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Wednesday, August 11, 2021

Grano v Martin, 2021 WL 3500164 (S.D. New York, 2021) [Spain] [Petition granted] [Necessary Costs & Expenses] [Award reduced by 85% due to inability to pay]


In Grano v Martin, 2021 WL 3500164 (S.D. New York, 2021) the parties filed objections to the  Report and Recommendation (“R&R”) of  Magistrate Judge Davison recommending that Petitioner’s motion for attorney’s fees and costs incurred in connection with prosecuting this case be granted in part and denied in part. Petitioner requested a total of $467,944.46 ($359,799.05 in fees and $108,145.41 in costs). The District Court adopted the R&R in part and awarded Petitioner fees and costs in the amount of $34,296.19.


        The successful Petitioner filed a motion for attorney’s fees and costs.  Respondent argued that an award would be inappropriate, and that the motion should be denied, because of the abuse she suffered from Petitioner and her indigent financial condition. In the alternative, Respondent argued that Petitioner’s requested amount should be reduced because Petitioner’s counsel’s hours were not necessary or reasonable, and the records were insufficient to evaluate the necessity of the work performed.


The Court observed that in reviewing a magistrate judge’s report and recommendation, a district court “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1)(C). A party may object to the magistrate judge’s report and recommendation, but the objections must be “specific,” “written,” and submitted “[w]ithin 14 days after being served with a copy of the recommended disposition.” Fed. R. Civ. P. 72(b)(2); accord 28 U.S.C. § 636(b)(1)(C). A district court must review de novo those portions of the report or specified proposed findings or recommendations to which timely objections are made. 28 U.S.C. § 636(b)(1)(C). “The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions.” Fed. R. Civ. P. 72(b)(3); see Marji v. Rock, No. 09-CV-2420, 2011 WL 4888829, at *1 (S.D.N.Y. Oct. 13, 2011). The district court may adopt those portions of a report and recommendation to which no objections have been made, provided no clear error is apparent from the face of the record. See White v. Fischer, No. 04-CV-5358, 2008 WL 4210478, at *1 (S.D.N.Y. Sept. 12, 2008); Nelson v. Smith, 618 F. Supp. 1186, 1189 (S.D.N.Y. 1985); Fed. R. Civ. P. 72 advisory committee note (b).



The court noted that the reasonable hourly rate is the “prevailing market rate, i.e., the rate prevailing in the relevant community for similar services by lawyers of reasonably comparable skill, experience, and reputation.” Farbotko v. Clinton County, 433 F.3d 204, 208 (2d Cir. 2005) (cleaned up). Mr. Abbott billed at a rate of $675 when representing Petitioner. Mr. Morley billed at a rate of $600 when representing Petitioner. Mr. Saltzman billed at a rate of $400 when representing Petitioner. The Court found  a  rate of $425 to be reasonable for Mr. Morley. Because Mr. Abbott was not as well-credentialed as Mr. Morley in Hague Convention matters it found a rate of $400 is reasonable and appropriate for him. The court found  a rate of $375, consistent with Mr. Saltzman’s rate of $375, was  reasonable for two other attorneys. As to the paralegals,  $129 was  reasonable.


The Court found that “retaining multiple counsel in a case as complex as this one was ... entirely reasonable.”  The Court agreed with Judge Davison’s recommendation that the Court disallow compensation for fees associated with collateral state proceedings and reduce all unclear or comingled time entries by 50%, arguing that those hours were necessarily incurred to secure the return of the child. It found Petitioner’s necessary fees and costs are as follows: $183,686.42 (fees) + $6,692.11 (costs paid by counsel) + $38,262.72 (costs paid by Petitioner)) = $228,641.25 in fees and costs.


Respondent objected to the R&R on the basis that Petitioner’s coercive control and psychological abuse towards her rendered an award of fees and costs “clearly inappropriate” under ICARA, 22 U.S.C. § 9007(b)(3), relying on Souratgar, 818 F.3d at 79, Radu v. Shon, No. 20-CV-246, 2021 WL 1056393, at *4 (D. Ariz. Mar. 19, 2021), Guaragno, 2011 WL 108946, at *2, and Silverman v. Silverman, No. 00-CV-2274, 2004 WL 2066778 (D. Minn. Aug. 26, 2004).


The Court noted that Second Circuit has held that an award of fees and costs is clearly inappropriate when the successful petitioner bears responsibility for “the circumstances giving rise to the petition.” Souratgar, 818 F.3d at 79-80. The Souratgar petitioner bore such responsibility because (1) he committed acts of physical violence against the respondent that did not stop after the respondent had left the family home, (2) the respondent’s departure from the country was related to the petitioner’s violence, and (3) there were no countervailing factors that favored the petitioner. Likewise, in both Guaragno and Silverman, the court found that the petitioner’s physical and mental abuse of respondent was an appropriate consideration in determining if the fee award was inappropriate. See Guaragno, 2011 WL 108946, at *3; Silverman, 2004 WL 2066778, at *4. In Radu, the abuse was almost entirely psychological, as it was here, but the abuse was only one of several reasons for concluding that a fee award was clearly inappropriate. See 2021 WL 1056393, at *3-4 (no fee awarded because petitioner prevailed only in part, award would prevent respondent from caring for children, petitioner provided no support for children and petitioner was psychologically abusive). The “unclean hands” exception to a fee award is almost always applied to acts of physical violence, sometimes coupled with acts of emotional abuse, and Respondent had not provided authority for the proposition that an award can be clearly inappropriate based on emotional abuse alone. See Hart v. Anderson, No. 19-CV-2601, 2021 WL 2826774, at *6 (D. Md. July 7, 2021) (finding petitioner’s “repeated pattern of alcohol abuse and violence” rendered a fee award inappropriate); see also Jimenéz Blancarte v. Ponce Santamaria, No. 19-13189, 2020 WL 428357, at *2 (E.D. Mich. Jan. 28, 2020) (finding an award for fees and costs inappropriate where petitioner had physically abused respondent and their child); Asumadu v. Baffoe, No. 18-CV-1418, 2019 WL 1531793, at *1 (D. Ariz. Apr. 9, 2019) (finding same when petitioner physically abused the respondent more than once). Souratgar referred repeatedly to the petitioner’s “violence,” as opposed to “abuse,” which suggests the Court meant physical, not mental, abuse. See 818 F.3d at 79-82. The court found that this case, which was almost entirely about psychological as opposed to physical abuse, and in which both sides were less than candid, did not rise to the level of those cases justifying complete denial of an award. Further, an award of at least some fees serves the statutory purpose of deterring future child abductions. In re JR, No. 16-CV-3863, 2017 WL 74739, at *4 (S.D.N.Y. Jan. 5, 2017). Although the coercive control Respondent experienced was no doubt serious domestic abuse, the court agreed with Judge Davison that Respondent had not met her burden to show that a fee award to Petitioner would be clearly inappropriate.



The Court observed that “[A] respondent’s inability to pay an award is a relevant equitable factor for courts to consider in awarding expenses under ICARA.” Souratgar, 818 F.3d at 81; see In re J.R., 2017 WL 74739, at *4. Courts in the Second Circuit have been “mindful that an expenses award that is greater than a respondent’s total assets requires, at the very least[,] a reasoned explanation.” Sanguineti, 2016 WL 1466552, at *9 (cleaned up); accord Lukic v. Elezovic, No. 20-CV-3110, 2021 WL 1904258, at *2 (E.D.N.Y. May 12, 2021). When a respondent demonstrates financial hardship, courts have reduced the fee award proportionately. See, e.g., Whallon v. Lyon, 356 F.3d 138, 141 (1st Cir. 2004) (affirming reduction in fees and expenses by 65%); Rydder v. Rydder, 49 F.3d 369, 373-74 (8th Cir. 1995) (reducing fee award by around 46% after considering respondent’s straitened financial circumstances); In re J.R., 2017 WL 74739, at *4 (reducing award by two-thirds after considering respondent’s inability to pay); Willing v. Purtill, 07-CV-1618, 2008 WL 299073, at *1 (D. Or. Jan. 31, 2008) (reducing award by 15% due to respondent’s financial circumstances, including respondent’s unemployment). An award should be reduced with ICARA’s purpose in mind, meaning the award should still deter future violations of the Convention. See In re J.R., 2017 WL 74739, at *4; Willing, 2008 WL 299073, at *1.


Here, Judge Davison reduced the award by 85% in light of Respondent’s demonstrated financial hardships. Respondent demonstrated that she was under financial strain: she had not been able to secure employment in Spain as she was not a legal resident there, and she owed her attorneys over $170,000. She represented that she had no savings, assets, or property. Her most recent bank statement provided to the Court represented that she had a savings account with a balance of $395.10, and a checking account with a balance of $3,255.36. Her net income in 2019 was approximately $27,551. As such, Respondent had sufficiently demonstrated that a substantial fee award for Petitioner would greatly strain her finances, and Respondent clearly would not be able to pay an unreduced award of fees and expenses totaling $228,641.25. While a complete reduction in fees and costs was not necessary –she had a graduate degree from a Spanish university and should at some point be able to get permission to work, the court agreed  with Judge Davison’s reduction of the award by 85%.


           The revised lodestar amount was as follows: ($183,686.42 (fees) + $6,692.11 (costs paid by Petitioner’s counsel) + $38,262.72 (costs paid by Petitioner)) = $228,641.25, reduced by 85% = $34,296.19.


Recent Hague Convention District Court Cases - Wan v DeBolt, 2021 WL 3510232, (United States District Court, C.D. Illinois, 2021) [Hong Kong][Petition granted][Necessary Costs] [Petitioner sought $518,307 in attorneys’ fees and $155,710.07 in costs; Court awarded Petitioner $310,933.50 in attorneys’ fees and $134,355.95 in costs; $650 hourly rate of Feinberg reduced to $425 an hour]


Wan v DeBolt, 2021 WL 3510232, (United States District Court, C.D. Illinois, 2021)

[Hong Kong][Petition granted][Necessary Costs] [Petitioner sought $518,307 in attorneys’ fees and $155,710.07 in costs; Court awarded Petitioner $310,933.50 in attorneys’ fees and $134,355.95 in costs; $650 hourly rate of Feinberg reduced to $425 an hour]

Recent Hague Convention District Court Cases - Luis Alfonso V.H. v. Banessa Cristina A.Z., 512 F.Supp.3d 633 (2021) ( W.D. Virginia, 2021) [ Honduras] Petition denied] [well-settled exception] .


Luis Alfonso V.H. v. Banessa Cristina A.Z., 512 F.Supp.3d 633 (2021) ( W.D. Virginia, 2021)

[ Honduras] Petition denied] [well-settled exception] .


Friday, August 6, 2021

Aluker v Yan, --- Fed.Appx. ----, 2021 WL 3417968 (4th Cir. 2021)[Portugal] [Habitual Residence] [Rights of Custody][Petition denied]


           In Aluker  v Yan, --- Fed.Appx. ----, 2021 WL 3417968 (4th Cir. 2021) the Fourth Circuit affirmed the holding of the  district court which concluded that Serge Aluker, the father of two minor children, did not have custody rights recognized by the Hague Convention and, therefore, failed to prove that the children’s mother, Simin Yan, wrongfully removed the children from Portugal to the United States.


Aluker was a United States citizen, a Russian citizen, and a legal resident of Portugal. Yan was a United States citizen who presently resided in Virginia. In 2006, Aluker and Yan were married in China, and they moved to the United States in 2008. While living in the United States, Aluker and Yan had two children. The family moved to Spain in 2015, and to Portugal in 2017. Shortly after their move to Portugal, Aluker and Yan separated. Initially, they shared parental responsibilities. However, in November 2018, Aluker and Yan executed a Separation and Property Settlement Agreement (PSA), which stated in relevant part: The parties … agree as follows: ... [Yan] shall have sole legal and primary physical custody of [the two children]. [Aluker] shall be entitled liberal and reasonable visitation with the children. ... The parties acknowledge that this Agreement is a full and final settlement that contains the entire understanding of the parties, and there are no representations, warranties, covenants, or undertakings other than those expressly set forth herein.... This Agreement shall be construed in accordance with the law of the Commonwealth of Virginia. Aluker also agreed in the PSA that Yan would have sole ownership of their house in Falls Church, Virginia. The parties further stipulated therein that each had “the right to reside at any place ... without the consent of the other party.” The PSA was not incorporated into any court order. Several months after the PSA was executed, Aluker initiated proceedings in May 2019 in a Portuguese court seeking an adjudication of child custody rights. The Portuguese court had not taken any action when, on October 3, 2019, Yan sent Aluker an e-mail stating that she was taking the children to the United States to live. Yan and the children traveled to the United States on the same day. Almost a year later, in September 2020, Aluker filed a petition in the district court under the Hague Convention. In his “verified petition of return of children to Portugal,” Aluker contended that the children were wrongfully removed from Portugal. On the day of a scheduled bench trial, Yan requested a judgment on partial findings under Federal Rule of Civil Procedure 52(c). The court conducted a brief evidentiary hearing, allowed Aluker to file a response memorandum, and later granted Yan’s motion. The court concluded that the PSA was a valid agreement, which established that Yan had legal custody of the children at the time she removed the children from Portugal. The court held that Yan’s status as legal custodian of the children defeated Aluker’s claim of wrongful removal.


The Fourth Circuit pointed out that in  cases involving claims brought under the Hague Convention, it review sa district court’s findings of fact for clear error and its conclusions of law de novo. Bader v. Kramer, 484 F.3d 666, 669 (4th Cir. 2007). It noted that Article 3 of the Hague Convention provides: The removal or the retention of a child is to be considered wrongful where ... it is in breach of rights of custody attributed to a person ... under the law of the State in which the child was habitually resident immediately before the removal or retention ... The rights of custody mentioned ... above, may arise in particular by operation of law or by reason of a judicial or administrative decision, or by reason of an agreement having legal effect under the law of that State. Hague Convention, art. 3. To establish a claim of wrongful removal under the Hague Convention, a petitioner must show that: (1) the children habitually resided in “the petitioner’s country of residence at the time of removal;” (2) the removal breached “the petitioner’s custody rights under the law of his home state;” and (3) the petitioner was actually exercising his custody rights at the time of removal. Bader, 484 F.3d at 668; see also Hague Convention, art. 3.


The Fourth Circuit held that irrespective whether the children were habitual residents of Portugal at the time of their removal, Aluker’s wrongful removal claim failed because he did not establish the other two requirements for proving his claim, namely, that when the children were taken to the United States, he had custody rights under Portuguese law and he was actually exercising those rights. See Bader, 484 F.3d at 668; Hague Convention, art. 3. At the time the children were removed from Portugal, no court had awarded custody rights to Aluker, and the parties had not entered into any written agreement providing Aluker with such rights. When the children were removed from Portugal, Yan had sole legal custody of the children, as agreed by the parties in the PSA.


Portuguese choice of law rules required that it apply United States law in this case. Article 57 of the Portuguese Civil Code directs that “[r]elationships between parents and children are regulated by the common national law of the parents, and in the lack thereof, by the law of their common habitual residence; if the parents habitually reside in different countries, the law of the child’s country of origin shall apply.” In applying Portugal’s choice of law provision to this case, the “common national law of the parents” is the United States, because both Aluker and Yan are United States citizens. Accordingly, United States law, here, the law of Virginia, applies to resolve this matter. It found that Aluker has failed to prove under Virginia law that he had any custody rights at the time the children were removed from Portugal. The PSA unambiguously provided that Yan “shall have sole legal and primary physical custody” of the two children. Although Virginia courts have the power to modify any private custody agreement that parents execute, parents still may enter into such custody agreements and courts may rely on them in making custody determinations. See Shoup v. Shoup, 556 S.E.2d 783, 787-89 (Va. Ct. App. 2001); Va. Code Ann. § 20-109.1 At the time the children were removed from Portugal, no court had altered the terms of the PSA or had adjudicated the issue of the children’s custody.


The terms of the Hague Convention also supported the district court’s conclusion that the PSA was a valid agreement addressing custody rights. Under the Hague Convention, custody rights can be determined by “an agreement having legal effect under the law of the [state of the child’s habitual residence].” Hague Convention, art. 3. An agreement having “legal effect” under the Hague Convention can include “simple private transactions between the parties concerning the custody of their children.” Elisa Pérez-Vera, Explanatory Report on the 1980 HCCH Child Abduction Convention, in 3 Actes et Documents de la Quatorziéme Session – Child Abduction, at 426, 447, ¶ 70 (1980). It concluded that the district court did not err in holding that the PSA had “legal effect” within the meaning of the Hague Convention, and that Aluker failed to prove his claim of wrongful removal.