Court Opinion

ID: 2971272
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:32:08.756302+00
Date Added: 2024-06-11T15:01:16.256653
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                Pursuant to Sixth Circuit Rule 206                          2       McCain v. Detroit II Auto Finance, et al. No. 03-1270
        ELECTRONIC CITATION: 2004 FED App. 0261P (6th Cir.)
                    File Name: 04a0261p.06                                                           _________________
                                                                                                           COUNSEL
UNITED STATES COURT OF APPEALS
                                                                            ARGUED: Ian B. Lyngklip, LYNGKLIP & TAUB,
                   FOR THE SIXTH CIRCUIT                                    Southfield, Michigan, for Appellant. Jason M. Katz, KATZ
                     _________________                                      & KATZ, Southfield, Michigan, for Appellees. ON BRIEF:
                                                                            Ian B. Lyngklip, LYNGKLIP & TAUB, Southfield,
 REBEKAH MCCAIN ,                 X                                         Michigan, for Appellant. Jason M. Katz, KATZ & KATZ,
         Plaintiff-Appellant,      -                                        Southfield, Michigan, for Appellees.
                                   -
                                   -  No. 03-1270                                                    _________________
           v.                      -
                                    >                                                                    OPINION
                                   ,                                                                 _________________
 DETROIT II AUTO FINANCE           -
 CENTER and BANK ONE , N.A., -                                                 MILTON I. SHADUR, District Judge. Rebekah McCain
        Defendants-Appellees. -                                             (“McCain”) originally brought suit against Detroit II Auto
                                   -                                        Finance Center (“Detroit II”) and Bank One, N.A. (“Bank
                                  N                                         One”) in connection with events that took place when she
      Appeal from the United States District Court                          attempted to secure a loan to purchase a vehicle. After
     for the Eastern District of Michigan at Detroit.                       Detroit II’s tender and McCain’s acceptance of a Fed. R. Civ.
    No. 02-70855—Patrick J. Duggan, District Judge.                         P. (“Rule”) 68 offer of judgment had produced a $3,000
                                                                            judgment in McCain’s favor, her counsel petitioned the
                      Argued: June 18, 2004                                 District Court for an award of costs and attorney’s fees.1 That
                                                                            petition was denied in its entirety, and after the stipulated
              Decided and Filed: August 5, 2004                             with-prejudice dismissal of McCain’s Second Amended And
                                                                            Supplemented Complaint, McCain filed an appeal against
        Before: GILMAN and ROGERS, Circuit Judges;                          Detroit II pursuant to 28 U.S.C. § 1291. We REVERSE the
                  SHADUR, District Judge.*                                  District Court’s denial of an award of costs and AFFIRM its
                                                                            denial of an attorney’s fee award.

                                                                                1
                                                                                  Although M cCain’s petition spok e of “attorney fees” (and Detroit
                                                                            II and the district court followed her lead in that respect), and although the
                                                                            statutes and cases are all over the lot (some using that term, others
                                                                            speaking of “attorneys’ fees” and still others of “attorney’s fees”), we
    *
                                                                            employ the usage in the text, as did the Supreme Court in the Marek case
     The Honorable Milton I. Shadur, United States District Judge for the   discussed hereafter. But see Stallworth v. Greater Cleveland Reg ’l
Northern District of Illinois, sitting by designation.                      Transit Auth., 105 F.3d 25 2, 254 n.1 (6th Cir. 1997).

                                   1
No. 03-1270 McCain v. Detroit II Auto Finance, et al.           3    4        McCain v. Detroit II Auto Finance, et al. No. 03-1270

                      BACKGROUND                                     against McCain in both respects. This timely appeal ensued
                                                                     after the subsequent entry of a final judgment of dismissal.
   McCain sought legal redress after having experienced
numerous difficulties with Detroit II and Bank One in the                         RULE 68 AND MAREK v. CHESNY
course of her purchase and financing of a new automobile.
McCain filed a multi-count Amended Complaint, seeking to              For purposes of this appeal Rule 68 is just as important for
invoke against Detroit II the federal Truth in Lending Act (15       what it does not say as for what it says (emphasis added):
U.S.C. § 1640)(Count I) and Equal Credit Opportunity Act
(15 U.S.C. § 1691)(Count II) as well as several Michigan                 At any time more than 10 days before the trial begins, a
statutes--the Consumer Protection Act (Mich. Comp. Laws                  party defending against a claim may serve upon the
§ 445.901)(Count IV), Motor Vehicle Sales Finance Act                    adverse party an offer to allow judgment to be taken
(Mich. Comp. Laws § 492.101)(Count X), Credit Reform Act                 against the defending party for the money or property or
(Mich. Comp. Laws § 445.1851)(Count XI) and Motor                        to the effect specified in the offer, with costs then
Vehicle Installment Sales Act (Mich. Comp. Laws                          accrued. If within 10 days after the service of the offer
§ 566.301)(Count XII)-- and also advancing some                          the adverse party serves written notice that the offer is
nonstatutory claims (Counts VI, VII, VIII and XIV). Both                 accepted, either party may then file the offer and notice
Count I and the “Request for Relief” section of the Amended              of acceptance together with proof of service thereof and
Complaint contained express requests for the award of costs              thereupon the clerk shall enter judgment. An offer not
and attorney’s fees, with the Request for Relief doing so as to          accepted shall be deemed withdrawn and evidence
the bulk of McCain’s claims.                                             thereof is not admissible except in a proceeding to
                                                                         determine costs. If the judgment finally obtained by the
 Several months into the litigation Detroit II delivered this            offeree is not more favorable than the offer, the offeree
Rule 68 offer to McCain:                                                 must pay the costs incurred after the making of the offer.

  NOW COMES, the Defendant, Detroit II Auto Finance                  Thus the Rule plainly speaks of the consequences of
  Center, Inc., by and through its attorney, Howard Alan             acceptance or rejection of an offer on the award of costs, but
  Katz, and presents the following offer of judgment                 it is totally silent on the subject of attorney’s fees.
  pursuant to FRCP 68. The defendant, Detroit II Auto
  Finance Center, Inc., offers to the Plaintiff, Rebekah               Hence the only way in which Rule 68 directly implicates
  McCain, the amount of three thousand dollars ($3000.00)            awards of attorney’s fees is in situations where such fees are
  as to all claims and causes of actions for this case.              made an element of “costs”--whether by statute (42 U.S.C.
                                                                     § 1988 is the most familiar example) or as a matter of
McCain’s timely acceptance of the offer triggered the entry of       contract. And it was in the former respect that the Supreme
a $3,000 judgment in her favor.                                      Court addressed Rule 68 in the seminal decision that basically
                                                                     controls this case, Marek v. Chesny, 473 U.S. 1 (1985).2
  Shortly thereafter McCain filed a Petition for Taxation of
Costs of $150 and a Petition for Attorney Fees of $7,652.50.
                                                                          2
After the parties had briefed the issues, the district court ruled          By sheer chance the writer of this opinion was the trial judge in
                                                                     Marek who ruled in defendants’ favor there (547 F. Supp. 542, 547 (N.D.
                                                                     Ill. 1982)), a decision that was then reversed on appeal (720 F.2d 474,
No. 03-1270 McCain v. Detroit II Auto Finance, et al.                      5    6      McCain v. Detroit II Auto Finance, et al. No. 03-1270

  Here is what Marek, id. at 6 (citation omitted) said on the                       attorney’s fees, we are satisfied such fees are to be
subject of Rule 68 offers and costs:                                                included as costs for purposes of Rule 68.
  If an offer recites that costs are included or specifies an                   Nothing in the opinion speaks to any relationship between a
  amount for costs, and the plaintiff accepts the offer, the                    Rule 68 offer and the awarding of attorney’s fees that are not
  judgment will necessarily include costs; if the offer does                    categorized as “costs.”
  not state that costs are included and an amount for costs
  is not specified, the court will be obliged by the terms of                      When these things are understood, the resolution of this
  the Rule to include in its judgment an additional amount                      case is straightforward.       As already stated, because
  which in its discretion, it determines to be sufficient to                    Detroit II’s Rule 68 offer was silent as to “costs then
  cover the costs. In either case, however, the offer has                       accrued,” the district court should have included in its
  allowed judgment to be entered against the defendant                          judgment the amount of those costs (agreed by the parties to
  both for damages caused by the challenged conduct and                         be $150). But because none of the statutes that McCain’s
  for costs. Accordingly, it is immaterial whether the offer                    Amended Complaint sought to call into play, and none of the
  recites that costs are included, whether it specifies the                     common law claims that McCain sought to advance, treats
  amount the defendant is allowing for costs, or, for that                      potentially awardable attorney’s fees as “costs,” the Detroit II
  matter, whether it refers to costs at all.                                    offer--which expressly embraced “all claims and causes of
                                                                                action for this case” (essentially echoing McCain’s own
And consistently with that teaching, Detroit II’s silence on the                terminology when she began page 1 of her multicount
subject of costs in its Rule 68 offer means that true costs are                 Amended Complaint with “Rebekah McCain states the
recoverable by McCain, so that the district court erred in                      following claims for relief”)--leaves no room for a post-offer
disallowing them.3                                                              effort by McCain to collect attorney’s fees.
  But because Rule 68 itself speaks only of “costs” as such                       All of the post-Marek cases that have had to wrestle with
and not in terms of “attorney’s fees,” Marek, id. at 9 spoke to                 the type of claim that McCain advances here have addressed
the latter subject solely in terms of the former:                               Rule 68 offers from the perspective of whether or not those
                                                                                offers have some greater or lesser degree of ambiguity or
  In other words, all costs properly awardable in an action                     perceived ambiguity (see, e.g., Goodheart Clothing Co. v.
  are to be considered within the scope of Rule 68 “costs.”                     Laura Goodman Enters., Inc., 962 F.2d 268, 272-73 (2d Cir.
  Thus, absent congressional expressions to the contrary,                       1992); Nordby v. Anchor Hocking Packaging Co., 199 F.3d
  where the underlying statute defines “costs” to include                       390, 392 (7th Cir. 1999); Hennessy v. Daniels Law Office,
                                                                                270 F.3d 551, 553-54 (8th Cir. 2001); Nusom v. Comh
                                                                                Woodburn, Inc., 122 F.3d 830, 833 (9th Cir. 1997) and Utility
                                                                                Automation 2000, Inc. v. Coctawhatchee Elec. Coop., Inc.,
478-79 (7th Cir. 1983)) but was then in turn upheld by the Supreme              298 F.3d 1238, 1242 (11th Cir. 2002)). But here it is
Court’s reversal of the Seventh Circ uit.                                       unnecessary to parse or to seek to distinguish among those
    3
                                                                                cases, for there is no ambiguity in the Detroit II offer and in
      Detroit II does not really contest that ruling. Its briefs on appeal do   McCain’s unequivocal acceptance of that offer, an issue that
not even broach that topic, and its counsel conceded during oral argument
that Detroit II was willing to pay M cCain her $ 150 in taxable costs.
No. 03-1270 McCain v. Detroit II Auto Finance, et al.                   7    8    McCain v. Detroit II Auto Finance, et al. No. 03-1270

is to be resolved under ordinary contract principles (Mallory                was no ambiguity” (id. at 393). That might well have been
v. Eyrich, 922 F.2d 1273, 1279-80 (6th Cir. 1991)).                          written for this case, and we so hold. As in Nordby, there is
                                                                             no room here for the application of the doctrine of contra
   On that score McCain can draw no comfort from Marek’s                     proferentem or for any other predicate for injecting ambiguity
decision as to the potential awardability of attorney’s fees                 where none exists. Just as with all other contracts, when an
when based on such fees’ inclusion in the term “costs.”                      unequivocal and unambiguous offer is responded to by an
While all four of the statutes cited in McCain’s Petition for                acceptance that does not depart from the terms of that offer,
Attorney Fees do allow for the recovery of attorney’s fees                   the prototypical enforceable bargain results.
under specified circumstances, not one does so by
encompassing such fees within “costs” (15 U.S.C.                                One final note should be added. We have deliberately
§ 1640(a)(3); 15 U.S.C. § 1691e(d); Mich. Comp. Laws                         eschewed offering advice to counsel generally, as McCain has
§ 445.911(2); Mich. Comp. Laws § 445.1861(1)(d)). To the                     requested, as to how Rule 68 offers and acceptances should be
contrary, those statutes either list attorney’s fees and costs as            shaped. As we have said, such offers and their acceptance
two separate elements of recovery or (in the case of the                     involve nothing more than applying the basic principles of
Michigan Consumer Protection Act) do not refer to costs at                   contract law. In this instance the absence of ambiguity stems
all. Nor is there any Michigan common law doctrine that                      from Detroit II’s counsel having taken McCain’s counsel at
treats attorney’s fees, when they are awardable, as an element               his word: In response to a complaint that spoke expressly in
of “costs.” Thus the situation before us parallels the one that              terms of “claims for relief” and that also asked expressly for
we dealt with in Oates v. Oates, 866 F.2d 203, 205, 208 (6th                 attorney’s fees to be granted as an integral part of the relief
Cir. 1989), and as in Oates no award of McCain’s attorney’s                  sought for those claims, a Rule 68 offer that mirrored that
fees may be made under the rubric of Rule 68 “costs.”                        language by tendering $3,000 for “all claims and causes of
                                                                             action” should have left McCain’s counsel free from doubt.
   Our conclusion as to the absence of ambiguity in the                      To be sure, there are other situations in which a prudent
Detroit II offer, unqualifiedly accepted by McCain as it was,                defense counsel, who after all has total control over the
echoes the Seventh Circuit’s comparable determination in                     drafting of a Rule 68 offer, ought to (or sometimes must) add
Nordby.4 There the defendant’s Rule 68 offer was for “one                    a specific reference to the inclusion of attorney’s fees to
total sum as to all counts of the amended complaint”                         provide clarity--but this is not one of them.
(remember that in this case the offer expressly embraced “all
claims and causes of action for this case”). There “[o]ne of                                       CONCLUSION
those counts specified attorneys’ fees as part of the relief
sought” (id. at 392), while here all of McCain’s claims for                     Nothing in the terms of Detroit II’s Rule 68 offer justified
relief specified attorney’s fees as part of what she was seeking             McCain’s effort to have the tail wag the dog by seeking an
to recover. And there the Seventh Circuit held “That relief                  attorney’s fees recovery of fully two and one-half times the
[the request for attorney’s fees] was covered by the offer”                  amount of the substantive judgment. For the reasons we have
(id.) and therefore “agree[d] with the district judge that there             stated, we AFFIRM the district court’s rejection of that
                                                                             claim, while we REVERSE the denial of McCain’s request
                                                                             for an award of $150 in true costs. Each party shall bear her
    4                                                                        or its costs on appeal.
    Again by sheer coincidence, the writer was also the district jud ge in
Nordby, this time being affirmed by the Court of Ap peals.