KeyBank National Association v. Monolith Solar Associates LLC
1:19-cv-01562
N.D.N.Y.Sep 16, 2020Background
- KeyBank filed a foreclosure action against Monolith Solar Associates and related entities; Daniel Scouler was appointed receiver under Rule 66 to manage receivership assets on Dec. 20, 2019.
- Gary Hickok leased roof space at Gary's Garage to Monolith for a solar installation; Monolith defaulted on payments and Hickok denied the receiver access to the solar panels.
- Court issued an order to show cause; Hickok failed to respond and was held in civil contempt on July 22, 2020.
- Receiver sought recovery of attorneys' fees and costs incurred prosecuting the contempt (totaling $5,320.98 attributable to Hickok) and also sought payment from receivership funds for his counsel (NHK and GK).
- Hickok later appeared, moved under Rule 60(b) to vacate/purge the contempt (citing mistake, confusion, COVID-19, lease signatory issues), and the receiver opposed based on notice and prejudice to creditors.
- Court denied Hickok's Rule 60(b) motion without prejudice, ordered Hickok to reimburse $5,320.98 by Sept. 30, 2020, granted NHK's fee payment from receivership ($17,528.98), and denied GK's fee request without prejudice for failure to submit contemporaneous time records (leave to refile by Sept. 30).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether contempt order should be vacated under Rule 60(b) (excusable neglect) | Hickok: failure to comply was mistake/inadvertence/confusion (COVID, sale of garage, signatory confusion); he later complied before the purge deadline. | Receiver (and creditors): Hickok received notice, was served, contact rebuffed; his delay was within his control and prejudiced receivership/creditors. | Denied under Rule 60(b); Pioneer factors weighed against excusable neglect; denial without prejudice (may renew after payment of fees/damages). |
| Whether Hickok must reimburse receivership for attorneys' fees/costs spent prosecuting contempt | Hickok sought relief from fee amount but did not contest validity of the receiver's fee request. | Receiver: billed, detailed records support fee claim; reimbursement appropriate to protect receivership funds/creditor pool. | Granted: Hickok ordered to pay $5,320.98 by Sept. 30, 2020. |
| Whether receiver may pay Nolan Heller Kauffman LLP (NHK) from receivership funds | Receiver: NHK billed reasonable rates/hours with contemporaneous entries; total $17,528.98 requested. | No substantial opposition; rates previously approved by court. | Granted: Receiver may pay NHK $17,528.98 from receivership. |
| Whether receiver may pay Goldberger & Kremer (GK) fees from receivership | Receiver: GK billed partners at approved rates seeking $910 for 3.25 hours. | Court: GK failed to provide contemporaneous, itemized time records required for fee applications. | Denied without prejudice for lack of records; receiver may refile with records by Sept. 30. |
Key Cases Cited
- Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380 (1993) (articulates four-factor excusable-neglect test for relief under Rule 60(b)).
- Stevens v. Miller, 676 F.3d 62 (2d Cir. 2012) (Rule 60(b) relief is within district court's sound discretion).
- Scott v. City of New York, 626 F.3d 130 (2d Cir. 2010) (attorneys must ordinarily submit contemporaneous time records with fee applications).
- Am. All. Ins. Co. v. Eagle Ins. Co., 92 F.3d 57 (2d Cir. 1996) (default-judgment vacatur standard discussed as distinct test from Rule 60(b)).
- Stair v. Calhoun, 722 F. Supp. 2d 258 (E.D.N.Y. 2010) (criticizes block billing; discusses proper billing entries for fee review).