Court Opinion

ID: 1018147
Source: CourtListenerOpinion
Date Created: 2013-07-04 22:15:38.728899+00
Date Added: 2024-06-11T12:26:51.227336
License: Public Domain

UNPUBLISHED

                     UNITED STATES COURT OF APPEALS
                         FOR THE FOURTH CIRCUIT

                              No. 05-1016

RON HUNT,

                                                Plaintiff - Appellee,

            versus

FRANCIS LEE,

                                               Defendant - Appellant,
            and

RITZ CABARET, a/k/a Tracy, Incorporated,

                                                            Defendant.

Appeal from the United States District Court for the District of
Maryland, at Baltimore. William D. Quarles, Jr., District Judge.
(CA-02-2523-WDQ)

Submitted:    November 30, 2005             Decided:   January 5, 2006

Before NIEMEYER, KING, and DUNCAN, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Brenda Grantland, Mill Valley, California, for Appellant. John J.
Hathway, Thomas Mugavero, WHITEFORD, TAYLOR & PRESTON, L.L.P.,
Washington, D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:

            Francis Lee appeals the district court’s order denying

his petition for attorney’s fees and costs pursuant to 42 U.S.C.

§ 1988 (2000) and 28 U.S.C. § 1927 (2000).               We affirm.

            Ron     Hunt   and    Francis      Lee     were    owners    of    adult

entertainment       establishments     otherwise       known     as   “gentlemen’s

clubs.”    From February to May 2002, Hunt met periodically with Lee

to discuss his interest in purchasing Lee’s club, the Ritz Cabaret.

When    these     discussions    began,     Lee   owned       the   club.      While

negotiations were ongoing, however, Lee pled guilty to conspiracy

to commit money laundering in violation of 18 U.S.C. § 1956(h)

(2000) and the Ritz Cabaret was forfeited to the Government.

            Nevertheless, discussions continued between Hunt and

Joerg Eichelberger, a man Hunt believed was Lee’s real estate

agent.     The discussions culminated in an offer from Hunt that

matched    Eichelberger’s       demands   ($1.6      million    and    six    percent

buyer’s    premium).       In    the   course     of    their       correspondence,

Eichelberger referenced the forfeiture, but only as an explanation

why he could not provide documentation relevant to the proposed

sale.     Significantly, Eichelberger’s repeated written statements

suggested that both Lee and Eichelberger retained some control over

the property, or at the very least, over the solicitation of offers

to purchase the Ritz Cabaret.

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           In fact, it appears that Lee and Eichelberger did indeed

solicit such offers.    Leonard Briskman, an employee of the United

States Marshal’s Service (the “Marshal’s Service”), attested that

he was assigned the task of managing the disposition of the Ritz

Cabaret.    Briskman explained that the property was to be sold

through an online auction service.         Briskman stated that Lee and

Eichelberger were never authorized to sell the Ritz Cabaret on

behalf of the Government; however, Briskman acknowledged that Lee

did solicit several written offers that were passed on to the

Marshal’s Service via Briskman.         The property was eventually sold

to the highest online bidder for $1,075,000.

           While Lee was incarcerated, he also signed a contract of

sale, ostensibly conveying the Ritz Cabaret to Philip Bast Gagne

and Dennis Alviani for $1.3 million. Lee entered into the contract

despite Hunt’s then-standing offer of $1.5 million and repeated

attempts   to   negotiate   with   Eichelberger.        Hunt    alleges    the

purchasers of the club were Caucasian; Hunt is African-American.

A former employee of Lee’s also claimed that Lee made disparaging

remarks about Hunt, including a comment that he preferred the club

be sold to a “white man.”    On this basis, Hunt filed a complaint in

the district court, claiming defamation and racial discrimination

in violation of 42 U.S.C. §§ 1981 and 1982 (2000).

           Lee moved to dismiss Hunt’s complaint, asserting that he

lacked   contractual   capacity    to   sell   the   property   due   to   the

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forfeiture.      Because no discovery had been taken, the court was

unable to resolve the agency issue.            Thus, the court denied the

motion to dismiss, ordered the parties to conduct discovery on the

issue of Lee’s capacity to contract, and further ordered that the

parties   file    dispositive    motions      by    October    2003.      At   the

conclusion of discovery, the court granted Lee’s motion for summary

judgment.    The district court nonetheless denied Lee’s motions for

attorney’s fees and costs.       The instant appeal followed.

            On appeal, Lee claims that the district court erred in

refusing to award attorney’s fees under 42 U.S.C. § 1988 (2000).

Under § 1988(b), a district court may award attorney’s fees to the

prevailing party in a civil rights action.                   A district court’s

denial of fees is reviewed for abuse of discretion.                    Johnson v.

City of Aiken, 278 F.3d 333, 336 (4th Cir. 2002).

            The Supreme Court has held that a prevailing defendant is

entitled to recover attorney’s fees under § 1988(b) only if the

lawsuit was frivolous, unreasonable, or groundless, or if the

plaintiff continued to litigate after it clearly became so.                     See

Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 422 (1978).

Thus, when awarding attorney’s fees under a civil rights statute,

“prevailing      defendants   are    to   be       treated    differently      from

prevailing    plaintiffs,     even   though    the    statutory    language     is

neutral.”    Bryant Woods Inn, Inc. v. Howard County, Md., 124 F.3d

597, 606 (4th Cir. 1997).            In so ruling, the district court

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carefully analyzes plaintiffs’ legal claim, the evidence adduced in

support of that claim, and when plaintiffs should have realized

that the claim was groundless.         Hutchinson v. Staton, 994 F.2d

1076, 1079 (4th Cir. 1993).      We cannot conclude that Hunt’s claim

of racial animus was without legal basis or factual foundation.

          Arguably, the district court referred to Hunt’s complaint

as “frivolous.”     As this court stated in Arnold v. Burger King

Corp., 719 F.2d 63, 68 n.7 (4th Cir. 1983), there are “varying

degrees of frivolousness.”        The district court noted that the

complaint was not demonstrably frivolous on the question of racial

animus, although the claim that Lee had the authority to convey the

property ultimately lacked a factual underpinning. The totality of

the district court’s findings indicate that the court did not

intend, by its use of the term, to connote that Hunt’s claim was so

utterly baseless as to warrant sanctions.           Where, as here, a case

is not absolutely groundless, an award of attorney’s fees is not

compelled.

          Moreover,      a   finding   of   bad    faith   is   a   necessary

precondition to imposition of fees on an attorney under 28 U.S.C.

§ 1927 (2000).     See Brubaker v. City of Richmond, 943 F.2d 1363,

1382 n.25 (4th Cir. 1991). Section 1927 provides: “Any attorney or

other person admitted to conduct cases . . . who so multiplies the

proceedings   in   any   case   unreasonably      and   vexatiously   may   be

required by the court to satisfy personally the excess costs,

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expenses, and attorneys’ fees reasonably incurred because of such

conduct.”    28 U.S.C. § 1927.       Although the litigation in this case

was contentious, we do not find Hunt or his counsel engaged in the

duplicative or unnecessary filings that would trigger sanctions

under § 1927.

            “Discretion      allows     district      courts     latitude     in

determining fee awards--even those that an appellate court might

initially have set in a different amount.”            See Carroll v. Wolpoff

& Abramson, 53 F.3d 626, 631 (4th Cir. 1995).                  Clearly, Hunt’s

counsel     could   have    conducted       more   comprehensive    pre-filing

discovery.     Nevertheless, Hunt’s claim of racial animus was not

frivolous on its face.        Moreover, the threshold legal issue--not

only Lee’s capacity to contract but his agency to contract--was not

clearly determined at the outset of the litigation.                Given these

facts, coupled with the district court’s discretion, we find that

the district court did not abuse its discretion when it denied

Lee’s petition.

            Accordingly, we affirm the district court’s denial of

attorney’s fees and costs.       We dispense with oral argument because

the facts and legal contentions are adequately presented in the

materials    before   the    court    and     argument   would   not   aid   the

decisional process.

                                                                       AFFIRMED

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