Summary
upholding lower court's decision to resolve fee award "based upon the affidavits and documents submitted by plaintiffs without conducting a hearing"
Summary of this case from Lehman Bros. Holdings, Inc. v. Gateway Funding Diversified Mortg. Servs., L.P.Opinion
February 4, 1994
Appeal from the Supreme Court, Monroe County, Curran, J.
Present — Denman, P.J., Green, Balio, Lawton and Boehm, JJ.
Order and judgment unanimously modified on the law and as modified affirmed with costs to plaintiffs and matter remitted to Supreme Court for further proceedings in accordance with the following Memorandum: We affirm that portion of the order and judgment awarding $10,145 to plaintiffs pursuant to General Business Law § 396-u (7) for attorney's fees incurred for pretrial and trial work. Defendant did not factually dispute the number of hours and hourly rate that plaintiffs maintained to be reasonable for such litigation. Defendant did not request a hearing and, in the absence of a factual dispute concerning calculation of the lodestar fee or adjustments to that fee, Supreme Court did not err in determining the fee award based upon the affidavits and documents submitted by plaintiffs without conducting a hearing (see, Blum v. Stenson, 465 U.S. 886, 892, n 5; Blum v. Witco Chem. Corp., 829 F.2d 367).
Supreme Court erred, however, in denying the remainder of plaintiffs' fee application, which related to the entirety of plaintiffs' posttrial litigation of the fee award, including the prior appeal. Plaintiffs' statutory entitlement to a reasonable attorney's fee includes a fee for services performed on the fee application itself (see, Podhorecki v. Lauer's Furniture Stores, 184 A.D.2d 1066, 1067, lv dismissed 81 N.Y.2d 783) and on appeal, even where the sole issue on appeal is the propriety of the fee award (see, Miller v. Marra Bros. Motor Co., 185 A.D.2d 663, 664, lv dismissed 80 N.Y.2d 972; Perkins v. Town of Huntington, 117 A.D.2d 726, 727). Supreme Court improperly denied plaintiffs' application for a fee award for posttrial services upon the ground that it could not, "in good conscience", award a fee three times the amount at issue in the lawsuit. Where, as here, calculation of the fee pursuant to the lodestar method is proper (see, Podhorecki v. Lauer's Furniture Stores, supra), the trial court should first calculate the lodestar fee by determining the reasonable number of hours that should have been expended on the legal task and multiplying that figure by what the court finds to be the reasonable hourly rate (Matter of Rahmey v. Blum, 95 A.D.2d 294, 300-303). That fee may then be adjusted upward or downward by a consideration of several subjective factors (Matter of Rahmey v. Blum, supra, at 303-304). Although the amount of a fee and its relationship to the amount at issue in the lawsuit is one of the subjective factors that may be considered, that factor is considered to reduce the award, not to eliminate it (cf., Giarrusso v. City of Albany, 174 A.D.2d 840, 841). Further, "[w]henever the court augments or reduces the lodestar fee, it must state its reasons for doing so as specifically as possible" (Matter of Rahmey v Blum, supra, at 305). There is no bright-line rule that a fee award cannot exceed three times the amount at issue in the lawsuit or that the amount of the fee must be proportional to the amount at issue (see, Riverside v. Rivera, 477 U.S. 561; Cowan v Prudential Ins. Co., 935 F.2d 522; Northeast Women's Ctr. v McMonagle, 889 F.2d 466, cert denied sub nom. Walton v. Northeast Women's Ctr., 494 U.S. 1068; see generally, Newberg, Attorney Fee Awards § 4.42). Reduction of the lodestar fee must be supported, therefore, by some reason grounded in statutory policy or facts applicable to the particular case. It is not sufficient to state that the fee must be reduced because the court cannot, "in good conscience", award what plaintiffs request.
Thus, we remit this matter for a hearing on the issue of reasonable attorney's fees for all posttrial legal work, including this appeal.