October 9, 2023
A recent Law 360 story by Emilie Ruscoe, “Conn. Defendants Slams $3M Atty Fee Bid as Late, ‘Excessive’”, reports that two defendants on the hook for $6.75 million in damages for duping a Delaware company into an investment scheme have pushed back against the more than $3 million in fees and expenses requested by the investor's counsel, telling a Connecticut state judge that certain fee-related filings were untimely and that other requests were made for work that didn't have to do with the state court claims. In an objection, Dean S. Barr and Joseph E. Meehan told Judge Sheila A. Ozalis that the plaintiff's counsel shouldn't get the nearly $3.1 million in legal fees and more than $210,000 in costs it sought last month.
The fee request came after Judge Ozalis determined after a nine-day bench trial that Barr and Meehan were jointly and severally liable for costing FIH LLC of Delaware millions of dollars by fraudulently enticing investments in Foundation Capital Partners LLC. She ruled that the two men owed $6.75 million in damages over the negligent misrepresentation and intentional fraudulent misrepresentation counts and claims arising from Connecticut's Uniform Securities Act and Unfair Trade Practices Act.
In objecting to the subsequent fee motion, Barr and Meehan said that FIH sought fees and costs for five law firms involved in its representation, but submitted affidavits describing the basis of the requests for only three of those firms, Wiggin and Dana LLP, Phillips Nizer LLP and Epstein Becker & Green PC, by the Sept. 29 deadline. The other two firms, Cozen O'Connor and Sadis & Goldberg LLP, "are in the process of preparing affidavits to support this attorneys' fees motion," FIH said in its filing, according to the objection. The supplemental affidavits were filed Oct. 4, the objection said.
Barr and Meehan said any fee request for Cozen O'Connor and Sadis & Goldberg LLP should be rejected because the deadline for submitting those affidavits had been "clear and unambiguous" and that no extension was either requested or granted. "FIH had more than enough notice, time and incentive to provide documentation for these fees," Barr and Meehan said. The defendants also asserted that the requested fees were "unreasonable and excessive" because they "inappropriately encompass" FIH's separate litigation of its securities claims in federal district court and its appeal to the Second Circuit.
Over $1 million of the fees sought arose only from the federal litigation, the defendants said, and those fees "were clearly not incurred in connection" with the litigation alleging violations of Connecticut's Uniform Securities Act. The defendants cited the example of the fees requested for FIH's appeal of a summary judgment order in favor of the defendants, noting that the appeal explicitly did not include FIH's state law claims.
And even before its appeal, "by its own admission, the time and costs spent litigating the federal trial were unrelated to FIH's [Connecticut's Uniform Securities Act] claim brought under Connecticut state law," the defendants said. Barr and Meehan also highlighted that FIH hadn't prevailed in the federal trial, telling the court that "its lack of success on those claims must be taken into account" in calculating fees and costs.
The defendants also argued that nothing in the fee motion or supporting filings showed that the time counsel spent on various proceedings was reasonable. "None of the affidavits filed offer any detailed descriptions attributing time to work performed," they said. In its fee motion, FIH said that it "should be allowed to recover the fees and costs it was forced to expend in its nearly decade-long efforts to recover the $6.75 million that it invested in Foundation Capital Partners based on Dean S. Barr and Joseph E. Meehan's lies and material omissions." FIH referred the court to a lengthy litigation history in support of its fee requests, noting various claims against the company it brought in state court and a federal district court action that twice was appealed to the Second Circuit.