Fulton Federal Savings & Loan Ass'n of Atlanta v. American Insurance

143 F.R.D. 292, 1991 U.S. Dist. LEXIS 20473, 1991 WL 348413
CourtDistrict Court, N.D. Georgia
DecidedAugust 6, 1991
DocketCiv. A. No. 1:86-CV-0107-JOF
StatusPublished
Cited by22 cases

This text of 143 F.R.D. 292 (Fulton Federal Savings & Loan Ass'n of Atlanta v. American Insurance) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fulton Federal Savings & Loan Ass'n of Atlanta v. American Insurance, 143 F.R.D. 292, 1991 U.S. Dist. LEXIS 20473, 1991 WL 348413 (N.D. Ga. 1991).

Opinion

ORDER

FORRESTER, District Judge.

This matter is before the court on defendant American Insurance Company’s (American) motion to re-tax costs and plaintiff Fulton Federal Savings & Loan Association of Atlanta’s (Fulton Federal) motion for leave to file a supplemental brief. Third-party defendants Edmund D. Rowe, Jr. and Olympic Construction, Inc. (Olympic), have joined American Insurance Company’s objections.

I. FACTS

In November of 1983, Fulton Federal agreed to provide Foundation Land Developments, Inc. (Foundation), with financing for a construction project. Third-party defendant Olympic was the general contractor for the project. Defendant American was the surety for Olympic. Alleging that Olympic defaulted on the project, Fulton Federal foreclosed against Foundation and took possession of the property. Fulton Federal then filed this action against American, seeking damages of $2.3 million for completion costs, diminution in value, lost profits, future liability for latent building defects, and bad faith penalties. American filed a third-party complaint against Olympic and its president, Edmund D. Rowe, Jr. These third-party defendants cross-claimed against Fulton Federal, which in turn counterclaimed against them. Foundation was later joined as a plaintiff.

The case was tried before a special master. Plaintiff Fulton Federal was awarded $2,443,928.00 against defendant American, including pre-judgment interest. However, Fulton Federal took nothing on its claims for bad faith penalties and attorney’s fees against American. American recovered the full amount of the judgment from the third-party defendants. The third-party defendants took nothing on their counterclaims against Fulton Federal. Costs in the amount of $69,883.30 were taxed against defendant American. Defendant filed objections to the bill of costs and followed with a motion to re-tax costs.

II. MOTION TO RE-TAX COSTS

Federal Rule of Civil Procedure 54(d) provides “costs shall be allowed as of course to the prevailing party unless the court otherwise directs.” A case must be examined as a whole to determine who is the prevailing party. Studiengesellschaft Kohle mbH v. Eastman Kodak Co., 713 F.2d 128, 131 (5th Cir.1983). “A party need not prevail on all issues to justify an award of costs.” Id.; see also United States v. Mitchell, 580 F.2d 789, 793 (5th Cir.1978). The standards for determining whether a party is entitled to an award of costs under Rule 54(d) are the same for determining whether a party is “prevailing” under 42 USC § 1988. Studiengesellschaft Kohle mbH v. Eastman Kodak Co., 713 F.2d at 132; Hensley v. Eckerhart, 461 U.S. 424, 433 n. 7, 103 S.Ct. 1933, 1939 n. 7, 76 L.Ed.2d 40 (1983) (“The standards set forth in this opinion are generally applicable in all cases in which Congress has authorized an award of fees to a ‘prevailing party.’ ”). A plaintiff is a prevailing party under 42 USC § 1988 when he succeeds on “any significant issue in litigation which achieve[d] some of the benefit the party sought in bringing the suit.” Texas Teachers Ass’n v. Garland Independent School Dist., 489 U.S. 782, 791-92, 109 S.Ct. 1486, 1493, 103 L.Ed.2d 866 (1989) (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir.1978)); Hensley, 461 U.S. at 433, 103 S.Ct. at 1939. In the case sub judice plaintiff recovered on its breach of bond claim against defendant but did not recover on its claim for bad faith and attorney’s fees. However, the breach of bond claim was clearly the significant issue and plaintiff’s recovery on that claim was the primary benefit plaintiff sought in bringing suit. The court finds that Fulton Federal is a prevailing party entitled to recover costs from defendant.

Rule 54(d) does not give district judges “unrestrained discretion to tax costs to reimburse a litigant for every expense [295]*295he has seen fit to incur in the conduct of his case.” Farmer v. Arabian American Oil Co., 379 U.S. 227, 235, 85 S.Ct. 411, 416, 13 L.Ed.2d 248 (1964). In Crawford Fitting Co. v. J.T. Gibbons, Inc., the Supreme Court held that district courts are limited by the list of items set forth in § 1920 and other related statutes. 482 U.S. 437, 445, 107 S.Ct. 2494, 2499, 96 L.Ed.2d 385 (1987). The discretion given by Rule 54(d) “is solely a power to decline to tax, as costs, the items enumerated in § 1920.” Id., at 442, 107 S.Ct. at 2498; Parkes v. Hall, 906 F.2d 658, 659 (11th Cir.1990) (§ 1920 limits costs that may be awarded under Rule 54(d)).

In Farmer v. Arabian American Oil Co., the Court had previously stated that “the discretion given district judges to tax costs should be sparingly exercised with reference to expenses not specifically allowed by statute.” 379 U.S. at 235, 85 S.Ct. at 416. In Crawford, the Court specifically disapproved of that statement as inconsistent with its holding that the district court had no discretion to tax costs beyond those enumerated by § 1920. 482 U.S. at 443, 107 S.Ct. at 2498.

Despite the broad language in Crawford, the lower courts have largely ignored its application other than in questions regarding awards of witness fees. See e.g., Zapata Gulf Marine Corp. v. Puerto Rico Maritime Shipping Authority, 133 F.R.D. 481, 485 (E.D.La.1990) (recognizing that while “[tjhere is no statutory authorization for taxing the costs of charts, models and photographs,” such costs are taxable if there is pre-trial authorization.) Some courts even continue to rely on the language in Farmer that Crawford specifically disapproved. See, e.g., Phillips v. Cameron Tool Corp., 131 F.R.D. 151, 154 (S.D.Ind. 1990). However, this court believes that the broad applicability of Crawford is clearly set forth in the recent case of West Virginia Univ. Hosps., Inc. v. Casey:

In Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437 [107 S.Ct. 2494, 96 L.Ed.2d 385] (1987), we held that these provisions define the full extent of a federal court’s power to shift litigation costs absent express statutory authority to go further____ Crawford plainly requires as a prerequisite to reimbursement, the identification of “explicit statutory authorization.”

— U.S.-,-, 111 S.Ct. 1138, 1140-41, 113 L.Ed.2d 68 (1991).

Cases prior to Crawford had allowed the taxing of costs for items not enumerated in § 1920 when the items were necessarily obtained for use in the case and when the party incurring the expense sought pretrial approval. See, e.g., Studiengesellschaft Kohle mbH v. Eastman Kodak Co.,

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143 F.R.D. 292, 1991 U.S. Dist. LEXIS 20473, 1991 WL 348413, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fulton-federal-savings-loan-assn-of-atlanta-v-american-insurance-gand-1991.