McCain v. Detroit II Auto

• Court: Court of Appeals for the Sixth Circuit
• Decided: August 5, 2004
• Docket: 03-1270
• Status: Published

Opinion

RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 2 McCain v. Detroit II Auto Finance, et al. No. 03-1270 ELECTRONIC CITATION: 2004 FED App. 0261P (6th Cir.) File Name: 04a0261p.06 _________________ COUNSEL UNITED STATES COURT OF APPEALS ARGUED: Ian B. Lyngklip, LYNGKLIP & TAUB, FOR THE SIXTH CIRCUIT Southfield, Michigan, for Appellant. Jason M. Katz, KATZ _________________ & KATZ, Southfield, Michigan, for Appellees. ON BRIEF: Ian B. Lyngklip, LYNGKLIP & TAUB, Southfield, REBEKAH MCCAIN , X Michigan, for Appellant. Jason M. Katz, KATZ & KATZ, Plaintiff-Appellant, - Southfield, Michigan, for Appellees. - - No. 03-1270 _________________ v. - > OPINION , _________________ DETROIT II AUTO FINANCE - CENTER and BANK ONE , N.A., - MILTON I. SHADUR, District Judge. Rebekah McCain Defendants-Appellees. - (“McCain”) originally brought suit against Detroit II Auto - Finance Center (“Detroit II”) and Bank One, N.A. (“Bank N One”) in connection with events that took place when she Appeal from the United States District Court attempted to secure a loan to purchase a vehicle. After for the Eastern District of Michigan at Detroit. Detroit II’s tender and McCain’s acceptance of a Fed. R. Civ. No. 02-70855—Patrick J. Duggan, District Judge. P. (“Rule”) 68 offer of judgment had produced a $3,000 judgment in McCain’s favor, her counsel petitioned the Argued: June 18, 2004 District Court for an award of costs and attorney’s fees.1 That petition was denied in its entirety, and after the stipulated Decided and Filed: August 5, 2004 with-prejudice dismissal of McCain’s Second Amended And Supplemented Complaint, McCain filed an appeal against Before: GILMAN and ROGERS, Circuit Judges; Detroit II pursuant to 28 U.S.C. § 1291. We REVERSE the SHADUR, District Judge.* District Court’s denial of an award of costs and AFFIRM its denial of an attorney’s fee award.

1 Although M cCain’s petition spok e of “attorney fees” (and Detroit II and the district court followed her lead in that respect), and although the statutes and cases are all over the lot (some using that term, others speaking of “attorneys’ fees” and still others of “attorney’s fees”), we * employ the usage in the text, as did the Supreme Court in the Marek case The Honorable Milton I. Shadur, United States District Judge for the discussed hereafter. But see Stallworth v. Greater Cleveland Reg ’l Northern District of Illinois, sitting by designation. Transit Auth., 105 F.3d 25 2, 254 n.1 (6th Cir. 1997).

1 No. 03-1270 McCain v. Detroit II Auto Finance, et al. 3 4 McCain v. Detroit II Auto Finance, et al. No. 03-1270

BACKGROUND against McCain in both respects. This timely appeal ensued after the subsequent entry of a final judgment of dismissal. McCain sought legal redress after having experienced numerous difficulties with Detroit II and Bank One in the RULE 68 AND MAREK v. CHESNY course of her purchase and financing of a new automobile. McCain filed a multi-count Amended Complaint, seeking to For purposes of this appeal Rule 68 is just as important for invoke against Detroit II the federal Truth in Lending Act (15 what it does not say as for what it says (emphasis added): U.S.C. § 1640)(Count I) and Equal Credit Opportunity Act (15 U.S.C. § 1691)(Count II) as well as several Michigan At any time more than 10 days before the trial begins, a statutes--the Consumer Protection Act (Mich. Comp. Laws party defending against a claim may serve upon the § 445.901)(Count IV), Motor Vehicle Sales Finance Act adverse party an offer to allow judgment to be taken (Mich. Comp. Laws § 492.101)(Count X), Credit Reform Act against the defending party for the money or property or (Mich. Comp. Laws § 445.1851)(Count XI) and Motor to the effect specified in the offer, with costs then Vehicle Installment Sales Act (Mich. Comp. Laws accrued. If within 10 days after the service of the offer § 566.301)(Count XII)-- and also advancing some the adverse party serves written notice that the offer is nonstatutory claims (Counts VI, VII, VIII and XIV). Both accepted, either party may then file the offer and notice Count I and the “Request for Relief” section of the Amended of acceptance together with proof of service thereof and Complaint contained express requests for the award of costs thereupon the clerk shall enter judgment. An offer not and attorney’s fees, with the Request for Relief doing so as to accepted shall be deemed withdrawn and evidence the bulk of McCain’s claims. thereof is not admissible except in a proceeding to determine costs. If the judgment finally obtained by the Several months into the litigation Detroit II delivered this offeree is not more favorable than the offer, the offeree Rule 68 offer to McCain: must pay the costs incurred after the making of the offer.

NOW COMES, the Defendant, Detroit II Auto Finance Thus the Rule plainly speaks of the consequences of Center, Inc., by and through its attorney, Howard Alan acceptance or rejection of an offer on the award of costs, but Katz, and presents the following offer of judgment it is totally silent on the subject of attorney’s fees. pursuant to FRCP 68. The defendant, Detroit II Auto Finance Center, Inc., offers to the Plaintiff, Rebekah Hence the only way in which Rule 68 directly implicates McCain, the amount of three thousand dollars ($3000.00) awards of attorney’s fees is in situations where such fees are as to all claims and causes of actions for this case. made an element of “costs”--whether by statute (42 U.S.C. § 1988 is the most familiar example) or as a matter of McCain’s timely acceptance of the offer triggered the entry of contract. And it was in the former respect that the Supreme a $3,000 judgment in her favor. Court addressed Rule 68 in the seminal decision that basically controls this case, Marek v. Chesny, 473 U.S. 1 (1985).2 Shortly thereafter McCain filed a Petition for Taxation of Costs of $150 and a Petition for Attorney Fees of $7,652.50. 2 After the parties had briefed the issues, the district court ruled By sheer chance the writer of this opinion was the trial judge in Marek who ruled in defendants’ favor there (547 F. Supp. 542, 547 (N.D. Ill. 1982)), a decision that was then reversed on appeal (720 F.2d 474, No. 03-1270 McCain v. Detroit II Auto Finance, et al. 5 6 McCain v. Detroit II Auto Finance, et al. No. 03-1270

Here is what Marek, id. at 6 (citation omitted) said on the attorney’s fees, we are satisfied such fees are to be subject of Rule 68 offers and costs: included as costs for purposes of Rule 68. If an offer recites that costs are included or specifies an Nothing in the opinion speaks to any relationship between a amount for costs, and the plaintiff accepts the offer, the Rule 68 offer and the awarding of attorney’s fees that are not judgment will necessarily include costs; if the offer does categorized as “costs.” not state that costs are included and an amount for costs is not specified, the court will be obliged by the terms of When these things are understood, the resolution of this the Rule to include in its judgment an additional amount case is straightforward. As already stated, because which in its discretion, it determines to be sufficient to Detroit II’s Rule 68 offer was silent as to “costs then cover the costs. In either case, however, the offer has accrued,” the district court should have included in its allowed judgment to be entered against the defendant judgment the amount of those costs (agreed by the parties to both for damages caused by the challenged conduct and be $150). But because none of the statutes that McCain’s for costs. Accordingly, it is immaterial whether the offer Amended Complaint sought to call into play, and none of the recites that costs are included, whether it specifies the common law claims that McCain sought to advance, treats amount the defendant is allowing for costs, or, for that potentially awardable attorney’s fees as “costs,” the Detroit II matter, whether it refers to costs at all. offer--which expressly embraced “all claims and causes of action for this case” (essentially echoing McCain’s own And consistently with that teaching, Detroit II’s silence on the terminology when she began page 1 of her multicount subject of costs in its Rule 68 offer means that true costs are Amended Complaint with “Rebekah McCain states the recoverable by McCain, so that the district court erred in following claims for relief”)--leaves no room for a post-offer disallowing them.3 effort by McCain to collect attorney’s fees. But because Rule 68 itself speaks only of “costs” as such All of the post-Marek cases that have had to wrestle with and not in terms of “attorney’s fees,” Marek, id. at 9 spoke to the type of claim that McCain advances here have addressed the latter subject solely in terms of the former: Rule 68 offers from the perspective of whether or not those offers have some greater or lesser degree of ambiguity or In other words, all costs properly awardable in an action perceived ambiguity (see, e.g., Goodheart Clothing Co. v. are to be considered within the scope of Rule 68 “costs.” Laura Goodman Enters., Inc., 962 F.2d 268, 272-73 (2d Cir. Thus, absent congressional expressions to the contrary, 1992); Nordby v. Anchor Hocking Packaging Co., 199 F.3d where the underlying statute defines “costs” to include 390, 392 (7th Cir. 1999); Hennessy v. Daniels Law Office, 270 F.3d 551, 553-54 (8th Cir. 2001); Nusom v. Comh Woodburn, Inc., 122 F.3d 830, 833 (9th Cir. 1997) and Utility Automation 2000, Inc. v. Coctawhatchee Elec. Coop., Inc., 478-79 (7th Cir. 1983)) but was then in turn upheld by the Supreme 298 F.3d 1238, 1242 (11th Cir. 2002)). But here it is Court’s reversal of the Seventh Circ uit. unnecessary to parse or to seek to distinguish among those 3 cases, for there is no ambiguity in the Detroit II offer and in Detroit II does not really contest that ruling. Its briefs on appeal do McCain’s unequivocal acceptance of that offer, an issue that not even broach that topic, and its counsel conceded during oral argument that Detroit II was willing to pay M cCain her $ 150 in taxable costs. No. 03-1270 McCain v. Detroit II Auto Finance, et al. 7 8 McCain v. Detroit II Auto Finance, et al. No. 03-1270

is to be resolved under ordinary contract principles (Mallory was no ambiguity” (id. at 393). That might well have been v. Eyrich, 922 F.2d 1273, 1279-80 (6th Cir. 1991)). written for this case, and we so hold. As in Nordby, there is no room here for the application of the doctrine of contra On that score McCain can draw no comfort from Marek’s proferentem or for any other predicate for injecting ambiguity decision as to the potential awardability of attorney’s fees where none exists. Just as with all other contracts, when an when based on such fees’ inclusion in the term “costs.” unequivocal and unambiguous offer is responded to by an While all four of the statutes cited in McCain’s Petition for acceptance that does not depart from the terms of that offer, Attorney Fees do allow for the recovery of attorney’s fees the prototypical enforceable bargain results. under specified circumstances, not one does so by encompassing such fees within “costs” (15 U.S.C. One final note should be added. We have deliberately § 1640(a)(3); 15 U.S.C. § 1691e(d); Mich. Comp. Laws eschewed offering advice to counsel generally, as McCain has § 445.911(2); Mich. Comp. Laws § 445.1861(1)(d)). To the requested, as to how Rule 68 offers and acceptances should be contrary, those statutes either list attorney’s fees and costs as shaped. As we have said, such offers and their acceptance two separate elements of recovery or (in the case of the involve nothing more than applying the basic principles of Michigan Consumer Protection Act) do not refer to costs at contract law. In this instance the absence of ambiguity stems all. Nor is there any Michigan common law doctrine that from Detroit II’s counsel having taken McCain’s counsel at treats attorney’s fees, when they are awardable, as an element his word: In response to a complaint that spoke expressly in of “costs.” Thus the situation before us parallels the one that terms of “claims for relief” and that also asked expressly for we dealt with in Oates v. Oates, 866 F.2d 203, 205, 208 (6th attorney’s fees to be granted as an integral part of the relief Cir. 1989), and as in Oates no award of McCain’s attorney’s sought for those claims, a Rule 68 offer that mirrored that fees may be made under the rubric of Rule 68 “costs.” language by tendering $3,000 for “all claims and causes of action” should have left McCain’s counsel free from doubt. Our conclusion as to the absence of ambiguity in the To be sure, there are other situations in which a prudent Detroit II offer, unqualifiedly accepted by McCain as it was, defense counsel, who after all has total control over the echoes the Seventh Circuit’s comparable determination in drafting of a Rule 68 offer, ought to (or sometimes must) add Nordby.4 There the defendant’s Rule 68 offer was for “one a specific reference to the inclusion of attorney’s fees to total sum as to all counts of the amended complaint” provide clarity--but this is not one of them. (remember that in this case the offer expressly embraced “all claims and causes of action for this case”). There “[o]ne of CONCLUSION those counts specified attorneys’ fees as part of the relief sought” (id. at 392), while here all of McCain’s claims for Nothing in the terms of Detroit II’s Rule 68 offer justified relief specified attorney’s fees as part of what she was seeking McCain’s effort to have the tail wag the dog by seeking an to recover. And there the Seventh Circuit held “That relief attorney’s fees recovery of fully two and one-half times the [the request for attorney’s fees] was covered by the offer” amount of the substantive judgment. For the reasons we have (id.) and therefore “agree[d] with the district judge that there stated, we AFFIRM the district court’s rejection of that claim, while we REVERSE the denial of McCain’s request for an award of $150 in true costs. Each party shall bear her 4 or its costs on appeal. Again by sheer coincidence, the writer was also the district jud ge in Nordby, this time being affirmed by the Court of Ap peals.