Metropolitan Lofts of NY, LLC v. Metroeb Realty 1, LLC, Index No. 503441/2012, 2/27/2015 (Demarest, J.)

Damages; injunction; recovery; legal fees

By Douglas Ma | Staff Writer

Defendants, both seller and purchaser, entered into a contract for the sale of a building. One week prior to the closing, plaintiff filed an action against the seller for breach of contract and specific performance to compel the seller to sell the property to plaintiff. Defendant alleged that the contract between plaintiff and seller was valid and binding. Plaintiff moved for a preliminary injunction, preventing defendants from closing on the property until a determination was rendered on plaintiff’s contract claim. The court granted the preliminary injunction, and, in response, purchaser intervened as a defendant, seeking to protect its interest in the building. Subsequently, the court held that plaintiff’s contract with defendant was invalid and binding, and vacated the injunction.

Pursuant to CPLR 6312(b), the court granted defendants’ motion directing plaintiff to pay defendants “all damages and costs [including attorneys’ fees] which may be sustained by reasons of the [wrongfully-entered] injunction.”

In assessing damages, the court noted that the amount recoverable for attorneys’ fee was the reasonable value of the services rendered. Here, the court found that defense firms’ legal fees were unacceptable. Although the attorneys’ hourly rates were reasonable, the paralegals’ hourly rates, ranging from $230 to $280 per hour, were grossly unrealistic and were reduced to $80 per hour, which was determined to be the reasonable rate prevailing in this jurisdiction. In addition, the number of hours for both attorneys and paralegals was found to be excessive based on duplication in some of the billing. This warranted a discount on the billings.

The type of service rendered limited defendants’ request for legal fees. While the court allowed attorneys’ fees associated with the injunction, it disallowed any fees unrelated to the injunction. Specifically, a general counsel’s legal services rendered in negotiating the sale and provided prior to the injunction were not recoverable. Furthermore, description of legal services in the billing, such as “provid[ing] assistance with the defense of this action,” and “Litigation Services,” without any more detail did not sufficiently demonstrate that the fees were incurred in connection with the injunction, and were therefore unrecoverable.

Metropolitan Lofts of NY, LLC v. Metroeb Realty 1, LLC, Index No. 503441/2012, 2/27/2015 (Demarest, J.)





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