Mobile Power Enterprises, Inc. v. Power Vac, Inc., 73-1682.

• Decision Date: 31 May 1974
• Docket Number: No. 73-1682.,73-1682.
• Citation: 496 F.2d 1311
• Parties: MOBILE POWER ENTERPRISES, INC., Plaintiff-Appellant, v. POWER VAC, INC., Defendant, and Anilas Corporation, Defendant-Appellee. Eugene Ashley GAITERS, Plaintiff, v. POWER VAC, INC., Defendant, and Anilas Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

496 F.2d 1311 (1974)

MOBILE POWER ENTERPRISES, INC., Plaintiff-Appellant, v. POWER VAC, INC., Defendant, and Anilas Corporation, Defendant-Appellee.

Eugene Ashley GAITERS, Plaintiff, v. POWER VAC, INC., Defendant, and Anilas Corporation, Defendant-Appellee.

No. 73-1682.

United States Court of Appeals, Tenth Circuit.

May 31, 1974.

Warren L. McConnico, Tulsa, Okl. (Phil Thompson, Tulsa, Okl., on the brief), for appellant.

Paul P. McBride, Tulsa, Okl. (William D. Hunt, Tulsa, Okl., on the brief), for appellee.

Before HILL and McWILLIAMS, Circuit Judges, and DURFEE,^* Judge.

HILL, Circuit Judge.

In this diversity action plaintiff-appellant Mobile Power Enterprises, Inc. (Mobile) appeals the trial court's decision to grant to defendant-appellee Anilas Corporation (Anilas) $1250 in costs and attorneys fees incurred in preparing for this lawsuit.

Pertinent facts leading up to the lawsuit include the following. In 1970 Mobile leased from Anilas a self-contained washing unit manufactured by Power Vac, Inc. (Power Vac).¹ The agreement provided Mobile with a five year lease and the option to purchase the unit when the lease expired. The lease also provided that Mobile would indemnify and hold Anilas harmless from any and all liabilities resulting from use of the truck.²

On February 11, 1972, Eugene Gaiters, an employee of Mobile, was driving the washing unit along a four lane highway in Tulsa County, Oklahoma, when another vehicle suddenly swerved into his lane. Gaiters applied the brakes and heard a loud "pop" in the rear of the vehicle; thereafter the vehicle went out of control and turned over, causing extensive injuries to Gaiters and damaging the truck.

A suit was filed by Mobile and by Gaiters against Anilas and Power Vac. Subsequently plaintiffs obtained a satisfactory offer of settlement from Power Vac and sought an Order of Dismissal with prejudice against both defendants. Anilas then filed its application to tax costs and attorneys fees citing as its reasons the above stated indemnification clause and an Oklahoma statute which allows attorneys fees to the prevailing party in certain cases. Anilas' motion was granted.

On appeal Anilas justifies the costs and attorneys fees on two grounds: (1) Rule 54(d), F.R.Civ.P., and other statutory authority allow costs to the prevailing party; and (2) the lease purchase contract expressly provides indemnification for actions arising out of the use or operation of the washing unit. We do not agree and accordingly reverse.

Rule 54(d)³ and 12 Okla.Stat. § 936 allow costs to the prevailing party in civil actions. We do not believe, however, that Anilas is a "prevailing party" as meant by the statutes. Generally a prevailing party is the party in whose favor judgment is rendered by the district court. S. A. Hirsh Mfg. Co. v. Childs, 157 F.Supp. 183 (W.D.Pa.1957); Nash v. Raun, 67 F.Supp. 212 (W.D.Pa. 1946); 6 Moore's Federal Practice ¶ 54.704. Judgment, however, was not entered in Anilas' favor. Mobile elected to settle with Power Vac rather than go to court against both co-defendants and by no stretch of the imagination can we see where settlement between plaintiff and one co-defendant transforms the other co-defendant into a prevailing party.

Anilas suggests that where a plaintiff voluntarily dismisses an action the defendant is entitled to recover costs. While this is an accurate statement of law with respect to dismissal of actions without prejudice, the court lacks power to allow costs, barring exceptional circumstances, if the dismissal is with prejudice. Smoot v. Fox, 353 F.2d 830 (6th Cir. 1965), cert. den'd 384 U.S. 909, 86 S.Ct. 1342, 16 L.Ed.2d 361; 9 Wright & Miller, Federal Practice and Procedure, § 2366. We do not believe Anilas has presented any exceptional circumstances...