Summary
awarding fees and costs of $7,000.00 rather than $27,583.10 requested
Summary of this case from Underwriters Group v. Clear Creek Independent SCHOpinion
01 Civ. 10079 (JGK)
November 15, 2002
OPINION AND ORDER
Plaintiff GOAT, Inc. ("GOAT") moves for attorney's fees and costs incurred in connection with its action in interpleader filed under Rule 22 of the Federal Rules of Civil Procedure. The funds at issue are the proceeds of a settlement between GOAT and Four Finger Art Factory, Inc. ("4 FAF"). While the settlement required GOAT to pay the settlement to 4FAF, GOAT was advised that Douglas Howard had a lien and had sued 4FAF, and that Howard advised that the funds should be paid to him. GOAT has already paid the disputed funds into the Court and, pursuant to a stipulation signed by Magistrate Judge Eaton, GOAT has been discharged. In the stipulation, GOAT reserved the right to apply for its attorney's fees and costs incurred in the interpleader action. The interpleader action remains pending between 4FAF and Howard.
GOAT's application for attorney's fees and costs has been opposed by both 4FAF and Howard. This Court has discretion to award costs and fees where the party bringing the action is (1) a disinterested stakeholder, (2) who has conceded liability with respect to the deposited fund, (3) has deposited the disputed funds into the Court, and (4) has sought to be discharged from liability. See Septembertide Pub., B.V. v. Stein and Day, Inc., 884 F.2d 675, 683 (2d Cir. 1989); Metropolitan Life Ins. Co. v. Jackson, 896 F. Supp. 318, 324 (S.D.N.Y. 1995); Pressman v. Estate of Steinvorth, 860 F. Supp. 171, 182 (S.D.N.Y. 1994); 7 Wright, Miller Kane, Federal Practice and Procedure: Civil 3d § 1719 (2001). GOAT meets all of these requirements. Indeed, GOAT has already been discharged from any liability in connection with the funds deposited pursuant to the Stipulation and Order of Magistrate Judge Eaton.
The only point that the claimants to the fund dispute is whether GOAT is disinterested. 4FAF argues that GOAT was well aware of Howard's claim. It is apparent, however, that GOAT was at least not aware of the extent of Howard's claim. In any event, as to the fund deposited with the Court it is clear that GOAT has no interest other than seeing that it is discharged and has no further liability with respect to the funds. If 4FAF in fact owes funds to Howard and if the proceeds of the settlement should be paid to Howard because of 4FAF's lialbility to Howard, that is a matter completely between 4FAF and Howard. As to the funds at issue, GOAT was a disinterested stakeholder and has paid those funds into the Court.
The papers reflect that GOAT attempted to resolve the dispute as to whom the funds should be paid but, because there was no resolution, it was required to resort to the interpleader action to assure that it could pay the funds and not be sued by the party to whom it did not pay the funds. This is a case in which the Court should exercise its discretion to award reasonable attorney's fees and costs. See Gold Wachtel v. Burnham, 1991 WL 190544, at *2 (S.D.N.Y. Sept. 12, 1991) (stakeholder entitled to attorney's fees and costs where stakeholder was disinterested and innocent, had spent time and money in a dispute not of its own making, the dispute's outcome would not impact the stakeholder's interests, and the fees and costs sought did not pertain to ordinary business expenses); Sparta Florida Music Group, Ltd. v. Chrysalis Records, Inc., 566 F. Supp. 321, 322 (S.D.N.Y. 1983) (same); see also Pressman, 860 F. Supp. at 182-83 (same).
The amount of attorney's fees and costs sought is, however, excessive and unreasonable. GOAT's counsel seeks an award of $27,583.10 in attorney's fees and costs. The work for which it is being compensated consists primarily of the drafting of the interpleader complaint and the appearance at a conference before the Magistrate Judge, which led to an Order and subsequent Stipulation discharging GOAT from the action. This is not a case in which there was extensive litigation as to the discharge of the stakeholder or in which the stakeholder was required to participate in discovery before discharge. Some of the excessive legal work included more than thirty hours by one lawyer, primarily on legal research and drafting in connection with what should have been a relatively straightforward interpleader action, and about four hours by another lawyer spent drafting a letter to the Magistrate Judge. The excessiveness is highlighted by the amount of the fund that was at issue and placed on deposit with the Court. It appears from the papers that the amount of attorney's fees and costs would exceed 20% of the fund, and would be paid to a disinterested stakeholder who is not even involved in the dispute between the two parties.
Given the issues in the interpleader action and the work reasonably necessary to obtain a discharge, a reasonable amount of attorney's fees is $6,000 and costs of $1,000, for a total award of $7,000. See Hoffman v. Toms, 2000 WL 246408, at *2 (S.D.N.Y. Mar. 3, 2000) (awarding $4,006 in attorney's fees where amount sought was "excessive given the simplicity of the task."); Johnson v. Electrolux Corp., 763 F. Supp. 1181, 1189 (D.Conn. 1991) (awarding $1,000 in fees and costs rather than the $7,422.07 requested where interpleader was simple, requiring no discovery and no complex legal research."); Chemical Bank v. Richmul Associates, 666 F. Supp. 616, 619 (S.D.N.Y. 1987) (awarding $7,357.16 in fees and costs rather than the $26,570.44 requested where there "was no real complexity of [the] interpleader action, no significant discovery, and no extensive motion practice.").
CONCLUSION
GOAT's motion for attorney's fees and costs is granted to the extent that GOAT shall be paid $7,000 from the fund on deposit with the Court for this case as reimbursement for GOAT's reasonable attorney's fees and costs.