Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Pasternak v. Radek

April 24, 2008

WILLIAM PASTERNAK, MARGARET LASKOWSKI FOR THE ESTATE OF LEONARD LASKOWSKI, AND CAROL MOHEDANO, PLAINTIFFS,
v.
DENNIS R. RADEK AND EDWARD A. RADEK, JR., DEFENDANTS.



The opinion of the court was delivered by: Matthew F. Kennelly, District Judge

MEMORANDUM OPINION AND ORDER ON MOTION FOR RECONSIDERATION

Plaintiffs have moved for reconsideration of the Court's decision of April 3, 2008, in which the Court granted their petition for attorney's fees and costs, but awarded an amount significantly lower than plaintiffs had requested. For the reasons stated below, the Court denies plaintiffs' motion but clarifies its decision in certain respects.

Background

Plaintiffs settled claims against Dennis and Edward Radek, the owners of plaintiffs' former employer Ready Metal Manufacturing Company. They sued the Radeks under the Employment Retirement Income Security Act of 1974, 29 U.S.C. § 1132(e)(1), alleging that the Radeks had converted sums withheld from the plaintiffs' paychecks for medical insurance premiums and used them for other purposes rather than for medical insurance. As a result, the insurance premiums went unpaid for several months, leaving the plaintiffs without insurance coverage, unbeknownst to them. A few months later, Ready Metal closed its doors and assigned its assets for the benefit of creditors. Each of the three plaintiffs ended up getting stuck for significant medical bills they had incurred during the several months during which they were employed but lacked insurance coverage. The total of these bills was approximately $30,000.

Plaintiffs sued the Radeks under ERISA for breach of fiduciary duty. In the suit, they were represented by Clinton Krislov and Elizabeth Neugent Dixon of the law firm of Krislov & Associates (K&A). The Radeks answered the complaint by claiming that they had paid over far more to the insurer during the year in question than they had withheld from the employees' paychecks and that they could not have anticipated either the collapse of Ready Metal or the cancellation of the employees' insurance coverage.

At an early stage of the case, given the relatively modest amount of damages claimed, the Court referred the matter to a magistrate judge for the purpose of conducting a settlement conference. The conference did not produce a settlement. The Court thereafter held a status hearing to determine how to proceed. As best the Court can recall, counsel advised that the settlement conference had failed due to a dispute over about $11,000 of the $35,000 then claimed by plaintiffs as damages. Due to the modest amount in dispute, the Court determined to hold a second settlement conference and conducted the conference itself, in October 2007. After a mediation session in which counsel and all but one of the parties participated, the parties reached a settlement under which the plaintiffs would be paid $30,000, which appeared to satisfy all their medical-expense claims that should have been covered under Ready Metal's insurance plan, and the issue of attorney's fees would be submitted to the Court for its determination. The Court advised the parties that in briefing the matter of attorney's fees, the Court was opting out of Local Rule 54.3, based on its view that the sometimes cumbersome and time-consuming tasks contemplated under that Rule would only exacerbate what appeared to be a festering dispute over the amount of fees claimed, because it would increase the amount of work required by both sides' counsel.

Following the settlement, plaintiffs petitioned for attorney's fees. Plaintiffs sought attorney's fees of $129,735 and expenses of $2,604. The fee request was based on claimed hourly rates of $600 for Mr. Krislov, $350 for Ms. Dixon (a third-year associate at the relevant time) and $250 for Mr. Salas, another more junior associate; and $175 for various law clerks and paralegals. K&A submitted time records reflecting that Mr. Krislov had recorded about 55 hours of time working on the case, Ms. Dixon had recorded about 252 hours, Mr. Salas about 13 hours, and the various law clerks and paralegals a total of about 32 hours. Defendants objected to the fee petition, arguing that plaintiffs were not entitled to recover fees under ERISA, and they also objected to the amounts claimed on various grounds.

After the matter was fully briefed, the Court issued a written decision, dated April 3, 2008. The Court summarizes that decision briefly. First, the Court found that plaintiffs were entitled to fees under ERISA, rejecting defendants' contrary argument. Second, the Court found that K&A had failed to support the hourly rates it sought and instead awarded hourly rates of $400 for Mr. Krislov, $225 for Ms. Dixon, $150 for Mr. Salas, and $125 each for the law clerks. Third, the Court found that K&A had failed to show that the time it had spent on various tasks -- primarily 107 hours Ms. Dixon recorded for researching and preparing plaintiffs' complaint -- was reasonable, and it reduced that time by one-half. Fourth, the Court eliminated certain other time entries claimed by K&A because they concededly concerned clients who were not a part of the complaint in this lawsuit. Fifth, the Court eliminated or reduced other time entries on the ground that they were unreasonably duplicative, involved billing law clerk or paralegal time for clerical tasks, or were "block billing" entries that combined arguably compensable with plainly non-compensable time. Sixth, the Court found excessive the time charged by Mr. Krislov for preparing the fee petition. The result was that the Court allowed a total of a little over 39 hours for Mr. Krislov, just under 167 for Ms. Dixon, 6 for Mr. Salas, and about 19 for the law clerks. The total amount, at the reduced hourly rates the Court approved, was $56,574.50. The Court allowed plaintiffs' claim for expenses in full, a total of $2,604.

The Motion for Reconsideration

Plaintiffs (actually, K&A) make the following arguments in their motion for reconsideration:

1) K&A says that what it characterizes as "the Court's tone, clearly implying deficiencies in either Ms. Dixon's work, or the rates and hours, sought by the firm, is unfortunate." Motion at 1.

2) K&A says plaintiffs' complaints involved matters personally significant to them but "smaller than [K&A] would consider ordinarily for a case." Nonetheless, because Mr. Krislov "personally felt that what the Radeks had done was so offensive," the harm to the plaintiffs so unfortunate, and the likelihood of other firms taking the case on so slim, he decided to represent the plaintiffs. Id. at 1-3.

3) K&A argues that though the Court was "less than charitable" with Ms. Dixon, she devoted "exhaustive time" to the case. In the motion, K&A attempts to justify the amount of time that Ms. Dixon spent prior to the complaint -- one of the key matters addressed in the Court's April 3 decision. Mr. Krislov says that "[i]f it was error to submit all [Ms. Dixon's] time . . . , the 'discretion in billing' error was mine, and did not warrant the negative tones regarding Ms. Dixon's work." Id. at 3.

4) K&A argues that the Court erred in reducing the firm's claimed hourly rates. Id. at 4.

5) K&A argues that the Court failed to give consideration of the results ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.