Court Opinion

ID: 52395
Source: CourtListenerOpinion
Date Created: 2010-04-26 01:15:27+00
Date Added: 2024-06-11T14:57:54.006037
License: Public Domain

[DO NOT PUBLISH]

           IN THE UNITED STATES COURT OF APPEALS
                                                               FILED
                  FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                    ________________________ ELEVENTH CIRCUIT
                                                          APRIL 6, 2007
                           No. 06-15014                 THOMAS K. KAHN
                       Non-Argument Calendar                CLERK
                     ________________________

                 D. C. Docket No. 04-61127-CV-TEB

SYSTEMS UNLIMITED, INC.,
a Florida Corporation,

                                                Plaintiff-Appellee,

                                versus

CISCO SYSTEMS, INC.,
a California corporation,
CISCO SYSTEMS CAPITAL CORPORATION,
a Nevada corporation,
CAPITAL ACQUISITION CORPORATION,
a Delaware corporation,
ASSET ACQUISITION CORPORATION,
a Delaware corporation,

                                                Defendants-Appellants.

                     ________________________

              Appeal from the United States District Court
                  for the Southern District of Florida
                    _________________________

                            (April 6, 2007)
Before BLACK, CARNES and MARCUS, Circuit Judges.

PER CURIAM:

      This is the companion appeal to case number 06-12357. There, we affirmed

the denial of Systems Unlimited, Inc.’s motion for leave to amend its complaint

and the grant of summary judgment to Cisco Systems, Inc. on Systems’ claims that

Cisco breached the bill of sale contract.

      In this appeal, Cisco challenges the district court’s order denying its motion

for attorneys’ fees. Cisco contends that while the bill of sale at issue in this

litigation did not contain an attorneys’ fees provision, a separate settlement

agreement between it and Systems did contain one. Cisco argues that the

settlement agreement should be read in conjunction with the bill of sale to require

that Systems pay attorneys’ fees as the losing party.

      This is the same type of argument that Systems made in the 06-12357 appeal

from the summary judgment for Cisco. There, Systems argued that the settlement

agreement should be read into the bill of sale to impose an obligation on Cisco to

deliver certain software. We rejected that contention because: (1) the bill of sale

did not purport, either implicitly or explicitly, to incorporate the settlement

agreement; and (2) since the language of the bill of sale was clear, we would not

look to other contemporaneous documents to interpret the contract.

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      We likewise conclude here that the settlement agreement cannot be used to

impose an attorneys’ fees obligation on Systems where no such obligation is

contained in the bill of sale, absent explicit incorporation of the settlement

agreement or some ambiguity in the bill of sale. Cisco argues that “two

instruments that relate to the same matter, are between the same parties, and are

executed or created as part of substantially one transaction are interpreted as a

single instrument.” (Blue Br. 11.) This proposition comes from the California

rules for interpreting contracts, which provide in part that “[s]everal contracts

relating to the same matters, between the same parties, and made as parts of

substantially one transaction, are to be taken together.” Cal. Civ. Code § 1642.

But, as Cisco itself pointed out in the 06-12357 appeal, “[t]his provision . . . only

applies where there is an ambiguity in a contract that requires explanation by

reference to contemporaneously executed agreements.” (06-12357 Red Br. 25)

(citing Sonoma Falls Developers, LLC v. Nev. Gold & Casino, Inc., 272 F. Supp.
2d 919, 924 (N.D. Cal. 2003) (section 1642 “is applicable only if there is

ambiguity concerning the interpretation of a contract”)). Here, both parties agree

that the bill of sale is unambiguous.

      Despite that, Cisco argues, “attorneys’ fee provisions in agreements also

become part of writings referenced by such agreements.” (Blue Br. 13.) Cisco’s

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argument, in other words, is that because the settlement agreement (which is not

the contract at issue here) incorporates the bill of sale, then the attorneys’ fee

provision is incorporated into the bill of sale.

      However, the two decisions Cisco cites in support of this proposition make

clear that Cisco has this argument backwards. Only where the agreement at issue

explicitly incorporates a second contract with an attorneys fees provision will the

fees provision be enforced in a breach of contract action on the first contract. Cf.

Republic Bank v. Marine Nat’l Bank, 53 Cal. Rptr. 2d 90, 93 (Ct. App. 1996)

(“Under such circumstances, and in light of the incorporation by reference

language, whatever else the combined sublease/master-lease package may have

provided for, it certainly provided for attorney fees as delineated in the relevant

clause in the master lease.” (emphasis added)); Nevin v. Salk, 119 Cal. Rptr. 370,

374 (Ct. App. 1975) (“Inasmuch as the provisions of the notes and the security

instruments were incorporated in the agreement, and made a part thereof, and

inasmuch as the sale involved one piece of property and veterinary practice, the

trial court properly concluded all the instruments formed a single contract and the

fact the agreement itself contained no provision for payment of fees in the event of

a lawsuit is of no consequence.” (emphasis added)). Otherwise, the plain language

rule controls. See Cal. Civ. Code § 1638 (“The language of a contract is to govern

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its interpretation, if the language is clear and explicit, and does not involve an

absurdity.”).

      Here, as the district court explained, “the terms of the settlement agreement

were not incorporated by reference in the bill of sale which was at issue in this

action.” (R3:177:2.) And “[t]he parties do not contest that the bill of sale itself

contains no provision for fee shifting or payment of expenses related to any

dispute.” Id. Like the district court, we will not read an attorneys’ fee provision

into a contract where one plainly does not exist.

      The district court’s order denying Cisco’s motion for attorneys’ fees is

affirmed.

      AFFIRMED.

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