FILED U.S. COURT OF APPEALS ELEVENTH CIRCUIT JUNE 30 2000 THOMAS K. KAHN CLERK

* Honorable Cynthia Holcomb Hall, U.S. Circ uit Judge for the Ninth Circuit, sitting by designation. [PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

________________________ No. 99-12932

________________________ D. C. Docket No. 96-00453-CV-GET-1 CAPITAL ASSET RESEARCH CORPORATION, Plaintiff-CounterDefendant-Appellant,

versus ROGER FINNEGAN, BREEN CAPITAL HOLDINGS, INC., Defendants-CounterClaimants-Appellees.

________________________ Appeal from the United States District Court for the Northern District of Georgia

_________________________ (June 30, 2000) Before ANDERSON, Chief Judge, BLACK and HALL * , Circuit Judges.
PER CURIAM:2 Capital Asset Research Corporation (“ Capital Asset”) brought suit against Roger Finnegan and Breen Capital Holdings, In c. The instant appeal is brought by Capital Asset, challenging the district court’ s award of attorneys’ fees to Finnegan. Capital Asset makes two primary arguments on appeal: (1) that the district court lacked subject matter jurisdiction to award attorneys’ fees to Finnegan; and (2) that any such award should have been denied in any event because Finnegan’s motion for attorneys’ fees was untimely.

BACKGROUND The background facts and proceedings re levant to the above-mentioned issues on appeal can be stated concisely. Cap ital Asset asserted three claims against Finnegan: (1) a breach of contract clai m asserting a breach of the Consulting Agreement; (2) a breach of c ontract claim asserting a breach of the Non-disclosure Agreement; and (3) a claim asserting a viol ation of the Georgia Trade Secrets Act. After a 1997 bench trial, the di strict court found in favor of Finnegan with respect to the two breach of contract claims; in othe r words, Finnegan succe ssfully defended the contract claims. However, the districtcourt found in favor of Capital Asset on its trade secrets claim. As a result of prevailing on its trade secrets claim, Capital Asset was awarded by the district court all of th e relief that it could have received had it1 Actually, both Finnegan and Breen appealed, as the judgment in favor of Capital Asset was against both Finnegan and Breen. We refer only to Finnegan, however, because at the later stage after remand, see infra , attorneys’ fees were awarded only to Finnegan, and thus Breen is not involved in this appeal.

2 Rule 54(d)(2) provides that “Claims for attorney s’ fees and related nont axable expenses shall be made by motion unless the substantive law governing the action provides for the recovery of such fees as an element of damages to be proved at tria l.” Fed. R. Civ. P. 54(d)(2)(A). The Rule requires that such motions be “filed and served no later th an 14 days after entry of judgment.” Fed. R. Civ. P. 54(d)(2)(B). 3 prevailed on its breach of contract claims. After the district court’s judgment in its favor, Capital Asset moved for attorneys’ f ees. The district court granted same. Finnegan appealed. 1 This Court reversed both the judgment in favor of Capital Asset and its award of attorneys’ fees. Onremand, Finnegan m oved for an award of attorneys’ fees based on a contractual pr ovision allowing attorneys’ fees to the prevailing party, and the district court gr anted same. Capital Asset now appeals the district court’s award of attorneys’ fees in favor of Finnegan. We turn first to Capital Asset’s argument on appeal that the district court had no subject matter jurisdiction to award fees to Finnegan.

DISCUSSION A. Subject Matter Jurisdiction Capital Asset argues that motions for attorneys’ fees filed after judgment are usually governed by Fed. R. Civ. P. 54(d)(2), 2 but that Rule 54(d)(2) does not apply4 in the instant case because in the instant case “the substantive law governing the action provides for recovery of such fees as an element of damages to be proved at trial.” Fed. R. Civ. P. 54( d)(2)(A). Continuing its argum ent, Capital Asset asserts that when substantive law (such as the cont ractual provision here) provides for the recovery of such fees, they must be pled and proved as damages at trial, and that the district court has no jurisdiction to entertai n a plea for attorneys’ fees when such a request was not made in the pleadings. In the instant case, Capital Asset argues, Finnegan made no request for attorneys’ fees in its pleadings, and thus the district court had no subject matter jurisdiction to entertain Finnegan’s motion for attorneys’ fees. We reject Capital Asset’s jurisdictional ar gument. It is clear that the district court had subject matter jurisdiction of this diversity case under 28 U.S.C. § 1332. Nothing in Rule 54(d)(2) suggests that the district court in the instant case had no subject matter jurisdiction to entertain Finne gan’s request for attorneys’ fees. Rule 54(d)(2)(A) mandates that claims for attorney s’ fees be made by a motion “unless the substantive law governing the action provides for the recovery of such fees as an element of damages to be proved at trial.” Fe d. R. Civ. P. 54(d)(2)(A ). It is true that the Advisory Committee notes clarify that Rule 54(d)(2) is not applicable to attorneys’ fees recoverable as an element of damages, and the Advisory Committee cites3 We note incidentally that Finnegan’s pleading did seek “such other and further relief as the Court deems just and proper.” 5 attorneys’ fees pursuant to the terms of a contract as an example thereof. The Advisory Committee notes go on to say th at such damages “typically” are to be claimed in a pleading, and may involve issu es to be resolved by a jury. However, nothing in the language of the Rule itself or in the Advisory Committee notes suggests that the failure to seek attorneys’ fees ina pleading is a defect depriving the district court of subject matter jurisdiction. To the contrary, the A dvisory Committee notes state that such damages are “typically” to be claimed in a pleading. Moreover, a failure to plead is rarely, if ever, a jurisd ictional defect. Rather, both the text of Rule 15(a) and the cases indicate that leave to amend pleadings shall be freely given when justice so requires. See Fed. R. Civ. P. 15(a). Indeed, even jurisdictional defects may often be cured by amendment. See 28 U.S.C. § 1653 (“Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.”). Contrary to Capital Asset’s argument that the failure to plead entitlement to such fees is a defect depriving the district court of subject matter jurisdiction, Rule 54(c) expressly provides that “every final judgment shall gr ant the relief to which the party in whose favor it is rendered is entitle d, even if the party has not demanded such relief in the party’s pleadings.” 36 The case law also supports our conclusi on that Finnegan’s failure to make an explicit request for attorneys’ fees in its pl eadings is not a defect depriving the district court of subject matter jurisdiction. In Engel v. Teleprompter Corp. , 732 F.2d 1238 (5th Cir. 1984), the Fifth Circuit held that it was appropriate to award attorneys’ fees to a prevailing defendant despite its failure to seek attorneys’ fees in its pleadings. There, the plaintiff in its pleadings had sought an award of attorney s’ fees, as provided for in the relevant contract. Plaintiff pr evailed in the district court. Defendant appealed and obtained a reversal. On remand, defendant for the first time moved for attorneys’ fees. The Fifth Ci rcuit held that the defendant’s failure to seek attorneys’ fees in its original pleadings did not bar it from seeking an award of fees upon attaining the status of prevailing party. Th e court held that Rule 54(c) – providing that “every final judgment shall grant the relie f to which the party in whose favor it is rendered is entitled, even if the party has not demanded su ch relief in its pleadings” – justified an award of fees under the circ umstances despite the pleading failure. The Fifth Circuit did not expressly address anargument that there was no subject matter jurisdiction, but its exercise of jurisd iction constitutes a holding inconsistent with Capital Asset’s argument in the instant case. Accord Klarman v. Santini , 503 F.2d 29, 36 (2d Cir. 1974) (relying on Rule 54(c) and rejecting an argument that a party’s failure specifically to request attorneys’ f ees in its pleadings is in itself a bar to4 Capital Asset relies upon Allgood Electric Co mpany v. Martin K. Eby Construction Company, Inc. , 179 F.R.D. 646 (M.D. Ga. 1998) and Ca remark, Inc. v. Coram Health Care Corporation , 924 F.Supp. 891 (N.D. Ill. 1996). In both cases, the district court declined to entertain a motion for attorneys’ fees, where entitlement to fees was based on a contractual provision, because the request for attorneys’ fees was made by motion and the party had failed to seek attorneys’ fees in its pleadings. Both cases noted that Rule 54(d)(2) – providing that attorneys’ fees should be sought by motion no later than 14 days after judgment – does not apply where, inter alia , the substantive law governing the action (e.g. , a contractual provision) provides for recovery of such fees as an element of damages. In declining to entertain a requestfor attorneys’ fees that was not included in the pleadings, the court in Caremark used jurisdictional terminology – “I do not have jurisdiction under Rule 54(d)(2) to order Caremark to pay Coram its attorneys’ fees.” Id. at 892. While Allgoodmay well have been based upon an exercise of the district court’s discretion, its citation of Caremark with approval might be interpreted as s uggesting a jurisdictional basis. For the reasons set out in the text above, we reject as unpersuasive any implication in Caremark or Allgood that the failure to plead and prove attorneys’ fees before judgment depr ives a district court of subject matter jurisdiction to entertain a request for attorneys’ fees after judgment. Capital Asset also cites dicta from an unpublis hed opinion from the Sixth Circuit, Clarke v. Mindis Metals, Inc. , 99 F.3d 1138 (table), No. 95-5517, 1996 WL 616677 (6th Cir. Oct. 24, 1996). Capital Asset cites the jurisdictional language used by the court at *8 in th e context of noting that a Rule 54(d)(2) motion was unnecessary and in referring to the Caremark court’s holding that the district court in such a context would have no juri sdiction to hear such a motion. We construe the Sixth Circuit as having inadvertently picked up Caremark ’s loose jurisdictional terminology, and in any event, the cited phrase is dicta. The Clarke court specifically rejected the argument that the district court had no subject matter jurisdicti on. Indeed, the jurisdictional ruling in Clarke is entirely consistent with our jurisdictional holding. 7 recovery); Paliaga v. Luckenbach Steamship Co. , 301 F.2d 403, 410 (2d Cir. 1962) (same); see also Thorstenn v. Barnard , 883 F.2d 217, 218 (3d Cir. 1989) (citing Rule 54(c) and holding that a plaintiff who fi nally succeeded on appeal could rely on 42 U.S.C. §§ 1983 and 1988 to support an award of attorneys’ fees even though plaintiff failed to rely on such statutes in th e complaint in the district court). 4 For the foregoing reasons, we reject Capital Asset’s argument that the district court lacked subject matter jurisdiction to entertain Finnegan’s request for attorneys’ fees. B. Timeliness8 Having established the district court’ s jurisdiction and authority to award attorneys’ fees notwithstanding the pleading defect, we turn to Capital Asset’s argument that Finnegan’s motion for attorn eys’ fees was untimely. To understand Capital Asset’s argument, it is appropriate to recall that Finnegan successfully defended the breach of contract claims asserted by Capital Asset during the 1997 bench trial. Finnegan’s entitlement to a ttorneys’ fees is based upon a contractual provision that provides in substance thatin any lawsuit brought to enforce the contract, the prevailing party, either pl aintiff or defendant, would be entitled to attorneys’ fees. The gist of Capital Asset’s argument is that Finnegan had prevailed with respect to the contract claims as of the conclusion of the 1997 trial, after the district court held that Finnegan had successfully defe nded against Capital Asset’s claims of breach of contract. Thus, Capital Asset argues, Finnegan should have sought attorneys’ fees either before the 1997 judgment or w ithin a short time thereafter (suggesting by analogy the 14-day period indicated in Rule 54(d)(2)). Instead, Capital Asset points out that Finne gan waited until after its successful appeal of the 1997 judgment against Finnegan on Capita l Asset’s trade secrets claim. Capital Asset argues that Finnegan’s motion for atto rneys’ fees on remand after its successful appeal was untimely.5 The district court so found in th e course of awarding attorneys’ fees in favor of Capital Asset after the 1997 trial. Finnegan had opposed Capital Asset’s motion for attorneys’ fees on the grounds that it was untimely, not having been filed within 14 days of the 1997 judgment.

6 In seeking reimbursement of all of its attorn eys’ fees following the 1997 trial, plaintiff represented to the district court that “plaintiff’s success on the trade secrets claim afforded plaintiff 9 We reject Capital Asset’s arguments. We emphasize that an award of attorneys’ fees in circumstances such as those presente d in this case is a matter addressed to the broad discretion of the district court. Because most of the arguments asserted by Capital Asset on appeal were also presented to the district court, we construe the district court’s award of attorneys’ fees inthis case as an exercise of its broad discretion. In affirming the district court’s exercise of discretion in this case, we deem it significant that the parties in the instant case “agreed dur ing the trial of this matter, and the court consented, to the bifurcation of attorneys’ fees for later hearing.” Dist. Ct. Order dated March 25, 1998. 5 Thus, Capital Asset’s assertions of surprise and prejudice – on account of not having been forewarned of attorneys’ fees by Finnegan’s pleadings – ring hollow. Even more significant is the fact that Capital Asset, as a result of prevailing at the 1997 trial on its trade secrets claim, r eceived relief at the expense of Finnegan which amounted to all of the relief that it could have received had it prevailed on its breach of contract claims. Cap ital Asset conceded this fact in its brief on appeal, and also made the same representation to the district court. 6 In light of the fact that Capitalthe complete relief it sought from defendants.” Dist.Ct. Order dated March 25, 1998.

7 As the Supreme Court stated in Hensley v. Eckerhart , 461 U.S. 424, 103 S.Ct. 1933 (1983), “the most critical factor is the degree of success obtained.” Id. at 436, 103 S. Ct. at 1941. 10 Asset received all of the re lief it would have received ha d it prevailed on the contract claims, it can hardly be said that Finne gan, although it successfully defended against recovery of such relief on the contr act theories, was the prevailing party. 7 Cf. Taylor v. City of Ft. Lauderdale , 810 F.2d 1551, 1555-56 (11th Cir. 1987) (“In order to qualify as a prevailing party under 42 U.S.C . §1988, the plaintiff must be successful on the central issue in the case, exhibited by the fact that the plaintiff acquired the primary relief sought.”); Miami Herald Publishing Co. v. City of Hallandale , 742 F.2d 590, 591 (11th Cir. 1984) (“Pre vailing for purposes of §1988 is exhibited by the fact that the litigant ‘has acquired the primary relief sought.’”) (quoting from Iranian Students Association v. Edwards , 604 F.2d 352, 353 (5th Cir. 1979)); see also Worthington v. Lick , 783 F.2d 1369, 1370 (9th Cir. 1986) (Although the case presented several theories of recovery, and although the plaintiff prevailed on his conversion claim, the action was a single lawsuit, and the de fendant “prevailed” because he was the one who received the net award and the party in whose favor judgment was rendered). In any event, it is entirely understandable that Finnegan would thus construe the matter.11 The Fifth Circuit Engel case discussed above is also relevant to our inquiry concerning timeliness. Although the Engel court held that a district court has the authority to award attorneys’ fees (pursuan t to a contractual provision) to a prevailing defendant who has failed to plead same and who seeks same for the first time after successfully appealing a judgment in favor of plaintiff, the court also recognized potential prejudice to the opposing party, and indicated that an award in such circumstances would be discretionary. Exam ining the plaintiff’s assertion of prejudice there, the Engel court acknowledged that the defendant had not sought attorneys’ fees in its pleadings, but noted that the contr act was in evidence and clearly provided that the prevailing party could rec over attorneys’ fees, that plaintiff’s own application for attorneys’ fees had specifically focused a ttention on the attorneys’ fees clause, and that “[o]nly the identity of the prevailing party had to be esta blished before that party’s right to this form of relief became manifest.” Engel , 732 F.2d at 1242. In the instant case, the same factors are present: although Finnegan did not seek attorneys’ fees in its pleadings, the cont ract was in evidence and expressly provided for attorneys’ fees for the prevailing party, and only the identity of the prevailing party had to be established before that party’s ri ght to attorneys’ fees became manifest. It is true that Engel is distinguishable in that the appeal in Engel involved the very8 The Advisory Committee notes to Rule 54(d)(2) state that “[a] new period for filing [i.e., a new 14-day period] will automatically begin if a new judgment is entered following reversal or remand by the appellate court.” Although we suspect that the commentary was contemplating an appeal and reversal on the very issue on wh ich entitlement to fees hinged, as in Engel , the common sense of the proposition lies in the fact that the id entity of the prevailing party is unascertained until after the appeal. 12 contract claim on which the entitlement to attorneys’ fees depended. 8 On the other hand, in the instant case, Finnegan’s orig inal appeal challenged only the district court’s judgment in favor of Capital Asse t on the trade secrets claim. Indeed, Finnegan had successfully defended Capit al Asset’s claim against it based upon breach of the contract. However, the instant case is like Engel in that, as a practical matter, the identity of the prevailing party could not be ascertained until after the appeal. As explained above, although Fi nnegan had successfully defended Capital Asset’s claim that Finnegan had breached the contract, Finnegan probably would not have been considered the prevailing party because Capital Asset obtained via its trade secrets claim all of the relief that it mi ght have gotten had it succeeded on its breach of contract claim. Under the particular circumstances of this case, we hold that the district court did not abuse its discretion in finding Finne gan’s request for attorneys’ fees timely, and in awarding same. Accordingly, the judgment of the district court is9 Capital Asset’s other arguments on appeal – th at Finnegan was not the prevailing party and that the district court abused its discretion with respect to the amount of the fees – are rejected without need for discussion. Thus, the district court’s award of fees and the amount thereof are affirmed without modification. In addition, Finne gan’s motion for attorneys’ fees on appeal is granted as to entitlement, and that matter is remanded to the district court for a determination of amount. 13 AFFIRMED. 9