United States District Court, D. Connecticut
RULING AND ORDER ON MOTION FOR ATTORNEYS' FEES
A. BOLDEN, UNITED STATES DISTRICT JUDGE
Co., Ltd. (“Plaintiff”), has moved for
attorneys' fees and costs against Calmare Therapeutics,
Inc. (“Defendant” or “CTI”). Mot. for
Fees, ECF No 219.
reasons set forth below, the Court GRANTS
the motion for attorneys' fees and costs and awards GEOMC
$836, 442.05 in attorneys' fees and $5, 231.80 in costs.
FACTUAL AND PROCEDURAL BACKGROUND
Court assumes the parties' familiarity with the facts and
procedural posture of this case, and reiterates the facts and
procedural history to the extent necessary for this ruling.
See Sept. 29 Ruling, ECF No. 212; Dec. 29 Ruling,
ECF No. 238; Ruling on GEOMC's Mot. Summ. J. (“MSJ
Ruling”), ECF No. 187.
case arises out of a dispute over payment of pain management
devices (“devices”) that GEOMC provided to CTI.
Sept. 29 Ruling at 2. The parties entered into several
agreements that governed the payment plans for the devices.
Id. at 3-4. CTI, however, fell behind on its
payments and, by 2011, owed GEOMC $3, 858, 402. Id.
at 4-5. CTI committed to a payment plan that required the
company to pay monthly installments of $200, 000 in the
remaining months of 2011 and $300, 000 beginning in 2012, but
CTI again failed to pay those bills. Id. at 5.
2012, the parties entered into a Security Agreement that
granted GEOMC a security interest in 273 devices located at
CTI's warehouse in Stamford, Connecticut, and 120 devices
located in CTI's warehouse in Charlotte, North Carolina,
in consideration for the delivery of the devices. Sec. Agmt.,
ECF No. 171-5; see also Dec. 29 Ruling at 3; MSJ
Ruling at 4-5. The Security Agreement also stated that, if
CTI defaulted on its payments, CTI would be required to:
pay on demand all costs and expenses, including without
limitation, reasonable attorneys' fees and expenses,
incurred by or on behalf of [GEOMC], (a) in enforcing the
Obligations and (b) in connection with the taking, holding,
preparing for sale or other disposition, selling, managing,
collecting or otherwise disposing of the Collateral.
Sec. Agmt. ¶ 9. The agreement also provided that CTI
any and all expenses incurred or paid by [GEOMC] in
establishing, defending, protecting or enforcing its security
interest or rights upon or under the Obligations or with
respect to the Collateral or in collecting all amounts due,
including, without limitation, all of [GEOMC's]
reasonable attorneys' fees . . . .
Sec. Agmt. ¶ 13.
August 2014, GEOMC sued CTI for failing to pay for the
devices. Compl., ECF No. 1; Dec. 29 Ruling at 3; Second Am.
Compl., ECF No. 137 at 13-18. After the parties engaged in
discovery and filed dispositive motions, the Court issued an
Order granting summary judgment on GEOMC's breach of
contract claim with respect to CTI's liability for
failing to pay GEOMC for the devices sold after 2011, and
denying summary judgment with respect to CTI's liability
for any devices that had not yet been sold. MSJ Ruling at 1.
The Court also granted GEOMC's motion on its claims for
replevin, wrongful detention, conversion, and unjust
enrichment. Id. Finally, the Court denied the motion
with respect to the claim under the Connecticut Unfair Trade
Practices Act. Id. The Court also left for trial any
disputes as to the amount of damages owed under the
September 25 and 26, 2017, the Court held a bench trial,
after which the Court entered judgment in favor of GEOMC and
against CTI. Dec. 29 Ruling at 5 (citing ECF Nos. 206-07,
212-13). On September 29, 2017, the Court awarded a judgment
of $4, 673, 406.00 with interest amounting to $5, 678,
764.41, together totaling $10, 352, 170.41. Judgment at 2,
ECF No. 213. The Court also ruled that, if by December 31,
2017, CTI had failed to satisfy the judgment GEOMC would be
authorized to take possession of the devices. Id.;
Dec. 29 Ruling at 5. The judgment also directed GEOMC to
submit any application for fees and costs within thirty days.
Judgment at 3.
October 30, 2017, GEOMC applied for attorneys' fees and
expenses, claiming an entitlement to recover attorneys'
fees under the parties' Security Agreement. Memo. in
Support of Mot. for Fees (“Memo. for Fees”) at 1,
ECF No. 219-1. GEOMC seeks $1, 264, 704.30, based on fees and
costs paid to two sets of lawyers-Cohen & Gresser LLP,
which represented GEOMC from the case's inception until
September 2015, and Dentons U.S. LLP, which represented GEOMC
during the latter part of the case. Id.
December 22, 2017, CTI filed an emergency motion to approve
alternative security or, in the alternative, a motion to stay
the judgment pending appeal. Dec. 29 Ruling at 6 (citing ECF
Nos. 231-32). The Court ordered an expedited briefing
schedule and, on December 29, 2017, denied CTI's motion
to approve alternative security or, in the alternative, to
stay the judgment pending appeal. Dec. 29 Ruling at 21. The
Court also, however, granted a temporary stay until January
5, 2018, and instructed that if CTI moved with the Second
Circuit to stay the judgment pending appeal, a temporary stay
would remain in effect until the Second Circuit resolved the
motion to stay. Id.
April 18, 2018, the Second Circuit granted CTI's request
for a stay. ECF No. 239. The Court now addresses the pending
motion for attorneys' fees.
STANDARD OF REVIEW
lawsuit based on diversity, “[s]tate law creates the
substantive right to attorney's fees[.]” Banker
v. Nighswander, Martin & Mitchell, 37 F.3d 866, 873
(2d Cir. 1994) (quoting Riordan v. Nationwide Mut. Fire
Ins. Co., 977 F.2d 47, 53 (2d Cir. 1992)).
Connecticut's substantive law on attorneys' fees
therefore will apply because GEOMC asserted state law
contract claims against CTI. See Am. Compl. at 13-18
(asserting claims based on replevin, wrongful detention,
conversion, the Connecticut Unfair Trade Practices Act, and
unjust enrichment, each stemming from CTI's breach of the
adheres to the ‘American rule' regarding
attorney's fees”-that is, “in the absence of
statutory or contractual authority to the contrary, a
successful party is not entitled to recover attorney's
fees or other ‘ordinary expenses and burdens of
litigation . . . .'” Total Recycling Servs. of
CT., Inc. v. Connecticut Oil Recycling Servs., LLC, 308
Conn. 213, 326 (2013) (quoting TES Franchising, LLC v.
Feldman, 286 Conn. 132, 148 (2008)). A specific
contract, however, may entitle a party to recover
attorney's fees and costs. Id. at 327. In that
case, the court must “apply the well established
principle that ‘[a] contract must be construed to
effectuate the intent of the parties, which is determined
from [its] language . . . interpreted in the light of the
situation of the parties and the circumstances connected with
the transaction.'” Id. (quoting FCM
Group, Inc. v. Miller, 300 Conn. 774, 811 (2011)).
when a prevailing party is entitled to fees and costs under a
contract, that party still must make an evidentiary showing
that the application is reasonable. Id. at 327-28.
To determine whether an application for attorneys' fees
is reasonable, the court may consider its “general
knowledge” of the proceedings held before it and of
reasonable compensation rates, but that general knowledge may
be defeated by countervailing evidence that the amount is
unreasonable. Id. (citing Smith v. Snyder,
267 Conn. 456, 472 (2004) (“Even though a court may
employ its own general knowledge in assessing the
reasonableness of a claim for attorney's fees, we also
have emphasized that ‘no award for an attorney's
fee may be made when the evidence is
insufficient.'”) (quoting Appliances, Inc. v.
Yost, 186 Conn. 673, 680 (1982)).
Court will calculate a reasonable fee award by determining a
reasonable hourly rate and multiplying that rate by the
reasonable number of hours required for the litigation.
See Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542,
551 (2010); see also Arbor Hill Concerned
Citizens Neighborhood Ass'n v. Cty. of Albany and Albany
Bd. of Elections, 522 F.3d 182, 186 (2d Cir. 2008)
(abandoning the term “lodestar” and instead
instructing the court, “in exercising its considerable
discretion, to bear in mind all of the case-specific
variables that we and other courts have identified as
relevant to the reasonableness of attorney's fees in
setting a reasonable hourly rate” and then “use
that reasonable hourly rate to calculate what can properly be
termed the ‘presumptively reasonable
fee'”). The result of multiplying reasonable hours
by reasonable fees “is ‘only presumptively
reasonable'; it is still within the court's
discretion to adjust the amount upward or downward based on
the case-specific factors.” Tyco Healthcare Grp. LP
v. Ethicon Endo-Surgery, Inc., No. 3:10-cv-60 (JBA),
2012 WL 4092515, at *2 (D. Conn. Sept. 17, 2012) (quoting
Robinson v. City of New York, No. 05-cv-9545 (GEL),
2009 WL 3109846, at *3 (S.D.N.Y. Sept. 29, 2009)).
Entitlement to Fees
having prevailed at trial, seeks to recover attorneys'
fees and costs under paragraphs nine and thirteen of the
Security Agreement governing the parties' relationship
and under Federal Rule of Civil Procedure 54(d). Memo. for
Fees at 3; Fed.R.Civ.P. 54(d). CTI argues that GEOMC is not
entitled to recover attorneys' fees, first because the
Security Agreement is invalid, and second because GEOMC was
required to establish the amount of its fees at trial rather
than in a post-trial motion. Opp. to Mot. for Fees at 1, ECF
No. 230. The Court agrees with GEOMC.
Court has already determined that the Security Agreement is
valid. MSJ Order at 25 (“[T]he undisputed facts
demonstrate that the 2012 Security Agreement was valid and
binding as to both GEOMC and CTI.”); see also
Reply to Opp. to Mot. for Fees at 2 (“By executing the
Security Agreement, CTI agreed to pay GEOMC's attorneys
fees.”); Opp. to Mot. for Fees at 3 (acknowledging that
“this Court has already concluded that GEOMC is
entitled to an award of attorney's fees in this action,
” but arguing that the Court should reconsider that
conclusion). Moreover, the Court instructed GEOMC to file a
motion for fees and costs within thirty days of the entry of
judgment. Judgment ¶ 6. And the valid Security Agreement
requires CTI, in the event of default, to pay “all
costs and expenses, ” including reasonable
attorneys' fees. See Sec. Agmt. ¶¶ 9,
Court's instructions and the law of the case therefore
will apply, and the Court will consider GEOMC's
application for fees and costs. See United States v.
Carr, 557 F.3d 93, 102 (2d Cir. 2009) (“[W]hen a
court has ruled on an issue that decision should generally be
adhered to by that court in subsequent stages in the same