The following papers read on this motion (index no. 506225/2014):Papers Numbered

Plaintiff PNL Phoenix, LLC ("PNL"), seeks an order awarding plaintiff all of the legal [*2]fees and expenses it actually incurred in connection with two separate but related actions before this Court, a replevin action under index number 506225/2014 (the "Replevin Action"), and a foreclosure action under index number 507092/2014 (the "Foreclosure Action").

In March 2012, plaintiff acquired two loans by assignment from Sovereign Bank. The first loan was made by defendants Janton Industries, Inc. and Designcore Ltd. ("Janton" and "Designcore", collectively the "Borrowers"), in the principal sum of $1,200,000 (the "First Loan"), and was evidenced by a mortgage note, dated May 11, 2001 (the "Mortgage Note"). The First Loan was secured by a leasehold mortgage on a property known as Unit A, Bush Terminal, 13 42nd Street, Brooklyn, New York (the "Leasehold Mortgage"), a real estate mortgage on commercial property known as 269 41st Street, Brooklyn, New York (the "41st Street Mortgage"), an assignment of leases and rents, and the personal guaranty of defendant Joseph Ianno ("Ianno"). The second loan acquired by plaintiff was a $750,000 line of credit loan made by Janton and Designcore (the "Second Loan"), which was evidenced by a Line of Credit Note, dated October 1, 2008 (the "Line of Credit Note"). The Second Loan is secured by a lien on all of the assets of Janton, Designcore, and Allboro Maintenance Corp. ("Allboro"), including their accounts receivable, equipment, and inventory, and the commercial guaranties of Ianno and Allboro. Plaintiff claims that defendants were in default under both the First Loan and the Second Loan at the time that plaintiff acquired these loans.

Plaintiff claims that it engaged in negotiations with the Borrowers which resulted in a Forbearance and Amendment Agreement, dated September 30, 2012 (the "Forbearance Agreement"). The Forbearance Agreement provided that Borrowers would seek to refinance one of the mortgaged properties and would pay all of their obligations to plaintiff by September 30, 2013. As additional security for the Forbearance Agreement and the First Loan, an affiliate of the Borrowers, 2032 Bath Avenue Realty Corp., granted to plaintiff a mortgage on its commercial real property (the "Bath Mortgage"). Plaintiff claims that Borrowers failed to refinance and failed to pay off their obligations by September 30, 2013.

Plaintiff states that it postponed initiating litigation immediately because of assurances from the defendants that they were continuing to seek refinancing and that plaintiff would be paid imminently. However, due to Borrowers' continued failure to pay off its obligations pursuant to the Forbearance Agreement, plaintiff commenced two separate proceedings against the Borrowers. The first proceeding, commenced on July 9, 2014, under index number 506225/2014, was a replevin action seeking to obtain an order of seizure to recover the collateral that secured the Second Loan, as well as a money judgment against the Borrowers for any deficiency. The second proceeding, commenced on August 1, 2014, under index number 507092/2014, was a foreclosure action to foreclose on the Leasehold Mortgage, the 41st Street Mortgage, and the Bath Mortgage, as well as to obtain a money judgment against Borrowers for any deficiency.

Defendants claim that at the time plaintiff initiated the Replevin Action, defendants had been making continuous monthly payments of principal and interest to the plaintiff and the outstanding principal balance of the Second Loan was only $185,000. Defendants further claim that at the time the Foreclosure Action was commenced, defendants had been making monthly payments on the First Loan and the outstanding principal balance was only $276,963.48. [*3]Defendants claim that the assurances they made to plaintiff that they would refinance and repay their entire indebtedness were made in good faith, and that defendants were finally able to refinance and pay all principal and interest on the two loans on October 16, 2014. The only remaining dispute between the parties is the issue of attorneys fees.

Based on the affirmation of Robert A. Abrams, Esq. ("Abrams"), a partner at the firm Katsky Korins LLP, who served as lead counsel for the plaintiff in both the Replevin Action and the Foreclosure Action, plaintiff is seeking to recover a total of $90,969.75 in attorneys fees and expenses for the period June 1, 2014 through November 5, 2014. In his affirmation, Abrams discusses his qualifications and experience, attaches a document list of the papers and motions that have been filed in both actions, and recites the work performed on each separate action. Abrams provides contemporaneous time records that demonstrate the time billed by his firm and the work performed on both the Replevin Action and the Foreclosure Action. Abrams also annexes additional time logs that segregate the time billed specifically on the Replevin Action and the time billed relating to the Foreclosure Action.

Abrams states that his standard hourly rate is $620 but that plaintiff received a twenty percent discount such that Abrams charged $496 per hour in this matter. Other attorneys who performed work on the Replevin Action and the Foreclosure Action included Steven Newman, a partner at the firm, who billed at $504 per hour, and George Stavis, of counsel to the firm, who billed at $395 per hour. These billing rates also reflect the twenty percent discount afforded to the plaintiff. The time records indicate that a total of 75.5 hours were billed for work on the Replevin Action between June 5, 2014 and October 15, 2014, which included 70.15 hours billed by Abrams, 3.85 hours billed by Steven Newman, and 1.5 hours billed by George Stavis, for a total sum of $37,327.30. Plaintiff also claims $1,167.09 for disbursements relating to the Replevin Action, for a total of $38,494.39. For the Foreclosure Action, the time records show that a total of 78.9 hours were billed between June 5, 2014 and October 13, 2014, including 78.6 hours billed by Abrams and 0.3 hours billed by Steven Newman, for a total sum of $39,136.80. Plaintiff also claims $3,840.16 for disbursements relating to the Foreclosure Action, for a total of $42,976.96. Plaintiff further seeks attorneys' fees for work performed in connection with the instant application, for which time records are also provided, totaling 19.15 hours billed for the period October 16, 2014 through November 5, 2014, resulting in the sum of $9,498.40.

Section 16.9 of the Forbearance Agreement provides:

It is well settled that attorneys' fees are subject to review and must be reasonable (see Matter of Freeman, 34 NY2d 1, 9-10 [1974]). The amount recoverable for counsel fees is the reasonable value of the services required (see Breidbart v Wiesenthal, 117 AD3d 766, 767 [2d Dept 2014]). In deciding an application for counsel fees the Court must consider "the following factors: time and labor required, the difficulty of the questions involved, and the skill required to handle the problems presented; the lawyer's experience, ability and reputation; the amount involved and benefit resulting to the client from the services; the customary fee charged by the Bar for similar services; the contingency or certainty of compensation; the results obtained; and the responsibility involved" (Matter of Freeman, 34 NY2d at 9; see also Breidbart, 117 AD3d at 767). Under the lodestar method customarily employed to calculate reasonable attorneys' fees in class actions, applying these factors, reasonable fees are calculated by multiplying the reasonable hours expended on the action by a reasonable hourly rate (see Matakov v Kel-Tech Constr. Inc., 84 AD3d 677, 678 [1st Dept 2011]). In the event that the court finds that an attorney spent excessive, or an unreasonable number of hours, it may exclude the amounts billed for those hours from the calculation (see Nager v Teachers' Retirement Sys. of City of New York, 57 AD3d 389, 390 [1st Dept 2008], lv denied 13 NY3d 702 [2009]).

Defendants argue that, because Borrowers had been making continuous monthly payments on both loans, and the outstanding principal balance on both loans was low relative to the original amount, and because Borrowers kept plaintiff informed of their efforts to refinance, plaintiff's commencement of the two separate actions and related litigation was frivolous and was conducted in order to inflate the legal bill. However, " [t]he law is clear that when a mortgagor defaults on loan payments, even if only for a day, a mortgagee may accelerate the loan, require that the balance be tendered or commence foreclosure proceedings, and equity will not intervene'" (First Federal Savings Bank v Midura, 264 AD2d 407, 407 [2d Dept 1999], quoting New York Guardian Mortgagee Corp. v Olexa, 176 AD2d 399, 401 [3d Dept 1991]). Moreover, Borrowers acknowledged their default in the Forbearance Agreement and acknowledged that plaintiff is fully entitled to immediately exercise any or all of its remedies under the loan documents (see Forbearance Agreement, Exhibit 3 to Affirmation of Robert A. Abrams, ¶ 2.2). Even if Borrowers were making partial payments subsequent to their default, which were accepted by plaintiff, this does not constitute a waiver of plaintiff's rights under the Forbearance [*4]Agreement (see P.T. Bank Central Asia v Ho Ho Ho Realty Co., 273 AD2d 212 [2d Dept 2000]). Plaintiff was within its rights to commence the Replevin Action and the Foreclosure Action, and to seek any relief permitted by the Forbearance Agreement and the law, including appointment of a receiver and replevin of the collateral securing the outstanding debt. Even though, as defendants argue, the chattels that plaintiff sought to seize through the Replevin Action included heavy equipment and machinery, which would be practically difficult to seize, this does not affect plaintiff's right to seek this remedy under the Forbearance Agreement.

Defendants also argue that certain filings made by the plaintiff in the two actions were unreasonable and the related attorneys' fees incurred should be disallowed. Defendants object to the filing of an unauthorized reply to plaintiff's order to show cause in the Replevin Action on October 9, 2014. The Commercial Division Rules prohibit the submission of a reply to an order to show cause absent prior approval of the court (see 22 NYCRR § 202.70, Rule 19). As no permission was given by this Court, the 6.35 hours billed for work relating to this unauthorized reply are disallowed. Defendants also object to the reply that plaintiff submitted in the Foreclosure Action in response to defendants' opposition to the ex parte motion for appointment of a receiver because plaintiff did not obtain prior approval pursuant to 22 NYCRR § 202.70, Rule 19. However, this rule only applies to orders to show cause and does not include ex parte applications. Further, the terms of the Leasehold Mortgage and the 41st Street Mortgage, which were the properties for which plaintiff sought appointment of a receiver, permitted plaintiff to obtain a receiver without the necessity of proving inadequacy of the security or insolvency of the Borrowers. Therefore, it was defendants' own decision to submit opposition to the ex parte application that necessitated the reply for which related attorneys' fees were necessary and reasonable.

Defendants also take issue with plaintiff's motions for summary judgment filed in both actions, arguing that the motion for summary judgment in the Replevin Action was duplicative and sought the same relief as the order to show cause. However, the motion for summary judgment also sought to strike defendants' affirmative defenses, which defendants interposed in their answer filed subsequent to the order to show cause, rendering the summary judgment motion non-duplicative and necessary in order to obtain the relief sought. Defendants also argue that plaintiff's motion for summary judgment in the Foreclosure Action was premature because it was filed shortly after defendants filed their answer, thereby precluding a resolution by settlement that would have avoided the expense of litigation. This argument is rejected because plaintiff was within its rights to seek this relief under the Forbearance Agreement and other loan documents, and because defendants have made no representation here that any discovery demands were made which were impeded by the motion for summary judgment.

Defendants also argue that plaintiff's invoices are not a reliable record of the time spent on this matter because the invoices commingled entries for the two separate actions and because plaintiff then artificially separated the entries ex post facto to distinguish the time spent on the Foreclosure Action from the time spent on the Replevin Action. Defendants' argument is without merit because plaintiff did provide contemporaneous time records of the work done on both actions and provided segregated records solely for the convenience of the Court. As the lender and borrower in both actions were the same, and as the loan documents and issues in the two actions were interrelated, it stands to reason that the contemporaneous time records would [*5]simultaneously include the work performed on both actions, especially because all of the work was performed by primarily the same attorney. Therefore, the contemporaneous time records are properly before the Court and may be considered in the instant application for attorneys' fees.

Defendants further argue that plaintiff's counsel's fee of $496 per hour is unreasonable and is at least $150 per hour in excess of the standard and customary rates for such legal work charged in Kings County, and that the issues in these matters were not sufficiently complex to warrant the amount of time expended by plaintiff's attorney. "As a general rule, the reasonable hourly rate [for an attorney] should be based on the customary fee charged for similar services by lawyers in the community with like experience and of comparable reputation to those by whom the prevailing party was represented'" (Gamache v Steinhaus, 7 AD3d 525, 527 [2d Dept 2004] quoting Getty Petroleum Corp. v G.M. Triple S. Corp., 187 AD2d 483, 483-84 [2d Dept 1992]). Plaintiff supports the reasonableness of its fees by arguing that payment by a sophisticated business entity of its attorneys' fees in advance of prevailing and with no guaranty that the fees would be recovered is strong evidence of the reasonableness of such fees (see Bleecker Charles Co. v 350 Bleecker Street Apartment Corp., 212 F Supp2d 226 [SDNY 2002]). Plaintiff argues that further evidence of the reasonableness of its rates includes the fact that plaintiff's client negotiated a twenty percent reduction in the fees normally charged by Katsky Korins (see Prospect Capital Corp. v Enmon, 2010 WL 2594633 [SDNY June 23, 2010]).

Although defendants have cited authority in support of an hourly rate of $275 to $350 as reasonable for services rendered in the Kings County where this Court is located (see HSBC Bank USA Nat'l Ass'n v Strong Steel Door Corp., 36 Misc 3d 1207[A] [Kings Co Sup Ct 2012]; Board of Managers of Brightwater Towers Condominium v Lukashevskaya, 2012 NY Slip Op 52207[U] [Kings Co Sup Ct 2012]), in the Court's experience, such rates are not presently the prevailing rate for services necessary to competently and effectively litigate the issues at bar, but that the rate billed by plaintiff's attorney are generally consistent with those charged in matters involving complex commercial real estate transactions (see In re Vitamin C Antitrust Litigation, 2013 WL 6858853 [EDNY 2013]); see also Metropolitan Lofts of NY, LLC v Metroeb Realty 1, LLC, 2015 NY Slip Op 50251[U] [Kings Co Sup Ct 2015]). Defendants also contend that plaintiff's attorneys' fees were unreasonably inflated because all of the work on the matter was performed by senior partners at the firm rather than associates who would have charged $350 per hour. Although clients may choose to engage a more experienced partner in the belief that a less experienced associate would take more time to generate a work product, albeit at a lower hourly rate, certain basic research and filing tasks could have been performed by less expensive lawyers in this matter without a significant loss to efficiency. Therefore, a five percent reduction in the time charges is warranted, resulting in a total reduction of $3,665.72 inclusive of both actions ^[FN1] (see In re Vitamin C, 2013 WL 6858853 at *5).

Defendants also object to certain time entries that they claim demonstrate excessive time billed for the work reported, such as an entry on July 9, 2014 billing seven hours for preparing an [*6]RJI, e-filing documents, some correspondence, and partial drafting of a foreclosure complaint, as well as a charge of five hours on June 23, 2014 for a phone call and drafting an affidavit. The Court finds that in light of the fact that this work was performed by a senior partner, rather than a less experienced attorney, some of the time charges are excessive (see Kaygreen Realty Co. v IG Second Generation Partners, 78 AD3d 1008 [2d Dept 2010]). The Court further notes that although plaintiff was well within its rights to pursue two separate actions as there were two separate loans that were separately collateralized, based on the low outstanding balance on each loan, plaintiff could have recovered the entire outstanding balance of the debt through the Foreclosure Action alone, thereby saving the additional expense of litigating two separate actions. Therefore, a further ten percent reduction of the attorneys' fees is warranted, resulting in a reduction of the fees relating to the Replevin Action to $29,221.94 and a reduction in the fees relating to the Foreclosure Action to $33,461.96.

Plaintiff also seeks an additional $9,498.40 in attorneys' fees for the period of October 16, 2014 to November 5, 2014, claiming that plaintiff's attorney expended 19.15 hours in connection with the Borrowers' closing of the refinance on the Bath Mortgage, its efforts to settle the fee dispute, and the preparation of the instant application to collect attorneys' fees and expenses. However, defendants object that these hours billed are excessive, especially in light of the fact that plaintiff's attorney did not prepare any of the closing documents in connection with the refinance. Moreover, unlike the contemporaneous time logs submitted by the plaintiff to support its litigation fees through October 15, 2014, the time logs submitted after this period are not contemporaneous but were constructed by the plaintiff ex post facto. Although plaintiff is entitled to an award of attorneys' fees in connection with preparing an application for attorneys' fees (see Rahmey v Blum, 95 AD2d 294 [2d Dept 1983]), a review of these time logs indicates excessive and duplicative hours billed between the Replevin Action and the Foreclosure Action (see Exhibits 14 and 15 to Abrams Affirmation). Plaintiff will only be allowed 10.3 hours for the work performed in preparing the instant application, resulting in an additional $5,108.80 awarded to the plaintiff (see Podhorecki v Lauer's Furniture Stores, Inc., 201 AD2d 947 [4th Dept 1994]).

Accordingly, plaintiff is awarded $29,221.94 in attorneys' fees and $1,167.09 in expenses relating to the Replevin Action, $33,461.96 in attorneys' fees and $3,840.16 in expenses relating to the Foreclosure Action, and an additional $5,108.80 for the instant application, resulting in a total award of $72,799.95.

Plaintiff's application for attorneys' fees and expenses is granted to the extent that the Court awards plaintiff a judgment in its favor against defendants in the amount of $72,799.95 for incurred legal fees and expenses.

This constitutes the decision and order of the court.

J.S.C.