TransUnion Risk & Alternative Data Solutions v. Best One, Inc. (In re TLFO, LLC)

571 B.R. 880, 2017 Bankr. LEXIS 2467
CourtUnited States Bankruptcy Court, S.D. Florida.
DecidedMay 18, 2017
DocketCASE NO.: 13-20853-BKC-PGH; ADV. NO.: 14-1793-BKC-PGH-A
StatusPublished
Cited by1 cases

This text of 571 B.R. 880 (TransUnion Risk & Alternative Data Solutions v. Best One, Inc. (In re TLFO, LLC)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Florida. primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
TransUnion Risk & Alternative Data Solutions v. Best One, Inc. (In re TLFO, LLC), 571 B.R. 880, 2017 Bankr. LEXIS 2467 (Fla. 2017).

Opinion

ORDER ON DEFENDANT TBO’S MOTION FOR PARTIAL SUMMARY JUDGMENT (ECF NO. 597) RELATING TO PLAINTIFF’S MOTION FOR ATTORNEY’S FEES

Paul G. Hyman, Jr., Judge United States Bankruptcy Court

THIS MATTER came before the Court upon the Motion for Partial Summary Judgment on Threshold Legal Issues (the “Motion for Partial Summary Judgment”) (ECF No. 597) filed by Defendant The Best One, Inc. (“TBO”) as to the Motion and Memorandum of Law in Support of its Application for Attorney’s Fees and Costs (the “Motion in Support of Attorney’s Fees and Costs”) (ECF No. 527) filed by Plaintiff TransUnion Risk and Alternative Data Solutions, Inc. (“TRADS”).

On August 18, 2016, after a seven-day trial, the Court issued a Trial Order (ECF No. 473) and Final Judgment (ECF No. 474)1 in favor of TRADS as to (1) the Second Amended Complaint (the “Adversary Complaint”) (ECF No. 61) and the Motion to Enforce Sale Order and to Hold The Best One, Inc. in Contempt (the “Motion for Contempt”) (ECF No. 1282, Case No. 13-20853-BKC-PGH)2 filed, by TRADS; (2) the Answer, Affirmative Defenses, and Counterclaim (the “TBO Counterclaim”) (ECF Nos. 333 and 334) filed by Defendant TBO; and (3) the Answer, Affirmative Defenses, and Counterclaim (the “Poulsen Counterclaim”) (ECF Nos. 335 and 336) filed by Ole Poulsen (“Poulsen,” and together with TBO, the “Defendants”). Of particular relevance here, the Court found in favor of TRADS as to its Motion for Contempt, holding “Defendant TBO nka IDI, Inc. is hereby found to have knowingly violated the Sale Order (ECF No. 610, Case No. 13-20853) and shall be sanctioned so as to compensate [TRADS] for the attorney’s fees and costs incurred in this litigation.” Trial Order at 81. Moreover, the Court held specifically that it was “retaining] jurisdiction to determine the amount of damages and attorney’s fees to be awarded in favor of [TRADS] and against Defendant TBO nka IDI, Inc..” Id. at 82.

Defendants TBO and Poulsen along with IDI, Inc. appealed the Court’s Trial Order and Final Judgment. Defendants TBO and Poulsen also filed a Motion to Stay Pending Appeal (ECF No. 487) in this Court. After the Court denied those Motions, see Order (ECF No. 512), Defendants TBO and Poulsen and IDI, Inc. filed Motions to Stay Pending Appeal in the District Court. The District Court denied those Motions. See Notice of Filing (ECF No. 560). Subsequently, Defendants TBO and Poulsen and IDI, Inc. appealed the District Court’s decision to the Eleventh Circuit Court of Appeals, which denied the appeal of the District Court’s decision to deny the Motions to Stay Pending Appeal. See Orders (ECF Nos. 570 and 571).

On October 7, 2016, TRADS filed the Motion in Support of Attorney’s Fees and Costs, along with two Declarations (ECF Nos. 528 and 529) and a Bill of Costs (ECF No. 530). After the Eleventh Circuit issued [884]*884its decision, Defendant TBO filed the Motion for Partial Summary Judgment now before the Court, and the Court established a schedule for the parties to submit additional briefing. See TRADS’s Response (ECF No. 601) and Defendant TBO’s Reply (ECF No. 603). Defendant TBO’s Motion for Partial Summary Judgment seeks resolution of six discrete legal issues related to TRADS’s Motion in Support of Attorney’s Fees and Costs. The Court will address each in turn.

I. TRADS did not forfeit its entitlement to prove damages

Defendant TBO asserts that TRADS should not be permitted to put on evidence as to its damages—which, in a civil contempt claim, include attorney’s fees and costs—because both liability and damages must be proved at trial and the trial here has already concluded. Particularly, Defendant TBO asserts that the Federal Rules of Civil Procedure limit what types of attorney’s fees and costs may be sought by motion post-trial.

To begin with, it is important to note that the trial has not concluded. The liability portion of the trial concluded in June 2016. However, in its Trial Order and Final Judgment, the Court expressly reserved jurisdiction to determine TRADS’s entitlement to, and amount of, attorney’s fees and costs, and Defendant TBO did not object to this procedure.

Even though the contention that the trial concluded in June 2016 is inaccurate, the Court will nonetheless address Defendant TBO’s argument that the Federal Rules preclude TRADS from seeking its attorney’s fees and costs at this stage in the proceedings. Federal Rule of Civil Procedure 54(d)(2)(A), made applicable to bankruptcy proceedings by Federal Rule of Bankruptcy Procedure 7054(b)(2), 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.” The construction of Rule 54(d)(2)(A) is such that it merely exempts claims for attorney’s fees that must be proved as an element of damages from the requirement that a claim for attorney’s fees and costs must be made by post-trial motion. The text of Rule 54(d)(2)(A) does not mandate anything with respect to claims for attorney’s fees that must be proved as an element of damages. At most, Rule 54(d)(2)(A) simply provides that fees and costs which constitute damages may be pleaded like any other element of a case and need not be 'requested by motion for first time after the trial has concluded. See Fed. R. Civ. P. 54, advisory committee’s note to 1993 amendment (clarifying Rule 54(d)(2) only to explain that subsection (d)(2) “does not ... apply to fees recoverable as an element of damages, as when sought under the terms of a contract; such damages typically are to be claimed in a pleading and may involve issues to be resolved by a jury” (emphasis added)). This interpretation is further supported by the advisory committee notes to Bankruptcy Rule 7008:

The rule is amended to delete subdivision (b), which required a request for attorney’s fees always to be pleaded as a claim in an allowed pleading.... The procedures for seeking an award of attorney’s fees are now set out in Rule 7054(b)(2), which makes applicable most of the provisions of Rule 54(d)(2) F.R.Civ.P. As specified by Rule 54(d)(2)(A) and (B) .... a claim for attorney’s fees must be made by a motion filed no later than 14 days after entry of the judgment unless the governing substantive law requires those fees to be proved at trial as an element of damages. When fees are an element of damages, such as when the terms of a contract provide for the recovery of fees [885]*885incurred prior to the instant adversary proceeding, the general pleading requirements of this rule still apply.

Fed. R. Bankr. P. 7008, advisory committee’s note to 2014 amendment. See also, In re Carey, 446 B.R. 384, 389-90 (9th Cir. BAP 2011) (noting that the Rules do “not shed any light on whether ...

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571 B.R. 880, 2017 Bankr. LEXIS 2467, Counsel Stack Legal Research, https://law.counselstack.com/opinion/transunion-risk-alternative-data-solutions-v-best-one-inc-in-re-tlfo-flsb-2017.