Bernback v. Greco ( 2007 )

Opinions of the United
2007 Decisions States Court of Appeals
for the Third Circuit
1-16-2007
Bernback v. Greco
Precedential or Non-Precedential: Non-Precedential
Docket No. 05-4642
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 05-4642 & 05-4643
MICHAEL L. BERNBACK
Appellant (No. 05-4643)
v.
THOMAS GRECO, individually and as
President of Harvey’s Lake
Amphitheater, Inc.
Appellant (No. 05-4642)
Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Civil Action No. 98-cv-00230)
District Judge: Honorable A. Richard Caputo
Submitted Under Third Circuit LAR 34.1(a)
November 28, 2006
Before: RENDELL and AMBRO, Circuit Judges
PRATTER,* District Judge
(filed: January 16, 2007)
*
Honorable Gene E.K. Pratter, United States District Judge for the Eastern District of
Pennsylvania, sitting by designation.
OPINION
AMBRO, Circuit Judge
I. Facts and Procedural History
This is a dispute over attorneys’ fees due following a jury verdict, two (now four)
unsuccessful appeals, and two unsuccessful petitions for certiorari.
Plaintiff Michael Bernback and Defendant Thomas Greco were once partners in a
concert promotion business. Their relationship deteriorated over time, and they ended up
in a now ten-year saga of litigation in state and federal courts. In the case before us,
Bernback sued, alleging fraud, intentional interference with contractual relations,
intentional interference with business advantage, and breach of contract. After a two-
week trial the jury returned a verdict for Bernback on the breach of contract claim for
$225,000.
Pursuant to a fee-shifting clause in the breached contract, the District Judge
awarded Bernback attorneys’ fees in the amount of $90,000 and expenses in the amount
of $69,470.87. The Judge noted that $90,000 was significantly less than the $287,000
calculated by multiplying hours spent by hourly rate (the so-called lodestar), but because
the contract specified that the prevailing party should receive actual attorneys’ fees, the
Judge determined that the fees awarded should be limited to those actually due under the
fee agreement between Bernback and his counsel. That agreement provided for a 40%
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contingent fee, so the Judge awarded Bernback 40% of $225,000 in fees ($90,000) plus
actual expenses. Greco appealed the verdict and the fee award, and we affirmed on all
grounds. Bernback v. Greco (Bernback I), 69 Fed. Appx. 98 (3d Cir. 2003) (not
precedential), cert. denied 540 U.S. 1185 (2004).
Following the denial of certiorari, Bernback moved the District Court for post-
judgment interest and a supplemental fee award because of the expenses incurred
responding to the appeal, petition for rehearing en banc, and petition for certiorari. The
District Court awarded post-judgment interest and determined that it would calculate
interest on the fee award from the date at which those fees were quantified. The Court
further ordered Bernback to submit evidence of additional fees and expenses. This time
he appealed, arguing that interest on fees should accrue from the date of the jury verdict.
Noting that the case was controlled by our decision in Eaves v. County of Cape May, 239
F.3d 527, 542 (3d Cir. 2001), we affirmed. Bernback v. Greco (Bernback II), 127 Fed.
Appx. 45 (3d Cir. 2005) (not precedential), cert. denied ___ U.S. ___, 126 S.Ct. 420(2005).
In February 2004, Greco paid Bernback $444,593.48 in an attempt to satisfy the
verdict and all awards of attorneys’ fees and expenses. Bernback contested Greco’s
calculations, but the District Judge agreed with Greco and declared in June 2004 that the
verdict, along with the fees and expenses award, were satisfied. That order was not
appealed.
3
In September 2005, following our affirmance in Bernback II and the unsuccessful
petition for certiorari, the District Judge quantified Bernback’s supplemental fee request,
ordering Greco to pay an additional $18,654.64 in attorneys’ fees. This amount is nearly
40% of the post-judgment interest on the verdict that accrued before Greco satisfied the
judgment in February 2004. In calculating this amount, the Court subtracted the amount
of interest that Greco had already paid on the attorneys’ fees award from the interest on
the verdict.1
Both parties appealed.2 At issue is whether Bernback’s motion for supplemental
fees was timely and, if so, whether the amount awarded was reasonable.
II. Standard of Review
We exercise plenary review over interpretations of the Federal Rules of Civil
Procedure. Singletary v. Pa. Dep’t of Corr., 266 F.3d 186, 193 (3d Cir. 2001). We
review extensions of filing deadlines and awards of attorneys’ fees for abuse of
discretion. Weis-Buy Servs., Inc. v. Paglia, 411 F.3d 415, 419 (3d Cir. 2005) (attorneys’
fees); Planned Parenthood of Cent. N.J. v. Att’y Gen. of N.J., 297 F.3d 253, 259 (3d Cir.
2002) (time extensions).
III. Discussion
A. Was Bernback’s motion for additional fees untimely?
1
Specifically, the Court’s formula was 40% of (interest on the verdict – interest on the
attorneys’ fees) = $18,654.64.
2
The District Court’s jurisdiction is based on diversity of citizenship. 28 U.S.C.
§ 1332. We have jurisdiction under 28 U.S.C. § 1291.
4
Rule 54(d)(2)(B) of the Federal Rules of Civil Procedure governs motions for
attorneys’ fees. It states:
Unless otherwise provided by statute or order of the court, the
motion must be filed no later than 14 days after entry of
judgment; must specify the judgment and the statute, rule, or
other grounds entitling the moving party to the award; and
must state the amount or provide a fair estimate of the amount
sought. If directed by the court, the motion shall also disclose
the terms of any agreement with respect to fees to be paid for
the services for which claim is made.
Greco argues that because Bernback filed his motion for additional fees far more
than 14 days after the initial entry of judgment on the jury verdict, his motion is untimely.
This argument fails because the relevant event for purposes of a motion for supplemental
fees is the entry of the judgment that required the prevailing party to incur the additional
fees. “Judgment” in Rule 54 is defined as “a decree and any order from which an appeal
lies.” Fed. R. Civ. P. 54(a). Thus, when a party is entitled to additional fees for
successfully opposing post-judgment motions, the fee application should be filed within
14 days of entry of denial of those motions, not within 14 days of the initial entry of
jugment. Weyant v. Okst, 198 F.3d 311, 315-16 (2d Cir. 1999). Following this logic,
when a party is entitled to additional fees for successfully opposing an appeal, the
relevant date is the date on which the appellate court enters judgment affirming the
district court.
The relevant events for purposes of Bernback’s application for additional fees
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were the entry of our Court’s affirmance in Bernback I, our denial of the petition for
rehearing, and the entry of the Supreme Court’s denial of the petition for certiorari.
Those dates were July 11, 2003, August 13, 2003, and February 26, 2004, respectively.
Bernback filed his application for additional fees on March 5, 2004, within 14 days of the
Supreme Court’s denial of certiorari but not within 14 days of the other two events.
Responding to an appeal does not relieve the prevailing party at trial of the obligation of
applying for attorneys’ fees in a timely manner because the rules stipulate that the motion
should be filed within 14 days of the district court entering “any order from which an
appeal lies.” Fed. R. Civ. P. 54(a); see also United Indus., Inc. v. Simon-Hartley, Ltd., 91
F.3d 762, 765-66 (5th Cir. 1996). Similarly, evaluating a petition for certiorari does not
relieve a party successfully opposing an appeal from applying for additional fees in a
timely manner, for an affirmance from a court of appeals is also a final order, subject only
to the discretionary grant of a writ of certiorari. Thus, Bernback’s motion was only
timely as to the fees and expenses incurred as a result of the certiorari process.
We do not end here, as the timeliness issue is complicated by the fact that the
District Judge granted Bernback leave to file his supplemental fee application out of time,
which, under Rule 54(d)(2)(B), the Court may do. The Court’s discretion, however, is not
unfettered. To extend filing times after they elapse, a district judge must find “excusable
neglect.” Fed. R. Civ. P. 6(b); see also Allen v. Murph, 194 F.3d 722, 723-24 (6th Cir.
1999). The Supreme Court has held that the following four non-exclusive factors are
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relevant in determining whether a party’s neglect is excusable: (1) the danger of
prejudice, (2) the length and effect of the delay, (3) the reason for the delay, and (4)
whether the movant acted in good faith. Pioneer Inv. Servs. Co. v. Brunswick Assocs.
Ltd. P’ship, 507 U.S. 380, 395 (1993). While it is true that the Pioneer holding related to
excusable neglect in a different context, the Court stated that the bankruptcy rule that it
was interpreting was patterned after Federal Rule of Civil Procedure 6(b), id. at 391, and
so the Pioneer factors apply here.
In this case, the District Court did not address the standard for excusable neglect
directly, but it did give two reasons for granting leave: (1) no one was prejudiced, and (2)
Bernback could not predict at the time of the verdict how much future involvement the
case would require. While a more detailed discussion might have been more helpful,
given the facts of this case and our deferential standard of review, these reasons are
adequate here. Essentially, the Court commented on the prejudice factor and the reason
for delay, finding that both favored its granting leave. Greco did not allege bad faith, and
so that factor was irrelevant. Had the Court explicitly considered the length of the delay
and its effect on the litigation, it almost certainly would have concluded the same.
Bernback only delayed until the Supreme Court denied certiorari, and so the parties were
still actively litigating the matter when Bernback moved for additional fees. Thus, the
length of the delay was moderate and the effect on the litigation minimal. Given that no
Pioneer factor argues against granting leave to file the motion out of time, the Court was
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well within its discretion in so doing.
B. Was the award of $18,654.64 in additional fees reasonable?
Greco argues that even if the District Court properly considered Bernback’s
motion, its award was unreasonable. As an initial matter, we read the District Court’s
Order as awarding additional fees because Greco’s appeal forced Bernback’s attorneys to
continue working on the case, not because post-judgment interest accrued on the initial
judgment. The Court did, however, limit those additional fees to 40% of post-judgment
interest on the initial verdict in keeping with its previous order (which we affirmed).
Moreover, Bernback received no more than the Court believed was actually due under
Bernback’s and his attorneys’ fee agreement.
In determining the supplemental fee award, the District Court began with the
lodestar analysis that we have recommended. See Gulfstream III Assocs., Inc. v.
Gulfstream Aerospace Corp., 995 F.2d 414, 423 (3d Cir. 1993). The Court found a
lodestar of $27,200.00 in additional fees, and neither party challenges that result. The
Court then reiterated that it would award no more than it thought Bernback actually had to
pay under his fee agreement. Because post-judgment interest had accrued on the verdict,
the Court determined that Bernback’s attorneys were properly due 40% of that amount
under the agreement. Thus, the Court limited additional fees accordingly.
The Court did not award the whole 40% of post-judgment interest, however,
deciding to subtract from it an amount comprising 40% of the post-judgment interest that
8
Bernback had already received on the initial attorneys’ fee award. Bernback argues that
this illegally deprived him of mandatory post-judgment interest on the fee award. This
argument is unavailing. Bernback received the post-judgment interest he was then due in
February 2004. Nothing in the order before us purports to change that; rather, the Judge
merely took account of how much money Bernback had already received in fees in setting
an additional fee.3
“Where a district court has awarded attorneys’ fees under a valid contractual
authorization, we recognize that it has broad discretion in doing so, ‘and an award of such
fees may be set aside only for abuse of discretion.’” U.S. Fid. & Guar. Co. v. Braspetro
Oil Servs. Co., 369 F.3d 34, 74 (2d Cir. 2004) (quoting McGuire v. Russell Miller, Inc., 1
F.3d 1306, 1313 (2d Cir. 1993)). The District Court awarded a fee within a reasonable
range given a lodestar of $27,200. See Lindy Bros. Bldg., Inc. of Philadelphia v. Am.
Radiator & Standard Sanitary Corp., 540 F.2d 102, 115 (3d Cir. 1976) (“[D]iscretion is
abused only where no reasonable man would take the view adopted by the trial court.”).
Because the District Court awarded a reasonable additional fee, we affirm the amount and
reject both parties’ appeals.
3
The District Court’s calculation is a bit confusing because it subtracted the interest on
its initial fee award of $90,000 from the interest on the verdict of $225,000 and then
awarded 40% of that amount. If its goal was to avoid double counting the interest on the
initial fee award, then it should have subtracted the interest on the initial fee award from
40% of the interest on the verdict. Had the District Court done so—and it would have
been reasonable to do—Bernback would have received an even smaller supplemental
award. Thus, Bernback truly has nothing about which to complain.
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C. The Post-Judgment Interest Rate on Bernback’s Attorneys’ Fees
Bernback argues that the District Court improperly applied a post-judgment
interest rate of 1.97% to its initial award of attorneys’ fees. This issue is not properly
before us. Bernback appealed the District Court’s September 2005 Order, which says
nothing about the rate for calculating interest on attorneys’ fees. In fact, it appears from
the docket that the District Court decided this issue in a June 2005 Order marking the
attorneys’ fees award satisfied after Greco had paid interest at the rate that Bernback now
opposes. This was a final order, as it effectively ended litigation on the amount of interest
due on the judgments marked satisfied. See Berke v. Bloch, 242 F.3d 131, 134 (3d Cir.
2001). Had Bernback taken issue with the interest rate, he should have requested Rule 59
or 60 relief or appealed the order marking the judgment satisfied. Fed. R. Civ. P. 59 &
60; Fed. R. App. P. 3. He did none of these things and thus now cannot attack that order
collaterally in this proceeding.
IV. Conclusion
The propriety of the post-judgment interest rate on Bernback’s attorneys’ fees is
not properly before us; therefore, Bernback’s appeal on that issue is dismissed. The
District Court did not abuse its discretion in considering and ruling on Bernback’s motion
for supplemental fees. Thus, we affirm the Court’s Order as to those issues.
We note that because Bernback successfully opposed Greco’s appeal, he will
probably want additional fees for so doing. We, however, believe that unfair given that
10
Bernback also unsuccessfully appealed the order before us. Therefore, each party must
bear its own costs for these appeals, and no supplemental fees will be awarded.
We cannot help but observe that these are the parties’ third and fourth unsuccessful
appeals to our Court over a breach of contract claim worth $225,000. While we will
continue to decide appeals in this case as long as the parties bring them, 4 we note that the
amount in controversy is dwindling with each iteration. Attorneys’ fees, on the other
hand, continue to accrue on both sides. For their own sakes, “[t]he parties are advised to
chill.” Mattel, Inc. v. MCA Records, Inc., 296 F.3d 896, 908 (9th Cir. 2002) (Kozinski,
J.).
4
We remind the parties, however, that awards of attorneys’ fees are highly
discretionary, and appeals should only be taken when the aggrieved party has a plausible
argument for abuse. See Fed. R. App. P. 38.
11