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Odilon Costa, A Foreign National v. Datapro

February 22, 2012



This matter is before the Court on Defendant Datapro, Inc.'s Motion for Attorney's Fees (DE 139). Datapro requests $324,804.25 in attorney's fees. United States District Judge Donald L. Graham referred all motions for attorney's fees to the Undersigned (DE 26) and the parties consented to final disposition of attorney's fees motions by a magistrate judge on November 12, 2010 (DE 17).

Datapro attempted to confer with Plaintiff Odilon Costa before filing its motion, and it mailed a copy of the motion via U.S. mail to Costa in Brazil on September 27, 2011. However, Costa ceased participating in this case months ago and did not respond to the motion. The Undersigned carefully reviewed the motion, the pertinent portions of the record, and the application law. The motion will be granted in part and denied in part,as set forth below.

I. Procedural Background

Costa sued Datapro Inc. in September 2010, asserting common law claims for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment and promissory estoppel. Costa's claims were based on an oral agreement between Costa and Datapro. Datapro moved to dismiss Costa's complaint for failure to meet the jurisdictional amount for a diversity action and failure to state a claim. The district court denied the motion to dismiss but granted Datapro's motion to strike Costa's claim for attorney's fees because Costa failed to allege a statutory or contractual basis for the claim.

Datapro then counterclaimed against Costa for breach of contract, breach of fiduciary duty, violation of Florida's Uniform Trade Secrets Act (FUTSA) and trademark infringement under the Lanham Act. Datapro twice amended its counterclaim to include additional Lanham Act violations and claims for tortious interference with a business relationship. Counts II, III, and IV of Datapro's second amended counterclaim respectively alleged causes of action for trademark, service mark, and trade dress infringement against Costa under the Lanham Act.

At the crux of Datpro's counterclaims was its "e-IBS" software, which Costa secretly sold to a Brazilian bank, Banco Nossa Caixa, without Datapro's permission. Judge Graham recently found that:

Costa, secretly and behind Datapro's back, used Datapro's service mark, trade dress, registered "e-IBS" trademark, and trade secret to engage in self-dealing. Costa intended to, and did, (a) confuse and mislead Datapro's clients into associating the Costa Entity with Datapro, and (b) led Datapro's clients and customers into believing that Costa and his entity had the authority to license the "e-IBS" Software. (DE 144, ¶ 9).

This case was never tried on the merits, however. Because of Costa's systematic obstruction of the discovery process, I recommended that Judge Graham strike Costa's answer and affirmative defenses, bar Costa from submitting any new defenses and enter judgment for Datapro on the issue of liability. (DE 123, at 19-20). Judge Graham adopted this recommendation and in addition dismissed Costa's affirmative claims with prejudice because Costa failed to appear at the pretrial conference, did not respond to opposing counsel's attempts to prepare a joint pretrial stipulation and ultimately stopped participating in this case altogether.

Judge Graham then directed Datapro to file a motion for summary judgment on the issue of damages. On February 15, 2012, Judge Graham granted in part Datapro's motion for final judgment, which included a request for tremble damages. Judge Graham entered a final judgment, awarding Datapro $1,579,455.94 in damages against Costa, but declined to award treble damages.

As stated above, Costa ceased participating in this case and did not respond to the instant attorney's fees motion. The motion is now ripe for adjudication.*fn1

II. Entitlement to Attorney's Fees

Under the "American rule," parties are presumed to bear their own fees and costs unless a statute or contract supports an independent claim to attorney's fees and costs. See Travelers Cas. & Sur. Co. of Am. v. PG&E, 549 U.S. 443, 448 (2007). If the court determines that a party is entitled to an award of attorney's fees, then it must determine the appropriate amount of the fee award. In calculating a reasonable attorney's fee award, the court must consider the number of hours reasonably expended on the litigation, together with the customary fee charged in this community for similar legal services. See Hensley v. Eckerhart, 461 U.S. 424 (1983); Loranger v. Stierheim, 10 F.3d 776 (11th Cir. 1994). These two figures are then multiplied together, resulting in a sum commonly referred to as the "lodestar."

Datapro advances four bases for attorney's fees: (1) Federal Rule of Civil Procedure 37(b)(2)(C); (2) 15 U.S.C. § 1117(b); (3) 15 U.S.C. § 1117(a); and (4) Fla. Stat. § 688.005. Datapro argues that the entry of a default judgment against Costa causes all well-pleaded allegations in the complaint to be admitted as true and that those allegations clearly meet the threshold for entitlement to fees under the respective Lanham Act and FUTSA provisions. See Tyco Fire & Sec., LLC v. Alcocer, 218 F App'x 860, 863 (11th Cir. 2007) (entry of default causes all well-pleaded allegations in the complaint to be admitted as true); Rio Props., Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1023 (9th Cir. 2002) (justifying attorney's fee award under Lanham Act where the defendant was in default and the complaint alleged that the defendant acted "knowingly, maliciously, and oppressively").

Datapro appears to have overlooked that the Undersigned's sanctions recommendation, which Judge Graham adopted in its entirety, fell short of entering a default judgment against Costa and limited judgment to the issue of liability. (DE 123, at 19-20 & n.3). In this vein, Judge Graham made independent factual findings in determining the appropriate level ...

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