Prologis Six Rivers Ltd. v. Gould (In Re Gould)

363 B.R. 45, 2007 Bankr. LEXIS 721
CourtUnited States Bankruptcy Court, D. Connecticut
DecidedFebruary 28, 2007
Docket19-30134
StatusPublished
Cited by1 cases

This text of 363 B.R. 45 (Prologis Six Rivers Ltd. v. Gould (In Re Gould)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Prologis Six Rivers Ltd. v. Gould (In Re Gould), 363 B.R. 45, 2007 Bankr. LEXIS 721 (Conn. 2007).

Opinion

MEMORANDUM AND ORDER ON MOTIONS FOR ATTORNEYS’ FEES AND COSTS

ALAN H.W. SHIFF, Bankruptcy Judge.

The matters before the court involve two motions by Prologis Six Rivers Limited Partnership (“Prologis”) for attorney fees and costs.

BACKGROUND

Regrettably, the issues raised in these motions have been protracted due to unreasonable objections by the chapter 11 debtor, Peter J. Gould, d/b/a Cherry Hill Development Co. (“Gould”). Gould has been a frequent litigator in this court. See Gould v. Oakland Associates (In re Gould), 363 B.R. 41, 2005 WL 2589183 (Bankr.D.Conn.2005); Gould v. Berger (In re Gould), 337 B.R. 750 (Bankr.D.Conn.2006) 1 ; Gould v. S.S. Silberblatt, Inc. (In re Gould), 339 B.R. 293 (Bankr.D.Conn.2006), familiarity with which is assumed. Findings made in those actions are also relevant here.

On April 2, 1991, Lensclean, Inc. and Aldine Technologies, Inc., both wholly owned by Gould, entered into a lease with Carlstadt Associates, Ltd. for warehouse space in a building in Carlstadt, New Jersey. The lease provided that the “[t]en-ant[s] shall be liable to the Landlord for any and all reasonable attorneys’ fees and other costs which the Landlord may incur as a result of successfully enforcing or protecting its rights against the Tenant[s]”. Prologis’s Exh. I, at p. 28. In December, 2002, Peter J. Gould executed a document by which he personally guaranteed “the obligations of the Tenant[s] under the Lease”. Prologis’s Exh. J, at p. 1. In March, 2003, Keystone purchased the building from Carlstadt Associates. Tr. at 25. On August 22, 2003, Gould commenced this chapter 11 case.

On November 16, 2004, in order to facilitate confirmation of his Second Amended Plan of Reorganization, Gould paid Keystone’s claim for attorneys’ fees and costs attributed to the enforcement of its rights under the lease. That is, Gould paid Keystone’s claim pursuant to the court’s order on his motion to distribute, however, he reserved the right to challenge the awarded fees and costs in an adversary proceeding. See Gould’s Motion to Disburse, Doc. Id. No. 166.

The instant matters result from the following scenario. On December 7, 2004, Gould filed an adversary proceeding against Keystone (“Gould adversary proceeding”), seeking the return of the attorneys’ fees and costs. See Gould v. Berger, supra, 337 B.R. at 753-54. On February 7, 2006, the court granted Keystone’s motion for summary judgment, concluding that there was no basis upon which the attorneys’ fees and costs should be disgorged. Id. at 758. On March 6, 2006, Prologis, which claimed to be the successor of Keystone, filed the first of the instant motions for attorneys’ fees and costs incurred defending the Gould adversary proceeding (“Prologis motion 1”). Gould’s objection required a further trial, as a con *48 sequence of which, Prologis now also moves for attorneys’ fees and costs incurred prosecuting Prologis motion 1 (“Prologis motion 2”) 2 .

DISCUSSION

Liability for Attorneys’ Fees and Costs

A party seeking attorneys’ fees has “the burden of ‘establishing entitlement to an award and documenting the appropriate hours expended and the hourly rates’ Savoie v. Merchants Bank, 166 F.3d 456, 463 (2d Cir.1999) (quoting Cruz v. Local Union No. 3 of Intern. Broth. Of Electrical Workers, 34 F.3d 1148, 1160 (2d Cir.1994) (quoting Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983))).

Fees and costs for Proloyis motion 1

As a preliminary matter, Gould argues that Prologis is not the successor of Keystone. Post trial brief at p. 2. That challenge was not supported by the record. To the contrary, Prologis offered the testimony of its manager, Linda Correll, who identified the lease and the guaranty pursuant to which its attorneys’ fees and costs were incurred. Tr. at 21, 23; see also Prologis’s Exhs. I and J. She also testified that in August, 2004, Keystone merged with Prologis and contributed the building to Prologis Cimarron, NJ, L.L.C., an entity owned by Prologis. Id. at 27. According to her testimony, at the time of trial, Prologis Cimarron, NJ, L.L.C. owned the building and had given Prologis permission to sue on behalf of Prologis Cimarron for recovery of the attorneys’ fees and costs at issue 3 . Id.

Alternatively, Gould argues that the fees and costs sought by Prologis are not related to its rights under the lease. Specifically, Gould challenges numerous line entries in Prologis’s statement of fees and costs. See Exh. D. Again, the record demonstrates otherwise. For example, Gould disputes the services rendered in connection with Gould’s request that Pro-logis be restrained “from criminally prosecuting [Gould] any further with respect to issues relating to the building” 4 . Tr. at 62. But, the criminal prosecution was prompted by Gould’s trespass at the leased property. Therefore, Prologis’s involvement, as a complaining property owner, was merely an enforcement of its rights under the lease. See Tr. at 62-63.

Gould also cross examined Prologis’s attorney regarding the time and expense of a conference with Chicago Title Company regarding insurance issues. Prologis responded that this issue was related to enforcing rights under the lease because “Chicago Title was a title insurer on the purchase by [Prologis]_[Gould’s] prayer for relief asked that the building be conveyed to Mr. Gould as part of the rights that he had under the right of first *49 refusal in the lease. That certainly put a cloud on the title and we would have been remiss not to put the title insurer on notice”. Tr. at 75-76.

Fees and costs for Prologis motion 2

Prologis's motion 2 seeks attorney's fees and costs incurred in the prosecution of its motion 1. See Prologis’s Exh. A; see also Supplementary Affidavit of Prologis’s attorneys, Doc. Id. No. 291, Exhs. 1 and 2. The law in this circuit supports that result. As the court in Gagne v. Maher held, “time reasonably spent by [parties] in establishing their fee[s]” may be allowed. 594 F.2d 336, 344 (2d Cir.1979), aff'd on other grounds, 448 U.S. 122, 100 S.Ct. 2570, 65 L.Ed.2d 653 (1980). To rule otherwise would “dilute the value of a fees award by forcing [the] attorneys into extensive, uncompensated litigation”. Id. (quoting Stanford Daily v. Zurcher, 64 F.R.D. 680, 683-84 (N.D.Cal.1974), aff'd,

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Bluebook (online)
363 B.R. 45, 2007 Bankr. LEXIS 721, Counsel Stack Legal Research, https://law.counselstack.com/opinion/prologis-six-rivers-ltd-v-gould-in-re-gould-ctb-2007.