North American Clearing, Inc. v. Brokerage Computer Systems, Inc. , 395 F. App'x 563 ( 2010 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 10-10943 ELEVENTH CIRCUIT
Non-Argument Calendar SEPTEMBER 2, 2010
________________________ JOHN LEY
CLERK
D.C. Docket No. 6:07-cv-01503-PCF-KRS
6:07-CV-1503-PCF-KRS
NORTH AMERICAN CLEARING, INC.,
Plaintiff,
versus
BROKERAGE COMPUTER SYSTEMS, INC.,
llllllllllllllllllll Defendant.
6:08-CV-1567-PCF-KRS
BROKERAGE COMPUTER SYSTEMS, INC.
lllllllllllllllllllll Plaintiff - Appellee,
versus
RICHARD L. GOBLE,
an individual,
lllllllllllllllllllll Defendant - Appellant,
BRUCE B. BLATMAN, et al.,
llllllllllllllllllllll Defendants.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(September 2, 2010)
Before BLACK, PRYOR and KRAVITCH, Circuit Judges.
PER CURIAM:
Richard Goble—a prevailing defendant on claims for breach of contract and
violations of the Lanham Act, 15 U.S.C. § 1125(a), and the Florida Deceptive and
Unfair Trade Practices Act (FDUTPA), Fla. Stat. § 501.204(1)—appeals from an
order denying his motion for attorney’s fees. Although we approve the district
court’s denial of Goble’s motion as it pertained to fees under the Lanham Act and
the FDUTPA, we reverse the court’s order with respect to Goble’s motion for fees
on the contract claim.
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I
Goble was the sole shareholder of North American Clearing (NAC), a
stock-brokerage firm that entered into a software-licensing agreement with
Brokerage Computer Systems (BCS). The companies’ business relationship
soured, and NAC sued BCS, which in turn filed counterclaims under the Lanham
Act, under the FDUTPA, and for breach of contract. When NAC was forced into
receivership, BCS filed a new lawsuit asserting the same claims directly against
Goble.
After the district court granted Goble’s motion for final summary judgment,
he moved the court for attorney’s fees pursuant to provisions in the Lanham Act,
15 U.S.C. § 1117(a); the FDUTPA, Fla. Stat. § 501.211(2); and BCS’s contract
with NAC. Over Goble’s objection, the district court adopted a magistrate judge’s
recommendation to deny the motion. This is Goble’s appeal.
II
A. Fees Under the Lanham Act
Parties who prevail on claims under the Lanham Act may recover their
reasonable attorney’s fees “in exceptional cases.” 15 U.S.C. § 1117(a).
Defendants can qualify as prevailing parties, but even when a case is exceptional,
we will only review the district court’s decision on a motion for attorney’s fees for
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an abuse of discretion. Lipscher v. LRP Publ’ns., Inc., 266 F.3d 1305, 1319–20
(11th Cir. 2001).
We conclude that the district court did not abuse its discretion by denying
Goble’s motion for fees under the Lanham Act. For the purposes of that statute,
“an exceptional case is one that can be characterized as malicious, fraudulent,
deliberate and willful, or one in which evidence of fraud or bad faith exists.” Tire
Kingdom, Inc. v. Morgan Tire & Auto, Inc., 253 F.3d 1332, 1335 (11th Cir. 2001)
(quotation marks and citations omitted). Aside from the evident weakness of
BCS’s claim and the company’s decision to sue Goble only after NAC had entered
receivership, nothing supports the contention that BCS acted maliciously or in bad
faith by suing Goble under the Lanham Act. The district court thus acted within
its discretion when it denied Goble’s request for attorney’s fees under that statute.
B. Fees Under the FDUTPA
Like prevailing parties under the Lanham Act, the prevailing party in an
action under the FDUTPA may, according to the court’s discretion, recover his
reasonable attorney’s fees. Fla. Stat. § 501.2105; Humane Soc’y of Broward
Cnty., Inc. v. Fla. Humane Soc’y, 951 So. 2d 966, 971 (Fla. Dist. Ct. App. 2007).
A magistrate judge concluded that Goble had failed to establish his entitlement to
attorney’s fees under the FDUTPA because he had made no reference to the
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factors Florida courts consider when determining the appropriateness of
discretionary fee awards. See Humane Soc’y of Broward Cnty., 951 So. 2d at 971.
The district court refused to consider Goble’s objection to the magistrate’s
recommendation on the ground that his objection was not specific. Cf. Marsden v.
Moore, 847 F.2d 1536, 1548 (11th Cir. 1988) (“Parties filing objections to a
magistrate’s report and recommendation must specifically identify those findings
objected to. Frivolous, conclusive, or general objections need not be considered
by the district court.”).
Although we believe Goble’s objection was adequately specific, his
argument before the district court was deficient in the same respect as his
argument before the magistrate: he failed to discuss the factors relevant to the
appropriateness of a fee award under the FDUTPA. We limit the scope of our
review in civil appeals to arguments actually raised in the district court, and
Goble’s omission before that court of any argument concerning the factors that
might justify an FDUTPA fee award constituted a waiver for the purposes of this
appeal. See Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1331 (11th Cir.
2004). We therefore will not disturb the district court’s ruling on Goble’s request
for attorney’s fees under the FDUTPA.
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C. Fees Under the Contract
BCS’s breach-of-contract claim against Goble depended on the theory that
Goble had used NAC as his “alter ego.” In other words, according to the
complaint, “Goble was the company and the company was Goble.” The licensing
agreement on which BCS sued contained a provision concerning attorney’s fees:
“If any legal action or arbitration is necessary to enforce the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorney’s fees in
addition to any other relief to which that party may be entitled.” Yet the district
court adopted the magistrate judge’s recommendation to deny Goble’s request for
fees under that provision on the ground that Goble was not a party to the contract.
In other words, the court concluded that the term “prevailing party” meant
“prevailing party [to the contract].”
We disagree with the district court’s analysis. “Courts should attempt to
give words and phrases used in contracts the natural meaning or that meaning
most commonly understood when considered in reference to [the] subject matter
and circumstances.” Rupp Hotel Operating Co. v. Donn, 29 So. 2d 441, 445 (Fla.
1947).1 The term “prevailing party” in the context of a provision describing “legal
action or arbitration” is most naturally understood as a reference to the prevailing
1
The contract here provides that it is to be construed in accordance with Florida law.
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party in a legal action. Cf. FDUTPA, Fla. Stat. § 501.2105(1) (“In any civil
litigation resulting from an act or practice involving a violation of this part . . ., the
prevailing party . . . may receive his or her reasonable attorney’s fees and costs
from the nonprevailing party.”).
The district court’s reading of the term, by contrast, would require the word
“party” to bear two meanings at once: “party to the litigation” and “party to the
contract.” The magistrate judge concluded that such a reading was appropriate
because the contract concerned the obligations of BCS and NAC to each other,
without any reference to Goble’s rights or responsibilities as an individual. But in
our view, the provision regarding attorney’s fees speaks plainly enough: in “any
legal action or arbitration . . . necessary to enforce the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorney’s fees.” Although Goble
was not technically a party to the contract, it was foreseeable that he might, given
his role as NAC’s owner and signatory to the contract on its behalf, become a
party to litigation “necessary to enforce the terms of [the] Agreement.” In these
circumstances, allowing Goble to recover his reasonable attorney’s fees is
consistent with the apparent intent underlying the fees provision—especially in
light of BCS’s alter-ego allegation that Goble was a de facto party to the contract.
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Furthermore, even if the term “prevailing party” were patently ambiguous,
ambiguities in a contract “do[] not allow courts to rewrite contracts, add meaning
that is not present, or otherwise reach results contrary to the intentions of the
parties.” Excelsior Ins. Co. v. Pomona Park Bar & Package Store, 369 So. 2d
938, 942 (Fla. 1979). Given BCS’s alter-ego allegations, it would be unreasonable
for us to assume that the contract allowed BCS to seek attorney’s fees from
Goble—as it did in its complaint—without affording him the same opportunity if
he prevailed on the claims against him. “A reasonable interpretation of a contract
is preferred to an unreasonable one,” id. at 941, and we will not adopt a one-sided
interpretation of the fees provision here without any evidence that such an
asymmetry was intended.
III
Although the district court did not abuse its discretion by denying Goble’s
requests for fees under the Lanham Act and the FDUTPA, Goble was entitled to
recover his reasonable attorney’s fees on BCS’s claim for breach of contract. See
Lashkajani v. Lashkajani, 911 So. 2d 1154, 1158 (Fla. 2005) (“Provisions in
ordinary contracts awarding attorney’s fees and costs to the prevailing party are
generally enforced. Trial courts do not have the discretion to decline to enforce
such provisions, even if the challenging party brings a meritorious claim in good
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faith.” (citation omitted)). We therefore affirm the parts of the district court’s
order denying Goble’s requests for attorney’s fees under the Lanham Act and the
FDUTPA, reverse the part of the order denying his request for fees on the breach-
of-contract claim, and remand for further proceedings consistent with this opinion.
AFFIRMED in part, REVERSED in part, and REMANDED.
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