Robert Addie v. Christian Kjaer , 836 F.3d 251 ( 2016 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______
Nos. 14-4265, 14-4394 and 14-4395
______
ROBERT ADDIE; JORGE PEREZ;
JASON TAYLOR,
Appellants in 14-4265
v.
CHRISTIAN KJAER; HELLE BUNDGAARD;
STEEN BUNDGAARD; JOHN KNUD FÜRST;
KIM FÜRST; NINA FÜRST; KEVIN F. D’AMOUR
CHRISTIAN KJAER; HELLE BUNDGAARD;
STEEN BUNDGAARD; JOHN KNUD FÜRST;
KIM FÜRST; NINA FÜRST,
Appellants in 14-4395
KEVIN F. D’AMOUR,
Appellant in 14-4394
______
On Appeal from the District Court
of the Virgin Islands
(D.C. No. 3-04-cv-00135)
District Judge: Honorable Curtis V. Gómez
______
Argued December 10, 2015
Before: FISHER, KRAUSE, and ROTH, Circuit Judges.
(Filed: September 7, 2016)
Robert L. Byer
Duane Morris
600 Grant Street, Suite 5010
Pittsburgh, PA 15219
Robert M. Palumbos [ARGUED]
John J. Soroko
Andrew R. Sperl
Duane Morris
30 South 17th Street
United Plaza
Philadelphia, PA 19103
Counsel for Appellants Robert Addie et al.
Carol G. Hurst
3562 Honduras, Suite 7
St. Thomas, VI 00802
2
Sherry L. Talton [ARGUED]
302 North Market Street, Suite 450
Dallas, TX 75202
Counsel for Appellees/Cross-Appellants Christian Kjaer et al.
Maria T. Hodge, Esq. [ARGUED]
Gaylin Vogel, Esq.
Hodge & Hodge
1340 Taarneberg
St. Thomas, VI 00802
Counsel for Appellee/Cross-Appellant Kevin F. D’Amour
______
OPINION OF THE COURT
______
FISHER, Circuit Judge.
The romantic notion of having an island to one’s self has
long captivated people’s imagination. Twelve years ago, the
parties to this case contemplated the sale and purchase of a
small island in the U.S. Virgin Islands. The deal fell apart and
took a decidedly unromantic turn—the parties have been
litigating the aftermath ever since. We addressed the merits of
the parties’ claims in a previous opinion, Addie v. Kjaer, 737
F.3d 854 (3d Cir. 2013). At issue in the present appeals are
prejudgment and postjudgment interest and attorney’s fees.
I
Our previous opinion provided a detailed factual and
procedural history. Id. at 857–61. There is no need to rehash
that history in its entirety here, so what follows is a
condensed version.
3
In 2004, Robert Addie, Jorge Perez, and Jason Taylor
entered into several contracts to buy a small island off the
coast of St. Thomas and a launch point on St. Thomas for,
respectively, $21,000,000 and $2,500,000. The sellers were
Christian Kjaer and his family members Helle Bundgaard,
Steen Bundgaard, John Knud Fürst, Kim Fürst, and Nina
Fürst. The sellers’ attorney was Kevin D’Amour, who was
also the sole owner of the escrow company involved in the
transaction. The contracts required the buyers to pay a deposit
of $1,000,000. The buyers later paid an additional $500,000
to extend the closing date. Taylor provided the money for
these deposits, which were nonrefundable. After another
extension of the closing date, the buyers had not paid the
purchase price, and the sellers had not conveyed marketable
title. D’Amour sent the buyers a notice of default, and the
buyers in turn demanded that the deposits be refunded.
Shortly thereafter, the buyers sued the sellers and D’Amour in
the District Court of the Virgin Islands, asserting various tort
and contract claims. The sellers filed counterclaims.
The district court granted summary judgment to the
buyers on a conversion claim against D’Amour for
$500,000.1 The remaining claims were tried to a jury, which
awarded Taylor (alone) $1,546,000 (remitted to $1,500,000)
in contract damages from the sellers and $46,000 for
fraudulent misrepresentation by D’Amour. The jury awarded
the sellers $339,516.76 in damages from Addie and Perez for
misrepresenting their ability to purchase the properties, but
1. The district court also dismissed the buyers’ claims
against the sellers for negligent misrepresentation,
fraud, and conversion.
4
the district court granted Addie and Perez judgment as a
matter of law because it concluded that the tort claims were
barred by the gist of the action doctrine. On motion by the
sellers, the district court reduced Taylor’s contract damages
award to $0, concluding that no damages were appropriate
since all parties had breached the contracts. The district court
upheld the fraudulent misrepresentation verdict against
D’Amour for $46,000.
On appeal, we concluded that the gist of the action
doctrine applied and barred all tort claims. Id. at 865. We
affirmed the order granting judgment as a matter of law to
Addie and Perez and reversed both the order granting
summary judgment against D’Amour and the jury verdict
against D’Amour. We concluded that the buyers and the
sellers failed to perform under the contracts and affirmed the
order of the district court denying all damages for breach of
contract. Id. at 864. But we also concluded that Taylor was
entitled to restitution from the sellers in the amount of
$1,500,000. Id. at 864–65.
On remand, the district court entered judgment for
Taylor for $1,500,000 on April 3, 2014. The district court
entertained motions from Taylor (for prejudgment interest,
costs, and attorney’s fees) and D’Amour (for costs and
attorney’s fees).
The district court found that awarding prejudgment
interest at the statutory rate of 9 percent “would amount to a
windfall,” and instead awarded prejudgment interest at a rate
of 3 percent for the time during which the sellers possessed
the funds—September 22, 2004, to April 26, 2010, and
November 7, 2011, to April 3, 2014. (App. 219.) From April
26, 2010, to November 7, 2011, the funds were deposited in
the registry of the district court, and the court awarded the
5
interest actually earned during that period. The district court
concluded that postjudgment interest should run from April 3,
2014, the date of its judgment after remand, and not August
14, 2009, the date of its original judgment.
The district court declined to award attorney’s fees to
Taylor, concluding that he “was a prevailing party in a
meaningful sense on only one claim—unjust enrichment.”
(App. 217.) Taylor’s “role in breaching the contract” and the
complexity of the case “counsel[ed] against awarding any
party attorney’s fees.” (App. 217–18.) The district court
concluded that D’Amour was not entitled to an award of
attorney’s fees because of his conduct. The court noted that
the jury found he made fraudulent misrepresentations and
fraudulently failed to disclose information he was under a
duty to disclose. Taylor,2 the sellers, and D’Amour filed
notices of appeal.
II3
We are faced with five issues in these appeals. First, we
address whether it was appropriate to award prejudgment
interest on the $1,500,000 in restitution awarded to Taylor,
and, if so, whether the district court erred by awarding 3
percent interest. We conclude that prejudgment interest at 9
percent is mandatory in this case under the Virgin Islands
2. Addie and Perez disclaimed any interest in the
$1,500,000 awarded to Taylor.
3. The district court had jurisdiction under 48 U.S.C.
§ 1612(a) and 28 U.S.C. § 1332. We have jurisdiction
under 28 U.S.C. § 1291.
6
prejudgment interest statute. Second, we review the district
court’s decision to award only the actual interest earned while
the disputed funds were in the court’s registry, and we find no
error in that decision. Third, we conclude that the district
court was correct to award postjudgment interest from the
date of the judgment after remand rather than the date of the
original judgment following the jury verdict. Fourth and fifth,
we find that the district court did not abuse its discretion by
declining to award attorney’s fees to Taylor and D’Amour.
A
We start our prejudgment interest analysis with the
Virgin Islands prejudgment interest statute, which provides, in
pertinent part:
(a) The rate of interest shall be nine
(9%) per centum per annum on—(1) all
monies which have become due; (2)
money received to the use of another
and retained beyond a reasonable time
without the owner’s consent, either
express or implied; (3) money due upon
the settlement of matured accounts
from the day the balance is ascertained;
and (4) money due or to become due
where there is a contract and no rate is
specified.
V.I. Code tit. 11, § 951(a).
The district court found that Taylor was entitled to
prejudgment interest. But the court was concerned that
prejudgment interest at 9 percent was “a substantial sum”—
approximately $1,300,000— that was “nearly equivalent to
the judgment amount.” (App. 219.) The court considered this
“a windfall.” (Id.) Accordingly, it reduced the interest rate to
7
3 percent for the periods during which the funds were in the
sellers’ possession.4
The sellers assert that the district court erred by awarding
any prejudgment interest. Taylor argues that the district court
erred by awarding less than the 9 percent interest rate
specified by V.I. Code tit. 11, § 951(a). The question we must
answer, then, is whether awarding prejudgment interest under
V.I. Code tit. 11, § 951(a) is mandatory. We hold that it is
mandatory in this case for three reasons.
First, the statute is worded in mandatory terms. It is a
simple command: the rate of interest “shall be” 9 percent.
Where the Legislature of the Virgin Islands intended to give
courts discretion, it did so explicitly. E.g., V.I. Code tit. 5,
§ 541(b) (“[T]here shall be allowed to the prevailing party in
the judgment such sums as the court in its discretion may fix
by way of indemnity for his attorney’s fees . . . .”). The
prejudgment interest statute affords no such discretion.5
4. The district court had awarded prejudgment interest at 9
percent in the 2009 judgment following the jury verdict.
5. We have not previously considered whether courts have
discretion under V.I. Code tit. 11, § 951(a). We have
noted, however, that under Virgin Islands law, “the
district court is given discretion to award prejudgment
interest on unliquidated sums as justice requires.” Am.
Home Assurance Co. v. Sunshine Supermarket, Inc., 753
F.2d 321, 329 (3d Cir. 1985) (emphasis added). This
pronouncement is consistent with V.I. Code tit. 11,
§ 951(a), which applies to money that is due—in other
words, liquidated sums.
8
Second, courts have interpreted similarly worded statutes
from other states as mandatory. For example, New York law
provides that
[i]nterest shall be recovered upon a sum
awarded because of a breach of
performance of a contract, or because
of an act or omission depriving or
otherwise interfering with title to, or
possession or enjoyment of, property,
except that in an action of an equitable
nature, interest and the rate and date
from which it shall be computed shall
be in the court’s discretion.
N.Y. C.P.L.R. § 5001(a) (emphasis added). Under this statute,
prejudgment interest is mandatory in a breach of contract
action. New England Ins. Co. v. Healthcare Underwriters
Mut. Ins. Co., 352 F.3d 599, 606 (2d Cir. 2003). The interest
rate is also mandatory under New York law. N.Y. C.P.L.R.
§ 5004 (“Interest shall be at the rate of nine per centum per
annum, except where otherwise provided by statute.”); Oy
Saimaa Lines Logistics Ltd. v. Mozaica-N.Y., Inc., 193 F.R.D.
87, 90 (E.D.N.Y. 2000) (“Under New York law, the court has
no discretion to award prejudgment interest at a rate higher
than the statutory rate.”); cf. Int’l Telemeter Corp. v. Hamlin
Int’l Corp., 754 F.2d 1492, 1494 (9th Cir. 1985) (“Under New
York law, the district court had no discretion to deviate from
the 9% rate in awarding post-judgment interest.”).
Massachusetts has a similarly phrased statute for
prejudgment interest in tort actions. Under Massachusetts law,
[i]n any action in which a verdict is
rendered or a finding made or an order
for judgment made for pecuniary
9
damages for personal injuries to the
plaintiff or for consequential damages,
or for damage to property, there shall
be added by the clerk of court to the
amount of damages interest thereon at
the rate of twelve per cent per annum
from the date of commencement of the
action . . . .
Mass. Gen. Laws Ch. 231, § 6B (emphasis added). This
prejudgment interest is mandatory. Bennett v. City of Holyoke,
362 F.3d 1, 11 (1st Cir. 2004). So is the 12 percent interest
rate. Doty v. Sewall, 908 F.2d 1053, 1063 (1st Cir. 1990).
Third, the Virgin Islands decision that the district court
cited in finding it had discretion over whether to award
prejudgment interest, Rasmussen v. Dalmida, 50 V.I. 1032
(D.V.I. 2008), relied on inapposite authority. In Rasmussen,
the district court stated that “[a] court may exercise its
discretion to award prejudgment interest ‘upon considerations
of fairness and prejudgment interest may be denied when its
exaction would be inequitable.’” Id. at 1039–40 (quoting
Thabault v. Chait, 541 F.3d 512, 534 (3d Cir. 2008)).
Thabault was a diversity case in which we applied New
Jersey law. The New Jersey prejudgment interest statute,
unlike that of the Virgin Islands (or New York or
Massachusetts), explicitly permits courts to “suspend the
running” of prejudgment interest “in exceptional cases.” N.J.
Court R. 4:42-11(b). The Thabault decision provides no basis
to conclude that prejudgment interest in the Virgin Islands is
similarly discretionary.
Rasmussen also cited Anthuis v. Colt Industries
Operating Corp., 971 F.2d 999, 1010 (3d Cir. 1992), and
Knapp v. Ernst & Whinney, 90 F.3d 1431, 1442 (9th Cir.
10
1996). In Anthuis, an ERISA case, we noted that, “[i]n the
absence of an explicit congressional directive, the awarding
of prejudgment interest under federal law is committed to the
trial court’s broad discretion.” 971 F.2d at 1009 (quoting
Ambromovage v. United Mine Workers, 726 F.2d 972, 981–82
(3d Cir. 1984)). In Knapp, a securities law case under section
10(b) of the Securities Exchange Act and Rule 10b-5, the
Court of Appeals for the Ninth Circuit stated that it was
appropriate for the district court to deny prejudgment interest
when it would amount to “a windfall recovery” for the
plaintiff. 90 F.3d at 1442. ERISA and Rule 10b-5 do not
provide for prejudgment interest and thus fall under the
general, court-made rule committing the question to the
discretion of the district courts. These decisions, and other
decisions interpreting federal statutes without a prejudgment
interest provision, are simply not relevant for interpreting V.I.
Code tit. 11, § 951(a).6
We must address one additional argument that the district
court could exercise its discretion in this case. The sellers
argue that, because the recovery was for restitution rather than
breach of contract, the district court had the authority to vary
6. Other decisions of lower courts in the Virgin Islands
have stated that awarding prejudgment interest is
discretionary. See, e.g., Deward v. Bushfield, 993 F.
Supp. 365 (D.V.I. App. Div. 1998) (reviewing the trial
court’s decision to grant prejudgment interest for abuse
of discretion); Bookworm, Inc. v. Tirado, No. Civ.
538/1997, 2002 WL 1765782 (V.I. Terr. Ct. July 1,
2002). We are not bound by those decisions, and we find
them similarly mistaken.
11
from the statutory rate by exercising its equitable powers.
Sellers support this contention by citing Peterson v. Crown
Financial Corp., 661 F.2d 287 (3d Cir. 1981). Interpreting
Pennsylvania law, we found in Peterson that “because [the
plaintiff’s] claim sounds in restitution, it calls for the exercise
of the court’s broader equitable powers. … [T]he trial judge
does have discretion in such cases to award damages in the
nature of prejudgment interest in an amount greater than [the]
six percent [provided by statute].” Id. at 292–93.
The applicable Pennsylvania statute provided that
Reference in any law or document
enacted or executed heretofore or
hereafter to “legal rate of interest” and
reference in any document to an
obligation to pay a sum of money “with
interest” without specification of the
applicable rate shall be construed to
refer to the rate of interest of six per
cent per annum.
41 Pa. Stat. § 202. By its terms, this statute applies to
contracts and contractual damages. See Peterson, 661 F.2d at
292 (“[U]nder Pennsylvania law, prejudgment interest in the
ordinary suit for contract damages is limited to the six percent
legal rate.”). In contrast, the Virgin Islands statute is broader
and applies to “all monies which have become due,” not just
money due under a contractual theory of recovery. V.I. Code
tit. 11, § 951(a)(1).7
7. New York’s prejudgment interest statute similarly
provides discretion in equitable actions, and in this
12
For these reasons, we hold that prejudgment interest at 9
percent is required in this case. The Legislature of the Virgin
Islands has determined that prejudgment interest is to be
awarded at the rate of 9 percent, and it is not our place to alter
the statute or add our gloss to it.8 The district court erred by
awarding interest at a rate other than the rate provided by
statute.9
respect it differs from V.I. Code tit. 11, § 951(a). N.Y.
C.P.L.R. § 5001(a).
8. Should the Legislature of the Virgin Islands determine
that 9 percent is too high or that courts should have
discretion in making interest awards, it is perfectly
capable of amending the law, as it has done in other
contexts. The Virgin Islands postjudgment interest
statute, V.I. Code tit. 5, § 426, formerly provided for a 9
percent interest rate but was amended in 2001 to reduce
the rate to 4 percent. No similar change was made to V.I.
Code tit. 11, § 951(a).
9. We do not share the district court’s concern that
awarding Taylor prejudgment interest at the statutorily
required rate of 9 percent would amount to a windfall.
When Taylor handed over his deposit in 2004, interest
rates were significantly higher than they are today.
Before they fell to the current rate of around 3.5 percent,
prime lending rates, for example, were around 5 percent
in 2004, steadily climbed to around 8 percent by 2006,
and hovered around 6 to 8 percent until 2008. See
Selected Interest Rates (Weekly) - H.15, Bd. of
13
B
We next turn to the interest awarded for the period
during which the disputed funds were in the registry of the
district court, April 14, 2010, to November 7, 2011. The
district court explained that the court “is not a for-profit
enterprise, nor is it in the business of generating profit for
Governors of Fed. Reserve Sys.,
http://www.federalreserve.gov/releases/h15/default.htm
(last visited Aug. 25, 2016) (Federal Reserve statistical
sheets for 2004, 2006, 2007, 2008, and 2016); Levan v.
Capital Cities/ABC, Inc., 190 F.3d 1230, 1235 n.12
(11th Cir. 1999) (taking judicial notice of the prime
rate). Putting aside these fluctuations, the interest Taylor
could have otherwise collected on his $1,500,000 is
significant when we consider monthly compounding
over the course of a decade. For example, monthly
compounding of $1,500,000 at an interest rate of 3.5
percent over ten years would yield over $600,000 in
interest, and compounding at a rate of 6 percent would
result in interest of $1,200,000. Using another proxy, if
Taylor invested his $1,500,000 in a S&P 500 stock
market index fund over this time period, he could have
expected to roughly double his investment, assuming
dividend reinvestment. See Chris Kahn, Historical
returns investing calculator, Bankrate.com,
http://www.bankrate.com/finance/investing/historical-
returns-investing-calculator.aspx (last visited Aug. 25,
2016). In our view, these considerations counterbalance
what might otherwise seem like a windfall for Taylor.
14
parties.” (App. 220.) For that reason, the court ordered that
Taylor receive the actual interest earned while the money was
in the registry of the court. This was $19,650.45. Taylor
argues that the district court should have awarded him 9
percent prejudgment interest even for the period during which
the funds were in the registry of the court, a substantially
larger sum.
Under our precedent, however, the district court was
correct. In Hartford Accident & Indemnity Co. v. Sharp, 87
F.3d 89 (3d Cir. 1996), we interpreted V.I. Code tit. 11,
§ 951(a) to permit prejudgment interest from the date a notice
of claim was filed until the date the defendant deposited the
funds into the district court’s registry. Id. at 93 (citing Atlin v.
Security-Conn. Life Ins. Co., 788 F.2d 139, 142 (3d Cir.
1986), for the proposition that “no interest runs against the
stakeholder after he pays the disputed sum into court”). In
Atlin, we noted two factors supporting the conclusion that
paying the funds into the court relieves the paying party from
prejudgment interest: “First, the stakeholder no longer has
access to the money and enjoys no further benefit. Second,
while deposited in the registry, the money presumably will be
invested and accrue interest for the benefit of the ultimate
recipient.” Atlin, 788 F.2d at 142.
Given this clear authority, the district court did not err by
awarding Taylor only the actual interest earned while the
funds were in the registry of the court. We will affirm the
judgment of the district court in this respect.
C
The sellers assert that the district court erroneously
determined the date prejudgment interest ends and
postjudgment interest begins. The sellers argue that
postjudgment interest should accrue from August 14, 2009,
15
when the district court entered its original judgment following
the jury verdict. Taylor argues that the district court correctly
awarded postjudgment interest from April 3, 2014, the date of
the district court’s judgment after remand.10
Our review of the district court’s determination of the
accrual date for postjudgment interest is plenary. Loughman v.
Consol-Pa. Coal Co., 6 F.3d 88, 97 (3d Cir. 1993). There are
no relevant decisions interpreting the Virgin Islands
postjudgment interest statute, V.I. Code tit. 5, § 426. Our
analysis is guided by the federal postjudgment interest statute,
28 U.S.C. § 1961, which we have noted is “analogous” to V.I.
Code tit. 5, § 426. Christian v. Joseph, 15 F.3d 296, 298 (3d
Cir. 1994).
Whether postjudgment interest should run from the date
of the original judgment following the jury verdict or the
post-remand judgment “turns on the degree to which the
original judgment was upheld or invalidated on appeal.”
Loughman, 6 F.3d at 97 (interpreting 28 U.S.C. § 1961). The
application of this standard is fact specific. For example, “if
the original judgment is affirmed in whole, such as where the
court of appeals reverses the district court’s grant of judgment
n.o.v. and orders the original judgment reinstated in its
entirety, post-judgment interest will accrue from the date of
the first judgment.” Id. at 98. To the contrary, if the original
judgment is reversed, postjudgment interest accrues from the
10. This dispute is animated by the difference between the
statutory prejudgment interest rate (9 percent) and the
statutory postjudgment interest rate (4 percent).
Compare V.I. Code tit. 11, § 951(a), with V.I. Code tit. 5,
§ 426.
16
date of the judgment after remand. “[D]istilled to its essence,”
the inquiry is when “liability and damages, as finally
determined, were ascertained or established.” Id.
In this case, the jury determined that the sellers were
liable to Taylor for $1,546,000 in damages for breach of
contract, which the district court remitted to $1,500,000 in its
judgment dated August 14, 2009. The sellers moved for
judgment as a matter of law or amended judgment. The
district court found that Taylor failed to tender performance
and was barred from recovering on his breach of contract
claim. In an order dated March 1, 2011, the court amended
the judgment from $1,500,000 to $0. In the first appeal, we
agreed that neither Taylor nor the sellers could recover for
breach of contract but found that Taylor was entitled to
restitution of the $1,500,000 deposit. Addie, 737 F.3d at 865.
On April 3, 2014, the district court ordered that the sellers
return Taylor’s $1,500,000 deposit and entered judgment in
that amount.
The sellers argue that damages were ascertained at the
time of the August 2009 judgment because “[t]he amount of
the award is the amount of Taylor’s deposit, which has always
been known in this litigation.” (Seller’s Br. 40.) The sellers
assert that the fact that the legal theory underlying the damage
award changed from breach of contract to restitution is
irrelevant. This argument is unavailing.
When the legal basis for the judgment changes after
appeal, postjudgment interest properly begins from the time
of the judgment after remand. See Loughman, 6 F.3d at 97–98
(“In general, where a first judgment lacks an evidentiary or
legal basis, post-judgment interest accrues from the date of
the second judgment; where the original judgment is basically
sound but is modified on remand, post-judgment interest
17
accrues from the date of the first judgment.” (quoting Cordero
v. De Jesus-Mendez, 922 F.2d 11, 16 (1st Cir. 1990)); Lewis v.
Whelan, 99 F.3d 542, 545 (2d Cir. 1996) (“[W]here the first
judgment is vacated because it lacks a legal basis or requires
further factual development, the vacated award should be
treated as a nullity and post-judgment interest therefore
accrues from the entry of judgment on remand.”).
As we set forth in the first Addie decision, we affirmed
the amended judgment of $0 on the contractual claims
because there was no legal basis for the breach of contract
damages awarded to Taylor in the August 2009 judgment.
Addie, 737 F.3d at 864. Although the amount of Taylor’s
recovery ultimately was the same in the 2009 and 2014
judgments, the nature and legal basis for the judgments
changed. In accordance with our instructions, on remand in
2014, the district court granted Taylor recovery on his unjust
enrichment claim. Back in 2009, the jury found for Taylor on
this claim during the liability phase of the trial, but the district
court withdrew it from the jury during the damages phase,
eventually holding that an unjust enrichment award is
inappropriate where there are valid contracts. Addie, 737 F.3d
at 860. Because the district court withdrew it from the jury,
there was no judgment on the unjust enrichment claim. Thus,
this is not one of those cases in which a court of appeals
reversed a judgment of damages n.o.v. and reinstated a jury
verdict. The final determination of liability and damages was
not ascertained or established until the judgment of April 3,
2014, and the district court correctly determined that this was
the date from which postjudgment interest accrues.
Loughman, 6 F.3d at 98. We will therefore affirm the district
court’s judgment on this issue.
18
D
The Virgin Islands Code authorizes courts to award
attorney’s fees to the “prevailing party in the judgement.” V.I.
Code tit. 5, § 541(b). Whether to award attorney’s fees and
the amount of any award is within the discretion of the district
court and will only be reversed for a clear abuse of discretion.
Id.; Lucerne Inv. Co. v. Estate Belvedere, Inc., 411 F.2d 1205,
1207 (3d Cir. 1969). The determination of whether a party is a
“prevailing party” under the statute is a legal question subject
to plenary review. See Truesdell v. Phila. Hous. Auth., 290
F.3d 159, 163 (3d Cir. 2002) (interpreting “prevailing party”
in the context of 42 U.S.C. § 1988). Taylor argues that the
district court erroneously determined that he was not a
prevailing party and asks us to reverse and remand so that the
district court can properly exercise its discretion in the first
instance.
Taylor’s interpretation of the district court’s opinion is
flawed. The district court did not determine that Taylor was
not a prevailing party; instead, it exercised its discretion to
award no fees despite Taylor’s being a prevailing party. Cf.
Raab v. City of Ocean City, — F.3d ––, — (3d Cir. 2016)
(noting that in the context of § 1988, prevailing party status is
necessary but not sufficient to justify a fee award). The
district court noted that “Taylor was a prevailing party in a
meaningful sense on only one claim—unjust enrichment.”
(App. 217.) The district court explained that “Taylor, and his
co-plaintiffs, failed on the vast majority of claims that they
brought during the course of this litigation.” (Id.) The district
court considered “[t]he complexity of [the] matter, … the
inextricably intertwined breaches occasioned by each party to
the transaction,” and “the balance between prevailing claims
and failed claims.” (App. 217–18.) Weighing these
19
considerations, the district court exercised its discretion and
declined to award Taylor attorney’s fees.
Alternatively, Taylor argues that the district court failed
to make sufficient factual findings to support a discretionary
denial of attorney’s fees to Taylor. Taylor argues that the
district court’s reliance on the balance between prevailing
claims and failed claims is erroneous due to a flawed
prevailing party analysis and that Taylor’s role in breaching
his obligations under the contract was irrelevant.
The district court did not engage in a flawed prevailing
party analysis. And Taylor cites no cases for the proposition
that considering a party’s conduct is entirely irrelevant for
determining whether to award attorney’s fees. In similar
contexts, courts have approved considering a party’s conduct
when deciding whether to award attorney’s fees. For example,
in the context of whether to award fees under ERISA, which
also permits a discretionary award of attorney’s fees, 29
U.S.C. § 1132(g)(1), we have instructed district courts to
consider five factors, including “the offending parties’
culpability or bad faith” and “the relative merits of the parties’
position.” Ursic v. Bethlehem Mines, 719 F.2d 670, 673 (3d
Cir. 1983). These two factors are fairly analogous to
considering the balance of the claims won and lost between
the parties and the parties’ underlying conduct.
Declining to award attorney’s fees to Taylor was not an
abuse of discretion.
E
D’Amour also appeals the district court’s denial of his
motion for attorney’s fees. In ruling on D’Amour’s motion,
the district court considered D’Amour’s conduct. In ruling on
the parties’ summary judgment motions, the district court
found that D’Amour was liable to the buyers for conversion
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as a matter of law, and the jury found that D’Amour
committed fraud. In the first appeal, we held that the gist of
the action doctrine barred the conversion and fraud claims.
Nevertheless, on remand the district court found that
D’Amour’s underlying conduct weighed against awarding
attorney’s fees even though he was a prevailing party.
D’Amour argues that the district court abused its
discretion by relying on facts found by the jury during the
jury’s consideration of legally barred claims. According to
D’Amour, our ruling in the first appeal that the gist of the
action doctrine barred the tort claims “plainly warrants the
conclusion that any prior findings of the lower court with
respect to the improper tort claims were erroneous, and such
findings are therefore legally irrelevant.” (D’Amour’s Br. 13.)
D’Amour cites no decisions supporting this position.
When we vacated the judgments against D’Amour—
because the tort claims were inextricably intertwined with
breach of contract claims—the conduct that led the court and
the jury to find wrongdoing by D’Amour did not disappear.
D’Amour’s argument that his conduct cannot be considered
because he could not be liable in tort is not persuasive. The
district court did not abuse its discretion by considering
D’Amour’s conduct. We will affirm the denial of D’Amour’s
motion for attorney’s fees.
III
For the reasons set forth above, we affirm the district
court’s judgment in all respects except where it awarded
prejudgment interest at a rate other than the statutorily
provided 9 percent. On the issue of the prejudgment interest
rate we reverse and remand.
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