Durden v. Citicorp Trust Bank

• Decision Date: 20 January 2011
• Docket Number: Case No. 3:07–cv–974–J–34JRK.
• Citation: 763 F.Supp.2d 1299
• Parties: M. Gibson DURDEN, individually and as Trustee for the M. Gibson Durden Charitable Remainder Unit Trust, Plaintiff,v.CITICORP TRUST BANK, FSB, Defendant.
• Court: U.S. District Court — Middle District of Florida

763 F.Supp.2d 1299

M. Gibson DURDEN, individually and as Trustee for the M. Gibson Durden Charitable Remainder Unit Trust, Plaintiff,

v.CITICORP TRUST BANK, FSB, Defendant.

Case No. 3:07–cv–974–J–34JRK.

United States District Court, M.D. Florida,Jacksonville Division.

Jan. 20, 2011.

Steven J. Gard, Gard Law Firm, Ponte Vedra Beach, FL, for Plaintiff.

Michael A. Abel, Andrew Joshua Steif, Holland & Knight, LLP, Jacksonville, FL, for Defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

MARCIA MORALES HOWARD, District Judge.

THIS CAUSE is before the Court on Citicorp Trust Bank, FSB's Renewed Motion for Attorneys' Fees and Supporting Memorandum of Law (Doc. No. 134; Motion), filed on June 17,2010.¹ Having reviewed the pleadings and considered the arguments of counsel as well as the remainder of the record, the Court makes the following findings of fact and conclusions of law as required by Rules 54(d)(2)(C) and 52(a), Federal Rules of Civil Procedure (Rule(s)).

I. Findings of Fact

Plaintiff initiated the instant action by filing a multi-count complaint against Defendant in Florida state court. Defendant removed the action to this Court and filed a Motion to Dismiss. See Notice of Removal (Doc. No. 1); Defendant Citicorp Trust Bank's Motion to Dismiss and Supporting Memorandum of Law (Doc. No. 6; Motion to Dismiss). On May 16, 2008, 2008 WL 2098040, the Honorable Virginia M. Hernandez Covington, the district judge previously assigned to the case, entered an Order granting, in part, and denying, in part, the Motion to Dismiss. See Order (Doc. No. 22).² In accordance with Judge Covington's Order, on June 6, 2008, Plaintiff filed his First Amended Complaint (Doc. No. 26; Complaint), which became the operative Complaint in this action.

In the Complaint, Plaintiff alleged several claims against Defendant in connection with Defendant's management of certain trust assets. Specifically, Plaintiff alleged violations of the Florida Securities and Investor Protection Act (FSIPA), Florida Statutes section 517.301(1)(a) (count one); breach of fiduciary duty and breach of trust (count two); negligence (count three); negligent misrepresentation (count four); and fraud in the inducement and unjust enrichment (count five). See generally Complaint. After Plaintiff filed the Complaint, the case was transferred to the undersigned.

Defendant filed a Motion for Summary Judgment on April 1, 2009. See Motion for Summary Judgment of Defendant Citicorp Trust Bank, FSB and Memorandum of Legal Authority (Doc. No. 40; Motion for Summary Judgment). On August 21, 2009, 2009 WL 6499365, the Court entered an Order granting, in part, and denying, in part, Defendant's Motion for Summary Judgment. Specifically, the Court granted summary judgment in favor of Defendant as to Plaintiff's claims for violation of FSIPA (count one), negligent misrepresentation (count four), and fraud in the inducement and unjust enrichment (count five), and the Court denied summary judgment as to the remaining claims. See Order (Doc. No. 70; Summary Judgment Order) at 34–35. Plaintiff later voluntarily dismissed his negligence claim (count three) with prejudice, see Dismissal With Prejudice (Doc. No. 96), and his sole remaining claim—breach of fiduciary duty and breach of trust (count two)—proceeded to jury trial. On December 10, 2009, the jury returned a verdict in favor of Defendant. See Verdict (Doc. No. 115). Thereafter, in accordance with the jury's verdict and the Court's Summary Judgment Order, the Court entered Judgment in favor of Defendant and against Plaintiff as to counts one, two, four, and five of Plaintiff's Complaint. See Judgment in a Civil Case (Doc. No. 117).

In the instant Motion, Defendant requests “an award of the attorneys' fees incurred in defending Plaintiff's [FSIPA] claim and related fraud claims in the amount of” $85,350.25. See Motion at 1, 14, 16. Defendant contends that a fee award for defense of the FSIPA claim is appropriate under Florida Statutes section 517.211(6), and that a fee award is likewise appropriate for the related fraud-based claims—negligent misrepresentation and fraud in the inducement—because those claims were “intertwined” with the FSIPA claim. See Motion at 7–13. Defendant limits its fee request to defense of the fraud claims, and does not seek fees associated with the remaining claims. See id. at 2 n. 2. Plaintiff opposes the requested relief. See generally Plaintiff's Response to Defendant's Renewed Motion for Attorney's Fees (Doc. No. 136; Response). Specifically, Plaintiff argues that an award of fees would be “unjust” and, alternatively, that even if an award of fees is proper as to the FSIPA claim, the other fraud claims are not sufficiently intertwined with that claim to justify a fee award for any efforts directed toward those claims. See id. at 1–13. Finally, Plaintiff argues that Defendant's fee request is excessive. See id. at 13–16. The issues in the Motion are fully briefed and ripe for resolution.

II. Conclusions of LawA. Propriety of Fee Award for Defense of FSIPA Claim1. Applicable Law

Because Defendant's “claim for attorneys' fees sounds in state law and reaches [this Court] by way of federal diversity jurisdiction, [the Court applies] the substantive law of Florida, the forum state” including its choice of law provisions. Trans Coastal Roofing Co., Inc. v. David Boland Inc., 309 F.3d 758, 760 (11th Cir.2002) (citation omitted); see also Prime Ins. Syndicate, Inc. v. B.J. Handley Trucking, Inc., 363 F.3d 1089, 1091 (11th Cir.2004) (citation omitted). Plaintiff seeks a fee award under Florida Statutes section 517.211(6), and thus, Florida state law governs whether a fee award is appropriate. See Golub v. J.W. Gant & Assocs., 863 F.2d 1516, 1521 (11th Cir.1989); Dillon v. Axxsys Int'l, Inc., No. 8:98–cv–2237–T–23TGW, 2006 WL 3841809, at *2 (M.D.Fla. Dec. 19, 2006); see also Prime Ins. Syndicate, Inc. v. Soil Tech Distribs., Inc., 270 Fed.Appx. 962, 963 (11th Cir.2008) (per curiam) (“We have consistently recognized that in diversity cases a party's right to attorney's fees is determined by reference to state law.”) (citing All Underwriters v. Weisberg, 222 F.3d 1309, 1311 (11th Cir.2000)).

“Under Florida law, each party generally bears its own attorneys' fees unless a contract or statute provides otherwise.” United States v. Pepper's Steel & Alloys, Inc., 289 F.3d 741, 742 (11th Cir.2002) (per curiam) (citation omitted); see also Dade County v. Pena, 664 So.2d 959, 960 (Fla.1995). Plaintiff brought his FSIPA claim pursuant to Florida Statutes sections 517.301(1)(a) and 517.211(2). See Complaint at 5–7; see also E.F. Hutton & Co., Inc. v. Rousseff, 537 So.2d 978, 980–81 (Fla.1989) (per curiam) (explaining that section 517.211(2) provides the civil liability provision for violations of section 517.301(1)). Section 517.211(6) provides that “[i]n any action brought under this section, including an appeal, the court shall award reasonable attorneys' fees to the prevailing party unless the court finds that the award of such fees would be unjust.” Thus, there being no dispute that Defendant is the prevailing party as to Plaintiff's FSIPA claim, Defendant is entitled to an award of attorney's fees as to that claim unless such an award would be unjust. See id.; see also Golub, 863 F.2d at 1521 (“The award of attorneys' fees [under section 517.211(6) ] is compelled by the statute unless the result would be unjust.”); Josephthal Lyon & Ross, Inc. v. Durham, 734 So.2d 487, 489 (Fla. 5th DCA 1999) (“Success on the FSIPA claim would entitle Durham to an award of attorney's fees [under section 517.211(6) ].”) (internal citation omitted).³

2. Analysis

Plaintiff argues that an award of attorney's fees in this case would be unjust. In support of this position, he contends that there is a “vast difference in financial resources between” the parties; that Plaintiffs resources “were already depleted” and Defendant “profited” during the period Defendant served as trustee; that Plaintiffs “claims had merit and were not frivolous”; that Plaintiff's “losses were real and were caused by the Defendant's investment decisions”; and that a fee award “would be contrary to the remedial nature and purpose of the Florida Securities Act and would serve as a deterrent to future plaintiffs with similar claims.” See Response at 7–8.

The fundamental flaw in Plaintiffs argument is that he conflates the breach of fiduciary claim—which, although it failed before the jury, survived summary judgment and a motion for directed verdict—with the FSIPA and other fraud claims—which were resolved by summary judgment in favor of Defendant. Although Plaintiff focuses on the relative merit of the former, it is only the latter for which Defendant seeks a fee award. Contrary to Plaintiffs representation, his fraud claims, including his FSIPA claim, were neither justified nor meritorious. Indeed, the Court recognized that “fraud claims do not usually lend themselves to summary disposition” but nevertheless, after extensive review of the record, determined that Plaintiffs allegations of fraud were so unsubstantiated “that under each theory of fraud advanced by Plaintiff he has failed to identify a genuine dispute of material fact that would enable a reasonable jury to return a verdict in his favor.” See Summary Judgment Order at 12, 26.⁴ For this reason, the various cases cited by Plaintiff in support of his contention that a fee award would be unjust are readily distinguishable. See Dillon, 2006 WL 3841809, at **9–11 (holding that a fee award would be unjust where defendant won as to FSIPA claim but plaintiffs won as to another closely related claim, noting that “[s]uch an award would completely negate” plaintiffs recovery as to the claim for which they prevailed and “would result in the defrauded plaintiffs owing a beneficiary of the fraud over $100,000”); Newsom v. Dean Witter Reynolds, Inc., 558 So.2d 1076, 1077–78 (Fla. 1st DCA 1990) (fi...