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Monday, May 23, 2016

Sanguineti v Boqvist, 2016 WL 1466552 (SDNY, 2016) [Canada] [Costs & Expenses]

In Sanguineti v Boqvist, 2016 WL 1466552 (SDNY, 2016) after the Petition of  Katherine Sanguineti  seeking the return of her son, BAB, to Canada  was  granted, she moved for attorney’s fees and other expenses, seeking a total amount of $195,291.80. The Court awarded fees of $106,642.00, attorney’s costs of $1164.00 and Out of Pocket expenses of $2851.00. The district court observed that ICARA provides that a court “shall” award such expenses, unless the respondent establishes that an award “would be clearly inappropriate.” 22 U.S.C. § 9007. There is a presumption in favor of awarding necessary costs to a prevailing petitioner in a return action. The court has the obligation to determine whether the requested fees and costs were ‘necessary’ to secure the child’s return. The burden of proving that costs are “necessary” falls upon the petitioner.
          Petitioner’s counsel, a solo practitioner, sought attorney’s fees of $186,152.10, which she divided into two categories: 450.4 hours at $400 per hour for attorney services, and 44.9 hours at $129 per hour for what she described as “Secretarial and Paralegal Services.” The Court noted that in return cases under the Hague Convention, the “ ‘lodestar’ approach is the proper method for determining the amount of reasonable attorney’s fees.” Knigge v. Corvese, No. 01 cv 5743 (DLC), 2001 WL 883644, at *1 (S.D.N.Y. Aug. 6, 2001). In calculating the lodestar, or “presumptively reasonable fee,” the district court must first determine the reasonable hourly rate for the attorney’s work, which is the “rate a paying client would be willing to pay.” Arbor Hill, 522 F.3d at 190. As a starting point in determining the reasonable hourly rate, the court should consider the “fees that would be charged for similar work by attorneys of like skill in the area.”  
 Under petitioner’s fee agreement with her attorney the hourly billing rate was $250.00 per hour. However, the attorney contended that her reasonable hourly rate was actually $400.00 per hour, and that she charged petitioner a reduced rate due to petitioner’s exigent circumstances.  The both stated that they had agreed that if petitioner were to prevail in the present action, her attorney would seek fees and costs at her regular hourly rate of $400.00 per hour. The Court held that even when a specific hourly rate is included in a fee agreement, a prevailing party’s attorney may seek fees at the market rate for similar services by lawyers of reasonably comparable skill, experience, and reputation. Awarding attorney’s fees at a higher rate than what was provided for in a fee agreement does not confer a benefit onto a prevailing party.
          The Court held that the attorney’s reasonable hourly rate would be set in the same way that attorneys’ rates are typically set in such cases: by determining the rate a paying client would be willing to pay, and taking account all relevant factors, including “the current market rate in the Southern District of New York ... for similar services by lawyers of reasonably comparable skill, experience, and reputation.” Reiter, 457 F.3d at 233. The Court concluded that a rate of $335.00 per hour was reasonable. The Court also found reasonable $129 per hour for work completed by her that constituted secretarial and paralegal work. The Court found that petitioner was entitled to $142,189.60 in attorney’s fees ($136,713.50 for attorney time, $5,276.10 for non-attorney time, and $200 for her initial one-hour consultation).
          The court awarded counsel sums for copies and filing fees, and awarded petitioner sums for translation costs, trial transcripts which the Court required the parties to obtain in order to reference them in post-trial briefing, travel, food and lodging, but denied the request for fees for mediation services, expenses for the care of CFPC, petitioner’s child not the subject of the current action, and medical care for BAB,.

          The court pointed out that the “clearly inappropriate” standard permits an award of expenses “subject to the application of equitable principles by the district court.” Ozaltin, 708 F.3d at 375. Courts have considered the degree to which the petitioner bears responsibility for the circumstances giving rise to the fees and costs associated with a petition. Souratgar, __ F.3d __, 2016 WL 1168733, at *6. A respondent’s inability to pay an award is a relevant equitable factor for courts to consider in awarding expenses under ICARA.. The Court determined that respondent bore the bulk of responsibility for the circumstances giving rise to the fees and costs associated with the petition. Weighing against an award of necessary expenses was respondent’s alleged financial constraints. He contended that he had a net worth of $603, excluding legal bills. The Court concluded that only a modest reduction in petitioner’s award was appropriate. The Court was mindful that “an expenses award that is greater than a respondent’s total assets” requires, at the very least “a reasoned explanation.” Souratgar, __ F.3d __, 2016 WL 1168733, at *8 n.3. It concluded that an award greater than respondent’s total assets was  justified because respondent had no limitations on his earning ability.  His background, education, and work experience all indicated that he had significant earning potential in the future. Respondent’s spending patterns weighed against a determination that an award of necessary expenses would be “clearly inappropriate.” He spent at the very least, $7,977 every month on expenses, which far exceeded his monthly income and far exceeded what was necessary for respondent’s day-to-day living expenses. Respondent’s inability to pay was predominantly caused by his own spending far above bare necessities. The Court concluded that respondent’s own excessive spending should not serve as a complete bar to petitioner’s recovery. Taking into account respondent’s financial circumstances—including his remaining assets, his liabilities, and his ability to earn a substantial income—as well as all the other equitable factors previously discussed, the Court concluded that a reduction in the total fee award  by 25% was appropriate. The Court was  also satisfied that such a reduction would ensure that the award of necessary expenses does not impede respondent from visiting and caring for BAB in the future. Norinder v. Fuentes, 657 F.3d 526, 536 (7th Cir. 2011) 

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