The ProImmune Company, LLC v. Holista Colltech Ltd.
- Kenneth Karas
- 7:20-cv-01247
- U.S. District Court · Southern District of New York
- 8
In ProImmune v. Holista, Judge Karas granted in part and denied in part ProImmune’s motion for fees and prejudgment interest.
ProImmune received an award of nine-percent prejudgment interest and established entitlement to attorneys’ fees under the Fourth Contract, while Holista avoided fee liability under the First Contract; the final Fourth Contract fee amount remained for later determination.
What happened
In The ProImmune Company, LLC v. Holista Colltech Ltd., ProImmune asked the court to award attorneys’ fees and prejudgment interest after earlier rulings that Holista breached several distribution agreements. The motion concerned the First, Second, and Fourth Contracts.
ProImmune argued that the First and Fourth Contracts allowed it to recover attorneys’ fees. Holista disputed the request under the First Contract and argued that the Fourth Contract’s fee provision applied only to certain contract changes. The parties agreed that ProImmune could recover prejudgment interest but disagreed about when that interest should begin.
Judge Kenneth M. Karas ruled that ProImmune was not entitled to attorneys’ fees under the First Contract but was entitled to them under the Fourth Contract. He also awarded nine-percent prejudgment interest on damages under the First, Second, and Fourth Contracts, calculated from specified breach dates. The motion was granted in part and denied in part, and the parties were ordered to submit additional briefing on calculating reasonable attorneys’ fees.
The detailed version
- The ProImmune Company, LLC v. Holista Colltech Ltd. · No. 7:20-cv-01247
- Kenneth Karas
- Aug. 2, 2023
Background
The ProImmune Company, LLC sued Holista Colltech Ltd. and Does 1–50, alleging that Holista breached four agreements concerning distribution of ProImmune’s dietary supplement. Holista brought counterclaims. In earlier rulings, the court granted ProImmune summary judgment, denied Holista summary judgment, and awarded ProImmune damages under the First Contract, Second Contract, and the initial period of the Fourth Contract.
ProImmune then moved for attorneys’ fees and prejudgment interest. The order addresses the fee request under the First and Fourth Contracts and the interest owed on the contract damages.
Attorneys’ Fees
New York generally follows the “American Rule,” under which each side ordinarily pays its own attorneys’ fees unless a statute or enforceable contract clearly provides otherwise. The court strictly construed the contracts’ fee provisions.
The First Contract required Holista to indemnify ProImmune for certain costs, expenses, claims, and liabilities caused by Holista. The court held that this language did not clearly authorize recovery of attorneys’ fees in litigation. The provision did not mention attorneys’ fees or obligations arising from litigation. ProImmune therefore was not entitled to attorneys’ fees under the First Contract.
The Fourth Contract stated that “direct legal fees associated with any future modifications and/or compliance of this Agreement will be charged back to Holista for issues it initiates.” The court held that this language clearly covered attorneys’ fees associated with compliance with the Fourth Contract. The court rejected Holista’s argument that the provision applied only to contract modifications concerning extensions or renewals. Because the court had determined that Holista initiated the relevant issues by failing to meet the Fourth Contract’s minimum annual performance requirements, ProImmune was entitled to attorneys’ fees related to that contract.
The court did not calculate the final fee amount in this order. It directed the parties to submit supplemental briefing about calculating reasonable attorneys’ fees when only one of several contracts involved in the litigation authorizes a fee award.
Prejudgment Interest
Under New York law, prejudgment interest is interest added to a contract-damages award for the period before judgment. The statutory rate is nine percent. The court held that interest should be calculated from the earliest ascertainable date on which each breach occurred, rather than from a single intermediate date proposed by Holista.
The court awarded ProImmune nine-percent prejudgment interest as follows:
- On the First Contract award, from March 16, 2016. - On the Second Contract award, from June 16, 2017. - On the Fourth Contract award, from September 1, 2019.
The dollar amounts of the three underlying awards are blank in the opinion text provided, so the order does not state the total interest amount here.
Disposition
In The ProImmune Company, LLC v. Holista Colltech Ltd., Judge Kenneth M. Karas granted in part and denied in part ProImmune’s motion. ProImmune was denied attorneys’ fees under the First Contract, awarded entitlement to attorneys’ fees under the Fourth Contract subject to further calculation, and awarded nine-percent prejudgment interest on the specified contract damages. The clerk was directed to terminate the motion and file the order under seal. The parties were also directed to submit proposed redactions and additional briefing limited to the fee-calculation issue.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.