Galveston County Nav. Dist. No. 1 v. Hopson Towing Co., Inc., 95-40221

• Decision Date: 27 August 1996
• Docket Number: No. 95-40221,95-40221
• Parties: GALVESTON COUNTY NAVIGATION DISTRICT NO. 1, Plaintiff-Appellee, v. HOPSON TOWING COMPANY, INC., Defendant, and M/V MISS SANDY, its engines, tackle, equipment, machinery, gear, furniture, apparel, appurtenances, etc.; Hopson Transportation, Inc.; Hopson Marine Transportation, Inc., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 353

92 F.3d 353

1996 A.M.C. 2850

GALVESTON COUNTY NAVIGATION DISTRICT NO. 1, Plaintiff-Appellee, v. HOPSON TOWING COMPANY, INC., Defendant, and M/V MISS SANDY, its engines, tackle, equipment, machinery,

gear, furniture, apparel, appurtenances, etc.;

Hopson Transportation, Inc.; Hopson

Marine Transportation, Inc.,

Defendants-Appellants.

No. 95-40221.

United States Court of Appeals, Fifth Circuit.

Aug. 27, 1996.

Michael L. Wilson, Rider and Wilson, Galveston, TX, for plaintiff-appellee.

Robert S. De Lange, Royston, Rayzor, Vickery & Williams, Houston, TX, for defendant and defendants-appellants.

Edward D. Vickery, Royston, Rayzor, Vickery & Williams, Houston, TX, for defendants-appellants.

Appeal from the United States District Court for the Southern District of Texas.

Before GARWOOD, EMILIO M. GARZA and DeMOSS, Circuit Judges.

GARWOOD, Circuit Judge:

The M/V Miss Sandy, a tug boat owned and operated by defendants-appellants Hopson Transportation, Inc., et al. (defendants), was pushing two barges when one of the barges allided with a drawbridge owned and operated by plaintiff-appellee Galveston County Navigation District No. 1 (plaintiff). Following a bench trial, the district court found in favor of the plaintiff. Moreover, the district court ordered the defendants to pay plaintiff attorneys' fees totaling $20,000. The defendants appeal, challenging only this award of attorneys' fees.

Facts and Proceedings Below

On March 11, 1993, one of two barges being pushed by the defendants' tug boat, the M/V Miss Sandy, allided with the southeast fender system of the Herbert Schmidt drawbridge. ¹ This drawbridge is owned, maintained, and operated by the plaintiff. The resulting damages were surveyed, and although the parties agreed to the amount of damages, they disagreed regarding the apportionment of fault relating to this accident. Accordingly, the plaintiff filed this suit in the district court below against Hopson Transportation, Inc., which owned and operated the M/V Miss Sandy on the date of the allision, against Hopson Marine Transportation, Inc., which owned the M/V Miss Sandy at the time this suit was filed, and also against the M/V Miss Sandy, in rem.

Prior to trial, the plaintiff responded to the defendants' discovery requests by presenting its two bridge tenders for deposition. The plaintiff likewise took the depositions of several persons, including Douglas Ebert, the mate of the M/V Miss Sandy at the time of the accident, Ricky Borres, the captain of the M/V Miss Sandy at the time of the accident, and Joseph Hopson, the President of Hopson Transportation, Inc. and Hopson Marine Transportation, Inc. Additionally, the defendants responded to plaintiff's requests for admissions, written interrogatories, and requests for production.

At trial, the plaintiff put on evidence regarding the standard operating procedures employed to insure that the drawbridge is fully open and in a fixed position in sufficient time for a vessel to pass through the bridge without incident. The plaintiff adduced evidence that the drawbridge complied with these procedures, but that the M/V Miss Sandy failed to (1) properly align its tows, (2) adequately anticipate current and wind conditions, (3) maintain proper speed, and (4) adequately communicate with the drawbridge during its approach.

In response, the defendants adduced evidence at trial that the drawbridge did not respond to the M/V Miss Sandy's initial attempts at radio contact--on two different channels--for three to five minutes. Only after the M/V Miss Sandy sounded a whistle signal did the drawbridge radio operator instruct Mate Ebert that the bridge would be opened when the M/V Miss Sandy drew a bit closer. The parties offered conflicting evidence concerning the location of the M/V Miss Sandy when the bridge began to open. The defendants offered testimony that the M/V Miss Sandy had to be stopped because the bridge was not sufficiently opened, and Mate Ebert was concerned that his tow would allide with the drawbridge itself. Moreover, testimony was presented that subsequently, after the bridge had further opened, the tug boat, finding itself unable to turn around safely in the channel after coming to a stop, elected to proceed forward through the drawbridge. Finally, the defendants offered testimony that the drawbridge's failure to open timely forced the tug boat to lose its maneuverability close to the bridge, which in turn contributed to its barge's allision with the southeast fender system of the bridge. ² Therefore, the parties disputed at trial whether the bridge had been timely raised and whether delay in raising, if any, contributed to the allision.

The district court found that the plaintiff carried its burden of proving reasonable operation of the bridge, and that no act or omission on the part of the plaintiff caused or contributed to causing the allision. The court further found that the M/V Miss Sandy was guilty of causative negligence in the following particulars: (1) failing to undertake adequate communications with the bridge on its approach, (2) failing to maintain proper speed and to maintain steerage way in its approach, (3) failing to back away or take evasive measures once a problem with the bridge was apprehended, and (4) failing to adequately anticipate current and wind conditions during its approach. The court also found that the M/V Miss Sandy's owners failed to give her captain adequate notice of potential problems with the bridge approach. Therefore, the court held that the defendants were solely and one hundred percent liable for the stipulated damages (with prejudgment interest) arising from this accident. ³

Furthermore, the district court held that the plaintiff was entitled to recover $20,000 in reasonable and necessary attorneys' fees. ⁴ In so holding, the court asserted that:

"[T]he defense offered by the Defendants in regard to the claim of this case borders on the frivolous, is unsupported factually from a common sense standpoint, is contradictory factually even as regards its own merits, and is utterly incredible to the Court in any respect ... It is necessary to award Plaintiff its attorney's fees in order to make Plaintiff whole."

Citing Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718, 87 S.Ct. 1404, 1407, 18 L.Ed.2d 475 (1967), the district court concluded that the circumstances of the present case justified the award of attorneys' fees to an "admiralty plaintiff" as an item of compensatory damages. Citing Vaughan v. Atkinson, 369 U.S. 527, 530-31, 82 S.Ct. 997, 999-1000, 8 L.Ed.2d 88 (1962), the court held that:

"By failing to pay for the damages it obviously caused in an amount that Defendants stipulated and agreed was reasonable, the Defendants have not acted in an equitable manner in the equity action before this Court and have required Plaintiff to incur significant attorney's fees in order to recover the damages relating to its traffic fender system that were plainly owed to Plaintiff. Defendants' default herein was willful and persistent." (internal citations omitted).

We must note, however, that the district court prefaced its finding that the defense "border[ed] on the frivolous" with praise for defense counsel's conduct: "In this case, notwithstanding the fine efforts of counsel for defendant, which the Court only commends and finds no impropriety with in any respect whatsoever ..." Moreover, at the close of its remarks regarding the award of attorneys' fees, the court addressed counsel for both sides and offered additional praise:

"All right. Well, again, I would like to thank each of you for your thoughtfulness and your assistance throughout the resolution of the case. I would like to commend each of the parties again, notwithstanding the mechanics of the resolution of the case, for a superb job in the preparation of and presentation of the case. I'm very pleased that each of the attorneys here is an officer of this court and I look forward to many opportunities to work with each of you in the future."

The district court entered judgment on February 28, 1995. The defendants appeal only that portion of the judgment awarding the plaintiff attorneys' fees.

Discussion

Pursuant to the "American Rule," "In the United States, the prevailing litigant is ordinarily not entitled to collect a reasonable attorneys' fee from the loser." Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975); see also Delta Steamship Lines, Inc. v. Avondale Shipyards, Inc., 747 F.2d 995, 1011 (5th Cir.1984) ("The general rule in admiralty is that attorneys' fees are not recoverable by the prevailing party"). Generally, absent statute or enforceable contract, litigants must pay their own attorneys' fees. Id. at 255-57, 95 S.Ct. at 1621. ⁵

There are, of course, exceptions to this general rule. The Supreme Court also recognized in Alyeska that the federal courts have the inherent power to award attorneys' fees in particular situations, unless forbidden by Congress. Id. at 258-59, 95 S.Ct. at 1622. Of the several examples of such situations given by the Court in Alyeska, only one might even be arguably relevant in the present case: "[A] court may assess attorneys' fees ... when the losing party has 'acted in bad faith, vexatiously, wantonly, or for oppressive reasons....' " Id. (quoting F.D. Rich Co., Inc. v. United States for Use of Industrial Lumber Co., Inc., 417 U.S. 116, 129, 94 S.Ct. 2157, 2165, 40 L.Ed.2d 703 (1974) (citing Vaughan v. Atkinson, 369 U.S. 527, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962))). ⁶

The evolution of this bad faith exception to the American Rule in the context of admiralty law began with Vaughan v. Atkinson, 369 U.S. 527, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962); see also Guevara v. Maritime Overseas Corp., 59 F.3d 1496, 1502 (5th Cir.1995) (en banc) ("In fact, Vaughan is often cited as a foundational case for this 'bad-faith'...