Eaton Partners, LLC v. Azimuth Capital Management IV, LTD.

Background

Eaton Partners, LLC sought to enforce an arbitration award against Azimuth Capital Management IV, Ltd. The dispute arose from a placement agreement under which Eaton agreed to seek capital commitments for Azimuth and Azimuth agreed to pay Eaton in installments. The agreement required arbitration of disputes, allowed collection of reasonable attorney’s fees after a payment default, and selected New York law.

The arbitrator issued a Partial Final Award awarding Eaton CAD $921,514.57 in damages and providing that interest at New York’s statutory rate of nine percent per year would continue to accrue if Azimuth did not pay within 30 days. The arbitrator later issued a Final Award granting Eaton US $263,639.72 in attorney’s fees, costs, and administrative fees. The court previously confirmed the arbitration award, denied Azimuth’s request to vacate it, and entered judgment. That judgment included the damages and the fees and costs but did not include prejudgment interest.

After the Second Circuit affirmed the judgment, Eaton asked the court to amend the judgment to include CAD $83,844.18 in interest on the damages award and US $23,140 in interest on the arbitration fees and costs. Eaton also sought additional attorney’s fees and costs for work performed in the federal case. Azimuth opposed the interest requests and asked the court to reduce the fee award.

Amendment of the Judgment

Federal Rule of Civil Procedure 60(a) permits a court to correct clerical mistakes or omissions so that a judgment accurately reflects the decision that was actually made. It does not permit a court to change the parties’ substantive rights by adding a new form of relief.

The court held that adding interest to the damages award was an appropriate Rule 60(a) correction. The court’s earlier opinion had confirmed the arbitration award in full, and the Partial Final Award clearly provided for nine-percent interest on the damages if they were not paid within 30 days. The court therefore amended the judgment to add CAD $83,844.18 for interest accruing from November 28, 2018, through December 2, 2019, the date judgment was entered.

The court denied Eaton’s request for US $23,140 in interest on the attorney’s fees and costs. The arbitrator had not awarded interest on those amounts, and the court concluded that adding such interest would create a new category of payment rather than correct a clerical omission.

Attorney’s Fees and Costs

The court applied the lodestar method, which generally calculates a presumptively reasonable fee by multiplying a reasonable hourly rate by a reasonable number of hours. Eaton submitted detailed time and cost reports, satisfying its initial burden to show that its request was reasonable. The court found the attorneys’ hourly rates reasonable but reduced the requested compensation for certain work.

The court denied or reduced entries concerning preparation of the arbitration fee application because those fees had already been awarded by the arbitrator. It also excluded $11,533.50 in the original submission and $6,973.75 in the supplemental submission for work devoted to the separate Canadian enforcement proceedings. The court allowed fees for responding to Azimuth’s effort to disqualify Eaton’s counsel and for settlement communications.

The court further reduced the award for excessive or unnecessary work, including administrative tasks performed by a partner and time spent preparing fee submissions. It imposed an additional 10-percent reduction for block billing, which grouped multiple tasks into single time entries. It also reduced certain travel-related entries by half, subtracting $3,257.50.

Eaton sought $184,872.66 in attorney’s fees. After subtracting $22,826.25 for work related to the Canadian and arbitration proceedings and $3,257.50 for travel-related reductions, and applying a total 20-percent reduction for block billing and excessive entries, the court awarded Eaton US $127,031.13 in fees and costs.

Disposition

The court’s applications were GRANTED in part and DENIED in part. The Clerk was directed to issue an amended judgment adding CAD $83,844.18 in prejudgment interest and awarding Eaton US $127,031.13 in attorney’s fees and costs. The court directed the Clerk to terminate the pending motions and close the case.