G & C v. Rexam Beverage ( 2013 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT May 29, 2013
Elisabeth A. Shumaker
Clerk of Court
G&C HOLDINGS, LLC,
Plaintiff-Appellant,
v. No. 12-6239
(D.C. No. 5:10-CV-01079-D)
REXAM BEVERAGE CAN COMPANY, (W.D. Okla.)
Defendant-Appellee.
ORDER AND JUDGMENT*
Before BRISCOE, Chief Judge, McKAY and O’BRIEN, Circuit Judges.
In this diversity case brought under Oklahoma law, plaintiff G&C Holdings,
LLC (G&C) appeals from the district court’s post-judgment orders denying its
motion for attorney’s fees and its motion to review costs award. Exercising
jurisdiction under 28 U.S.C. § 1291, we affirm.
*
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
I. BACKGROUND
In February 2010, G&C and defendant Rexam Beverage Can Company
(Rexam) entered into a real estate purchase agreement (the Agreement) pursuant to
which G&C was to purchase a parcel of real property from Rexam. As required by
the Agreement, G&C paid $100,000 in earnest money to a title company to be held in
escrow and later disbursed in accordance with the terms of the Agreement. Old
Republic Title Company of Oklahoma (Old Republic) was the title company that
acted as the escrow agent.
There are four provisions in the Agreement that are relevant to the issues in
this appeal. First, Section 6 of the Agreement provided for a “Due Diligence Period”
during which time G&C could conduct any due diligence related to the property that
it deemed necessary. Second, Section 6.1 provided that G&C could “terminate [the]
Agreement during the Due Diligence Period for any reason by providing [Rexam]
with written notice of termination.” Aplt. App. at 73. Third, Section 6.2 provided
that Old Republic would promptly return the earnest money to G&C if it “properly
terminate[d] the Agreement . . . during the Due Diligence Period.” Id. Fourth,
Section 13.5 is entitled “Effects of Termination,” and it provided as follows:
Upon the termination of this Agreement, [G&C] and [Rexam] shall have
no further rights, duties or obligations under this Agreement, except any
rights, duties, obligations or responsibilities expressly provided for in
this Agreement to survive the termination of this Agreement, and in the
event this Agreement is terminated after the expiration of the Due
Diligence Period, the Title Company shall promptly disburse the
Earnest Money to [Rexam]. Notwithstanding the foregoing, in the event
that the termination of this Agreement occurs as a result of a Party’s
-2-
misrepresentation, breach or failure to perform, the breaching Party
shall be obligated and responsible for any and all costs and expenses
(including reasonable attorney’s fees) incurred by the non-breaching
Party related to or connected with this Agreement.
Id. at 79.
In July 2010, G&C’s attorney sent a letter to Rexam’s attorney requesting that
the Agreement be mutually terminated and the earnest money released to G&C.
Rexam’s attorney rejected G&C’s request, however, claiming that the earnest money
was nonrefundable as a result of the expiration of the Due Diligence Period.
In September 2010, G&C filed a Petition in an Oklahoma state court, naming
both Rexam and Old Republic as defendants. G&C claimed that “[b]y virtue of the
July 27, 2010 letter of termination, the Agreement is terminated and the earnest
money should be returned to plaintiff.” Aplt. App. at 18. In its request for relief,
G&C therefore “pray[ed] that the . . . Agreement be deemed terminated, that plaintiff
be returned the earnest money of $100,000.00, [and] that defendant, Old Republic, be
ordered to return the earnest money to plaintiff.” Id. Importantly, G&C’s Petition
did not assert a claim for relief for misrepresentation, breach of contract, or failure to
perform. Rexam removed the case to federal court based on diversity of citizenship
and filed a counterclaim against G&C for breach of contract.
In January 2011, in response to a joint motion filed by the parties, the district
court entered an Order For Interpleader directing Old Republic to “deposit with the
Clerk of Court the sum of $100,000.00 less the amount of [Old Republic’s]
reasonable expenses agreed to by the parties.” Id. at 162. The order further stated
-3-
that, “upon notice to the Court of such payment, Defendant Old Republic . . . shall be
dismissed from this action.” Id.In February 2011, G&C filed a motion for summary judgment seeking a
determination that it was entitled to terminate the Agreement and to recover the
earnest money. Consistent with its initial Petition, G&C’s motion did not assert a
claim for relief for misrepresentation, breach of contract, or failure to perform. In
March 2011, Rexam filed a motion for partial summary judgment seeking a
determination that G&C had breached the Agreement.
On November 21, 2011, the district court entered an order granting G&C’s
motion for summary judgment and denying Rexam’s motion for partial summary
judgment. In its order, the court found that G&C had “properly exercised its
unconditional right of termination within the Due Diligence Period.” Id. at 158. The
court therefore determined that G&C was “entitled to summary judgment in its favor
and to payment of the escrow money.” Id. However, there were no findings in the
district court’s order to the effect that Rexam made a misrepresentation, committed a
breach, or failed to perform under the Agreement.
On November 22, 2011, Old Republic deposited the earnest money with the
district court. The total amount of the deposit was $94,035. In accordance with the
court’s Order for Interpleader, Old Republic deducted and retained $5,965 to
-4-
reimburse itself for the attorney’s fees it had incurred in this action.1 On November
28, 2011, the district court entered an order dismissing Old Republic from the case.
On November 30, 2011, G&C filed a Bill of Costs seeking to recover from
Rexam its litigation costs as a prevailing party under Fed. R. Civ. P. 54(d)(1) and
pursuant to Section 13.5 of the Agreement. The total amount of costs requested by
G&C was $6,218.19, and this amount included, as “other costs,” the $5,965 in
attorney’s fees that Old Republic had deducted from the interpleader fund. On
January 12, 2012, the clerk of the district court taxed costs against Rexam in the
amount of $253.10, but the clerk denied G&C’s request to tax the amount deducted
by Old Republic for its attorney’s fees.
On January 17, 2012, G&C filed a motion to review the clerk’s costs award,
seeking again to recover from Rexam the amount deducted by Old Republic for its
attorney’s fees. In addition to relying on federal law and Section 13.5 of the
Agreement, G&C also argued in its motion that it was entitled to recover the
deducted amount under Okla. Stat. tit. 12, § 2022(D). On August 13, 2012, the
district court entered an order denying G&C’s motion to review the costs award.
1
We note that the record on appeal does not contain any documentation
specifically showing that Old Republic incurred $5,965 in attorney’s fees in
defending itself in this case. However, Rexam has asserted both in the district court
proceedings and in this appeal that the $5,965 was retained by Old Republic as
reimbursement for its attorney’s fees, and G&C has not disputed this assertion. We
therefore assume, for purposes of this appeal, that the retained amount was
reimbursement for the attorney’s fees that Old Republic incurred in this case.
-5-
Meanwhile, back in December 2011, G&C had also filed a motion to recover
the attorney’s fees that it incurred in this case. G&C sought to recover $38,570 in
attorney’s fees from Rexam, arguing that it was entitled to recover its fees under
Section 13.5 of the Agreement. In August 2012, the district court entered an order
denying G&C’s motion for attorney’s fees. Specifically, the court concluded that
Section 13.5 of the Agreement provided for an award of attorney’s fees upon
termination of the Agreement only if the termination occurred as a result of a party’s
misrepresentation, breach, or failure to perform. Because the court did not find in its
summary judgment order that Rexam had committed any such act in connection with
the Agreement’s termination, the court held that G&C was not entitled to recover its
attorney’s fees under Section 13.5.
II. DISCUSSION
A. G&C’s Motion for Attorney’s Fees
This diversity case is governed by Oklahoma law, and “Oklahoma follows the
American rule concerning the recovery of attorney fees. It provides that each litigant
pay for legal representation and that courts are without authority to assess attorney
fees in the absence of a specific statute or contract.” Whitehorse v. Johnson, 156
P.3d 41, 47 (Okla. 2007). Because G&C is seeking to recover its attorney’s fees
under Section 13.5 of the Agreement, the American rule is not a bar to recovery.
Instead, G&C’s request for fees raises issues of contract interpretation. The
controlling legal principles under Oklahoma law are as follows:
-6-
If the terms of a contract are unambiguous, clear and consistent,
they are accepted in their plain and ordinary sense and the contract will
be enforced to carry out the intention of the parties as it existed at the
time it was negotiated. The interpretation of a contract, and whether it
is ambiguous is a matter of law for the Court to resolve.
Whitehorse, 156 P.3d at 47 (footnote omitted).
We review the district court’s legal conclusions concerning the provision for
attorney’s fees in Section 13.5 of the Agreement de novo. See Tulsa Litho Co. v. Tile
& Decorative Surfaces Magazine Pub., Inc., 69 F.3d 1041, 1043 (10th Cir. 1995).
Having conducted the required de novo review, we agree with the district court’s
analysis. We therefore adopt the following reasoning of the district court:
[I]n this case, the Court finds the contractual provision on which
Plaintiff relies to be clear and unambiguous. The Agreement expressly
provided that upon a termination according to its terms – without a
breach of contractual obligations by either party – the parties would
simply walk away, with no further rights or obligations other than those
specifically provided for in the Agreement. The express provision for
attorney fees obligated one party to bear the other party’s costs and
expenses only “[i]n the event that the termination of this Agreement
occurs as a result of a Party’s misrepresentation, breach or failure to
perform.” See Agreement, § 13.5. Despite Plaintiff’s attempt to
recharacterize its action at this late stage, Plaintiff did not assert prior to
judgment that Defendant breached the Agreement or failed to perform
it. Instead, Plaintiff sought and obtained an interpretation of the
Agreement and a judicial declaration of rights under it. The parties
simply had a legitimate dispute about whether Plaintiff had timely
exercised its termination right. Upon the Court’s determination in
Plaintiff’s favor, the Agreement was terminated according to its terms,
and each party must simply walk away.
Aplt. App. at 210-11.
We also reject the arguments advanced by G&C on appeal. First, G&C argues
that “Defendant would not allow Plaintiff to terminate the Agreement and reclaim its
-7-
earnest money. Plaintiff submits that this was a breach of the Agreement by
Defendant as it prevented Plaintiff [from] performing [its] rights on the contract.”
Aplt. Opening Br. at 9. We disagree. Section 13.5 of the Agreement unambiguously
provided that “in the event that the termination of this Agreement occurs as a result
of a Party’s . . . breach . . . , the breaching Party shall be obligated and responsible
for any . . . reasonable attorney’s fees . . . incurred by the non-breaching Party.”
Aplt. App. at 79 (emphasis added). Given this explicit language, the attorney’s fees
provision in Section 13.5 is limited to a breach that results in the termination of the
Agreement, and no such breach occurred here.
Second, G&C argues that it “had to defend against a [counterclaim] of breach
and the parties litigated a cause for breach. Therefore, the Court erred in when it
failed to consider these facts in determining whether attorney’s fees should be
awarded under the Agreement for breach of contract.” Aplt. Opening Br. at 11. This
argument is a nonsequitur. As Rexam points out, “the District Court’s denial of
Rexam’s Motion for Partial Summary Judgment was a determination that G&C had
not committed a breach, not that Rexam had.” Aplee. Br. at 15.
Third, G&C argues for the first time on appeal that it was entitled to an award
of attorney’s fees under Section 22 of the Agreement. However, “[a]bsent
extraordinary circumstances, we will not consider arguments raised for the first time
on appeal.” Koch v. City of Del City, 660 F.3d 1228, 1237 n.4 (10th Cir. 2011)
-8-
(internal quotation marks omitted). We see no such circumstances here, and we
therefore decline to consider Section 22 of the Agreement.
Finally, G&C argues that Rexam should be judicially estopped from opposing
its request for attorney’s fees because Rexam pled in its counterclaim that “[u]nder
the terms of the Agreement, the prevailing party in this action is entitled to recover
attorneys’ fees and costs.” Aplt. App. at 32. This argument is without merit. To be
entitled to judicial estoppel, G&C had to prove that the district court relied upon
Rexam’s representation to either grant relief to Rexam or to deny relief to G&C.
See Johnson v. Lindon City Corp., 405 F.3d 1065, 1069 (10th Cir. 2005). Neither of
these scenarios occurred in the district court proceedings.
B. G&C’s Motion to Review Costs Award
In its opening brief, G&C argues that it was entitled to recover from Rexam
the amount deducted by Old Republic for its attorney’s fees under Sections 13.5 and
22 of the Agreement and under Okla. Stat. tit. 12, § 2022(D). However, G&C’s
arguments under Sections 13.5 and 22 of the Agreement fail for the reasons
articulated above. The Oklahoma statute is also of no assistance to G&C. It provides
that, “[i]n cases of interpleader, costs may be adjudged for or against any party.”
Okla. Stat. tit. 12, § 2022(D). G&C has not made any attempt to explain how this
general provision allows a winning claimant in an interpleader action to recoup the
attorney’s fees awarded to the stakeholder from a losing claimant. Instead, G&C has
only argued, in conclusory fashion, that “Oklahoma law . . . provides for the recovery
-9-
of interpleader costs for or against any party.” Aplt. Opening Br. at 8-9 (citing
§ 2022(D)); see also id. at 13 (same). This is an inadequate appellate argument, and
we therefore refuse to consider it. See Adler v. Wal-Mart Stores, Inc., 144 F.3d 664,
679 (10th Cir. 1998) (“Arguments inadequately briefed in the opening brief are
waived . . . .”); Wilburn v. Mid-South Health Dev., Inc., 343 F.3d 1274, 1281 (10th
Cir. 2003) (“We . . . will not consider issues that are raised on appeal but not
adequately addressed.”).
The judgment of the district court is affirmed.
Entered for the Court
Mary Beck Briscoe
Chief Judge
- 10 -