Bank of America, N.A. v. Third Avenue Imaging LLC

Background

Bank of America sought attorneys’ fees and costs under a loan agreement with Third Avenue Imaging LLC and guaranty agreements signed by Joel Reisman on behalf of himself and several entities. The agreements required payment of reasonable attorneys’ fees and costs connected with the loan, the guaranties, and related litigation. Bank of America requested $337,874.55, stating that the amount already reflected a 5% discount and other reductions.

The Reisman Defendants argued that $100,000 was reasonable, while Distinguished Diagnostic Imaging, P.C. argued that $238,000 was reasonable. The defendants also jointly asked the court to sever Distinguished Diagnostic Imaging’s indemnification cross-claim against the Reisman Defendants and dismiss that cross-claim because the court lacked subject-matter jurisdiction over it.

Attorneys’ Fees and Costs

The court independently reviewed the lawyers’ hourly rates and billing records. It found the rates and hours reasonable except for work performed between June and November 2023. During that period, counsel sought $96,005 while preparing for a bench trial concerning whether Joel Reisman was authorized to sign the guaranty agreement for Distinguished Diagnostic Imaging. The trial was canceled after Bank of America and Distinguished Diagnostic Imaging settled the claims scheduled for trial.

The court agreed that substantial preparation during that period was unnecessary because the issue and relevant documents had already been addressed in the court’s decision on Bank of America’s motion for partial summary judgment. However, the court found no excessive overbilling or improper billing practices and noted that Bank of America had already reduced its request by 5%. It therefore reduced the fees for that period by 15%, or $14,400.75, resulting in $323,473.80.

The Reisman Defendants also argued that the fees were excessive because they admitted their default early and did not oppose Bank of America’s summary-judgment motion. The court rejected that argument, explaining that Bank of America was entitled to pursue the borrower and guarantors for the unpaid loan and that Joel Reisman’s signing of the guaranty for Distinguished Diagnostic Imaging had caused much of the litigation.

Cross-Claim

The court granted the joint application by Distinguished Diagnostic Imaging and the Reisman Defendants. It severed Distinguished Diagnostic Imaging’s indemnification cross-claim from Bank of America’s claims against the defendants and dismissed the cross-claim without prejudice to refiling in state court.

Disposition

Judge Vincent L. Briccetti ruled that the defendants are jointly and severally liable for Bank of America’s reasonable attorneys’ fees and costs in the amount of $323,473.80. The court also severed and dismissed Distinguished Diagnostic Imaging’s cross-claim against the Reisman Defendants without prejudice to refiling in state court.