MidAmerica Federal Sav. & Loan Ass'n v. Shearson/American Exp., Inc.

• Decision Date: 28 April 1992
• Docket Number: Nos. 91-5077,91-5108,s. 91-5077
• Citation: 962 F.2d 1470
• Parties: MIDAMERICA FEDERAL SAVINGS & LOAN ASSOCIATION, a federal savings and loan association; Federal Deposit Insurance Corporation, as Manager of FSLIC Resolution Fund, Plaintiff-Appellee and Cross-Appellant, v. SHEARSON/AMERICAN EXPRESS, INC., a Delaware corp.; Don Crow, an individual, Defendants-Appellants and Cross-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1470

962 F.2d 1470

MIDAMERICA FEDERAL SAVINGS & LOAN ASSOCIATION, a federal savings and loan association; Federal Deposit Insurance Corporation, as Manager of FSLIC Resolution Fund Plaintiff-Appellee and Cross-Appellant, v. SHEARSON/AMERICAN EXPRESS, INC., a Delaware corp.; Don Crow, an individual, Defendants-Appellants and Cross-Appellees.

Nos. 91-5077, 91-5108.

United States Court of Appeals Tenth Circuit.

April 28, 1992.

Scott R. Rowland (and Richard P. Hix, of Doerner, Stuart, Saunders, Daniel & Anderson, Tulsa, Okl., and Richard S. Gill, F.D.I.C., Washington, D.C., with him on the brief), for plaintiff-appellee and cross-appellant.

Claire V. Eagan (C. Kevin Morrison, with her on the brief) of Hall, Estill, Hardwick, Gable, Golden & Nelson, Tulsa, Okl., for defendants-appellants and cross-appellees.

Before McKAY, Chief Judge, LOGAN and BALDOCK, Circuit Judges.

BALDOCK, Circuit Judge.

We have already addressed the merits in this case. See MidAmerica Federal Savings & Loan v. Shearson American/Express Inc., 886 F.2d 1249 (10th Cir.1989) (MidAmerica I ). This appeal centers entirely on the resulting attorneys' fees award. Plaintiff-appellee MidAmerica Federal Savings & Loan ("MidAmerica") ¹ brought this lawsuit in 1984, alleging numerous federal securities and pendent state causes of action arising from its purchase of $50 million in GNMA Series I Investment Trusts from Defendant-appellant Shearson/American Express, Inc., through Shearson's broker, Defendant-appellant Don Crow (collectively referred to as "Shearson"). After two jury trials, the case culminated in verdicts in favor of MidAmerica on two pendent state claims: (1) a breach of fiduciary duty claim; and (2) an Oklahoma Securities Act § 408(a)(2) claim, Okla.Stat.Ann. tit. 71, § 408(a)(2) (West Supp.1992). ² Upon instructions that recovery would be had on the highest damage amount only, the jury assessed damages of $7,513,851 (plus $1.00 punitive damages) on the breach of fiduciary duty claim, and $6,513,851 on the § 408(a)(2) claim. The district court then awarded actual damages of $7,513,851 (plus $1.00 punitive damages), the jury's highest damage assessment. Shearson appealed, and we affirmed the judgment. MidAmerica I, 886 F.2d 1249.

In 1986 MidAmerica applied for attorneys' fees resulting from the § 408(a)(2) claim, ultimately requesting $717,424.50. The court held the matter in abeyance until disposition of the appeal. After the appeal was decided, the court eventually awarded MidAmerica $512,197.15 in attorneys' fees on April 22, 1991. This amount did not include post-merits-judgment interest. Shearson appeals, contending that (1) the judgment allows an impermissible double recovery, and (2) MidAmerica waived its right to attorneys' fees by failing to submit evidence of the fees to the jury. ³ MidAmerica cross-appeals, contending that it should have received interest on the award from July 23, 1986, the date of the original merits judgment. Shearson's appeal presents questions of state law, which we review de novo with no deference to the district court's legal analysis, see Salve Regina College v. Russell, --- U.S. ----, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991). MidAmerica's cross appeal presents a question of federal law, which we review de novo. We consider each argument in the order presented and affirm the judgment.

I. Shearson's Appeal, No. 91-5077.

A. Double Recovery.

During deliberations the jury in this case posited to the court certain written questions that indicated confusion regarding the measure of damages for the breach of fiduciary duty claim. The court responded by referring the jury to the instructions, which contained no reference to attorneys' fees either in the breach of fiduciary duty provision or the § 408 provision. In spite of our previous holding on the merits, Shearson now contends that these communications unequivocally indicate that the $1 million excess of the breach of fiduciary duty damages over the § 408(a)(2) damages represents an effort by the jury to compensate MidAmerica for attorneys' fees. Therefore, Shearson contends that an additional statutory award under § 408 is an impermissible double-recovery of attorneys' fees. ⁴

It is undisputed that a plaintiff generally may not double recover damages. See, e.g., U.S. Industries, Inc. v. Touche Ross & Co., 854 F.2d 1223, 1259-60 (10th Cir.1988) (compensatory damages for federal securities claim and state breach of fiduciary duty claim duplicative); Clappier v. Flynn, 605 F.2d 519, 530-31 (10th Cir.1979) (compensatory damages for federal civil rights claim and state civil rights claim duplicative); Lexton-Ancira Real Estate Fund, 1972 v. Heller, 826 P.2d 819, 822-24 (Colo.1992) (punitive damages for misappropriation claim and treble damages for deceptive trade practices claim duplicative because punitive and treble damages serve the same deterrent purpose).

This case, however, does not involve double recovery of a certain type of damages--duplicative compensatory or duplicative punitive awards, for example. Instead, it involves two separate awards--one compensatory damages award and one attorneys' fees award. The jury communications to the court do evidence some confusion regarding the measure of damages for the breach of fiduciary duty claim, but we answered this question in the prior appeal by holding that the damages assessed on the fiduciary duty claim were supported by the evidence. MidAmerica I, 886 F.2d at 1259. Attorneys' fees estimates were not a part of the supporting evidence, nor could they properly be in evidence on the fiduciary duty claim since Oklahoma follows the general American Rule prohibiting attorneys' fees awards in the absence of a specific statutory or contractual provision. Kay v. Venezuelan Sun Oil Co., 806 P.2d 648, 650 (Okla.1991). See also Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975). Shearson itself points in its second argument to this lack of evidence. See infra § B. MidAmerica therefore has not double-recovered attorneys' fees.

Nevertheless, Shearson argues that MidAmerica is legally barred from recovering a § 408 attorneys' fees award because the underlying judgment was entered on the higher fiduciary duty claim award for which the American Rule prohibiting attorneys' fees awards applies. It contends that the court entered an impermissible "mix and match" verdict by combining the § 408 attorneys' fees award with the breach of fiduciary duty compensatory and punitive damages award. Section 408(l ) provides, however, that "[t]he rights and remedies provided for in this title are in addition to other rights or remedies that may exist in law or in equity...." See supra note 4. Oklahoma courts have not addressed this provision, but we think that they would interpret it much as have other jurisdictions with similar statutes; that is, allow aggregation of all remedies that are not duplicative. See, e.g., Naranjo v. Paull, 111 N.M. 165, 803 P.2d 254, 261 (App.1990) (interpreting similar securities act savings clause as allowing aggregation of securities act compensatory damages and common law fraud punitive damages); Bradley v. Hullander, 266 S.C. 188, 222 S.E.2d 283, 287 (1976) (interpreting identical securities act savings clause as indication of clear intent to state that securities act remedies "are in addition to all other causes of action or remedies at law or in equity").

We addressed a similar situation in Young v. Taylor, 466 F.2d 1329 (10th Cir.1972). In that case, the jury returned a general verdict supported by three different theories: (1) a federal Rule § 10b-5 claim; (2) a pendent Utah securities fraud claim; and (3) a pendent Utah common law fraud claim. The 10b-5 claim did not encompass recovery for punitive damages or attorneys' fees, but the pendent common law claim provided for punitive damages, and the pendent securities fraud claim provided for attorneys' fees. Interpreting the savings clause in § 28(a) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78bb(a), we held that the plaintiff could aggregate all remedies that were not duplicative:

A reasonable limiting effect is given by interpreting § 28(a) as meaning that if a federal claim is maintained as here, recovery of actual damages twice on separate claims in the action is prohibited, but that if the elements of a state claim are necessarily found to exist, punitive damages and attorneys' fees allowed under state law are not barred. We feel we should construe the Act in a way that would save these rights under state law. Therefore, we conclude we should sustain the punitive damages and attorney's fees awarded here.

Young, 466 F.2d at 1338. Accordingly, MidAmerica is entitled to recover its attorneys' fees because the award simply is not duplicative given our prior holding on the merits. To hold otherwise would render the § 408(l ) savings clause meaningless.

Shearson cites Grogan v. Garner, 806 F.2d 829 (8th Cir.1986), contending that it expressly disallows MidAmerica's "mix and match" recovery. In Grogan, the plaintiffs attempted to recover prejudgment interest on their federal Rule 10b-5 claim as well as punitive damages on their pendent state common law fraud claim. The Eighth Circuit held:

When a federal securities claim overlaps with a pendent state law claim, the plaintiff is entitled to the maximum amount recoverable under any claim. Jacobs, The Measure of Damages in Rule 10b-5 Cases, 65 Geo.L.J. 1093, 1166 (1977). This does not require an election of remedies. Instead, [Plaintiffs] are each entitled to the greatest amount recoverable under any single theory pled, with actual damages plus prejudgment interest representing one single amount and actual damages plus punitive damages representing the other single amount.

Id. at 839 (emphasis supplied). Citing the emphasized language, Shearson contends that MidAmerica should have been forced to choose...