Cardinal Health 108, LLC v. HemaCare Plus, Inc.
ORDER granting in part and denying in part 20 Plaintiff's Motion for Summary Judgment as set out, in the total amount of $688,920.62 comprised of $667,565.69 (plus interest accruing at the contractual rate) on Cardinal's claim s for breach of contract, account stated and open account; $20,867.50 in attorney's fees; and $487.43 in costs. Defendant Hemacare's claims against Third-Party Janis Spratlin remain pending. Signed by Judge Kristi K. DuBose on 1/11/2017. (cmj)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
CARDINAL HEALTH 108, LLC,
HEMACARE PLUS, INC.,
CIVIL ACTION 16-00079-KD-M
This matter is before the Court on Plaintiff’s Amended Motion for Summary Judgment
(Docs. 20, 22),1 Defendant Response (Doc. 39) and Plaintiff’s Reply (Docs. 32, 48).2
This case stems from Defendant Hemacare Plus, Inc. (Hemacare)’s non-payment of
approximately $667,565.69 for specialty pharmaceutical products from Plaintiff Cardinal Health
108, LLC (Cardinal)3 in 2015.
(Docs. 1, 1-1).
In its February 25, 2016 Complaint, Cardinal
asserts six (6) counts against Hemacare for: goods sold/delivered (Count I); open account (Count
II); account stated (Count III); unjust enrichment (Count IV); breach of contract (Count V); and
1 Cardinal did not seek leave to amend its summary judgment brief (Doc. 21). Nevertheless, the Court
finds the amendment is permitted and the operative brief is Doc. 22 (amended). Doc. 21 is deemed WITHDRAWN.
2 Hemacare filed a Rule 56(d) motion and motion to compel arbitration, which were denied (Docs. 34, 35).
There are no motions as to Spratlin and thus, summary judgment is inapplicable to her and Hemacare’s claims
against her remain pending in this case.
3 Cardinal is a global company that specializes in medical and pharmaceutical distribution, technologies
and supply services to various health organizations, including, but not limited to, hospitals, pharmacies, nursing
homes, image centers, and clinics. (Doc. 1 at 2).
attorneys’ fees/costs (Count VI).4 On April 13, 2016, Hemacare filed an untimely5 answer
denying all claims, and a three (3) count third-party complaint for fraud, conversion and unjust
enrichment against Janis Spratlin (Spratlin), its former bookkeeper, alleging that she is
responsible for the amounts owed as she exceeded her authority by ordering specialty
pharmaceutical products from Cardinal, billing insurance carriers and diverting the proceeds
from those transactions to her personal account.
On June 1, 2016, the Rule 16(b) Scheduling Order issued, setting the close of discovery
as February 24, 2017.
On July 15, 2016, Cardinal served its first set of discovery
on Hemacare, including requests for admission and interrogatories.
Jackson at 3-4)).
(Docs. 19, 22-2, 22-3 (Aff.
Hemacare did not provide responses to Cardinal’s discovery within 30 days of
service as required under Rules 34 and 36.
(Doc. 22-3 (Aff. Jackson at 3-4)).
26, 2016 Cardinal moved for summary judgment -- without any discovery responses from
Hemacare -- asserting that summary judgment should be granted in its favor because Hemacare’s
failure to respond means that the facts contained therein are deemed admitted.
On October 7, 2016, Hemacare provided untimely 6 responses to the requests for
production and interrogatories, but still failed to respond to the requests for admission.
In the interrogatory responses, Hemacare denies that Spratlin had authority to make the
purchases from Cardinal. (Doc. 39 at 27-31 at ##4-6, 10-11, 15).
On summary judgment,
Hemacare neither references its failure to timely respond to the requests for admission nor
opposes summary judgment on that basis.
To date, Hemacare has not responded to Cardinal’s
4 Cardinal misnumbered the counts in the complaint.
The Court has simply renumbered them.
5 Hemacare’s answer was due March 23, 2016.
6 Hemacare filed the discovery responses untimely -- almost two (2) months late.
requests for admissions.
(See also Doc. 48-1 (2nd Aff. Jackson)).
Requests for Admission
Cardinal seeks summary judgment based on Hemacare’s failure to timely file responses
to its requests for admission asserting that, as a matter of law, Hemacare’s failure means the
admissions are undisputed and “deemed admitted” in this case.
Rule 36(a)(3) of the Federal Rules of Civil Procedure provides that “[a] matter is deemed
admitted unless, within 30 days after being served, the party to whom the request is directed
serves on the requesting party a written answer or objection addressed to the matter and signed
by the party or its attorney.” Rule 36(b) specifies further:
(b) Effect of an Admission; Withdrawing or Amending It. A matter admitted under
this rule is conclusively established unless the court, on motion, permits the admission to
be withdrawn or amended. Subject to Rule 16(e), the court may permit withdrawal or
amendment if it would promote the presentation of the merits of the action and if the
court is not persuaded that it would prejudice the requesting party in maintaining or
defending the action on the merits. An admission under this rule is not an admission for
any other purpose and cannot be used against the party in any other proceeding.
With regard to such circumstances, the Eleventh Circuit in Garmley v. Cochran, 651 Fed.
Appx. 933, 936 (11th Cir. 2016) (emphasis added) concluded as follows:
…The district court did not abuse its discretion by deeming admitted the requests for
admission....neither Garmley nor Southern responded to Henderson's requests for admissions
or moved the district court to withdraw the admissions. We have previously found that a
party's failure to respond to requests for admission constituted admissions of the same,
and we see no reason to depart from that rule today. See, e.g., Perez v. Miami–Dade Cty.,
297 F.3d 1255, 1263 (11th Cir. 2002).….
Additionally, in Perez v. Miami-Dade Cty., 297 F.3d 1255, 1263-1264 and 1268 (11th Cir. 2002)
(footnotes and citations omitted, emphasis added), the Eleventh Circuit explained that:
Rule 36… governs requests for admissions…The purpose of the rule is “to expedite the
trial and to relieve the parties of the cost of proving facts that will not be disputed at
trial.”… If a party fails to respond within thirty days, then “[t]he matter is admitted.”
Id….Once the matter is admitted, Rule 36(b) provides that it is “conclusively established
unless the court on motion permits withdrawal or amendment of the admission.”…
….when a party uses the rule to establish uncontested facts and to narrow the issues for
trial, then the rule functions properly. When a party…uses the rule to harass the other
side or, as in this case, with the wild-eyed hope that the other side will fail to answer and
therefore admit essential elements (that the party has already denied in its answer), the
rule's time-saving function ceases; the rule instead becomes a weapon, dragging out the
litigation and wasting valuable resources….
Moreover, akin to the facts of this case, the court in Jacobs v. Electronic Data Sys. Corp.,
2006 WL 3742202, *2-3 (N.D. Ala. Dec. 18, 2008) (emphasis added, footnotes omitted)
concluded -- on summary judgment -- that unanswered requests for admission were admitted:7
…Jacobs's Title VII claim…cannot survive summary judgment....Jacobs has filed no motion
to withdraw the admissions or set aside the…order. Nor did Jacobs even address the issue
in her brief in opposition to summary judgment, despite the defendants having argued that
summary judgment was warranted on the basis of the admissions....As Rule 36(b)
expressly provides for withdrawal only “on motion,” the court will not sua sponte
withdraw Jacobs's admissions or set aside the order….
…Jacobs has opposed summary judgment with other evidence that tends to contradict the
admissions. Jacobs's deposition testimony is generally inconsistent with her admissions…
But admissions are unlike other evidence in that a party cannot rebut its own admissions
by introducing evidence that contradicts it. In re Carney, 258 F.3d 415, 420 (5th Cir.2001)
(“Since Rule 36 admissions, whether express or by default, are conclusive as to the matters
admitted, they cannot be overcome at the summary judgement [sic] stage by contradictory
affidavit testimony or other evidence in the summary judgment record.”); United States v.
Kasuboski, 834 F.2d 1345, 1350 (7th Cir.1987); see also 8A Wright, Miller & Marcus, §
2264, at 572-74. Once an issue is deemed admitted, the admission is conclusive unless
withdrawn upon motion to the court. Perez v. Miami-Dade County, 297 F.3d 1255, 1264
(11th Cir.2002); United States v. 2204 Barbara Lane, 960 F.2d 126, 129 (11th Cir.1992);
Stubbs v. Comm'r, 797 F.2d 936, 937-38 (11th Cir.1986) (per curiam).
As stated, the court's role at the summary-judgment stage is not to weigh the evidence or to
determine the truth of the matter, but rather to determine only whether a genuine issue exists
7 Cf. Russell v. Gilliam, 2006 WL 1663666, *3 (S.D. Ala. Jun. 9, 2006) (assessing the consequences of
untimely responses to requests for admission as within the court’s discretion, finding withdrawal of admissions
would result in no prejudice). The Middle District of Florida also applied its discretion in Reid v. McNeil, 2015
WL 5755898, *4-7 (M.D. Fla. Sept. 29, 2015) (construing a party's repeated denials of the factual allegations
throughout the case as a motion to withdraw any admissions and concluding that “withdrawal will subserve the
‘ascertainment of the truth and the development of the merits’” and would not prejudice the opposing party).
for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249…(1986). If this case were to
proceed to trial, Jacobs would not be permitted to introduce evidence to rebut the
admissions she has already made during the discovery phase of this litigation. Williams v.
City of Dothan, 818 F.2d 755, 762 (11th Cir.1987); see also Am. Auto. Ass'n, 930 F.2d at
1120. ...These admissions preclude recovery....Hulsey, 367 F.3d at 1244. Accordingly, there
is no genuine issue of material fact …and EDS is entitled to judgment as a matter of law.
Further, as set forth by the Fifth Circuit in In re Carney, 258 F.3d 415, 420-421 (5th Cir.
2001) (footnotes omitted and emphasis added):
Federal Rule of Civil Procedure 56(c) specifies that “admissions on file” can be an
appropriate basis for granting summary judgment….Since Rule 36 admissions, whether
express or by default, are conclusive as to the matters admitted, they cannot be
overcome at the summary judgement [sic] stage by contradictory affidavit testimony or
other evidence in the summary judgment record... Instead, the proper course for a
litigant that wishes to avoid the consequences of failing to timely respond to Rule 36
requests for admission is to move the court to amend or withdraw the default admissions
in accordance with the standard outlined in Rule 36(b).
…[Defendant] did not avail…[itself] of the procedural mechanism for attempting to
avoid the effect of…default. Consequently, application of this Court's precedent
applying the plain language of Rule 36 compels us to conclude, on the record before
us, that the validity of the…claim has been conclusively established. Moreover, this
Court has affirmed a grant of summary judgment based on default admissions coupled
with a district court's denial of a request to withdraw those admissions.…[Defendant’s]
failure to move…to withdraw his admission prior to or concurrently with the….motion
for summary judgment simply compels affirmance of the grant of summary judgment….:
We recognize the potential harshness of this result. The failure to respond to
admissions can effectively deprive a party of the opportunity to contest the
merits of a case. This result, however, is necessary to insure the orderly
disposition of cases; parties to a lawsuit must comply with the rules of
procedure. In addition, the harshness is tempered by the availability of the
motion to withdraw admissions, a procedure which [….] did not employ.
Kasuboski, 834 F.2d 1345.
Because of…default admissions, we need not explore in detail the…. alternative holding
that summary judgement [sic] was appropriate based on the absence of genuine material
Finally, in the Sixth Circuit (governing Tennessee law, and here the substantive claims
are governed by the law of Tennessee as explained infra), “…a request for admissions which is
not responded to within the applicable time period ‘is conclusively established unless the court
on motion permits withdrawal or amendment of the admission.’” Kerry Steel, Inc. v. Paragon
Indus., 106 F.3d 147, 153 (6th Cir. 1997).
Additionally, a party may seek to request an
admission as deemed admitted on “ultimate facts” and even where the request is “dispositive of
the entire case.” Campbell v. Spectrum Automation Co., 601 F.2d 246, 253 (6th Cir. 1979)
Courts within the Sixth Circuit and Tennessee state courts routinely enforce
Rule 36 when faced with unanswered requests for admission.8
In light of the circumstances of this case and the relevant Rule 36 law, the Court finds
that Cardinal’s requests for admission are deemed admitted by Hemacare.
Hemacare has had
numerous opportunities to respond to Cardinal’s requests, but has failed to do so. Hemacare
has made no attempt to avoid the consequences of failing to timely respond to the requests –
indeed not even acknowledging its failure.
Hemacare has neither mentioned nor addressed the
requests on summary judgment, much less endeavored to explain or justify its failure to file (or
timely file) responses.
Hemacare has not sought any relief in this Court concerning the requests
via withdrawal or amendment (or otherwise).
Cardinal would be unfairly prejudiced if
Hemacare were permitted – at this juncture -- to respond to the requests for admission, as
Cardinal has already moved for summary judgment on the grounds that the facts asserted in the
8 See, e.g., Grimes v. Middle Tenn. Hospitalists, PLC, 2013 WL 6497962, *2 (M.D. Tenn. Dec. 11, 2013);
Tracy v. Heffron, 1987 WL 37916, *1 (6th Cir. Jul. 6, 1987). See also Neely v. Velsicol Chemical Corp., 906
S.W.2d 915 (Tenn. Ct. App. 1995) (granting summary judgment based on a plaintiff's failure to respond to requests
for admission…: “[A]n admission under Rule 36…‘concludes the matter and avoids any need for proof’...no proof is
necessary to establish a fact admitted, nor should evidence be allowed to refute the admission”); Porter v. Melton,
1992 WL 29821 (Tenn. Ct. App. 1992) (the “trial court erred by refusing to grant [plaintiff's] Motion to Rely Upon
Requests for Admissions,” after defendant failed to respond to the set of requests in accordance with Rule 36”);
Tennessee Dep't of Human Services v. Barbee, 714 S.W.2d 266 (Tenn. 1986) (“Rule 36 is a useful tool in the
preparation of a lawsuit…Unanswered requests for admission are deemed admitted and the matter requested is
conclusively established for the purpose of the pending case. The admission is comparable to an admission in
pleadings or a stipulation drafted by counsel for use at trial”).
requests have been deemed admitted by Hemacare.
There is also no indication that Cardinal is using Rule 36 requests to “harass” Hemacare
or as “a weapon” “with the wild-eyed hope” that it would “fail to answer and…admit essential
Perez, 297 F.3d at 1268.
Rather, Hemacare simply ignored the requests for
admissions, and has done so to its detriment.
Thus, the following facts/allegations are deemed admitted by Hemacare and will be
treated as undisputed on summary judgment:9
Exhibit A to the Complaint
Ex. A are true and correct copies of the Invoices Cardinal sent to Hemacare from
-Hemacare received copies of Ex. A.
-Hemacare never objected in writing to Ex. A.
-Cardinal delivered to Hemacare the specialty pharmaceuticals in Ex. A.
-Hemacare accepted the specialty pharmaceuticals delivered by Cardinal in Ex. A.
-Hemacare never refused delivery or returned any of the specialty
pharmaceuticals from Cardinal in Ex. A.
-Hemacare used the specialty pharmaceuticals delivered by Cardinal in Ex. A.
-Hemacare has not paid Cardinal for the specialty pharmaceuticals in Ex. A.
-Hemacare has not paid the amounts due and owing in Ex. A.
-Hemacare has paid certain invoices received from Cardinal prior to June 2015.
Exhibit B to the Complaint
-Ex.B to the Complaint is a true and correct copy of the Terms and Conditions of Sale
that accompanied the Invoices sent to Hemacare from June-December 2015.
-Hemacare received copies of the Terms and Conditions of Sale – Ex. B.
Exhibit C to the Complaint
Ex. C to the Complaint is a true and correct copy of the Account Statement showing the
amounts due and owing in Ex. A.
-Janis Spratlin was the bookkeeper for Hemacare during the relevant time period.
9 As a consequence, any arguments asserted and/or evidence submitted by Hemacare on summary
judgment to the contrary are moot and have not been considered on summary judgment.
-During the relevant time period, Spratlin’s job responsibilities for Hemacare included
ordering and/or purchasing specialty pharmaceuticals from suppliers.
-During the relevant time period, Spratlin had authority to order specialty
pharmaceuticals from Cardinal.
Cardinal’s motion will be assessed in light of these admissions, as set forth in Doc. 22-2.
Findings of Fact10
This case concerns Hemacare’s failure to pay Cardinal approximately $667,565.69 for
specialty pharmaceutical products Cardinal supplied starting in May 2015.
from June to December 2015, Hemacare’s employee, bookkeeper Janis Spratlin (Spratlin),
ordered certain specialty pharmaceutical products as set forth in Cardinal’s Invoices. (Docs.
22-1, 22-2 at #1, 14).
Spratlin’s job duties included ordering and purchasing such products
from suppliers like Cardinal.
(Doc. 22-2 at #15).
Spratlin had the authority to order and
purchase specialty pharmaceutical products from Cardinal for Hemacare.
(Id. at #16).
After Cardinal delivered the products to Hemacare, Hemacare accepted them, never
refused delivery or returned them, and used them.
(Id. at #4-6).
Cardinal’s product Invoices
included “Terms and Conditions of Sale” which governed the transactions:
AGREEMENT FOR SALE. Cardinal….shall sell, and…[Hemacare] shall
purchase and pay for, goods distributed by Cardinal….
PAYMENT. Payment shall be due thirty (30) days from the date of invoice, or as
otherwise mutually agreed upon by the parties and indicated on…[Hemacare’s]
invoice….Any default by…[Hemacare] of its obligations shall accrue interest
from the date payment is due at the rate one and one-half percent (1.5%) per
month, or the highest rate permitted by law, on past due amounts owed to
Cardinal…[Hemacare] shall be liable to Cardinal…for any costs (including
reasonable attorneys’ fees) which Cardinal…incurs as a result of …[Hemacare]’s
10 At the summary judgment stage, the facts are taken in the light most favorable to the non-movant.
Tipton v. Bergrohr GMBH–Siegen, 965 F.2d 994, 998–999 (11th Cir. 1992). The “facts, as accepted at the summary
judgment stage of the proceedings, may not be the actual facts of the case.” Priester v. City of Riviera Beach, 208
F.3d 919, 925 n. 3 (11th Cir. 2000).
default of its obligations hereunder.…
GOVERNING LAW. These Terms and Conditions of Sale and all other questions
arising hereunder or pursuant to the parties’ transactions shall be governed
determined by the laws of the State of Tennessee, excluding its conflict of laws
(Doc. 22-1 at 35).
(See also Docs. 1-1, 1-2, 22-1 (including Aff. Byrd)).
paid for some of the products it ordered, Hemacare eventually stopped paying Cardinal’s
Invoices, resulting in the current amount owed.
Cardinal repeatedly communicated with
Hemacare about the unpaid invoices and amounts owed:
-August 31, 2015: Cardinal emailed Spratlin to collect payment of Hemacare’s “past due
invoices amounting to $965,633.00.” (Emails000027).
-September 3, 2015: Spratlin responded, stating that she had paid certain invoices
“yesterday” and would be “sending out more checks today.” (Emails000026-27).
-Over the next few weeks, Cardinal continued to email Spratlin in an attempt to collect
payment of Hemacare’s past due Invoices. (Emails000024- 26).
-September 21, 2015, Spratlin emailed Cardinal, assuring it that additional invoices were
recently paid, and that she had “more [checks] going out today.” (Emails000024).
-September 24, 2015: Cardinal emailed Spratlin inquiring about the “whole payment
amount for all past due invoices,” which, as of that date, was “$939,482.04.”
-September 29, 2015: Spratlin emailed Cardinal stating that the “[n]ew balance is
$793,791.28 plus any late fees” because she had “paid $145,690.76 last week.”
(Emails000021) (emphasis added). Spratlin stated Hemacare “will be sending checks
until the balance is paid in full and any late fees.” Id.
-October 5, 2015: Cardinal emailed Spratlin explaining that, “[a]s of the moment,” the
“AR Balance is $807,299.76,” and providing a “breakdown” of the amount due.
-October 7 & 12, 2015: Spratlin responded: “We will get this balance paid.”
(Emails000019); (Emails000015-16) (“I know we will have the account paid up.”).
-November 9, 2015: Cardinal communicated with counsel for Hemacare. Hemacare
“realize[s] that [Cardinal] need[s] to be paid for what [it] provided,” and that Hemacare
“will make the payments.” (Emails 000006) (stating that Hemacare’s President, “will
make the payments”); (Emails 000004-5) (stating that “Hemacare’s President, “and I both
realize that you need to be paid for what you provided”); (Emails 000005-6) (“We are
working on getting the next couple of invoices paid shortly.”).
-December 16, 2015: counsel informed Cardinal that Hemacare “can pay $100k/month
until paid in full.” (Emails 000001-2).
(Doc. 22-1 at 37-70; Doc. 22-1 (Aff. Byrd)). Hemacare made partial payments to Cardinal
from August-December 2015.
As of December 31, 2015, Hemacare owed $667,565.69 to
Cardinal, despite Cardinal’s repeated demands for payment in full.
(See also Doc. 22-1
at 72; Doc. 48-2 (2nd Aff. Byrd)).
Standard of Review
“The court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
R. CIV. P. 56(a).
Rule 56(c) provides as follows:
(1) Supporting Factual Positions. A party asserting that a fact cannot be or is
genuinely disputed must support the assertion by:
(A) citing to particular parts of materials in the record, including
depositions, documents, electronically stored information, affidavits or
declarations, stipulations (including those made for purposes of the motion only),
admissions, interrogatory answers, or other materials; or
(B) showing that the materials cited do not establish the absence or
presence of a genuine dispute, or that an adverse party cannot produce admissible
evidence to support the fact.
(2) Objection That a Fact Is Not Supported by Admissible Evidence. A party
may object that the material cited to support or dispute a fact cannot be presented
in a form that would be admissible in evidence.
(3) Materials Not Cited. The court need consider only the cited materials, but it
may consider other materials in the record.
(4) Affidavits or Declarations. An affidavit or declaration used to support or
oppose a motion must be made on personal knowledge, set out facts that would be
admissible in evidence, and show that the affiant or declarant is competent to
testify on the matters stated.
FED.R.CIV.P. Rule 56(c).
The party seeking summary judgment bears the “initial responsibility of informing the
district court of the basis for its motion, and identifying those portions of ‘the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any,’ which it believes demonstrate the absence of a genuine issue of material fact.” Clark v.
Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991) (quoting Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986)). If the nonmovant fails to make “a sufficient showing on an essential
element of her case with respect to which she has the burden of proof,” the movant is entitled to
Celotex, 477 U.S. at 323.
In assessing whether the nonmovant has met
its burden, “the court must stop short of weighing the evidence and making credibility
determinations of the truth of the matter….Instead, ‘[t]he evidence of the non-movant is to be
believed, and all justifiable inferences are to be drawn in his favor.’” Tipton v. Bergrohr
GMBH-Siegen, 965 F.2d 999 (11th Cir. 1992).
Conclusions of Law
At the outset, while Cardinal’s Complaint alleges common law claims for goods
sold/delivered, open account, account stated, unjust enrichment, breach of contract and
attorneys’ fees/costs, Cardinal moves for summary judgment on these claims as alleged under the
Uniform Commercial Code.
This is because the case concerns Cardinal’s sale of goods –
specialty pharmaceutical products – to Hemacare under Tennessee law, and in Tennessee the sale
of goods is governed by Tennessee’s version of the UCC.
“Generally speaking, transactions for
the sale of goods are governed by provisions of the Uniform Commercial Code…Tenn.Code Ann.
Sec. 47–2–101, et seq….” Wilson Sporting Goods Co. v. U.S. Golf & Tennis Ctrs., Inc., 2012
WL 601804, *4 (Ct. App. Tenn. Feb. 24, 2012).
Additionally, a federal court in a diversity case is required to apply the laws, including
principles of conflict of laws, of the state in which the federal court sits. Manuel v. Convergys
Corp., 430 F.3d 1132, 1139 (11th Cir. 2005); Colonial Life & Acc. Ins. Co. v. Hartford Fire Ins.
Co., 358 F.3d 1306, 1308 (11th Cir. 2004).
As to choice of law, “Alabama follows the principle
of ‘lex loci contractus,’…a contract is governed by the laws of the state where it is made except
where the parties have legally contracted with reference to the laws of another jurisdiction.”
Cherry, Bekaert & Holland v. Brown, 582 So.2d 502, 506 (Ala. 1991) (emphasis added).
“Alabama law has long recognized the right of parties to an agreement to choose a particular
state's laws to govern an agreement.”
Id. 11 Cardinal’s products were sold to Hemacare
pursuant to Invoices which contained “Terms and Conditions of Sale” with a Tennessee choice
of law provision (i.e., the parties legally contracted with reference to the laws of another state):
GOVERNING LAW. These Terms and Conditions of Sale and all other questions arising
hereunder or pursuant to the parties’ transaction shall be governed and determined by the
laws of the State of Tennessee, excluding its conflict of laws provisions.
Accordingly, Tennessee law governs Cardinal’s claims in this case.12
Counts II & III: Open Account & Account Stated
11 An exception is made “where application of that other state’s laws would be contrary to Alabama
policy” as under those circumstances, “the parties’ choice of law will not be given effect and Alabama law will
govern the agreement.” Id. at 507. In this case, there is no indication that giving the parties’ their choice of law
its effect would be contrary to Alabama policy, and neither party contends as much.
12 Hemacare’s opposition to Cardinal’s motion for summary judgment is rooted in Alabama law and
relies heavily on what authority Spratlin had while employed. However, as stated supra, Tennessee law applies to
Cardinal’s claims (i.e., Alabama law is inapplicable) and Hemacare has already admitted to Spratlin’s authority (by
failing to respond to the requests for admission). In sum, neither Hemacare’s discussion of Alabama law nor of
Spratlin’s authority is relevant to the present motion and as such, has not been considered.
Due to Hemacare’s failure to respond to Cardinal’s RFAs, Hemacare has admitted it
received all Cardinal’s Invoices, Cardinal delivered the products to Hemacare, Hemacare
accepted the products and never refused delivery or returned same, Hemacare used the products,
Hemacare has not paid Cardinal in full for the products, Hemacare still has amounts due and
owning to Cardinal, Hemacare received copies of the Terms and Conditions of Sale from
Cardinal, and Hemacare acknowledges the validity of Cardinal’s Account Statement and
Invoices showing what remains due and owing.
Concerning an open account in Tennessee, the Court has been unable to find a case
discussing the specific elements for this claim and Cardinal has provided none.13 However, the
cases which have been located appear to simply reference a Tennessee open account claim as
existing when an amount is owed by a party (i.e., an unpaid balance exists) “on the books” to
See, e.g., Farmers Livestock Market, Inc. v. Deaton, 2013 WL 4451074 (E.D.
Tenn. Aug. 16, 2013); Amber Brazilian Export Resources, Inc. v. Crown Labs., Inc., 2012 WL
982969 (Ct. App. Tenn. Mar. 21, 2012).
The record indicates that Cardinal and Hemacare had a series of prior dealings during
2015 through which Hemacare ordered specialty pharmaceutical products from Cardinal on an
open account, Cardinal then delivered those products to Hemacare with Cardinal’s invoices and
Terms and Conditions of Sale, Hemacare accepted the products, and Hemacare partially paid
13 Cardinal asserts that Tennessee treats actions on an “open account” and “account stated” as one cause
of action, citing China Export & Credit Ins Co. v. Carlisle Transp. Prod. Inc., 2016 WL 4239970, *3 (M.D. Tenn.
Aug. 11, 2016) (Doc. 22 at 15). This is unclear. The Court’s review of China Export indicates that the case
addressed the elements for an “action on account,” suggesting it concerns only an “account stated” claim. And the
two (2) cases cited by China Export (and also cited by Cardinal’s citation to that case) appear to concern a claim for
an “account stated” not an “open account.”
Cardinal the prices per the invoices.
Hemacare’s partial payments resulted in an outstanding
balance – the amounts Cardinal now seeks to recover.
Additionally, by failing to respond to the
requests for admission, Hemacare has admitted to the accuracy of the amount owed on the
account per the Invoices, the authenticity of the Account Statement and Invoices provided by
Cardinal, and that Hemacare owes Cardinal $667,565.69 as of December 31, 2015 (plus interest).
See supra Section II.
As such, Cardinal’s motion on this claim is GRANTED.
With regard to account stated, per Southern Housing Co. v. Morton, 242 S.W.2d 843,
850-851 (Ct. App. Tenn. 1950):
…[It] is an agreement express or implied as to the amount due. There must be an absolute
acknowledgment of a certain sum due or a reference to something by which it can be
definitely and certainly ascertained. If there is but an admission that something is due
without specifying how much, there is no account stated….
The elements for this claim are: 1) a series of prior dealings between the parties on an open
account, 2) an agreement between the parties concerning the amount owed on the account, and 3)
a specific and unconditional acknowledgement of the obligation by the party to be charged.
Hudson Bros., Inc. v. Cook, 1991 WL 148035, *4 (Ct. App. Tenn. 1991) (citations omitted).
See also China Export & Credit Ins. Co. v. Carlisle Trans. Prod. Inc., 2016 WL 4239970, *3
(M.D. Tenn. Aug. 11, 2016).
Due to Hemacare’s failure to respond to the requests for
admission, which have been deemed admitted, Cardinal has established a series of prior dealings
between the parties on an open account, an agreement between the parties concerning the amount
owed on the account, and a specific and unconditional acknowledgement of the obligation by
See supra Section II.
As such, Cardinal’s motion on this claim is GRANTED.
Count V: Breach of Contract
With regard to Cardinal’s breach of contract claim in Tennessee, “there are three
elements that must be proven to support a breach of contract claim: (1) the existence of an
enforceable contract; (2) nonperformance amounting to breach of contract; and (3) damages
caused by the breach of contract.”
*3 (W.D. Tenn. Aug. 24, 2016).
Kutite, LLC v. Excell Petroleum, LLC, 2016 WL 7495877,
Tennessee law further provides that “[a] contract for sale of goods may be made in any
manner sufficient to show agreement, including conduct by both parties which recognizes
the existence of such a contract.” Tenn. Code Ann. § 47–2–204(1). The Statute of Frauds
provides that, in general,
a contract for sale of goods for the price of five hundred dollars ($500) or
more is not enforceable by way of action or defense unless there is some writing
or record sufficient to indicate that a contract for sale has been made between the
parties and signed by the party against whom enforcement is sought or by his
authorized agent or broker.
Tenn. Code Ann. § 47–2–201(1). Alternatively, the Statute of Frauds is satisfied and an
enforceable contract results “with respect to goods for which payment has been made and
accepted or which have been received and accepted.” Tenn. Code Ann. § 47–2–201(3)(c).
Whether a contract has been breached “is a pure and simple question of contract
interpretation which should not vary from state to state.” Indianer v. Franklin Life Ins.
Co., 113 F.R.D. 595, 607 (S.D.Fla.1986), overruled in part on other grounds by Ericsson
GE Mobile Commc'ns, Inc. v. Motorola Commc'ns & Elecs., Inc., 120 F.3d 216, 219 n. 12
(11th Cir.1997). “The obligation of the seller is to transfer and deliver and that of the
buyer is to accept and pay in accordance with the contract.” Tenn. Code Ann. § 47–2–
301. The failure of either party to satisfy this obligation constitutes a breach.
Orlowski v. Bates, 146 F. Supp.3d 908, 923 (W.D. Tenn. 2015).
Moreover, for contract claims
stemming from a party’s non-payment of goods:
…because this case involves a transaction in goods between merchants, it is governed by
the sales provisions of the Uniform Commercial Code (U.C.C.), Tenn.Code Ann. §
47-2-101 et seq. Under the U.C.C., the remedies available to a buyer for a breach of
contract by the seller depend in part on whether the buyer has accepted or rejected the
goods….Tenn.Code Ann. § 47-2-606(1) provides:
Acceptance of goods occurs when the buyer: (a) after a reasonable opportunity to
inspect the goods signifies to the seller that the goods are conforming or that he
will take or retain them in spite of their nonconformity; or (b) fails to make an
effective rejection…but such acceptance does not occur until the buyer has had a
reasonable opportunity to inspect them; or (c) does any act inconsistent with the
seller's ownership; but if such act is wrongful as against the seller it is an
acceptance only if ratified by him.
Upon acceptance the buyer must pay for the accepted goods at the contract rate.
Tenn.Code Ann. § 47-2-607(1). Trinity Industries, Inc., 77 S.W.3d at 175.….
Wings Manuf. Corp. v. Lawson, 2005 WL 1950115, *4 (Ct. App. Tenn Aug. 12, 2005).
Further, as noted in Carbon Processing and Reclamation, LLC v. Valero Marketing and Supply
Co., 823 F.Supp.2d 786, 804 (W.D. Tenn. 2011) (footnotes omitted), Tennessee adopted UCC 2–
207(3) at Tenn.Code Ann. § 47–2–207(3), and:
‘Conduct by both parties which recognizes the existence of a contract is sufficient to
establish a contract for sale although the writings of the parties do not otherwise establish
a contract’…[and] ‘performance by both parties under what they apparently believe to
be a contract’ may be ‘sufficient to establish a contract, notwithstanding the fact that no
contract would have been recognized on the basis of their writings alone.’ The rationale
for such a rule is easy to apprehend. ‘Sellers usually do not ship and Buyers do not
receive goods unless they think they have struck a deal.’ Under such circumstances, the
terms of the agreement between the parties are the ‘terms on which the writings of the
parties agree’ as well as the UCC's gap filling provisions.…’
As an initial matter then, the sale of the specialty pharmaceutical products is a sale of
goods subject to Tennessee’s enactment of the UCC, as per Tenn. Code Section 47-2-105(1),
goods are “all things…which are movable at the time of identification to the contract for sale
other than the money in which the price is to be paid, investment securities…and things in
action….” In light of Hemacare’s deemed admissions, the record reflects that Hemacare placed
orders from Cardinal for the products at issue, Hemacare received the products, Hemacare used
the products, and Hemacare partially paid for the products.
Additionally, the products were
accompanied with Invoices that included Terms and Conditions of Sale which provided the
contractual terms for the transactions.
These facts establish an enforceable written contract for
the sale of goods in Tennessee and the Statute of Frauds is alternatively satisfied when payment
for the goods was received and accepted by Cardinal.
Tenn. Code § 47-2-201; Orlowski, 146 F.
Supp. 3d at 924. The fact that Hemacare failed to pay the amounts due in full to Cardinal for
the products ordered is undisputed on summary judgment given Hemacare’s admissions.
Cardinal has thus suffered damages in the amount left unpaid plus accrued interest, costs, and
attorneys’ fees (as provided for in the product Invoices’ Terms and Conditions of Sale).
sum, the record establishes the existence of an enforceable contract, nonperformance by
Hemacare breaching the contract and damages to Cardinal due to that breach.
Cardinal’s motion for summary judgment on this claim is GRANTED.
Count I: Goods Sold/Delivered
On summary judgment, Cardinal asserts that Count I is “essentially one for breach of
contract under Article 2 of the UCC[,]” as Hemacare breached the contract by failing to pay the
amounts due and owing per the invoices.
(Doc. 22 at 14-15 and note 14).
no case law showing that a claim for “goods sold and delivered” exists in Tennessee and/or that
“goods sold and delivered” are part a breach of contract claim for the sale of goods in Tennessee.
Nevertheless, the Court has ascertained that under Tennessee law, “[i]n the case of goods
sold and delivered, the theory is quantum valebat (as much as they were worth).” Menzer v.
Herrera, 1986 WL 8335, *3 (Ct. App. Tenn. Jul., 31, 1986) (citing Chambliss, Bahner and
Crawford v. Luther, 531 S.W.2d 108, 110 (Tenn. App. 1975)).
See also 27 TENN. PRAC.
CONST. LAW § 12:19. In Tennessee then, it appears that a “goods sold and delivered” claim is a
form of quantum meruit, which only applies when there is no existing enforceable contract. Id.
As the contracts between Cardinal and Hemacare – the written Invoices containing the Terms
and Conditions of Sale – are enforceable and written, a claim for “goods sold and delivered”
(and/or quantum meruit) is thus inapplicable.
Cardinal’s motion for summary judgment on this
claim is DENIED and it is DISMISSED as a matter of law.
Count IV: Unjust Enrichment
“In Tennessee, unjust enrichment is applied in the absence of a contract.” Monaco
Indus., LLC v. Shopper Local, LLC, 2014 WL 4678283 (E.D. Tenn. Sept. 18, 2014) (citing
Whitehaven Cmty. Baptist Church v. Holloway, 973 S.W.2d 592, 596 (Tenn. 1998) and World
Healthcare Sys., Inc. v. SSI Surgical Servs., Inc., 2011 WL 2199979, *11 (E.D. Tenn. June 7,
Cardinal is barred from recovery under an unjust enrichment theory against Hemacare
because the record establishes that a series of express written contracts for the sale of goods (the
written Invoices with the attached Terms and Conditions of Sale for the products) govern the
relationship between Cardinal and Hemacare.
See, e.g., Daily v. Gusto Records, Inc., 14 Fed.
Appx. 579, 587 (6th Cir. 2001); Ilar v. Wells Fargo Bank, N.A., 2014 WL 6886588, *3 (E.D.
Tenn. Dec. 4, 2014); Holt v. Macy's Retail Holdings, Inc., 719 F.Supp.2d 903, 915-916 (W.D.
Tenn. 2010); In Re Nissan N.A., Inc. Odometer Litigation, 664 F.Supp.2d 873, 894-895 (M.D.
Tenn. 2009); Doe v. HCA Health Servs. of Tenn., 46 S.W.3d 191, 197-198 (Tenn. 2001).
such, Cardinal’s motion on this claim is DENIED and it is DISMISSED as a matter of law.
Count VI: Attorney’s Fees & Costs
Pursuant to the contract between the parties – the product Invoices’ Terms & Conditions
of Sale --- Cardinal (as a prevailing party) seeks $14,729.34 for attorney’s fees already incurred
and billed, $7,413.12 for “work in progress” attorneys fees (already incurred but not yet billed),
$487.62 in costs and $275.00 in expert fees.
(Docs. 22 at 3, 22-3 (including Aff. Jackson), 22-4
Tennessee adheres to the American Rule for assessing an award of attorney fees: “a party
in a civil action may recover attorney fees only if: (1) a contractual or statutory provision creates
a right to recover attorney fees; or (2) some other recognized exception to the American rule
applies, allowing for recovery of such fees in a particular case.” Cracker Barrel Old Country
Store, Inc. v. Epperson, 284 S.W.3d 303, 308 (Tenn. 2009).
The product Invoices (Terms and
Conditions of Sale) contain a contractual provision creating a right for Cardinal to recover
attorneys’ fees from Hemacare as follows:
PAYMENT…[Hemacare] shall be liable to Cardinal…for any costs (including
reasonable attorneys’ fees) which Cardinal…incurs as a result of [Hemacare]’s default of
its obligations hereunder…
(Doc. 22-1 at 35).
Cardinal can thus recover costs including reasonable attorneys’ fees due to
Hemacare’s failure to pay the full bill.
The starting point for any award of attorney fees by a federal court is the calculation of
the “lodestar.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). “The party seeking an award of
fees should submit evidence supporting the hours worked and rates claimed.” Id. The Court
should not consider hours “not reasonably expended” or that were “excessive, redundant, or
otherwise unnecessary.” Id. at 434. The Court may then exercise its discretion to reduce an
award “where the documentation of hours is inadequate.”
Id. at 433.
In Tennessee, to
establish the lodestar amount and any adjustments, as specified in Larango v. Wolfe, 2016 WL
7383786, *2 (E.D. Tenn. Nov. 17, 2016):
…a court is to consider the factors laid out in the Tennessee Rules of Professional
(1) the time and labor required, the novelty and difficulty of the questions
involved, and the skill requisite to perform the legal service properly; (2) the
likelihood, if apparent to the client, that the acceptance of the particular
employment will preclude other employment by the lawyer; (3) the fee
customarily charged in the locality for similar legal services; (4) the amount
involved and the results obtained; (5) the time limitations imposed by the client or
by the circumstances; (6) the nature and length of the professional relationship
with the client; (7) the experience, reputation, and ability of the lawyer or lawyers
performing the services; (8) whether the fee is fixed or contingent; (9) prior
advertisements or statements by the lawyer with respect to the fees the lawyer
charges; and (10) whether the fee agreement is in writing.
Tenn. Sup. Ct. R. 8, R. of Prof. C. 1.5(a); Killingsworth, 104 S.W.3d at 534.
See also e.g., Shuman v. Simply Right, Inc., 2016 WL 6875965, *1 (M.D. Tenn. Nov. 22,
2016).14 In Tennessee, “[w]here a plaintiff has obtained excellent results, his attorney should
recover a fully compensatory fee.”
Id. at *4.
“Ultimately…the calculation of attorneys' fees is
left to the discretion of the district court, and, in reaching its conclusion, the court need not
articulate its findings as to each factor.” WMC Indus. Inc. v. IPS Corp., 2016 WL 5661858, *3
(W.D. Tenn. Sept. 29, 2015).
Cardinal has submitted affidavits of counsel (Matthew R. Jackson, Esq. and John
Davidson, Esq.), detailed billing statements and time entries, as well as the affidavit of a local
Mobile, Alabama attorney (Charles Fleming, Esq.) as an expert witness, with regard to the rates
charged (attesting to their reasonableness) for litigating this case from January 2016 to the
(Docs. 22-3, 22-4).
Cardinal has provided no information about Davidson other
than he has a few years of practice and no longer works at the firm and that he billed at the same
rate as Jackson, who has more years of experience.
14 These factors are very similar to the 12 set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d
714, 717-719 (5th Cir.1974), which is followed by courts within the Eleventh Circuit.
Specifically, the rates requested by Cardinal are as follows.
The rate $211.20/hour for
95.90 hours (60.80 hours completed and billed plus 35.10 hours completed but not yet billed) of
work performed by Matthew Jackson (with six (6) years of experience).
And the rate of
$211.20/hour for 11.25 hours work performed by John Davidson (with one (1) to two (2) years
of experience) -- for a total of 107.15 hours litigating this case against Hemacare.
22-3 at 1-27 (including Aff. Jackson)). This totals a request by Cardinal for $15,216.96 in
attorneys’ fees already incurred and billed15 plus $7,413.12 for attorneys’ fees already
incurred but not yet billed.
(Doc. 22-3 at 29-34).
“A reasonable fee is one that is ‘adequately compensatory to attract competent counsel
yet which avoids producing a windfall for lawyers.’” Dowling v. Litton Loan Servicing LP, 320
Fed. Appx. 442, 446 (6th Cir. 2009).
Thee party seeking fees bears the initial burden of
establishing the hours expended by providing detailed time records that document the tasks
completed and the amount of time spent. Granzeier v. Middleton, 173 F.3d 568, 577 (6th Cir.
1999) (citing Hensley, 461 U.S. at 433).
And as set forth in WMC Indus. Inc. v. IPS Corp.,
2016 WL 5661858, *2-3 (W.D. Tenn. Sept. 29, 2015):
The Sixth Circuit Court of Appeals has upheld an award of attorney fees and found
billing records to be adequate where entries made by counsel “were sufficient even if the
description for each entry was not explicitly detailed.” McCombs v. Meijer, Inc., 395 F.3d
346, 360 (6th Cir. 2005). See Anderson v. Wilson, 357 F.Supp.2d 991, 999 (E.D. Ky.
2005) (holding that the plaintiffs provided sufficiently detailed billing records where
counsel disclosed “itemized statements describing the subject matter, the attorney, the
time allotment, and the charge for all work done on Plaintiffs' case”).
Therefore, “[c]ounsel need not record in great detail each minute he or she spent on an
item, [just] the general subject matter should be identified.” Imwalle v. Reliance Med.
Prods., 515 F.3d 531, 553 (6th Cir. 2008)(citations omitted)(internal quotation marks
omitted). See Hensley, 461 U.S. at 437 n.12 (“Plaintiff's counsel, of course, is not
15 The Court presumes that Cardinal’s request of only $14,729.34 for these fees (for 72.05 hours at
$211.20/hour) is based on a mathematical error.
required to record in great detail how each minute of his time was expended. But at least
counsel should identify the general subject matter of his time expenditures.”); PPG
Indus., Inc. v. Celanese Polymer Specialties Co., 840 F.2d 1565, 1570 (Fed. Cir. 1988)
(holding that the trial court abused its discretion in refusing to award fees based on lack
of documentation when counsel failed to keep contemporaneous time records, but
furnished affidavits and corroborative business records).
Additionally, “a district court itself has experience in determining what are reasonable
hours and reasonable fees, and should rely on that experience and knowledge if the
documentation is considered inadequate.” Slimfold Mfg. Co. v. Kinkead Indus., Inc., 932
F.2d 1453, 1459 (Fed. Cir. 1991).
Moreover, as specified in Jones v. Babcock & Wilcox Tech. Servs. Y-12, LLC, 2016 WL
4691294, *4 (E.D. Tenn. Aug. 8, 2016):
In determining the appropriate hourly rate to apply, the district court must consider the
prevailing market rate in the relevant community, which for fee purposes, is the legal
community within the court's territorial jurisdiction or venue. Brooks v. Invista, No.
1:05-cv-328, 2008 WL 304893, *3 (E.D. Tenn. Jan. 30, 2008) (citing Adcock-Ladd v.
Sec'y of the Treasury, 227 F.3d 343, 349 (6th Cir. 2000)). The appropriate or reasonable
hourly rate “may not, however, exceed the amount necessary to cause competent legal
counsel to perform the work required.” Id. (citing Coulter v. Tennessee, 805 F.2d 146,
148 (6th Cir. 1986)).
The Court of Appeals has explained this distinction well:
The statutes use the words “reasonable” fees, not “liberal” fees. Such fees are
different from the prices charged to well-to-do clients by the most noted lawyers and
renowned firms in a region. Under these statutes a renowned lawyer who customarily
receives $250 an hour in a field in which competent and experienced lawyers in the
region normally receive $85 an hour should be compensated at the lower rate.
Coulter, 805 F.2d at 149; see also Lamar Adver. Co. v. Charter Township of Van Buren,
178 Fed.Appx. 498 (6th Cir. 2006) (“Even if it would be reasonable to award [plaintiff]
$370 per hour, the record supports the district court's conclusion that $200 per hour is
sufficient to encourage competent lawyers in the relevant community to undertake legal
At the outset, the Court finds the requested rate of $211.20/hour for both a first or second
year associate and a sixth year associate incongruous.
The Court cannot ascertain why a novice
associate would bill the same rate as one in his sixth year of practice.
determining the appropriate rate, the undersigned turns to the relevant legal community in the
Court’s territorial jurisdiction – Mobile, Alabama.
Indeed, the Court, which is familiar with the
prevailing rates in the local market, may act as its own expert and rely on its knowledge and
experience to determine the reasonableness and propriety of the requested fees. Stewart v. Cont'l
Cas. Co., 2015 WL 225290, at *6 (S.D. Ala. Jan. 16, 2015).
Upon consideration of all affidavits and evidence submitted, the factors outlined above,
and the Court's expertise, the undersigned finds the following rates reasonable.
Jackson, an associate with six (6) years of experience, the Court awards the rate of
$200.00/hour. Garrett Invest., LLC v. SE Prop. Holdings LLC, 956 F.Supp.2d 1330, 1341
(S.D. Ala. 2013) (awarding $190/hour to an associate with six (6) years of experience).
also, e.g., Decorative Components Inc., Inc. v. ICON Computing Solutions, Inc., 2012 WL
5398800, *5-6 (S.D. Ala. Nov. 2, 2012) finding that $200.00 per hour was reasonable for an
attorney with seven years experience); Gulf Coast Asphalt Co., L.L.C. v. Chevron U.S.A., Inc.,
2011 WL 612737, 3-4 (S.D. Ala., Feb. 11, 2011) (same); Vanderbilt Mortg. and Fin., Inc. v.
Crosby, 2015 WL 5178719, *2 (S.D. Ala. Sept. 4, 2015) ($185/hour as a reasonable rate for an
attorney with three (3) to four (4) years of experience).
As for Davidson, an associate with one (1) or two (2) years of experience, the Court
awards $150/hour, which this Court has deemed appropriate for an associate attorney with either
indeterminate years of experience, or just a few.
See, e.g., Garrett Invest., 956 F.Supp.2d at
1341 (finding reasonable $150/hour for an associate with one (1) to (2) years of experience);
Vision Bank v. FP Mgt., LLC, 2012 WL 222951, *3 (S.D. Ala. Jan. 25, 2012) (finding $150 per
hour a reasonable rate for an associate attorney with an indeterminate amount of experience);
Adams v. Austal, U.S.A., L.L.C., 2010 WL 2496396, *6 (S.D. Ala. June 16, 2010) (finding
$150.00 as reasonable for associates with a few years experience).
See also Breland v. Levada
Ef Five, LLC, 2016 WL 1717207, *12 (S.D. Ala. Apr. 28, 2016); Denny Mfg. Co. v. Drops &
Props, Inc., 2011 WL 2180358, *3–5 (S.D. Ala. June 1, 2011).
Reasonable Hours Expended
Cardinal seeks to recover 72.05 hours of completed and billed work by Jackson and
The Court finds, upon review of the relevant records, that Cardinal’s counsel has
made “a good faith effort to exclude from [its] fee request hours that are excessive, redundant, or
otherwise unnecessary.” Hensley, 461 U.S. at 434. Additionally, the work performed during the
hours requested are sufficiently described in the submitted documents, including delineation of
those hours incurred by Jackson (60.80) versus Davidson (11.25). As such, the Court finds
72.05 hours of work is reasonable and awardable to Cardinal for the completed and billed work.
Additionally, Cardinal seeks to recover 35.10 hours of completed but not yet billed work
by Jackson. The Court finds, upon review of the relevant records, that for these hours Cardinal’s
counsel has again made “a good faith effort to exclude from [its] fee request hours that are
excessive, redundant, or otherwise unnecessary.” Hensley, 461 U.S. at 434. Additionally, the
work performed during the hours requested are sufficiently described in the submitted
As such, the Court finds that 35.10 hours of work is reasonable and also awardable
to Cardinal for the completed but not yet billed work.
As noted supra, the lodestar represents the number of hours reasonably expended on the
litigation multiplied by a reasonable hourly rate, which is a matter of the Court’s sound
Hensley, 461 U.S. at 433.
Cardinal may recover $12,160.00 for Jackson’s fees for
the completed and billed work as follows: 60.80 hours of work at $200/hour.
Cardinal may also recover $7,020.00 for Jackson’s fees for the completed and billed work as
follows: 35.10 hours of work at $200/hour.
This results in a recovery of $19,180.00 to
Cardinal for Jackson’s work. Likewise, Cardinal may recover $1,687.50 for Davidson’s fees
for the completed and billed work as follows: 11.25 hours of work at $150/hour.
Cardinal’s motion as to attorneys’ fees is GRANTED in part and DENIED in part such that
the total amount of recovery is $20,867.50.
Cardinal seeks to recover $487.62 in costs from Hemacare plus $275.00 in expert fees for
the expert witness services of Charles Fleming.
(Docs. 22, 22-3 (Aff. Jackson), 22-4 (Aff.
As to costs, Cardinal did not delineate what the costs are comprised of in its brief.
However, the Court’s review of Jackson’s affidavit reveals $87.43 for subpoena process serving
fees, $.19 for long distance calls and $400.00 for court filing fees.
(Doc. 22-3 at 16, 18).
Rule 54(d)(1) provides that “costs—other than attorney's fees—shall be allowed to the
This “language creates a presumption in favor of awarding costs, but allows
denial of costs at the discretion of the trial court.” Singleton v. Smith, 241 F.3d 534, 539 (6th Cir.
Rule 54(d)(1) costs “are confined to the costs itemized in 28 U.S.C. § 1920.” In re
Cardizem CD Antitrust Litig., 481 F.3d 355, 359 (6th Cir. 2007). See also Crawford Fitting Co.
v. J.T. Gibbins, Inc., 482 U.S. 437, 445 (1987).
Section 1920 states that a judge or clerk of any
court of the United States may tax as costs:
(1) Fees of the clerk and marshal;
(2) Fees of the court reporter for all or any part of the stenographic transcript 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.
Filing fees and subpoena process server fees are recoverable; however, long distance
telephone calls and expert witness fees are not.
Brown v. Lambert’s Cafe III, 2016 WL
325131, *10 (S.D. Ala. Jan. 27, 2016) (citing Scelta v. Delicatessen Support Services, Inc., 203
F.Supp.2d 1328, 1339 (M.D. Fla. 2002) (“…long distance telephone calls…and expert witness
fees ... are not compensable under § 1920 because these expenses are not enumerated in the
statute”)…However, the filing fee of $400.00…are determined to be compensable…”);
Cromer-Tyler v. Teitel, 2007 WL 2684878, *7 (M.D. Ala. Sept. 11, 2007) (Pursuant to §
1920(1), fees paid to private process servers may be taxed as costs. See, e.g., U.S. EEOC v.
W&O, Inc., 213 F.3d at 624”).
Specifically, with regard to expert witnesses:
“…expert witness fees are not taxable as costs beyond the statutory per diem fee, mileage
and the subsistence allowance provided for under 28 U.S.C. § 1821.” D.B. v. Orange
Cty., Fla., 2015 WL 847293, *3 (M.D. Fla. Feb. 26, 2015). As enunciated in Kerns, 2007
WL 2710372, *2 (emphasis added):
...It is black-letter law that expert witness fees cannot be taxed as costs. See, e.g.,
Morrison v. Reichhold Chemicals, Inc., 97 F.3d 460, 463 (11th Cir.1996) (“we
find that the district court erred in taxing as costs any amount for expert witness
fees in excess of the $40 per day allowed under § 1821, and, upon remand, the
district court should reduce the taxable costs accordingly”); L&W Supply Corp. v.
Acuity, 475 F.3d 737, 741 (6th Cir.2007) (“we hold that expert witness fees may
not be taxed as costs at a court's discretion under Rule 54(d) because § 1920 does
not provide for them”); Walker v. Bozeman, 243 F.Supp.2d 1298, 1308
(N.D.Fla.2003) (“Expert witness fees (above the $40 daily attendance fee
applicable to any witness ...) are not recoverable.”)....
Additionally, pursuant to 28 U.S.C. § 1920(3), courts may tax costs for “fees and
disbursements for ... witnesses.” Witness costs are set by 28 U.S.C. § 1821(b), through
which “[a] witness shall be paid an attendance fee of $40 per day for each day's
attendance. A witness shall also be paid the attendance fee for the time necessarily
occupied in going to and returning from the place of attendance at the beginning and end
of such attendance or at any time during such attendance.” In short, these costs are
limited to witness payments of $40/day. PODS Ent., LLC v. U-Haul Int'l, Inc., 2015 WL
5021668, *1 (M.D. Fla. Aug. 24, 2015). Expenses for expert witnesses which exceed $40
per day (the statutory per diem fee), mileage and subsistence allowance under Section
1821 are not taxable. D.B., 2015 WL 847293, *3-4. Moreover, this Court's Standing
Order 13 provides “[n]o fees of expert witnesses in excess of the above mentioned
attendance, subsistence and travel fees shall be taxed.” Further, Dr. Steward was not a
witness at trial such that even the $40/day cost is inapplicable. The expert witness costs
Austal seeks then, fall outside those costs which Section 1920 permits, and are “clearly
nonrecoverable.” Duckworth v. Whisenant, 97 F.3d 1393, 1399 (11th Cir. 1996); Kivi v.
Nationwide Mut. Ins. Co., 695 F.2d 1285, 1289 (11th Cir. 1983) (“additional amounts
paid as compensation, or fees, to expert witnesses cannot be allowed or taxed as costs in
federal courts[ ]”)…
Bumpers v. Austal U.S.A., L.L.C., 2015 WL 6870122, *14 (S.D. Ala. Nov. 6, 2015).
Concerning Fleming, there is no indication as to what expert capacity he served, or how he is
involved in this case apart from providing an affidavit attesting to the reasonableness of the fees
and costs sought by Cardinal.
Additionally, there is no contractual provision in the Invoices’
Terms & Conditions of Sale referencing recovery for expert fees.
Moreover, as noted in Vision
Bank v. Anderson, 2011 WL 2142786 , *4 (S.D. Ala. May 31, 2011):
… Plaintiff also seeks to recover $275.00 charged by Fleming for his work as an expert
in this matter. None of the agreements at issue contain unambiguous terms by which
Defendant agrees to pay expert fees…an Alabama “trial court does not have the
discretion to award fees for expert witnesses unless a statute authorizes the recovery of
such fees.” Se. Envtl. Infrastructure, L.L.C. v. Rivers, 12 So.3d 32, 52 (Ala.2008) (internal
quotations omitted). Plaintiff has not identified any Alabama statute which would
authorize its recovery of expert fees in this matter, nor has it demonstrated how this
expert fee is “a component of otherwise compensable attorneys fees[.]” Id. (internal
quotations omitted). Therefore, Plaintiff's request for expert fees is DENIED.
Further, there was no trial and thus, what would be Fleming’s maximum expert fee – the $40/day
cost – is not recoverable.
See also Natures Way Marine, LLC v. Everclear of Ohio, Ltd., 2015
WL 1757116, *7-8 (S.D. Ala. Apr. 17, 2015).
Thus, Cardinal’s motion is GRANTED as to the $400.00 court filing cost and $87.43 in
subpoena process server fees but DENIED as to the long distance telephone calls and expert
witness fee request, for a total recovery of $487.43 in costs.
Accordingly, it is ORDERED that Plaintiff’s Motion for Summary Judgment (Docs. 20,
22) is GRANTED in part and DENIED in part as set forth supra in the total amount of
$688,920.62 comprised of: $667,565.69 (plus interest accruing at the contractual rate) on
Cardinal’s claims for breach of contract, account stated and open account; $20,867.50 in
attorney’s fees; and $487.43 in costs.
Defendant Hemacare’s claims against Third-Party Janis Spratlin remain pending.
DONE and ORDERED this the 11th day of January 2017.
/s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE
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