Koninklijke Ahold, N.V. v. Millbrook Commons, LLC et al

Filing 71

ORDER as follows: 1. Millbrooks Motion for Reasonable Attorneys Fees and Costs of Litigation or, in the Alternative, Motion to Alter or Amend the final judgment in this case (Doc. 61 ) is DENIED as further set out in the order; 2. Aholds Motion to Alter or Amend the final judgment in this case (Doc. 65 ) is DENIED as further set out in the order; and 3. Millbrooks Motion for Certificate of Appealability (Doc. 63 ) is GRANTED. Signed by Honorable Judge Mark E. Fuller on 8/8/2013. (dmn, )

IN THE UNITED STATES DISTRICT COURT FOR
THE MIDDLE DISTRICT OF ALABAMA
NORTHERN DIVISION
KONINKLIJKE AHOLD, N.V.,
Plaintiff/Counterclaim-Defendant,
v.
MILLBROOK COMMONS, LLC, et al.,
Defendants/CounterclaimPlaintiffs.

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CASE NO. 2:10-cv-1060-MEF
(WO – Do Not Publish)

ORDER
Defendants/Counterclaim-Plaintiffs Millbrook Commons, LLC (“Millbrook”)1 filed
a post-judgment Motion for Reasonable Attorneys’ Fees and Costs of Litigation or, in the
Alternative, Motion to Alter or Amend the final judgment in this case (Doc. #61) following
a bench trial in this matter, where judgment was entered in its favor. For the reasons set forth
below, the Court finds that Millbrook’s motion is due to be DENIED.
I. JURISDICTION AND VENUE
The Court has subject-matter jurisdiction over this lawsuit pursuant to 28 U.S.C. §

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Millbrook Commons, LLC was the original owner of the property at issue. Millbrook
Commons, LLC sold the Property to Milton J. Domit (60%), Milton G. Domit (20%), and Karen
Stephens (20%). Milton J. Domit is deceased and his 60% interest in the Property is now owned by
the Estate of Milton J. Domit. Milton G. Domit and Karen Stephens have placed their interest in
the Property in the Milton J. Domit Trust, LLC. Millbrook Commons is a joint venture between the
Estate of Milton J. Domit and the Milton J. Domit Trust, LLC, and is the proper party in this
litigation. For ease of reference, the Court will refer to all Defendants in this case—Millbrook
Commons, LLC, Karen D. Stephens, and Milton G. Domit Limited Liability Company—collectively
as Millbrook.

1332 (diversity). The parties do not contest personal jurisdiction or venue and the Court
finds adequate allegations supporting both.
II. FACTUAL AND PROCEDURAL BACKGROUND
Millbrook is the owner of property in a shopping center in Millbrook, Alabama, that
it leased to Bruno’s Supermarket, LLC (“Bruno’s”) on December 3, 2001.
Plaintiff/Counterclaim-Defendant Koninklijke Ahold, N.V. (“Ahold”), an international
grocery retailer, acquired Bruno’s that same month—December 2001—and guaranteed
Bruno’s lease with Millbrook on March 29, 2002.
Bruno’s filed for bankruptcy in February 2009. On March 13, 2009, pursuant to an
order approved by the Bankruptcy Court, Millbrook purchased fixtures located at the
Property—including refrigerators, freezers, copper pipes, and wiring—from Bruno’s at a cost
of $300,000.00. On April 10, 2009, the Bankruptcy Court issued an order that granted
Bruno’s’ motion to reject its lease with Millbrook and made the rejection effective as of April
8, 2009.
Ahold initiated this lawsuit on December 13, 2010, when it filed a complaint seeking
a declaratory judgment that it was not liable to Millbrook under the guaranty it executed with
Millbrook. The complaint alleged, among other things, that Millbrook accepted Bruno’s’
abandonment of the lease by reentering the premises, thus terminating Ahold’s obligation
under the guaranty. Millbrook responded with a counterclaim against Ahold for breach of
contract, alleging that Bruno’s had defaulted on its lease with Millbrook and seeking all rent
due under the lease, plus rent collection costs and reasonable attorneys’ fees. Millbrook’s
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lease with Bruno’s contains the following provision for reasonable attorneys’ fees:
If Tenant or Landlord shall bring any action for any relief against the other,
declaratory or otherwise, arising out of this Lease, including any suit by
Landlord for the recovery of rent or possession of the Leased Premises, the
losing party shall pay the successful party a reasonable sum for attorneys’ fees
which shall be deemed to have accrued on the commencement of such action
and shall be paid whether or not such action is prosecuted to judgment.
(Millbrook’s Trial Ex. 1, ¶ 21.04.) Similarly, Millbrook’s guaranty contract with Ahold
states that Ahold “agrees to indemnify and save Landlord harmless of and from all cost,
liability, damage, and expense (including reasonable counsel fees), which may arise by
reason of Tenant’s default under the Lease or Tenant’s insolvency, or Guarantor’s default
hereunder . . . .” (Millbrook’s Tr. Ex. 2.)
The Court granted in part and denied in part Ahold’s motion for summary judgment
and allowed this case to proceed to a bench trial on the sole issue of when Millbrook
accepted Bruno’s’ abandonment of the lease. Although Millbrook alleged it was entitled to
reasonable attorneys’ fees under the lease agreement and guarantee in its counterclaim
against Ahold, and included this claim in the pretrial order, Millbrook presented no evidence
at trial on the amount of attorneys’ fees it was entitled to. Upon conclusion of the trial, the
Court found that Millbrook had accepted Bruno’s’ abandonment of the lease on August 10,
2009, the date it secured a new tenant for the leased property, and that Millbrook was entitled
to unpaid rent in the amount of $99,008.81, plus pre-judgment interest and costs of litigation,
excluding attorneys’ fees.

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III. DISCUSSION
Millbrook’s present motion seeks attorneys’ fees in the amount of $88,832.55.
(Millbrook’s Ex. A, Doc. #60-1.) In the alternative, Millbrook asks the Court to allow it to
submit evidence of reasonable attorneys’ fees and to alter or amend the final judgment in this
case awarding it reasonable attorneys’ fees. In response, Ahold opposes Millbrook’s motion
and asks the Court to alter or amend its final judgment to find that Ahold, not Millbrook, was
the prevailing party in this action. For the reasons set forth below, all motions will be
DENIED.
As a threshold matter, the Court declines to find that Ahold was the prevailing party
in this action. Ahold initiated this suit seeking a declaratory judgment that it had no liability
to Millbrook under the guaranty and the terms of Millbrook’s underlying lease with Bruno’s.
Although Ahold prevailed (in part) on its summary judgment motion, the Court ultimately
entered judgement against Ahold, finding that it was liable to Millbrook for Bruno’s breach
of the lease agreement under the guaranty. Accordingly, the Court finds that Millbrook was
the prevailing party in this litigation, and therefore, Ahold’s motion to alter or amend the
final judgment in this case (Doc. #65) is DENIED.
Federal Rule of Civil Procedure 54 provides that “[a] claim for attorney’s fees must
be made by motion . . . unless the substantive law requires those fees to be proved at trial as
an element of damages.” Fed. R. Civ. P. 54(d)(2)(A). Because this is a suit in diversity for
breach of contract, Alabama’s contract law principles govern the Court’s decision on
Millbrook’s motion for attorneys’ fees. The “elements of a breach-of-contract claim under
Alabama law are (1) a valid contract binding the parties; (2) the plaintiff’s performance under
the contract; (3) the defendant’s nonperformance; and (4) resulting damages.” Shaffer v.
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Regions Fin. Corp., 29 So. 3d 872, 880 (Ala. 2009). Where parties have contractually
agreed, in mandatory terms, that the prevailing party will pay the losing party reasonable
attorneys’ fees as damages in an action to recover on that contract, and the amount of
reasonable attorneys’ fees is in dispute, the claim for attorneys’ fees may be waived if not
properly presented at trial. See Hill v. Premier Builders and Realty, LLC, 56 So. 3d 669, 676
(Ala. Civ. App. 2010) (holding that party waived its claim to contractually-mandated
reasonable attorneys’ fees when it failed to object to court’s jury instructions, which did not
include an instruction on reasonable attorneys’ fees). At the bench trial in this case,
Millbrook presented no evidence on its claim for reasonable attorneys’ fees under the lease.
Thus, the Court found this claim to be waived by Millbrook in rendering its final judgment.
Moreover, it is a well-settled rule in the Eleventh Circuit that “when the parties
contractually provide for attorneys’ fees, the award is an integral part of the merits of the
case.” Ierna v. Arthur Murray Int’l, Inc., 833 F.2d 1472, 1476 (11th Cir. 1987) (citing
cases). Here, the parties contractually provided for attorneys’ fees, and Millbrook included
its claim for attorneys’ fees in its complaint and proposed pretrial order, as well as its
proposed findings of fact and conclusions of law. It is clear from these filings that Millbrook
considered attorneys’ fees to be an integral part of its breach-of-contract counterclaim against
Ahold under the lease and the guaranty. Yet Millbrook presented no evidence of this claim
at trial. Moreover, Millbrook never moved the Court to bifurcate the issue of attorneys’ fees
from the rest of the issues in the case pursuant to Federal Rule of Civil Procedure 42(b)
(providing that courts may order separate trials on separate issues to expedite and economize
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the trial). Based on the foregoing, the Court deems Millbrook’s claim for attorneys’ fees as
waived. Thus, Millbrook’s motion seeking attorneys’ fees and to alter and amend the
judgment to award attorneys’ fees is DENIED.
IV. CONCLUSION
It is hereby ORDERED as follows:
1. Millbrook’s Motion for Reasonable Attorneys’ Fees and Costs of Litigation or, in
the Alternative, Motion to Alter or Amend the final judgment in this case (Doc. #61) is
DENIED;
2. Ahold’s Motion to Alter or Amend the final judgment in this case (Doc. #65) is
DENIED; and
3. Millbrook’s Motion for Certificate of Appealability (Doc. #63) is GRANTED.
DONE this the 8th day of August, 2013.
/s/ Mark E. Fuller
UNITED STATES DISTRICT JUDGE

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