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Absolute Activist Value Master Fund Ltd. v. Devine

United States District Court, M.D. Florida, Fort Myers Division

August 1, 2019

ABSOLUTE ACTIVIST VALUE MASTER FUND LIMITED, ABSOLUTE EAST WEST FUND LIMITED, ABSOLUTE EAST WEST MASTER FUND LIMITED, ABSOLUTE EUROPEAN CATALYST FUND LIMITED, ABSOLUTE GERMANY FUND LIMITED, ABSOLUTE INDIA FUND LIMITED, ABSOLUTE OCTANE FUND LIMITED, ABSOLUTE OCTANE MASTER FUND LIMITED, and ABSOLUTE RETURN EUROPE FUND LIMITED, Plaintiffs,
v.
SUSAN ELAINE DEVINE, Defendant.

          OPINION AND ORDER

          JOHN E. STEELE SR. UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on defendant's Motion for Award of Costs and Fees (Doc. #713 and Doc. #741[1]) filed on July 25, 2018. Also filed are the Declaration of Matthew D. Lee (Doc. #714) and a proposed Bill of Costs (Doc. #715) in the amount of $104, 725.37. Plaintiffs filed an Opposition (Doc. #732) on August 22, 2018, along with the Declaration of David Spears in Support (Doc. #733). Defendant filed a Reply in Support (Doc. #750) of her motion and another Declaration (Doc. #751) with exhibits on October 2, 2018. Plaintiffs filed a Sur-Reply (Doc. #752), and a Declaration of Christopher Dysard (Doc. #753) on October 23, 2018. The parties were granted leave to file the motion, response, and supporting declarations under seal. (Docs. ## 728, 729, 738, 739, 741, 742.)

         I. Procedural History

         The Court briefly summarizes the relevant portions of the lengthy and contentious procedural history of this case as follows:

         The case was initiated on June 1, 2015, by a Complaint (Doc. #2) and an Ex Parte Motion (Doc. #3) filed under seal. (Doc. #7.) The six-count, 144-page Complaint alleged a money laundering enterprise to conceal fraudulently obtained funds taken in a penny stock scheme orchestrated by defendant Susan Devine and her non-party former husband Florian Homm.

         On July 1, 2015, the Court entered a 69-page Opinion and Order (Doc. #10) granting plaintiffs an ex parte Temporary Restraining Order enjoining defendant from transferring, converting, withdrawing or otherwise disposing of any money or other assets. Defendant was also enjoined from the destruction or disposal of her financial documents, and limited discovery was permitted. Plaintiffs were required to post a $10, 000 bond, and a preliminary injunction hearing was set. The bond monies were deposited with the Clerk of Court on July 7, 2015. (Doc. #15.)

         The Temporary Restraining Order was extended through July 30, 2015 (Doc. #55), and then through October 1, 2015 (Doc. #67), and was modified and extended on August 3, 2015 (Doc. #68) to exclude certain assets and August 24, 2015 (Doc. #76) to release sums to pay expenses. On September 17, 2015, the Court granted the parties' joint request to consolidate the preliminary injunction hearing with the trial on the merits (Doc. #83). On September 25, 2015, a Case Management and Scheduling Order (Doc. #89) was entered. Laird Lile, Orion Corporate and Trust Services, Ltd., and Conrad Homm were allowed to intervene for the limited purpose of protecting their interests in the assets described in their motions. (Doc. #156.)

         On January 14, 2016, plaintiffs filed an Amended Complaint (Doc. #196) to correct certain pleading deficiencies. The 147-page Amended Complaint alleged two federal RICO claims (Counts I and II), a state RICO claim and a Florida Civil Remedies for Criminal Activities claim (Counts III and IV), a state law unjust enrichment claim (Count V), and a state law constructive trust claim (Count VI).

         On February 1, 2016, the temporary restraining order was further amended to allow defendant to pay for the maintenance and upkeep of foreign properties from foreign accounts, and to allow the opening of accounts to accept rental income for entities with rental income. (Doc. #230.) On February 2, 2016, the temporary restraining order was modified to allow a release of funds for the reasonable living and educational expenses and attorneys' fees for Isabella Devine and Conrad Homm. (Doc. #233.) On March 21, 2016, a modification was granted to allow defendant to rent out a villa in Spain with the rental income to be reported to plaintiffs on a monthly basis. (Doc. #333.)

         On April 19, 2016, the Court denied defendant's request to dissolve the Temporary Restraining Order, leaving the issue of the preliminary injunction for trial. (Doc. #368.) Defendant filed a Notice of Interlocutory Appeal (Doc. #383), but the appeal was later voluntarily dismissed. (Doc. #601.)

         On February 8, 2017, the Court granted in part defendant's Motion to Dismiss Amended Complaint. (Doc. #521.) The Court dismissed Counts I and II (the federal RICO counts) and the Florida RICO and Florida Civil Remedies for Criminal Activities claims (Count III and IV) without prejudice because they did not set forth plausible claims that the wrongful acts were committed domestically and not abroad. (Id., p. 56.) Count VI was dismissed with prejudice because constructive trust is not a freestanding cause of action but a remedy to the unjust enrichment claim. (Id., p. 62.) The motion was denied as to the unjust enrichment claim. (Id., p. 63.) The Court granted plaintiffs leave to file a second amended complaint. (Id., p. 65.)

         On February 28, 2017, plaintiffs notified the Court that they were choosing not to file a Second Amended Complaint (Doc. #527), leaving only Count V for unjust enrichment as the operative claim. Defendant moved to dissolve the Temporary Restraining Order as not being justified by the unjust enrichment claim, the only remaining claim. (Doc. #530.) On May 8, 2017, the Court directed plaintiffs to file a Second Amended Complaint which included only the remaining state claim of unjust enrichment without the superfluous allegations. (Doc. #559.) On May 15, 2017, the Second Amended Complaint (Doc. #560) was filed.

         On July 25, 2017, the Court issued an Opinion and Order (Doc. #575) granting defendant's motion to dissolve the Temporary Restraining Order. Plaintiffs filed an interlocutory appeal (Doc. #576), which on February 20, 2018, was deemed voluntarily dismissed by plaintiffs. (Doc. #681.) On February 14, 2018, plaintiffs filed a Notice of Voluntary Dismissal Without Prejudice Pursuant to Rule 41(a)(1)(A)(i) (Doc. #680).

         On February 21, 2018, the Court entered an Order (Doc. #682) dismissing the case without prejudice pursuant to the Notice of Voluntary Dismissal Without prejudice (Doc. #680), and directed the Clerk to close the case.

         On April 20, 2018, defendant filed a Motion for Entry of Partial Final Judgment (Doc. #685). This Motion sought entry of a final judgment in favor of defendant as to the counts of the Amended Complaint which had been dismissed on February 8, 2017. After extensive briefing, on July 11, 2018, the Court directed judgment in favor of defendant and against plaintiffs dismissing Counts I, II, III, IV, and VI with prejudice. (Doc. #707.) Judgment (Doc. #708) was issued on July 11, 2018.

         Defendant now seeks an award of costs pursuant to Federal Rule of Civil Procedure 54(d) as a prevailing party; costs and attorney's fees pursuant to Fed.R.Civ.P. 37(d), the Court's inherent authority, and the Florida RICO Act; and damages pursuant to Fed.R.Civ.P. 65 against the temporary restraining order bond. The Court discusses each below.

         II. Taxable Costs

         Defendant seeks taxable costs of either $105, 425.37 (Doc. #713, p. 11; Doc. #714, p. 2 ¶ 4) or $104, 725.37 (Bill of Costs, p. 1) pursuant to Fed.R.Civ.P. 54(d) as the prevailing party in this case. A “prevailing party” is entitled to recover costs other than attorney fees as a matter of course unless a federal statute, the Federal Rules, or a court order provide otherwise. Fed.R.Civ.P. 54(d)(1). The costs which may be taxed in favor of a prevailing party are set forth in 28 U.S.C. § 1920. Plaintiffs object to many of the costs, discussed below, and seek to reduce taxable costs to $3, 264.50. (Doc. #732, p. 29.) Plaintiffs have provided a chart (Doc. #753-10) of the requested costs and their objections.

         A. Costs Incurred After February 28, 2017

         Plaintiffs argue the Court should deny all costs incurred after February 28, 2017, the date plaintiffs filed their Notice of election to pursue only the unjust enrichment count. (Doc. #527.) Plaintiffs implicitly acknowledge that defendant became the prevailing party as to the five counts plaintiffs decided not to pursue as of this date. Plaintiffs argue, however, that their subsequent February 14, 2018 voluntary dismissal of the unjust enrichment count pursuant to Rule 41(a)(1)(A)(i) did not create prevailing party status as to that last remaining count because a voluntary dismissal is not a resolution on the merits. Since defendant was not a prevailing party as to the unjust enrichment count, plaintiffs argue, it would be inequitable to tax any costs incurred between these dates since these costs could only relate to the unjust enrichment claim. (Doc. #732, pp. 30-32.) Plaintiffs compute these impermissible costs as totaling $12, 712.33. (Doc. #753-10, p. 8.) The Court rejects this position for several reasons.

         It is certainly well-settled that “[p]revailing parties are entitled to receive costs under Fed.R.Civ.P. 54(d)”, U.S. EEOC v. W&O, Inc., 213 F.3d 600, 620 (11th Cir. 2000), while non-prevailing parties cannot be awarded such costs, Lipscher v. LRP Publ'ns, Inc., 266 F.3d 1305, 1321 (11th Cir. 2001). But prevailing party status relates to the case, not just individual counts within the federal case. Thus, a party may be considered a “prevailing party” under Rule 54(d) without prevailing on all counts. Head v. Medford, 62 F.3d 351, 354-55 (11th Cir. 1995); Lipscher, 266 F.3d at 1321. To be a prevailing party,

[a] party need not prevail on all issues to justify a full award of costs, however. Usually the litigant in whose favor judgment is rendered is the prevailing party for purposes of rule 54(d).... A party who has obtained some relief usually will be regarded as the prevailing party even though he has not sustained all his claims.... 10 Wright & Miller, supra, § 2667, p. 129-130. Cases from this and other circuits consistently support shifting costs if the prevailing party obtains judgment on even a fraction of the claims advanced.

Medford, 62 F.3d at 354-55 (quoting United States v. Mitchell, 580 F.2d 789, 793-94 (5th Cir. 1978) (citations omitted)). Ordinarily, to be a prevailing party requires a judgment or some “judicial imprimatur” that prompts a material alteration in the legal relationship of the parties. Buckhannon Bd. & Care Home, Inc. v. W.Va. Dep't of Health & Human Res., 532 U.S. 598, 605 (2001).

         The five unpursued counts were dismissed with leave to amend on February 8, 2017; plaintiffs decided not to re-file such counts on February 28, 2017; and an order and a judgment were entered on July 11, 2018 dismissing the five counts with prejudice and the unjust enrichment count in the Second Amended Complaint without prejudice. (Docs. ## 707, 708.) Defendant thus became the prevailing party in the case as of July 11, 2018, when defendant succeeded on significant claims and there was a change in the legal relationship between the parties through a resulting enforceable judgment. Farrar v. Hobby, 506 U.S. 103, 109, 111 (1992). The Court will not exclude costs simply because they were incurred after February 28, 2017.

         B. Items of Taxable Costs

         Defendant submitted a proposed Bill of Costs (Doc. #715) of $104, 725.37. It is undisputed that the Court may tax six categories of litigation expenses as costs:

(1) Fees of the clerk and marshal;
(2) Fees for printed or electronically recorded transcripts necessarily obtained for use in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case;
(5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.

28 U.S.C. § 1920. All parties agree that taxable costs are limited to those costs enumerated in § 1920. The Court addresses each category of costs sought by defendant.

         (1) Filing and Docket Fees

         Pursuant to 28 U.S.C. § 1923, the Bill of Costs seeks the costs of docket fees associated with plaintiffs' discontinuance of the civil action ($5.00) and the fee for filing a motion for judgment ($5.00). (Doc. #715, p. 1, and Exh. 6.) These are taxable costs, 28 U.S.C. § 1920(1), and the $10.00 will be taxed.

         The Bill of Costs also seeks the cost of the $505 appellate filing fee paid on May 20, 2016, in conjunction with defendant's interlocutory Notice of Appeal (Doc. #383) from the Opinion and Order (Doc. #368) denying defendant's Motion to Dissolve the Temporary Restraining Order. (Doc. #715, p. 1, and Exh. 1.) This appeal was later voluntarily dismissed by defendant. (Doc. #601.) Since defendant was not the ...


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