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Top Ridge Investments, LLC v. Anichini, Inc.

United States District Court, D. Vermont

September 27, 2018




         This case concerns two primary issues: (1) a claim originally filed in New York state court by Top Ridge Investments, LLC ("Top Ridge") against Defendants Anichini, Inc., Anichini Hospitality, Inc., Anichini Retail, Inc., and Susan Dollenmaier to collect on a promissory note and personal guaranty; and (2) counterclaims by Defendants against Top Ridge, its principal Jeffrey Tauber and Royal Heritage House, LLC ("RHH"). The case was removed to the Southern District of New York (see Docs. 1, 9, 17) and transferred to the District of Vermont (Doc. 23).

         The case went to trial before a jury in December 2017. The jury did not address Top Ridge's breach-of-contract claim on the promissory note, since the parties did not dispute default or the principal amount owed ($453, 269.16). (See Doc. 142 at 10-11.) The jury found against the Anichini parties[1] on their misrepresentation claim against RHH, [2] and found that RHH breached a term of its contract for the acquisition of the Anichini companies, but that the Anichini parties had not proved that the breach caused damages. (Doc. 146.) The court has ordered a new trial on the counterclaims and third-party claims. (Doc. 162.)

         Top Ridge seeks an award of attorneys fees in the amount of $489, 297.50 and costs in the amount of $28, 776.38. (Docs. 152, 160, 161.)[3] In their Objection to Top Ridge's fees request, the Anichini parties state that:

(1) Top Ridge should only recover for fees it actually incurred and paid. Since Plaintiffs counsel was retained and paid by RHH, Top Ridge should not recover fees.
(2) Top Ridge should not recover fees incurred in the defense of claims against RHH and Jeffrey Tauber;
(3) RHH's breach of its agreement to acquire the Anichini companies and employ Ms. Dollenmaier prevents Top Ridge from recovering fees or costs incurred when the promissory note went unpaid as a consequence of RHH's actions.

(Doc. 155.) Top Ridge maintains that its application for an award of attorneys fees should be granted. (Doc. 156.)

         Vermont follows the "American Rule," under which "parties bear their own litigation costs, including attorney's fees, unless provided otherwise by contract or statute." Walsh v. Cluba, 2015 VT 2, ¶ 15, 198 Vt. 453, 117 A.3d 798. In this case, as described below, the relevant contracts do include fee-shifting provisions. Since fees must be reasonable, id., the court will first address the proof of the reasonableness of the attorneys fees. It will then address the three issues raised by the Anichini parties in the Objection they filed to the claim for attorneys fees (Doc. 155).

         I. Reasonable Fees

         In reviewing Top Ridge's fee request, the court begins with the "lodestar" method. This method depends upon a determination of the number of hours reasonably expended on the litigation and a reasonable hourly rate. Blum v. Stenson, 465 U.S. 886, 888 (1984); Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cty. of Albany, 522 F.3d 182, 186 (2d Cir. 2008). Although not always conclusive, the lodestar calculation creates a "presumptively reasonable fee," and absent extraordinary circumstances, failure to calculate it as a starting point is legal error. Millea v. Metro-North R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011).

         The court sets forth its lodestar calculation below. The lodestar method has been described as an "economic model," but there is also the 12-factor "Johnson" approach-a model that is based on the court's "experience and judgment." See Arbor Hill, 522 F.3d at 187-88. The court recognizes the doubt cast in recent cases on the 12-factor test established in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). See Klipsch Grp., Inc. v. ePRO E-Commerce Ltd., 880 F.3d 620, 634 n.8 (2d Cir. 2018) (citing Perdue v. Kenney A. ex rel. Winn, 559 U.S. 542, 550-52 (2010).[4] Here-as in A ex rel. Mr. A. v. Hartford Board of Education, No. 3.11-CV-01381-GWC, 2017 WL 187138, at *2 (D. Conn. Jan. 17, 2017)-the court concludes that the "best course is to avoid becoming fixated on any particular method," and to instead consider both the lodestar and Johnson models.

         A. Reasonable Rates

         Based upon the declarations submitted by Plaintiffs lead counsel Mark Gross and Vermont counsel Mark Werle, the court finds that the hourly rates charged by the attorneys are reasonable in amount. Multiple partners, associates, and paralegals representing Top Ridge billed hours on this case, including Mr. Gross and associates at his current and former firms- Fox Rothschild LLP ("Fox") and Greenbaum, Rowe, Smith & Davis, LLP ("Greenbaum"), respectively-as well as Mr. Werle and associates at his Vermont firm (Ryan Smith & Carbine ("RSC")). Mr. Gross billed at hourly rates between $516.33 and $535.30. Mr. Werle and his partners billed at hourly rates in the $240-250 range. (See Docs. 152-3, 152-4.)

         These figures are not challenged by counsel for the Anichini parties. They are reasonable and supported in light of the Johnson factors, including the experience and duties of the attorneys and paralegals and the market rates for counsel from the New York region. The rates are consistent with the experience of this court in attorneys fee litigation. See, e.g., Bank of Am., N.A. v. New England Quality Serv., Inc., No. 5:16-cv-83 (D. Vt. Aug. 2, 2018), ECF No. 134 (finding $280 hourly rate to be reasonable in commercial lending case); see also A. ex rel. Mr. A., 2017 WL 187138, at *7 (approving an hourly rate of $450 to experienced Hartford area attorney in educational IDEA litigation).

         B. ...

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