Mid-Hudson Catskill Ministry v. Fine Host

• Decision Date: 08 August 2005
• Docket Number: Docket No. 04-0056-CV(L).,Docket No. 04-0181-CV(XAP).,Docket No. 04-0767-CV(XAP).,Docket No. 04-0472-CV(CON).
• Citation: 418 F.3d 168
• Parties: MID-HUDSON CATSKILL RURAL MIGRANT MINISTRY, INC., Plaintiff-Appellant-Cross-Appellee, v. FINE HOST CORPORATION, Defendant-Appellee-Cross-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

418 F.3d 168

MID-HUDSON CATSKILL RURAL MIGRANT MINISTRY, INC., Plaintiff-Appellant-Cross-Appellee, v. FINE HOST CORPORATION, Defendant-Appellee-Cross-Appellant.

Docket No. 04-0056-CV(L).

Docket No. 04-0181-CV(XAP).

Docket No. 04-0472-CV(CON).

Docket No. 04-0767-CV(XAP).

United States Court of Appeals, Second Circuit.

Argued: February 9, 2005.

Decided: August 8, 2005.

COPYRIGHT MATERIAL OMITTED

Dan Getman, New Paltz, N.Y. (Carol A. Lafond, LeBoeuf, Lamb, Greene & MacRae, LLP, New York, NY, on the brief), for plaintiff-appellant-cross-appellee.

Patrick L. Seely, Jr., Hacker & Murphy, LLP, Latham, NY, for defendant-appellee-cross-appellant.

Before: McLAUGHLIN and SOTOMAYOR, Circuit Judges, and CEDARBAUM, District Judge.^*

SOTOMAYOR, Circuit Judge.

Plaintiff-appellant/cross-appellee Mid-Hudson Catskill Rural Migrant Ministry, Inc. ("plaintiff" or "the Ministry") appeals from a judgment of the United States District Court for the Southern District of New York dismissing its quantum meruit claim under New York law against defendant-appellee/cross-appellant Fine Host Corp. ("defendant" or "Fine Host"). Because plaintiff has recovered damages from defendant under a valid contract governing the same subject matter as the quantum meruit claim, we affirm the district court's dismissal of that claim.

Plaintiff also appeals from a judgment setting awarded attorney's fees at $1,000, arguing that the district court rested its fee calculation on a mistaken analysis of the case law, a misreading of plaintiff's retainer agreement, and a misapplication of Federal Rule of Civil Procedure 68. Plaintiff also claims—and defendant does not dispute—that the district court erred in failing to award plaintiff prejudgment interest on its damages award. On cross-appeal, defendant claims that the underlying contract does not authorize the award of attorney's fees in a breach-of-contract action between the parties. We affirm the district court's judgment awarding plaintiff fees in the amount of $1,000, but we remand the case for consideration of plaintiff's application for prejudgment interest.

BACKGROUND

Plaintiff is a nondenominational multi-faith ministry providing religious services and other assistance to migrant farm workers in eastern New York State. Defendant is a national food service provider headquartered in Connecticut that provides food and related services for, inter alia, outdoor public events such as the event at the heart of this appeal.

On April 26, 1994, defendant entered into a food, beverage, and merchandise concession agreement with the promoter of Woodstock 1994, a multi-day outdoor concert in Saugerties, New York. To staff its concession stands, defendant solicited local nonprofit organizations to provide volunteer labor in return for a share of the profits. Plaintiff accepted defendant's offer, and the two parties signed a contract in August 1994. Under the contract, plaintiff was to receive between seven and eight percent of the gross sales of the food booths its volunteers managed. On appeal, the parties dispute how many volunteers plaintiff was to provide under the contract. Plaintiff alleges that it was a maximum of twenty volunteers per booth per day, while defendant claims that it was a maximum of twenty volunteers per booth per shift (with several shifts each day). Regardless of what the contract provided, the parties agree that plaintiff supplied over 250 volunteers.

Woodstock 1994 did not go as planned. According to plaintiff, the individuals managing the festival were incapable of dealing with the severe weather and unruly crowds. Hundreds of people entered the concert without paying and widespread looting of concession stands occurred. Plaintiff alleges that defendant failed to provide adequate food, kitchen staff, and restroom facilities, failed to sell the "festival scrips" that concert attendees needed to buy concession stand food, failed to keep the booths open and accessible, and failed to provide adequate protection from looters. Plaintiff also alleges that it did not receive payment under the contract.

In July 1998, plaintiff filed a complaint in the United States District Court for the Southern District of New York, asserting state-law causes of action based on quantum meruit, unjust enrichment, and breach of contract. Jurisdiction was based on diversity of citizenship. The complaint sought a judgment "for the full value of the services [plaintiff] provided to defendant or alternatively for damages incurred by defendant's breach of contract in the approximate amount of $200,000 plus interest." The complaint further sought punitive damages, costs, and attorney's fees.

By order dated January 19, 2001, then District Court Judge Barrington D. Parker, Jr. granted defendant's motion for summary judgment on plaintiff's quantum meruit and unjust enrichment claims to the extent that plaintiff sought damages based on the number of hours worked by the volunteers. The court held that such "wage based" damages could be claimed—if at all—only by the volunteers themselves. The court left open for trial, however, whether plaintiff could recover quantum meruit damages based on another theory. The court denied plaintiff's cross-motion for summary judgment on the quantum meruit claim.

Visiting District Court Judge Samuel Conti of the Northern District of California took over the case in July 2003. Prior to trial, he ruled, based on Judge Parker's earlier order precluding a wage-based measure of damages, that plaintiff could not introduce evidence related to the hourly-rate value of the work of its volunteers. Judge Conti explained: "Any costs that [plaintiff] expended in getting the extra . . . people would be quantum meruit costs, but any amount of money attributable to them, to their worth is their own private cause of action, as I read Judge Parker's order." After all evidence had been presented at trial, Judge Conti determined that any remaining quantum meruit claims were subsumed by the contract claim. The court dismissed the quantum meruit claim while allowing the contract claim to proceed.

The jury found defendant liable for breach of contract, but awarded damages of only $3,000. Pursuant to an indemnity clause in the parties' contract, plaintiff sought $155,179.13 in attorney's fees and $5,397.36 in costs. The district court agreed that the contract entitled plaintiff to recover reasonable attorney's fees, but the court set the awarded amount at $1,000, well below plaintiff's request. The court based its reduction of the award on defendant's earlier offer of judgment under Federal Rule of Civil Procedure 68, the small size of the damages award, and the contingent-fee arrangement between plaintiff and its attorney. Both parties appealed.

DISCUSSION

I. Quantum Meruit and Unjust Enrichment

Plaintiff claims that "[t]he District Court erred when it determined that [plaintiff] did not have standing to pursue quantum meruit and unjust enrichment claims." This is not, however, what the district court held. Rather, Judges Parker and Conti held that because plaintiff lacked standing to bring suit on behalf of its volunteers, plaintiff could not measure damages in the quantum meruit action by reference to a wage-based valuation of the volunteers' work. The court left open the possibility that Mid-Hudson could recover quantum meruit damages on a theory that was not wage-based. When the district court ultimately dismissed the quantum meruit claim, it did so not for lack of standing but rather because the evidence adduced at trial had demonstrated that the quantum meruit claim was indistinguishable from the contract claim.

Plaintiff's brief does not make clear whether it seeks to sue in quantum meruit on its own behalf, on behalf of its volunteers, or both. Plaintiff's opening brief for example, claims that the district court's holding on standing was erroneous because plaintiff had brought the quantum meruit claims "on its own behalf and not on behalf of its volunteers." Later in that same argument section, however, plaintiff explains that it has "standing to sue as a representative of the volunteers." In one particularly confusing sentence, plaintiff argues that it "has standing to bring such claims on its own behalf based on Matter of Dental Society of the State of New York v. Carey, 61 N.Y.2d 330, 474 N.Y.S.2d 262, 462 N.E.2d 362 (1984), in which a professional society was found to have standing to [sue] on behalf of its members" (emphasis added).

Despite these points of confusion, we will construe the briefs liberally as raising an objection to the district court's quantum meruit ruling in its entirety. Cf. Paramedics Electromedicina Comercial, Ltda. v. GE Med. Sys. Info. Techs., Inc., 369 F.3d 645, 653 n. 4 (2d Cir.2004) (reaching a claim where "certain language" in the brief could be "liberally construed" as raising it). We will also assume that plaintiff intends to raise the quantum meruit claims both on its own behalf and on behalf of its volunteers. See id. Reviewing the issues de novo, we affirm the judgment of the district court. See Shain v. Ellison, 356 F.3d 211, 214 (2d Cir.2004) ("The existence of standing is a question of law that we review de novo."); Grochowski v. Phoenix Constr., 318 F.3d 80, 84-85 (2d Cir.2003) (noting that this Court reviews grants of summary judgment de novo).

A. Plaintiff has standing to sue on its own behalf but not on behalf of its volunteers.

Where, as here, jurisdiction is predicated on diversity of citizenship, a plaintiff must have standing under both Article III of the Constitution and applicable state law in order to maintain a cause of action. See Bano v. Union Carbide Corp., 361 F.3d 696, 713-14 (2d Cir.2004) (applying federal law of standing in a diversity action and holding that plaintiff organizations lacked standing to bring damages claims belonging to their members); Official Comm. of the Unsecured Creditors of Color Tile, Inc. v. Coopers...