Appendix — Bernback v. Greco

la

UNITED STATES COURT OF APPEALS FOR THE

THIRD CIRCUIT

No. 04-2494

MICHAEL L. BERNBACK,

PLAINTIFF-APPELLANT,

Vv.

TIKOMAS GRECO, INDIVIDUALLY AND AS PRESIDENT OF

HARVEY’S LAKE AMPHITHEATER, INC.,

DEFENDANT-APPELLEE.

Submitted: March 7, 2005

Opinion Filed: March 30, 2005

Appeal from the United States District Court for the Middle

District of Pennsylvania. (D.C. Civ. No. 98-00230).

Honorable A. Richard Caputo, District Judge.

Before SCIRICA, Chief Judge, and ROTH and

GREENBERG, Circuit Judges.

OPINION

GREENBERG, Circuit Judge.

This matter comes on before this court on an appeal from

an order entered April 29, 2004, in accordance with a

memorandum opinion of the district court of that day.

Inasmuch as we are writing only for the parties who, of

course, are familiar with this case, we need not set forth its

facts or procedural history. The issue in this case is quite

simple and is stated fairly by Michael L. Bernback, the

appellant: whether interest on an award of attorneys fees and

2a

expenses accrues from the date of the original judgment on a

jury verdict entitling a party to attorneys fee and expenses, in

this case November 6, 2000, or, as the appellee Thomas

Greco argues, from the time when a judgment was entered on

the award of attorneys fees and expenses after they were

quantified, in this case, July 29, 2002. The district court

selected the later date and Bernback has appealed.

The district court exercised diversity of citizenship

jurisdiction under 28 U.S.C. § 1332 and we exercise

jurisdiction under 28 U.S.C. § 1291. We exercise plenary

review as the question is purely of law. Tudor Dev. Group,

Inc. v. United States Fid. & Guar. Co., 968 F.2d 357, 359 (3d

Cir. 1992).

We will affirm as our result is controlled by our opinion

in Eaves v. County of Cape May, 239 F.3d 527, 542 (3d Cir.

2001). Bernback’s brief, which argues for interest from the

earlier date and cites precedent from other courts of appeal in

support of this contention, necessarily is of no avail as it is

dependent on his assertion that we “wrongly followed the so-

called minority view,” appellant’s br. at 17, in reaching our

result in Eaves. Of course, we as a panel must reject

Bernback’s contention as Eaves binds us. Third Circuit IOP

9.1.

The order of April 29, 2004, will be affirmed.

3a

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

MICHAEL L. BERNBACK,

Plaintiff,

VS. : CIVIL ACTION NO.

3:98-CV-0230

THOMAS GRECO, ;

Individually and as President : (JUDGE CAPUTO)

of Harvey’s Lake

Amphitheater, Inc.,

Defendant.

MEMORANDUM

This matter presents the interesting question as to

whether the prevailing party who has been awarded legal fees

is limited to interest on the awarded fees or whether the

prevailing party may recover additional attorney fees on the

interest accrued and paid on the judgment itself. The issue is

presented because in awarding attorney fees in the first

instance, I found any fees were capped to the Plaintiff’s

agreement with his lawyer. The documents authorizing fees

to the Plaintiff spoke of collecting from Defendant the actual

fees incurred by the Plaintiff. At the same time, Plaintiff’s

fee agreement with his counsel limited his fees to 40%. The

relevant provisions are as follows:

2. I (we) agree to pay Angina & Rovner, P.C. any

out-of-pocket expenses they incur to secure records,

_ expert etc., plus a contingent fee that is totally

dependant upon their obtaining monies for me (us)

as follows...

(c) Settlement or verdict at trial, or

arbitration, after trial, arbitration, or

4a

appeals or shortly before trial, and

after this case has been totally

prepared — 40%

(d) If no-fault recovery or non-

monetary benefit — RCA ($500);

NJR ($450); others ($400) per hour

but not to exceed 40% of the total

recovery of value of benefit.

(Power of Attorney and Fee Agreement, Doc. 270, Ex. A at §

2(c)(d)) (emphasis added).

By his Motion for Interest, Attorney’s Fees and Expenses

(Doc. 302), Plaintiff seeks to recover 40% of the interest

which was paid on the judgment. In addition, Plaintiff seeks

interest on the attorney’s fees already awarded, and he seeks

the interest from the day I determined the fees were due, not

from the day they were quantified.

The interest on the attorney’s fees already awarded in the

amount of $90,000 began to run on July 29, 2002, the day

judgment was entered on the amount of fees. This is

governed by Eaves v. County of Cape May, 239 F.3d 527 (3d

Cir. 2001) where the court held that post judgment interest on

an attorney’s fee award runs from the date the award is

quantified, viz the date there is a “money judgment” under 28

"U.S.C. § 1961(a). /d. at 527. Therefore, interest on the award

of counsel fees and of course the expenses awarded

($162,748.62) begins to run July 29, 2002, the date the

judgment for the amount of the fees was entered. The amount

of interest owed is therefore $54,935.78.

As noted, Plaintiff also seeks additional fees for services

rendered in connection with a post trial appeal to the United

States Court of Appeals for the Third Circuit, opposing a

petition for a writ of certiorari to the United States Supreme

Court, and various other matters requiring the performance of

legal services.

Sa

In deciding the entitlement and amount of fees on the

Plaintiff's original petition for fees and expenses, I did a

lodestar analysis, and determined the amount yielded in the

lodestar analysis was limited by the agreement which Plaintiff

had with his counsel, since the documents providing for fees

and costs to the prevailing party authorized “actual attorney’s

fees incurred, court costs, and other litigation related

expenses.” (See Memorandum of May 20, 2002 at p. 6.) The

fee agreement between the Plaintiff and counsel provided for

a contingent fee of 40% in the event of “settlement or verdict

at trial... or appeals . . . and after the case had been totally

prepared.” (/d. at p. 15.)

Now I am confronted with the Plaintiff's claim for

additional fees performed for proceedings post judgment, viz

appeal to the United States Court of Appeals for the Third

Circuit and petitions for writ of certiorari to the United States

Supreme Court. This represents a period of November 9,

2002 to the present. Plaintiffs have not yet provided the

number of hours of services provided during this period.

Plaintiff should submit evidence of those services, and |

will undertake to determine the amount of fees to which

Plaintiff is entitled. After I do a lodestar analysis respecting

the additional legal services, | will determine the amount of

fees due taking into account the fee agreement.

Therefore, Plaintiff will submit his evidence of fees and

expenses for the period since November 20, 2002, together

with a brief, within thirty (30) days and the Defendant shall

have thirty (30) days to file opposing evidence and a brief.

An appropriate order follows.

Date : April 24, 2004

A. Richard Caputo

United States District Judge

Supreme Court, US,

FILED

No. 05-19 SEP 3 1 25

Su The i

Supreme Court of the Anited States

--——-

MICHAEL L. BERNBACK,

Petitioner,

Vv.

THOMAS GRECO, Individually and as

President of Harvey’s Lake Amphitheater, Inc.,

Respondent.

&

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Third Circuit

2

Vv

BRIEF OF RESPONDENT IN OPPOSITION

TO PETITION FOR WRIT OF CERTIORARI

&

Vv

JOSEPH M. COSGROVE

Counsel of Record

1460 Wyoming Avenue

Forty Fort, PA 18704

(570) 287-0921

Attorney for Respondent

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED

Whether the Court should decline to review an unpub-

lished decision of the U.S. Court of Appeals for the Third

Circuit affirming the district court’s determination of the

date from which interest on a judgment for attorney’s fees

accrues under 28 U.S.C. 1961(a), when, unlike cases from

other circuits interpreting sec. 1961(a), the district court’s

assessment of attorney's fees in this case was based upon

private contracts between the parties as well as a compli-

cated fee agreement between petitioner and counsel, and

was not otherwise specifically provided for by statute or

other provision of law.

li

CORPORATE DISCLOSURE STATEMENT

Respondent, Thomas Greco, was the sole shareholder

of Harvey's Lake Amphitheater, Inc. Through the Stock

Purchase Agreement at issue in this case, petitioner

acquired “a 50% interest in Harvey's Lake Amphitheater,

subject to certain conditions.” Bernback v. Greco, No. 02-

2742, 69 Fed.Appx. 98, 101 (CA3 July 11, 2003). Respon-

dent appears in this matter individually, and as President

of Harvey’s Lake Amphitheater, Inc.

ill

TABLE OF CONTENTS

Page

QUESTION PRESENT i sccs i cssisciieisdensssevisevssseses i

CORPORATE DISCLOSURE STATEMENT ............. il

COUNTER-STATEMENT OF THE CASE................. 1

REASONS FOR DENYING THE WRIT.................... 3

A. Since the attorney’s fees awarded in this case

were based on the district court’s interpreta-

tion of complicated private contracts and not

on statutory or other provisions of law (as in

the cases cited by petitioner as representing

a “recurring circuit conflict”), the factual

complexity of this case makes it an inappro-

priate vehicle for consideration of the ques-

tion presented by petitioner ........................085

RERPNG RIA ISIN IER iota cs socks ba ok ia Seas e aks Geineepnaueeanees

1V

TABLE OF AUTHORITIES

Page

CASES:

Associated General Contractors of Ohio, Inc. v.

DraGik 256 Fae 482 (CAG 200K) oo: oii ai eaveaneseet 4

BankAtlantic vu. Blythe Eastman Paine Webber, Inc.,

pe ea” G7 OSS Se oo: | 9 Sane ae ane apni IE eee RP Vern Py ‘

Bernback v. Greco, No. 02-2742, 69 Fed.Appx. 98

(CA3 July 11, 2003), cert. denied, 540 U.S. 1185

SUN ad asa che cs sad can osviasay avd sks oddaia ee

Copper Liquor, Inc. v. Adolph Coors Co., 701 F.2d

Ot aos ccs Sassia ss ss natsapansisieusccseuasendel 4,5

Eaves v. County of Cape May, 239 F.3d 527 (CA3

| 8 8 SEGRE OSES Peso ety peo ean pk ot herent ng ae CN 2,4, 6

Fleming v. County of Kane, 898 F.2d 553 (CA7

C+ | SSRUNG SRUSEASS HS eed See Ai CO RPE EDC EEO SB RIE GREED or? 4

Friend v. Kolodzieczak, 72 F.3d 1386 (CA9 1995),

cert: denied. SiG U.S. 1146 (1906) «o.oo ccs aonsccccitecsscnenenes 4

Jenkins v. Missouri, 931 F.2d 1273 (CA8 1991)....0..00000000... 4

Kaiser Aluminum & Chemical Corp. v. Bonjorno,

494 U.S. 827, 110 S.Ct. 1570, 108 L.Ed.2d 842

MRR geile ok eckcsesonchk exdets ionon dec cdiGuaoseassacaemiphabetnel 3

Aing v. JCS Enterprises, Inc., 325 F.Supp.2d 162

RIN ics coded a dichsas Anica Riaandcccondescaacoberneodadial 5

Mathis v. Spears, 857 F.2d 749 (CAFC 1988).........00.......... 4

MidAmerica Federal Savings & Loan Association v.

Shearson/American Express, Inc., 962 F.2d 1470

ON BRE oie ap cdr <u conacds eosdeacakades sncsaveasigsuadincboanmeed 4,5

U.S. v. Metropolitan Dist. Com’n, 847 F.2d 12 (CA1

1966) .2.05..; Sia tapicea Natick ies PiGdsai pei Cas ccaccnds chads Seach eubaneh ea 6

TABLE OF AUTHORITIES — Continued

Page

STATUTES:

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ee PIG RN ieee bs ions sks a scaschod.cacsdsscicesscshcc: 2, 3, 4,5

PP Masia tstthasdababvchcisicecacnescxeschpdsisceisonsbsedastedendbcsacs 4

Nhs iirc wriditiadinisadlsdedeainiondessdanearscbiancvosecauaceaiooes 4

LS EE RES URES SE Ree a Ae SR RAEN EOP R IT 4

a PER asic Sco cia is wate aPaeohs dn chdsahans cackenasiaatoonc 5

RULES AND REGULATIONS:

EIS Ss te ERR ey ld BRM RO MBL Bog 1

a 4

COUNTER-STATEMENT OF THE CASE

The underlying facts of this case reflect a complicated

business relationship between petitioner and respondent

manifested in several agreements between them individu-

ally as well as through the entity known as Harvey’s Lake

Amphitheater, Inc (“HLAI”). Although HLAI was formed

in 1992 to construct an outdoor concert arena near the

popular Pocono Mountain recreation area of Pennsylvania,

the relationship between petitioner and respondent had so

deteriorated by 1996 that a series of legal struggles scon

commenced. Bernback v. Greco, No. 02-2742, 69 Fed.Appx.

98, 101 (CA3 July 11, 2003). The pending petition is

merely the most recent salvo in this long and combative

process. In fact, this is not the first time this Court has

reviewed a petition for writ of certiorari regarding these

parties. In 2004, certiorari was denied on respondent’s

petition seeking review of the Third Circuit’s affirmation

of the district court’s permission to amend petitioner’s

complaint in the midst of trial, despite the admonitions of

-Rule 15, Fed.R.Civ.P. Bernback, supra, cert. denied, 540

U.S. 1185 (2004). .

Now, it is petitioner who is unhappy with a lower

court’s determination of an issue important to him,

namely, the question of whether interest accrues on an

award of attorney's fees from the date of the initial judg-

ment on the merits (which, in this case did not include an

award of fees), or as the Third Circuit held below, from the

“time when a judgment was entered on the award of

attorney's fees and expenses after they were quantified

...” Pet. App. 2a.

The peculiar factual history of this matter is essential

to consideration of the question at hand: On November 6,

2000, after the jury’s verdict, the district court entered

judgment in petitioner’s favor, without specific reference to

attorney’s fees. There was also no indication that attor-

ney’s fees were allowable under any particular statutory or

other legal provision. Instead, petitioner filed a_post-

verdict motion for fees and expenses, alleging that two

alleged contracts between him and respondent “contained

fee shifting provisions that allowed for an award of attor-

neys fees ...” Bernback, 69 Fed.Appx. at 105. The district

court reviewed these contracts (a Stock Purchase Agree-

ment as well as a Personal Guarantee, id.) and concluded

that although each contract contained provisions for

award of attorney's fees, petitioner had also entered into a

separate fee agreement with his counsel which “limited

[counsel's] fees to 40%.” Pet. App. 3a. For this reason, the

district court “conform[ed] the fee award to the fee agree-

ment between |petitioner] and his counsel.” Bernback,

supra. The first judgment, therefore, to address attorney’s

fees was entered on July 29, 2002, after the district court

construed the role of these three private agreements in the

calculation of those fees. Pet. App. 3a.

When respondent later sought interest on the

awarded fees, the district court construed the plain lan-

guage of 28 U.S.C. 1961(a) (hereinafter sec. 1961), as well

as the Third Circuit's decision in Eaves v. County of Cape

May, 239 F.3d 527 (CA3 2001) and held that interest

would be calculated from July 29, 2002, “the day judgment

was entered on the amount of fees.” Pet. App. 4a. When

the Third Circuit affirmed, id. at la, petitioner sought this

Court's review.

3

REASONS FOR DENYING THE WRIT

A. Since the attorney’s fees awarded in this case

were based on the district court’s interpretation

of complicated private contracts and not on statu-

tory or other provisions of law (as in the cases

cited by petitioner as representing a “recurring

circuit conflict”), the factual complexity of this

case makes it an inappropriate vehicle for consid-

eration of the question presented by petitioner.

The attorney's fees at issue in this case were calcu-

lated by the district court based upon its interpretation of

three separate, complicated and even conflicting agree-

ments between private parties, and were not premised on

any statutory or rule-based provisions. The district court

found that petitioner and respondent were parties to two

of these private agreements (a finding which respondent

continues to vigorously oppose), namely the Stock Pur-

chase Agreement and the Personal Guarantee which form

the basis for much of the nearly decade long litigation

between them. The third contract was a fee agreement

between respondent and his counsel, which was based

upon a complex calculus of both hourly rates and percent-

age of recovery. Pet. App. 3a-4a. Without this stew of

private contractual provisions, the award of attorney’s fees

would not have been at issue in this case.

After extraction of the various fee-based clauses of

these three documents, and its interpretation of their

relevance to one another, the district court constructed its

fee assessment and entered judgment awarding the

quantified fee on July 29, 2002. Under the plain statutory

language of sec. 1961, any interest on this award could

only be calculated from this date. See, Kaiser Aluminum &

Chemical Corp. v. Bonjorno, 494 U.S. 827, 835 (1990)

(“[Tlhe starting point for interpretation of [sec. 1961] . . . is

the language of the statute itself.”). It is this calculation,

however, which petitioner seeks to overturn.

Petitioner takes great pains to urge this Court’s

review of what it perceives to be a “frequently recurring

circuit conflict” on the question of when the calculation of

interest on a sec. 1961 award begins to run, specifically

with regard to attorney's fees. Petition at 2-3. Supporting

. this contention is a list of decisions from the several courts

of appeals addressing the calculation date for interest on

such fees. See, e.g., Associated General Contractors of Ohio,

Inc. v. Drabik, 250 F.3d 482, 484-85 (CA6 2001); Eaves,

supra; MidAmerica Federal Savings & Loan Association v.

Shearson/American Express, Inc., 962 F.2d 1470, 1476

(CA10 1992); Fleming v. County of Kane, 898 F.2d 553, 565

(CA7Z 1990); Friend v. Kolodzieczak, 72 F.3d 1386, 1391-92

(CA9 1995), cert. denied, 516 U.S. 1146 (1996); BankAtlan-

tic v. Blythe Eastman Paine Webber, Inc., 12 F.3d 1045,

1052-53 (CA11 1994); Jenkins v. Missouri, 931 F.2d 1273,

1277 (CA8 1991); Mathis v. Spears, 857 F.2d 749, 760

(CAFC 1988); Copper Liquor, Inc. v. Adolph Coors Co., 701

F.2d 542, 544-45 (CA5 1983). The underlying facts of these

cases, however, are vastly different from those in the

present case. In fact, in each of the cases cited by peti-

tioner, the award in question was based cither on statute

or rule which was evident at the time of entry of the award

on the merits._

For example, Drabik, Eaves, Fleming, Friend and

Jenkins were civil rights cases under 42 U.S.C. 1983, with

the question of attorney's fees governed by 42 U.S.C. 1988.

In BankAtlantic, the court imposed discovery violation

sanctions pursuant to Rule 37, Fed.R.Civ.P. Mathis was a

patent case, with the fee question arising under 35 U.S.C.

285. Copper Liquor involved the Sherman Act, 15 U.S.C. 1,

with fees claimed under the Clayton Act, 15 U.S.C. 15. On

the other hand, the fee issue in MidAmerica arose out of a

pendent state claim under the Oklahoma Securities Act.

71 Okla.Stat. 408.

Whatever their decision on the sec. 1961 question,

these cases represent the prevailing view regarding award

of attorney's fees, namely, that “[uJnder the ‘American

Rule,’ the prevailing party will not be awarded attorney’s

fees unless expressly authorized by Congress.” King v.

JCS Enterprises, Inc., 325 F.Supp.2d 162 (E.D.N.Y. 2004).

In each of the cases cited by petitioner, either federal or

state statute, or procedural rule governed the award of

fees. As such, the existence of these provisions which

“expressly authorized” the award of attorney’s fees was

obvious throughout those proceedings.

Such is not the case, however, in the present matter.

There is no ancillary statute or rule which “expressly

authorized” the award of fees in this case. Instead, the fees

in question were contractually based, and required a

separate motion for their award as well as a separate

adjudication by the district court.

Given the interpretive gymnastics in which the

district court had to engage in order to determine what, if

any, fee would be awarded, it is an imaginative stretch to

say that at the time of the jury verdict and judgment on

the merits, it was clear that petitioner was “‘uncondition-

ally entitled’ to recover attorney's fees.” Petition 7-8, fn. 4.

As such, the only “judgment” relevant to a sec. 1961

interest calculation under the peculiar facts of this case

was the July 29, 2002 date. By upholding the district

court, the Third Circuit merely recognized that “[iJn the

6

realm of fee awards ... to a far greater extent than is true

of discrete legal issues, the battle is likely to be deter-

mined in the trial court ...” U.S. v. Metropolitan Dist.

Com'n, 847 F.2d 12 (CA1 1988) (internal citations omit-

ted).

While petitioner suggests that grant of certiorari is

necessary in this case in order to resolve this supposed

“circuit conflict,” he is mistaken. In fact, this case is a most

inappropriate vehicle for resolution of the question peti-

tioner presents given the complex factual marsh through

which the Court must wade in order to reach that ques-

tion. Actually, this Court would have to dive into the

district court’s fact-based assessment of the contracts at

issue and the intent of the various parties to those con-

tracts and then determine what impact these factual

nuances have on the assessment of sec. 1961 issues in

other cases where a clearer underlying entitlement to

attorney's fees existed. Such machinations do not readily

allow for the kind of clear resolution petitioner seeks, nor

do they easily support invocation of certiorari. As such, for

these reasons this Court should deny certiorari. ~

+

' Petitioner is in error when he suggests that the Third Circuit

only grudgingly affirmed. See, Petition at 2, § 3. His claim that the

Third Circuit “acknowledged that petitioner's position was supported

‘by precedent from other courts of appeals,’” is an overstatement. I[d.

The Third Circuit merely noted that petitioner had cited these other

cases, but did not give any indication that it agreed with petitioner as

to their value. Instead, the panel restated its allegiance to the prece-

dent from this Circuit outlined in Eaves.