Morozov v. ICOBOX Hub Inc.

Background

Eugene Morozov and MEM Consulting Inc. sued ICOBOX Hub Inc., ICOBOX, Alex Moskovsky, and Nickolay Evdokimov. They alleged that the defendants failed to pay wages and retaliated against them in violation of the Fair Labor Standards Act and New York Labor Laws. They also asserted breach-of-contract claims.

The defendants’ lawyer withdrew after warning the defendants that they could face judgment if they did not obtain new counsel or defend themselves. The plaintiffs then moved for partial summary judgment on their breach-of-contract claims against Evdokimov. The court granted that motion without opposition and referred damages and attorneys’ fees to Magistrate Judge Sarah L. Cave for an inquest, a process for determining the amounts owed.

The plaintiffs later moved for default judgment on their unpaid-wage and retaliatory-discharge claims against ICOBOX Hub Inc., ICOBOX, Moskovsky, and Evdokimov. They also sought an order requiring Evdokimov to answer questions about his assets and restraining him from disposing of those assets. The defendants did not respond to the plaintiffs’ submissions.

Report and Objections

Magistrate Judge Cave recommended entering judgment against Evdokimov for $354,500 in damages, $63,810 in attorneys’ fees, and $6,815 in costs. She also recommended granting the plaintiffs’ request for asset-related relief under Section 5229 of the New York Civil Practice Law and Rules.

The plaintiffs objected only to the recommended attorneys’ fee amount. They requested $106,350, based on a 30% contingency-fee agreement with their counsel. They did not submit contemporaneous billing records or invoices. Instead, they submitted a description of the work and counsel’s estimate that at least 200 hours had been spent on the case.

Attorneys’ Fees

The court explained that a party seeking attorneys’ fees must provide records showing the hours worked, dates, and nature of the work. Because the plaintiffs did not provide contemporaneous billing records, the court agreed with Magistrate Judge Cave that a 40% reduction from the requested $106,350 was appropriate. The court therefore awarded $63,810 in attorneys’ fees.

Asset-Related Relief

The court held that Rule 64 of the Federal Rules of Civil Procedure permits use of state-law remedies for securing satisfaction of a potential judgment. It adopted Magistrate Judge Cave’s conclusion that Section 5229 of the New York Civil Practice Law and Rules authorized an examination of Evdokimov and restraints on his assets after the plaintiffs obtained a favorable decision.

The court cited the asserted risk that Evdokimov might transfer assets, including concerns about his participation in the litigation, his stated residence outside New York, uncertainty about his whereabouts, and ICOBOX’s alleged ownership structure and operations. The court granted the plaintiffs’ asset-related motion as recommended.

Disposition

Judge George B. Daniels adopted Magistrate Judge Cave’s Report and Recommendation in its entirety and overruled the plaintiffs’ objection. The court directed entry of final judgment ordering Evdokimov to pay the plaintiffs $354,500 in damages, $63,810 in attorneys’ fees, and $6,815 in costs. The court also granted the recommended remedies concerning examination and restraint of Evdokimov’s assets.