Drip Capital, Inc. v. M/s. Goodwill Apparels

Background

Drip Capital, Inc. asked the court for attorneys’ fees under Federal Rule of Civil Procedure 54(d)(2) after an earlier default judgment. Drip Capital requested $109,041.00 for 102.70 hours of work by attorney Scarola, 63.3 hours by attorney Zubatov, and 0.6 hours by paralegal Corzo. It also sought reimbursement of a 3.5% fee charged by counsel’s law firm instead of separate disbursement charges, bringing the total request to $112,857.44.

The Factoring Agreement required M/s. Goodwill Apparels to pay Drip Capital’s costs, including legal costs, incurred in enforcing or preserving rights under the agreement or obtaining legal advice about it. Drip Capital submitted detailed invoices and time records. M/s. Goodwill Apparels did not file an opposition after the court directed it to respond and stated that the motion would be treated as unopposed if it failed to do so.

Legal Standard

Under Rule 54(d)(2), a party may ask for attorneys’ fees after judgment. Under the law applied by the court, fees generally cannot be awarded unless authorized by an agreement, statute, or court rule. A contractual fee provision must be clearly written, and any award must be reasonable for the services actually performed.

Courts commonly calculate reasonable fees by multiplying a reasonable hourly rate by a reasonable number of hours. Hours that are excessive, duplicative, unnecessary, or inadequately described may be excluded or reduced.

Court’s Analysis

The court found that Drip Capital’s motion was timely and that the Factoring Agreement clearly authorized recovery of attorneys’ fees for enforcing the agreement. Because M/s. Goodwill Apparels did not dispute that provision, the court found that the agreement clearly changed the usual rule that each side pays its own legal fees.

The court found the requested hourly rates reasonable: $765 for Scarola, $495 for Zubatov, and $125 for Corzo. It considered Scarola’s approximately 40 years of experience, Zubatov’s 22 years of experience, comparable rates in the district, and the complexity of work involving arbitration, confirmation of the award, and service in a foreign state.

The court found most of the billed hours reasonable. It identified some vague entries involving unspecified correspondence, communications about next steps or status, and calls to chambers about unspecified topics. The court stated that it ordinarily would reduce the bill for those entries, but Scarola had already voluntarily reduced his fees by an amount comparable to the reduction the court would have ordered. The court therefore made no further reduction. It also found Corzo’s 0.6 hours reasonable.

The court denied the request for reimbursement of the 3.5% disbursement fee. Drip Capital’s counsel provided neither legal authority nor actual billing invoices supporting the reasonableness of imposing that additional charge.

Disposition

The court granted in part and denied in part Drip Capital’s motion for attorneys’ fees. It awarded $77,632.50 for Scarola’s work, $31,333.50 for Zubatov’s work, and $75.00 for Corzo’s work. The total award was $109,041.00, excluding the requested 3.5% disbursement fee.