Lebetkin v. Giray

Background

Ayse Giray, also identified as Sarah Baran, sought attorney’s fees and costs as the prevailing party against Steven Lebetkin. In 2012, Lebetkin and Giray entered a consulting agreement under which Lebetkin agreed to assist Giray with a potential lawsuit against a third party. The agreement stated that, in any action or proceeding to enforce rights under the agreement, the prevailing party would be entitled to recover costs and attorney’s fees.

Giray terminated the agreement in September 2012 and later settled her lawsuit against the third party. Lebetkin then brought this action seeking 3% of Giray’s settlement proceeds under the consulting agreement. The court previously granted Giray summary judgment on Lebetkin’s breach-of-contract and quantum-meruit claims. The opinion states that Lebetkin’s other claims had been dismissed earlier in the litigation.

Giray requested $263,850 in attorney’s fees and $10,367.92 in costs. Her attorneys sought compensation for slightly less than 530 hours of work, at a negotiated rate of $500 per hour for each of three attorneys. They maintained contemporaneous time records. Lebetkin did not dispute that Giray was the prevailing party or that the agreement entitled her to attorney’s fees. He also did not challenge the $500 hourly rate or the request for costs, although he raised limited objections to some time entries.

Legal standard

Under the American Rule, each side ordinarily pays its own attorney’s fees unless a statute or enforceable contract provides otherwise. A court enforces a contractual fee provision when the contract is valid under applicable state law. Because fee-shifting provisions depart from the American Rule, the intent to allow fees must be stated clearly.

The court evaluates a requested fee by determining a reasonable hourly rate and a reasonable number of hours. The resulting amount is often called a presumptively reasonable fee. The rate should reflect what a paying client would be willing to pay, and attorneys generally must provide contemporaneous records of their work. Fee proceedings should not become a separate major lawsuit; courts may use reasonable estimates rather than conduct a perfectly detailed audit.

Court’s analysis

The court held that Giray was the prevailing party because she obtained a judgment in her favor and all claims against her had been dismissed. It found that the agreement unambiguously entitled the prevailing party to fees for litigation seeking to enforce rights under the agreement.

The court found the $500 hourly rate for each of Giray’s three attorneys reasonable. It also found that counsel’s records, hours, and work were reasonable based on the court’s familiarity with the litigation and its complexity. Giray’s explanations adequately resolved Lebetkin’s limited objections to the time entries.

Disposition

The court granted Giray’s June 5 application for attorney’s fees and costs in the full amount requested. It directed Giray to submit a proposed order granting the application and closing the case.