United States District Court, S.D. Florida
BLOOM UNITED STATES DISTRICT JUDGE.
CAUSE is before the Court upon Defendant Sunny
Kapoor's Motion for Fees and Costs (“Kapoor's
Motion for Fees and Costs”), ECF No. ,
Circuitronix, LLC's Motion for Attorneys' Fees and
Non-Taxable Expenses and Costs (“Circuitronix's
Motion for Fees and Costs”), ECF No. , Sunny
Kapoor's Application for Appellate Attorneys' Fees
(“Kapoor's Application for Appellate Fees”),
ECF No. [156-1], and Defendant Sunny Kapoor's Motion for
Attorneys' Fees incurred in connection with
Circuitronix's Motion for Relief from Final Order under
Rule 60(b), ECF No.  (collectively referred to as the
“Motions”). The Court previously referred the
Motions to the Honorable Alicia O. Valle, United States
Magistrate Judge, for a Report and Recommendation, ECF Nos.
, , .
April 12, 2019, Judge Valle issued a Report and
Recommendation (the “Report”), recommending that
the Motions be denied. See Report, ECF No. .
The Report advised the parties that objections to the Report
must be filed within fourteen days. Id. at 17-18.
Both parties timely filed objections to Judge Valle's
Report. See ECF Nos. , . Kapoor filed a
response to Circuitronix's objection. See ECF
underlying facts of the instant action stem from an
employment dispute between Circuitronix and Kapoor, a former
employee of the company. ECF No.  at 2. Following
Kapoor's termination in 2015, Circuitronix filed suit
against him, asserting claims for the improper dissemination
of Circuitronix's proprietary information, self-dealing,
and other alleged breaches of employment agreements.
Id. In response to Circuitronix's claims, Kapoor
filed a counterclaim against Circuitronix and its CEO,
asserting claims for breach of employment contract, unlawful
retaliation, civil theft, and unpaid wages. Id. In
December of 2015, the parties entered into a settlement
agreement, which was subsequently approved by the Court. ECF
December 30, 2015, Circuitronix filed its first motion for
enforcement of the Settlement Agreement, claiming that Kapoor
was competing directly with Circuitronix through work he was
performing at the time for Bawa Machine and Tool
Manufacturing (“BMTM”). See ECF No.
. That motion was resolved when the parties filed a Joint
Stipulation on January 22, 2016, which specifically provided,
inter alia, that “[p]ursuant to the
Parties' Settlement Agreement, Kapoor shall not, directly
or indirectly, engage in any line of Circuitronix's
business, including within the scope of his work with
[BMTM].” ECF No. . The Joint Stipulation also
identified certain metal parts that Kapoor's work with
BMTM did not involve. See Id. at 2 n.1.
September 9, 2016, Kapoor filed a Motion to Enforce the
Settlement Agreement. See ECF No. . Kapoor filed
the motion in response to letters sent by Circuitronix to
BMTM and Koala Holdings, LLC (“Koala”), relating
to Circuitronix's claim that Kapoor was improperly
competing with the company in violation of the Settlement
Agreement. ECF Nos.  at 3;  at 6. In the motion,
Kapoor argued that the letters violated the Settlement
Agreement's confidentiality and non-disparagement
clauses. ECF No. . Kapoor further requested that he be
granted limited discovery to determine if Circuitronix had
sent any additional violative letters to third parties On
September 26, 2016, Circuitronix filed its own Cross-Motion
to enforce the Settlement Agreement, claiming that Kapoor was
competing directly with Circuitronix through work he was
performing at the time for BMTM. See ECF No. .
Circuitronix also requested limited discovery in order to
seek additional evidence of Kapoor's alleged breach of
the Settlement Agreement. See Id.
Court held an initial evidentiary hearing on the
Cross-Motions on December 8, 2016. Following the initial
evidentiary hearing, the Court entered an Order defining
Circuitronix's line of business for purposes of the
Settlement Agreement. ECF No.  at 12-13. Having defined
Circuitronix's line of business, this Order also allowed
Circuitronix limited discovery going forward to determine
whether Kapoor materially breached the Settlement Agreement
by competing in that line of business or “by otherwise
violating the restrictive covenants found under paragraphs 4
or 5 of the Settlement Agreement.” Id. at 15.
With respect to relief, the Court held that Circuitronix
would not be permitted to seek damages (including liquidated
damages) for Kapoor's alleged breach of the Settlement
Agreement. See Id. at 13-15. Instead, the Court
explained that it would only consider Circuitronix's
Cross-Motion “insofar as it seeks injunctive
relief” because Circuitronix failed to meaningfully
comply with the conferral requirements under Local Rule
7.1(a)(3) before filing the Cross-Motion. Id. at 15.
Regarding Kapoor's Motion, the Court held in the December
16, 2016 Order that the two letters Circuitronix sent to BMTM
and Koala Holdings did not violate the confidentiality or
non-disparagement clauses of the Settlement Agreement, and
therefore denied Kapoor's Motion to that extent. However,
the Court allowed Kapoor limited discovery to determine
whether other third-party communications that Circuitronix
had apparently sent out violated the Settlement
Agreements' confidentiality and non-disparagement
clauses. Id. at 6-7, 15.
final evidentiary hearing, the Court addressed both
parties' Motions to Enforce the Settlement Agreement.
During the hearing, Kapoor conceded that the additional
letters Circuitronix had sent out to third parties, which
were produced during the parties' limited discovery, did
not violate the Settlement Agreements' confidentiality
and non-disparagement clauses. On August 10, 2017, after
considering the evidence presented at the hearing and in the
parties briefing, the Court issued an Order denying the
respective Motions in a Final Order on Cross-Motions to
Enforce Settlement Agreement. ECF No. . Thereafter,
Circuitronix appealed the Court's ruling. ECF No. .
On October 1, 2018, the Eleventh Circuit issued its mandate
affirming the Court's Final Order. ECF No. . The
Eleventh Circuit transferred Kapoor's Application for
Appellate Attorney's Fees to the District Court for its
consideration on the Application. ECF No. . The parties
then renewed their respective request for attorneys' fees
and costs. ECF Nos. , . Defendant Kapoor also
sought his attorneys' fees related to the fees incurred
as a result of the filing of Circuitronix's Motion for
Relief from Final Order, ECF No. . ECF No. .
parties have objected to the Report. See ECF Nos.
, . Defendant Sunny Kapoor objects to the
Report's recommendation that his Motions for
Attorneys' Fees be denied, arguing that while it
initiated the post-settlement litigation, the substantial
volume of the litigation related to the counterclaims
asserted by Circuitronix. ECF No. , at 3-5. Defendant
Kapoor also argues that the Report fails to undertake any
factual analysis as to the significant issues tried, and
therefore has improperly determined the attorneys' fee
issue to be a “wash.” Id. at 2-6.
Lastly, Kapoor argues that even if the Court adopts the
Report's recommendation in denying his motions for
attorneys' fees, his Application for Appellate
Attorneys' Fees should nonetheless be granted.
Id. at 11-14.
also objects to the Report's recommendation that its
Motion for Fees and Costs be denied, and the Report's
finding that no party was the “prevailing party.”
Specifically, Circuitronix argues that where a court has
determined a “tie” has occurred, the party who
was sued and found not liable should be determined to be the
“prevailing party.” ECF No. , at 1.
Circuitronix further objects as to Judge Valle's finding
that because both parties lost on all of their claims, there
was a “compelling reason” to find that neither
party prevailed. Id. at 2.
to Defendant Kapoor's objections, the Court finds they
are also without merit. Defendant Kapoor first appears to
argue that the significant issue in an action should be
determined by which issue resulted in the parties expending
the most resources. However, Defendant Kapoor cites no
authority to support this proposition. Further, an issue can
be significant even if it was resolved efficiently by the
Court during the duration of the litigation. Moreover, the
Court disagrees with Defendant Kapoor's second objection
that the Report fails to identify the significant issues that
arose in this litigation. The Report specifically states
[W]here both parties sought to enforce the Settlement
Agreement and neither succeeded, the undersigned finds that
the application of the “significant issues” test
results in a “wash.” Specifically, Kapoor lost on
his claim that Circuitronix violated the Settlement
Agreement's confidentiality and non-disparagement