Roundpoint Mortgage Servicing Corporation v. Five Brothers Mortgage Company Services and Securing, Inc., 3:15-cv-00559

Background

RoundPoint (mortgage servicer) contracted with Five Brothers (property preservation vendor) under a Tri‑Party Field Services Agreement containing a broad indemnity in favor of RoundPoint and 24 Asset.
In 2013 Annette Hayes sued SHCU (loan owner), RoundPoint, Five Brothers, and a Five Brothers agent (Stuart) asserting 19 causes of action arising from foreclosure and two alleged trespasses/lockouts.
After motions and summary judgment, only a trespass claim based on the March 17, 2013 visit (and related claims) remained; the Hayes case ultimately settled for $15,500 (RoundPoint/SHCU paid $5,500).
RoundPoint incurred $381,403.16 in legal fees defending Hayes; Five Brothers incurred ~$54,824 defending itself. RoundPoint demanded indemnification from Five Brothers for its fees and settlement contribution; Five Brothers refused.
Court previously held as a matter of law that Five Brothers must indemnify RoundPoint for fees defending Causes of Action 6–19 and certain other claims; the reasonableness and amount of fees were reserved for trial.
After a two‑day bench trial, the court applied New York contract principles and the lodestar method, concluding Five Brothers must indemnify RoundPoint $153,107.16 (fees + costs + $5,000 allocation of settlement).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Scope of indemnity clause — whether it covers all fees RoundPoint incurred in Hayes	RoundPoint: broad indemnity covers all fees because Hayes litigation grew out of Five Brothers’ trespasses	Five Brothers: indemnity limited by its plain terms; does not cover claims unrelated to Five Brothers or fees for non‑parties (SHCU) or separate foreclosure action	Court: indemnity is unambiguous but limited by plain language; covers defense of claims arising from Five Brothers (Causes 6–19) and the 4th cause (breach/implied covenant) insofar as it alleges trespass/lockouts; excludes Causes 1–3, 5, SHCU’s defense, and foreclosure proceeding fees
Whether RoundPoint can recover fees incurred defending SHCU	RoundPoint: RoundPoint paid SHCU’s defense costs and should be reimbursed under indemnity	Five Brothers: SHCU is not an indemnitee under the contract; clause lists covered parties and does not include SHCU	Court: denied; SHCU not covered and RoundPoint’s attempt to read it in is impermissible under plain meaning
Whether fees related to the separate foreclosure proceeding are indemnifiable	RoundPoint: foreclosure‑related costs were part of the same litigation strategy and should be covered	Five Brothers: foreclosure action predated the contract and was unrelated to Five Brothers’ services	Court: denied; foreclosure was a separate proceeding outside the Contract’s scope
Reasonableness and amount of attorneys’ fees recoverable	RoundPoint: billed $381,403.16; Hunoval firm’s rates and hours were reasonable	Five Brothers: fees are excessive, duplicative, and reflect padding; should be substantially reduced	Court: applied lodestar; reduced billed hours from 1,900 to 400, accepted $265/hr, added 25% for lead counsel, awarded $132,500 in fees + $15,607.16 costs + $5,000 settlement share = $153,107.16

Key Cases Cited

Greenfield v. Philles Records, 98 N.Y.2d 562 (N.Y. 2002) (clear, unambiguous written agreements are enforced according to plain meaning)
Levine v. Shell Oil Co., 269 N.E.2d 799 (N.Y. 1971) (broad indemnity language can encompass indemnitee’s active negligence when plain words plainly include it)
Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (lodestar method: reasonable hours × reasonable rate to determine fee awards)
Gierlinger v. Gleason, 160 F.3d 858 (2d Cir. 1998) (trial court may rely on its familiarity with the case in assessing reasonable fees)
United States Football League v. National Football League, 887 F.2d 408 (2d Cir. 1989) (attorney’s fees include reasonable out‑of‑pocket expenses ordinarily charged to clients)