Produce Pay, Inc. v. AgroSale, Inc.
Decision Date | 10 August 2021 |
Docket Number | 20-22585-Civ-SCOLA/TORRES |
Parties | PRODUCE PAY INC, Plaintiff, v. AGROSALE, INC., et al ., Defendants/Counter-Plaintiff, CARIBBEAN PRODUCE EXCHANGE, LLC, et al ., Counter-Defendants. |
Court | U.S. District Court — Southern District of Florida |
REPORT AND RECOMMENDATION ON MOTION FOR FEES AND COSTS
This matter is before the Court on Caribbean Produce Exchange LLC's (“Caribbean Produce”), Gualberto Rodriguez's (“Mr. Rodriguez”) and Gualberto Rodriguez's Feliciano's (“Mr. Feliciano”) (collectively, the “Caribbean Produce Defendants”) motion for fees and costs against Agrosale, Inc. (“Agrosale”). [D.E. 80]. Agrosale responded to the motion on June 21, 2021 [D.E. 88] to which the Caribbean Produce Defendants replied on June 28, 2021. [D.E. 95]. Therefore, the motion is now ripe for disposition. After careful consideration of the motion, response, reply relevant authorities, and for the reasons discussed below the motion for fees and costs should be DENIED.[1]
On April 8, 2021, the Court granted the Caribbean Produce Defendants' motion to dismiss Agrosale's third-party complaint and denied Agrosale's motion seeking leave to amend. [D.E. 73]. However, the Court only dismissed Agrosale's pleading without prejudice so that Agrosale could refile its claims in a separate action and an appropriate forum. Because of the dismissal without prejudice, the Caribbean Defendants now seek $93, 038.95 in fees and costs as the prevailing party pursuant to a contractual agreement and Fla. Stat. § 57.105.[2]
The Caribbean Produce Defendants say that fees are appropriate because of a contractual agreement signed between the parties:
In the event court action is necessary to enforce collection of any amount due hereunder, the Buyer agrees to pay all collection costs including reasonable attorney's fees and that Dade County, Florida shall be the venue for all such actions.
[D.E. 80 at 2]. Although this contract only references a “Buyer, ” the Caribbean Produce Defendants claim that Fla. Stat. § 57.105(7) makes this unilateral fee provision reciprocal so that either party can seek fees as a prevailing party:
If a contract contains a provision allowing attorney's fees to a party when he or she is required to take any action to enforce the contract, the court may also allow reasonable attorney's fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract.
Fla. Stat. § 57.105(7).[3]
Agrosale opposes the motion for three reasons. The first argument relies on the doctrine of judicial estoppel. Agrosale says that the Caribbean Produce Defendants cannot claim, on a prior motion to dismiss, that Puerto-Rican law applies and then change their position after dismissal when seeking fees. Agrosale's second contention is that, even if judicial estoppel fails, the Caribbean Produce Defendants are not a prevailing party because they only succeeded in dismissing the third-party complaint without prejudice. Agrosale's final argument takes issue with the number of hours requested in the motion. We will only consider the second argument because, even if we assume that the Caribbean Produce Defendants prevail on the question of judicial estoppel and on the reasonableness of the number of hours requested, they should not be entitled to fees or costs.
A. Determining the Prevailing Party
Agrosale argues that the Caribbean Produce Defendants cannot recover fees or costs because they are not the prevailing party. Agrosale says that prevailing party status is reserved for those that succeed on significant issues in a case and that a dismissal without prejudice does not meet that threshold. See Moritz v. Hoyt Enterprises, Inc., 604 So.2d 807, 810 (Fla. 1992) (“We agree that the party prevailing on the significant issues in the litigation is the party that should be considered the prevailing party for attorney's fees.”); Sream, Inc. v. Cary Tobacco I, Inc., 2017 WL 6408981, at *3 (S.D. Fla. Aug. 2, 2017), Report and Recommendation adopted, 2017 WL 6408996 (S.D. Fla. Aug. 17, 2017) (“Courts have often encountered the question of whether a dismissal without prejudice is sufficient to determine a ‘prevailing party' and . . . they have uniformly held that it does not alter the legal relationship between the parties.” (citing cases). In other words, Agrosale claims that the Caribbean Produce Defendants cannot be considered a prevailing party because the third-party complaint can be refiled in a separate action seeking all the remedies previously asserted. Because this fails to resolve any claim or significant issue, Agrosale concludes that the motion should be denied.
Although Agrosale never states it directly, it relies on the federal standard for determining a prevailing party and never addresses the question of what law applies.[4] In cases brought into federal court based upon diversity jurisdiction, courts must apply the law of the forum state - in this case Florida - to determine an award of attorney's fees and expenses. See 2002 Irrevocable Trust for Richard C.Hvizdak v. Shenzhen Development Bank, Co., Ltd., 2011 WL 4112776 *2 (M.D. Fla. Sept. 15, 2011) (citing Trans Coastal Roofing Co., Inc. v. David Boland Inc., 309 F.3d 758, 760 (11th Cir. 2002)); see also Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938) ( ). Statutes allowing for the recovery of attorney's fees are considered substantive law. See McMahon v. Toto, 256 F.3d 1120, 1132 (11th Cir. 2001), amended on reh'g, 311 F.3d 1077 (11th Cir. 2002) (“it is clear that statutes allowing for recovery of attorney's fees are substantive for Erie purposes”) that .
If the Florida standard for determining a prevailing party applies, “[i]t is not necessary for there to be an adjudication on the merits in order to be entitled to fees as a prevailing party.” Valcarcel v. Chase Bank USA NA, 54 So.3d 989, 990 (Fla. 4th DCA 2010) (citing Baratta v. Valley Oak Homeowners' Assn at the Vineyards, Inc., 891 So.2d 1063 (Fla. 2d DCA 2004)); see also Rabco Corp. v. Steele Plaza, LLC, 2018 WL 7982921, at *4 (M.D. Fla. Aug. 9, 2018) ( )(citing Nudel v. Flagstar Bank, FSB, 60 So.3d 1163, 1165 (Fla. 4th DCA 2011) ()).
This is different than the federal standard for determining whether a party “prevails, ” because that requires a party to obtain a material court-ordered change in the legal relationship between the parties. See Dattner v. Conagra Foods, Inc., 458 F.3d 98, 101 (2d Cir. 2006) () (quoting Buckhannon Bd. & Care Home, Inc. v. W.Va.Dep't of Health & Human Res., 532 U.S. 598, 605 (2001)). The Eleventh Circuit has found that a “material alteration” occurs in: “(1) a situation where a party has been awarded by the court at least some relief on the merits of his claim or (2) a judicial imprimatur on the change in the legal relationship between the parties.” Smalbeinex rel. Estate of Smalbein v. City of Daytona Beach, 353 F.3d 901, 905 (11th Cir. 2003).
If the federal standard applies in determining a prevailing party, a dismissal without prejudice is insufficient to award fees because it does not materially change the parties' legal relationship. See Sream, Inc. v. Cary Tobacco I, Inc., 2017 WL 6408981, at *3 (S.D. Fla. Aug. 2, 2017), Report and Recommendation adopted, 2017 WL 6408996 (S.D. Fla. Aug. 17, 2017) () (citing Oscar v. Alaska Dep't of Educ. & Early Dem, 541 F.3d 978, 981 (9th Cir. 2008) ( ); Keene Corp. v. Cass, 908 F.2d 293, 298 (8th Cir. 1990) (); Szabo Food Serv. Inc. v. Canteen Corp., 823 F.2d 1073, 1076-77 (7th Cir. 1987) () ). Therefore, to determine which law applies and whether the Caribbean Produce Defendants are entitled to fees and costs, we must look to the third-party complaint to see if this case is premised on the Court's diversity jurisdiction, a federal question, or both.
The Caribbean Produce Defendants say that Florida law applies because the Court has jurisdiction over the third-party complaint due to complete diversity between the parties.[5] Specifically, the Caribbean Produce Defendants claim that Agrosale is a Florida corporation based on the allegations of the third-party complaint and that each of the individual defendants are citizens of Puerto Rico. [D.E. 23 at ¶ 3 ()]. That is not, however, what the pleading alleges. It only asserts...
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