Specialty Retailers, Inc. v. Main Street NA Parkade, LLC

804 F. Supp. 2d 68, 2011 U.S. Dist. LEXIS 92086, 2011 WL 3628966
CourtDistrict Court, D. Massachusetts
DecidedAugust 17, 2011
DocketCivil Action No. 09-12134-KPN
StatusPublished
Cited by8 cases

This text of 804 F. Supp. 2d 68 (Specialty Retailers, Inc. v. Main Street NA Parkade, LLC) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Specialty Retailers, Inc. v. Main Street NA Parkade, LLC, 804 F. Supp. 2d 68, 2011 U.S. Dist. LEXIS 92086, 2011 WL 3628966 (D. Mass. 2011).

Opinion

MEMORANDUM AND ORDER WITH REGARD TO DEFENDANT’S MOTION FOR COSTS AND FEES (Document No. 51)

NEIMAN, United States Magistrate Judge.

Pursuant to paragraph 24.7 of the lease agreement (the “Lease”) between Main Street, NA Parkade, LLC (“Defendant”) and Specialty Retailers, Inc. (“Plaintiff’), Defendant has moved post-trial for attorney’s fees and court costs. Plaintiff has opposed the motion on a number of grounds. For the following reasons, the court will allow the motion in part.

I. Background

In light of the parties’ familiarity with the matter, only an abbreviated background is provided. In 2009, Plaintiff commenced this action alleging that Defendant breached an exclusive use clause in the Lease by allowing another retail store, Label Shopper Corporate Stores, LLC (“Label Shopper”), to operate in the same shopping center as Plaintiff. Plaintiff also claimed that Defendant violated Mass. Gen. L. ch. 93A. Defendant answered these claims and raised waiver as an affirmative defense. In essence, Defendant asserted that Plaintiff waived its right to claim a breach when it waited one and one-half years from the time Label Shopper began operating its business in the shopping center before voicing any objection and, in the interim, even renegotiated the Lease.

The case proceeded to trial in March of 2011. The parties agreed that the jury’s factual findings would determine the issues of breach of contract and waiver and that Plaintiffs chapter 93A claim would be reserved for the court. The jury found that Plaintiff had proven by a preponderance of the evidence that Label Shopper was a “so-called ‘off-price’ retail store,” which meant that Defendant had violated the exclusive use clause in the Lease. The jury, however, did not hold Defendant liable for this violation because it found as well that Defendant had proven by a preponderance of the evidence that Plaintiff had waived its right to recover for any such breach. The court itself issued judgment in Defendant’s favor on Plaintiffs chapter 93A claim.

In light of its success, Defendant asserts that it fully prevailed in the action and, pursuant to Paragraph 24.7 of the Lease, has moved for attorney’s fees and costs. Paragraph 24.7 provides as follows:

In the event of a dispute hereunder and either party institutes an action or proceeding against the other, the prevailing party in such action or proceeding shall recover reasonable attorneys’ fees and court costs from the other.

(The Lease, Ex. A attached to Complaint.) Specifically, Plaintiff seeks fees ($92,-403.50) and costs ($105,150.43) totaling $197,553.93. In addition, Defendant seeks $9,800.25 in fees for successfully opposing Plaintiffs motion for judgment as a matter of law or for a new trial and, as well, for its current motion.

In opposition to Defendant’s motion, Plaintiff argues that no fees or costs ought to be awarded because Defendant failed to request such fees and costs in its pleadings. Plaintiff further argues that, if the court is inclined to award fees and costs, the requested amounts, for a number of reasons, should be reduced. The court will address Plaintiffs arguments seriatim.

[71]*71II. Defendant’s Failure to Plead its Request for Attorney’s Fees

As an initial matter, Plaintiff asserts that attorney’s fees are “special damages” which, pursuant to Rule 9(g), had to be “specifically stated” in Defendant’s pleadings. Since they were not so pled, Plaintiff argues, Defendant is not entitled to such fees.

Rule 9(g), however, does not define the term “special damages.” Moreover, the First Circuit, has rejected the argument that attorney’s fees sought by a prevailing party are special damages within the meaning of Rule 9(g). See Flynn v. AK Peters, Ltd., 377 F.3d 13, 25-26 (1st Cir.2004); but see Maidmore Realty Co. v. Maidmore Realty Co., 474 F.2d 840, 843 (3d Cir.1973) (stating that attorney’s fees are special damages that must be specifically pled). Instead, in Flynn, the First Circuit applied Rule 54(d)(2)(A) — which provides that “a claim for attorney’s fees and related nontaxable expenses must be made by motion unless the substantive law requires those fees to be proved at trial as an element of damages” — and held that attorney’s fees do not typically have to be pled. Flynn, 377 F.3d at 25-26.

The First Circuit’s conclusion, of course, is controlling and, in the court’s view, correct for the reasons set forth below. Accordingly, despite Plaintiffs arguments to the contrary, Defendant, given the particulars of this matter, was not required to plead attorney’s fees before requesting those fees in its post-trial motion.1

To be sure, Plaintiff attempts to distinguish Flynn on several grounds. First, Plaintiff argues that Flynn does not control whether attorney’s fees must be pled pursuant to Rule 9(g) because it involved the application of California not Massachusetts law. That argument is unpersuasive. Although, in diversity cases, “the law of the state in which the district court sits determines whether a party is entitled to attorney fees ... the procedure for requesting an award of attorney fees is governed by federal law.” Carnes v. Zamani, 488 F.3d 1057, 1059 (9th Cir.2007). The fact that the First Circuit in Flynn looked to California law to determine whether attorney’s fees had to be separately proven at trial, therefore, had no bearing on its conclusion that, as a matter of federal procedure, attorney’s fees did not need to be specifically pled pursuant to Rule 9(g). Thus, the First Circuit’s holding applies with equal force to the case at hand.2

The court also finds unpersuasive Plaintiffs argument — which relies on a ruling out of the Southern District of Georgia— that the First Circuit’s decision in Flynn is “unconvincing” and “likely the product of poor lawyering rather than an informed decision by the circuit court.” Perry v. Serenity Behavioral Health Systems, No. CV106-172, 2009 WL 1259367, at *2 n. 4 (S.D.Ga. May 6, 2009). Disagreeing with Flynn’s rejection of the argument that attorney’s fees must be pled under Rule 9(g), the court in Perry maintained that the [72]*72First Circuit was “apparently unaware that at least five other circuit courts have already accepted this exact argument.” Id.

As indicated, this court is bound by Flynn however much Plaintiff or other courts may disagree with it. See Old Colony Trust Co. v. United States, 300 F.Supp. 1032, 1035 (D.Mass.1969) (“a district court in this circuit is bound by a prior ruling of the Court of Appeals ... until that ruling is either vacated by a subsequent decision of the Court of Appeals or rendered nonviable by a ruling of the Supreme Court.”). As importantly, the First Circuit’s refusal in Flynn to categorically require that requests for attorney’s fees be pled before being raised by motion is well supported by several other circuits.

The Ninth Circuit’s decision in Riordan v. State Farm Mut. Auto. Ins. Co.,

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Bluebook (online)
804 F. Supp. 2d 68, 2011 U.S. Dist. LEXIS 92086, 2011 WL 3628966, Counsel Stack Legal Research, https://law.counselstack.com/opinion/specialty-retailers-inc-v-main-street-na-parkade-llc-mad-2011.