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The Dallas/Fort Worth International Airport Board v. Inet Airport Systems, Inc.

United States District Court, N.D. Texas, Fort Worth Division

September 21, 2017

INET AIRPORT SYSTEMS, INC., ET AL., Defendants, and INET AIRPORT SYSTEMS, INC., ET AL., Counterclaimants.



         Came on for consideration the second motion of counterclaimants, INET Airport Systems, Inc. ("INET Inc."), and INET Airport Systems, LLC, as successor in interest to INET Airport Systems, Inc. ("INET LLC"), (collectively "INET") for attorney's fees. The court, having considered the motion, the response of plaintiff, The Dallas/Fort Worth International Airport Board, the reply, the record, and applicable authorities, finds that the motion should be granted.

         I. Background

         On March 30, 2015, the court signed a memorandum opinion and order granting in part and denying in part plaintiff's motion for summary judgment and granting defendants' motion for summary judgment.[1] Doc.[2] 85. Following the pretrial conference and further briefing, the court narrowed the issues to be tried. On June 8, 2015, the court heard evidence on those issues and, by memorandum opinion and order signed June 16, 2015, the court awarded INET LLC the sum of $318, 189.4 0 for work performed under the contract with plaintiff[3] and attorney's fees in the amount of $975, 539.34 for prevailing on its breach of contract claim against plaintiff. Doc. 157.[4] A final judgment was signed that same day. Doc. 158.

         Plaintiff appealed and the Court of Appeals for the Fifth Circuit reversed the grants of summary judgment and vacated the court's judgment awarding damages and fees. Dallas/Fort Worth Int'l Airport Bd. v. IMET Airport Sys., Inc., 819 F.3d 245 (5th Cir. 2016). Plaintiff sought panel rehearing, which was denied. Dallas/Fort Worth Int'l Airport Bd. v. INET Airport Sys., Inc., 821 F.3d 643 (5th Cir. 2016). In so ruling, the Fifth Circuit noted that issues inadequately briefed are considered abandoned. 821 F.3d at 644.

         Although it reversed the court's summary judgment rulings and final judgments, the Fifth Circuit vastly narrowed the issues to be tried on remand. In particular, the Fifth Circuit held that the court had "correctly concluded there was no dispute of material fact regarding whether the plans and specifications were defective and had to be changed for the Rooftop Units to function properly." 819 F.3d at 250. Further, it recognized that the contract required each party to cooperate with the other. Id. at 250-51. Thus, the ultimate issue to be resolved on remand was "which party prevented performance by failing to cooperate in arriving at a solution once the parties discovered defects." Id. at 250. The court prepared a proposed verdict form in keeping with the Fifth Circuit's directives. Doc. 184. Plaintiff raised numerous objections, which the court overruled, pointing out the narrow scope of the matters to be tried. Doc. 188.

         The court made slight revisions to the proposed verdict form and provided it to the parties by order signed June 27, 2017. Doc. 209. Plaintiff again raised numerous objections in a 37 page document filed June 29, 2017, Doc. 211, accompanied by a 65 page appendix. Doc. 212. By order signed July 5, 2017, the court overruled the objections and made minor changes to the verdict form. Doc. 228. In particular, the court noted that plaintiff relied on the "law of the case" in lodging its objections, whereas the whole point of the court's proposed verdict form was to adhere strictly to the law of the case as articulated by the Fifth Circuit. Doc. 228 at 2-3.

         Immediately prior to trial, plaintiff sought leave to file a supplemental answer to assert the defense of payment, representing that plaintiff had tendered to INET LLC "payment which INET has accepted" and that "[plaintiff's] payment constitutes full payment and discharge of any indebtedness owed by [plaintiff] to INET." Doc. 171, Ex. A at 2, ¶ 3. As INET explained in its response to the motion, it had not accepted any payment from plaintiff. Doc, 175. The response recited the lengthy history of plaintiff's attempts to manipulate the proceedings and avoid paying INET its attorney's fees. INET urged the court to deny the motion on the grounds of undue delay, bad faith, and prejudice. Id. The court denied the motion. Doc. 183.

         On July 10 and 11, 2017, the court conducted a jury trial. On July 11, 2017, the jury returned its verdict in favor of INET Inc., finding that, after plaintiff and INET Inc. learned that the plans and specifications were defective, plaintiff intentionally conducted itself in such a way that it prevented plaintiff and INET Inc. from reaching an agreement about how to address the defects in the plans and specifications. Doc. 249. On July 12, 2017, the court signed its order and final judgment awarding INET LLC the sum of $395, 974.13[5] plus post-judgment interest thereon and dismissing with prejudice the claims plaintiff had asserted. Docs. 255, 256.

         On July 26, 2017, INET filed its second motion for attorney's fees. Doc. 257. Plaintiff filed a document requesting an opportunity for adversary submission on attorney's fees. Doc. 260. By order signed July 27, 2017, the court clarified that it intended to determine the matter of attorney's fees based on briefs and supporting affidavits or declarations and did not anticipate taking oral testimony, although the matter might be set for hearing if the court determined that a hearing would be helpful. Doc. 261. Plaintiff filed its response to the motion, Doc. 275, and appendix in support, Doc. 276. INET filed its reply and appendix. Docs. 282, 283.

         In the interim, plaintiff appealed from the judgment on the jury's verdict. Doc. 263. The court determined that it would hold the matter of attorney's fees in abeyance pending the appeal since additional fees might be appropriate depending on the Fifth Circuit's ruling. Doc. 284. After transmission of the record on appeal, plaintiff filed a motion to dismiss its appeal, which was granted. Doc. 285. Apparently, no agreement was reached as to the award of attorney's fees.

         II. Merits of the Motion and Plaintiff's Opposition

         Relying on the law of the case doctrine, as plaintiff once did, and the waiver doctrine, INET contends that plaintiff cannot now relitigate the propriety of the $975, 539.34 initially awarded as attorney's fees following the first trial in this action. Plaintiff does not dispute that it did not raise on its first appeal any issue regarding the propriety of the amount of the award. Instead, it urges that because the award was vacated, it is, in effect, a nullity.

         The law of the case doctrine is a complicated one that does not seem to fit exactly the issue now before the court. See Medical Ctr. Pharmacy v. Holder, 634 F.3d 830 (5th Cir. 2011). Rather, the waiver doctrine is applicable. It holds that an issue that could have been, but was not, raised on appeal is forfeited and may not be revisited by the district court on remand. Id. at 834. The waiver doctrine is a consequence not of a ruling by the court of appeals, but of a party's inaction. Lindquist v. City of Pasadena, 669 F.3d 225, 239 (5th Cir. 2012). "The doctrine promotes procedural efficiency and 'prevents the bizarre result that a party who has chosen not to argue a point on a first appeal should stand better as regards the law of the case than one who had argued and lost.'" Id. at 239-40 (citation omitted). Here, as in Lindquist, plaintiff could have attacked the basis for the court's award of attorney's fees as well as the reasonableness, necessity, equity, and justice of the award, but failed to do so. It cannot now raise arguments that could and should have been raised on the first appeal.

         Plaintiff's primary objection to an award of attorney's fees to INET is the contention that § 271.153 of the Texas Local Government Code does not create a right to recover attorney's fees. This is the first time that plaintiff has raised the argument. When the court first considered the award of attorney's fees, the parties were in accord that the provisions of § 271, 153 governed. Doc. 157 at 8. Plaintiff's argument at the time was that attorney's fees could only be awarded on INET's counterclaim, citing § 271.153 as "limiting recovery of fees to those 'awarded in an adjudication brought against a localgovernmental entity for breach of a contract.'" Doc. 130 at 6. Plaintiff argued ...

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