Court Opinion

ID: 2673110
Source: CourtListenerOpinion
Date Created: 2014-05-10 00:01:26.371034+00
Date Added: 2024-06-11T13:06:36.840683
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                             Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                      File Name: 14a0096p.06

                 UNITED STATES COURT OF APPEALS
                                  FOR THE SIXTH CIRCUIT
                                    _________________

                      13-5688                             ┐
CRESTWOOD FARM BLOODSTOCK,                                │
                                                          │
                                   Plaintiff-Appellee,    │    Nos. 13-5688/5689
      v.                                                  │
                                                          >
                                                          │
EVEREST STABLES, INC.,                                    │
                                Defendant-Appellant.      │
                                                          │
                                                          │
                      13-5689                             │
JEFFREY L. NIELSEN,                                       │
                                             Plaintiff,   │
                                                          │
                                                          │
EVEREST STABLES, INC.,                                    │
                                  Plaintiff-Appellant,    │
      v.                                                  │
                                                          │
                                                          │
LEWIS POPE MCLEAN, SR.; CRESTWOOD FARM                    │
BLOODSTOCK, LLC; MCLEAN HOLDINGS, LLC;                    │
CRESTWOOD FARM, LLC,                                      │
                          Defendants-Appellees.           │
                                                          ┘
                       Appeal from the United States District Court
                     for the Eastern District of Kentucky at Lexington
       Nos. 5:09-cv-00317; 5:10-cv-00072—Karen K. Caldwell, Chief District Judge.
                                  Argued: January 29, 2014
                                Decided and Filed: May 9, 2014

              Before: SUTTON, McKEAGUE and WHITE, Circuit Judges.

                                                1
Nos. 13-5688/5689     Crestwood Farm Bloodstock v. Everest Stables, Inc.            Page 2

                                       _________________

                                          COUNSEL

ARGUED: Thomas W. Pahl, FOLEY & MANSFIELD P.L.L.P., Minneapolis, Minnesota, for
Appellant. Adrian M. Mendiondo, KINKEAD & STILZ, PLLC, Lexington, Kentucky, for
Appellees. ON BRIEF: Thomas W. Pahl, Howard I. Wallach, FOLEY & MANSFIELD
P.L.L.P., Minneapolis, Minnesota, for Appellant. Adrian M. Mendiondo, D. Barry Stilz,
KINKEAD & STILZ, PLLC, Lexington, Kentucky, for Appellees.

        SUTTON, J., delivered the opinion of the court, in which McKEAGUE, J., joined, and
WHITE, J., joined in part. WHITE, J. (pp. 16B20), delivered a separate opinion concurring in
part and dissenting in part.

                                       _________________

                                           OPINION
                                       _________________

       SUTTON, Circuit Judge. In this breeders’ quarrel between two thoroughbred horse
operations—Everest Stables and Crestwood Farm Bloodstock—the parties dispute the terms of
various arrangements between them to reproduce, care for and sell racehorses. The district court
granted summary judgment for Crestwood on its breach of contract claim and against Everest on
its assortment of claims. We affirm.

                                               I.
       When this dispute began, Jeffrey Nielsen owned Everest, a Minnesota corporation that
breeds and races thoroughbreds, and Pope McLean, Sr., owned Crestwood, a thoroughbred farm
in Kentucky’s horse country. The two businesses began working together in 1993, when Everest
boarded several horses at Crestwood. The relationship continued for fifteen years and included
various boarding, breeding and selling arrangements.

       One arrangement concerned an Everest horse named “Petionville,” a stallion that had
won the Louisiana Derby, the Ohio Derby and the La Jolla Handicap. Crestwood agreed to
board Petionville in 1996.     Consistent with a “protocol” letter written by Nielsen, the
arrangement required Crestwood to contact Nielson with all requests for Petionville’s breeding
services, to supply information about the mare’s “pedigree, race record, [etc.],” and not to sign
Nos. 13-5688/5689      Crestwood Farm Bloodstock v. Everest Stables, Inc.              Page 3

any breeding “contract . . . without [Nielsen’s] approval.” R. 152-6 at 1. The letter said little
else.

        The parties entered a more definite arrangement in November 2008, when Everest and
Crestwood agreed to sell Everest’s horses. According to the agreement, Everest would transfer
ownership of more than 100 horses to Crestwood, Crestwood would take responsibility for the
horses’ day-to-day costs (including boarding, veterinary services and preparation for sale), and
Crestwood would sell the horses at a public auction or in a private sale. The agreement added
that the parties “shall sell” the subject horses, e.g., R. 152-4 at 2, and prohibited Crestwood from
setting a “reserve” on any horse—a price floor below which the seller refuses to go, id. at 3. The
agreement allowed Crestwood to keep twenty-five to fifty percent of the proceeds from each
horse’s sale as payment for its services.

        The agreement included more specific provisions about two horses: Island Fashion and
its unnamed filly. As with the other horses in the agreement, Island Fashion and its filly would
be boarded at Crestwood’s farm. And as with the other horses, they would be sold at auction by
Crestwood’s agents. But in contrast to the other horses, they remained Everest’s property.
These were special horses in Nielsen’s eyes—Island Fashion had won over $2 million—and
Nielsen had high hopes in selling them.

        Consistent with this arrangement, Crestwood tried to sell several Everest horses at
auction, including the Island Fashion filly. Interested buyers placed two bids for the filly, one
for $850,000, the other for $875,000. Everest wasn’t satisfied. It planted a separate agent at the
auction (without Crestwood’s knowledge), who tried to drive the selling price higher by placing
a $900,000 bid for the filly on Everest’s behalf—a move that effectively set a reserve of at least
$900,000 on the horse. In the absence of any non-Everest bids at or exceeding $900,000, the
sale failed, and the auction house published the transaction as “R.N.A.”—reserve not attained.
After learning what Everest had done, Crestwood kept a portion of Everest’s proceeds from
selling other horses at the auction—$219,513.89, to be exact, which was twenty-five percent of
the failed high bid for the filly (plus auction fees), what amounted to the commission Crestwood
otherwise would have earned but for Everest’s conduct.
Nos. 13-5688/5689       Crestwood Farm Bloodstock v. Everest Stables, Inc.            Page 4

       Everest sued Crestwood in response, claiming that Crestwood breached a stable of
contractual and other duties. Crestwood counterclaimed, arguing that Everest breached the
November 2008 contract and that Crestwood should be allowed to keep the disputed money.
The district court granted summary judgment to Crestwood. It denied Everest leave to file a
fourth amended complaint. And it saddled Everest with $272,486.30 in attorney’s fees.

                                               II.
       Everest challenges the district court’s rejection of several of its claims. Each argument is
unconvincing.

       Everest’s breach of contract claim arising from an alleged management agreement.
Kentucky law, as the parties agree, governs this dispute. Under Kentucky law, as under the law
of other States, a contract must “contain definite and certain terms” to be enforceable. Kovacs v.
Freeman, 957 S.W.2d 251, 254 (Ky. 1997). Invoking this principle, the district court determined
that no agreement existed between Everest and Crestwood regarding Petionville’s
“management.” Crestwood might have offered Petionville a place to stay, but that does not
mean it agreed to manage Petionville’s retirement—advertising him, choosing breeding partners
for him and the like.

       A fresh look at the record supports the district court’s decision. The key document
offered to support this claim—the “protocol” letter that Nielsen sent McLean in 1996—shows
that Crestwood never agreed to manage Petionville’s stud career. Under the protocol, Everest
retained final authority over Petionville’s breeding partners, and Crestwood lacked authority to
accept any breeding contract without Everest’s approval. So far as the written record shows,
Crestwood’s only job was to forward breeding requests for Petionville to Nielsen for his
review—hardly a management task.

       In the alternative, Everest contends that it entered into an oral agreement with Crestwood
to manage Petionville. Yet even an oral contract, even one that we will assume for now would
not violate the statute of frauds, must contain “clear and definite” terms. In the absence of
something concrete, no one could determine whether a party breached the agreement or how to
measure damages. Quadrille Bus. Sys. v. Kentucky Cattlemen’s Assoc., 242 S.W.3d 359, 364
(Ky. Ct. App. 2007) (rejecting oral contract claim as a matter of law due to lack of “definite and
Nos. 13-5688/5689      Crestwood Farm Bloodstock v. Everest Stables, Inc.            Page 5

certain” terms). Everest cannot meet that requirement on this record. All that Everest has is the
deposition testimony of Nielsen, who alleges that Crestwood agreed to “aggressively” market
Petionville’s breeding services. R. 159-3 at 13. The what, when, where and how of this
marketing are never explained.       Nor does Everest show how all of this would create a
management agreement.        Nielsen’s hopes and Crestwood’s puffery do not a definite and
enforceable contract make.

       Everest insists that Crestwood conceded the existence of a Petionville management
contract. Not so. The cited statements concede nothing of the sort, and indeed say just the
opposite. One says that, “[d]espite standing PETIONVILLE at Crestwood, Everest did not enter
any stallion management agreement with Crestwood.” R. 152-1 at 2 (emphasis added). The
other says that “Nielsen controlled all aspects of PETIONVILLE’s management.” Id. at 15
(emphasis added). Crestwood, true enough, admitted that it reached some agreement regarding
Petionville.   Yet it was an agreement to provide “animal husbandry” services, including
“stabling, grooming, veterinary care, and breeding administration,” App’ee Br. at 26—tasks
associated with boarding a horse, not managing it.

       In the absence of evidence, written or oral, that Crestwood agreed to terms to manage
Petionville, Everest alternatively submits that Crestwood impliedly agreed to manage the horse.
The first premise of Everest’s argument is accurate: Kentucky law recognizes implied contracts
when the record shows “acts or circumstances which according to the ordinary course of dealing
. . . show[] a mutual intent to contract.” Rider v. Combs, 256 S.W.2d 749, 749 (Ky. 1953). The
second premise is not: No such evidence exists. Everest and Crestwood acted according to the
division of responsibilities described in the 1996 “protocol” letter: Everest managed Petionville,
and Crestwood boarded him.         Even Nielsen admitted that “Crestwood performed animal
husbandry and cared for [his] horses while at the farm. . . . [and] had no part in [his] breeding
decisions.” R. 152-11 at 3. The district court correctly determined that no management contract
existed, express or implied, written or oral.

       In claiming that the implied contract claim should go to a jury, the dissent points to
various “Stallion Service” agreements signed by McLean, a letter McLean sent to potential
breeding partners for Petionville, and testimony from Nielsen about his conversations with
Nos. 13-5688/5689       Crestwood Farm Bloodstock v. Everest Stables, Inc.            Page 6

McLean. Post at 16–20. But as shown even implied contracts must have “definite and certain”
terms to be enforceable, Kovacs, 957 S.W.2d at 254; see Rider, 256 S.W.2d at 750, and we see
nothing in this evidence—or in the dissent—that tells us what these terms were, such as how
long the “contract” lasted, how performance was measured and how compensation was set.
Nielsen’s testimony illustrates the point. When asked what “assurances” McLean made to him
about Petionville, Nielsen said that “Crestwood . . . would work . . . very hard and extra hard and
team up, and continue what they had been doing for the last several years and accelerate their
efforts.”   R. 152-5 at 18.     Neither this language nor the other evidence shows anything
approaching a meeting of the minds between the stables—or more precisely a basis for a jury to
find a meeting of the minds between them—about what the alleged obligation to manage
Petionville entailed.

        Everest’s breach of contract claim arising from the 2008 sales agreement. In claiming
that Crestwood breached the November 2008 sales agreement, Everest had to present evidence of
a breach and damages. Moore v. Phillip Morris Cos., 8 F.3d 335, 340 (6th Cir. 1993); see also
Miles v. Miller, 75 Ky. (12 Bush) 134, 136 (1876). It suffices to say, in reviewing this claim,
that Everest has not shown damages.

        The November 2008 agreement required Crestwood to sell horses “only to unaffiliated
third parties.” R. 152-4 at 3. Crestwood sold twenty horses for $20,000 to Don Ackel, and
Everest maintains that Ackel had a horseracing partnership with McLean. Assuming for the sake
of argument that this established a breach, that does not mean Everest suffered damages from
this public auction. Nielsen wanted these twenty horses to be “immediately disposed of,” R.
152-5 at 25, and the November agreement made Nielsen’s desire explicit: Crestwood was to
“sell or otherwise dispose of” these horses, R. 152-4 at 3 (emphasis added). Given that context,
$20,000 for a score of horses that might have gone for nothing or, worse, been euthanized does
not establish damages. The record indeed includes testimony that Nielsen was “pleased” with
this price at the time. R. 152-10 at 9.

        Everest isn’t pleased now, it is true. And the company claims it met this damages burden
through Cecil Seaman, one of McLean’s “consultant[s],” R. 181-2 at 8, who submitted a “report”
estimating that the twenty horses sold to Ackel were worth close to $100,000 at the time of sale.
Nos. 13-5688/5689      Crestwood Farm Bloodstock v. Everest Stables, Inc.            Page 7

App. Br. at 46. Crestwood moved to exclude Seaman’s report, but the district court found no
need to rule on the motion—and for ample reason. Even on its own terms, the report does not
create a material issue of fact regarding damages. For one, Seaman’s report is a “preliminary”
appraisal of the horses sold to Ackel, R. 159-59 at 8, one never made final. For another, the
report never comes to grips with the terms of the November sales contract, which required
Crestwood to sell or dispose of the horses quickly and prohibited Crestwood from setting a
reserve on any horse. For still another reason, the report never acknowledges the time frame in
which Crestwood was asked to sell the horses promptly—November 2008—the midst of an
economic crisis that surely affected the prices of stocks, houses and horses.

       Seaman’s appraisal methodology illustrates these problems. To estimate a value for each
horse, Seaman referred to the sales price for horses he considered “comparable” to those sold in
bulk to Ackel. R. 159-59 at 8. But Seaman never explains how these horses were comparable.
Were they too designated for immediate sale or disposal? Were they too sold in a setting in
which the seller was prohibited from setting a reserve—a floor—on the sales prices of the
horses? In the absence of such information, Seaman’s “comparable” sales offer no meaningful
comparison.

       Everest also appears to raise a distinct breach of contract claim, suggesting that
Crestwood did not use “commercially reasonable efforts” to market and sell all of the horses.
App. Br. at 47. Here too Everest has a damages problem. And here too Everest relies on
Seaman’s expert report to overcome it. The report refers to “Exhibit 9,” which lists “reserve
prices that should have been set for Everest’s horses.” R. 159-59 at 8. Exhibit 9 presumably
shows a dollar-value difference between the recommended reserve for each horse and the horse’s
final sales price. But we can only presume. Exhibit 9 gives us just one half of the equation (each
horse’s suggested reserve price) without any clear indication of the other half (what each horse
actually sold for)—which perhaps explains why neither party relied on the exhibit’s valuations to
show (or argue against) damages. But even if the parties had relied on Exhibit 9 and even if the
exhibit had contained comparisons along these lines, it would face another problem. The whole
premise of the argument is that Everest was damaged by Crestwood’s failure to set reserves on
Nos. 13-5688/5689      Crestwood Farm Bloodstock v. Everest Stables, Inc.            Page 8

each horse’s sale, yet the contract expressly prohibited Crestwood from setting any such
reserves.

       Even apart from this failing, we do not see how Crestwood breached its duty to act in a
“commercially reasonable” manner. The only relevant evidence on this score comes from an
industry expert who “personally observed” Crestwood’s preparation of the horses for sale and
concluded that “[t]he horses were in excellent condition and the protocol followed [by
Crestwood] was standard and consistent with high quality consignments in Central Kentucky.”
R. 152-21 at 1. The same expert added that it was standard practice to “bundl[e] a group of low
value horses for sale as a package,” id. at 2, making the sale of twenty horses to Don Ackel for a
flat fee customary rather than out of the ordinary. That satisfies the “commercially reasonable”
standard.

       Everest turn to “[c]ommon sense,” suggesting that the unreasonableness of Crestwood’s
marketing efforts is obvious even to lay observers. App. Br. at 48. But the contract doesn’t
impose a “reasonable man” standard on Crestwood’s sales activities; it requires “commercially
reasonable efforts,” R. 152-4 at 3 (emphasis added), which means Crestwood promised to act “in
good faith and in accordance with commonly accepted commercial practice,” Black’s Law
Dictionary 263 (7th ed.). A lay person’s common sense, even if it were properly characterized
here (which is doubtful), cannot rebut the uncontradicted testimony of industry experts, who
know a thing or two about what is “commonly accepted” and what isn’t.

       Everest’s breach of fiduciary duty claim.       In the absence of a breach of a written
agreement, Everest seeks refuge in fiduciary duties.         Fiduciary relationships “necessarily
involve[] an undertaking in which a duty is created in one person to act primarily for another’s
benefit.” Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 485 (Ky. 1991). To find
such a relationship, Everest must show that its “reliance [on the alleged fiduciary relationship]
was not merely subjective.” In re Sallee, 286 F.3d 878, 892 (6th Cir. 2002) (applying Kentucky
law). The reliance must be reasonable, and “[o]nly in rare commercial cases is it reasonable to
believe the other party will put your interests ahead of their own.” Id.

       This is not that rare case. The relationship between Everest and Crestwood instead looks
like any other “ordinary business relationship” premised on a series of “arm’s length
Nos. 13-5688/5689       Crestwood Farm Bloodstock v. Everest Stables, Inc.             Page 9

transactions.” Quadrille Bus. Sys., 242 S.W.3d at 365. Both Everest and Crestwood are for-
profit businesses, and Everest duly compensated Crestwood for its services.           Everest was
represented by counsel and other advisors before entering into the November 2008 agreement at
the center of this controversy, and that agreement makes clear that “Crestwood [would act] . . .
for and on behalf of both Crestwood and Everest,” R. 152-4 at 3 (emphasis added). Nielsen
admitted in his deposition that the decision to split the proceeds from his horses’ sale reflected a
compromise between the needs of the two parties. All of this shows that the Everest-Crestwood
relationship fell short of the fiduciary line.

        Everest acknowledges it must demonstrate “extraordinary facts” to impose any fiduciary
duties on Crestwood, App. Br. at 55, and claims it did so based on several allegations: Nielsen
told McLean he was seriously ill and wanted to make sure his family was provided for; McLean
had been Nielsen’s “trusted advisor, agent and friend for 15-years”; and McLean “sold stud
seasons” and collected stud fees on Everest’s behalf, id. at 56. That the two were friends, even
close friends, may well explain why they did business together. But that does not establish a
fiduciary relationship—that Crestwood was charged with putting Everest’s interests above its
own. Many friends do business together. But not all friends are fiduciaries, and in the world of
arms-length commercial negotiations few are. See, e.g., Sallee, 286 F.3d at 891–92 (“[T]he fact
that the relationship has been a cordial one, of long duration, [is not] evidence of a [fiduciary]
relationship.” (internal quotation marks omitted)); 90 C.J.S. Trusts § 197 (“The mere existence
of mutual respect and confidence does not make a business relationship fiduciary.”)

        Everest’s constructive trust theory doesn’t make it out of the gate either. Nielsen claims
that the court should find a constructive trust between the parties (premised on fiduciary duties),
because McLean “took title to Everest’s horses without payment to Everest, . . . taking advantage
of Nielsen’s illness and determination to protect his family.” App. Br. at 57 (citing Moore v.
Terry, 170 S.W.2d 29 (Ky. 1943)). But the facts don’t support the claim. Nielsen negotiated the
November 2008 agreement with the help of counsel, who wrote several drafts of the agreement.
Both sides were well-positioned to protect their own interests.

        Everest’s breach of agency duties claim. Everest’s agency-duty claim also fails. “Where
a contract exists defining the scope of the principal-agent relationship . . . the existence and
Nos. 13-5688/5689      Crestwood Farm Bloodstock v. Everest Stables, Inc.            Page 10

extent of the agent’s duties are determined by the agreement between the parties.” Monumental
Life Ins. Co. v. Nationwide Retirement Solutions, Inc., 242 F. Supp. 2d 438, 449 (W.D. Ky.
2003) (applying Kentucky law); Restatement (Second) of Agency § 376. Crestwood did not
breach any agency duties created by the November 2008 sales agreement—for many of the
reasons already given. The sales agreement required Crestwood to “exercise all commercially
reasonable efforts” to sell Everest’s horses; it prohibited Crestwood from setting “reserve” prices
on any horse; and it required Crestwood to keep title to any unsold subject horse “without
additional consideration.” R. 152-4 at 3. Crestwood met each requirement.

       Everest maintains that Crestwood breached its agency duties, because it “failed to
maximize the selling prices” of the horses at various auctions. App. Br. at 53. “McLean refused
to discuss or set reserves” on horses, Everest adds, “despite the express orders and direction from
Everest” to do so. Id. Had Crestwood set reserves on any of the horses, however, it would have
breached the November agreement, which prohibited such reserve setting.             R. 152-4 at 3
(“Crestwood agrees and covenants that each horse shall be sold with no reserve.”). Adhering to
this duty does not violate the contract in which it appears.

       Everest’s unjust enrichment claim.       Once it is established that Crestwood was not
Everest’s fiduciary, Everest’s unjust enrichment claim falls by the wayside. Everest demands an
“accounting to determine the amount of money owed resulting from a breach of fiduciary
duties,” R. 204 (internal quotation marks omitted), but “to maintain an accounting, the claimant
must have a . . . fiduciary relationship with [the] defendant . . . and an interest in the monies or
property subject to the accounting.” Gentry v. Coffey, No. 2006-CA-002293-MR, 2007 WL
4465573, at *1 (Ky. Ct. App. Dec. 21, 2007). Everest may well have the latter, but it has not
shown the former.

       Everest’s fraud claim. Also unavailing is Everest’s fraud claim. To establish fraud, a
claimant must show that it reasonably relied on a representation that was material, false, known
to be false or recklessly made, and made with the intent of inducing another to act or refrain from
acting. See Ross v. Powell, 206 S.W.3d 327, 330 (Ky. 2006). A claim for fraud under Kentucky
law also “must relate to an existing or past fact. If the alleged misrepresentation relates to a
Nos. 13-5688/5689       Crestwood Farm Bloodstock v. Everest Stables, Inc.                Page 11

future promise or an opinion of a future event, then it is not actionable.” Radioshack Corp. v.
ComSmart, Inc., 222 S.W.3d 256, 262 (Ky. Ct. App. 2007) (citations omitted).

        No fraud occurred. Everest bases its claim on Crestwood’s promise to “increase [its]
efforts to sell Petionville [breeding] seasons,” App. Br. at 35—to “take Petionville to the next
level,” R. 204 at 20. Everest contends that Crestwood made these promises “with no present
intention to actually perform” them.        App. Br. at 35.      But allegations of this ilk are not
actionable. The statements sound more like “future promise[s] or . . . opinion[s] of a future
event” than “false” representations of fact. See Radioshack Corp, 222 S.W.3d at 262. Even if
Everest could overcome this obstacle, the evidence suggests nothing false about Crestwood’s
promise: Crestwood tried to market Petionville and “in no way hindered the horse’s career.” R.
152-22 at 3.

        What about the drop in sales of Petionville’s breeding seasons, Everest adds? Sales of
Petionville’s breeding seasons indeed dropped in 2006, falling eighty-five percent from the year
before. But that statistic does not explain why the sales dropped. The only evidence in the
record on that score comes from Crestwood’s experts, who concluded that sales tanked because
Petionville’s offspring did poorly on the race track, not because Crestwood failed to market him.
Said one: “By 2006 the market had determined that Petionville’s advertised stud fee was
unwarranted [given the race performance of his offspring] and demand for his services fell
accordingly.” R. 152-21 at 3. Said another: “Only a good top echelon stallion . . . will sire
successful runners. Petionville . . . did not hit the mark . . . , a fact that was not within the control
of [Crestwood].” R. 152-22 at 3.

                                                  III.
        Everest argues that the district court should have permitted it to file a fourth amended
complaint. Leave to amend a complaint, it is true, should be “freely given when justice so
requires.” Fed. R. Civ. P. 15(a). Yet a court may deny leave on the basis of delay, bad faith,
dilatory motive or futility. See Forman v. Davis, 371 U.S. 178, 182 (1962). We have no license
to overturn the district court’s decision unless it abused its discretion. Prater v. Ohio Educ.
Ass’n, 505 F.3d 437, 445 (6th Cir. 2007).
Nos. 13-5688/5689      Crestwood Farm Bloodstock v. Everest Stables, Inc.           Page 12

       No abuse of discretion occurred. The court found undue delay because Everest moved
for leave to amend more than two months after the court granted summary judgment to
Crestwood and almost a year after the close of discovery. “[A]ll key deadlines,” in the court’s
words, “ha[d] long passed.” R. 233 at 2. That was not all. An “amendment at this late stage” of
this case would have imposed “an unwarranted burden on the Court and place[d] an unfair
burden on the opposing parties.” Id. at 1. Finding “undue delay . . . and undue prejudice to the
opponent in allowing amendment after the close of discovery,” to say nothing of doing so in the
context of a fourth amended complaint, is not an abuse of discretion. Duggins v. Steak ’N Shake,
Inc., 195 F.3d 828, 834 (6th Cir. 1999).

       Everest claims that the court denied the motion because any amendment at that point
would have been futile, a decision that gets fresh review. That, however, is not the essence of
what the district court did. It denied the motion in the main because it was too late in coming,
burdening both the court and the opposing party as a result. “Futility” is mentioned in passing
only at the end of the opinion, R. 233 at 3, which does not change this court’s standard of review,
see Prater, 505 F.3d at 445 (“Taken together, however, the retirees’ delay, the late stage of the
case when the motion was filed and the likely futility of any amendment show that the district
court acted well within its discretion.” (emphasis added)).

                                               IV.
       Everest also challenges the district court’s decision to grant judgment as a matter of law
to Crestwood on its breach of contract claim and to grant Crestwood’s motion for attorney’s fees.
Each argument fails.

       Crestwood’s breach of contract claim.         As with all contracts, the November 2008
purchase and sale agreement came with a “duty to do everything necessary to carry [the
agreement] out.” Ranier v. Mount Sterling Nat. Bank, 812 S.W.2d 154, 156 (Ky. 1991). This
duty included an implied covenant of good faith and fair dealing. Neither party, as a result, may
act to “prevent[] the creation of the conditions under which . . . payment would be due.” Odem
Realty Co. v. Dyer, 45 S.W.2d 838, 840 (Ky. 1932).

       As the district court correctly held, Everest breached this covenant. The agreement
obliged Crestwood to sell Everest’s horses, including the Island Fashion filly. And this duty was
Nos. 13-5688/5689      Crestwood Farm Bloodstock v. Everest Stables, Inc.            Page 13

communicated through the language of obligation: “Crestwood shall consign for sale and shall
offer for sale and sell” the subject horses. R. 152-4 at 3. “Shall means shall,” Vandertoll v.
Kentucky, 110 S.W.3d 789, 796 (Ky. 2003), and, once Crestwood met this obligation, payment (a
percentage of the sales fee) became due. But Everest deliberately blocked the Island Fashion
filly’s sale. Not unlike a realty customer who in bad faith prevents his broker from finding a
buyer (and from collecting a sales commission), see Odem Realty Co., 45 S.W.2d at 839–40,
Everest secretly bid on the filly and effectively set a reserve price that prevented a willing buyer
from leaving with the horse and that kept Crestwood from collecting the fruits of its contract, a
twenty-five percent cut.

       How, Everest asks, could it have breached the agreement if nothing in it prevented
Everest from setting a reserve price on the filly?        True, while the agreement prohibited
Crestwood from setting a reserve, the writing says nothing about Everest’s obligations on this or
any other score. But the point makes no difference. The agreement may not have been explicit
about what Everest had to do under the contract, but an implied covenant of good faith and fair
dealing never is.

       Everest persists that the contract’s merger clause means the court cannot look outside the
four corners of the contract to find a breach. Because the contract says nothing about Everest’s
ability to set reserves, Everest argues, the district court erred by invoking extra-contractual
obligations (like the covenant of good faith and fair dealing) to condemn Everest’s reserve-
setting behavior. This run-of-the-mill merger clause cannot bear the weight Everest places on it.
The clause provides that “[t]his Agreement contains the entire agreement of the parties and any
prior or concurrent written or oral understandings are deemed merged into this Agreement.” R.
152-4 at 6. That is to say, neither party may use parol evidence to modify the contract’s terms.
That is not to say that the clause eliminates the implied good-faith obligations implicit in “every”
contract on each party. Ranier, 812 S.W.2d at 156 (emphasis added).

       Everest separately argues that language in the contract supports its right to set a reserve
and scuttle the filly’s sale. According to the agreement, “Crestwood shall consign for sale and
shall offer for sale and sell at recognized 2009 Kentucky public auction sale(s), as mutually
agreed and determined between Everest and Crestwood, [various] . . . thoroughbred weanling
Nos. 13-5688/5689        Crestwood Farm Bloodstock v. Everest Stables, Inc.          Page 14

horses.” R. 152-4 at 3. As Everest reads this clause, it didn’t “mutually agree” to sell the Island
Fashion filly for $875,000, and it therefore retained the right to pull the horse from the auction
ring. But this theory misreads the contract, as the district court correctly recognized. The last
antecedent rule provides that “a limiting clause or phrase should ordinarily be read as modifying
only the noun or phrase that it immediately follows.” United States v. Hayes, 555 U.S. 415, 425
(2009) (internal quotation marks and alterations omitted). And here, “as mutually agreed”
immediately follows “recognized 2009 Kentucky public auction sale(s),” meaning Crestwood
and Everest agreed only to “mutually” decide where and when to sell the Island Fashion filly, not
whether to sell the filly at all.

        The agreement as a whole supports this reading. See Fidelity & Cas. Co. of New York v.
Cooper, 126 S.W. 111, 113 (Ky. 1910) (“The language of the contract should be construed as a
whole . . . . [T]he general purpose of the contract should not be defeated by a strained
construction of particular words.”).      The clear purpose of the “PURCHASE AND SALE
AGREEMENT” was to sell Everest’s horses by various means: Some horses “shall” be sold at
the Keenland auction in January 2009, R. 152-4 at 2; some horses “shall” be sold to private
buyers, id. at 3; and some horses (including the Island Fashion filly) “shall” be sold at another
“recognized” Kentucky auction, id. at 2–3. Crestwood and Everest agreed to sell the Island
Fashion filly; the only question was which public auction the parties would choose for the filly’s
sale.

        Crestwood’s motion for attorney’s fees. The November 2008 sales agreement includes a
prevailing-party fee provision. “In the event of any action or proceeding to . . . enforce the terms
of this Agreement,” it says, “the prevailing party . . . shall be entitled to recover its . . .
reasonable attorney’s fees and other costs.” R. 152-4 at 6. Consistent with this clause, the
district court awarded $272,486.30 to Crestwood. Unless this award amounts to an abuse of
discretion, we must respect it. Singleton v. Smith, 241 F.3d 534, 538 (6th Cir. 2001).

        In reaching this figure, the court initially calculated Crestwood’s “lodestar”—
$340,607.90—the “proven number of hours reasonably expended on the case by an attorney,
multiplied by a reasonable hourly rate.” Isabel v. City of Memphis, 404 F.3d 404, 415 (6th Cir.
2005). It then reduced this amount by twenty percent because the contract provided fees not for
Nos. 13-5688/5689     Crestwood Farm Bloodstock v. Everest Stables, Inc.            Page 15

all claims but only for claims “enforc[ing] the terms” of the agreement. A few claims (Everest’s
fraud claim as an example) exceeded that scope. The resulting fee—$272,486.30—is reasonable
in a case in which Everest sought more than $1 million in damages and raised multiple claims,
ranging from breach of contract to breach of fiduciary duty to unjust enrichment. See Graceland
Fruit, Inc. v. KIC Chemicals, Inc., 320 F. App’x 323, 330 (6th Cir. 2008) (approving $400,000
award in case involving $800,000 in damages and multiple claims).

       Everest does not challenge the $340,607.90 lodestar figure on appeal. It instead argues
that the court’s twenty percent reduction was unreasonable. The reduction was “arbitrary,”
Everest submits, because it was based on only “a few generalities about the case.” App. Br. at
67. But Everest, it appears, is the one offering generalities. The district court found that
Crestwood “clearly demonstrated how the remaining 80% of work relates to the November
Agreement,” and cited Crestwood’s motion, which described in detail the rationale for the
reduction. R. 234 at 8. Based on ample facts, to say nothing of the court’s time-earned
familiarity with the case, the district court reasonably found a twenty percent reduction
appropriate. “The essential goal in shifting fees is to do rough justice,” it is well to remember,
“not to achieve auditing perfection.” Fox v. Vice, 131 S. Ct. 2205, 2210 (2011). This award
comes within this modest ambit.

                                               V.
       For these reasons, we affirm.
Nos. 13-5688/5689        Crestwood Farm Bloodstock v. Everest Stables, Inc.         Page 16

                _____________________________________________________

                      CONCURRING IN PART AND DISSENTING IN PART
                _____________________________________________________

       HELENE N. WHITE, Circuit Judge (concurring in part, dissenting in part). I agree with
the majority’s determinations with two exceptions. I conclude that issues of fact precluded
summary judgment on Everest’s claims that Crestwood violated an implied contract to manage
Petionville, and on both parties’ claims that the other breached the 2008 purchase and sale
agreement.

Implied Contract to Manage Petionville

       Everest presented evidence that, beginning early on in the parties’ relationship,
Crestwood co-managed Petionville and his stallion career, and provided services for Petionville
that went beyond animal husbandry.         Nielsen testified that McLean undertook to market
Petionville, and that he and McLean jointly set Petionville’s stud fee, although the final decision
was Nielsen’s. PID 3005-06, 3007. McLean, Sr., acknowledged that he cancelled “a few” of
Petionville’s service contracts without contacting Nielsen, and that “there could have been a
few” times he decided which mares were going to be bred to Petionville without consulting
Nielsen. PID 3032-33. Everest produced numerous written “Stallion Service” agreements
signed by McLean, not Nielsen, for Petionville breeding sessions. See PID 3307-08 (3/11/97),
3309-10 (3/20/98), 3312-13 (6/6/2000), 3314-15 (1/24/2001), 3316-17 (1/21/2002), 3349
(12/30/2002), 3347-48 (1/6/2003), 3318-19 (3/6/2003), 3320-21 (3/5/2004), 3302-03
(3/26/2004), 3322-23 (1/4/2005), 3324-25 (11/18/2005), 3326-27 (1/12/2007), 3328-29
(2/14/2008), 3330-31 (1/19/09) (sealed). Although Crestwood maintains that these agreements
evidence simply that it administered the paperwork for breeding Petionville and not that it
managed Petionville, a reasonable factfinder could conclude otherwise. Everest also submitted
letters McLean sent breeders in January 2000 and January 2004, thanking them for their past
support of Petionville and urging them to consider breeding mares to Petionville again. The
2004 letter stated:
Nos. 13-5688/5689      Crestwood Farm Bloodstock v. Everest Stables, Inc.              Page 17

       Dear Breeder,
       We would like to thank you for your past support of Petionville. Those of us that
       had the foresight to breed to Petionville initially, believing in his future stallion
       potential were right, and his success has become a reality!
       Petionville has achieved some very impressive statistics from his first four crops.
       His name is continually found among the top leading sires’ lists in various
       categories. His ability to sire a sound, fast, and precocious athlete is indicated by
       his 80% starters from foals, 67% winners from starters, and 26% 2-year old
       winners from starters. He sired an impressive seven stakes winners in 2003.
       Thus far his crowning achievement is Island Fashion, winner of the Alabama
       Stakes (G1) at Saratoga, and the LaBrea (G1) at Santa Anita and has earnings of
       $1,112,970. His achievements are not based on a single championship caliber
       superstar, but an impressive roster of solid Graded stakes winners/horses and
       $100,000 + stakes winning earners as well! (see stallion page).
       Petionville was an impressive dual Louisiana (G2) and Ohio Derby (G2) winner
       of over $811,000. Petionville’s pedigree is equally impressive, being by
       champion sire-of-sires Seeking the Gold, a son of Mr. Prospector. Possibly his
       real genetic strength comes from his dam Vana Turns who produced Kentucky
       Oaks (G1) winner Pike Place Dancer.
       As Petionville continues to climb the sire ranks, we invite you to consider
       Petionville again in 2004.
       Sincerely,
       Pope McLean

PID 3356 (dated 1/22/04) (italic and bold emphasis in original).

       Nielsen also presented evidence supporting that Crestwood’s efforts surrounding
Petionville dropped off after Nielsen received a $ 6.5 million offer to purchase Petionville in
February 2005. Nielsen discussed the offer with McLean, Sr., who discouraged him from
accepting the offer, and thereafter did little to market Petionville, contrary to representations that
Crestwood would take Petionville “to the next level”:

       Q. And what was the discussion with Mr. McLean?
       A. He discouraged me from taking the offer . . . . He said that I would be leaving
       money on the table; that PETIONVILLE was right at the point where if he got to
       the next level, he would be worth millions more than the 6 and a half, and he told
       me that if Taylormade was interested at 6 and a half, that should tell me
       something; that they were very smart people and aggressive people and they were
       going to improve on the horse.
       ....
Nos. 13-5688/5689          Crestwood Farm Bloodstock v. Everest Stables, Inc.                  Page 18

       Q. And you said certain assurances were given to you during that conversation?
       A. Correct.
       Q. What were those assurances?
       A. Just an acknowledgement that I was going to be passing up a lot of money,
       and that – the extra effort to take that horse to the next level would be made by
       Crestwood; they would work . . . very hard and extra hard and team up, and
       continue what they had been doing for the last several years and accelerate their
       efforts.
       ....
       [A]fter I told [Pope McLean, Sr.,] that I was going to sell the horse, I think they
       only sold 18 seasons the rest of the year. I could be wrong on the amount, but it
       dropped significantly.

PID 2558, 2560. Nielsen also testified that McLean, Sr., had told him year after year that
Crestwood had “a concentrated three person sales force,” and that it was only during discovery in
the instant case that he learned that was not the case. PID 2560.

       Further, the letter the majority quotes1 does not doom Everest’s implied-contract claim.
Maj. Op. at 5. Nielsen wrote Crestwood on July 31, 2009 regarding mare abortions and horse
euthanasia. PID 2602-03. Crestwood’s motion for summary judgment characterized Nielsen’s
letter as “summariz[ing] Crestwood’s involvement with PETIONVILLE and [Nielsen’s] general
breeding operation” when, in fact, the letter makes no reference to Petionville or to Crestwood’s
duties regarding Petionville’s management and promotion. The majority nonetheless relies on
language in the letter’s final two paragraphs, where Nielsen states that Crestwood on numerous
occasions

               took credit for my spotless reputation in the horse industry and also
       attributed my success as a national top ten breeder to Crestwood. Crestwood had
       minimal involvement in my breeding operation. . . . Crestwood performed animal
       husbandry and cared for my horses . . . However, Crestwood had no part in my
       breeding decisions, my genetic and/or catalogue mare selections, my selection of
       two year old trainers, and my race track and race horse management, and my
       ultimate earnings. The breeder owner ranking I achieved was based on race track
       monetary earnings. Crestwood had nothing to do with that.

       1
           Crestwood’s motion for summary judgment refers it as the “Animal Husbandry Letter.” PID 2489-90.
Nos. 13-5688/5689          Crestwood Farm Bloodstock v. Everest Stables, Inc.                         Page 19

See PID 2603. This letter was written on the eve of this action being filed and while a possible
settlement was being discussed, PID 3258 n.8, and is subject to varying interpretations. The
paragraph quoted above could be interpreted as an admission that Crestwood had minimal
involvement in all of Everest’s breeding operations, including Petionville’s, or it could be
interpreted otherwise, e.g., as referring to the fact that Crestwood had no hand in building
Everest’s reputation from the mid-1980s, when Everest entered the horse business, until the mid-
1990s, when the parties entered into a relationship or, as Nielsen testified, as simply responding
curtly to Crestwood’s correspondence seeking credit for Everest’s accomplishments. PID 3258.

       The majority’s determination that Nielsen’s “protocol” letter to Crestwood2 shows that
“Crestwood never agreed to manage Petionville’s stud career” is a factual finding inappropriate
at the summary-judgment stage. The letter does not establish that Crestwood did not manage
Petionville’s stud career. The letter states, in sum, that Nielsen will have the right to “approve”
any stud contract for Petionville, implying that Crestwood was involved in managing
Petionville’s breeding contracts. Nielsen testified that he wrote the 1996 “protocol” letter in an

       attempt to suggest to Pope [McLean] kind of include me in the process here.
       I’m interested in the mares. I’m interested in who the clients are. Interested in
       what they are saying about PETIONVILLE. I mean literally . . . we were almost
       talking everyday [sic]. So there was [sic] dozens of times, hundreds of times that
       they wouldn’t send me a pedigree like this [protocol letter] suggests and they
       would just call and say the mare is a stakes winner or the mare has been baron

       2
           The “protocol letter” from Nielsen to Pope McLean, Sr., at Crestwood states:

                  I believe we should establish a protocol for handling calls regarding seasons for
                  “Petionville.”
                  All requests should be accompanied by Mare’s pedigree, race record, produce
                  and last year’s breeding history (together with dates bred from the farm) and
                  sent to me.
                  I will respond within a very short time if the Mare will be satisfactory.
                  Although I hope all Mares submitted will be fine, unfortunately a few may not
                  be attractive, and I do not want to alienate or hurt anyone’s feelings
                  unnecessarily. For this reason, a contract should not be approved or sent out
                  without my approval.
                  Best regards,
                  EVEREST STABLES, INC.
                  Jeffrey L. Nielsen

       PID 2574.
Nos. 13-5688/5689     Crestwood Farm Bloodstock v. Everest Stables, Inc.            Page 20

       [sic] four years in a row or something like that, and we would talk and make a
       decision on what to do.

PID 3002 (Nielsen dep. at 105, emphasis added).

       Because these are issues of material fact, I would vacate the grant of summary judgment
to Crestwood on Everest’s implied contract claim.

2008 Agreement

       The 2008 agreement clearly provides that Everest retained title to the Island Fashion filly
until she sold. See PID 3457 (“the parties agree that Everest shall retain title and ownership to
[Island Fashion and the 2008 Storm Cat/Island Fashion filly], from the Effective Date of this
Agreement through the sale of said horses.”) And, as the district court and the majority observe,
the agreement is silent on whether Everest could set a reserve on the Island Fashion filly. PID
4451; Maj. Op. at 15 ¶ 41. Where a contract is ambiguous or silent on a vital matter, a court may
consider parol and extrinsic evidence involving the circumstances surrounding execution of the
contract, the subject matter of the contract, the objects to be accomplished, and the conduct of
the parties.” Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381, 384 (Ky. App. 2002);
Dennis v. Watson, 264 S.W.2d 858, 860 (Ky. App. 1953). Because the district court did not
consider such evidence, I would vacate the grant of summary judgment to Crestwood on the
question whether Everest breached the 2008 agreement by setting a reserve price on the Island
Fashion Filly, and the award of damages to Crestwood. The majority’s determination that
Everest has not shown damages is premature.