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International Auto Logistics, LLC v. Vehicle Processing Center of Fayetteville, Inc.

United States District Court, S.D. Georgia, Brunswick Division

July 5, 2017




         On rare occasion, victory and defeat are hard to tell apart. See, e.g., Jean-Paul Sartre, The Devil & the Good Lord 4 (trans. Kitty Black 1960) ("A victory described in detail is indistinguishable from a defeat."); Plutarch, The Life of Pyrrhus 417 (trans. Bernadotte Perrin 1920) ("If we are victorious in one more battle with the Romans, we shall be utterly ruined." (quoting Pyrrhus of Epirus)) . But it was obvious who won and who lost when this Court held that Defendant Vehicle Processing Center of Fayetteville, Inc. ("VPCF") "undisputedly breached [a] Subcontract and there [wa]s no genuine factual dispute" as to Plaintiff International Auto Logistics, LLC's ("IAL") damages calculation-such that IAL was "entitled to summary judgment." Dkt. No. 68 at 8. For this reason, and the others given below, IAL's bill of costs, dkt. no. 73, will be TAXED to VPCF, and IAL's motion for attorneys' fees, dkt. no. 74, will be GRANTED.


         VPCF had a subcontract to run a vehicle-processing and storage center for IAL, a government contractor. Dkt. No. 68 at 1. VPCF violated labor laws and tried to cover that up. Id. at 5-6. IAL found out and terminated the subcontract. Id. IAL calculated what it owed VPCF as being just south of $60, 000. Id. at 6. VPCF responded by claiming that it was entitled to 95.5% of everything IAL earned from the government-over $3, 000, 000. Id.

         IAL sought declaratory judgment as to what it owed VPCF and VPCF counterclaimed breach of contract. Id. at 7. IAL repeatedly informed VPCF that it was seeking attorneys' fees. Dkt. No. 79 at 25 (extracting from Sept. 8, 2016 deposition), 32 (extracting from June 10, 2016 initial disclosures). The Court ultimately held that VPCF, not IAL, breached the subcontract. Dkt. No. 68 at 11-13. It then held that IAL properly calculated how much it owed VPCF. Id. at 13-19.

         IAL moved for costs and attorneys' fees on May 30, 2017. Dkt. Nos. 73-1, 74. Both matters have been fully briefed and are now ripe for disposition. Dkt. Nos. 76, 78-79.


         "As a general rule, an award of attorney fees and expenses of litigation are not available to the prevailing party unless authorized by statute or contract." Cary v. Guiraqossian, 508 S.E.2d 403, 406 (Ga. 1998). "[I]n the absence of a controlling statute, a party's entitlement to attorney fees under a contractual provision is determined by the usual rules of contract interpretation." Benchmark Builders, Inc. v. Schultz, 711 S.E.2d 639, 640 (Ga. 2011) (citation omitted); accord City Heights Condo. Ass'n, Inc. v. Bambara, 788 S.E.2d 563 (Ga.Ct.App. 2016) (applying similar rule in costs context); Dan J. Sheehan Co. v. McCrory Constr. Co., 643 S.E.2d 546, 549 (Ga.Ct.App. 2006) (holding arbitrator appropriately considered "the contractual language regarding . . . costs").


         IAL is entitled to costs and fees. VPCF objects on four grounds: (1) IAL did not prevail; (2) there is no contractual basis for awarding fees; (3) IAL never tendered any money to VPCF; and (4) the fees request is not specific enough. Dkt. No. 76 at 3; Dkt. No. 78 at 1. The first argument is frivolous. The remaining three are not much better and are also meritless.


         VPCF absurdly claims that it "is entitled to attorney's fees because it was the prevailing party.'' Dkt. No. 7 6 at 6. It goes so far as to promise that it "will seek an award of attorney's fees." Id. at 7. This effort would be in vain. It is extremely clear that IAL prevailed. "[A] plaintiff 'prevails' when actual relief on the merits of his claim materially alters the legal relationship between the parties by modifying the defendant's behavior in a way that directly benefits the plaintiff." Farrar v. Hobby, 506 U.S. 103, 111-12 (1992) (interpreting 42 U.S.C. § 1988). "In other words, there must be: (1) a situation where a party has been awarded by the court *"at least some relief on the merits of his claim"' or (2) a 'judicial imprimatur on the change' in the legal relationship between the parties." Smalbein ex rel. Estate of Smalbein v. City of Daytona Beach, 353 F.3d 901, 905 (11th Cir. 2003) (interpreting 42 U.S.C. § 1988) (quoting Buckhannon Bd. & Care Home, Inc. v. W.Va. Dep't of Health & Human Res., 532 U.S. 598, 603, 605 (2001) (interpreting 42 U.S.C. §§ 3613(c)(2), 12205)); see also Tex. State Teachers Ass'n v. Garland Indep. Sch. Dist., 489 U.S. 782, 791-92 (1989) (interpreting 42 U.S.C. § 1988) (requiring only that party prevail as to "any significant issue" (citation omitted)). A declaratory judgment "will usually satisfy that test." Lefemine v. Wideman, 568 U.S. 1, 4 (2012) (interpreting 42 U.S.C. § 1988).

         VPCF's argument as to how it prevailed is threefold: "The Court has ultimately held that [IAL] owes [VPCF] $59, 446.58, " whereas IAL initially offered VPCF $3000 less than that and "took the position that it owed nothing." Dkt. No. 76 at 5; see also id. at 6 ("[T]here was no relief granted . to [IAL] against [VPCF]."). "IAL had previously dismissed its other claims against VPCF . . . ." Id. at 7. And "IAL could have filed an interpleader action, but it did not." Id. at 5.

         The first contention is more slanted than a funhouse mirror. In its complaint, IAL asked the Court to issue declaratory judgment as to "the amount, if any, due to VPCF." Dkt. No. 1 ¶ 23. IAL alleged that it "calculated the amount it determined to be due, " but that VPCF rejected this amount and "contended that it was due more than $2 million more." Id. ¶¶ 13-14. By summary judgment, IAL asked the Court to decide that it owed $59, 44 6.58-the amount the Court ultimately accepted. Dkt. No. 46 at 16; Dkt. No. 68 at 19. This was indeed $3000 more than IAL offered VPCF before litigation-because IAL voluntarily reconsidered one of the offsets it had made. Dkt. No. 44-3 ¶ 42. On every issue that remained in ...

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