Todd v. Fidelity National Financial, Inc. et al
Filing
137
ORDER granting in part and denying in part 83 Motion for Costs and denying 84 Motion for Attorney Fees. By Judge Robert E. Blackburn on 3/12/2014.(klyon, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Action No. 12-cv-00666-REB-CBS
UNITED STATES OF AMERICA,
ex rel. Dale Todd,
Plaintiffs,
v.
FIDELITY NATIONAL FINANCIAL, INC.,
SERVICELINK, INC.,
Defendants.
ORDER CONCERNING MOTION FOR COSTS & MOTION FOR ATTORNEY FEES
Blackburn, J.
This matter is before me on the following: (1) Defendant Castle Stawiarski, LLC
and CS Legal Services’ Motion for Costs [#83]1; and (2) Defendant Castle
Stawiarski, LLC and CS Legal Services’ Motion Attorneys’ Fees [#84], both filed
July 22, 2013. The motions prompted responses [#97 & #98] and replies [#102 &
#103]. I grant the motion for costs in part and deny it in part. I deny the motion for
attorney fees.
I. BACKGROUND
This case is a qui tam action under the False Claims Act, 31 U.S.C. § 3279 et
seq. The relator, Dale Todd, filed his first amended complaint [#11] on January 15,
2013, alleging that Colorado American Title performed vastly substandard title work for
1
“[#83]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this
convention throughout this order.
homes whose loans were guaranteed by Freddie Mac, Fannie Mae, HUD, FHFA or VA.
According to the first amended complaint, defendants Castle Stawiarski, LLC and CS
Legal Services previously owned Colorado American Title and provided legal services in
connection with the title services conducted by Colorado American Title. On July 5,
2013, following some initial proceedings, the relator voluntarily dismissed without
prejudice 20 of the 25 defendants named in the amended complaint. The notice of
dismissal [#70] was filed under FED. R. CIV. P. 41(a)(1)(A)(i) and dismissed without
prejudice the claims against Castle Stawiarski, LLC and CS Legal Services (Law Firm
Defendants) and several other defendants. Even though the notice of dismissal [#70]
was self-effectuating, the court entered an order [#73] approving the notice, dismissing
the defendants specified in the notice, and dropping those defendants from the caption
of this case.
In their present motions, the Law Firm Defendants seek an award of costs under
FED. R. CIV. P. 54(d)(1) and an award of attorney fees under 31 U.S.C. § 3730(d)(4),
part of the False Claims Act. In response to both motions, the relator contends, inter
alia, that the law firm defendants are not properly viewed as “prevailing parties” under
either Rule 54(d)(1) or § 3730(d)(4) because the claims against the Law Firm
Defendants were dismissed by the relator, the plaintiff, under Rule 41(a)(1)(A)(i).
According to the Law Firm Defendants, they properly are viewed as prevailing parties
and are entitled to an award of both costs and attorney fees.
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II. ANALYSIS
A. Costs
Addressing an award of costs after a voluntary dismissal by a plaintiff, the United
States Court of Appeals for the Tenth Circuit, sitting en banc, held “that a defendant is a
prevailing party under Rule 54 when, in circumstances not involving settlement, the
plaintiff dismisses its case against the defendant, whether the dismissal is with or
without prejudice.” Cantrell v. Int'l Bhd. of Elec. Workers, AFL-CIO, Local 2021, 69
F.3d 456 (10th Cir. 1995). The dismissal in this case did not involve a settlement.
Given the holding in Cantrell, I conclude that the Law Firm Defendants are prevailing
parties for the purposes of Rule 54(d).
Even if the Law Firm Defendants are prevailing parties, the relator asserts, their
motion for costs should be denied because it was untimely. Under D.C.COLO.LCivR
54.1, a bill of costs must be filed “within 14 days after the entry of judgment or final
order.” The notice of dismissal [#70] was neither an entry of judgment nor a final order.
The order of the court issued in reaction to the notice [#73] was not a final order. The
motion for costs was timely filed and, if anything, is premature.
The relator argues also that costs should not be awarded because the factors
specified in Cantrell militate against an award of costs. Rule 54 creates a presumption
that the district court will award costs to the prevailing party. Cantrell, 68 F.3d at 459.
A court has discretion to decline to award costs, but that discretion is limited and may
be exercised only when the circumstances summarized in Cantrell are present. Id. In
their motion, the Law Firm Defendants seek a determination that they are entitled to an
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award of costs, and they seek leave to file a bill of costs within 14 days of an order on
their motion. Without a bill of costs, the court cannot fully analyze the Cantrell factors.
Because a judgment or final order has not entered in this case, a bill of costs is
not yet due from the Law Firm Defendants. However, because the Law Firm
Defendants are prevailing parties under Rule 54(d), they are entitled to submit a bill of
costs within 14 days after the entry of a judgment or final order in this case.
D.C.COLO.LCivR 54.1. Once a judgment or final order has entered, a bill of costs has
been submitted, and the clerk has taxed costs under FED. R. CIV. P. 54(d), the court
then may review any motion challenging the costs taxed by the clerk and, as part of that
review, apply the factors summarized in Cantrell. Absent a judgment or final order,
however, taxation of costs and review of costs taxed is premature. Thus, the motion for
costs filed by the Law Firm Defendants is granted to the extent the Law Firm
Defendants seek a determination that they are prevailing parties under FED. R. CIV. P.
54(d). Resolution of the amount of costs to be taxed and the propriety of an award of
costs in a specific amount must await completion of the events and procedures outlined
in FED. R. CIV. P. 54(d) and D.C.COLO.LCivR 54.1.
B. Attorney Fees
In the context of a notice of dismissal under FED. R. CIV. P. 41(a)(1)(A)(i), the
landscape for prevailing parties shifts dramatically when the issue is an award of
attorney fees under a federal fee shifting statute, as opposed to an award of costs under
Rule 54(d). The Tenth Circuit addressed this issue in Lorillard Tobacco Co. v.
Engida, 611 F.3d 1209 (10th Cir. 2010). The Lorillard court addressed a claim that a
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defendant dismissed from an action via a notice of dismissal under Rule 41(a)(1)(A)(i)
was a prevailing party for the purpose of a fee shifting statute. In Lorillard, the court
noted that “(u)nder the plain language of Rule 41(a)(1)(A)(i), a plaintiff may dismiss the
action without a court order; no judicial sanction is required.” Lorillard, 611 F.3d at
1215.
Voluntary dismissal of an action ordinarily does not create a prevailing
party because in order to create a prevailing party there must be a
“judicially sanctioned change 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, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001).
Lorillard, 611 F.3d at 1215. Absent such a judicially sanctioned change, the Lorillard
court held, the defendant was not a prevailing party for purposes of the fee shifting
statute.
The defendant in Lorillard sought an award of attorney fees under 15 U.S.C. §
1117(a), part of the Lanham Act. That section provides, in relevant part:
The court in exceptional cases may award reasonable attorney fees to the
prevailing party.
15 U.S.C. § 1117(a). The Law Firm Defendants seek an award of attorney fees under
31 U.S.C. § 3730(d)(4), which provides, in relevant part:
[i]f the Government does not proceed with the action and the person
bringing the action conducts the action, the court may award to the
defendant its reasonable attorneys’ fees and expenses if a defendant
prevails in the action and the court finds that the claim of the person
bringing the action is clearly frivolous, clearly vexatious or brought
primarily for purposes of harassment.
Both statutes provide for an award of attorney fees to a prevailing party, although §
3730(d)(4) is limited to prevailing defendants.
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Given the holdings in Buckhannon and Lorillard, I may not conclude that the
Law Firm Defendants are prevailing defendants for the purpose of an award of attorney
fees under § 3730(d)(4). The claims against the Law Firm Defendants were dismissed
by the relator via a notice to dismiss under Rule 41(a)(1)(A)(I). That notice was selfeffectuating when filed, and no judicial sanction was required to make the notice
effective. Lorillard, 611 F.3d at 1215. The notice [#70] did not result in a judicially
sanctioned change in the legal relationship of the parties and, therefore, did not cause
the Law Firm Defendants to become prevailing defendants.
The Law Firm Defendants argue that this case differs from Lorillard because in
this case, the court entered an order [#73] approving the Rule 41(a)(1)(A)(i) notice of
dismissal [#70] filed by the relator. That order, the Law Firm Defendants assert,
constitutes a judicially sanctioned change in the relationship of the parties. I disagree.
A determination of who is and who is not a prevailing party does not hinge on whether
or not a court enters an order in response to a Rule 41(a)(1)(A)(i) notice of dismissal.
This is true because court approval of such a notice is not necessary and has no effect
on the legal relationship of the parties independent of the notice. It was the Rule
41(a)(1)(A)(i) notice of dismissal filed by the relator that changed the legal relationship
of the parties, without judicial sanction, and not the order issued in response to the
notice.
III. CONCLUSION & ORDERS
The Law Firm Defendants are prevailing parties under FED. R. CIV. P. 54(d) and,
when a judgment or final order enters in this case, the Law Firm Defendants my file a
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bill of costs and seek taxation of costs from the clerk. Once costs have been taxed, any
award of costs to the Law Firm Defendants may be challenged as provided under Rule
54(d) and D.C.COLO.LCivR 54.1. However, the Law Firm Defendants are not
prevailing defendants for purposes of 31 U.S.C. § 3730(d)(4) and, therefore, are not
entitled to an award of attorney fees.
THEREFORE, IT IS ORDERED as follows:
1. That Defendant Castle Stawiarski, LLC and CS Legal Services’ Motion
for Costs [#83] filed July 22, 2013, is GRANTED in part;
2. That defendants Castle Stawiarski, LLC and CS Legal Services are prevailing
parties under FED. R. CIV. P. 54(d) and MAY FILE a bill of costs under Rule 54(d) and
D.C.COLO.LCivR 54.1, when a judgment or final order enters in this case;
3. That otherwise, Defendant Castle Stawiarski, LLC and CS Legal Services’
Motion for Costs [#83] filed July 22, 2013, is DENIED; and
4. That Defendant Castle Stawiarski, LLC and CS Legal Services’ Motion
Attorneys’ Fees [#84], both filed July 22, 2013, is DENIED.
Dated March 12, 2014, at Denver, Colorado.
BY THE COURT:
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