at the statutory 9% rate as calculated by the Clerk of Court, using the dates of accrual set forth above, (3) $30,108.32 in reasonable attorneys' fees, (4) $1,356.97 in costs, and (5) postjudgment interest at the statutory rate.
OBJECTIONS AND RIGHT TO APPEAL
Pursuant to 28 U.S.C. § 636(b)(1) and Rules 72, 6(a), and 6(d) of the Federal Rules Of Civil Procedure, the parties shall have fourteen (14) days to file written objections to this Report And Recommendation. Such objections shall be filed with the Clerk of the Court, with extra copies delivered to the Chambers of the Honorable Vernon S. Broderick, United States Courthouse, 40 Foley Square, New York, New York 10007, and to the Chambers of the undersigned, United States Courthouse, 500 Pearl Street, New York, New York 10007. Failure to file timely objections will result in a waiver of objections and will preclude appellate review.