Preview
FILED: NASSAU COUNTY CLERK 02/06/2024 06:30 PM INDEX NO. 608354/2020
NYSCEF DOC. NO. 77 RECEIVED NYSCEF: 02/06/2024
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
-------------------------------------------------------------------X
Adrienne Goodman, Gary Goodman, and Beth Index No.: 608354/2020
Slosberg,
Plaintiffs,
AFFIRMATION IN REPLY
- against -
Brian Tepfer, LBH Capital Inc, and Lake End Capital
LLC,
Defendants.
--------------------------------------------------------------------X
Joseph D. DePalma, being an attorney admitted to practice law in the Courts of the State
of New York, and not a party to this action, affirms under the penalty of perjury as follows:
1. I am an associate at J. Kaplan & Associates, PLLC, counsel for the defendants.
2. I am submitting this affirmation in further support of the defendants’ motion for
summary judgment on their counterclaim for attorneys’ fees and, if necessary, setting the matter
down for a hearing to determine defendants’ reasonable fees.
3. Plaintiffs do not contest that the parties’ contract entitles the defendants to an
award of attorney’s fees or argue that defense counsel billed at an excessive hourly rate.
Plaintiffs should be deemed to have conceded defendants’ entitlement to an award of attorney’s
fees as a matter of law. Furthermore, as discussed below, the Court has information necessary to
assess—and dismiss— plaintiffs’ arguments against the reasonableness of the fees sought on the
instant application.
4. Plaintiffs’ sole argument in opposition to defendants’ motion is that the number of
hours billed for certain aspects of the litigation was unreasonable. However, plaintiffs severely
misrepresent the billing invoices submitted in support of defendants’ motion. For example,
plaintiffs’ counsel claims that “Defendants also often used two attorneys, Joseph D. DePalma
1 of 4
FILED: NASSAU COUNTY CLERK 02/06/2024 06:30 PM INDEX NO. 608354/2020
NYSCEF DOC. NO. 77 RECEIVED NYSCEF: 02/06/2024
and Jeffrey A. Kaplan, for the same work, which unnecessarily inflated Defendants’ fees, and so
is unreasonable.” Lonergan at ¶ 5. However, the invoices submitted by defendants only contain
four billing entries for work performed by Mr. Kaplan: (1) .75 Hours on 9/20/2020 for an initial
review of materials provided by the defendants; (2) .5 Hours on 10/30/2020 for the review of
defendants’ first motion to dismiss; (3) .2 Hours on 4/25/2022 for a conference call with the
defendant; and (4) .3 Hours on 4/28/2022 for the review of defendants’ motion seeking a
commission. Notably, while your affiant participated in the 4/25/2022 conference call, only Mr.
Kaplan billed for the call. Mr. Lonergan’s claim that defendants’ counsel double billed is
completely unfounded.
5. Equally misleading are Mr. Lonergan’s claims that defendants’ billing for two
motions to dismiss were “unnecessary, excessive, exorbitant and unreasonable.” The plaintiffs’
initial complaint (NYSCEF Docket No. 1) included claims for fraud in the inducement, breach of
the duty of good faith, securities fraud for violation of §10(B) of the 1934 Act and Rule 10-B-5,
violation of 6 Del. Admin. Code §709, and breach of fiduciary duty. While fees relating to
defendants’ motion to dismiss the initial complaint total $10,700, much of that cost was
necessitated by Mr. Lonergan’s inclusion of claims under Delaware and Federal Law.
6. Notably, plaintiffs made no attempt to defend or justify the Delaware and Federal
Law claims, instead responding to defendants’ initial motion to dismiss by amending their
complaint to remove the frivolous and baseless foreign law claims. The Court should not allow
plaintiffs to assert meritless claims, and then complain that the motion causing them to withdraw
those claims was unnecessary.
7. Plaintiffs’ amended complaint (NYSCEF Docket No. 14) replaced the Delaware
and Federal claims with new causes of action sounding in breach of contract and negligent
2
2 of 4
FILED: NASSAU COUNTY CLERK 02/06/2024 06:30 PM INDEX NO. 608354/2020
NYSCEF DOC. NO. 77 RECEIVED NYSCEF: 02/06/2024
misrepresentation. Plaintiffs misrepresent to the Court that “Defendant’s counsel then apparently
charged in excess of $7,000 to refile this same motion – which was unsuccessful - once Plaintiff
had amended.” Lonergan at ¶ 7. Contrary to Mr. Lonergan’s allegation, defendants’ counsel
charged $1,880 (Exhibit G, invoice entries dated 11/20/2020 and 11/24/2020) for the preparation
of a motion to dismiss the first amended complaint.
8. Lonergan, in a further attempt to mislead, claims that excessive billing relating to
defendants’ second motion to dismiss includes “multiple entries for the same work, such as
“preparing for argument” in June 2021.” Lonergan at ¶ 7. Defendants’ invoices show only one
such entry in June 2021. (Exhibit G at 10). Other entries for time spent “preparing for argument”
relate to different, alternative oral argument dates scheduled by the Court, typically months apart.
9. Plaintiffs make no substantive argument that the time billed for preparation for
plaintiffs’ depositions was unreasonable. Both Gary Goodman and Beth Slosberg are “seasoned
investors” (June 30, 2023 Decision and Order (NYSCEF Docket No. 64 at 1) and their
depositions necessitated fluency with sophisticated finance and investment principles and issues
in addition to the records and events relevant to the plaintiffs’ claims. The billing for preparation
for the plaintiffs’ depositions was reasonable given the plaintiffs’ expertise and the complexity of
the claims at issue.
10. Finally, plaintiffs contend that “Defendants’ counsel charged for a post-trial
motion for a directed verdict in February 2023 that was denied by the Court at trial.” Lonergan at
¶ 10. Contrary to Mr. Lonergan’s representations, the trial of this matter was held over three
days, closing on December 19, 2022. On the last day of trial, Justice Pineda-Kirwan reserved
decision on defendants’ post-trial motion, and ordered additional briefing to be submitted by
February 23, 2023. See, June 30, 2023 Decision and Order at 1. During trial, the Court did not
3
3 of 4
FILED: NASSAU COUNTY CLERK 02/06/2024 06:30 PM INDEX NO. 608354/2020
NYSCEF DOC. NO. 77 RECEIVED NYSCEF: 02/06/2024
deny defendants’ motion, but reserved decision on the motion pending receipt for full post-trial
briefing. December 19, 2022 Trial Transcript (NYSCEF Docket No. 59) at 79. Mr. Lonergan’s
misrepresentations regarding defendants’ post-trial submissions should be rejected by the Court.
11. The plaintiffs do not dispute that defendants, who entirely prevailed at trial, are
entitled to attorney’s fees under the parties’ agreement. While plaintiffs argue that certain billing
entries submitted by defendants were not reasonable, as demonstrated above those, arguments
are unsupported by the billing invoices submitted to the Court.
12. Accordingly, defendants respectfully requested that the Court grant the instant
motion in its entirety. In the alternative, the Court should partially grant defendants’ motion for
summary judgment and set this matter down for a hearing to determine the reasonable fee to be
awarded to defendants.
Dated: February 6, 2024
New York, New York
_________________________
Joseph D. DePalma
4
4 of 4
Preview
FILED: NASSAU COUNTY CLERK 02/06/2024 06:30 PM INDEX NO. 608354/2020 NYSCEF DOC. NO. 77 RECEIVED NYSCEF: 02/06/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU -------------------------------------------------------------------X Adrienne Goodman, Gary Goodman, and Beth Index No.: 608354/2020 Slosberg, Plaintiffs, AFFIRMATION IN REPLY - against - Brian Tepfer, LBH Capital Inc, and Lake End Capital LLC, Defendants. --------------------------------------------------------------------X Joseph D. DePalma, being an attorney admitted to practice law in the Courts of the State of New York, and not a party to this action, affirms under the penalty of perjury as follows: 1. I am an associate at J. Kaplan & Associates, PLLC, counsel for the defendants. 2. I am submitting this affirmation in further support of the defendants’ motion for summary judgment on their counterclaim for attorneys’ fees and, if necessary, setting the matter down for a hearing to determine defendants’ reasonable fees. 3. Plaintiffs do not contest that the parties’ contract entitles the defendants to an award of attorney’s fees or argue that defense counsel billed at an excessive hourly rate. Plaintiffs should be deemed to have conceded defendants’ entitlement to an award of attorney’s fees as a matter of law. Furthermore, as discussed below, the Court has information necessary to assess—and dismiss— plaintiffs’ arguments against the reasonableness of the fees sought on the instant application. 4. Plaintiffs’ sole argument in opposition to defendants’ motion is that the number of hours billed for certain aspects of the litigation was unreasonable. However, plaintiffs severely misrepresent the billing invoices submitted in support of defendants’ motion. For example, plaintiffs’ counsel claims that “Defendants also often used two attorneys, Joseph D. DePalma 1 of 4 FILED: NASSAU COUNTY CLERK 02/06/2024 06:30 PM INDEX NO. 608354/2020 NYSCEF DOC. NO. 77 RECEIVED NYSCEF: 02/06/2024 and Jeffrey A. Kaplan, for the same work, which unnecessarily inflated Defendants’ fees, and so is unreasonable.” Lonergan at ¶ 5. However, the invoices submitted by defendants only contain four billing entries for work performed by Mr. Kaplan: (1) .75 Hours on 9/20/2020 for an initial review of materials provided by the defendants; (2) .5 Hours on 10/30/2020 for the review of defendants’ first motion to dismiss; (3) .2 Hours on 4/25/2022 for a conference call with the defendant; and (4) .3 Hours on 4/28/2022 for the review of defendants’ motion seeking a commission. Notably, while your affiant participated in the 4/25/2022 conference call, only Mr. Kaplan billed for the call. Mr. Lonergan’s claim that defendants’ counsel double billed is completely unfounded. 5. Equally misleading are Mr. Lonergan’s claims that defendants’ billing for two motions to dismiss were “unnecessary, excessive, exorbitant and unreasonable.” The plaintiffs’ initial complaint (NYSCEF Docket No. 1) included claims for fraud in the inducement, breach of the duty of good faith, securities fraud for violation of §10(B) of the 1934 Act and Rule 10-B-5, violation of 6 Del. Admin. Code §709, and breach of fiduciary duty. While fees relating to defendants’ motion to dismiss the initial complaint total $10,700, much of that cost was necessitated by Mr. Lonergan’s inclusion of claims under Delaware and Federal Law. 6. Notably, plaintiffs made no attempt to defend or justify the Delaware and Federal Law claims, instead responding to defendants’ initial motion to dismiss by amending their complaint to remove the frivolous and baseless foreign law claims. The Court should not allow plaintiffs to assert meritless claims, and then complain that the motion causing them to withdraw those claims was unnecessary. 7. Plaintiffs’ amended complaint (NYSCEF Docket No. 14) replaced the Delaware and Federal claims with new causes of action sounding in breach of contract and negligent 2 2 of 4 FILED: NASSAU COUNTY CLERK 02/06/2024 06:30 PM INDEX NO. 608354/2020 NYSCEF DOC. NO. 77 RECEIVED NYSCEF: 02/06/2024 misrepresentation. Plaintiffs misrepresent to the Court that “Defendant’s counsel then apparently charged in excess of $7,000 to refile this same motion – which was unsuccessful - once Plaintiff had amended.” Lonergan at ¶ 7. Contrary to Mr. Lonergan’s allegation, defendants’ counsel charged $1,880 (Exhibit G, invoice entries dated 11/20/2020 and 11/24/2020) for the preparation of a motion to dismiss the first amended complaint. 8. Lonergan, in a further attempt to mislead, claims that excessive billing relating to defendants’ second motion to dismiss includes “multiple entries for the same work, such as “preparing for argument” in June 2021.” Lonergan at ¶ 7. Defendants’ invoices show only one such entry in June 2021. (Exhibit G at 10). Other entries for time spent “preparing for argument” relate to different, alternative oral argument dates scheduled by the Court, typically months apart. 9. Plaintiffs make no substantive argument that the time billed for preparation for plaintiffs’ depositions was unreasonable. Both Gary Goodman and Beth Slosberg are “seasoned investors” (June 30, 2023 Decision and Order (NYSCEF Docket No. 64 at 1) and their depositions necessitated fluency with sophisticated finance and investment principles and issues in addition to the records and events relevant to the plaintiffs’ claims. The billing for preparation for the plaintiffs’ depositions was reasonable given the plaintiffs’ expertise and the complexity of the claims at issue. 10. Finally, plaintiffs contend that “Defendants’ counsel charged for a post-trial motion for a directed verdict in February 2023 that was denied by the Court at trial.” Lonergan at ¶ 10. Contrary to Mr. Lonergan’s representations, the trial of this matter was held over three days, closing on December 19, 2022. On the last day of trial, Justice Pineda-Kirwan reserved decision on defendants’ post-trial motion, and ordered additional briefing to be submitted by February 23, 2023. See, June 30, 2023 Decision and Order at 1. During trial, the Court did not 3 3 of 4 FILED: NASSAU COUNTY CLERK 02/06/2024 06:30 PM INDEX NO. 608354/2020 NYSCEF DOC. NO. 77 RECEIVED NYSCEF: 02/06/2024 deny defendants’ motion, but reserved decision on the motion pending receipt for full post-trial briefing. December 19, 2022 Trial Transcript (NYSCEF Docket No. 59) at 79. Mr. Lonergan’s misrepresentations regarding defendants’ post-trial submissions should be rejected by the Court. 11. The plaintiffs do not dispute that defendants, who entirely prevailed at trial, are entitled to attorney’s fees under the parties’ agreement. While plaintiffs argue that certain billing entries submitted by defendants were not reasonable, as demonstrated above those, arguments are unsupported by the billing invoices submitted to the Court. 12. Accordingly, defendants respectfully requested that the Court grant the instant motion in its entirety. In the alternative, the Court should partially grant defendants’ motion for summary judgment and set this matter down for a hearing to determine the reasonable fee to be awarded to defendants. Dated: February 6, 2024 New York, New York _________________________ Joseph D. DePalma 4 4 of 4