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Pasternack v. Klein

United States District Court, E.D. Pennsylvania

October 17, 2017

ALLA PASTERNACK, Executrix of the Estate of Leon Frenkel, Plaintiff,
v.
BRUCE K. KLEIN, et al., Defendants.

          MEMORANDUM

          Schiller, J.

         Plaintiff Alla Pasternack, Executrix of the Estate of Leon Frenkel, seeks an award of attorneys' fees and costs in the amount of $197, 170.53 following the entry of a judgment in Plaintiff's favor on July 24, 2017. For the following reasons, the Court will award counsel $135, 528.68.

         I. BACKGROUND

         On April 18, 2014, Leon Frenkel sued Bruce Klein and Victory Partners LLC (“Defendants”) for breach of contract related to two promissory notes.[1] On August 11, 2014, after Defendants failed to appear, the Court entered a default judgment in favor of Plaintiff. On October 30, 2015, Defendants challenged the sufficiency of Plaintiff's service of the Complaint and moved to set aside the default judgment. After a period of discovery on the issue of service, the Court set aside the default judgment on March 21, 2016, and denied Plaintiff's motion for reconsideration the following month.

         In December 2016, the Court granted partial summary judgment to Plaintiff, finding that Victory Partners LLC breached the Note. On July 24, 2017, following a bench trial conducted on January 9, 2017, this Court found that Defendants breached the Pledge Agreement and pierced the corporate veil of Victory Partners LLC. The Court awarded Frenkel's estate $318, 744.01. Defendants appealed. Pursuant to the Court's Order, the issue of attorneys' fees remains.

         Both the Victory Partners LLC Note and Pledge Agreement contain attorneys' fee clauses. The Note states:

Borrower shall pay all costs of collection incurred by Lender, including without limitation, the reasonable attorney's fees and disbursements of Lender's legal representative, which costs may be added to the indebtedness and shall be paid promptly on demand, together with all outstanding amounts due to Lender with interest thereon at the Default rate.

         (Pet., Ex. A ¶ 7, ECF. No. 103.) The Pledge Agreement states:

The parties hereto agree that Pledgor will upon demand pay to Holder the amount of any and all reasonable expenses, including the reasonable fees and expenses of counsel which Holder may incur in connection with (i) the sale of, or realization upon, any of the Collateral, or (ii) the exercise or enforcement of any of the rights of Holder hereunder.

(Id., Ex. B. ¶ 5.)

         The Note is governed by Pennsylvania law and the Pledge Agreement is governed by New York law. (Id., Ex. A ¶ 4; id., Ex. B ¶ 11.)

         II. DISCUSSION

         A. Choice of Law

         Although Plaintiff sued to enforce his rights under both the Note and Pledge Agreement, which call for the application of Pennsylvania and New York law, respectively, this Court ...


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