Sphere Drake Ins. Plc v. Trisko

• Decision Date: 08 September 1999
• Docket Number: No. Civ. 97-334(RLE).,Civ. 97-334(RLE).
• Citation: 66 F.Supp.2d 1088
• Parties: SPHERE DRAKE INSURANCE PLC, UnionAmerica Insurance Company, Ltd., Copenhagen Reinsurance Company, St. Paul Reinsurance Company, and Terra Nova Insurance Company, Ltd., Plaintiffs, v. Robert TRISKO, d/b/a Trisko Designer Jewelry and Trisko Jewelry Sculptures, Ltd., Defendants.
• Court: U.S. District Court — District of Minnesota

66 F.Supp.2d 1088

SPHERE DRAKE INSURANCE PLC, UnionAmerica Insurance Company, Ltd., Copenhagen Reinsurance Company, St. Paul Reinsurance Company, and Terra Nova Insurance Company, Ltd., Plaintiffs, v. Robert TRISKO, d/b/a Trisko Designer Jewelry and Trisko Jewelry Sculptures, Ltd., Defendants.

No. Civ. 97-334(RLE).

United States District Court, D. Minnesota.

September 8, 1999.

James Thomas Martin, Dan Thomas Tyerson, Gislason Martin & Varpness, Edina, MN, for plaintiffs.

Kevin Starr Carpenter, Holmen & Carpenter, St. Cloud, MN, for defendants.

MEMORANDUM ORDER

ERICKSON, United States Magistrate Judge.

I. Introduction

In accordance with the consent of the parties, this matter was tried before the Court, and is presently before us on the Plaintiffs' Objection to the Defendants' Taxation of Costs. For these purposes, the Plaintiffs have appeared by James T. Martin, Esq., and the Defendants have appeared by Kevin S. Carpenter, Esq. We grant costs in the amount of $3,191.27.

II. Discussion

By Order dated July 30, 1999 [Docket No. 58], we directed the parties to "meet and confer" in an effort to amicably resolve the taxation of costs issue. While the parties were able to reduce the amount of costs, which remain in dispute, a complete accord escaped them. On August 18, 1999, the Defendants filed of Bill of Costs in the total amount of $8,701.27. See, Docket No. 59. In response, on August 19, 1999, the Plaintiffs filed their Objections to certain costs that the Defendants seek to tax. The Plaintiffs do not oppose a taxation of the Defendants' Fees of the Clerk; Fees of Court Reporters; Docket Fees; and Video Playback Expenses — costs that total $2,189.19. See, Title 28 U.S.C. § 1920(1)-(6). We direct that these costs be taxed to the Plaintiffs, and our analysis turns to the expenses that remain in dispute.

The Defendants seek to tax the following witness fees:

                                                 Attendance  Subsist.  Mileage     Total
                             Walter Yarbrough    $1,000.00             $   86.80  $1,086.80
                             John Dorsey         $2,000.00   $91.58    $  105.40  $2,196.98
                             Dale Walz           $  210.00             $   86.80  $  296.80
                             Mike Crowley1  $  500.00   $88.00    $1,000.00  $1,588.00
                                                                                  _________
                                 TOTAL                                            $5,168.58
                                                                                  =========
                

The plaintiffs do not quarrel with the Defendants' entitlement to some reimbursement of witness fees, and they agree to the "Mileage" expenses being requested for Yarbrough, Dorsey, and Walz, but they take exception to the requests for the items of "Subsistence," for the travel expenses of defense counsel, which were related to the taking of Crowley's deposition, and they seek a reduction of the "Attendance" fees to $300.00 per witness, with the exception of Walz, who testified as a fact witness. We conclude that the Defendants are not entitled to more than the statutory attendance fee for those lay, and expert witnesses, who testified on their behalf at their Trial.

"[A]bsent explicit statutory or contractual authorization for the taxation of the expenses of a litigant's witnesses as costs, federal courts are bound by the limitations set out in 28 U.S.C. § 1821 and § 1920." Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 445, 107 S.Ct. 2494, 96 L.Ed.2d 385 (1987). Section 1821(a) and (b) allows the prevailing litigant, in a Federal Court case, to recover forty dollars per day, per witness.² The same forty dollar limitation applies to expert witnesses. Henkel v. Chicago, St. Paul, Minneapolis & Omaha Ry., 284 U.S. 444, 446-47, 52 S.Ct. 223, 76 L.Ed. 386 (1932). Indeed, in Henkel, the Court rejected an argument that Minnesota's discretionary rule, which allows an award of expert witness fees to the prevailing party, should trump the predecessor to Section 1821, reasoning as follows:

The appellant, seeking the application of the statutes of Minnesota, invokes the rule that "the laws of the several states, except where the Constitution, treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules of decisions in trials at common law, in courts of the United States, in cases where they apply." *** But this provision, by its terms, is inapplicable, as the Congress has definitely prescribed its own requirement with respect to the fees of witnesses. The Congress has dealt with the subject comprehensively, and has made no exception of the fees of expert witnesses. Its legislation must be deemed controlling, and excludes the application in the federal courts of any different state practice.

Admittedly, Henkel involved a claim under the Federal Employee's Liability Act, thereby invoking the Federal Question jurisdiction of the Federal Courts, while the Plaintiffs' claim invoked this Court's diversity jurisdiction.

Notably, the Defendants draw no express statutory, or contractual authorization for the award of witness fees, in excess of the forty dollar amount, which is specified in Section 1821, and our independent review has uncovered no such authorization. We recognize that, under Minnesota law, the costs of defending against an insurer's action, for a declaration of no insurance coverage, can be assessed against the unsuccessful insurer, but such assessments are limited to declaratory judgment actions in which the insurer has declined any duty to defend. As our Court of Appeals recently explained, in Chicago Title Insurance Co. v. Federal Deposit Insurance Corp., 172 F.3d 601, 605 (8th Cir.1999):

[I]n a scenario where the insurer fulfills its duty to defend and also contests coverage, the insured is not entitled to attorneys' fees and costs in the declaratory judgment action to determine coverage. Attorneys' fees and costs are only awarded for the declaratory judgment action if there was a breach of the duty to defend in the underlying action.

Citing, American Standard Ins. Co. v. Le, 551 N.W.2d 923, 927 (Minn.1996).

The same rule was expressed by the Court, in Diocese of Winona v. Interstate Fire & Casualty Co., as follows:

The Minnesota Supreme Court's encouragement of declaratory judgment actions extends only to those circumstances where there is a claim of a duty to defend. *** In the present case, the claim asserted relates to the Archdiocese's right to be indemnified, not to a duty to defend.

Where a contract is breached and a suit is brought to enforce the contract, it could in some sense be said that the fees incurred are causally related to the breach. That causal relationship, however, does not entitle the prevailing party in such a contract action on an indemnification agreement to recover fees.

[Citations and footnote omitted].

Our reading of the operative "Jewellers Block Policy" confirms that the policy is for indemnification of lost jewelry, and includes no duty to defend. The policy is also devoid of any agreement, on the Plaintiffs' part, to pay the Defendants' costs in defending against any declaratory judgment claim that either party to the contract may commence. Accordingly, we find no contractual or Federal statutory basis for the Defendants' request for enhanced expert witness fees.

Although not expressly addressing the matter, we infer from the Defendants' citation to Minnesota case law, for the proposition that the award of expert witness fees is within the Trial Court's discretion that the Defendants contend that, this being a diversity action, the law of Minnesota should apply. We disagree.³ As the Defendants acknowledge, the allowance of expert fees, under Minnesota Statutes Section 357.25 is wholly discretionary with the Trial Court.⁴ As such, that Section cannot vest litigants, in Federal Court, with a substantive right to an award of expert costs which trumps the forty dollar limitation of Section 1821. The cases which have specifically addressed this issue support our application of Section 1821. See, e.g., Aceves v. Allstate Insurance Co., 68 F.3d 1160, 1167-68 (9th Cir.1995) (concluding that Federal law should control the reimbursement of expert witnesses in Federal Courts sitting in diversity jurisdiction); Chevalier v. Reliance Insurance Co., 953 F.2d 877, 886 (5th Cir.1992) ("[A]bsent an express indication from the Louisiana legislature or its courts, of Louisiana's special interest in providing litigants with recovery of expert witness fees in personal injury actions, federal law controls the award of such fees as costs."); Ruiz-Rodriguez v. Colberg-Comas, 882 F.2d 15, 18 (1st Cir.1989); Bob Willow Motors, Inc. v. General Motors Corp., 872 F.2d 788, 799 (7th Cir.1989); Chaparral Resources, Inc. v. Monsanto Co., 849 F.2d 1286, 1291-92 (10th Cir.1988); Kivi v. Nationwide Mutual Insurance Co., 695 F.2d 1285, 1289 (11th Cir.1983).

Although we have found no decision, within this Circuit, which has explicitly undertaken an Erie-type analysis, see, Erie Railroad Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), with specific respect to the taxation of expert witness fees under Section 1821 as opposed to a State statute, in a diversity case, the decisions we have cited, from foreign jurisdictions, have considered the Erie implications, and have found Section 1821 to be controlling. In addition, vintage authority, within this District and this Circuit, has held, in what appear to be diversity proceedings, that the fee cap, in Section 1821, applies in contradistinction to discretionary awards of expert witness fees. See, American Steel Works v. Hurley Construction Co., 46 F.R.D. 465, 468-69 (D.Minn.1969) ("The general rule is that an expert witness is entitled only to the regular statutory witness fees and the costs actually incurred above this amount are not taxable."); Hill v. Gonzalez, 53 F.R.D. 1, 3 (D.Minn.1971) (same); Murphy v. Amoco Production Co.,...