Opinion
95 Civ. 8851 (RPP)
June 13, 2001
Alfredo Castellanos Esq., Castellanos Law Firm Counsel for Plaintiff.
Sandor Frankel Esq., Stuart Abrams, Esq., M. Breeze McMennamin Esq., Frankel Abrams Counsel for Defendant.
OPINION AND ORDER
Plaintiff New Shows, S.A. de C.V., ("Plaintiff") applies for an award of attorneys' fees and costs based on the jury's award of $63,500 against Defendant Don King Productions, Inc. ("Defendant") for breach of contract for the co-promotion of a boxing event in Monterrey, Mexico. Defendant moves for an order, pursuant to Federal Rule of Civil Procedure ("Fed.R.Civ.P.") 11 awarding monetary sanctions against Plaintiff. For the following reasons, Plaintiff's application is denied. Defendant's motion is granted.
BACKGROUND
Following a jury trial held between November 23 and November 30, 1998, a verdict was returned awarding Plaintiff $63,500 for breach of contract and $700,000 for fraudulent inducement to enter into a contract against Defendant. See New Shows. S.A. de C.V. v. Don King Prods., Inc., No. 95 Civ. 8851(RPP), 1999 WL 553780 at *1 (S.D.N.Y. July 29, 1999). After the trial, both Plaintiff and Defendant filed various post-trial motions.Id. In its Opinion and Order of July 29, 1999 (the "July 1999 Opinion"), the Court denied each of the post-trial motions with the exception of Plaintiff's request for attorneys' fees and costs on the breach of contract claim, which was granted based on the terms of the Co-Promotion Agreement. Id. at * 11. The Co-Promotion Agreement provided:
DKP agrees to indemnify, defend and hold New Shows . . . harmless from and against any and all claims, actions, liabilities, losses, damages, costs and expenses, including reasonable attorneys' fees, arising out of or relating to DKP's breach of any provision, warranty or representation herein.Id. The Court ordered Plaintiff to submit an application for an award of attorneys' fees and costs limited to its fees and costs for the breach of contract claim by August 31, 1999. Id.
On August 27, 1999, Plaintiff filed a Memorandum of Costs. Rather than complying with the Court's order, however, Plaintiff attached without explanation its bills for attorneys, consultants, accountants, court reporters, hotel expenses of witnesses, telephone calls, travel expenses and other expenses, and statutory costs and fees. See New Shows. S.A. de C.V. v. Don King Prods., Inc., No. 95 Civ. 8851(RPP), 1999 WL 970443 at *1 (S.D.N.Y. Oct. 22, 1999) (the "October 1999 Opinion"). Plaintiff failed to submit attorneys' affidavits or anything else to enable the Court to determine that the fees and expenses applied for were reasonable or attributable to the contract claim. Id. at *2. Accordingly, the Court denied Plaintiff's application for attorneys' fees and costs as inadequately presented. Id. at *3
On August 26, 1999, Plaintiff filed a notice of appeal from the July 1999 Opinion. On April 28, 2000, the Second Circuit issued a Summary Order affirming the judgment of this Court. See New Shows. S.A. de C.V. v. Don King Prods., Inc., 210 F.3d 355, 2000 WL 354214 (2d Cir. April 6, 2000) (table).
On September 19, 2000, Plaintiff filed an Amended Memorandum of Costs, with supporting affidavits and exhibits requesting an award of attorneys' fees and costs, without notice of motion. By memorandum endorsement dated October 18, 2000, the Court accepted Plaintiff's counsel's affidavit as a motion for attorneys' fees on the breach of contract claim. On November 20, 2000, Defendant submitted a memorandum of law in opposition. On December 12, 2000, Plaintiff submitted a reply memorandum of law.
Also on November 20, 2000, Defendant moved for an order pursuant to Fed.R.Civ.P. 11 awarding monetary sanctions, including payment of Defendant's attorneys' fees and expenses, against Plaintiff and/or its attorneys and law firms for filing a frivolous request for attorneys' fees and costs, on the basis that the request was untimely and not permitted by any rule or legal authority and is barred by the mandate of the Court of Appeals. By letter dated December 18, 2000, Plaintiff responded to Defendant's motion for an order pursuant to Fed.R.Civ.P. 11.
DISCUSSION
I. Attorneys' Fees and Costs
Plaintiff applies for an award of attorneys' fees and costs based on the jury's award of $63,500 against Defendant for breach of contract for the co-promotion of a boxing event in Monterrey, Mexico. Defendant opposes Plaintiff's application for an award of attorneys' fees and costs and contends that Plaintiff's application is procedurally barred because: 1) the Court has no power to amend the judgment in the case because the Court of Appeals affirmed the judgment below in its mandate; 2) Plaintiff did not appeal the October 1999 Opinion denying its application for attorneys' fees and costs and the judgment is therefore final; and 3) Plaintiff's motion is untimely. Defendant also contends that Plaintiff's application should be denied on the merits because it is virtually identical to the one submitted in 1999, and therefore does not present grounds for the Court to revisit the issue. Plaintiff responds that its application for an award of fees and costs is not untimely and is unaffected by the Court of Appeals' mandate.
The Court, by memorandum endorsement dated October 18, 2000, accepted Plaintiff's counsel's affidavit as a motion for attorneys' fees on the breach of contract claim. Although Plaintiff did not object to the Court's memorandum endorsement, Plaintiff argues that its counsel's affidavit is a renewed application for an award of attorneys' fees and costs, rather than a motion for attorneys's fees and costs. For the purposes of this motion, Plaintiff's counsel's affidavit will be considered a renewed application for an award of attorneys' fees and costs.
Defendant first contends that the Court has no power to amend the judgment in this case because the Court of Appeals affirmed the judgment below in its mandate. A district court is bound by the mandate of a federal appellate court under the "law of the case" doctrine. United States v. Ins. Co. of N. Am., 131 F.3d 1037, 1041 (D.C. Cir. 1997). "The `mandate rule' [is] an application of the `law of the case' doctrine, [which] states that a district court is bound by the mandate of a federal appellate court and generally may not reconsider issues decided on a previous appeal." Id. "When a case has been decided by [a circuit] court on appeal and remanded to the district court, every question which was before [the circuit] court and disposed of by its decree is finally settled and determined." Klein v. Arkoma Prod. Co., 73 F.3d 779, 784 (8th Cir. 1996). "Unlike the doctrine of res judicata, however, the `law of the case' doctrine does not seek to sweep under its coverage all possible issues arising out of the facts of the case." Ins. Co. of N. Am., 131 F.3d at 1041. "Rather, the scope of the `law of the case' doctrine is limited to issues that were decided either explicitly or by necessary implication. . . ." Id.
Here, the parties appealed the Court's July 1999 Opinion. That Opinion was affirmed by the Court of Appeals. See New Shows. S.A. de C.V., 2000 WL 354214. Plaintiff stated in its reply brief on the cross-appeal that the issue of attorneys' fees and costs was not properly before the Court of Appeals because Plaintiff had not filed a notice of appeal from the Court's Opinion denying Plaintiff's application for an award of attorneys' fees and costs. (See Plaintiff's Reply Brief on the Cross Appeal dated Feb. 10, 2000, at 26.) Thus the October 1999 denial of Plaintiff's application for an award of attorneys' fees and costs was not ruled on or decided either explicitly or by necessary implication by the Court of Appeals. Accordingly, this Court is not bound by the mandate rule on the issue of an award of a sum of attorneys' fees and costs for the breach of contract claim.
Second, Defendant argues that Plaintiff has not articulated any reason why its motion is proper under Fed.R.Civ.P. 60(b), which provides for relief from a final judgment. A final judgment "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment," Catlin v. United States, 324 U.S. 229, 233(1945), or resolve collateral issues, Budinich v. Becton Dickinson Co., 486 U.S. 196, 199-200(1988). A judgment declaring a defendant liable for damages to a plaintiff but not fixing the amount of damages is not a final judgment.Liberty Mutual Ins. Co. v. Wetzel, 424 U.S. 737, 744(1976). Specifically with respect to attorneys' fees, "a judgment awarding an unspecified amount of attorney's fees is interlocutory in nature." Deloach v. Delchamps. Inc., 897 F.2d 815, 826 (5th Cir. 1990); see also Becton Dickinson Co. v. Dist. 65, UAW, 799 F.2d 57, 61 (3d Cir. 1986) (holding that "if the award of attorneys' fees is not reduced to a definite amount, that award is not final"). Unlike final judgments, "interlocutory judgments are not brought within the restrictions of [Rule 60], but rather they are left subject to the complete power of the court rendering them to afford such relief from them as justice requires." Fed.R.Civ.P. 60 advisory committee's notes (1946 amend.).
Fed.R.Civ.P. 60(b) provides in pertinent part:
On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment. The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment, order, or proceeding was entered or taken.
However, "an unresolved issue of attorney's fees for the litigation in question does not prevent judgment on the merits from being final."Budinich, 486 U.S. at 202.
Here, Plaintiff's motion for attorneys' fees and costs was properly made pursuant to Fed.R.Civ.P. 54(d)(2)(B). Although the Court granted Plaintiff's motion for attorneys' fees and costs in its July 1999 Opinion, it did not award a specified amount of attorneys' fees. Plaintiff's application for an award of attorneys' fees and costs was denied in the October 1999 Opinion as inadequately presented since Plaintiff failed to demonstrate that the attorneys' fees and costs sought were reasonable. Accordingly, the award has not been reduced to a sum certain. Since the amount of attorneys' fees and costs has not been reduced to a sum certain, the October 1999 Opinion is not a final judgment but rather interlocutory, and not subject to the restrictions of Rule 60. Accordingly, Defendant's objection that Plaintiff has not articulated any reason why its motion is proper under Fed.R.Civ.P. 60(b) is misplaced.
Fed.R.Civ.P. 54(d)(2)(B) provides:
Unless otherwise provided by statute or order of the court, the motion must be filed and served no later than 14 days after entry of judgment; must specify the judgment and the statute, rule, or other grounds entitling the moving party to the award; and must state the amount or provide a fair estimate of the amount sought. If directed by the court, the motion shall also disclose the terms of any agreement with respect to fees to be paid for the services for which claim is made.
Defendant also notes that Plaintiff did not file either a notice of appeal or a motion for reconsideration pursuant to S.D.N.Y. Local Civil Rule 6.3 ("Loc. Civ. R. 6.3"). Since the October 1999 Opinion was interlocutory, however, it is subject to the power of the Court to afford such relief from it as justice requires.
Third, Defendant argues that Plaintiff's application for an award of fees and costs is untimely. The advisory committee notes to Rule 54(d)(2)(B), which outlines the procedure for filing a motion for attorneys' fees and costs, provides that evidentiary material bearing on the fees sought "must of course be submitted in due course, according to such schedule as the court may direct in light of the circumstances of the case." Fed.R.Civ.P. 54(d)(2)(B) advisory committee's notes (1993 amend.). In the case at hand, after the Court granted Plaintiff's motion for attorneys' fees and costs on the breach of contract issue in the July 1999 Opinion, it directed Plaintiff to submit an application for an award of attorneys' fees and costs with supporting documents just over four weeks later. The October 1999 Opinion, unlike the July 1999 Opinion, did not set a time by which Plaintiff might renew its application for attorneys' fees and costs. Plaintiff did not seek guidance from the Court regarding whether or when it might renew its application for an award of attorneys' fees and costs on the contract claim. Plaintiff eventually renewed its application for an award of attorneys' fees and costs on September 19, 2000, eleven months after the October 22, 1999, Opinion was issued denying Plaintiff's initial application for an award of fees and costs. Plaintiff offers no explanation for why it waited almost one year to renew its application for attorneys' fees and costs, particularly when the Court had ordered in the July 1999 Opinion that Plaintiff submit its first application within five weeks, nor does Plaintiff explain why its renewed application is made "in due course." However, given that the Court did not set a time by which Plaintiff might renew its application or specify whether the application was denied with prejudice, Plaintiff's application will not be considered untimely.
In its renewed application for an award of attorneys' fees and costs, however, Plaintiff has not cured the deficiencies in its previous application or provided a basis for the Court to revisit the issue. In fee-shifting award cases, the court has an obligation to determine that the fees and expenses are not unreasonable. See F.H. Krear Co. v. Nineteen Named Trustees, 810 F.2d 1250, 1263 (2d Cir. 1987). Plaintiff's earlier application was denied, in part, because "[t]here was no breakdown of any of [the] fees and expenses between the breach of contract claim and the fraud claim, nor any rationale submitted which would permit the Court to make such a calculation." New Shows. S.A. de C.V., 1999 WL 970443 at * 1. The Court also noted that "[e]ven the application for attorneys' fees is inadequate since it fails to set forth the hourly rate, the hours expended by the attorney, and the nature of the services rendered for which plaintiff incurred costs." Id. at *2.
In its renewed application, Plaintiff has not presented any additional evidence showing which fees and costs should reasonably be attributed to the breach of contract claim versus the fraud claim, nor has Plaintiff submitted any rationale to permit the Court to make such a calculation itself. Indeed, the amount of attorneys' fees and costs sought is virtually identical to the amount sought in Plaintiff's previous application, yet Plaintiff again fails to explain why or how those fees and costs relate to the contract claim rather than the fraud claim. For example, Plaintiff seeks an award of $21,166.66 for the fees of Plaintiff's counsel Castellanos Law Firm. In support of this claim, Plaintiff's counsel simply states that "a vast majority" of the fees incurred by Plaintiff's counsel relate to the contract claim. (Aff. of Alfredo Castellanos dated Sept. 19, 2000 ¶ 6.) However, Plaintiff does not explain why the vast majority of the fees incurred relate to the contract claim, particularly when the damages awarded for the contract claim were a fraction of the damages awarded for the fraud claim, nor does Plaintiff offer the Court any rationale for apportioning the fees between the two claims. Additionally, although Plaintiff's counsel Castellanos's billing records have been provided, they are in Spanish and no translation has been provided so the Court can determine the nature of the services rendered. Thus even in the renewed application, the application for attorneys' fees is inadequate since it fails to set forth the nature of the services rendered or explain why or how they relate to the contract claim.
In its first application for an award of attorneys' fees and costs, Plaintiff sought a total of $223,383.26, of which $133,037.50 was for attorneys' fees and $90,345.76 was for costs. In its renewed application, Plaintiff seeks a total of $219,397.82, of which $132,635.67 is for attorneys' fees and $86,762.15 is for costs.
Plaintiff also seeks an award of $24,497.54 for the attorneys' fees of Roger Maldonado. The unsigned affidavit provided in support of that application states that "[a]lmost all of the services" provided by Roger Maldonado "focused on DKII's breach of the Promotion Agreement and DKP's related breach of the implied convenant [sic] of good faith and fair dealing." (Aff of Roger Juan Maldonado (unsigned) dated Sept. 21, 2000 ¶ 7.) Again, Plaintiff's counsel's affidavit does not provide the Court with any rationale to apportion the attorneys' fees between the two claims.
No attorneys' affidavit is provided for the $86,971.47 in attorneys' fees sought for the services of Mayer, Brown Platt, LLP, although Plaintiff's counsel explains that he attempted to obtain such an affidavit unsuccessfully. (Am. Mem. of Costs § I.B.) In support of its application, Plaintiff attaches copies of invoices and payments to Mayer, Brown Platt, and simply asserts that "[a]s can be ascertained from the documentation, these fees were necessary and proper." (Id.) Contrary to Plaintiff's assertion, it cannot be ascertained that the fees were necessary and proper from invoices that do not provide the hourly rate, the hours expended by the attorney, or the nature of the services rendered.
Additionally, the attorneys' affidavits do not explain the supporting documentation or the application for an award for costs in the amount of $86,762.15. Plaintiff simply asserts that "Plaintiff incurred costs in the litigation of this matter, specifically in the breach of contract claim." (Am. Mem. of Costs § II.) However, Plaintiff does not explain why those costs relate to the breach of contract claim rather than the fraud claim, or provide the Court with any rationale for apportioning the costs between the claims. Additionally, while some of the supporting documentation is in English, much is in Spanish with no translation provided. It is unclear in some cases whether the rates or expenses charged are in U.S. dollars or in another currency.
In its second application for attorneys' fees and costs, Plaintiff has not remedied the deficiencies noted in this Court's October 1999 Opinion or provided this Court with any way to determine that the requested fees and expenses are reasonable or attributable to the contract claim. Accordingly, Plaintiff's application for an award of attorneys' fees and costs is denied. In view of Plaintiff's counsel's failure to adhere to the Court's prior directives and the length of time that has elapsed, the application is denied with prejudice.
II. Rule 11
Defendant moves for an order pursuant to Fed.R.Civ.P. 11 awarding monetary sanctions, including payment of Defendant's attorneys' fees and expenses, against Plaintiff and/or its attorneys and law firms, for having filed a frivolous request for attorneys' fees and costs. Defendant contends that the request is plainly untimely, is not permitted by any rule or other legal authority, is barred by the mandate of the Court of Appeals, and is baseless on the merits.
Fed.R.Civ.P. 11(b) provides, in pertinent part:
By presenting to the court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances . . . (2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law; (3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery. . . .
Rule 11(c) provides for sanctions, "[i]f, after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated, the court may . . . impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation." Fed.R.Civ.P. 11(c). The Supreme Court has held that "[d]etermining whether an attorney has violated Rule 11 involves a consideration of three types of issues." Cooter Gell v. Hartmarx Corp., 496 U.S. 384, 399(1990). "The court must consider factual questions regarding the nature of the attorneys' prefiling inquiry and the factual basis of the pleading or other paper." Id. "Legal issues are raised in considering whether a pleading is `warranted by existing law or a good faith argument' for changing the law. . . ." Id. "Finally, the district court must exercise its discretion to tailor an `appropriate sanction.'" Id.
Under Rule 11, sanctions are based on a standard of "reasonableness under the circumstances." Bus. Guides. Inc. v. Chromatic Communications Enters., Inc., 498 U.S. 533, 551(1991) (applying previous standard of Rule 11). "`[T]o constitute a frivolous legal position for purposes of Rule 11 sanction, it must be clear . . . that there is no chance of success. . . . Thus, not all unsuccessful arguments are frivolous or warrant sanctions.'" Pierce v. F.R. Tripler Co., 955 F.2d 820, 830 (2d Cir. 1992) (quoting Mareno v. Rowe, 910 F.2d 1043, 1047 (2d Cir. 1990) and applying previous standard of Rule 11).
Defendant argues that sanctions are appropriate in this case because Plaintiff has no colorable basis for its latest request for attorneys' fees and costs, since: (1) the mandate of the Court of Appeals has issued, thereby depriving this Court of jurisdiction; (2) Plaintiff does not cite any rule or legal authority for its claim; (3) the time to move under Rule 60 has passed and Plaintiff has not attempted to show grounds for relief under Rule 60; (4) Plaintiff neither filed an appeal nor a motion for reconsideration; (5) the time to make a new Rule 54 application for attorneys' fees has expired; and (6) upon the merits, the request does not satisfy the deficiencies that caused the Court to deny Plaintiff's first application for fees and costs, and most of the documentation is in Spanish with no translation and Plaintiff offers no guidance to the Court.
Plaintiff responds by letter that his Memorandum of Costs is not an application for attorneys' fees and therefore Rule 54(d) does not apply, and that Plaintiff's request for attorneys' fees has already been affirmed by the Court of Appeals. Plaintiff argues that its motion is not a request for attorneys' fees, but an attempt to correct the deficiencies in its previous application for an award of attorneys' fees and costs identified in the Court's October 1999 Opinion.
Here, the question is whether Plaintiff's claim for an award of attorneys' fees and costs for the breach of contract claim was frivolous. With regard to Defendant's procedural objections to Plaintiff's renewed application for an award of fees and costs, as discussed above, since the October 1999 Opinion was not reviewed or ruled on by the Court of Appeals, the mandate rule does not apply. Additionally, the October 1999 Opinion is not a final judgment but interlocutory, therefore Rule 60 does not apply. As noted above, since the Court did not specify when Plaintiff might renew its application or whether it was denied with prejudice, Plaintiff's renewed application will not be deemed untimely. However, Defendant is correct that Plaintiff has not articulated any rule or authority for its motion.
Plaintiff argues that its motion is an attempt to correct the deficiencies identified in its previous application for attorneys' fees and costs in the October 1999 Opinion. To that end, Plaintiff provided two attorneys' affidavits, one of which is unsigned, and supporting documentation, much of which is in Spanish with no translation or explanation provided. As noted above, Plaintiff has not provided the Court with any rationale for apportioning its requested fees and costs to the breach of contract claim. Indeed, the amount of attorneys' fees and costs sought is virtually identical to those sought in Plaintiff's earlier application.
Plaintiff was explicitly instructed in the July 1999 Opinion to submit to the Court its application for attorneys' fees and costs limited to the breach of contract claim. Plaintiff was also specifically instructed in the October 1999 Opinion that its application for fees and costs was deficient because it did not limit its application to those fees and costs incurred for the breach of contract claim, or explain how the Court might apportion the requested fees and costs. Under these circumstances, Plaintiff's renewed application, which again fails to limit the requested fees and costs to those incurred on the breach of contract claim or offer any rationale for the Court to apportion the requested fees and costs, is frivolous. Accordingly, Defendant's motion for an order pursuant to Fed.R.Civ.P. 11 awarding monetary sanctions is granted. Plaintiffs counsel is to pay Defendant's reasonable attorneys' fees and costs incurred in responding to Plaintiff's renewed application for an award of attorneys' fees and costs. Defendant shall submit to the Court a proposed order with supporting documentation of Defendant's reasonable attorneys' fees and costs incurred in responding to Plaintiff's renewed application for an award of attorneys' fees and costs, with copies to Plaintiff's counsel, by June 29, 2001.
CONCLUSION
For the foregoing reasons, Plaintiff's application for an award of attorneys' fees and costs is denied. Defendant's motion for an order pursuant to Fed.R.Civ.P. 11 awarding monetary sanctions in the amount of Defendant's reasonable attorneys' fees and expenses incurred in responding to Plaintiff's renewed application for an award of attorneys' fees and costs is granted.
IT IS SO ORDERED