PNC Bank, National Association v. Dana Transport, Inc.

Background

The plaintiffs were PNC Bank, National Association; Wells Fargo Capital Finance, LLC; Wells Fargo Bank, National Association; BMO Harris Bank; Huntington National Bank; Cathay Bank; and Bank Leumi, USA. The defendants were Dana Transport, Inc. and Ronald B. Dana.

The parties’ Third Amended Loan Agreement required the borrowers to indemnify the lenders for liabilities, costs, and attorneys’ fees connected to litigation related to the agreement, except when the loss resulted from willful misconduct by the party being indemnified. Dana had earlier sued the plaintiffs in this district in an action referred to in the opinion as Dana I, asserting RICO, contract, and tort claims arising from the lending relationship. Dana voluntarily dismissed that action in December 2015.

The plaintiffs then sued Dana for indemnification after Dana refused to pay their attorneys’ fees from Dana I. In August 2022, the court granted partial summary judgment for the plaintiffs, finding that the loan agreement contained an indemnification provision, that the plaintiffs had performed under the agreement, and that Dana had failed to indemnify them for fees incurred in Dana I. The court also rejected Dana’s arguments that the agreement was signed under duress and that the plaintiffs’ alleged willful misconduct excused indemnification.

Fee applications and objections

The plaintiffs sought fees and expenses incurred in Dana I. BMO Harris Bank and Huntington National Bank jointly sought $18,541.57. Wells Fargo sought $27,637.00. PNC Bank, Cathay Bank, and Bank Leumi jointly sought $179,637.02.

Dana argued that the court could not award fees yet because the prior summary-judgment ruling was not final and non-appealable and because a related case, Dana II, remained pending in New Jersey Superior Court. Dana also argued that the requested fees were unreasonable because some billing records were redacted or used “block billing,” meaning multiple tasks were combined into one time entry.

Court’s analysis

The court rejected the argument that the fee applications were premature. It treated its earlier ruling that the plaintiffs were entitled to indemnification as binding at this stage of the same case. Because the court had already rejected the willful-misconduct defense, the exception in the indemnification provision did not prevent the court from determining the amount of fees. The court also concluded that the pending New Jersey case did not prevent it from deciding the fee applications.

The court found all requested hourly rates reasonable. It also found that the redactions generally left enough information to evaluate whether the work was reasonable. After reviewing PNC’s unredacted records privately, the court identified two unreasonable entries totaling $675 and deducted that amount from PNC’s award.

The court also found that some PNC entries used block billing in a way that made the time spent on individual tasks unclear. It therefore reduced PNC’s requested hours by 5%. The court found the remaining hours and expenses reasonable.

Ruling and amounts awarded

Judge Jennifer L. Rochon granted the plaintiffs’ motions for attorneys’ fees. The court awarded:

- BMO Harris Bank and Huntington National Bank: $18,541.57 in attorneys’ fees and expenses. - Wells Fargo Bank, National Association and Wells Fargo Capital Finance, LLC: $27,637.00 in attorneys’ fees and expenses. - PNC Bank, National Association, Cathay Bank, and Bank Leumi, USA: $170,362.60 in attorneys’ fees and expenses.

The court directed the Clerk of Court to close the case. This opinion’s classification is procedural because it decided an ancillary fee request rather than the underlying indemnification merits, which the court had addressed in its earlier summary-judgment ruling.