Coastal Fuels Mktg. v. FL Express Shipping

• Decision Date: 28 March 2000
• Docket Number: 98-4937,Nos. 98-4455,98-5108 and 98-5188,s. 98-4455
• Citation: 207 F.3d 1247
• Parties: (11th Cir. 2000) COASTAL FUELS MARKETING, INC., Coastal Offshore Fuels, Inc., Plaintiffs-Appellants, v. FLORIDA EXPRESS SHIPPING CO., INC., Defendant-Appellee. Coastal Fuels Marketing, Inc., Coastal Offshore Fuels, Inc., Plaintiffs-Counter-Defendants-Appellees-Cross-Appellants, v. Florida Express Shipping Co., Inc., Defendant-Counter-Claimant-Appellant-Cross-Appellee, Suntrust Bank, Miami, N.A., Garnishee. Coastal Fuels Marketing, Inc., Coastal Offshore Fuels, Inc., Plaintiffs-Counter-Defendants-Appellees, v. Florida Express Shipping Co., Inc., Defendant-Counter-Claimant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1247

207 F.3d 1247 (11th Cir. 2000)

COASTAL FUELS MARKETING, INC., Coastal Offshore Fuels, Inc., Plaintiffs-Appellants, v. FLORIDA EXPRESS SHIPPING CO., INC., Defendant-Appellee.

Coastal Fuels Marketing, Inc., Coastal Offshore Fuels, Inc., Plaintiffs-Counter-Defendants-Appellees-Cross-Appellants, v. Florida Express Shipping Co., Inc., Defendant-Counter-Claimant-Appellant-Cross-Appellee Suntrust Bank, Miami, N.A., Garnishee.

Coastal Fuels Marketing, Inc., Coastal Offshore Fuels, Inc., Plaintiffs-Counter-Defendants-Appellees, v. Florida Express Shipping Co., Inc., Defendant-Counter-Claimant-Appellant.

Nos. 98-4455, 98-4937, 98-5108 and 98-5188.

United States Court of Appeals Eleventh Circuit.

March 28, 2000.

[Copyrighted Material Omitted]

Appeals from the United States District Court for the Southern District of Florida. (No.95-08310-CV-DMM), Donald M. Middlebrooks, Judge.

Before EDMONDSON and BARKETT, Circuit Judges, and COHILL ^*, Senior District Judge.

PER CURIAM:

This appeal arises from a dispute about entitlement to insurance proceeds and attorney's fees. We affirm the judgment except that, because the court failed to determine whether the amount of attorney's fees requested by Defendant Florida Express Shipping Co. ("Express") for the work of its out-of-state counsel was reasonable, we must vacate and remand on that issue.

BACKGROUND

In 1993, Plaintiff, Coastal Fuels Marketing, Inc. ("Coastal"), entered into a bareboat charter agreement with Express to charter the MV Florida Express for four years. In 1995, the MV Florida Express caught fire and was seriously damaged while at sea. At the time of the fire, there was a $5,300,000 agreed value hull insurance policy covering the MV Florida Express. The insurance proceeds were to be distributed according to the terms of the bareboat charter. But, the parties disagreed on which provisions of the bareboat charter were controlling and whether the charter was ambiguous. Depending on how the charter was interpreted, Coastal would or would not be entitled to approximately $900,000 of the $5.3 million of proceeds.

Coastal filed suit seeking a declaratory judgment that it was entitled to the disputed funds. Express answered and claimed that it was entitled to the disputed funds. Express also counterclaimed, alleging that it (pursuant to the bareboat charter) was entitled to additional charter hire payments. At trial, Coastal also sought reimbursement from Express for certain items it claimed were left on board the MV Express when the vessel was returned to Express, sought contribution for amounts paid to settle a personal injury suit arising out of the fire, and additionally claimed that Express's acts deprived Coastal of its option to purchase the MV Express. Pursuant to a court order, $1,650,000 of the insurance proceeds were placed in escrow. The vessel was sold for scrap.

The parties consented to a bench trial before a magistrate judge and a three-day trial was held. Following trial, the court declared that Express was entitled to the disputed insurance proceeds and also awarded Express $59,500 in charter hire. Coastal was awarded $38, 897.32 as reimbursement for fuels and lubricants that were left on board the vessel, but did not otherwise recover.

After the court entered judgment, both parties claimed that, pursuant to the charter agreement, they were entitled to attorney's fees. Upon reviewing the motions and holding a telephone conference, the court said that, because Express had "prevailed on most of its claims filed in this action," Express was entitled to attorney's fees and costs pursuant to the terms of the charter agreement. Although Coastal was awarded money for the fuel and lubricants that had been left on board the vessel, the court denied its motion for fees and said that "[s]imply because the Plaintiffs prevailed on a portion of their claim does not make them prevailing parties nor does it negate this Court's ability to find that the Defendant prevailed on most of its claims." The court scheduled an evidentiary hearing on the "issue of reasonableness of the fees and costs sought by the Defendant."

At the evidentiary hearing, Express's lead counsel, Mr. Mariani, and an attorney from his firm, Mr. Copeland, testified about the number of hours spent on the case by the attorneys and paralegals of their firm and their hourly rates. The court received into evidence the billing summaries and invoices for Mariani's firm. The court also heard expert testimony from both sides about the reasonableness of Mariani's fee request. Mariani, Copeland and the expert witness were subject to cross-examination by Plaintiff.

Express also requested attorney's fees for work performed by Express's out-of-state counsel, Cadwalader, Wickersham & Taft. No Cadwalader attorney was present at the hearing. Mr. Mariani, as lead counsel in the case, attempted to testify about Cadwalader's fees. The court, however, did not allow Mr. Mariani to testify about the bills submitted by Cadwalader. The court did receive into evidence Cadwalader's billing summaries.

The court also heard, from both sides, expert testimony about the reasonableness of Cadwalader's fee request. Express's expert's testimony was based on a review of the billing records and on an interview of Cadwalader's billing partner on the case. Express's expert was subject to cross-examination on these matters.

In its order on attorney's fees, the court awarded Express $130,036.50 for its local counsel's fees. The court also said that, because no Cadwalader representative had appeared at the evidentiary hearing, Plaintiff was prevented from cross-examining or inquiring into the reasonableness of the fees charged and the tasks performed by Cadwalader. The court noted that it had scheduled the hearing to receive all evidence on the reasonableness of the fees and costs sought by defendant; the court then concluded that Cadwalader had failed to present sufficient evidence at the hearing about the amounts sought. Therefore, the court decided that no fees or costs attributable to Cadwalader were recoverable against Plaintiff. The court made no specific findings about the reasonableness or unreasonableness of Cadwalader's billings.

DISCUSSION

We review the court's findings of fact for clear error and the conclusions of law de novo. See Worthington v. United States, 21 F.3d 399, 400 (11th Cir.1994). We review the decision to grant or deny attorney's fees for an abuse of discretion. See United States v. Gilbert, 198 F.3d 1293, 1298 (11th Cir.1999).

On appeal, Plaintiff argues that the court erred in interpreting the bareboat charter, in excluding Coastal's expert witness, and in determining that Express was entitled to the disputed funds and additional charter hire. We have reviewed the record and the court's findings of fact and conclusions of law; we see no reversible error. Therefore, we affirm without further discussion the court's determination that Express is entitled to the disputed insurance proceeds and that Express is entitled to additional charter hire in the amount of $59,500. The remaining issues concern the court's treatment of Express's claim that it was entitled to attorney's fees.

I.Express's Entitlement to Fees

Because this case involves the interpretation and construction of a bareboat charter agreement, this case arises in admiralty; and we apply the general maritime law. See Sea Lane Bahamas, Ltd. v. Europa Cruises Corp., 188 F.3d 1317, 1320 (11th Cir.1999); Atlantic Lines, Ltd. v. Narwhal, Ltd., 514 F.2d 726, 731 (5th Cir.1975). A party is not entitled to attorney's fees in an admiralty case unless fees are statutorily or contractually authorized. See Galveston County Navigation Dist. v. Hopson Towing Co., 92 F.3d 353, 356 (5th Cir.1996). In this case, a specific contractual provision allows for the recovery of attorney's fees as damages for breach of the charter. Paragraph 35 of the charter said: "Damages for breach of this Charter shall include all provable damages, and all reasonable costs, disbursements and attorney's fees incurred by the Owner or the Charterer in any action or proceeding to enforce any rights under this Charter."

Coastal argues that the court erred in finding that Express was entitled to attorney's fees. Coastal contends that, because it recovered $39,897.32 for lubricants and fuel, the court erred when it concluded that Express was the prevailing party. Put differently, Coastal argues that, because both parties partially prevailed, neither party was entitled to attorney's fees.

Express argues that not only did it prevail on its claim for charter hire, it also prevailed on the central issue in the litigation: who was entitled to the disputed insurance proceeds. And, Express points out that, even though Coastal recovered some money for lubricants and fuel left on board the vessel, it did not have a net recovery. Citing Florida case law, Express argues that it was the prevailing party and that it was therefore entitled to attorney's fees under the charter agreement.

General maritime law is federal law. See World Tanker Carriers Corp. v. MV Ya Mawlaya, 99 F.3d 717, 723 (5th Cir.1996). But, when neither statutory nor judicially created maritime principles provide an answer to a specific legal question, courts may apply state law provided that the application of state law does not frustrate national interests in having uniformity in admiralty law. See Steelmet, Inc. v. Caribe Towing Corp., 779 F.2d 1485, 1488 (11th Cir.1986) ("One must identify the state law involved and determine whether there is an admiralty principle with which the state law conflicts, and, if there is no such admiralty principle, consideration must be given to whether such an admiralty rule should be fashioned. If none is to be fashioned, the state rule should be followed."); Palestina v. Fernandez, 701 F.2d 438, 439 (5th Cir.1983)("[W]here there is no uniform federal rule, 'even though...