ANN M. DONNELLY, District Judge.
The plaintiff, George Zouvelos ("Zouvelos") filed this action pro se on April 15, 2016, after I denied him leave to implead defendants Michele Riley, Surety Financial of America, Inc., Julio Pozo, and Joe Mastrapa in a related action brought against him by nominal defendant Financial Casualty & Surety, Inc. ("FCS") for breach of contract and breach of fiduciary duty (the "2012 Action").
On January 29, 2018, Magistrate Judge Roanne L. Mann issued a Report and Recommendation ("R&R") recommending that Riley's and FCS's motions for attorneys' fees be granted in the amount of $28.700 as to Riley and $16.980.80 as to FCS. (ECF No. 92, at 24.) Judge Mann also recommended awarding Riley $184.45 in costs. (Id.) Judge Mann directed the parties to file objections to the R&R by February 12, 2018. Thereafter, I extended the deadline for objections to February 26, 2018. (Minute Entry, February 6, 2018.) Zouvelos filed timely objections to the R&R, and Riley responded to those objections. (ECF Nos. 94, 95.) To date, neither Riley nor FCS has objected to the R&R. I have undertaken a de novo review of the record, the R&R, and the instant objections and response to those objections. For the reasons set forth below, I adopt Judge Mann's thoughtful and comprehensive opinion in its entirety.
Zouvelos did not object to the facts and procedural history set forth in the Background section of the R&R. I have reviewed this portion of the R&R for clear error and found none. Accordingly, I adopt those facts in their entirety.
In reviewing a Report and Recommendation, a district court "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1). A party's objections must be specific; where a party "makes only conclusory or general objections, or simply reiterates [the] original arguments, the Court reviews the [R & R] only for clear error." Poll Corp. v. Entegris, Inc., 249 F.R.D. 48. 51 (E.D.N.Y. 2008) (quoting Barran v. Joie, No. 96 Civ. 324, 2002 WL 335014, at *I (S.D.N.Y. Mar. 4, 2002)). The district judge must evaluate proper objections de novo and may accept, reject, or modify the recommended disposition." Fed. R. Civ. P. 72(b)(3).
"[E]ven in a de novo review of a party's specific objections, [however.] the court will not consider `arguments, case law and/or evidentiary material which could have been, but were not, presented to the magistrate judge in the first instance.'" Brown v. Smith, No. 09 Civ. 4522, 2012 WL 511581, at *1 (E.D.N.Y. Feb. 15, 2012) (quoting Kennedy v. Adamo, No. 02 Civ. 1776, 2006 WL 3704784, at *1 (E.D.N.Y. Sept. 1, 2006)) (alterations omitted). Moreover, "the district court is `permitted to adopt those sections of a magistrate judge's report to which no specific objection is made, so long as those sections are not facially erroneous.'" Sasmor v. Powell, No. 11 Civ. 4645, 2015 WL 5458020, at *2 (E.D.N.Y. Sept. 17, 2015) (quoting Batista v. Walker, No. 94 Civ. 2826, 1995 WL 453299, at *1 (S.D.N.Y. July 31, 1995)).
Zouvelos has the following objections to the R&R.
Although I am only obligated to review the R&R for clear error,
In this case, judgment was entered on March 31, 2017. (ECF No. 41.) FCS filed its motion for attorney's fees on May 1, 2017. (ECF No. 58.) Zouvelos claims that FCS's motion for attorneys' fees was untimely because it was filed more than 14 days after the entry of judgment, contrary to Rule 54(d)(2)(B)(i) of the Federal Rules of Civil Procedure. FCS, on the other hand, maintains that its motion was timely because it assumed that my March 29, 2017 Scheduling Order in the 2012 Action—which directed FCS to "file any motion for attorneys' fees" by May 1, 2017—also applied in this case.
To clarify, my Scheduling Order setting the May 1
Nevertheless, I agree with Judge Mann that I should extend nunc pro tune FCS's time to file its motion for attorneys' fees in this case to May I, 2017. "A court may extend the time to file a motion for fees . . . if the movant demonstrates `excusable neglect.'" Sorenson v. Wolfson, 683 F. App'x 33, 36 (2d Cir. 2017) (summary order) (citing Tancredi v. Mel. Life, Ins. Co., 378 F.3d 220, 227-28 (2d Cir. 2004). Excusable neglect is determined by considering "[1] [t]he danger of prejudice to the [opposing party], [2] the length of the delay and its potential impact on judicial proceedings, [3] the reason for the delay, including whether it was in the reasonable control of the movant, and [4] whether the movant acted in good faith." Id. (quoting Tancredi, 378 F.3d at 228) (internal quotations omitted). Here, there is good reason to extend the filing deadline. Given the close proximity in time between my March 29, 2017 Scheduling Order in the 2012 Action and my March 30, 2017 Order dismissing the complaint in this case, it was not unreasonable for FCS to believe that the May 1 s' deadline applied in both cases. That FCS was acting in good faith is clear, since it filed its motion in this case on May 1, 2017. Zouvelos suffered no prejudice. I granted him an extension to respond to FCS's motion, and he had more than a month to file his response. (Minute Entries, June 1, 2017 and June 12, 2017.) Accordingly, I extend nunc pro tune FCS's time to file its motion for attorney's fees to May 1, 2017.
I also reject Zouvelos's claim that I cannot award attorneys' fees to either defendant because my March 30, 2017 Order dismissing the complaint with prejudice directed the Clerk of the Court "to close the case." (See ECF No. 46.) It is well-settled that "[w]henever a district court has federal jurisdiction over a case, it retains ancillary jurisdiction after dismissal to adjudicate collateral matters such as attorney's fees." Tancredi, 378 F.3d at 225; Chesley v. Union Carbide Corp., 927 F.2d 60, 64 (2d Cir. 1991) ("A federal court may, in its discretion, exercise ancillary jurisdiction to hear fee disputes . . . between litigants and their attorneys when the dispute relates to the main action. . . ."). Zouvelos's appeal of my March 30, 2017 Order dismissing this case does not preclude me from considering the defendants' fee motions; the filing of an appeal "only divest[s] the district court of jurisdiction respecting the questions raised and decided in the order appealed from." Witek v. City of New York, No. 12CV981CBAVVP, 2015 WL 9460132, at *4 (E.D.N.Y. Dec. 23, 2015) (citing N. Y. State Nat'l Org.fin. Women v. Terry, 886 F.2d 1339, 1350 (2d Cir. 1989)). See also Tancredi, 378 F.3d at 225 ("[N]ot with standing a pending appeal, a district court retains residual jurisdiction over collateral matters, including claims for attorneys' fees."). That I did not include any language in my Order specifically directing the defendants to file motions for attorneys' fees by a certain lime does not change this analysis. Accordingly, I affirm Judge Mann's decision on this issue.
Judge Mann recommends that I award Riley attorney's fees in the amount of $28,700 ($17.800 for 71.2 hours of' district court-related work and $10,900 for 43.6 hours of appeal-related work) instead of the $35,300 that counsel requested. (ECF No. 92, at 17.)
I reject Zouvelos's claim that he was deprived of due process because he did not have unredacted copies of all of counsel's billing records and thus, had no opportunity to review and comment on them. (ECF No. 94, at 7.) Zouvelos was not entitled to unredacted copies of all of counsel's billing records by virtue of Riley's motion for attorney's fees.
Moreover, it is for the Court to decide the reasonableness of the fees, not the losing party. "If the fees are inflated, the court can make that determination [] by reviewing the records in camera after a finding of liability." Collins, 2012 WL 3011028, at *5. See also Errant Gene Therapeutic, LLC v. Sloan-Kettering Inst../Or Cancer Research, No. 115CV02044AINSDA, 2018 WL 259803, at *2 (S.D.N.Y. Jan. 2, 2018) ("The Court "enjoys broad discretion in determining the amount of a fee award."); Div. 1181 Amalgamated Transit Union-New York Employees Pension Fund v. D & A Bus Co., 270 F.Supp.3d 593. 619 (E.D.N.Y. 2017) ("To determine whether the number of hours spent by counsel was reasonable, the Court must `use [its] experience with the case, as well as [its] experience with the practice of law, to assess the reasonableness of the hours spent . . . in a given case.'"). Here, Riley submitted unredacted copies of her counsel's invoices to Judge Mann's chambers for in camera review. Judge Mann conducted an extensive review of those records and struck fees that were unreasonable and excessive in light of the nature of this case. (ECF No. 92, at 17.) Judge Mann had sufficient information to make a decision, and required no input from Zouvelos.
Zouvelos also contends that Riley's counsel "opposed voluntary withdrawal of [his] appeal solely to generate legal fees," and that the number of hours for which Riley's counsel is compensated in connection with appeals-related work should be further reduced. (ECF No. 94, at 11.) I disagree. There is no indication that Riley opposed Zouvelos's withdrawal of the appeal in bad faith. To the contrary, the evidence shows that Riley opposed Zouvelos's withdrawal of the appeal in order to recoup fees incurred as a result of having to defend the appeal. (17-cv-1225, ECF No. 67.) As Judge Mann observed, "The fees incurred by Riley in moving for previously incurred fees would have been avoided had Zouvelos not filed an appeal in the first instance." (ECF No. 92, at 16.) Thus, no further reduction of Riley's counsel's fees is necessary, and I adopt Judge Mann's fee recommendation with respect to Riley in its entirety.
After a thorough review of FCS's billing records, Judge Mann concluded that FCS did not exercise appropriate billing judgment, applied a 20% reduction to its attorney's fees, and recommended that I award FCS attorney's fees in the amount of $16.980.80 instead of the $21,226 that FCS requested. (ECF No. 92, at 23.) Zouvelos now argues that a reduction of more than 20% is necessary because FCS "was a mere `nominal' defendant in the instant action" who "had little if any stake in the outcome," and because FCS did not exercise proper billing judgment. (ECF No. 94, at 9-10.) After a de novo review of FCS's billing records and the case law, I agree with Judge Mann that a 20% fee reduction sufficiently ensures that FCS is not being compensated for non-legal work, or for redundant, duplicative, or excessive hours. See, e.g., Preston Expl. Co., LP v. GSP, LLC, No. CIV.A. H-08-3341, 2013 WL, 3229678, at *9 (S.D. Tex. June 25, 2013) (a reduction in recoverable hours of 20% is warranted given the lack of billing judgment in the case); Ramirez v. Lewis Energy Grp., L.P., 197 F. Stipp. 3d 952, 959 (S.D. Tex. 2016) (applying a 20% fee reduction due to the unreasonably high number of hours billed and lack of billing judgment). Thus, I adopt Judge Mann's fee recommendation with respect to FCS in its entirety.
For the reasons set forth above, I affirm and adopt Judge Mann's R&R in its entirety. I grant defendants Riley's and FCS's motions for attorneys' fees in the amount of $28,700 as to Riley and $16,980.80 as to FCS. I also award Riley $184.45 in costs.