Court Opinion

ID: 174686
Source: CourtListenerOpinion
Date Created: 2010-09-02 19:07:38+00
Date Added: 2024-06-11T17:25:31.457680
License: Public Domain

[DO NOT PUBLISH]

                        IN THE UNITED STATES COURT OF APPEALS

                              FOR THE ELEVENTH CIRCUIT
                               ________________________          FILED
                                                        U.S. COURT OF APPEALS
                                     No. 10-10943         ELEVENTH CIRCUIT
                                 Non-Argument Calendar    SEPTEMBER 2, 2010
                               ________________________        JOHN LEY
                                                                CLERK
                          D.C. Docket No. 6:07-cv-01503-PCF-KRS

6:07-CV-1503-PCF-KRS

NORTH AMERICAN CLEARING, INC.,

                                                                         Plaintiff,

                                         versus

BROKERAGE COMPUTER SYSTEMS, INC.,

llllllllllllllllllll                                                   Defendant.

6:08-CV-1567-PCF-KRS

BROKERAGE COMPUTER SYSTEMS, INC.

lllllllllllllllllllll                                         Plaintiff - Appellee,

                                         versus
RICHARD L. GOBLE,
an individual,

lllllllllllllllllllll                                           Defendant - Appellant,

BRUCE B. BLATMAN, et al.,

llllllllllllllllllllll                                                    Defendants.

                               ________________________

                         Appeal from the United States District Court
                             for the Middle District of Florida
                               ________________________

                                    (September 2, 2010)

Before BLACK, PRYOR and KRAVITCH, Circuit Judges.

PER CURIAM:

         Richard Goble—a prevailing defendant on claims for breach of contract and

violations of the Lanham Act, 15 U.S.C. § 1125(a), and the Florida Deceptive and

Unfair Trade Practices Act (FDUTPA), Fla. Stat. § 501.204(1)—appeals from an

order denying his motion for attorney’s fees. Although we approve the district

court’s denial of Goble’s motion as it pertained to fees under the Lanham Act and

the FDUTPA, we reverse the court’s order with respect to Goble’s motion for fees

on the contract claim.

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                                          I

      Goble was the sole shareholder of North American Clearing (NAC), a

stock-brokerage firm that entered into a software-licensing agreement with

Brokerage Computer Systems (BCS). The companies’ business relationship

soured, and NAC sued BCS, which in turn filed counterclaims under the Lanham

Act, under the FDUTPA, and for breach of contract. When NAC was forced into

receivership, BCS filed a new lawsuit asserting the same claims directly against

Goble.

      After the district court granted Goble’s motion for final summary judgment,

he moved the court for attorney’s fees pursuant to provisions in the Lanham Act,

15 U.S.C. § 1117(a); the FDUTPA, Fla. Stat. § 501.211(2); and BCS’s contract

with NAC. Over Goble’s objection, the district court adopted a magistrate judge’s

recommendation to deny the motion. This is Goble’s appeal.

                                         II

      A. Fees Under the Lanham Act

      Parties who prevail on claims under the Lanham Act may recover their

reasonable attorney’s fees “in exceptional cases.” 15 U.S.C. § 1117(a).

Defendants can qualify as prevailing parties, but even when a case is exceptional,

we will only review the district court’s decision on a motion for attorney’s fees for

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an abuse of discretion. Lipscher v. LRP Publ’ns., Inc., 266 F.3d 1305, 1319–20

(11th Cir. 2001).

      We conclude that the district court did not abuse its discretion by denying

Goble’s motion for fees under the Lanham Act. For the purposes of that statute,

“an exceptional case is one that can be characterized as malicious, fraudulent,

deliberate and willful, or one in which evidence of fraud or bad faith exists.” Tire

Kingdom, Inc. v. Morgan Tire & Auto, Inc., 253 F.3d 1332, 1335 (11th Cir. 2001)

(quotation marks and citations omitted). Aside from the evident weakness of

BCS’s claim and the company’s decision to sue Goble only after NAC had entered

receivership, nothing supports the contention that BCS acted maliciously or in bad

faith by suing Goble under the Lanham Act. The district court thus acted within

its discretion when it denied Goble’s request for attorney’s fees under that statute.

      B. Fees Under the FDUTPA

      Like prevailing parties under the Lanham Act, the prevailing party in an

action under the FDUTPA may, according to the court’s discretion, recover his

reasonable attorney’s fees. Fla. Stat. § 501.2105; Humane Soc’y of Broward

Cnty., Inc. v. Fla. Humane Soc’y, 951 So. 2d 966, 971 (Fla. Dist. Ct. App. 2007).

A magistrate judge concluded that Goble had failed to establish his entitlement to

attorney’s fees under the FDUTPA because he had made no reference to the

                                          4
factors Florida courts consider when determining the appropriateness of

discretionary fee awards. See Humane Soc’y of Broward Cnty., 951 So. 2d at 971.

The district court refused to consider Goble’s objection to the magistrate’s

recommendation on the ground that his objection was not specific. Cf. Marsden v.

Moore, 847 F.2d 1536, 1548 (11th Cir. 1988) (“Parties filing objections to a

magistrate’s report and recommendation must specifically identify those findings

objected to. Frivolous, conclusive, or general objections need not be considered

by the district court.”).

       Although we believe Goble’s objection was adequately specific, his

argument before the district court was deficient in the same respect as his

argument before the magistrate: he failed to discuss the factors relevant to the

appropriateness of a fee award under the FDUTPA. We limit the scope of our

review in civil appeals to arguments actually raised in the district court, and

Goble’s omission before that court of any argument concerning the factors that

might justify an FDUTPA fee award constituted a waiver for the purposes of this

appeal. See Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1331 (11th Cir.

2004). We therefore will not disturb the district court’s ruling on Goble’s request

for attorney’s fees under the FDUTPA.

                                          5
      C. Fees Under the Contract

      BCS’s breach-of-contract claim against Goble depended on the theory that

Goble had used NAC as his “alter ego.” In other words, according to the

complaint, “Goble was the company and the company was Goble.” The licensing

agreement on which BCS sued contained a provision concerning attorney’s fees:

“If any legal action or arbitration is necessary to enforce the terms of this

Agreement, the prevailing party shall be entitled to reasonable attorney’s fees in

addition to any other relief to which that party may be entitled.” Yet the district

court adopted the magistrate judge’s recommendation to deny Goble’s request for

fees under that provision on the ground that Goble was not a party to the contract.

In other words, the court concluded that the term “prevailing party” meant

“prevailing party [to the contract].”

      We disagree with the district court’s analysis. “Courts should attempt to

give words and phrases used in contracts the natural meaning or that meaning

most commonly understood when considered in reference to [the] subject matter

and circumstances.” Rupp Hotel Operating Co. v. Donn, 29 So. 2d 441, 445 (Fla.

1947).1 The term “prevailing party” in the context of a provision describing “legal

action or arbitration” is most naturally understood as a reference to the prevailing

      1
          The contract here provides that it is to be construed in accordance with Florida law.

                                                  6
party in a legal action. Cf. FDUTPA, Fla. Stat. § 501.2105(1) (“In any civil

litigation resulting from an act or practice involving a violation of this part . . ., the

prevailing party . . . may receive his or her reasonable attorney’s fees and costs

from the nonprevailing party.”).

      The district court’s reading of the term, by contrast, would require the word

“party” to bear two meanings at once: “party to the litigation” and “party to the

contract.” The magistrate judge concluded that such a reading was appropriate

because the contract concerned the obligations of BCS and NAC to each other,

without any reference to Goble’s rights or responsibilities as an individual. But in

our view, the provision regarding attorney’s fees speaks plainly enough: in “any

legal action or arbitration . . . necessary to enforce the terms of this Agreement, the

prevailing party shall be entitled to reasonable attorney’s fees.” Although Goble

was not technically a party to the contract, it was foreseeable that he might, given

his role as NAC’s owner and signatory to the contract on its behalf, become a

party to litigation “necessary to enforce the terms of [the] Agreement.” In these

circumstances, allowing Goble to recover his reasonable attorney’s fees is

consistent with the apparent intent underlying the fees provision—especially in

light of BCS’s alter-ego allegation that Goble was a de facto party to the contract.

                                            7
      Furthermore, even if the term “prevailing party” were patently ambiguous,

ambiguities in a contract “do[] not allow courts to rewrite contracts, add meaning

that is not present, or otherwise reach results contrary to the intentions of the

parties.” Excelsior Ins. Co. v. Pomona Park Bar & Package Store, 369 So. 2d

938, 942 (Fla. 1979). Given BCS’s alter-ego allegations, it would be unreasonable

for us to assume that the contract allowed BCS to seek attorney’s fees from

Goble—as it did in its complaint—without affording him the same opportunity if

he prevailed on the claims against him. “A reasonable interpretation of a contract

is preferred to an unreasonable one,” id. at 941, and we will not adopt a one-sided

interpretation of the fees provision here without any evidence that such an

asymmetry was intended.

                                          III

      Although the district court did not abuse its discretion by denying Goble’s

requests for fees under the Lanham Act and the FDUTPA, Goble was entitled to

recover his reasonable attorney’s fees on BCS’s claim for breach of contract. See

Lashkajani v. Lashkajani, 911 So. 2d 1154, 1158 (Fla. 2005) (“Provisions in

ordinary contracts awarding attorney’s fees and costs to the prevailing party are

generally enforced. Trial courts do not have the discretion to decline to enforce

such provisions, even if the challenging party brings a meritorious claim in good

                                           8
faith.” (citation omitted)). We therefore affirm the parts of the district court’s

order denying Goble’s requests for attorney’s fees under the Lanham Act and the

FDUTPA, reverse the part of the order denying his request for fees on the breach-

of-contract claim, and remand for further proceedings consistent with this opinion.

      AFFIRMED in part, REVERSED in part, and REMANDED.

                                           9