Malin International Ship Repair & Drydock, Inc. v. Veolia Es Special Services, Inc.

Case: 09-30377 Document: 00511046141 Page: 1 Date Filed: 03/09/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
March 9, 2010
No. 09-30377 Charles R. Fulbruge III
Clerk
MALIN INTERNATIONAL SHIP REPAIR AND DRYDOCK, INC.,
Plaintiff - Appellee
v.
VEOLIA ES SPECIAL SERVICES, INC.,
Defendant - Appellant
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:08-CV-0110
Before KING, JOLLY, and STEWART, Circuit Judges.
PER CURIAM:*
Veolia Es Special Services, Inc. (“Veolia”) appeals the district court’s award
of attorney’s fees to Malin International Ship Repair and Drydock, Inc. (“Malin”)
For the reasons stated below, we affirm.
I. BACKGROUND
The facts that gave rise to this case are not in dispute. Veolia refused to
pay Malin over $1.2 million for work performed by Malin on Veolia’s vessel, the
Seim Swordfish MV. After performing the work requested, Malin remitted
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
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No. 09-30377
invoices for its work. These invoices included standard terms and conditions
that are found on all of Malin’s invoices, including a provision whereby Malin
would be entitled to recover its costs of collection, including reasonable
attorney’s fees.
After unsuccessful attempts to resolve the dispute regarding work
performed on the Seim Swordfish MV, Malin filed suit against Veolia. The
district court held two separate pretrial conferences in this matter. Following
each, the district court made minute entries, and neither provided that the
issues of entitlement to and quantum of attorney’s fees were to be bifurcated for
purposes of the trial. The parties also filed a joint pretrial order, approved by
the district court, that stated that “[t]he issue of liability will not be tried
separately from that of quantum.”
A two-day bench trial was held on February 12–13, 2009, and during trial
Malin failed to present evidence concerning the quantum of its attorney’s fees.
Following trial, the district court found in Malin’s favor and entered judgment,
on February 20, 2009, as to the principal amount owed, prejudgment interest,
and an entitlement to attorney’s fees. In a minute entry following the bench
trial, the court instructed Malin to submit a brief supporting the quantum of
attorney’s fees and gave Veolia fourteen days to file a response. Malin filed its
attorney’s fees brief on February 27, 2009, claiming $79,837.75.
Veolia responded by filing both a motion for a new trial on March 5, 2009,
arguing that Rule 54 precludes an attorney’s fees award, and a response to
Malin’s brief on March 13, 2009, urging again that Rule 54 precludes an award
of attorney’s fees to Malin and, alternatively, that Malin should not be awarded
the full amount of its claimed attorney’s fees. The district court awarded
attorney’s fees to Malin and denied Veolia’s motion for a new trial on April 14,
2009. The court entered judgment in favor of Malin for $79,837.75 in attorney’s
fees on April 16, 2009. This appeal followed.
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II. DISCUSSION
Rule 42(b) governs bifurcation and provides that “[f]or convenience, to
avoid prejudice, or to expedite and economize, the court may order a separate
trial of one or more separate issues, claims, crossclaims, counterclaims, or third-
party claims.” F ED. R. C IV. P. 42(b). We will overrule a district court’s decision
to order a severance only upon a showing that the district court abused its
discretion. See F.D.I.C. v. Selaiden Builders, Inc., 973 F.2d 1249, 1253 (citing
Fid. & Cas. Co. v. Mills, 319 F.2d 63 (5th Cir. 1963)). A district court may sever
a case upon its own motion. Mills, 319 F.2d at 63.
In the instant case, the district court acted within its discretion when it
bifurcated the issues of entitlement to and quantum of attorney’s fees. These
issues were clearly separable, since the issue of quantum would not come into
question unless the district court first found that Malin was in fact entitled to
attorney’s fees. For the purpose of judicial economy, the district court was
within its discretion to conclude that it would not hear evidence as to the
amount, if any, of attorney’s fees until it first determined entitlement since a
negative finding on entitlement would negate the need to hear evidence of
quantum.
Veolia argues that the quantum of attorney’s fees sought by Malin
constitutes an element of damages that it was required to prove at trial rather
than collaterally under Rule 54. See F ED. R. C IV. P. 54(d)(2)(A). Assuming
arguendo that Veolia is correct, this is a question that we need not address today
because the district court did not abuse its discretion by bifurcating quantum.
See Pride Hyundai, Inc. v. Chrysler Fin. Co., 355 F. Supp. 2d 600, 605-06 (D.R.I.
2005) (acknowledging that in the exercise of its broad discretion, the court could
have enacted a bifurcated procedure prior to trial, although the attorney’s fees
represented an element of damages that had to be proven at trial, but simply
chose not do so).
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Veolia also argues that the district court erred because it failed to formally
enter a bifurcation order into the record. In view of the pretrial order, it
certainly would have been preferable to enter such an order or to modify the
pretrial order. But ultimately, Veolia’s argument fails to carry the day. First,
while the pretrial order stated that liability and quantum would be tried
together and the district court never formally entered an order of bifurcation, in
the court’s Order and Reasons the court expressly noted that the parties were
informed of its intention to bifurcate the issues of entitlement to and quantum
of attorney’s fees. Second, Malin expressly indicated, in its pre-trial
memorandum, that only if the district court found an attorney’s fee award
appropriate would it submit invoices in support of such an award. Third, Veolia
does not argue that it was unaware that the attorney’s fees issue would be
handled at least in part through post-trial motion.
We are convinced that Veolia was aware of the district court’s bifurcation
of quantum. But even assuming that Veolia had no knowledge of the district
court’s bifurcation, Veolia must still prove that it was prejudiced in order to
show that the district court abused its discretion. See, e.g., O’Dell v. Hercules
Inc., 904 F.2d 1194, 1202 (8th Cir. 1990). Evidence of prejudice is lacking. After
Malin filed its motion for attorney’s fees, Veolia was given sufficient
opportunity—fourteen days—to review and challenge the quantum of attorney’s
fees claimed by Malin, and in fact did so. Further, Veolia did not request, in any
of its pleadings challenging Malin’s attorney’s fees, a hearing or extra time to
challenge the evidentiary predicate for Malin’s attorney’s fees claims. As such,
we cannot say that Veolia was prejudiced by the district court’s decision to
bifurcate quantum, and, accordingly, the district court did not abuse its
discretion in bifurcating. Even here, Veolia’s brief does not identify specific
problems with the district court’s finding on quantum, choosing instead (in an
all or nothing approach) to focus on whether quantum should have been proved
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up at trial and whether the district court erred in bifurcating liability and
quantum.
III. CONCLUSION
For the foregoing reasons, we affirm the district court’s judgment.
AFFIRMED.
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E. GRADY JOLLY, Circuit Judge, specially concurring:
I concur, but only for the following reason: the defendant did not preserve
its objection to the denial of its rightful claim under the pretrial order to have all
damages, including attorney’s fees, tried in the liability phase of the action
under the standards and rules applicable to that proceeding.
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