Hsi Chang v. JPMorgan Chase Bank, N.A.

• Decision Date: 25 September 2015
• Docket Number: CASE NO. 1:14–cv–20368–KMM
• Citation: 138 F.Supp.3d 1352
• Parties: Hsi Chang aka Mark Chang, Plaintiff, v. JPMorgan Chase Bank, N.A., Defendant.
• Court: U.S. District Court — Southern District of Florida

138 F.Supp.3d 1352

Hsi Chang aka Mark Chang, Plaintiff,

v.JPMorgan Chase Bank, N.A., Defendant.

CASE NO. 1:14–cv–20368–KMM

United States District Court, S.D. Florida.

Filed September 25, 2015

Carl Francis Schoeppl, Jr., Schoeppl & Burke, P.A., Boca Raton, FL, for Plaintiff.

Andrew R. Herron, Herron Ortiz, Brian John Lechich, Coral Gables, FL, for Defendant.

PAPERLESS ORDER ADOPTING [79] REPORT AND RECOMMENDATION.

BARRY L. GARBER, United States Magistrate Judge

PAPERLESS ORDER ADOPTING [79] REPORT AND RECOMMENDATION. This cause is before the Court on Defendant JPMorgan Chase Bank, N.A.'s (‘Chase‘) [62] Motion for Taxable Costs and [67] Motion for Attorney's Fees. The Court referred this matter to the Honorable Barry L. Garber, United States Magistrate Judge, who issued a [79] Report and Recommendation recommending that the motions be granted. Plaintiff Hsi (Mark) Chang filed objections and Chase responded.

Chang objects to the Report and Recommendation on two main grounds. First, Chang argues that the Report incorrectly concludes that Chase's motions for fees and costs are timely. In support, Chang urges the Court to construe the thirty-day time period of Section 768.79 of the Florida Statutes as substantive state law, rather than procedural state law, in which case this Court would have to determine the timeliness of Chase's motions under Section 768.79, not its own local rules, pursuant to the Erie doctrine. The Court rejects this reading. The Supreme Court of Florida has interpreted the thirty-day time period of Section 768.79 as procedural. See Gulliver Acad., Inc. v. Bodek, 694 So.2d 675, 676 (Fla.1997), superseded on other grounds by Saia Motor Freight Line, Inc. v. Reid, 930 So.2d 598 (Fla.2006) ( ‘In accord with this analysis, we agree with the First District in Gilbert and hold that the time periods in these statutes are procedural and are governed by the Florida Rules of Civil Procedure.‘) Under Erie, then, the Court's local rules govern this dispute over attorney's fees and costs. Because Chase's motions were filed within sixty days of this Court's order dismissing Chang's claims with prejudice, as required under Local Rule 7.3(a), the motions are timely.

Chang next objects to the Report and Recommendation on the grounds that Chase's offer of settlement was not made in good faith. In determining whether an offeror has made an offer in good faith, a court should take into account the following factors: (1) the amount of the offer; (2) the offerors potential exposure; (3) the complexity and closeness of the case; and (4) the offerors justification for the offer. See Pickett v. R. J. Reynolds Tobacco Co., 948 F.Supp.2d 1314, 1317 (M.D.Fla.2013) (citation omitted). The burden is on Chang to prove that Chase acted without good faith in making its offer of judgment. See Pickett, 948 F.Supp.2d at 1317. For the reasons articulated by Judge Garber in his Report, Chang has failed to carry his burden of establishing that Chase's settlement offer was not made in good faith.

Accordingly, it is ordered and adjudged that the [79] Report and Recommendation is adopted. The Chase's [62] Motion for Taxable Costs and [67] Motion for Attorney's Fees are granted. Chang is ordered is to pay to Chase $48,702.80 in attorney's fees and $4,742.68 in costs.

Signed by Chief Judge K. Michael Moore on 9/25/2015. (mg00)

REPORT AND RECOMMENDATIONS

THE COURT has received, pursuant to referrals from Chief United States District Judge K. Michael Moore (DEs 68 & 71), defendant JPMorgan Chase Bank, N.A.'s ("Chase") Verified Motion for Attorney Fees (DE 67) and Motion for Taxable Costs (DE 62) and the concomitant responses and replies thereto. The Court has carefully reviewed these filings, along with all accompanying exhibits, as well as the entirety of the file in this case. Upon due consideration and for the following the reasons, the Court respectfully RECOMMENDS GRANTING both motions (DE 62 & 67) as detailed below.

I. Background

This action arises from a wire-fraud scheme perpetrated by Charles C. Gordon wherein Gordon induced the plaintiff Hsi "Mark" Chang to deposit $750,000 into an account at Chase and then immediately withdrew and misappropriated the funds for his own use. (Order Granting Def.'s Mot. to Dismiss DE 58, 1–2.) To effectuate his scheme Gordon opened three accounts, two checking and one savings, at Chase in the name of two sham business entities. (Id . at 2.) As the president of each business entity, Gordon was authorized to transact in each of the accounts while Chase was apparently unaware of the fraudulent activity. (Id .) The federal government eventually indicted Gordon for wire fraud to which he ultimately pled guilty, specifically admitting to defrauding Chang of the $750,000 he had deposited. (Id . at 3.) Chang's complaint in this Court then followed.

In his amended complaint, seeking to hold Chase liable for his $750,000 loss, Chang alleged negligence; gross negligence; aiding and abetting fraud; and aiding and abetting conversion. (Am. Compl. DE 15.) In response, Chase filed a motion to dismiss which Chief Judge Moore granted on all counts. (Order DE 58.) Chang's motion for reconsideration was thereafter denied as well. (Order DE 75.)

Pursuant to section 768.79, Florida Statutes, Southern District of Florida Local Rule 7.3, and 28 U.S.C. § 1920, Chase now seeks awards of certain attorneys' fees and taxable costs, as detailed below.

II. Chase is entitled to attorneys' fees pursuant to Florida Statutes section 768.79.

Chang objects to Chase's entitlement to fees on three general grounds. First, Chang complains that Chase's motion for an award of fees is untimely. Second, he argues that Chase did not make its offer for settlement in good faith. Lastly, Chang submits that his motion for reconsideration, if granted, would strip Chase of its status as a prevailing party thereby precluding it from recovering its fees. This last argument is now moot since Chang's motion was denied. (Order DE 75.)

A. Chase's motion for attorneys' fees is timely.

Chang submits that Chase's motion for fees is untimely according to the requirements set forth in Florida Statutes, section 768.79(b). Under this section, "upon motion made ... within 30 days after the entry of judgment or ... dismissal, the court shall determine" an award of attorneys' fees. As Chang points out, the district court entered its order dismissing Chang's claims with prejudice and directing the clerk to close the case on December 8, 2014. Chase did not file its motion for fees until February 4, 2015, obviously well beyond the 30 days set forth in the state statute.

In reply, on the other hand, Chase points out that the applicable time requirements are those set forth in Southern District of Florida Local Rule 7.3. Under this local federal rule, a fees motion "must be served but not filed at least thirty ... days prior to the deadline for filing any motion for attorneys fees and/or costs." S.D. Fla. R. 7.3(b). Then, "[w]ithin twenty-one ... days of service of the draft motion, the parties shall confer." Id. If efforts to resolve the motion by agreement of the parties fail, the "motion shall ... be filed within sixty ... days of the entry of ... final judgment." S.D. Fla. R. 7.3(a).

Chang contends that Local Rule 7.3 impermissibly enlarges the time within which the state fees statute requires that fees motions be filed. (Pl.'s Resp. DE 69, 4.) In his attempt to sidestep the inescapable proposition that "[u]nder the Erie doctrine, federal courts sitting in diversity apply state substantive law and federal procedural law,"¹ Chang clings to a 2007 order issued by the District Court of the Middle District of Florida. In that order, the court had before it a losing plaintiff objecting to a prevailing defendant's motion for attorneys' fees (sought under the same Florida statute), much like the posture here. Essex Builders Group, Inc. v. Amerisure Ins. Co., No. 6:06–cv–1562–Orl–31KRS, 2007 WL 2376036 (M.D.Fla. Aug. 16, 2007). Unlike here, however, the applicable local federal rule in Essex Builders required a prevailing party to file its motion for fees within fourteen days of the entry of judgment, as opposed to the thirty days provided for by the state statute. The plaintiff in Essex Builders argued that the federal procedural rule applied and therefore, since the motion there had been filed twenty-eight days after the entry of judgment, it was untimely. The court, however, declined to apply the local federal rule, instead allowing the prevailing defendant the thirty days provided for in the state statute. In declining to apply the federal rule, the court noted that "section 768.79 is substantive for present purposes." Id . at *2.

The Court finds Essex Builders inapplicable for a number of reasons. One, the court there avoided any scrutiny of the procedural aspects of the state statute. Instead, the court looked to the right conferred by the state statute generally and found it to be substantive for Erie purposes. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). In doing so, the court there appears to have chosen not to deny a prevailing party its entitlement to a state afforded right based on non-compliance with a federally imposed time limit while that party was still in compliance with the state time restrictions. Essex Builders, 2007 WL 2376036 at *2 ; see also Maale v. Kirchgessner, No. 08–80131–CIV, 2011 WL 1549058, at *5 (S.D.Fla. Apr. 22, 2011) ("While it is true that a court can deny a motion for failure to comply with the Local Rules, Maale has cited to no authority that requires a court to do so. Strict compliance with the Local Rules is always preferred and non-compliance may warrant appropriate sanctions; however, under the present facts the Court ... finds that it is properly within the Court's discretion to determine that the limited non-compliance did not warrant denial of the entire motion for attorney's fees.") The court in Essex Builders...