Jimico Enters., Inc. v. Lehigh Gas Corp.
| Decision Date | 25 March 2014 |
| Docket Number | 1:07-CV-0578 (GTS/RFT) |
| Parties | JIMICO ENTERPRISES, INC.; and BROWNSON ENTERPRISES, INC., Plaintiffs, v. LEHIGH GAS CORPORATION, Defendant. LEHIGH GAS CORPORATION, Counter-Claimant, v. BROWNSON ENTERPRISES, INC.; and PETER BROWNSON, Counter-Defendants. |
| Court | U.S. District Court — Northern District of New York |
APPEARANCES:
FARUQI, FARUQI, LLP
Counsel for Plaintiffs Jimico and Brownson Enters.
and Counter-Defendant Brownson Enters.
McNAMEE, LOCHNER TITUS & WILLIAMS, PC.
Counsel for Plaintiffs Jimico and Brownson Enters.
RICHARD D. SCHWARTZ, ESQ.
STEPHEN E. CONNOLLY, ESQ.
CHRISTOPHER MASSARONI, ESQ.
URS BRODERICK FURRER, ESQ.
Currently before the Court in this action brought by Jimico Enterprises, Inc. ("Jimico"), and Brownson Enterprises, Inc. ("Brownson") (collectively, "Plaintiffs") against Lehigh Gas Corporation ("Lehigh") pursuant to, inter alia, the Petroleum Marketing Practices Act ("PMPA"), 15 U.S.C. § 2805, are three motions. The first is a letter motion by defendant and counter-plaintiff, Lehigh requesting a stay of payment on the supersedeas bond posted November 15, 2011 by Aegis Security Insurance Company ("Aegis"). See Dkt. Nos. 139, 131. Plaintiffs oppose the motion. Second is Plaintiffs' motion to enforce liability on the supersedeas bond, which Lehigh opposes. See Dkt. No. 142. Third, and finally, is Plaintiffs' motion for attorney's fees, which Lehigh also opposes. See Dkt. No. 144. For the following reasons, Lehigh's letter motion is denied as moot, Plaintiffs' motion to enforce liability on the supersedeas bond is granted in part and denied in part, and Plaintiffs' motion for attorney's fees is granted in part and denied in part.
On September 30, 2011, this Court issued a Memorandum-Decision and Order, which, among other things, granted Lehigh's breach of contract claim against plaintiff Brownson and Peter Brownson as the guarantor and awarded Lehigh $84,889.72, to be offset by the Court's prior award to Brownson, yielding a net balance due to Lehigh of $33,458.34. The Court also granted Lehigh's request for attorney's fees pursuant to the Temporary Franchise Agreement ("TFA"). (See Dkt. No. 117.) In addition, the Court granted in part and denied in part Plaintiffs' motion for attorney's fees, expert fees, costs, pre-judgment interest and post-judgment interest. (See id.) On October 14, 2011, the Court amended its September 30, 2011 MDO, at the request of the parties, to correct a computational error in the calculation of prejudgment interest awardedto plaintiff Jimico. Thereafter, Lehigh filed a timely notice of appeal regarding this Court's prior orders, including the October 14, 2011 amended MDO and judgment, awarding Plaintiffs compensatory damages, punitive damages, attorney's fees and costs, and interest. (See Dkt. No. 122.) On November 9, 2011, the Court issued an Order staying the enforcement of the October 14, 2011 amended MDO pending outcome of the appeal pursuant to Fed. R. Civ. P. 62(d), and directed that Lehigh file and serve its supersedeas bond, which it did on November 15, 2011. On February 20, 2013, the Court of Appeals for the Second Circuit affirmed this Court's October 14, 2011 amended judgment and remanded the action to this Court for adjudication of attorney's fees. See Jimico Enters., Inc. v. Lehigh Gas Corp., 708 F.3d 106 (2d Cir. 2013). On March 27, 2013, this Court granted in part and denied in part Lehigh's motion for attorney's fees. (See Dkt. No. 136.) The following day, judgment was entered awarding Lehigh $18,372 in attorney's fees. On April 30, 2013, the Court of Appeals for the Second Circuit issued the mandate on its February 20, 2013 decision.
Two days after the mandate was issued, Lehigh filed its letter motion seeking a stay of payment on the supersedeas bond. The following day, Plaintiffs filed their motion to enforce liability on the bond. Plaintiffs later filed a motion for attorney's fees related to their defense of Lehigh's appeal and post-judgment litigation. (Dkt. No. 144.)
Generally, in support of its motion to stay enforcement of the bond, Lehigh noted that a motion to recall and stay the mandate was pending before the Court of Appeals and that Lehigh intended to file a petition for a writ of certiorari with the United States Supreme Court. Consequently, Lehigh argued, this Court's enforcement of the bond would severely prejudiceLehigh if its petition for certiorari were granted. (See generally Dkt. No. 139.)
Generally, in opposition to Lehigh's motion, Plaintiffs assert the following five arguments: (1) once the Court of Appeals issues its mandate, this Court no longer has jurisdiction to implement a stay of the judgment, (2) even if this Court has jurisdiction, it should decline to stay execution because Lehigh is essentially seeking the same relief from the Court of Appeals, (3) there is no rule or authority which would permit the surety to abrogate its responsibility to pay on the judgment now that the judgment is due, (4) the attorney for the surety admits that the amended judgment in this case is immediately due and enforceable against Lehigh, and (5) Lehigh's petition for certiorari "would be truly far-fetched." (See generally Dkt. No. 141.)
Generally, in support of their motion to enforce liability on the supersedeas bond, Plaintiffs argue that (1) with the issuance of the mandate of the Court of Appeals, the stay of execution of the amended judgment has lifted, (2) Rule 65.1 of the Federal Rules of Civil Procedure provides for a summary proceeding to enforce a surety's liability by the filing of a motion, and (3) Lehigh's motion to recall and stay the mandate is deficient. (See generally Dkt. No. 142-1.)
Generally, in opposition to Plaintiffs' motion, Lehigh notes that while it does not dispute that the bond must be satisfied, it does dispute the amount that Plaintiffs are due. In support, Lehigh argues that it is entitled to setoff such that any judgment in Plaintiffs' favor should be reduced to account for Lehigh's judgment on its counterclaims against Brownson as well as Lehigh's judgment for attorney's fees. Lehigh further argues that it has priority over anyattorney's lien. Accordingly, Lehigh opposes any payment on the bond in excess of $456,572.33. (See generally Dkt. No. 147-4.)
Generally, in its reply to Lehigh's opposition, Plaintiffs inform the Court that Aegis has paid them $456,572.33 and therefore, remaining for resolution is the appropriate disposition of the $51,431.38 that Lehigh claims it is entitled to due to setoff. In support of its argument that Lehigh is not entitled to setoff, Plaintiffs argue that (1) Lehigh waived its right to seek an additional setoff beyond what is included in the October 14, 2011 amended judgment by failing to raise the issue on appeal, (2) Lehigh failed to seek reconsideration of, or further amendment to, the amended judgment and any request for such relief is now untimely, (3) courts bar setoffs against fees awarded pursuant to federal remedial statutes such as the PMPA, and (4) there is no equitable way to disaggregate the joint attorney fee award to account for Brownson's sole debt. (See generally Dkt. No. 148.)
Generally, in support of their motion for attorney's fees, Plaintiffs argue that (1) the hourly rates of their attorneys are reasonable and well-documented, (2) the number of hours expended by counsel is reasonable and well-documented, (3) the factors enumerated in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 715 (5th Cir. 1974), establish that Plaintiffs' attorney's fees are reasonable, and (4) Plaintiffs' fee request is typical of awards granted to parties that successfully conduct appeals. (See generally Dkt. No. 144-1.)
Generally, in opposition to Plaintiffs' motion, Lehigh argues that (1) Plaintiffs' fee award should be denied as insufficient, (2) Plaintiffs' fee award should be denied as unreasonable, (3) Lehigh is entitled to setoff, (4) Lehigh's claim for setoff has priority over an attorney's lien, and(5) the fact that the fee award may be a joint award is irrelevant. (See generally Dkt. No. 150-4.)
Generally, in their reply to Lehigh's opposition, Plaintiffs argue that (1) the Court of Appeals has already held that Plaintiffs are entitled to reasonable attorney's fees, (2) Lehigh characterizes Plaintiffs' success as nominal, contrary to the Second Circuit's mandate, (3) Lehigh's interpretation of Luca v. County of Nassau, 698 F. Supp. 2d 296 (E.D.N.Y. 2010) is erroneous, (4) Lehigh's challenge to the fees for Christopher Massaroni are without merit, and (5) Lehigh challenges billing for work that was necessitated by its own stubbornness and gamesmanship. (See generally Dkt. No. 151.)
Generally, in its sur-reply, Lehigh argues that (1) it was entirely proper for it to address the degree of Plaintiffs' success in this matter in opposing their motion for attorney's fees, (2) Lehigh's reliance on Luca is not misplaced, and (3) Plaintiffs' refusal to acknowledge Lehigh's entitlement to setoff has been the basis of the most recent motion practice, and therefore, Lehigh reserves the right to seek attorney's fees in connection with this unnecessary motion practice. (See generally Dkt. No. 152.)
"[A] defendant's right of setoff, i.e., the right to reduce the judgment to be entered for the plaintiff by subtracting from the value of the plaintiff's claim an amount owed to the defendant by the plaintiff, . . . has its roots in common law." Valley Disposal Inc. v. Cent. Vermont Solid Waste Mgmt. Dist., 113 F.3d 357, 362 (2d Cir. 1997). "The right of setoff (also called 'offset') allows entities that...
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