Opinion
CV-S-01-0459-LRH (PAL).
December 21, 2004
ORDER
Presently before the Court is a Motion to Retax Costs (Docket No. 138) brought by Defendants Roderick Stewart ("Stewart"), Stewart Annoyances, Ltd. ("Sal"), and Armstrong Hirsch Jackoway Tyerman (collectively, the "Defendants"). Plaintiff Rio Properties, Inc. ("Plaintiff") has filed an opposition (Docket No. 139). Also before the Court is the Defendants' "Request for Permission to Withdraw their Bills of Costs and Motion to Retax Costs and to File an Amended Bill of Costs" (Docket No. 140). Plaintiff has filed an opposition (Docket No. 141), to which the Defendants subsequently replied (Docket No. 142). Upon review of the record and relevant law, the Court denies the Defendants' motions.
Plaintiff initially brought this action against the Defendants in order to recover, pursuant to a contract between the parties, a $2,000,000 fee Plaintiff had paid Stewart in advance for the second of two concerts which Stewart agreed to perform. Defendant Armstrong Hirsch Jackoway Tyerman ("AHJTW") was joined as a Defendant in the suit, as the company held $500,000 of the $2,000,000 pre-payment in a trust account. On November 13, 2002, the Court entered final judgment against Stewart in an amount equal to the $1,500,000 principal owed and held by Stewart, plus $301,233.68 in prejudgment interest (Docket No. 81). Defendant AHJTW was also directed to pay the $500,000 it held in trust to Plaintiff, plus interest accrued. On November 27, 2002, Defendants filed a notice of appeal (Docket No. 91) concerning the judgment, and Plaintiff filed a protective cross-appeal soon after (Docket No. 97).
Subsequently, on January 8, 2003, the Court issued an order granting Plaintiff's motion against Stewart and Sal for attorneys' fees (Docket No. 109). Additionally, the Court denied AHJTW's request for attorneys' fees against Plaintiff, finding that AHJTW was not the prevailing party under either Nevada or California law, and was therefore not entitled to attorneys' fees. On January 31, 2003, Defendants filed a Notice of Appeal concerning the grant of Plaintiff's motion for attorneys' fees as well as the denial of Defendant AHJTW's motion (Docket No. 114).
Upon considering the appeal regarding this Court's grant of summary judgment, the Ninth Circuit held that certain evidence not previously considered must be examined in making a determination on the matter, and remanded the case in light of this holding. Because Plaintiff was no longer the prevailing party as a result of the appellate opinion, the circuit court also reversed the award of attorneys' fees against Stewart and Sal.
Rio Properties v. Armstrong Hirsch Jackoway Tyerman Wertheimer, 94 Fed.Appx. 519, 520-21, 2004 WL 614775, *1 (9th Cir. 2004) and Rio Properties v. Armstrong Hirsch Jackoway Tyerman Werthetmer, 92 Fed.Appx. 546, 2004 WL 614829, *1 (9th Cir. 2004) are the respective Ninth Circuit decisions resolving the appeals regarding this Court's grant of summary judgment and ruling on attorneys' fees.
Defendants interpret the Ninth Circuit's rulings as entitling them to attorneys' fees for all costs of the appeal pursuant to the Federal Rules of Appellate Procedure, Rule 39 ("Rule 39"). On June 6, 2004, in response to a Bill of Costs filed by Defendants, the Clerk of Court issued a memorandum indicating that costs shall not be taxed in this case (Docket No. 137). In response, Defendants have filed their Motion to Retax Costs, asserting that under Rule 39 they are entitled to the costs of the appeal. The rule states that, where an appeal has been brought, the parties shall bear certain costs of the appeal as follows:
(1) if an appeal is dismissed, costs are taxed against the appellant, unless the parties agree otherwise;
(2) if a judgment is affirmed, costs are taxed against the appellant;
(3) if a judgment is reversed, costs are taxed against the appellee;
(4) if a judgment is affirmed in part, reversed in part, modified, or vacated, costs are taxed only as the court orders.
Fed.R.App.P. 39(a). Case law in the Ninth Circuit has clarified that district courts have no discretion to deviate from the costs and fees taxable under this statute, Johnson v. Pacific Lighting Land Co., 878 F.2d 297, 298 (9th Cir. 1989), and it is generally held that where there is no instruction as to costs in an appeal which results in only a partial reversal, each party shall be responsible for their own attorneys' fees and costs related to the appeal. See Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non-Marine Ass'n, 117 F.3d 1328, 1340-41 (11th Cir. 1997). Although at first blush the rule appears straightforward, the dispute between the parties is whether Defendants' appeals resulted in a complete reversal, or only a partial reversal, of the underlying orders. Defendants point out that the Ninth Circuit's two opinions regarding the judgment and grant of attorneys' fees is summarized by the closing words, "REVERSED AND REMANDED" and "REVERSED," respectively. The argument appears to be that, regardless of the analysis and decision provided in the body of the opinion, any district court determining whether the costs of appeal are taxable should merely consider the summation provided in the concluding words of the opinion.
This Court is reluctant to impose such a simplistic and exacting rule absent any supporting legal authority. To the contrary, several cases suggest that it is within a court's discretion to determine the relief available to the parties based on a reasonable interpretation of the relevant order or opinion. See Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non-Marine Ass'n, 117 F.3d 1328, 1340 (11th Cir. 1997); Certain Underwriters at Lloyd's London v. Oryx Energy Co., 25 F.Supp. 2d 769, 770 (S.D.Tex. 1998) (noting that where there is no complete reversal, under Rule 39(a), the district court has discretion in taxing costs only if the appellate court did not specifically order costs on appeal taxable to one party); Wal-Mart Stores, Inc. v. Crist, 123 F.R.D. 590, 593 (W.D.Ark. 1988) (finding that the appellate court's words "we reverse the decision of the district court with respect to [Defendant's] counterclaim," was likely only a reversal in part, since only disposition of the counterclaim was mentioned). Moreover, it does not escape this Court's notice that, were form to be exalted over substance in the manner propounded by Defendants, an error or considerable over-simplification of the order, contained in the final concluding lines, could work an unintended injustice on the parties.
Therefore, the Court finds that it is more reasonable to consider the body of an appellate opinion in order to determine whether it reverses or affirms a district court order. As a result, this Court concludes that the orders appealed by Defendants were reversed only in part by the Ninth Circuit. The Defendants' opening brief regarding the judgment ordered in the district court asserted numerous grounds for reversal. (Pl.'s Opp., "Opening Brief by Appellants . . ." Exhibit at 35-66). Although the Ninth Circuit reversed the judgment based on one of Defendants' arguments, it expressly upheld this Court's ruling that certain evidence should remain excluded. (Pl.'s Opp., "Memorandum, No. 03-15028" Exhibit at 6, n. 1). Similarly, the Ninth Circuit's concurrent order concerning the fees and costs of the party constituted only a reversal in part, as Defendants did not receive a favorable judgment concerning all issues advocated. As this Court finds that the appeals resulted in only partial reversals, and notes that the circuit court did not provide any instructions with regard to attorneys' fees and costs, under Rule 39 each party is expected to bear its own costs and fees associated with the appeals. In light of this determination, it is unnecessary for Defendants to file an amended bill of costs.
As Plaintiff's exhibits are not numbered, the Court will attempt to refer to them by their title.
Rather, the court stated:
Like the district court, we find that the terms of the Amendment are not reasonably susceptible to Stewart's alternative proffered interpretation that he would have to refund the advance fee only if he accepted an offer for a paid performance on December 31, 2000, but failed to meet the Amendment's notice provisions. Similarly, the integrated contract is not reasonably susceptible to Stewart's other alternative claim that the parties agreed to a liberal rescheduling provision for the Second Concert. Thus, the district court correctly refused to admit extrinsic evidence related to these alternative theories, as such evidence would contradict, rather than explain, the language in the contract."
(Id.) Although these arguments rejected by the circuit court constituted grounds upon which reversal could have alternatively been made, the court's decision that the evidence was properly excluded has potential to effect the future outcome of this litigation.
The Defendants' second opening brief before the appellate court stated:
In the post-judgment fee order which is the subject of this appeal . . . the District Court required Stewart to pay all of Rio's fees and costs, including those incurred by Rio in connection with its unsuccessful claims for breach of contract and unjust enrichment against Stewart's co-defendant, appellant [Armstrong], the transactional law firm representing Stewart in the underlying concert deal. In fact, [Armstrong] prevailed on its summary judgment motion against Rio. Yet the District Court denied any attorneys' fees and costs to [Armstrong], and that denial is also the subject of this appeal.
(Pl.'s Opp., "Appellants' Opening Brief" Exhibit at 1-2). The Ninth Circuit's opinion reversed the order awarding costs and fees to Plaintiff, in light of the concurrent order reversing summary judgment. (Pl.'s Opp., "Memorandum, No. 03-15244" Exhibit at 2). However, the court did not reverse the part of the order denying fees and costs to Armstrong.
It is therefore ORDERED that Defendants' Motion to Retax Costs (Docket No. 138) is DENIED.
It is further ORDERED that Defendants' "Request for Permission to Withdraw their Bills of Costs and Motion to Retax Costs and to File an Amended Bill of Costs" (Docket No. 140) is DENIED.
IT IS SO ORDERED.