[PUBLISH]
IN THE UNITED STATES COURT
OF APPEALS
FOR THE ELEVENTH CIRCUIT
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Nos. 98-4455 and 98-4937
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D. C. Docket No. 95-8310-CV-DMM
COASTAL
FUELS MARKETING, INC.,
COASTAL
OFFSHORE FUELS, INC.,
Plaintiffs-Appellants,
versus
FLORIDA
EXPRESS SHIPPING CO., INC.,
Defendant-Appellee.
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No. 98-5108
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D. C. Docket No. 95-8310-CV-FJL
COASTAL
FUELS MARKETING, INC.,
COASTAL
OFFSHORE FUELS, INC.,
Plaintiffs-Counter-Defendants-
Appellees-Cross-Appellants,
versus
FLORIDA
EXPRESS SHIPPING CO., INC.,
Defendant-Counter-Claimant-
Appellant-Cross-Appellee,
SUNTRUST
BANK, MIAMI, N.A.,
Garnishee.
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No. 98-5188
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D. C. Docket No. 95-8310-CV-FJL
COASTAL
FUELS MARKETING, INC.,
COASTAL
OFFSHORE FUELS, INC.,
Plaintiffs-Counter-Defendants-
Appellees,
versus
FLORIDA
EXPRESS SHIPPING CO., INC.,
Defendant-Counter-Claimant-
Appellant.
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Appeals from the United
States District Court
for the Southern District
of Florida
----------------------------------------------------------------
(March
28, 2000)
Before
EDMONDSON and BARKETT, Circuit Judges, and COHILL*, Senior District
Judge.
PER
CURIAM:
This
appeal arises from a dispute about entitlement to insurance proceeds
and attorney's fees. We affirm the judgment except that, because
the court failed to determine whether the amount of attorney's
fees requested by Defendant Florida Express Shipping Co. ("Express")
for the work of its out-of-state counsel was reasonable, we must
vacate and remand on that issue.
_______________
*Honorable
Maurice B. Cohill, Jr., Senior U.S. District Judge for the Western
District of Pennsylvania, sitting by designation.
BACKGROUND
In 1993, Plaintiff, Coastal Fuels Marketing,
Inc. ("Coastal"), entered into a bareboat charter agreement
with Express to charter the MV Florida Express for four years.
In 1995, the MV Florida Express caught fire and was seriously
damaged while at sea. At the time of the fire, there was a $5,300,000
agreed value hull insurance policy covering the MV Florida Express.
The insurance proceeds were to be distributed according to the
terms of the bareboat charter. But, the parties disagreed on
which provisions of the bareboat charter were controlling and
whether the charter was ambiguous. Depending on how the charter
was interpreted, Coastal would or would not be entitled to approximately
$900,000 of the $5.3 million of proceeds.
Coastal
filed suit seeking a declaratory judgment that it was entitled
to the disputed funds. Express answered and claimed that it was
entitled to the disputed funds. Express also counterclaimed,
alleging that it (pursuant to the bareboat charter) was entitled
to additional charter hire payments. At trial, Coastal also sought
reimbursement from Express for certain items it claimed were
left on board the MV Express when the vessel was returned to
Express, sought contribution for amounts paid to settle a personal
injury suit arising out of the fire, and additionally claimed
that Express's acts deprived Coastal of its option to purchase
the MV Express. Pursuant to a court order, $1,650,000 of the
insurance proceeds were placed in escrow. The vessel was sold
for scrap.
The
parties consented to a bench trial before a magistrate judge
and a three-day trial was held. Following trial, the court declared
that Express was entitled to the disputed insurance proceeds
and also awarded Express $59,500 in charter hire. Coastal was
awarded $38, 897.32 as reimbursement for fuels and lubricants
that were left on board the vessel, but did not otherwise recover.
After
the court entered judgment, both parties claimed that, pursuant
to the charter agreement, they were entitled to attorney's fees.
Upon reviewing the motions and holding a telephone conference,
the court said that, because Express had "prevailed on most
of its claims filed in this action," Express was entitled
to attorney's fees and costs pursuant to the terms of the charter
agreement. Although Coastal was awarded money for the fuel and
lubricants that had been left on board the vessel, the court
denied its motion for fees and said that "[s]imply because
the Plaintiffs prevailed on a portion of their claim does not
make them prevailing parties nor does it negate this Court's
ability to find that the Defendant prevailed on most of its claims."
The court scheduled an evidentiary hearing on the "issue
of reasonableness of the fees and costs sought by the Defendant."
At
the evidentiary hearing, Express's lead counsel, Mr. Mariani,
and an attorney from his firm, Mr. Copeland, testified about
the number of hours spent on the case by the attorneys and paralegals
of their firm and their hourly rates. The court received into
evidence the billing summaries and invoices for Mariani's firm.
The court also heard expert testimony from both sides about the
reasonableness of Mariani's fee request. Mariani, Copeland and
the expert witness were subject to cross-examination by Plaintiff.
Express
also requested attorney's fees for work performed by Express's
out-of-state counsel, Cadwalader, Wickersham & Taft. No Cadwalader
attorney was present at the hearing. Mr. Mariani, as lead counsel
in the case, attempted to testify about Cadwalader's fees. The
court, however, did not allow Mr. Mariani to testify about the
bills submitted by Cadwalader. The court did receive into evidence
Cadwalader's billing summaries.
The
court also heard, from both sides, expert testimony about the
reasonableness of Cadwalader's fee request. Express's expert's
testimony was based on a review of the billing records and on
an interview of Cadwalader's billing partner on the case. Express's
expert was subject to cross-examination on these matters.
In
its order on attorney's fees, the court awarded Express $130,036.50
for its local counsel's fees. The court also said that, because
no Cadwalader representative had appeared at the evidentiary
hearing, Plaintiff was prevented from cross-examining or inquiring
into the reasonableness of the fees charged and the tasks performed
by Cadwalader. The court noted that it had scheduled the hearing
to receive all evidence on the reasonableness of the fees and
costs sought by defendant; the court then concluded that Cadwalader
had failed to present sufficient evidence at the hearing about
the amounts sought. Therefore, the court decided that no fees
or costs attributable to Cadwalader were recoverable against
Plaintiff. The court made no specific findings about the reasonableness
or unreasonableness of Cadwalader's billings.
DISCUSSION
We review the court's findings of fact for
clear error and the conclusions of law de
novo. See
Worthington v. United States, 21 F.3d 399, 400 (11th Cir.
1994). We review the decision to grant or deny attorney's fees
for an abuse of discretion. See
United States v. Gilbert, 198 F.3d 1293, 1298 (11th Cir.
1999).
On appeal, Plaintiff argues that the court
erred in interpreting the bareboat charter, in excluding Coastal's
expert witness, and in determining that Express was entitled
to the disputed funds and additional charter hire. We have reviewed
the record and the court's findings of fact and conclusions of
law; we see no reversible error. Therefore, we affirm without
further discussion the court's determination that Express is
entitled to the disputed insurance proceeds and that Express
is entitled to additional charter hire in the amount of $59,500.
The remaining issues concern the court's treatment of Express's
claim that it was entitled to attorney's fees.
I. Express's
Entitlement to Fees
Because
this case involves the interpretation and construction of a bareboat
charter agreement, this case arises in admiralty; and we apply
the general maritime law. SeeSea
Lane Bahamas, Ltd. v. Europa Cruises Corp., 188 F.3d 1317,
1320 (11th Cir. 1999); Atlantic
Lines, Ltd. v. Narwhal, Ltd., 514 F.2d 726, 731 (5th Cir.
1975). A party is not entitled to attorney's fees in an admiralty
case unless fees are statutorily or contractually authorized. See
Galveston County Navigation Dist. v. Hopson Towing Co.,
92 F.3d 353, 356 (5th Cir. 1996). In this case, a specific contractual
provision allows for the recovery of attorney's fees as damages
for breach of the charter. Paragraph 35 of the charter said:
"Damages for breach of this Charter shall include all provable
damages, and all reasonable costs, disbursements and attorney's
fees incurred by the Owner or the Charterer in any action or
proceeding to enforce any rights under this Charter."
Coastal
argues that the court erred in finding that Express was entitled
to attorney's fees. Coastal contends that, because it recovered
$39,897.32 for lubricants and fuel, the court erred when it concluded
that Express was the prevailing party. Put differently, Coastal
argues that, because both parties partially prevailed, neither
party was entitled to attorney's fees.
Express
argues that not only did it prevail on its claim for charter
hire, it also prevailed on the central issue in the litigation:
who was entitled to the disputed insurance proceeds. And, Express
points out that, even though Coastal recovered some money for
lubricants and fuel left on board the vessel, it did not have
a net recovery. Citing Florida case law, Express argues that
it was the prevailing party and that it was therefore entitled
to attorney's fees under the charter agreement.
General
maritime law is federal law. See
World Tanker Carriers Corp. v. MV Ya Mawlaya, 99 F.3d
717, 723 (5th Cir. 1996). But, when neither statutory nor judicially
created maritime principles provide an answer to a specific legal
question, courts may apply state law provided that the application
of state law does not frustrate national interests in having
uniformity in admiralty law. See
Steelmet, Inc. v. Caribe Towing Corp., 779 F.2d 1485,
1488 (11th Cir. 1986) ("One must identify the state law
involved and determine whether there is an admiralty principle
with which the state law conflicts, and, if there is no such
admiralty principle, consideration must be given to whether such
an admiralty rule should be fashioned. If none is to be fashioned,
the state rule should be followed."); Palestina
v. Fernandez, 701 F.2d 438, 439 (5th Cir. 1983)("[W]here
there is no uniform federal rule, 'even though admiralty suits
are governed by federal substantive and procedural law, courts
applying maritime law may adopt state law by express or implied
reference or by virtue of the interstitial nature of federal
law.'")(quoting Baggett
v. Richardson, 473 F.2d 863, 864 (5th Cir. 1973)); see
also Wilburn Boat Co. v. Fireman's Fund Ins. Co., 75 S.
Ct. 368 (1955); Aasma
v. American S.S. Owners Mut. Protection and Indem. Ass'n,
95 F.3d 400 (6th Cir. 1996).
As
applied to this case, the parties do not cite to -- and we have
not found -- federal statutes or general maritime cases which
provide an answer to the question of whether Coastal's victory
on its claim for fuel and lubricants precludes Express from being
held entitled to an award of attorney's fees under the contract.
Express, however, cites to Florida cases for the proposition
that the party entitled to attorney's fees pursuant to the terms
of a contractual provision is the party who has won on the "significant
issues in the litigation." Moritz
v. Hoyt Enters., Inc., 604 So. 2d 807, 810 (Fla. 1992)
("[T]he fairest test to determine who is the prevailing
party is to allow the trial judge to determine from the record
which party has in fact prevailed on the significant issues tried
before the court."). And, whether a party received a "net
judgment," while not the determinative factor, is a significant
factor in determining whether a party "prevailed." See
Prosperi v. Code, Inc., 626 So. 2d 1360, 1363 (Fla. 1993).
We
think that this issue is not the kind of issue that calls for
us to create a uniform national rule in admiralty. This case
is not one which affects the "interests concerned with shipping
in its national and international aspects." See
Wilburn, 75 S. Ct. at 375 (Frankfurter, J. concurring).
This case concerns attorney's fees and whether the contractual
provision which provides for attorney's fees should be construed
to allow the party that was successful on all but one minor issue
to recover attorney's fees. Nothing particularly maritime in
nature sticks out about this issue, see
AASMA, 95 F.3d at 404, so we look to Florida law for guidance. (1)
The court said that it found Express
to be entitled to fees because Express had "prevailed on
most of its claims filed in this action." Upon the completion
of the litigation, Express was declared entitled to disputed
funds in the amount of $1,650,000 and was also entitled to $59,500
in additional charter hire. Plaintiff was only held entitled
to $38,897.32 for fuels and lubricants that had been left on
board the vessel. Express clearly prevailed on the significant
issue tried before the court, and the court's decision to award
Express attorney's fees was no error. See
Moritz, 604 So. 2d at 810.
II. Express's
Fee Award
On cross appeal, Express raises
this issue: whether the court erred in not determining whether
Express's attorney's fees request for its out-of-state counsel,
Cadwalader, was reasonable and in summarily rejecting the fee
request because Cadwalader had sent no representative to testify
at the evidentiary hearing.
We review an award of attorney's
fees for an abuse of discretion. See
American Civil Liberties Union of Georgia v. Barnes, 168
F.3d 423, 427 (11th Cir. 1999). "An abuse of discretion
occurs if the judge fails to apply the proper legal standard
or to follow proper procedures in making the determination or
bases an award [or a denial] upon findings of fact that are clearly
erroneous." United
States v. Gilbert, 198 F.3d 1293, 1298 (11th Cir. 1999).
On these facts, we believe that discretion was abused.
We have previously said that a fee
applicant bears the burden of establishing entitlement and of
documenting the appropriate hours and hourly rates. See
Norman v. Housing Authority of the City of Montgomery,
836 F.2d 1292, 1303 (11th Cir. 1988). We have also noted that
courts are often faced with fee applications that are not well-prepared
which are sometimes supported by opinions on reasonableness. See
id. In those circumstances, the court "is itself
an expert on the question and may consider its own knowledge
and experience concerning reasonable and proper fees and may
form an independent judgment either with or without the aid of
witnesses as to value." Id.
Therefore, where documentation or testimonial support is lacking,
the court may make the award on its own experience. See
id. Moreover, we have said that a court's order on attorney's
fees must allow meaningful appellate review. The trial court
should articulate and give principled reasons for its decisions
and show some calculations. If the court disallows hours, it
must explain which hours are disallowed and show why an award
of those hours would be improper. Id.
at 1304.
In this case, Express submitted
billing records in support of its fee application for both its
local and its out-of-state counsel. Express's expert had reviewed
the billing records of both firms, had interviewed both billing
partners, and testified about the reasonableness of the fee requests.
Express's expert was cross-examined by Coastal on those matters.
And, Coastal's expert had reviewed the billing records of both
firms and testified on the reasonableness of the fee request.
The only difference in the evidence
presented between the fee request that was allowed (Express's
fee request for its local counsel's fees) and the fee request
that was denied in its entirety (Express's fee request for Cadwalader's
fees) was that in the former there was testimony by members of
the firm about what they had worked on in the case. In the latter,
there was no testimony by a member of the Cadwalader firm.
The issue thus becomes whether just
Cadwalader's failure to send a representative to testify at the
evidentiary hearing on fees precludes the award of any fees where
it is undisputed that Cadwalader had performed work on this case,
Cadwalader had submitted its billing records to the court, and
expert testimony (which had been subjected to cross-examination)
had been presented about the reasonableness of the fees. The
answer is "no."
We do not want attorney's fees proceedings
to be full trials. In this case, the evidence available to the
court was sufficient for the court to have used its own expertise
to assess the reasonableness of the fee request and to award
some fees. It was an abuse of discretion to disallow altogether
Express's request for Cadwalader's attorney's fees just because
Cadwalader did not send a member to the hearing.
We do not intend to discourage a
court from scheduling an evidentiary hearing where appropriate.
To the extent that the absence of certain testimony about a firm's
billing records means that specific questions the court might
have go unanswered, that is a factor which a court may use in
determining whether certain amounts requested were unreasonable.
But, in the circumstances of this case, a firm's failure to send
a member is, in itself, an insufficient reason to disallow completely
a fee request. We must vacate the court's decision on this issue
and remand with instructions that the court determine whether
the amount of fees requested by Express for the services of Cadwalader,
Wickersham, & Taft, were reasonable.
For the reasons stated herein, the
judgment below is affirmed except that we vacate and remand for
a determination about the reasonableness of the fee request.
AFFIRMED IN PART, VACATED AND
REMANDED IN PART.
FOOTNOTES
1. This
course is particularly appropriate here: the parties agreed in
their pretrial statement that both Florida law and general maritime
law would apply. Also, in their briefs, both parties rely upon
Florida law and do not contend that some other state law should
apply.
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