FI L ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T DEC 18, 2008 THOMAS K. KAH

N CL ERK [DO NOT PUBLISH] IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 0 8- 12 09 0 Non -Arg um en t Ca le nd ar

__ __ __ __ __ __ __ __ __ __ __ __ D. C. Dock etNo. 0 7- 00 52 2- CV-2 -MHT KOCH FOODS OF ALABAMA, LLC, anAlab am a Lim it edLiab il it y Co ., Pl ai nt iff -Co un te rDefen da nt -Ap pe ll ee Cro ss -Ap pe ll an t,
ve rs us GENERAL E LECTRIC CAPI TAL CORPORATION, Defen da nt -Co un te rCl ai m an t-Ap pe ll an t Cro ss -Ap pe ll ee.

__ __ __ __ __ __ __ __ __ __ __ __ App eal s fr om

th e Uni te d S ta te s Di st ric t Co urt fo r th e Mi dd le Dis tri ctof Al ab am a

__ __ __ __ __ __ __ __ __ __ __ __ _ (Dece m ber 1 8, 2 00 8) Befo re TJ OFLAT, AN DERSON an d B LACK, Circ ui t J ud ge s. PER CURI AM:App el la ntGene ral Elec tri c Cap it al Co rp or at io n (“ GECC”) app eal s the

di st ric t co urt’s en try of s umm ary jud gm en t i n fa vo r of App el le e Koc h F oo ds of Alab am a, LLC (“ Koc h” ) on GECC’s cla im forco nv ers io n o f a ch ic ke n d eb on in g li ne an d asp ira l fr eeze r (co ll ect iv el y “ Equ ip m en t” ). Koch cro ss ap pe al s t he di st ric t co urt’s en try of s umm ary jud gm en t i n fa vo r of GECC on Koch ’s cla im

for a d ecl arat ory

jud gm en t tha t Ko ch own s t he Equ ip m en t o r, al te rn at iv el y , it s cl ai m fo r th e co stof s to rin g t he Equ ip m en t u nd er the do ctrin e o f un jus t en ric hm en t. Fo r th e rea so ns setforth be lo w, we affi rm . I. BACKGROUND Sy lv es t Fa rm s, In c. (“ Sy lv es t” ) op erat eda po ul try pro ces si ng pl an t. On Decem be r 29 , 20 05 Sy lv es t l eas eda ch ic ke n d eb on in g l in e an d s pi ral free zer f ro m GECC. The wri tt enlea se st at ed : “ All Equ ip m en t s ha ll at a ll ti m es rem ai n p ers on al pr op erty of [ GECC] even th ou gh itm ay be att ach edto real pro pe rty.” On Apri l 18 , 20 06 , Sy lv es t fi le d fo r ba nkrupt cy . App el le e Koc h p ur ch as edSy lv es t’s as se ts ata ba nkrupt cy

sal e. Koch was g iv enth e o pp ortu ni ty to re ject o r as su m e th e GECC le as e. Koch ch os e to rejectit . Howev er, Ko ch co nt in ue d s eam le ss op erat io n o f th e p ro ces si ng pl an t i nc lu di ng us e o f th e d eb on in g m ach in e. 1

Although the spiral fre ezer re mains in the proce ssing plant, it was ne ver ma de 1 operational and Koch ha s never used it. 2InAug us t o f 20 06 , GECC di sc ov eredth atKoch was u si ng th e d eb on er. On

Ja nu ary 2, 2 00 7, af

te r fai le d s et tl em en t n eg ot ia ti on s, GECC s en t Ko cha le tt er de m an di ng pa stan d fu tu re l eas e p aym en ts an d warni ng th atfai lu re t o p ay co ul d
subjec t Ko ch to anact io n fo r co nv ers io n o f th e Equ ip m en t. OnFeb ru ary 14 , 20 07 , Koc h re sp on de d wi th anoff er t o p ur ch as e th e Equ ip m en t an d, i n t he ev en t o f reject io n, i nf

orm edGECC itwou ldpu rch as e n ew m ach in ery. The l ette r al so ga ve GECC p erm is si on to en te r th e p la ntto rem ov e th e Equ ip m en t p ro vi de d t ha t GECC in de m ni fy Koch foran y

da m ag e cau se d t o t he pl an t b y th e rem ov al . GECC reject edth e o fferbu t n ev er at te m pt edto recl ai m

th e Equ ip m en t. In Apri l o f 20 07 , Koc h re m ov edth e d eb on er i n o rd er t o i ns ta ll ne w equ ip m en t an d p la ceditin an ad jacen t p ark in g l ot . On M ay 25 , 20 07 , Koch fil eda co m pl ai ntag ai ns t GECC i n s ta te co urt
se ek in g ade cl arat ory

jud gm en t t ha t i t o wne d t he Equ ip m en t. Alt ern at iv el y , Koch
as se rte d tha t GECC was li ab le forth e st or ag e co stof the Equ ip m en t u nd er the do ctrin e o f un

jus t en ric hm en t. GECC re m ov edth e act io n t o fe de ral co urt an d
as se rte d aco un te rcl ai m

forco nv ers io n. Bo th parti es fil edforsu m m ary jud gm en t. The di st ric t co urt en te redsu m m ary jud gm en t i n fa vo r of GECC onKoch ’s cla im s fo r de cl arat ory

jud gm en t an d u nju sten ric hm en t an d i n fa vo r of Koch on GECC’s
co nv ers io n c ou nt ercl ai m . GECC fil eda no ti ce o f ap pe al on Apri l 2 1, 2 00 8 a nd
3Koc h c ro ss -ap pe al ed
. 2 II. DISCUSS ION

Fi rs t, we wi ll ad dr es s wh ethe r th e le as e ag reem en t b etween Sy lv es t an d GECC p res erv edth e ch arac te r of th e Equ ip m en t as pe rs on al pro pe rty. N ex t, we tu rnto GECC’s cla im

forco nv ers io n. Th ird , we di sc us s Ko ch ’s equ it ab le cla im fo r un jus t en ric hm en t. Fo urth , we add res s wh ethe r Koc h wai ve d t he att orne y cl ie ntpri vi le ge wit h re sp ectto ane-m ai l i na dv ert en tl y pro du ceddu rin g d is co ve ry . Fi na ll y , we con si de r Koc h’s ar gu m en t t ha t i t i s en ti tl edto anawardof c os ts un de r Fed eral Ru le of C iv il Pro cedur e 6 8. A. The Ch arac te r of

th e Equ ip m en t Und er Al ab am a la w, th e Equ ip m en t i s GECC ’s per so na l p ro pe rty. T he ch at te l ch arac te r of

a fi xtur e m ay

be ret ai ne d b y

anag reem en t b etween th e se ll er
an d p ur ch as er ev en“ ag ai ns t t hi rdpe rs on s p ur ch as in g o r ta ki ng a m ortg ag e upo n th e la ndup on whi ch [th e fi xtur e] sta nd s, b on a fi de an d wi th ou t n ot ic e o f su ch ag reem en t.” M ob il e Cab an d B ag ga ge Co ., 74 So . 2d49 8, 5 02 (Ala . 19 54 ). Sy lv es t an d GECC en te redin to a le as e ag reem en t s ta ti ng th atth e Equ ip m en t

We reviewthe entry

of summary

judgme nt de novo. See Whately v. CNA Ins. 2 Co., 189 F.3d 1310, 1313 (11th Cir. 1999). Summary judgme nt is appropriate when the evidenc e, viewe d in the light most favor able to the nonmovingparty , prese nts no ge nuine issue of fa ct and c ompels judgme nt as a matter of law. I d.; Fed. R. Civ. P. 56(c). 4wou ldrem ai n GECC ’s per so na l p ro pe rty. Und er the rul e o f Mo bi le Cab , th e

Equ ip m en t re m ai ne d GECC ’s per so na l p ro pe rty even aft er Ko ch pu rch as edth e pl an t i n wh ic h t he Equ ip m en t was in st al le d. Koc h a tt em

pt s t o d is ti ng ui sh th is li ne of Al ab am a p rece de nt . Kocharg ue s th aton ly a lan do wne r can en te r in to anag reem en t p rev en ti ng ch at te ls fro m be co m in g fi xtur es . At th e ti m e iten te redin to th e equi pm en t l eas e wit h GECC , Sy lv es t was tec hn ic al ly the les se e o f th e p ro ces si ng pl an t. Howev er, Ko ch ’s bri ef 3 in fo rm s t hi s co urt tha t Sylve stex erci se d i ts op ti onto pu rch as e th e p ro ces si ng pl an t be fo re s el li ng th e p ro pe rty in b an krup tc y . Acco rd in gl y , at t he ti m e Koc h a cqui red 4 th e p ro pe rty, the lan do wne r (Sylve st ) was pa rty to t he ag reem en t s ta ti ng th atth e Equ ip m en t re m ai ne d GECC ’s per so na l p ro pe rty. T hu s, Ko ch ’s att em ptto di st in gu is h t hi s ca se is unpe rs ua si ve . 5

Sylvest entere d into an arr ang ement with Hodg es B onded Ware house whe reby 3 Hodg es purc hased the poultry proce ssing plant a

nd simult aneously

lease d the plant to Sylvest under a triple net lea se (“ Fa cility L ease ”). Under a

triple net lea se “the lessee pa y s all the expenses, including mor

tga g e intere st and amortization, leavingthe lessor with an a mount free of all claims.” B lack’ s L aw Dic tionary 908 (8th ed. 2004). Sylvest would become the owner of the plant at the end of

the lease or upon exercisingits opti on to purcha se the plant at any time by prepa ying the rema ining r ent. Fur thermore , Koch’ s brief in opposition to GECC’s mot ion for summary 4 judgme nt, filed in the district court, states that the F acility L ease “wa s essentially

equivalent to an installment purchase of the F acility . . . Sylvest had the c ontrol of and in re ality owned the Fa cility .” Be cause the holding in Mobile Cab dictates the outcome of this disput e, weneed 5 not addre ss the parties’ argument over whether the Equipment bec ame f ix tures under

a tra ditional 5B. GECC’s Cl ai m forCo nv ers io n The di stric t co urt d et erm in edth atGECC’s co nduc t i m pl ie d c on se ntto Koc h’s re te nt io n, d is po si ti on an d u se of t he Equ ip m en t. W e d is cern no rev ers ib le 6
erro r. Lack

of c on se ntis in di sp en sabl e to anact io n fo r co nv ers io n. J on es v. DCH Heal th Care Aut h., 6 21 So .2d13 22 , 13 24 (Ala . 19 93 ). GECC as ke d n otforreturn of th e Equ ip m en t b utforren ta l p aym en ts . Furt he rm or e, GECC m ad e n o a tt em pt to recl ai m

th e Equ ip m en t d es pi te Koch ’s writ te n o fferto all ow GECC t o re m ov e th e Equ ip m en t. GECC cla im s t ha t t he off er was un reas on ab le be cau se itrequi red 7 GECC to in de m

ni fy Koch forda m ag e to th e p la nt . To th e co nt rary, und er Alab am a la w, if the de ta ch m en t o f th e ch at te l wo ul d “ oc cas io n s om e d im in ut io n i n th e v al ue of t he free ho ld , as i t wo ul d h av e st oo d h adth e at ta ch m en t n otbe en
m ad e, th enth e d ep reci at io n m us t fi rs t b e m ad e who le ” to th e la nd own er, b efo re th e ri gh t o f th e ch at te l o wne r can be reco gn iz ed . W arre n v . Lid de ll , 20 So . 89 , 94
fix tures ana ly sis.

Contrary to GECC’s argument, the district court did not find that GECC was 6 require d under A labama la w to make a

demand f

or possession of its Equipment. The cour t simply conclude d that, on the fa cts of this case , GECC’s conduct – includingits failure to re quest the re turn of the Equipment, its reque st for re ntal pay ments, and its decision not to acc ept Koch’ s offe r to enter

the plant to remove the Equipment – implied consent to Koch’ s use of the Equipment. GECC did request surre nder of shrink-wra

pping e quipment it had leased to 7 Sylvest. Koch c omplied with the reque st. In compar ison, GECC took no action with respect to the equipment now at issue. The district court noted that this further demonstrated GECC’s implied consent to the rete ntion and use of the r emainingequipment. 6(Ala . 18 96 ). Thu s, GECC’s ar gu m en t h as no m eri t.

GECC al so arg ue s t ha t ev enif i t co ns en te d t o Ko ch ’s us e o f th e Equ ip m en t, itdi d n otco ns en t t o the di sp os it io n o f th e d eb on er, i .e. it s re m ov al an d s to rag e in
anou ts id e lo cat io n. Ag ai n, we fi ndno erro r in th e d is tri ctco urt’s d et erm in at io n th atGECC’s co nduc t i m

pl ie d c on se ntto th e d is po si ti on of t he de bo ne r. Koch in fo rm edGECC in writ in g t ha t i t wo ul d p ur ch as e n ew equi pm en t i f GECC was
un wil li ng to acce ptit s o fferto pu rch as e th e curren t d eb on er. Inth e sa m e le tt er, Koc h o ffer edto all ow GECC t o e nt er the pl an t t o re m ov e th e Equ ip m en t. GECC
ne ve r atte m

pt edto recl ai m

th e d eb on er. Thu s, Ko ch was l eftwit h n o c ho ic e b utto
rem ov e th e d eb on er i ts el f whe n t he ne w equ ip m en t arriv ed
. Fi na ll y , GECC arg ue s t ha t Ko ch co nv ert edth e Equ ip m en t b y wron gf ul ly
as se rti ng own ers hi p. Co nv ers io n i s “ th e wro ng fu l ex erci se of d om in io n o ve r pr op erty .” Ottv. Fo x, 3 62 So .2d83 6, 8 39 (Ala . 19 78 ). It ca n b e es tabl is he d,
am on g o th er m ean s, b y

“ anil le ga l as su m

pt io n o f own ers hi p.” Id. Ho wev er, Koc h d idno t as se rt o wne rs hi p o f th e Equ ip m en t u nt il itfil edanact io n fo r a de cl arat ory

jud gm en t i n s ta te co urt i n M ay of 2 00 7, af

te r GECC thr eat en edto br in g asu itforco nv ers io n. Pri orto th atti m e, Koc h n eg ot ia te d wi th GECC to
res ol ve th e m at te r, in cl ud in g m ak in g o ffer s t o p ur ch as e th e Equ ip m en t an d al lo win g GECC acce ss to th e p la ntto retrie ve th e Equ ip m en t. Thu s, Ko ch di d n ot
7il le ga ll y

ass um e o wne rs hi p o f th e Equ ip m en t. Acco rd in gl y , we con cl ud e th atth e d is tri ctco urt d idno t err in gra nt in g
su m m ary jud gm en t i n fa vo r of Koch on GECC’s co nv ers io n c la im
. 8 C. The C la im

forUnju stEnri ch m en t Koc h a ss ert s t ha t GECC i s l iabl e fo r st or ag e co st s fr om th e ti m e it de m an de d t ha t GECC r em ov e th e d eb on er fro m it s p la ntto th e p res en t. The di st ric t co urt co nc lu de d tha t “ no th in g s ug ge st s t ha t t he tri al co urt m us t s te p i n t o ba la nc e th e equi ti es in th is cas e.” We agre e. Unju sten ric hm en t i s “ anol d equi tabl e rem edy

pe rm it ti ng th e co urt i n e qu it y an d g oo d c on sc ie nc e to di sa ll ow
on e to be un

jus tl y en ric he d a t the ex pe ns e o f an ot he r.” Avi s R en t A CarSy s., In c. v. Hei lm an , 87 6 S o. 2 d 1 11 1, 1 12 3 (Al a. 20 03 ). Koch us edth e GECC d eb on er wit ho utpa ym en t fo r te n m on th s u nt il itwas abl e to sec ur e n ew equi pm en t. Thu s,
we can no t co nc lu de th atGECC ha s b een un jus tl y en ric he d b y

Koch ’s ret en ti on of th e equi pm en t. D. The Att orne y -Cl ie ntPri vi le ge W e co nc lu de th atth e d is tri ctco urt d idno t ab us e it s d is cret io n i n g ran ti ng Koc h’s m ot io n fo r a p ro te ct iv e o rd er. Dur in g d is co ve ry , Koch in ad ve rte nt ly

Be cause we a ffirm the grant of summar y judgme nt in favor of

Koch, we need not 8 addre ss the issue of dama g es. 8pr oduc edane-m ai l p ro te ct edby the att orne y -cl ie ntpri vi le ge . There is no

co nt ro ll in g Al ab am a p rece de nton waiv er o f th e at to rn ey -cl ie ntpri vi le ge th ro ug h in ad ve rte ntdi sc lo su re. Howev er, aft er ca refu ll y co ns id eri ng th e li m it edAlab am a 9
au th or it y av ai labl e, th e d is tri ctco urt co nc lu de d t ha t a t ot al it y -o f-the -ci rcu m st an ces te stpro vi de s fo r a co m

pr eh en si ve an d s en si ti ve ass es sm en t o f in ad ve rte ntwaiv ers
an d wo ul d l ik el y

be ad op te d b y

th e Alaba m a Supr em e Co urt i f itco nf ro nt edth e is su e. See Al ld readv. Ci ty of Gren ad a, 98 8 F .2d14 25 , 14 34 (5t h C ir. 1 99 3) . W e fin d n o e rro r in th e d is tri ctco urt’s co nc lu si on . Und er the to ta li ty-of-t he -ci rcu m st an ces tes t, t he co urt co ns id ers fiv e fac to rs :

“ (1 ) th e rea so nabl en es s o f pr ecau ti on s t ak ento pre ve ntdi sc lo su re; (2) th e am ou nt of ti m e ta ke n t o re m edy

th e err or ; (3 ) th e sc op e o f di sc ov ery; (4) th e ex te ntof t he di sc lo su re; an d (5 ) th e o ve rri di ng is su e o f fai rn es s.” Id . at 1 43 3. GECC ar gu es th atKoch fai le d t o a de qu at el y rev ie w th e d oc um en ts be fo re p ro du ci ng th em . In
supp ort o f th is arg um en t, GECC al le ge s t ha t Ko chin ad ve rte nt ly pro du cedat l eas t th ree p riv il eg ede-m ai ls
. Howev er, the pri vi le ge d e -m ai l atis su e h ere was fou nd 1 0 “While findings of

law ar e ordina

rily revie wable de novo, this Court wil l defe r to 9 a district cour

t's inter pretation of unsettled questions of the law of the state whe re the court sits.” Fe rre ro v. Associated Materials Inc., 923 F .2d 1441, 1444 (11th Cir. 1991). We revie w the entr y of a pr otective or der f

or an a buse of discr etion. See Chry sler Intern. Corp. v. Chemaly , 280 F.3d 1358, 1360 (11th Cir. 2002).

GECC also claims that the Xu af fidavit supports the conc lusion that the 1 0 documents we re c are lessly produce d. To the contra ry , the af fidavit states: Xu re viewed the documents seve ral times; the e- mail was inserte d in the middle of an e quipment lease; a nd Xu 9tu ck edin th e m id dl e o f a 3 7 p ag e le as e ag reem en t co nt ai ne d i n apro du ct io n o f

3,7 58 pa ge s o f do cu m en ts . The d oc um en t was in cl ud edin Koch ’s pri vi le ge lo g
an d Ko ch imm ed ia te ly objec te d a ndass ert edit s p riv il eg e whe n GECC pre se nt ed th e d oc um en t ata de po si ti on of Ko ch ’s Chi ef Fi na nc ia l Offi cer. Ap pl y in g t he se fact s t o t he to ta li ty-of-t he -ci rcu m st an ces tes t, we fi ndno ab us e o f di sc ret io n. E. Offer o f Ju dg m en t Koc h a rg ue s t ha t i t i s en ti tl edto anawardof c os ts un de r Fed eral Ru le of Ci vi l Pr oc edur e 6 8 i nc urredfro m th e ti m e itserve d a n o fferof ju dg m en t o n GECC. Howev er, Ko ch ’s bri ef al so st at es th at“ th e Dis tri ctCo urt m ig htno t h av e be enaware o f su ch anoff er.” Co ns eque nt ly, we co nc lu de th atKoch di d n otbri ng th e o fferof ju dg m en t t o t he att en ti on of t he di st ric t co urt. Thi s C ou rt wi ll no t
co ns id er o n app eal is su es no t ra is edbe fo re the di st ric t co urt. Ch arl es v. Bu rto n, 16 9 F .3d13 22 , 13 27 n.8 (11 th Cir . 19 99 ). Ther efo re, we co nc lu de th atKoch waiv edth is is su e o n app eal
. III. CONCLUSION Fo r th e fo reg oi ng reas on s, t he jud gm en t o f th e d is tri ctco urt i s AFFIR MED. 1 1

never intended to produc e the doc ument. Appellant’s r equest for

oral a rgument is DENI ED. 1 1 10