Filo Promotions, Inc. v. Bathtub Gins, Inc.
Filo Promotions, Inc. v. Bathtub Gins, Inc.
Opinion of the Court
During a conference on March 9, 2018, the Court vacated the default previously entered against Defendant. As a condition to that vacatur, Plaintiff moved for an order directing Defendant to pay Plaintiff's reasonable attorneys' fees and costs that were incurred as a result of Defendant's failure to timely respond to the complaint. The Court directed Plaintiff to file an affidavit of its counsel, together with appropriate time sheets, reflecting the total amount of fees and costs incurred by Plaintiff as a result of Defendant's failure to timely respond to the complaint, including fees and costs associated with Plaintiff's application for entry of Defendant's default and for a default judgment. Dkt. No. 45. Plaintiff filed that affidavit on March 12, 2018. Dkt. No. 46. Pursuant to Rule 6.1(b) of the Local Rules of the United States District Courts for the Southern and Eastern Districts of New York, any opposition to Plaintiff's motion for attorneys' fees and costs was due within fourteen days of service of Plaintiff's moving papers, that is, no later than March 26, 2018. Defendant filed no opposition. Therefore, the Court treats Plaintiff's motion as unopposed. For the reasons that follow, Plaintiff's motion for attorneys' fees and costs is GRANTED.
A. Conditions on the Vacatur of Default Are Appropriate
The Second Circuit has held that, "[i]n determining whether to exercise its discretion to set aside a default, a district court has inherent power to impose a reasonable condition on the vacatur in order to avoid undue prejudice to the opposing party." Powerserve Int'l v. Lavi ,
*648(quoting Richardson v. Nassau County ,
Here, Plaintiff served Defendant with the summons and complaint on January 4, 2018. Dkt. No. 7. Because Defendant is a corporation, it may appear only through counsel. See, e.g., Jones v. Niagara Frontier Transp. Auth. ,
No answer or other responsive pleading was filed timely by Defendant. Instead, on January 30, 2018, five days after the deadline for Defendant's response, Defendant's president and registered agent Michael Ogden filed a pro se motion for an extension of time to answer the complaint. Dkt. No. 13. The Court issued an order on February 1, 2018 denying that request and explaining that Defendant was required to appear through counsel. Dkt. No. 15.
Plaintiff obtained a Clerk's Certificate of Default against Defendant on February 1, 2018. Dkt. No. 12. On February 5, 2018, Susan Schlenger, an attorney barred in the State of Massachusetts and not admitted to the bar of this Court, filed a deficient motion to appear pro hac vice on behalf of Defendant. Dkt. No. 18. On the same day, the Clerk of Court entered a notice on the docket of this case advising Ms. Schlenger of the deficiencies in her pro hac motion. Ms. Schlenger did not immediately correct those deficiencies.
On February 8, 2018, Plaintiff filed a motion for default judgment. Dkt. Nos. 20-22. The Court issued an order to show cause why default judgment should not be entered, scheduled a hearing on Plaintiff's motion for February 28, 2018, and ordered that any opposition to the default judgment motion be filed no later than February 21, 2018. Dkt. No. 19. Plaintiff served a copy of the order to show cause on Defendant on February 8, 2018. Dkt. No. 23.
On February 11, 2018, Ms. Schlenger filed a second pro hac vice motion, which the Court granted two days later. Dkt. Nos. 24, 27. On February 12, 2018, Ms. Schlenger filed, on behalf of Defendant, a motion for extension of time to answer the complaint. Dkt. No. 25. Later that day, Ms. Schlenger filed a motion to correct or amend the motion filed earlier that day. Dkt. No. 26. Neither the original nor the amended motion addressed the default entered by the Clerk on February 1, 2018. On February 22, 2018, Plaintiff filed an opposition to Defendant's motions. Dkt. No. 28. The Court denied both defense motions, noting that the motions were not properly before the Court. Dkt. Nos. 29, 30.
On February 27, 2018, the day before the scheduled show-cause hearing, Defendant filed its first submission acknowledging its default-a motion to stay proceedings, vacate the default, and extend Defendant's time to respond to the complaint. Dkt. No. 31. In that motion, Defendant indicated that its counsel was actively involved in representing it in this matter as early as January 19, 2018, when Ms. *649Schlenger called Plaintiff's counsel with the purpose of initiating settlement discussions. Id. at 2. On February 28, 2018, prior to the hearing, Defendant filed a second motion to stay proceedings, vacate the default, and extend Defendant's time to respond to the complaint. Dkt. No. 32. Ms. Schlenger did not appear for the scheduled hearing that day.
During the show-cause hearing, the Court denied Plaintiff's application for a default judgment based on Plaintiff's failure to establish the Court's personal jurisdiction over Defendant. Dkt. No. 34. On that same day, Ms. Schlenger filed a letter apologizing for not appearing, stating that she had attempted "in multiple ways and times," but to no avail, to contact Plaintiff's counsel in order to "re-schedule this hearing by agreement." Dkt. No. 33. Ms. Schlenger, however, had not filed a request with the Court for an adjournment of the show-cause hearing.
In light of Defendant's motions to vacate the default, the Court held a conference on March 9, 2018. During that conference, the Court queried Ms. Schlenger regarding Defendant's failure to timely respond to the complaint. Ms. Schlenger replied that she had not filed a timely response on behalf of Defendant because "I wasn't admitted until February 13. So I couldn't do anything in January." Ms. Schlenger acknowledged that she was aware of the various deadlines for filing a response to the complaint and for opposing the motion for default judgment. When asked about Defendant's failure to oppose the default judgment motion, Ms. Schlenger responded, among other reasons, that it was again due to her status as not admitted to the bar of this Court, as well as her unfamiliarity with the federal courts' Electronic Case Filing ("ECF") system. She explained that she has "never, ever before used the ECF" and "was attempting to learn to use it."
Although the Court determined during the March 9, 2018 conference that Defendant's failure to timely respond to the complaint was not willful under the relevant case law, and, thus, vacatur of the default was appropriate, the Court finds that the vacatur of the default should be conditioned upon the payment by Defendant of Plaintiff's reasonable attorneys' fees and costs that were incurred as a result of Defendant's default. Defendant elected to retain an attorney who was not admitted to the bar of this Court, was entirely unfamiliar with this Court's filing system, and did not, apparently, consider soliciting local counsel to make a filing on its behalf. Through any of these mechanisms, Plaintiff's fees and expenses in connection with Defendant's default could easily have been avoided. As a result of Defendant's and counsel's failure to file any timely response on behalf of Defendant, or to make even a timely request for the extension of the relevant deadlines, despite counsel's active involvement in this matter since at least January 19, 2018 (a week before the deadline to answer the complaint), litigation of this matter has been delayed, and Plaintiff has been forced to expend additional monies on counsel fees. Accordingly, the Court finds it appropriate to impose on its vacatur of the default the condition that Defendant pay Plaintiff's reasonable attorneys' fees incurred as a result of its default.
B. Plaintiff's Reasonable Attorneys' Fees
Second Circuit precedent requires a party seeking an award of attorneys' fees to support its request with contemporaneous time records that show "for each attorney, the date, the hours expended, and the nature of the work done." N.Y. State Ass'n for Retarded Children, Inc. v. Carey,
District courts have "considerable discretion" in determining what constitutes a reasonable award of attorneys' fees. Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cty. of Albany ,
In determining a reasonable hourly fee, the Second Circuit has also instructed district courts to consider "all of the case-specific variables." Arbor Hill ,
The plaintiff bears "the burden of establishing entitlement to an award and documenting the appropriate hours expended .... The applicant should exercise 'billing judgment' with respect to hours worked and should maintain billing time records in a manner that will enable a reviewing court to identify distinct claims." Hensley v. Eckerhart ,
Here, Plaintiff has submitted timesheets that counsel avers were kept contemporaneously and that reflect the *651date of each entry, a description of the work performed, the identity of the attorney billing for each entry, the hours spent on each entry of work, and the applicable rate and total fee charged. See Declaration of John Bostany, Dkt. No. 46 ("Bostany Decl."), Ex. A. Plaintiff seeks a total of $24,747.50 in fees. Bostany Decl. ¶ 21.
Plaintiff's counsel is a member of the Bostany Law Firm, LLC, a firm that focuses its practice in the field of intellectual property law. See id. ¶ 1, 9. Mr. Bostany has been practicing law for nearly thirty years, and has worked specifically in the field of intellectual property law since opening the Bostany Law Firm in 1995. Id. ¶¶ 7-9. His customary hourly rate is $700, but he has billed his client in this matter the reduced rate of $610 per hour. Id. ¶ 17. Mr. Bostany seeks fees at the reduced rate and asserts that his hourly rate is in line with attorneys who are less senior than he and is commensurate with the rate awarded to partners with similar experience.
After considering all of the relevant case-specific factors, the Court concludes that $610 is a reasonable hourly rate for Mr. Bostany's work in this case. Mr. Bostany has considerable experience as an attorney and particularly in the field of intellectual property law. His client has apparently negotiated the hourly fee that it is willing to pay Mr. Bostany for his work in this matter, securing a $90 per hour reduction and thereby confirming that $610 per hour is a rate that a paying client is willing to pay for representation in this matter. See Arbor Hill ,
Turning to the reasonable number of hours for which fees should be awarded in connection with Mr. Bostany's work, Mr. Bostany has submitted detailed time sheets that show he billed a total of 39.75 hours in connection with Defendant's default.
The time sheets also reflect two hours of work by an associate attorney in "preparing the copies of the motion to serv[e] upon the Defendant and preparing affidavit of service and organizing file." Bostany Decl., Ex. A at 2. These tasks were billed at the hourly rate of $250. The tasks are clerical in nature, however, and should not be billed at the rate of an associate attorney. See *652Harty v. Par Builders, Inc. , No. 12-cv-2246 (CS),
In sum, the reasonable attorneys' fees and costs incurred as a result of Defendant's default total $24,297.50. While these fees are reasonable, the Court declines to award the entirety of the amount incurred. The delay caused by Defendant's default was not lengthy; Defendant's response to the complaint was ultimately filed with leave of the Court on March 26, 2018, approximately two months later than the original deadline. Therefore, the litigation of this case was delayed no more than two months.
Furthermore, the difficulty of the issues involved in this case thus far has not been great. Plaintiff has brought claims for trademark infringement under the Lanham Act. Plaintiff's claims are based on a registered service mark for which Plaintiff has secured an acknowledgment of incontestability. See Compl., Dkt. No. 1, ¶¶ 13, 14, 18-20. Therefore, in preparing Plaintiff's motion for a default judgment, counsel was not required to grapple with difficult legal issues, but instead had only to demonstrate that the complaint sufficiently pleaded a likelihood of customer confusion. See Virgin Enters. Ltd. v. Nawab ,
Finally, defense counsel has represented to the Court that Defendant, like Plaintiff, has limited resources. The preference in this Circuit is to litigate a case on its merits, see Enron Oil Corp. v. Diakuhara,
Therefore, considering the status of the parties, the relative lack of complexity of the legal issues involved, and the length of the delay caused by Defendant's default, the Court exercises its discretion and concludes that a total award of $8,100, a sum equal to approximately one-third of the total fees incurred by Plaintiff as a result of Defendant's default, is more appropriate at this stage of the litigation.
C. Conclusion
For the reasons described herein, vacatur of Defendant's default is conditioned upon payment of Plaintiff's reasonable attorneys' fees and costs in the total sum of $8,100.00. Accordingly, Defendant is directed to pay the total sum of $8,100.00 to Plaintiff no later than May 8, 2018. Plaintiff *653is directed to file a letter no later than May 10, 2018 updating the Court on the status of that payment. In the event Defendant fails to timely pay the sum ordered herein, Defendant will be considered in default and may be subject to a variety of sanctions, including the entry of a default judgment against it.
Nothing in this order prevents the parties from seeking an amicable resolution in connection with the payment of fees. If the parties reach such a resolution, they are directed to file a joint letter, no later than May 10, 2018, advising the Court of same.
Defense counsel is directed to serve a copy of this order on her client and to file proof of service on the docket of this case.
SO ORDERED.
Mr. Bostany has entered time for work that he has not billed his client and which he has not included in his application for fees in connection with Defendant's default.
Reference
- Full Case Name
- FILO PROMOTIONS, INC. v. BATHTUB GINS, INC.
- Cited By
- 11 cases
- Status
- Published