SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: IAS PART 3
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LASZLO N. TAUBER, M.D.,
Plaintiff,
-against-
Index No.: 113339/94
Sequence Nos.008 & 009
BANKERS TRUST COMPANY,
Defendant.
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Barry A. Cozier, J.:
Motion sequence nos. 008 and 009 are hereby consolidated for disposition.
In motion sequence no. 008, plaintiff Laszlo N. Tauber, M.D. moves for an order, pursuant to CPLR 4403, rejecting the report of Special Referee Kenneth McGrail filed on February 22, 1999, in which he concluded that the reasonable value of the attorneys' fees necessarily incurred by defendant Bankers Trust Company in the defense of this action and prosecution of its counterclaims was $398,755.09. In motion sequence no. 009, defendant Bankers Trust moves for an order confirming the Referee's report and, pursuant to CPLR 5102, directing a severance of the bank's claim for costs, expenses and attorneys' fees since April 1998.
As aptly described by the Referee, this has been a "ferociously prosecuted and vigorously defended action involving multi-million dollar claims." Report, at p. 5. He correctly concluded, based upon the extensive documentary evidence and the testimony of counsel for Bankers Trust, that the sum of $398,755.09 represented the reasonable value of the services necessarily incurred by the bank's outside counsel in the defense of this action, and the prosecution of the bank's counterclaims, including the enforcement of the $4.7 million judgment in both New York and Maryland, through April 1998. The Referee declined to award the fees sought by the bank's in-house counsel and the 15% mark-up above discount retainer rates afforded to the bank by Loeb & Loeb, and Bankers Trust has not contested this ruling by the Referee.
Plaintiff argues that Bankers Trust utilized two partner-level attorneys for virtually all tasks in this matter, and that such inefficiency should have been appropriately discounted by the Referee, citing Rahmey v. Blum, 95 A.D.2d 293, 300-01 (2d Dept 1983). However, in Rahmey, while the Second Department cautioned that hours which reflect "inefficiency" or "hours that are excessive or otherwise unnecessary," should be disallowed, at the same time it held that "Judges should weigh the hours claimed against his own knowledge, experience and expertise as to the time required to complete similar activities." While it may be true that an associate billing at a lower hourly rate is competent to do legal research and drafting of pleadings, etc., it is equally true that in difficult and complex legal matters, the use of more experienced lawyers can actually be more efficient. The fact that this case was handled primarily by Messrs. Satnick and Eizenman reduced the amount of time spent by new attorneys, who would of necessity have had to spend time familiarizing themselves with the facts, law and complex procedural history of this case. The Referee's rejection of plaintiff's lack of economy argument was clearly justified under the circumstances of this case.
Apparently, a small portion of the Loeb & Loeb attorney time records were redacted. Mr. Satnick testified that the bills were redacted to protect the attorney-client privilege. In view of the ongoing nature of this litigation, the Court finds that such redaction is completely warranted. Teich v. Teich, 245 A.D. 41 (1st Dept 1997); De La Roche v. De La Roche, 209 A.D.2d 157 (1st Dept.1994).
The Court has considered the remaining alleged infirmities of the Referee's report and finds them to lack merit. Rather than attacking any specific hours billed, the amount of time spent on any one aspect of the litigation, or the reasonableness of the hourly rate of the attorney's involved, plaintiff merely argues that the entire report should be rejected due to some isolated instances of inefficient billing of legal services to Bankers Trust over the course of almost four years.
Finally, plaintiff argues that it was improper to award Bankers Trust the costs, expenses and attorneys fees expended attempting to enforce the June 24, 1997 judgment, which are estimated by plaintiff to be approximately $80,000.00. The Referee properly rejected this argument, just as every court who has been called upon to rule on the issue has concluded that the judgment is valid and enforceable. Bankers Trust had every right to commence enforcement proceedings, both here and in Maryland, and seek indemnification for the expense of those proceedings pursuant to their agreement to "indemnify and hold harmless the other party for and against all out-of-pocket expenses, including legal fees ... and costs of collection." Bono Aff., Exh. 1 thereto.
Plaintiff has continued his legal battle with Bankers Trust after April 1998 in both New York and Maryland, by, inter alia, refusing to pay the judgment, and instead filing an appeal from this Court's July 10, 1998 decision and order, and filing a motion to reconsider the ruling from Maryland Court of Special Appeals dated January 26, 1999, which ruling had denied his appeal of the Maryland Circuit Court's denial of his motion to vacate recordation of the judgment in Maryland. To date, the judgments in favor of Bankers Trust against both plaintiff and his bonding company remain unsatisfied. Accordingly, pursuant to CPLR 5102, that portion of the second counterclaim seeking additional costs, expenses and attorneys fees from May 1, 1998 forward will be severed, and an assessment directed at the conclusion of all legal proceedings between these parties.
For the foregoing reasons, it is hereby
ORDERED that the plaintiff's motion (seq. no. 008) to reject the report of Special Referee Kenneth McGrail filed on February 22, 1999 is denied; and it is further
ORDERED that the defendant's motion (seq. no. 009) to confirm the report of Special Referee Kenneth McGrail filed on February 22, 1999 is granted and the Clerk of the Court is directed to enter partial judgment on the second counterclaim in favor of defendant Bankers Trust Company and against plaintiff Laszlo N. Tauber, M.D. in the amount of $398,755.09; and it is further
ORDERED that that portion of the second counterclaim seeking additional costs, expenses and attorneys fees from May 1, 1998 forward will be severed and an assessment directed at the conclusion of all legal proceedings between these parties; and it is further
ORDERED that a copy of this order with notice of entry be served upon the Clerk of the Trial Support Office (Room 158), who is directed, upon the filing of a note of issue and a statement of readiness and the payment of proper fees, if any, to place this action on the appropriate trial calendar for the assessment herein above directed.
Dated: May 27, 1999
ENTER:
J.S.C.