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Natures Way Marine, LLC v. Everclear of Ohio, Ltd.

United States District Court, S.D. Alabama, Southern Division

April 17, 2015

NATURES WAY MARINE, LLC, Plaintiff,
v.
EVERCLEAR OF OHIO, LTD., and NIRK MAGNATE HOLDING CORP., Defendants.

ORDER

CALLIE V. S. GRANADE, District Judge.

Natures Way Marine, LLC ("Natures Way") filed a motion for pre-judgment interest, attorneys' fees, and litigation expenses. (Doc. 212, Exhs. 1-4). Everclear of Ohio, Ltd. ("Everclear") and Nirk Magnate Holding Corp. ("Nirk Magnate") (together, "Defendants") filed a response in opposition. (Doc. 213). Natures Way then filed a reply (Doc. 223, Exhs. 1-2), [1] and Defendants responded. (Doc. 224). The motion is now ripe for disposition. For the reasons explained below, the Court finds that Natures Way's motion for prejudgment interest, attorneys' fees, and litigation expenses should be GRANTED IN PART and DENIED IN PART.

I. Background

Natures Way initiated this breach of contract action. Natures Way brought the case in diversity jurisdiction, though the parties agreed general maritime law governs the contract. (Doc. 1, p. 2; Exh. 1, p. 2). The complaint sought three forms of compensation based on Defendants' breach: 1) invoiced debt, 2) lost profits, and 3) attorneys' fees and expenses. (Doc. 1, pp. 3-5). Defendants answered and asserted breach of contract counterclaims against Natures Way. (Docs. 23, 53). The contract underlying the case includes a default provision, which reads:

Default: In the event that either party hereto violates or breaches the terms of this Charter and the other party hereto engages legal counsel for purposes of enforcing its rights and remedies hereunder or otherwise protecting its interests in connection with this Charter, said nondefaulting party, in addition to all other relief to which it may be entitled, shall also be entitled, in the event of [sic] it prevails against the breaching party, to recover all of the costs and expenses it incurs in enforcing this Charter and protecting its interests, including its reasonable attorneys' fees and expenses. (Doc. 1, Exh. 1, p. 1).

The parties tried this case before a jury in November 2014. (Doc. 209). The trial lasted six days. (Doc. 209). During the trial, Natures Way presented its breach of contract claim, [2] and Defendants presented their breach of contract counterclaims. The jury found in favor of Natures Way on its claim for invoiced debt, and awarded it $205, 512.00. (Doc. 209, Exh. 1, p. 3). The jury did not find that Defendants proved their affirmative defenses to overcome Natures Way's breach of contract claim. (Doc. 209, Exh. 1, p. 2). The jury also found Defendants proved two of their breach of contract counterclaims, but decided Natures Way proved its affirmative defense of waiver to overcome Defendants' counterclaims.[3] (Doc. 209, Exh. 1, pp. 3-4). As a result, the jury did not award Defendants any compensatory damages. (Doc. 209, Exh. 1, p. 4).

Natures Way now seeks post-trial recovery of attorney's fees, expenses, and prejudgment interest. In its initial post-trial motion, Natures Way claimed it is entitled to recover $226, 286.26, consisting of prejudgment interest in the amount of $43, 465.78, attorneys' fees and expenses in the amount of $148, 727.33, and expert fees in the amount of $34, 093.15. (Doc 212, pp. 2-4). In their first response, Defendants argue 1) Natures Way is not entitled to recover fees and expenses because it is not a "nondefaulting party" under the terms of the contract, (Doc. 213, p. 4), 2) Natures Way has not established that the requested attorneys' fees are reasonable, (Doc. 213, pp. 9-18), 3) Natures Way is not entitled to recover its expert fees because the Court excluded the expert witnesses, (Doc. 213, pp. 18-20), 4) Natures Way should not be awarded prejudgment interest because of the peculiar facts presented in this case, and Natures Way cites the incorrect prejudgment interest statute, (Doc. 213, pp. 21-25), and 5) the Court should not award Natures Way expenses or costs because it did not provide the required documentation for such an award. (Doc. 213, p. 26).

In its reply, Natures Way reduced the amount of its request to $214, 704.61 to address some of the issues Defendants raised in their response. (Doc. 223, Exh. 1, p. 3; Doc. 224, p. 2). Natures Way acknowledged it used the incorrect interest rate for its prejudgment interest calculation (Doc. 223, p. 15), and included a few incorrect time entries in its earlier motion. (Doc. 223, Exh. 1, p. 3). Defendants maintain Natures Way is not entitled to attorneys' fees, and raise an additional argument in their second response concerning attorneys' fees for work performed by an attorney who is not licensed to practice in Alabama or admitted in this district. (Doc. 224, p. 12). The arguments raised in the motion, responses, and replies are addressed below.

II. DISCUSSION

A. Natures Way is the Prevailing Party

A "prevailing party" is a party in whose favor a judgment is entered. Buckhannon Bd. & Care Home, Inc. v. W.Va Dep't of Health & Human Res., 532 U.S. 598, 603 (2001), superseded by statute 5 U.S.C. ยง 552(a)(4)(E)(ii), Open Government Act of 2007, Pub.L. 110-175, 121 Stat. 2524 (2007), as recognized in Warren v. Colvin, 744 F.3d 841, 845 (2d Cir. 2014) (further expanding definition of prevailing party as it pertains to Freedom of Information Act actions). Even an award of nominal damages suffices under this test. See Farrar v. Hobby, 506 U.S. 103 (1992);[4] see also Hanrahan v. Hampton, 446 U.S. 754, 757 (1980) (prevailing party must establish its entitlement to some relief on the merits of its claims, either in the trial court or on appeal). Here, Natures Way prevailed at trial when the jury awarded it $205, 512 for its breach of contract claim, and found Natures Way proved its affirmative defense of waiver.

"The prevailing party in an admiralty case is not entitled to recover its attorneys' fees as a matter of course." Natco Ltd. P'ship v. Moran Towing of Fla., Inc., 267 F.3d 1190, 1193 (11th Cir. 2001) (citing Noritake Co., Inc. v. M/V Hellenic Champion, 627 F.2d 724, 730 (5th Cir. 1980)). Generally, the "American Rule" requires each party to pay its own attorney's fees. Smith v. GTE Corp., 236 F.3d 1292, 1305 (11th Cir. 2001) (citing Ex Parte Horn, 718 So.2d 694, 702 (Ala. 1998)). There are exceptions to the general rule precluding recovery of attorneys' fees. Attorneys' fees may be awarded to the prevailing party in maritime cases if: "(1) they are provided by the statute governing the claim, (2) the nonprevailing party acted in bad faith in the course of the litigation, or (3) there is a contract providing for the indemnification of attorneys' fees." Natco, 267 F.3d at 1193; see also Coastal Fuels Mktg., Inc. v. Fla. Express Shipping Co., 207 F.3d 1247, 1250 (11th Cir. 2000) ("A party is not entitled to attorney's fees in an admiralty case unless fees are statutorily or contractually authorized.") (citation omitted).

In this case, a contract provision awards attorneys' fees to the nondefaulting party that prevails against the breaching party. (Doc. 1, Exh. 1, p. 1). Thus the issue is whether Natures Way is entitled to attorneys' fees as a "nondefaulting" party that "prevailed" at trial. Natures Way argues it should receive attorneys' fees because it is the prevailing party, exemplified by the jury verdict awarding it damages for its claim. (Doc. 223, pp. 4-5). Defendants rebut this position and argue Natures Way is not entitled to recover attorneys' fees because it is also a defaulting party. "As noted in the verdict, the jury specifically found that Natures Way breached the Charter Agreement by (1) failing to timely deliver barges to East Liverpool for the first shipment of recycled fuel oil, ' and (2) failing to complete the round-trip between East Liverpool and Avondale within 26 to 28 days, as necessary for Natures Way to make the twelve (12) monthly round trips required by the Charter Agreement, within the one year term of the agreement.'" (Doc. 213, pp. 6-7). Defendants cite a Delaware case to support their argument that Natures Way is a defaulting party that is not entitled to attorneys' fees under the default provision found in the contract. (Doc. 213, p. 7, citing Dittrick v. Chalfant, CIV.A. 2156-S, 2007 WL 1378346, (Del. Ch. May 8, 2007)). Defendants also point to Jet Sales of Stuart, LLC v. Jet Connection Travel, GMBH, 240 Fed.App'x 839 (11th Cir. 2007) for this proposition. (Doc. 224, pp. 6-9).

Whether a contract is ambiguous is a question of law for the trial court. Mega Life & Health Ins. Co. v. Pieniozek, 516 F.3d 985, 991 (11th Cir. 2008) (citation omitted). A court interpreting a contract should give the words of the contract their plain and ordinary meaning. Id . Additionally, "[t]he traditional rule of construction in admiralty cases is to construe the contract language most strongly against the drafter...." Edward Leasing Corp. v. Uhlig & Assocs., Inc., 785 F.2d 877, 889 (11th Cir. 1986) (citations and quotations omitted).

In this case, the default provision includes the word "nondefaulting, " which could suggest Natures Way should not receive attorneys' fees because the jury found Natures Way breached the contract, and thus "defaulted." But the jury verdict must be read as a whole. The jury decided Natures Way proved its affirmative defense of waiver. The affirmative defense of waiver means Defendants excused Natures Way's otherwise wrongful actions, and wanted Natures Way to continue to perform its part of the bargain. As a result, the Court does not ...


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