United States District Court, M.D. Pennsylvania
October 20, 2005.
JEWELCOR INCORPORATED JEWELCOR JEWELERS AND DISTRIBUTORS, INC., and MARKETING OF JEWEL SERVICES, INC., Plaintiffs
MICHAEL KARFUNKEL and GEORGE KARFUNKEL, individually and as partners trading as M & G EQUITIES, a general partnership, and THE SALVATION ARMY, Defendants.
The opinion of the court was delivered by: WILLIAM NEALON JR., Senior District Judge
MEMORANDUM and ORDER
Presently before the court is a Motion for Attorneys' Fees
(Doc. 186)*fn1 filed by plaintiffs on April 8, 2005, with
supportive pleadings filed thereafter. (Docs. 192, 196-197).
After the parties submitted briefs as to the timeliness of the
motion, and plaintiffs alternatively moved for an extension of
time, on August 3, 2005, the court issued an order granting the
Motion for an extension of time, thereby rendering the motion for attorneys'
fees timely. (Doc. 203). Defendants subsequently filed a brief in
opposition on August 18, 2005 (Doc. 205), to which Plaintiff
filed a Reply on September 9, 2005. (Doc. 209). The motion is now
ripe for disposition and, for the reasons set forth below, will
This civil matter involved a commercial lease between Plaintiff
Jewelcor, the lessee, and Defendant M& G Equities, the lessor.
Litigation of the rights and obligations under the lease has been
ongoing since 1991, and has proceeded in this court, the United
States Bankruptcy Court for the Middle District of Pennsylvania
and the Court of Appeals for the Third Circuit. The instant
matter was initiated in this court on July 16, 1999, when
Jewelcor filed a complaint alleging, inter alia, that it had
been evicted from the leased premises by M & G and suffered
monetary damages as a result of the eviction. (Doc. 1). In
addition to denying Jewelcor's claims for damages, M & G
submitted a counterclaim alleging that Jewelcor defaulted under
an obligation in the lease requiring the lessee to make extensive
repairs to the roof of the leased building. (Doc. 27). After adjudicating dispositive motions by both parties, a
non-jury trial was held in November, 2004. On March 22, 2005, the
court concluded that Jewelcor was entitled to damages for M & G's
breach of the lease consisting of the difference between the fair
rental value of the leasehold, less rent due under the lease, for
the period of time that Jewelcor was dispossessed of the
leasehold. It was further determined that M & G was not entitled
to recover on its counterclaim seeking reimbursement for having
replaced the roof. Accordingly, judgment was entered in the
amount of $448,602.99 in favor of Jewelcor on Count I of its
complaint, and against M & G on its counterclaim.
Subsequently, on April 8, 2005, Plaintiff filed a Motion for
Attorneys' Fees, Interest and Costs pursuant to Rules 54(d) and
59(e), (Doc. 186), which Defendants opposed as untimely inasmuch
as it was not filed within fourteen (14) days. (Doc. 187).
Plaintiffs thereafter amended their pleading on April 19, 2005,
to a Motion for an Extension of Time pursuant to Rule 6(b) and
for Relief from Judgment under Rule 60(a). (Doc. 189). Following
briefing on all issues, the court granted plaintiffs' motion for
an extension of time with respect to attorneys' fees, but denied
it as to prejudgment interest concluding it lacked jurisdiction
over the latter and denied relief. DISCUSSION
Federal Rule of Civil Procedure 54(d) provides as follows:
(2) Attorneys' Fees
(A) Claims for attorneys' fees and related nontaxable
expenses shall be made by motion unless the
substantive law governing the action provides for the
recovery of such fees as an element of damages to be
proved at trial.
(B) 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.
Fed.R.Civ.P. 54(d)(2). The terms of the underlying Lease in
this case provide for recovery of attorneys' fees which were to
be tendered within five (5) days of the prevailing party's
submission of its bill.*fn2
Lease, pp. 34-35. Defendants opposed Plaintiffs' motion by contending that it was
filed on April 8, 2005, seventeen (17) days after judgment was
entered and, therefore, was untimely under Fed.R.Civ.P.
54(d)(2)(B) which requires filing the motion fourteen (14) days
after judgment. Subsequently, after full briefing, on August 3,
2005, the court granted additional time for Plaintiffs to file
the motion and, thus, it was timely.
Additionally, Defendants argue that, because the lease had a
specific provision regarding attorneys' fees, under Fed.R.Civ.P.
54(d)(2)(A), the Plaintiffs were obligated to prove the fees as
an element of damages at trial. In support, Defendants cite
Paragraph (2) of the Advisory Committee Notes to the 1993
amendments interpreting Rule 54 (d)(2)(A), which states:
Paragraph (2). This new paragraph establishes a
procedure for presenting claims for attorneys' fees,
whether or not denominated as "costs." It applies
also to requests for reimbursement of expenses, not
taxable as costs, when recoverable under governing
law incident to the award of fees. Cf. West
Virginia Univ. Hosp. v. Casey, ___ U.S. ___ (1991),
holding, prior to the Civil Rights Act of 1991, that
expert witness fees were not recoverable under
42 U.S.C. § 1988. As noted in subparagraph (A), it does
not, however, apply to fees recoverable as an element
of damages, as when sought under the terms of a
contract; such damages typically are to be claimed in
a pleading and may involve issues to be resolved by a jury. Nor,
as provided in subparagraph (E), does it apply to
awards of fees as sanctions authorized or mandated
under these rules or under 28 U.S.C. § 1927.
This contention was answered and rejected in Kripplebauer v.
Celotex Corp., 2004 U.S. Dist. LEXIS 23998 (M.D. Pa. November 2,
2004) (Conaboy, J.), with the following reasoning:
This statutory and committee note cannot be read to
mean that any time recovery of attorneys' fees are
sought pursuant to the terms of a contract, the
amount of damages must be presented to a jury.
Significantly, the committee note uses the words
`typically' and `may.' The choice of these permissive
modifiers indicates that when fees are sought under
the terms of a contract there are atypical cases in
which the amount of fees are not sought in a pleading
and/or the case does not involve issues for a jury to
resolve . . . [.] Nothing in the statutory provision
or notes precludes the recovery of attorneys' fees
through the procedure used in this case. [The] cited
cases at most support that it is within a court's
discretion to put the award of contractually based
attorneys' fees and expenses to the jury, and that
some courts in Pennsylvania have implied in facts
distinguishable from the case at bar that contractual
attorneys' fees are an element of damages to be
proved at trial. These cases do not indicate that the
Court's procedural determination regarding attorneys'
fees is improper.
id. at 16-17. Moreover, the language of the lease supports Judge Conaboy's
analysis. It states "[a]ll such amounts due under this
sub-paragraph (k) shall be paid within five (5) days of the
rendition of a bill or statement therefor." This provision
contemplates the computation of attorneys' fees and costs by the
prevailing party and submission of the bill to the losing party
who must make payment within five (5) days. The "rendition of a
bill or statement" must necessarily await a judgment that
identifies the prevailing party.
Consequently, it is concluded that the claim for attorneys'
fees need not have been presented in Plaintiffs' case in
Defendants also maintain that Plaintiffs are foreclosed from
seeking attorneys' fees because the claim was not specifically
pleaded as required under Fed.R.Civ.P. 9(g). The purpose for
requiring such a pleading is to put the opposing party on notice
that such fees are being sought in order to avoid surprise should
a later claim be made. In this case, Defendants received ample
notice of the potential claim through Plaintiff's Pretrial
Memorandum as well as other pleadings, documents, and testimony.
Furthermore, the contract itself provided notice that the
prevailing party would be entitled to counsel fees after submitting the claim post-trial to the losing party.
This objection will be overruled.
Finally, Defendants challenge the Plaintiffs' claim for fees
commencing on January 3, 1995, four and a half years before this
Counsel for the parties will be directed to meet and confer
personally in an attempt to reach stipulations on the issue of
counsel fees and then advise the court no later than November 1,
2005, as to unresolved matters that will require a hearing.
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