Peeples v. Carolina Container, LLC

• Decision Date: 01 September 2022
• Docket Number: 4:19-cv-21-MLB
• Parties: Lloyd C. Peeples, III, Plaintiff, v. Carolina Container, LLC and William Ponder, Defendants.
• Court: U.S. District Court — Northern District of Georgia

Lloyd C. Peeples, III, Plaintiff, v. Carolina Container, LLC and William Ponder, Defendants.

No. 4:19-cv-21-MLB

United States District Court, N.D. Georgia, Rome Division

September 1, 2022

OPINION & ORDER

MICHAEL L . BROWN JUDGE

This case arises from a botched wire transfer. Defendant Carolina Container, LLC was supposed to wire $1.71 million (“the Holdback Amount”) to Plaintiff Lloyd C. Peeples under an asset purchase agreement. But it ended up wiring that money to a crook who hacked into the email account of Plaintiff's attorney (Defendant William Ponder) and used that account to send fraudulent payment instructions to Defendant Carolina. When the crook vanished with the money Plaintiff sued Defendants to recover.

Plaintiff asserted claims against Defendant Carolina for breach of contract (Counts 1-2) and breach of the implied covenant of good faith and fair dealing (Count 3). (Dkt. 46.) He also asserted claims against Defendant Ponder for negligence (Count 4) and legal malpractice (Count 5). (Id.) He sought damages of $1.71 million (the Holdback Amount) plus interest and attorneys' fees. (Id. at 27; Dkt 150 ¶ 10.)

All three parties moved for summary judgment. The Court granted Plaintiff's motion for summary judgment on Count 2 and essentially dismissed as moot Plaintiff's other claims. (Dkt. 186.) The Court found Defendant Carolina was liable for “$1.71 million, interest, and reasonable attorneys' fees,” but ordered supplemental briefing on “the amount of interest and attorneys' fees to which Plaintiff is entitled.” (Id. at 13, 27-28.) That briefing concluded last year, and the Court is now prepared to calculate Plaintiff's final award.

I. Defendant Carolina's Affirmative Defenses

Before getting into the numbers, the Court must resolve a threshold issue. Defendant Carolina claims the Court overlooked two affirmative defenses at summary judgment. (Dkt. 188 at 2-3, 5-6.) The first is that Plaintiff's “damages were caused by the negligence or fault of Plaintiff or persons and entities other than Carolina Container” (“Apportionment Defense”). (Dkt. 47 at 23.) The second is that “Plaintiff failed to take any reasonable steps to mitigate, alter or otherwise reduce his alleged damages” (“Mitigation Defense”). (Id.) Defendant Carolina asserted both defenses in its answer to Plaintiff's complaint. (Id.) And Defendant now claims both defenses raise a jury question about whether it is liable for less than the full Holdback Amount. The Court disagrees.

A. Defendant Failed to Timely Move for Reconsideration

At summary judgment, Plaintiff claimed Defendant Carolina was liable for the full Holdback Amount under a breach-of-contract theory. (See Dkts. 150 ¶¶ 9-10; 150-1 at 18, 28, 40; 169 at 9.) The Court agreed and granted summary judgment to that effect. (Dkt. 186 at 10-14, 27.) The reason was simple. The asset purchase agreement required Defendant to pay Plaintiff the Holdback Amount. Defendant did not do that. So, under the agreement, Defendant must “pay and reimburse” Plaintiff for any losses “based upon, arising out of, with respect to or by reason of” Defendant's failure to send him the Holdback Amount. (Dkt. 150-6 § 8.03(b).) Obviously, those losses include the Holdback Amount itself. So, under the agreement, Defendant must “pay and reimburse” Plaintiff for that amount-all $1.71 million of it.

Defendant now asks the Court to reconsider this conclusion. But it does so in a response brief rather than a motion for reconsideration. That is improper. Moreover, even if the Court construed Defendant's request as a motion for reconsideration, it would be untimely. The Local Rules require motions for reconsideration to be “filed with the clerk of court within twenty-eight (28) days after entry of the [challenged] order.” LR 7.2(E), NDGa. The Court entered its summary judgment order on September 16, 2021. (Dkt. 186.) Defendant did not challenge the Court's order until November 15, 2021, almost two months later. (Dkt. 188.) Defendant cannot circumvent the Local Rules by disguising its motion for reconsideration as something else.

B. Defendant Never Raised Its Affirmative Defenses

At summary judgment, Plaintiff explicitly asked the Court for “judgment as a matter of law as to his claims against Carolina Container and an award of compensatory damages in the amount of $1,710,000.” (Dkt. 150 ¶ 10.) “Defendant[] thus had an obligation to assert any arguments or defenses-including affirmative defenses-that (in [its] view) would've precluded the entry of that judgment.” Shenzhen Kinwong Elec. Co. v. Kukreja, --- F.Supp.3d ----2021 WL 5834244, at *35 (S.D. Fla. Dec. 9, 2021). Defendant's Apportionment and Mitigation Defenses, if successful, would have precluded the Court from granting the judgment Plaintiff sought. So Defendant had an obligation to meaningfully assert them. It did not do so. Thus, the Court properly ignored-or impliedly rejected-both defenses.

1. Law

“When Plaintiff move[s] for final summary judgment, it [becomes] Defendant's burden to raise any affirmative defenses that it believe[s] [are] applicable and preclude[] summary judgment.” FDIC v. Attorneys Title Ins. Fund, Inc., 2015 WL 11784950, at *1 (S.D. Fla. Mar. 11, 2015); see Shenzhen Kinwong, 2021 WL 5834244, at *34-36 (discussing this obligation). Defendant cannot “simply depend upon the mere allegations or defenses in [its] Answer.” Malibu Media, LLC v. Fitzpatrick, 2013 WL 5674711, at *4 (S.D. Fla. Oct. 17, 2013). Nor can it fall back on “vague allegations.” United States v. Tubbs, 2019 WL 7376706, at *2 (S.D. Fla. Nov. 22, 2019). Instead, it “must establish both the applicability of the defense(s) and triable issues of fact as to the existence of each essential element of that defense.” Qantum Commc'ns Corp. v. Star Broad., Inc., 473 F.Supp.2d 1249, 1260 (S.D. Fla. 2007). Or, put another way, it “must demonstrate why a particular affirmative defense is applicable, and how it precludes the entry of summary judgment.” Int'l Sch. Servs., Inc. v. AAUG Ins. Co., 2012 WL 5635590, at *8 (S.D. Fla. Nov. 15, 2012). This requires citations to authority and the record. See Great Am. Ins. Co. v. Mueller, 2022 WL 2377391, at *4 (11th Cir. June 30, 2022) (“[T]he burden is on the defendant to adduce evidence supporting an affirmative defense.”); Collazo v. Progressive Select Ins. Co., 2021 WL 5330647, at *2 (S.D. Fla. Nov. 16, 2021) (“[D]efendant must rely on record evidence in support of its affirmative defenses to create a genuine issue of material fact preventing the entry of summary judgment.”); Tubbs, 2019 WL 7376706, at *2 (“Defendant has not met his burden as to [his] affirmative defenses” because “Defendant's response to the motion for summary judgment contains only one full page of merits argument, with no record citations and no exhibits attached”); Int'l Sch. Servs., 2012 WL 5635590, at *9 (“Defendants fail to provide the Court with any facts or law to support this proposition. Because the burden falls upon Defendants to do so, Defendants' affirmative defense . . . is insufficient to prevent the entry of summary judgment.”).^[1]

More generally, “[f]or an issue to be adequately raised in [a] brief, it must be plainly and prominently raised and must be supported by arguments and citations to the record and to relevant authority.” Whitten v. Soc. Sec. Admin., Comm'r, 778 Fed.Appx. 791, 793 (11th Cir. 2019). Where a party does not “support [its] arguments with sufficient detail”-including with “citations to authority or significant discussion”-courts “consider these arguments abandoned and do not consider them.” Nat'l Mining Ass'n v. United Steel Workers, 985 F.3d1309, 1327 n.16 (11th Cir. 2021); see Hamilton v. Southland Christian Sch., Inc., 680 F.3d 1316, 1319 (11th Cir. 2012) (“A passing reference to an issue in a brief is not enough, and the failure to make arguments and cite authorities in support of an issue waives it.”). This principle applies to affirmative defenses, meaning “a district court can properly treat as abandoned an affirmative defense raised in a party's answer but not [adequately] included in its . . . summary judgment [briefing].” Ecp Station I LLC v. Chandy, 2016 WL 3883028, at *4 (M.D. Fla. June 29, 2016) (citing United States v. Kafleur, 168 Fed.Appx. 322, 327 (11th Cir. 2006)); see United Mine Workers of Am. 1974 Pension v. Pittston Co., 984 F.2d 469, 478 (D.C. Cir. 1993) (“[T]he failure to raise an affirmative defense in opposition to a motion for summary judgment constitutes an abandonment of the defense.”). To hold otherwise would either foist on a court the burden at summary judgment of anticipating a parties unargued positions and rendering judgment on hypothetical positions or permit a party unhappy with a court's resolution of its summary judgment arguments to prolong litigation while continually raising alternative arguments. If a party wants a defense addressed, the party ought to raise it with the court-a simple rule.

2. Apportionment Defense

Defendant Carolina did not assert its Apportionment Defense at summary judgment. (See, e.g., Dkt. 156 at 23-25.) At most, Defendant said the Court should allocate loss according to fault if “the imposter rule” applied. (Id. at 19-21.) But Defendant repeatedly insisted the imposter rule did not apply. (Id. 13-17; Dkt. 149-1 at 14-17.) And the Court explicitly “decline[d] to apply the rule.” (Dkt. 186 at 22.) So the Apportionment Defense was simply not on the table. Defendant “cannot readily complain about the entry of a summary judgment order that did not consider an argument [Defendant] chose not to develop for the district court at the time of the summary judgment motions.” Johnson v. Bd. of Regents of Univ. of Georgia, 263 F.3d 1234, 1264 (11th Cir. 2001).^[2]

3. Mitigation Defense

D...