Cadle Co. v. Beury

242 F.R.D. 695, 68 Fed. R. Serv. 3d 375, 2007 U.S. Dist. LEXIS 48179, 2007 WL 1830861
CourtDistrict Court, S.D. Georgia
DecidedMarch 28, 2007
DocketNo. 406CV255
StatusPublished
Cited by4 cases

This text of 242 F.R.D. 695 (Cadle Co. v. Beury) is published on Counsel Stack Legal Research, covering District Court, S.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cadle Co. v. Beury, 242 F.R.D. 695, 68 Fed. R. Serv. 3d 375, 2007 U.S. Dist. LEXIS 48179, 2007 WL 1830861 (S.D. Ga. 2007).

Opinion

ORDER

EDENFIELD, District Judge.

I. INTRODUCTION

Plaintiff The Cadle Company (“Cadle”) brought this collection case seeking a property-foreclosure deficiency judgment against defendants Harold R. and Sandra J. Beury. Doc. # 1. Cadle, however, had previously filed and voluntarily dismissed a similar ease in a Texas court, so this Court ordered briefing on the appropriate amount of F.R.Civ.P. 41(d) costs that Cadle should first pay to the defendants before this case proceeds. Doc. # 33. The parties have complied. Doc. ## 36, 37.

II. BACKGROUND1

The Beurys executed three promissory notes to purchase three Texas properties in 1985; the notes were secured by the properties. Doc. #33 at 1. After the Beurys defaulted in 1989, the notes’ holder foreclosed and sent the Beurys notice at their New Jersey residence. Id. at 2. At some point, Cadle acquired the notes and thus the right to collect from the Beurys. Doe. # 1 at 4, 6.

In 2005, the Beurys, then retirees living in Savannah, Georgia, received notice from Cadle that the proceeds of the 1989 foreclosure sales were insufficient to cover the amounts owing on the promissory notes, and that they were liable for both the deficiency amounts plus interest. Doc. #33 at 2. Invoking a limitations statute, the Beurys refused to pay, so Cadle sued them in a Texas state court on all three notes. Id. Fifteen months of litigation (costing the Beurys over $40,000) culminated in a 2.5-hour hearing on the limitations issue. Before that court could rule, however, Cadle voluntarily dismissed the case and filed this action to collect on two of the three notes. Id. at 3-4.

III. ANALYSIS

A. Rule 41(d) and Attorney’s Fees

Rule 41(d) states:

If a plaintiff who has once dismissed an action in any court commences an action based upon or including the same claim against the same defendant, the court may make such order for the payment of costs of the action previously dismissed as it [697]*697may deem proper and may stay the proceedings in the action until the plaintiff has complied with the order.

F.R.Civ.P. 41(d).

Here Cadle dismissed the Texas action, then commenced this action based on two of the three notes, thus “including the same claim against the same defendants.” Id. This Court therefore “may make such order for the payment of costs of the action previously dismissed as it may deem proper.” Id. The Court deems it proper that Cadle, before proceeding in this Court, pay a substantial portion of the Beurys’ costs of defending the nullified Texas action.

As the Court noted in its previous Order, however, some courts have held that Rule 41(d) does not allow an award of attorney’s fees as part of the “costs of the action previously dismissed.” In Rogers v. WalMart Stores, Inc., 230 F.3d 868 (6th Cir.2000), for example, the court held that attorney’s fees are not available under Rule 41(d). “The reason is simple,” that court stated, “the rule does not explicitly provide for them.” Id. at 874. The Rogers court reasoned that the term “costs” was not an explicit provision because

the law generally recognizes a difference between the term ‘costs’ and ‘attorney fees’ and we have no desire to conflate the two terms. Rather, we must assume that Congress was careful with its words when it approved Rule 41(d).

Id. What that court failed to directly address, however, is whether a rule that allows the court to impose “costs of the action previously dismissed” should be construed broadly enough to encompass some attorney’s fees expended defending that action. In other words, while the terms “costs” and “attorney’s fees” unquestionably define different outlays, it is not outlandish to construe the term “costs” to include some attorney’s fees (indeed, as will be shown infra, others have done precisely that).

Perhaps the Rogers court meant that the law generally recognizes that attorney’s fees are never a part of “costs.” Yet, without citation or clarification, it is difficult to tell what that panel meant. Perhaps it found mutual exclusivity in what has been called “the fundamental, essential, and common law doctrines and distinctions as to costs and fees.” Marek v. Chesny, 473 U.S. 1, 18 n. 8, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985) (Brennan, J. dissenting) (quoting Payne, Costs in Common Law Actions in the Federal Courts, 21 Va. L.Rev. 397, 398 (1935)); see also id. at 8, 105 S.Ct. 3012 (majority opinion) (defining “American Rule”—that here, “[ujnlike in England, such ‘costs’ generally had not included attorney’s fees”). The Rogers court applied this distinction to hold that, by using the term “costs,” the Federal Rules’ drafters intentionally omitted attorney’s fees. 230 F.3d at 874. The court also made other observations to support its holding. It noted that “Rule 41(d) only speaks of ‘costs’ and does not mention attorney fees, [while] several other provisions in the Federal Rules explicitly provide for recovery of attorney fees.” Id. at 875. And “28 U.S.C. § 1920 lists the items a court may tax as ‘costs’ ... but does not include attorney fees.” Id.

All of these arguments were made by Justice Brennan’s dissent, yet rejected by the majority in Marek, which the Rogers court failed to cite. The Marek Court held that the term “costs,” as used in Rule 68 — the federal offer of judgment rule — included attorney’s fees where a statute underlying the claim defines costs as including attorney’s fees. 473 U.S. at 11-12, 105 S.Ct. 3012. Justice Brennan chastised the majority because of, inter alia, the common law distinction between fees and costs, id. at 18 & n. 8, 105 S.Ct. 3012 (Brennan, J., dissenting), 28 U.S.C. § 1920’s omission of attorney’s fees as a portion of costs, id. at 13-14, 105 S.Ct. 3012, and other Federal Rules’ explicit mention of attorney’s fees, id. at 20, 105 S.Ct. 3012.

Nevertheless, the Marek Court refused to adopt that reasoning and instead held that the definition of “costs” under Rule 68 depended on the definition of costs that Congress gave for the underlying action where an independent statute speaks of “costs.” The Seventh Circuit applied Marek in the Rule 41(d) context. Esposito v. Piatrowski, 223 F.3d 497, 501 (7th Cir.2000) (“attorneys’ fees are not a recoverable cost of litigation [698]*698under Rule 41(d) unless the substantive statute which formed the basis of the original suit allows for the recovery of such fees as costs”).

This Court will not follow the Rogers or Esposito

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242 F.R.D. 695, 68 Fed. R. Serv. 3d 375, 2007 U.S. Dist. LEXIS 48179, 2007 WL 1830861, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cadle-co-v-beury-gasd-2007.