Trugreen Companies, LLC v. Mower Bros.

FILED
United States Court of Appeals
Tenth Circuit
July 2, 2014
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
TRUGREEN COMPANIES, LLC, a
Delaware limited liability company;
TRUGREEN LIMITED
PARTNERSHIP, a Delaware limited
partnership,
Plaintiffs - Appellees,
v. No. 13-4105
(D.C. No. 1:06-CV-00024-BSJ)
MOWER BROTHERS, INC., a Utah (D. Utah)
corporation; KEVIN D. BITTON,
d/b/a Scotts Lawn Service, a Utah
entity; GREENSIDE, LLC, a Utah
limited liability company; KEVIN D.
BITTON; JEAN ROBERT BABILIS;
RYAN MANTZ; JASON HILLER;
LARY GAYTHWAITE; JIM
LEBLANC; JAMES CLOGSTON;
RICK DEERFIELD; DAVID
STEPHENSEN; DAVID VAN
ACKER; MATT WALKER;
SHANNON CHRISTENSEN; PAUL
BROWER; JAMES MURRAY;
RICHARD COFFMAN; TAMMY
ROEHR; JESSICA SPENCER;
MARGIE SMITH; ALFREDA
EGBERT; JASON BECK,
individually,
Defendants - Appellants.
ORDER AND JUDGMENT *
*
This order and judgment is not binding precedent except under the
(continued...)
Before HARTZ, EBEL, and GORSUCH, Circuit Judges.
Back in 2006 TruGreen managers felt betrayed when a handful of
employees left to work for a rival lawn care company. TruGreen sued, charging
its former employees with breaching their employment contracts. In the end, the
company lost that claim and the victorious former employees — some based in
Idaho, others in Utah — asked the court to order the company to pay their
attorney fees and expenses. As these things go, the parties managed to consume
as many years litigating that collateral question as they had the merits. When the
dust finally settled, the district court decided to award $14,822 in fees to the
Idaho defendants but nothing to the Utah employees. Now the employees ask us
to overturn that decision and return the case to the district court for still more
proceedings. That much we find we cannot lawfully do.
We begin with the Utah employees’ argument that the district court
should’ve awarded them attorney fees and expert expenses. The argument runs
this way. Under the parties’ employment contract, TruGreen retained the right to
seek “reimburse[ment]” from its employees for “all attorneys’ fees and costs
*
(...continued)
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.
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incurred by [the company] in enforcing any of its [contractual] rights or
remedies.” As written, of course, this provision benefitted only the company and
not the employees. But as the employees rightly note, Utah’s reciprocal fee
statute turns the parties’ contract from a one-way into a two-way street. Under
the statute, both parties receive the benefit of any fee- and cost-shifting provision
appearing in their contract — transforming patently one-sided deals like
TruGreen’s into bilateral ones instead. See Utah Code Ann. § 78B-5-826 (2012);
Giusti v. Sterling Wentworth Corp., 201 P.3d 966, 980-81 (Utah 2009). In this
way, the Utah employees submit, they were entitled to their attorney fees and
expert costs and the district court erred by failing to recognize as much.
The problem the employees face is this. Utah’s statute ensures only that
both sides receive the benefit of a contractual fee-shifting provision — beyond
guaranteeing reciprocity, the law doesn’t create any new rights. In other words,
each party’s right to recover is the inverse of the other’s, no more and no less.
See, e.g., PC Crane Serv., LLC v. McQueen Masonry, Inc., 273 P.3d 396, 407-08
(Utah Ct. App. 2012); Hooban v. Unicity Int’l, Inc., 285 P.3d 766, 768 (Utah
2012). And, as the district court explained, reading the contract at issue in this
way still doesn’t help the employees’ cause. By its plain terms, the contract
allows only reimbursement of fees and costs incurred. Meanwhile, under a deal
the employees penned with their new employer, that company assumed sole
liability for all of the employees’ litigation fees and costs. So it is that, as a
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matter of plain language, the employees have incurred no fees or costs in this
litigation — the bills in this case do not “run, flow, fall . . . devolve [or] accrue”
to them but to someone else entirely. VII The Oxford English Dictionary 834-35
(2d ed. 1989). And there is, quite literally, nothing to reimburse them for —
nothing to “return to their purse.” See The Concise Oxford Dictionary of English
Etymology 396 (T.F. Hoad ed., 1986). Utah’s statute gives the employees the
same rights TruGreen has under the contract, but those rights don’t provide a
windfall recovery to one side or another that just happens to be equal to fees and
expenses someone else alone must pay.
Having said that much, we pause to emphasize what we have not said and
do not say. We don’t address the situation where a party remains legally liable
for fees and costs even though someone else pays them. Neither do we address
the situation where a party parts with consideration so that someone else (say, an
insurer) will assume responsibility for litigation expenses. In those situations, we
can imagine arguments that the party in question could still be “reimbursed” for
fees and costs it “incurred.” But we don’t have to pass (and do not pass) on any
of that in this case. In this case the employees are liable for nothing and —
whether they might have been able to do so — they do not contend they parted
with any consideration. In those circumstances alone, we agree with the district
court that, as a matter of plain language, there are no “incurred” fees to be
“reimbursed.”
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To be sure, the employees argue that a handful of cases compel a different
result. Most prominently, they rely on Centennial Archaeology, Inc. v. AECOM,
Inc., 688 F.3d 673 (10th Cir. 2012), interpreting Fed. R. Civ. P. 37(a)(5)(A), and
Blum v. Stenson, 465 U.S. 886 (1984), and Blanchard v. Bergeron, 489 U.S. 87(1989), both cases dealing with 42 U.S.C. § 1988. The employees stress that
these cases did not require prevailing parties to pay any fees before becoming
entitled to a fee recovery, even though the word “incurred” appears in the text of
both Rule 37 and § 1988 just as it does in their contract.
But the teachings of other cases about other statutes and rules do not —
without more — necessarily dictate the proper interpretation of the parties’
contract. In reaching the results they did, these other cases relied heavily on the
particular linguistic context in which the word “incurred” appeared, as well as the
animating purpose of the statute or rule at hand. And a good deal of that analysis
is simply inapt here. For example, one might make a plausible case that Rule
37’s sanctions provisions and the civil rights statutes embody a punitive policy —
an intent to punish the wrongdoer — that warrants an especially broad reading of
their terms. But it’s hard to see why we should impute a parallel policy to a
routine employment contract. Certainly the employees have presented no
persuasive argument for doing so.
Confirming our conclusion on this score is the care with which the
employees have (cherry) picked their cases. The employees point to cases
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holding that the word “incur” — when read in context of the full statute or rule at
issue — permits fee shifting even before a party has paid a fee. But plenty of
other statutes containing the terms “reimburse” and “incur” have been interpreted
as requiring the party who seeks fees to have a legal obligation to pay. And
though each statute, rule, or contract must be interpreted according to its own
terms, surely the combination of both “reimburse” and “incur” — present in our
contract, as in these other contexts — does more than one term might do alone to
suggest that something must come out of a party’s pocket before it can be
returned there. See, e.g., In re Espy, 338 F.3d 1036, 1038-39 (D.C. Cir. 2003)
(interpreting 28 U.S.C. § 593(f)(1)); Wisconsin v. Hotline Indus., Inc., 236 F.3d
363, 367 (7th Cir. 2000) (interpreting 28 U.S.C. § 1447(c)).
For their part, the Idaho employees lodge a different sort of complaint.
While the Utah employees must rest their appeal on the parties’ contract and
Utah’s reciprocal fee statute, the Idaho employees enjoy the benefit of a state
statute entitling them to a “reasonable” fee award. See Idaho Code Ann. § 12-
120(3). On this much everyone before us agrees — and for its part the district
court agreed as well to award the Idaho employees $14,822 in fees.
The Idaho employees say this award amounts to an abuse of discretion
because their defense cost a good deal more. They point to the fact that the
attorneys representing the Utah and Idaho employees collectively charged their
new employer hundreds of thousands of dollars in fees. But however this might
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be, when it came time to submit their fee application to the district court the
Idaho employees segregated out only $14,822 as pertaining to their defense. It’s
clear from the record, too, that the Idaho employees were well aware that their fee
application stood in a different and arguably more favorable legal posture than the
Utah employees’ — that they might recover and the Utah employees might not —
and thus had every incentive to clarify the full amount of fees they thought
attributable to their defense. Despite this, the Idaho employees offered the
district court no methodology for allocating more fees and costs to them. And
given that, we can hardly say the district court abused its discretion in issuing the
award it did. Cf. United States v. Fields, 516 F.3d 923, 950 (10th Cir. 2008)
(finding no abuse of discretion when party complains that the district court
declined to take a course of action that it never proposed).
Neither are we convinced that the district court abused its discretion in
declining to award more expenses under the separate terms of Idaho R. Civ. P.
54(d)(1)(D). That provision allows fee shifting only in “exceptional”
circumstances. Before the district court, the plaintiffs made no effort to show
their case met this high standard. And though they make the attempt in this court,
that effort comes too late. See Schrock v. Wyeth, Inc., 727 F.3d 1273, 1284 (10th
Cir. 2013) (holding similar argument waived).
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The judgment of the district court is affirmed. Because they have not
prevailed on any aspect of this appeal, the appellants’ request for their appellate
fees is denied.
ENTERED FOR THE COURT
Neil M. Gorsuch
Circuit Judge
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