BENNETT v. ITOCHU INTERNATIONAL INC.
2:09-cv-01819
| E.D. Pa. | Oct 4, 2013Background
- Consolidated civil actions arising from ITOCHU’s loan and guaranty disputes with Devon Robotics, DHS, and Bennett related to a $4 million loan and a $5 million guaranty.
- Judgment proceedings culminated in a jury verdict for Medsurg against Devon, and a final judgment in favor of Plaintiffs against Defendants on the loan/guaranty claims.
- Defendants moved to amend/correct the judgment; Plaintiffs opposed certain aspects but later motions were resolved.
- Court awarded prejudgment interest on Medsurg’s jury award and interest on the loan/guaranty amounts, and ordered attorneys’ fees and costs under the contractual provisions.
- New York law governs fee-shifting under the contracts, and the court applied lodestar principles to determine reasonable fees in this contract context.
- Final disposition closes all claims in Cases 2:09-cv-01819 and 2:09-cv-04123, subject to defined amounts for interest, fees, and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Medsurg is entitled to prejudgment interest on the jury award | Medsurg seeks prejudgment interest per 41 Pa. Stat. Ann. § 202 despite MDA | Medsurg’s interest may be waived by contract | Yes; prejudgment interest awarded to Medsurg |
| Whether interest accrues on the loan and Guaranty amounts | Interest should accrue under the Loan and Guaranty | Interest should be awarded as specified in the agreements | Yes; interest awarded on both loan and guaranty amounts |
| Whether ITOCHU is entitled to attorneys’ fees and costs | Contractual fee-shifting allows recovery of reasonable fees and costs | Fees should reflect reasonableness and relation to the loan/guaranty litigation | Yes; fees awarded in reduced amount after detailed Reasonableness review |
| What standard applies to calculating reasonable fees under the contracts | Lodestar method should be applied | Contract law governs; lodestar is appropriate in NY law context | Lodestar principles applied; fees reduced to $561,367.71 and $65,834.32 costs |
Key Cases Cited
- Travelers Cas. & Sur. Co. v. Ins. Co. of N. Am., 609 F.3d 143 (3d Cir. 2010) (prejudgment interest available as matter of right in contract actions)
- TruServ Corp. v. Morgan’s Tool & Supply Co., 39 A.3d 253 (Pa. 2012) (Restatement § 354 and prejudgment interest under Pennsylvania law)
- F.H. Krear & Co. v. Nineteen Named Trustees, 810 F.2d 1250 (2d Cir. 1987) (reasonableness and extent of attorneys’ fees in contract actions; lodestar context)
- Bankers Fed. Sav. Bank FSB v. Off Broadway Developers, 224 A.D.2d 376 (N.Y. App. Div. 1996) (guidance on evaluating necessity and reasonableness of fees; duplicative work reducción)
- Parks Real Estate Purchasing Grp. v. St. Paul Fire & Marine Ins. Co., 472 F.3d 33 (2d Cir. 2006) (contractual fee provisions and reasonableness considerations in fee awards)