Hinfin Realty Corp. v. Pittston Co.

212 F.R.D. 461, 2002 U.S. Dist. LEXIS 24211, 2002 WL 31840979
District Court, E.D. New York·Decided December 19, 2002·No. No. 00 CV 4285(ADS)(MLO)·Published·Cited by 1 cases

Opinion

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

Hinfin Realty Corp., Harbor Fuel Company, Inc., and Glenwood Terminal Corp. (collectively, the “plaintiffs”) brought this diversity action against The Pittston Company (“Pittston” or the “defendant”) seeking to recover damages they suffered as a result of an oil spill that occurred on their property during a time when the facilities for the receipt and distribution of “no. 6 fuel oil” were allegedly owned, maintained, and repaired by Pittston. Presently before the Court is the defendant’s motion for attorney’s fees and costs.

I. BACKGROUND

The relevant facts and parties are discussed in greater detall in the Court’s April 12, 2002 Memorandum and Order, familiarity with which is presumed. The plaintiffs brought a motion for the voluntary dismissal of their action pursuant to Rule 41(a)(2) of the Federal Rules of Civil Procedure (“Fed. R. Civ.P.”). Pittston requested that the Court condition the dismissal upon an award of its costs, including attorney’s fees in the amount of $135,000.

In the Memorandum and Order, the Court stated that where a plaintiff successfully dismisses a suit without prejudice under Rule 41(a)(2), courts often grant the defendant an award of costs or fees. The Court further stated that, by contrast, courts rarely award fees and costs when an action is dismissed voluntarily with prejudice. The Court stated that if the plaintiffs agreed to dismiss the action with prejudice within ten days of the date of the decision, the Court would deny the defendant’s motion for attorney’s fees and costs. However, in the event that the plaintiffs decided not to submit a notice indi-[462] eating that they were dismissing the action with prejudice, the Court stated that the defendant would be permitted to file an application for attorney’s fees and costs with the appropriate documentation in support of its application.

In the Memorandum and Order, the Court (1) granted the plaintiffs’ motion for a voluntary dismissal of this case "without prejudice pursuant to Rule 41(a)(2); (2) denied the defendant’s motion for an award of attorney’s fees and costs without prejudice and with leave to renew with the proper documentation and in accordance with the Court’s Individual Rules; and (3) determined that the Court will retain jurisdiction over this case for the limited purpose of (a) permitting the defendant to file a motion for costs and attorney’s fees in compliance with the terms of the Court’s Memorandum and Order; or (b) accepting a consent by the plaintiff for a dismissal with prejudice which must be filed within 10 days of the date of the Memorandum and Order.

On April 25, 2002, Pittston filed a motion for attorney’s fees and costs. On the same day, the plaintiffs requested an extension of time to file a stipulation discontinuing the action with prejudice. On May 2, 2002, the plaintiffs filed a letter application requesting an extension of time to respond to the defendant’s motions for attorney’s fees and costs. On May 29, 2002, the plaintiffs filed their opposition papers to the defendant’s motion for attorney’s fees and costs. On June 4, 2002, the defendant filed its reply to the plaintiffs’ opposition to its motion. Not having received the plaintiffs’ stipulation discontinuing the action with prejudice, the Clerk of the Court entered judgment on June 6, 2002 for plaintiffs’ motion for a voluntary dismissal of the case, without prejudice, pursuant to Fed.R.Civ.P. 41(a)(2).

II. DISCUSSION

The plaintiffs oppose the defendant’s motion for attorney’s fees and costs on the grounds that, (1) the plaintiffs commenced and conducted this action in good faith; (2) the defendant’s bad faith conduct precludes an award of such fees; and (3) there will be minimal duplicative expense. The plaintiffs further argue that, (a) Pittston’s application for attorney’s fees is premature; (b) if fees are awarded by the Court, it should hold enforcement of such order in abeyance, unless and until the plaintiffs commence another action against Pittston; and (c) the fees should be subject to a lodestar reduction. In response, Pittston argues that, (1) the plaintiffs’ claim that they are not liable for fees has already been rejected by the Court; (2) Pittston acted in good faith throughout the action; and (3) most of Pittston’s actions were expended on tasks that would not be duplicated in a future case.

At the outset, the Court notes that in the April 12, 2002 Memorandum and Order, it stated that “courts often grant fee awards when a plaintiff dismisses a suit without prejudice under Rule 41(a)(2).” Jewelers Vigilance Committee, Inc. v. Vitale, Inc., No. 90-1476, 1997 WL 582823, at *4, 1997 U.S. Dist. LEXIS 14386, at *12 (S.D.N.Y. Sept. 19, 1997) (citing Colombrito v. Kelly, 764 F.2d 122, 133 (2d Cir.1985)). “The purpose of such awards is generally to reimburse the defendant for the litigation costs incurred, in view of the risk (often the certainty) faced by the defendant that the same suit will be refiled and will impose duplicative expenses upon him.” Colombrito, 764 F.2d at 133 (citations omitted). Generally, both attorney’s fees and costs are included in fee awards. See e.g., Colombrito, 764 F.2d at 133; Mercer Tool Corp. v. Friedr. Dick, 179 F.R.D. 391, 397 (E.D.N.Y.1998). The Court will now review the grounds by the plaintiffs in opposition to the defendant’s motion for attorney’s fees and costs.

First, the plaintiffs argue that their “good faith” in bringing this action precludes the award of fees to the defendant. The Court agrees that the plaintiffs acted in good faith. Nevertheless, in the April 12, 2002 Memorandum and Order, this Court determined that fees are appropriate unless the plaintiffs dismissed their claim with prejudice. Having failed to dismiss the action with prejudice, the Court rejects the plaintiffs’ argument that fees and costs should be denied to the defendant based on their good faith.

Second, the plaintiffs urge the Court to carefully review Pittston’s conduct, especially [463] since the plaintiffs’ assets are the property involved herein and they have a limited cash of approximately $20,000. The plaintiffs argue that the defendant’s bad faith conduct should not be awarded. In particular, the plaintiffs contend that Pittston consistently represented to the plaintiffs that certain documents, namely the stock purchase agreements, would exonerate them. According to the plaintiffs, because such agreements were not turned over to the plaintiffs until February 2002, the defendant’s behavior resulted in “an enormous waste of judicial resources and of plaintiffs’ very limited resources.”

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Hinfin Realty Corp. v. Pittston Co., 212 F.R.D. 461, 2002 U.S. Dist. LEXIS 24211, 2002 WL 31840979 (E.D.N.Y. 2002).

212 F.R.D. 461 (Hinfin Realty Corp. v. Pittston Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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