United Realty Advisors, LP v. Verschleiser
- John Koeltl
- 1:14-cv-05903
- U.S. District Court · Southern District of New York
- 14
United Realty Advisors v. Verschleiser: Judge Koeltl denied Pinhasi’s request for costs and attorney’s fees under Rules 54 and 68 and § 1927.
Ophir Pinhasi did not receive the requested costs or attorney’s fees under Rules 68 or 54 as presented, or under 28 U.S.C. § 1927. The plaintiffs therefore were not ordered to pay those amounts.
What happened
In United Realty Advisors, LP v. Verschleiser, Ophir Pinhasi asked for costs and attorney’s fees after a jury found in his favor on every claim against him. He relied on a settlement offer made under Rule 68, as well as Rule 54 and a federal sanctions law.
Pinhasi argued that the plaintiffs recovered nothing from him, making his offer more favorable than the result against him. Plaintiff Jacob Frydman argued that the plaintiffs obtained a larger judgment against Eli Verschleiser than the defendants’ joint offer. The court also noted that Pinhasi had not properly documented or filed his request for costs under the court’s procedures.
Judge Koeltl denied Pinhasi’s motion. He ruled that Rule 68 does not apply when the defendant seeking fees won completely at trial, found no basis for sanctions under the federal law, and said Pinhasi had not properly pursued costs under Rule 54.
The detailed version
- United Realty Advisors, LP v. Verschleiser · No. 1:14-cv-05903
- John Koeltl
- Oct. 11, 2024
Background
The plaintiffs—Jacob Frydman, United Realty Advisors, LP, and Prime United Holdings, LLC—brought consolidated cases against multiple defendants, alleging violations of federal and New York laws. In 2018, several defendants, including Ophir Pinhasi, made a joint offer under Federal Rule of Civil Procedure 68 to settle for $2,500,000. The offer stated that Pinhasi and certain other defendants would be jointly and severally liable for up to $1,000,000. The plaintiffs rejected the offer.
The case proceeded to trial against Pinhasi and Eli Verschleiser in late 2022. The jury found in Pinhasi’s favor on every claim against him, including claims under the Racketeer Influenced and Corrupt Organizations Act, the Computer Fraud and Abuse Act, the Electronic Communications Privacy Act, the Stored Communications Act, and state-law claims. The jury found Verschleiser liable on several claims and awarded $2,133,005 in damages. The court entered a $3,234,906.04 judgment against Verschleiser, including prejudgment interest, and later awarded the plaintiffs $306,970.52 in costs and attorney’s fees against Verschleiser and Multi Group.
Pinhasi moved for costs and attorney’s fees under Rule 68, Rule 54(d), and 28 U.S.C. § 1927. Only Frydman responded. Frydman argued that Rule 68 did not apply because the judgment against Verschleiser exceeded the defendants’ $2,500,000 joint offer. Pinhasi also asserted that his costs totaled $18,738.84, but he did not provide a breakdown or supporting documents.
Rule 68 request
Rule 68 shifts post-offer costs when a plaintiff rejects an offer and ultimately obtains a judgment that is no more favorable than the offer. The court explained that the rule applies when the plaintiff obtains a judgment, not when the defendant seeking costs wins completely.
Because Pinhasi prevailed on all claims against him, the court held that Rule 68 did not authorize him to recover costs or attorney’s fees. The judgment obtained against Verschleiser did not change that result. The court relied on the principle that Rule 68 is inapplicable when the defendant seeking its benefits has prevailed entirely against the plaintiff.
Rule 54(d) request
Rule 54(d) generally allows a prevailing party to recover taxable costs, subject to applicable statutes, rules, and court orders. The Southern District of New York’s Local Rule 54.1 requires a party seeking costs to file a notice of taxation of costs with the Clerk, attach a Bill of Costs, and include supporting material.
Pinhasi did not file a notice of taxation or a Bill of Costs. Instead, he mentioned his request in a footnote in a memorandum primarily addressing Rule 68 and § 1927. The court found that presentation inadequate. It also noted that a request for attorney’s fees under Rule 54(d)(2) must meet separate filing requirements and identify a statute or other authority authorizing the fees.
The court stated that Pinhasi should follow the district’s procedure and present a Bill of Costs to the Clerk. It further noted that the ordinary 30-day period had not yet elapsed because an appeal by Verschleiser had not yet reached its final disposition. The court nevertheless denied Pinhasi’s motion for an award under Rule 54 as presented.
Section 1927 request
Section 1927 permits sanctions against an attorney who unreasonably and vexatiously multiplies proceedings. The court described the standard as requiring clear evidence that the claims were entirely meritless and pursued for an improper purpose, effectively requiring bad faith.
The court found no basis for sanctions. It noted that the parties’ contentious litigation practices appeared mutual, and that the court had previously found both sides responsible for increasing litigation time. Pinhasi also did not identify specific meritless arguments or motions. His assertion that Frydman sued to harass him was not enough, particularly because the jury found for the plaintiffs on several claims against Verschleiser.
Disposition
The court denied Pinhasi’s motion for attorney’s fees under Rules 54 and 68 and 28 U.S.C. § 1927, and directed the Clerk to close the motion docket entry.
Read the full 14-page opinion on CourtListener, the free public archive maintained by the Free Law Project.