FI L ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T NOVEMB ER 17, 2010 J OHN L EY CL ERK [DO NOT PUBLISH] IN THE U

NITED STATE S COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 1 0- 11 49 3 Non -Arg um en t Ca le nd ar

__ __ __ __ __ __ __ __ __ __ __ __ D.C. Dock etNo. 8 :0 6- cv -0 19 73 -TGW BADER AL-BABTAIN, ll ll ll ll ll ll ll ll ll ll l Pl ai nt iff

- Co un te r Defen da nt- App el le e, ABDULMOHSEN AL-BABTAIN ll ll ll ll ll ll ll ll ll ll l Pl ai nt iff

- App el le e, ve rs us HANI S. BANOUB ll ll ll ll ll ll ll ll ll ll l Defen da nt- Co un te r Cl ai m an t - Ap pe ll an t, U.S. ENERGY A LLIED, L LC, et a l., ll ll ll ll ll ll ll ll ll ll l Co un te r - Defen da nt s, M/ S. BADER BARRAK AL BABTAIN & BR OS. GEN. T RAD. & CONT. CO., a.k .a. M/ S. Bad er Al Bab ta in Gene ral Trad in g C o. ENERGY ALL IED CO., ll ll ll ll ll ll ll ll ll ll l Co un te r Defen da nt s - Ap pe ll ees .__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co urt forth e Mi dd le Dis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ (No ve m be r 17 , 20 10 ) Befo re CARNES, BAR KETT, an d HULL, Cir cu itJu dg es . PER CURI AM: Thi s ca se ari se s fr om

a bu si ne ss rel at io ns hi p b etween Hani Ban oub, wh o i s a res id en t o f Fl or id a, an d two b ro th ers who are b oth Ku wait i n at io na ls , Abdul m oh se n Al -Bab ta in an d B ad er Al -Bab ta in . Beg in ni ng in th e 1 98 0s , Ban oub en ga ge d i n anu m

be r of bu si ne ss ve ntur es with the Al-B ab ta in s, b utin 20 05 th e rel at io ns hi p s ou red . Thatsp rin g t he Al-B ab ta in s as ke d B an oub t o b uy a y ach t fo r th em in th e Uni te d S ta te s an d s hi p i t t o Kuwait . For t ha t p ur po se th ey sen t h im $9 00 ,00 0, b utBan oub n ev er b ou gh t t he y ach t an d n ev er re tu rn edth e m on ey . The Al-B ab ta in s b ro ug htanact io n i n d is tri ctco urt s eek in g t o re co ve r th ei r $9 00 ,00 0 a ndBan oub c ou nt ercl ai m edag ai ns t t he Al-B ab ta in s an d s ev eral of t he ir co m pa ni es , con te nd in g t ha t t he Al-B ab ta in s an d t ho se co m pa ni es actua ll y

owed hi m m on ey . After t he di st ric t co urt d is m is se d s om e o f Ban oub’s co un te rcl ai m s, bo th si de s ag reedto ha ve th e rem ai ni ng cla im s t ran sf erre d t o am ag is tra te jud ge . The cas e p ro ceed edto a th ree- da y be nc h t ria l, an d t he jud ge is su edhi s fi nd in gs of 2factan d c on cl us io ns of l aw on Marc h 5 , 20 10 . In ad di ti on to di sm is si ng th e

rem ai ni ng co un ts of B an oub’s co un te rcl ai m , he e nt ereda jud gm en t i n fa vo r of th e Al-B ab ta in s fo r ov er $ 1.2 m il li on , whi ch in cl ud edbo th th e $ 90 0,0 00 th ey ha d tra ns ferr edto Ban oub fo r th e y ach t an d o ve r $3 00 ,00 0 i n p reju dg m en t i nt eres t. Ban oub c on te nd s t ha t t he m ag is tra te jud ge co m m it te d c le ar erro r in hi s fi nd in gs of factan d abu se d h is di sc ret io n i n a n e vi de nt ia ry rul in g o n a tt orne y -cl ie ntpri vi le ge . I. W e rev ie w a di st ric t co urt’s fi nd in gs of f actforcle ar erro r. Und er thi s hi gh ly defer en ti al st an dard , “ we m us t af firm th e d is tri ctco urt u nl es s o urrev ie w of th e en ti re re co rdlea ve s u s ‘with t he de fin it e an d fi rm co nv ic ti on th ata m is ta ke ha s be enco m m it te d.’” Uni te d S ta te s v . Eng el ha rdCo rp ., 12 6 F .3d13 02 , 13 05 (11 th Ci r. 19 97 ) (quo ti ng And ers on v. Ci ty of Bes se m er Ci ty, N.C., 47 0 U.S. 5 64 , 57 3, 10 5 S .Ct. 1 50 4, 1 51 1 (1 98 5) ). Fin di ng s o f fac t tha t ar e b as edon th e d is tri ct co urt’s d et erm in at io n a s t o the cred ib il it y of wi tn es se s “ de m an d[ ] ev engre at er de fere nc e.” And ers on , 47 0 U.S. at57 5, 1 05 S.Ct . at 1 51 2. As th e Supr em e Co urt ha s ex pl ai ne d, “ whe n atri al jud ge ’s fin di ng is ba se d o n h is de ci si on to cred itth e te st im on y of o ne of t wo o r m or e wit ne ss es , each of wh om ha s t ol d aco he ren t an d faci al ly plaus ib le st ory

th atis no t co nt rad ic te d b y ex tri ns ic ev id en ce, tha t fi nd in g, 3if n otin te rn al ly inc on si st en t, ca n v irtua ll y ne ve r be cle ar erro r.” Id . Seek in g t o e st ab li sh anin te rn al in co ns is te nc y in th e ev id en ce the m ag is tra te jud ge cred it ed , Ban oub p oi nt s t o aclaus e in hi s emplo ym en t co nt ractwith En erg y All ie d, o ne of t he Al-B ab ta in s’ com pa ni es . Thatclaus e st at es : “ Thi s Ag reem en t co nt ai ns th e en ti re ag reem en t o f th e p art ie s an d t he re ar e n o o th er p ro m is es or co nd it io ns co ns id ered . Am en dm en ts to th is ag reem en t m us t b e m ad e in writ in g an d s ig ne d b y

bo th pa rti es .” The d is tri ctco urt ad dr es se d tha t cl au se be fo re the m ag is tra te jud ge di d, an d B an oub s ug ge st s t ha t t he m ag is tra te jud ge ’s lat er an al y si s was in co ns is te ntwith t he di st ric t co urt’s ea rli er o ne . Befo re the cas e was tra ns ferr edto th e m ag is tra te jud ge , th e Al- Bab ta in s an d th ei r co m pa ni es ha d m ov edto di sm is s B an oub’s co un te rcl ai m un de r Fed . R. Civ . P. 12 (b )(6 ). In rul in g o n t he m ot io n, t he di st ric t co urt ex am in edth e em pl oym en t ag reem en t wi th Ener gy Alli ed , whi ch was s ig ne d o n J anua ry 2, 2 00 4. That

1 co nt ractgu aran te edBan oub a n a nn ua l s al ary of $7 2,0 00 pl us a qu art erl y bo nu s o f 5% o f Ene rg y

All ie d’s t ot al gro ss rev enue s. Ba no ub ’s cou nt ercl ai m , ho wev er, al le ge d t he ex is te nc e o f anearl ie r or al co ntractwith B ad er Al -Bab ta in in ad di ti on The district cour

t was considering the employ ment agree ment on a motion to dism iss 1 beca use it was attac hed to B anoub’s amended c ounterc laim as an e x hibit. That agree ment was signe d by Ba der A l-Ba

btain as Chairman of

the B oard of

Energy Allied, one of the counter defe ndants. In its answer to the c ounterc laim, Energy Allied admitted the validity of the employ ment agree ment. 4to th e wri tt enco nt ractwith En erg y All ie d. Acco rd in g t o B an oub, tha t o ral co nt ractgu aran te edhi m

anad di ti on al 10 % of t he co m pa ny’ s g ro ss rev enue s. Ban oub m ad e th atall eg at io n d es pi te th e fac t tha t h e h im se lf h addra fte d the writ te n c on tra ctwith En erg y All ie d a ndde sp it e th e “ en ti re ag reem en t” claus e th at itco nt ai ne d. Inan al y zi ng th e “ en ti re ag reem en t” claus e fo r pu rp os es of t he Ru le 12 (b )(6 ) m ot io n, t he di st ric t co urt co nc lu de d t ha t t he claus e cl earl y serve d t o t erm in at e

“ ob li ga ti on s u nd er the ora l ag reem en t t ha t m ay ha ve ex is te d.” (em

ph as is ad de d) . Bu t t he claus e d idno t “ m erg e al l p rev io us ob li ga ti on s u nd er the [al le ge d] ora l ag reem en t i nt o t he Em

pl oym en t ag reem en t.” Th us , th e co urt re as on ed , Ban oub’s co nt ractwith En erg y

All ie d “ [d id ] no t co nt ai n am erg er cl au se .” The c ou rt acco rd in gl y

di sm is se d B an oub’s co un te rcl ai m s t o t he ex te ntth ey so ug htda m ag es ba se d o n t he ex is te nc e o f anora l co nt ractaft er J anua ry 2, 2 00 4, t he da te Ban oub si gn edth e em

pl oym en t ag reem en t; bu t cl ai m s b as edon servi ces he supp os ed ly pr ov id edto Ener gy Alli edbe fo re J anua ry 2, 2 00 4, s urvi ve d t he Ru le 12 (b )(6 ) m ot io n a ndwere am on g t he cla im s co ns id eredby the m ag is tra te jud ge du rin g t he be nc h tria l. Bo th Ban oub andth e Al- Bab ta in s t es ti fie d a t t ria l ab ou t the Ener gy Alli ed co nt ractan d i ts “ en ti re ag reem en t cl au se .” The m ag is tra te jud ge ’s det erm in at io ns 5on th es e p oi nt s re ad s:

Ban oub d raft edth e Ene rg y All ie d (Ku wait ) em

pl oym en t ag reem en t hi m se lf a ndwas p res en t i n Ku waitwhen th e ag reem en t was ex ecu te d. Ban oub t es ti fie d t ha t h e was en ti tl edno t o nl y to 5% o f gr os s re ve nu es of Ener gy Alli ed(Kuwa it ) as pro vi de d i n t he writ te n a gr eem en t, b ut al so to anad di ti on al 10 % of g ro ss rev enue s p ur su an t t o t he pri orora l ag reem en t wi th Bad er Al -Bab ta in . This tes ti m on y , whi ch I reject , st ru ckm e as pa te nt ly im

pl au si bl e, pa rti cu la rly in l ig htof t he m erg er pr ov is io n a ndth e fac t tha t t he ag reem en t was dra fte d b y Ban oub. Thi s i s s im

pl y on e ex am

pl e why I fin d B an oub n otto be a cred ib le wit ne ss . (rec or d c it at io ns om it te d) . Ban oub s ei zes up on th e la ng ua ge of t he m ag is tra te jud ge ’s fin di ng s t o s ug ge stth atth e fi nd in gs of f actin cl ud e an“ in te rn al in co ns is te nc y ”: th e m ag is tra te jud ge ass um edth atth ere was a m erg er cl au se in Ban oub’s co nt ractwith En erg y All ie d e ve n a fte r th e d is tri ctco urt i n i ts rul in g o n th e 1 2( b) (6 ) m ot io n h adde te rm in edth atth ere was no t o ne . That“ in te rn al in co ns is te nc y ,” Ban oub a rg ue s, l edth e m ag is tra te jud ge to di sc red itfro m th enon ev erythi ng he sai d andam ou nt s t o acle ar erro r warrant in g re ve rs al . Ban oub’s ar gu m en t m is se s t he bo at . Firs t, the m ag is tra te jud ge ’s fin di ng s of factwere n otpre m is edon whethe r Ban oub’s co nt ractco nt ai ne d aleg al ly bi nd in g m erg er p ro vi si on . Ins te ad , th e jud ge was m erel y po in ti ng to th e fac t t ha t Ban oub fa il edto off

er a re as on ab le ex pl an at io n fo r why he wo ul d d rafta co nt ract th aten ti tl edhi m

to on ly 5% of g ro ss rev enue s i f he were ac tu al ly ent it le d t o 1 5%.

6The jud ge cle arl y fou ndBan oub’s t es ti m on y onth atsubjec t i m

pl au si bl e reg ard le ss of th e le ga l ef

fectof t he m erg er p ro vi si on . Seco nd , inrul in g o n the 12 (b )(6 ) m ot io n, t he di st ric t co urt was de te rm in in g o nl y whet he r Ban oub’s co un te rcl ai m s su rv iv edas am atte r of

law, an d t he co urt was ob li ge d a t tha t s ta ge to “ acce ptth e al le ga ti on s o f th e co m

pl ai ntas t ru e an d . . . co ns tru e th e fac ts all eg edin th e li gh t m os t fa vo rab le to th e p la in ti ff.” Hu nn in gs v. Tex aco , Inc ., 29 F.3d14 80 , 14 84 (1 1t h C ir. 1 99 4) . Even if we a ccep t fo r th e sa ke of t he arg um en t t ha t t he m ag is tra te jud ge ’s fin di ng s o f fac t as su m e th e m erg er p ro vi si on was l eg al ly bi nd in g, t ha t as su m

pt io n wo ul d n otbe in co ns is te ntwith t he di st ric t co urt’s ea rli er ru li ng th at , forpu rp os es of d eci di ng th e 1 2( b) (6 ) m ot io n, the co nt ractdi d n ot co nt ai n am erg er cl au se th atwou ld , on it s fa ce, p recl ud e Ban oub’s co un te rcl ai m s as a m atte r of

law. Th ird , as t he m ag is tra te jud ge hi m se lf n ot ed , Ban oub’s te st im on y in reg ardto th e em

pl oym en t co ntractwith En erg y All ie d was “ si m

pl y on e ex am pl e” o f why he fo un d B an oub n otto be a cred ib le witne ss . The jud ge co ns is te nt ly rejectedBan oub’s t es ti m on y as “ va gu e, ev as iv e, an d i nc on si st en t,” ch oo si ng in st eadto cred itth e te st im on y of t he Al-B ab ta in s, the ir s up po rti ng wit ne ss , andth e d oc um en ta ry ev id en ce the y

off ered . The fi nd in gs of f

actco nt ai n no in te rn al in co ns is te nc y est ab li sh in g c le ar erro r.

III. 7Ban oub a ls o c on te nd s t ha t ce rta in ev id en ti ary ru li ng s v io la te d the

pr ot ect io ns of t he att orne y -cl ie ntpri vi le ge . Spe ci fic al ly, th e m ag is tra te jud ge al lo wedBan oub t o b e cro ss -ex am in edco nc ern in g ade m an d l et te r th atLeah Zam m it , Ban oub’s ex -wif

e an d an a tt orne y , sen t t o B ad er Al -Bab ta in in Octo be r 20 05 . Ban oub’s l awy er en te redth e d em an d l et te r in to ev id en ce dur in g h is cro ss ex am in at io n o f Abdul m oh se n Al -Bab ta in , andBan oub t es ti fie d abo utth e le tt er i n hi s o wn d ire ctex am in at io n. Co un se l ra is edth e p riv il eg e o bjec ti on on ly dur in g Ban oub’s cr os s- ex am in at io n, wh enth e Al- Bab ta in s’ lawyer beg anto qu es ti on Ban oub abo utth e co nv ers at io n tha t l edup to Zam m it ’s dra fti ng of t he let te r. Dur in g h is di rectex am in at io n, Ba no ub ha d t es ti fie d t ha t Ba de r Al-B ab ta in ha d t ol d h im

si m pl y to “ ke ep ” th e $ 90 0,0 00 th atwas t ran sf erre d fo r th e y ach t “ as anoff se t” un ti l t he pa rti es co ul d c om pl et e an “ acco un ti ng ” o f wha t was owed . On cro ss , th e Al- Bab ta in s’ lawyer so ug htto eli ci t wh en , if ev er, Ban oub h adto ld Zam m itab ou t t ha t s up po se d a rran ge m en t, an d t ha t i f he ha d d on e so , why th e arra ng em en t was no t m en ti on edin th e d em an d l ette r th atZam m itha d s en t. When Ban oub’s l awy er ra is edth e p riv il eg e o bjec ti on , th e co urt o ve rru le d, n ot in g,

“ [S]in ce thi s l et te r is in ev id en ce, i t’s n o l on ge r atto rn ey /c li en t p riv il eg e wit h res pe ctto th is stuf

f. . . . Y oucan no t h av e –

ha ve itbo th way s. Yo u’ve rel ie d upo n th is do cu m en t. Yo u’ve tal ke d abo utit . The p riv il eg e as far as th is do cu m en t i s 8co nc ern edis waiv ed .”

W e rev ie w th e d is tri ctco urt’s ev id en ti ary ru li ng on ly for an ab us e o f di sc ret io n, an d we wi ll rev ers e o nl y if “ co nv in ce[d ] . . . tha t anerro ne ou s ru li ng ‘resu lt edin a subs ta nt ia l p reju di ci al effec t.’” Uni te d S ta te s v . Sam an ie go , 34 5 F .3d 12 80 , 12 82 (11 th Cir . 20 03 ) (quo ti ng Alex an de r v. Fu lt onCo un ty, Ga., 20 7 F .3d 13 03 , 13 26 (11 th Cir .20 00 )). Fi rs t, we ar e n otpe rs ua de d t ha t at to rn ey -cl ie ntpri vi le ge ne ces sa ril y sh ou ld ha ve sh ie ld edBan oub fr om th e cro ss -ex am in at io n t ha t t he m ag is tra te jud ge al lo wed . Befo re h e rai se d t he pri vi le ge ob jecti on , Ban oub’s o wn co un se l h ad in tro du cedth e le tt er i nt o e vi de nc e dur in g h is cro ss of Ab du lm oh se n Al -Bab ta in , an d B an oub h im se lf h adtes ti fie d abo utiton di rect . The que st io ns Ban oub ob jecte d t o dur in g h is cro ss -ex am in at io n wer e li m it edin sco pe , foc us in g m ai nl y on why th e le tt er fa il edto m en ti on th e al le ge d $ 90 0,0 00 “ of fs et ” if in de edhe ha d in fo rm edZam

m itab ou t t ha t. The m ag is tra te jud ge di d n otab us e h is di sc ret io n i n pe rm it ti ng th atli m it edcro ss -ex am in at io n i nt o t he co nv ers at io n t ha t p rece de d t he le tt er’s draft in g. Seco nd , eve n i f th e jud ge ’s det erm in at io n i n re ga rdto th e p riv il eg e was in erro r, Ban oub h as fai le d t o s ho w subs ta nt ia l p reju di ce. At m os t t he ob jecte d- to qu es ti on in g s erv edon ly to fu rth er u nd erm in e Ban oub’s cr ed ib il ity as awitne ss . 9The m ag is tra te jud ge reject edon nu m ero us gro un ds Ban oub’s t es ti m on y reg ard in g hi s d eal in gs with the Al-B ab ta in s an d t he ir c om pa ni es . Lay in g a si de th e in qu iri es ab ou t the de m an d l ette r, th e rec or d s ti ll pro vi de s co m pe ll in g s up po rt f

orth e m ag is tra te jud ge ’s cred ib il it y de te rm in at io n. AFFIRMED.

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