Miller v. Brightstar Int'l Corp.

• Decision Date: 17 November 2022
• Docket Number: 3:20-cv-00313
• Parties: TYLER MILLER, Plaintiff, v. BRIGHTSTAR INTERNATIONAL CORP. et al., Defendants.
• Court: U.S. District Court — Middle District of Tennessee

TYLER MILLER, Plaintiff,
v.
BRIGHTSTAR INTERNATIONAL CORP. et al., Defendants.

No. 3:20-cv-00313

United States District Court, M.D. Tennessee, Nashville Division

November 17, 2022

HONORABLE WAVERLY D. CRENSHAW, JR., CHIEF DISTRICT JUDGE

REPORT AND RECOMMENDATION

ALISTAIR E. NEWBERN UNITED STATES MAGISTRATE JUDGE

This breach-of-contract action under the Court's diversity jurisdiction arises out of Plaintiff Tyler Miller's employment with Defendant Brightstar International Corp. (Brightstar). The Court entered summary judgment in Miller's favor after finding that Brightstar breached the parties' employment agreement by furloughing Miller without pay during the COVID-19 pandemic. (Doc. Nos. 79-81.) The Court further found that Miller is entitled to compensatory damages in the amount of $141,369.86, representing the salary that Brightstar failed to pay Miller after it furloughed him in March 2020 and before it terminated his employment without cause in December 2020. (Doc. Nos. 79, 80.)

Miller has filed an amended motion for attorney's fees, costs, expenses, and prejudgment interest. (Doc. No. 89.) He argues that the Florida choice-of-law provision in the parties' employment agreement governs the requests in his amended motion, that Fla. Stat. Ann. § 448.08-which provides for awards of reasonable attorney's fees and costs to prevailing parties in actions for unpaid wages-entitles him to reasonable attorney's fees, costs, and expenses, and

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that Florida common law entitles him to prejudgment interest. (Doc. Nos. 89, 90.) Brightstar argues in response that Tennessee law governs Miller's requests for attorney's fees, costs, and expenses and does not allow Miller to recover attorney's fees in this case. (Doc. No. 91.) Brightstar argues that, even if Florida law applies, Miller is not entitled to recover attorney's fees, costs, or expenses under § 448.08 because this action is not an action for unpaid wages. (Id.) In the alternative, Brightstar argues that the amount of attorney's fees Miller requests is unreasonable. (Id.) Miller has filed a reply. (Doc. No. 92.)

For the reasons that follow, the Magistrate Judge will recommend that Miller's amended motion for attorney's fees, costs, expenses and prejudgment interest be granted in part and denied in part.

I. Background

A. Factual Background

On April 9, 2018, Brightstar's subsidiary, Brightstar Asia, Ltd. (Brightstar Asia), purchased a controlling stock interest in Harvestar Solutions Limited (Harvestar), a company that Miller co-founded and co-owned. (Doc. Nos. 79, 91.) In connection with this purchase, Brightstar and Miller agreed that Brightstar would hire Miller to serve as Harvestar's general manager. (Doc. No. 79.) Brightstar sent Miller an offer letter dated April 9, 2018, that became the parties' employment agreement. (Doc. Nos. 79, 23-1.) The agreement states that Miller's employment would “be on an ‘at will' basis” and that his “annual base salary [would] be $200,000[.00] . . . paid in accordance with [Brightstar's] normal payroll procedures.” (Doc. No. 23-1, PageID# 219, 221.) In a section titled “Termination of Employment[,]” the agreement states:

Upon your termination of employment for any reason, except as otherwise specifically provided below, you shall have no further entitlement under this offer letter to any compensation, including but not limited to base salary and benefits, except (a) base salary that is accrued and unpaid as of your termination of employment, and (b) any vested accrued benefits to which you are entitled pursuant

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to [Brightstar]'s benefit plans. You agree to resign from all officer and director positions with [Brightstar] and its affiliates effective upon your termination of employment for any reason

In the event you are terminated without Cause or resign with Good Reason (as both terms are defined below), you shall continue to receive your salary until the earlier to occur of

1) the four (4) year anniversary of the date hereof;

2) the effective date that you are no longer a shareholder of Harvestar Solutions Limited (or any successor thereto); or

3) the date [Brightstar] agrees, in writing, to release you from the Restrictive Covenants Agreement, entered into between you and [Brightstar] as of April 9, 2018, and the provisions of Section 6.7 of the Share Purchase Agreement dated April 9, 2018.

(Id. at PagelD# 219-20.) In a section titled “Governing Law[,]” the agreement states that it “shall be governed and construed in accordance with the laws of the state of Florida without regard to conflicts of law.” (Id. at PageID# 221.) The agreement does not address attorney's fees in the event of litigation. (Doc. No. 23-1.) Miller signed the agreement and became a Brightstar employee effective April 10, 2018. (Doc. Nos. 23-1, 57, 65, 79.)

On March 24, 2020, Brightstar sent Miller an email informing him “that due to the coronavirus emergency and related business circumstances,” Brightstar was placing Miller on furlough, defined as “a company-initiated temporary unpaid leave of absence.” (Doc. No. 57-2, PageID# 427.) Brightstar stopped paying Miller's salary after March 27, 2020. (Doc. Nos. 65, 79.) On December 11, 2020, Brightstar sent Miller a termination letter stating that it was terminating his employment “without Cause” under the employment agreement. (Doc. No. 57-3, PageID# 432.) The letter further stated that Brightstar released Miller from the Restrictive Covenants Agreement and the provisions of Section 6.7 of the Share Purchase Agreement. (Doc. No. 57-3.)

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B. Procedural Background

Miller initiated this action on April 13, 2020, by filing a complaint asserting a breach-of-contract claim against Brightstar and derivative and breach-of-fiduciary-duty claims against Brightstar Asia.^[1] (Doc. No. 1.) The defendants moved to dismiss Miller's complaint, arguing, among other things, that Miller's claims against Brightstar Asia could only be brought in Hong Kong courts. (Doc. Nos. 14, 15.) In response to the defendants' motion, Miller voluntarily dismissed his claims against Brightstar Asia (Doc. No. 24) and filed an amended complaint against Brightstar (Doc. No. 23). The amended complaint alleged that Brightstar breached the parties' employment agreement by failing to pay Miller's salary while he was furloughed and sought compensatory damages of over $500,000.00 in addition to prejudgment interest, attorney's fees, costs, and expenses. (Doc. No. 23.)

The parties engaged in discovery and filed cross motions for summary judgment. (Doc. Nos. 41, 56.) The Court found that Florida law applied to Miller's breach-of-contract claim based on the employment agreement's choice-of-law provision. (Doc. No. 79.) It further found that Brightstar had breached the employment agreement by failing to pay Miller his base salary during the furlough period. (Id.) Consequently, the Court found that Miller was “entitled to recover the $200,000[.00] annual salary he [was] owed under the Employment Agreement for the period between March 28, 2020 (the first day he did not receive his salary) and December 11, 2020 (the day he was terminated).” (Id. at PageID# 932.) The Court entered judgment in Miller's favor,

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awarded him $141,369.86 in compensatory damages, and directed him to file a separate motion seeking attorney's fees, costs, expenses, and prejudgment interest. (Doc. Nos. 79-81.)

Miller filed a motion arguing that he was entitled to attorney's fees, costs, expenses, and prejudgment interest under Florida law. (Doc. Nos. 82, 84.) The Court referred Miller's motion to the Magistrate Judge for a report and recommendation. (Doc. No. 85.) The Magistrate Judge found that a choice-of-law analysis was required to determine which state or federal laws apply to Miller's requests and that the parties had not addressed choice of law in their briefing. (Doc. No. 88.) The Magistrate Judge directed the Clerk of Court to administratively terminate Miller's motion without prejudice to filing an amended motion that included a choice-of-law analysis. (Id.)

Miller has now filed an amended motion for attorney's fees, costs, expenses and prejudgment interest (Doc. No. 89), arguing that, under Tennessee's choice-of-law rules, the Court should apply Florida law to each request, award him $92,125.00 in attorney's fees and $2,478.45 in costs under Fla. Stat. Ann. § 448.08, and award him $3,457.61 in prejudgment interest under Florida common law (Doc. No. 90). Brightstar has responded in opposition, arguing that Tennessee's choice-of-law rules require the Court to apply Tennessee law to Miller's requests for attorney's fees and costs and that Tennessee law prohibits awarding attorney's fees for breach of contract where, as here, the underlying contract does not include an attorney's fees provision. (Doc. No. 91.) Brightstar argues that, even if Florida law applies, Miller is not entitled to attorney's fees and costs under Fla. Stat. Ann. § 448.08 because this action is not an action for unpaid wages under that statute. (Id.) Alternatively, Brightstar argues that, if § 448.08 does apply, the amount of Miller's attorney's fees request is unreasonable. (Id.) Brightstar does not contest Miller's assertion that Florida law governs his request for prejudgment interest and has not argued against Miller's proposed prejudgment interest award. (Id.) Miller has filed a reply, arguing that Florida law applies

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to his request for attorney's fees, costs, and expenses and that the attorney's fees he seeks are reasonable. (Doc. No. 92.)

II. Analysis

Under the Erie doctrine, federal courts sitting in diversity jurisdiction “apply the substantive law of the forum state and federal procedural law.” Hoven v. Walgreen Co., 751 F.3d 778, 783 (6th Cir. 2014) (first citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 (1938); and then citing Gasperini v. Ctr. for Humans., Inc.,...