Kawasaki Kisen Kaisha v. All City Used Auto Parts

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 08-14742 January 6, 2009
Non-Argument Calendar THOMAS K. KAHN
________________________ CLERK
D.C. Docket No. 07-00086-CV-J-20-MCR
KAWASAKI KISEN KAISHA, LTD.,
Plaintiff-Appellant,
versus
ALL CITY USED AUTO PARTS, INC.,
a foreign corporation, in personam,
Defendant-Cross Claimant-
Cross Defendant-Appellee,
SKYLINE TRADING, INC.,
a foreign corporation, in personam,
Defendant-Cross Defendant-
Cross Claimant-Appellee,
LIPMAN MODEL 227 1 b (ONE), etc., et al.,
Defendants.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(January 6, 2009)
Before BARKETT, PRYOR and COX, Circuit Judges.
PER CURIAM:
Kawasaki Kisen Kaisha, Ltd. (“Kawasaki”) appeals the district court’s order
denying Kawasaki’s motion for attorneys’ fees. Kawasaki’s original complaint was
filed in February 2007 and alleged federal subject matter jurisdiction based on 28
U.S.C. § 1332 (diversity jurisdiction), § 1333 (admiralty jurisdiction), and
Supplemental Rule B for Certain Admiralty and Maritime Claims. (R.1-1 ¶2.) In
Count I, the original complaint alleged that Defendants All City Used Auto Parts, Inc.
(“All City”) and Skyline Trading, Inc. (“Skyline”) asserted competing claims to
equipment that was in Kawasaki’s possession. Count I pled a claim for interpleader,
pursuant to Federal Rule of Civil Procedure 22, against these Defendants and sought
payment from these same Defendants for the costs of return freight, demurrage, care,
storage, and preservation of the equipment as well as costs and attorneys’ fees
incurred in the lawsuit. (R.1-1 at 2-6.) Count II of the original complaint sought
payment in quantum meruit from these same Defendants for the costs of return
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freight, demurrage, care, storage, and preservation of the equipment. (R.1-1 at 6-7.)
Count III requested that, pursuant to Rule B of the Supplemental Rules for Certain
Admiralty and Maritime Claims, the court issue Process of Maritime Attachment and
Garnishment, “attaching all of the Defendants’ tangible and intangible property,
goods, chattels and credits within the District and particularly the Equipment,” up to
the amount of the costs of return freight. (R.1-1 at 8.)
During the following months, Kawasaki’s claims for return freight were settled.
In August 2007, Kawasaki sought and received leave of the court to file an amended
complaint. The amended complaint pled two claims. As in the original complaint,
Count I of the amended complaint stated a claim for interpleader, pursuant to Federal
Rule of Civil Procedure 22. Count I of the amended complaint sought costs of the
care, storage, or preservation of the equipment and Kawasaki’s costs and attorneys’
fees incurred in bringing the lawsuit. The amended complaint alleged that
jurisdiction over Count I was based upon 28 U.S.C. §§ 1332 and 1333. (R.1-37 at 2-
5.) Count II of the amended complaint pled interpleader, pursuant to 28 U.S.C. §
1335. That statute provides an independent basis for federal subject matter
jurisdiction. Count II of the amended complaint also sought costs of the care, storage,
or preservation of the equipment and Kawasaki’s costs and attorneys’ fees incurred
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in bringing the lawsuit. The amended complaint did not seek any admiralty or
maritime remedy.
Because it was later determined that the amount in controversy was insufficient
to support jurisdiction under 28 U.S.C. §1332 or § 1333, Kawasaki did not pursue
Count I of the amended complaint. The district court granted Kawasaki’s motion for
interpleader on Count II of its amended complaint, the statutory interpleader claim.
(R.3-89.)
Kawasaki then moved for attorneys’ fees and costs. In its order denying the
motion, the district court acknowledged that “Generally, attorney’s fees are justified
in interpleader actions as the action itself yields a cost-efficient resolution of a dispute
in a single forum, rather than having the parties litigate the same issues piecemeal.”
(R.3-119 at 2.) But, the district court stated, “Notwithstanding this general rule, the
Court cannot overlook the fact that this action is an admiralty case, which requires
this Court, absent an act of Congress, to apply established maritime law. In this
Circuit, it is well established that attorney’s fees are generally not awarded in
admiralty cases.” (R.3-119 at 2.) (citations omitted.)
We review district court decisions regarding awards of attorneys’ fees for abuse
of discretion. Atlanta Journal and Constitution v. City of Atlanta Dep’t of Aviation,
442 F.3d 1283, 1287 (11th Cir. 2006). “‘A district court abuses its discretion if it
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applies an incorrect legal standard, follows improper procedures in making the
determination, or makes findings of fact that are clearly erroneous.’” Klay v. United
Healthgroup, Inc., 376 F.3d 1092, 1096 (11th Cir. 2004) (quoting Martin v.
Automobili Lamborghini Exclusive, Inc., 307 F.3d 1332, 1336 (11th Cir. 2002)). “A
district court may also abuse its discretion by applying the law in an unreasonable or
incorrect manner.” Id. (citing Woodard v. Fanboy, L.L.C., 298 F.3d 1261, 1268 n.14
(11th Cir. 2002)).
After review of the record, we conclude that the district court erred in finding
that this is an admiralty case and thus abused its discretion in denying Kawasaki’s
motion for attorney’s fees. The only claim resolved in this case was for statutory
interpleader pursuant to 28 U.S.C. § 1335. Neither the district court’s jurisdiction nor
the merits of that claim depend in any way on admiralty law. Thus, Kawasaki’s
motion for attorney’s fees should have been considered under the rule that attorney’s
fees generally are justified in interpleader actions. See In re Mandalay Shores Co-Op
Housing Ass’n, 21 F.3d 380, 383 (11th Cir. 1994).
The order denying an award of attorneys’ fees is vacated and the case is
remanded to the district court. The district court should reconsider Kawasaki’s
motion and make a determination as to the amount of attorneys’ fees, if any, that
Kawasaki is due under the general rule for statutory interpleader actions.
VACATED AND REMANDED.
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