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Adonai Communications, LTD. v. Awstin Investments, LLC

United States District Court, N.D. Texas, Dallas Division

January 22, 2018

ADONAI COMMUNICATIONS, LTD., Plaintiff,
v.
AWSTIN INVESTMENTS, L.L.C., PREMIUM ACQUISITIONS, INC. f/k/a MIDCOAST ACQUISITIONS CORP., MDC CREDIT CORP. f/k/a MIDCOAST CREDIT CORPORATION, PREMIUM INVESTORS, INC., f/k/a MIDCOAST INVESTMENTS, INC., SHOREWOOD ASSOCIATES, INC., SHOREWOOD HOLDINGS CORP., and MICHAEL BERNSTEIN, individually, Defendants.

          MEMORANDUM OPINION AND ORDER

          SAM A. LINDSAY UNITED STATE DISTRICT JUDGE.

         Before the court is Plaintiff's Motion to Amend Final Default Judgment, filed December 28, 2017 (Doc. 78). Having considered the motion, appendix, record, and applicable law, the court grants in part and denies in part the motion. The motion is granted with regard to Plaintiff Adonai Communications, Ltd.'s (“Adonai”) request that the court amend its Final Default Judgment issued on December 1, 2017, to award it an additional $239, 248.43 in “attorney's fees as damages, ” and denied in all other respects.

         I. Background

         The court has addressed the facts and procedural history of this case in several previous opinions and assumes the parties' familiarity with these opinions. See Adonai Commc'ns, Ltd. v. Awstin Invs., LLC, 2017 WL 5992227 (N.D. Tex. Dec. 1, 2017) (Lindsay, J.) (“Adonai III”); Adonai Commc'ns, Ltd. v. Awstin Invs., LLC, 2012 WL 899271 (N.D. Tex. March 16, 2012) (Lindsay, J.) (“Adonai II”); Adonai Commc'ns, Ltd. v. Awstin Invs., LLC, 2011 WL 6122268 (N.D. Tex. Dec. 7, 2011) (Lindsay, J.) (“Adonai I”).

         In Adonai III, the court granted in part and denied in part Adonai's Motion to Reform and Finalize Judgment. Among other things, the court awarded Adonai $378, 678.65 in damages for its breach of contract claim (comprised of $244, 061 in tax liabilities and $134, 617.65 in interest already paid on the tax liabilities), $8, 500 for attorney's fees it incurred for Mr. Christopher S. Ayres's legal services in connection with the tax protest litigation, as well as prejudgment and postjudgment interest and costs. Adonai III, 2017 WL 5992227, at *5. The court denied Adonai's motion in all other respects, including insofar as it sought to recover an additional sum of $239, 248.43 for “attorney's fees as damages, ” which included costs incurred for the law firm of Baker Botts, L.L.P's (“Baker Botts”) legal services in 2009 and 2010 in filing and prosecuting the tax protest in the amount $175, 932.26, and costs incurred for the law firm of Gary Reed & McGraw, L.L.P's (“Gary Reed & McGraw”) services as tax counsel in connection with the tax protest litigation from December 8, 2011, to June 25, 2015, in the amount of $63, 316.17. Id. at *6.[1] Although the court recognized that “attorney's fees as damages” were recoverable pursuant to Texas law under the circumstances presented, the court denied the relief sought, stating that Adonai:

failed to provide the court with any testimony or evidence that the amount of fees it paid Baker Botts and [Gary Reed & McGraw] was reasonable and necessary. Absent any evidence or testimony regarding the reasonableness or necessity of these fees, the court concludes that Adonai is not entitled to recover these amounts.

Id. at *4. Adonai now moves the court to amend the Final Default Judgment and award it the sum of $239, 248.43 for “attorney's fees as damages, ” as well as all other amounts the court declined to award it.

         II. Legal Standard

         A motion to alter or amend the judgment under Rule 59(e) of the Federal Rules of Civil Procedure “calls into question the correctness of a judgment.” Templet v. HydroChem Inc., 367 F.3d 473, 478 (5th Cir. 2004) (citation omitted). Such a motion “must clearly establish either a manifest error of law or fact or must present newly discovered evidence.” Marseilles Homeowners Condominium Ass'n Inc. v. Fidelity Nat'l Ins. Co., 542 F.3d 1053, 1058 (5th Cir. 2008) (citation omitted). It may not be used to relitigate issues that were resolved to the movant's dissatisfaction. Forsythe v. Saudi Arabian Airlines Corp., 885 F.2d 285, 289 (5th Cir. 1989). A Rule 59(e) motion may not raise arguments or present evidence that could have been raised prior to entry of judgment. Simon v. United States, 891 F.2d 1154, 1159 (5th Cir. 1990) (citation omitted). When considering a Rule 59(e) motion to reconsider, a court may not grant such a motion unless the movant establishes: “(1) the facts discovered are of such a nature that they would probably change the outcome; (2) the alleged facts are actually newly discovered and could not have been discovered earlier by proper diligence; and (3) the facts are not merely cumulative or impeaching.” Infusion Res., Inc. v. Minimed, Inc., 351 F.3d 688, 696-97 (5th Cir. 2003). “Relief under Rule 59(e) is also appropriate when there has been an intervening change in the controlling law.” Schiller v. Physicians Res. Grp. Inc., 342 F.3d 563, 567 (5th Cir. 2003).

         District courts have “considerable discretion in deciding whether to grant or deny a motion to alter a judgment.” Hale v. Townley, 45 F.3d 914, 921 (5th Cir. 1995). In exercising this discretion, a district court must “strike the proper balance between the need for finality and the need to render just decisions on the basis of all the facts.” Id. With this balance in mind, the Fifth Circuit has observed that Rule 59(e) “favor[s] the denial of motions to alter or amend a judgment.” Southern Constructors Grp., Inc. v. Dynalectric Co., 2 F.3d 606, 611 (5th Cir. 1993). Stated another way, “[r]econsideration of a judgment after its entry is an extraordinary remedy that should be used sparingly.” Templet, 367 F.3d at 479.

         III. Analysis

         Pursuant to Federal Rule of Civil Procedure 59(a)(2), Adonai moves the court to alter or amend the Final Default Judgment to consider additional evidence to establish that it is entitled to the sum of $239, 248.43 for “attorney's fees as damages.” Adonai also moves the court to amend the judgment to allow recovery of all other amounts denied in Adonai III.

         As a threshold matter, Rule 59(a)(2) of the Federal Rules of Civil Procedure provides as follows: “After a nonjury trial, the court may, on motion for a new trial, open the judgment if one has been entered, take additional testimony, amend findings of fact and conclusions of law or make new ones, and direct the entry of a new judgment.” Fed.R.Civ.P. 59(a)(2). As no nonjury trial took place in this case, Rule 59(a)(2), by its express terms, has no application. Accordingly, and as Adonai's motion was filed within twenty-eight days of the Final Default Judgment, the court will construe Adonai's motion as one to alter or amend judgment under Federal Rule of Civil Procedure 59(e), supra.

         Prior to addressing the merits of Adonai's motion, the court is compelled to comment on Adonai's none-too-nuanced suggestion that its current predicament-having to submit additional evidence to demonstrate that the $239, 248.43 in “attorney's fees as damages” sought was reasonable and necessary-is a result of the court's failure to inform it by prior order that an applicant for attorney's fees must submit evidence from which the court can determine that the amount of fees sought was reasonable and necessary. See Pl.'s Mot. 2 (“There was no mention, nor complaint by the Court concerning the submission of proof concerning attorney's fees.”). Adonai is obviously referring to the court's previous order (Doc. 74) in which the court, rather than denying Adonai's motion outright, gave it an opportunity to supplement its Motion to Reform and Finalize Judgment to correct certain mathematical errors and to provide some evidence that it (rather than Dr. Graves) was even a party entitled to an award of damages in connection with the underlying tax protest, as the only evidence before the court showed that the IRS assessed the tax penalty against Dr. Graves, not Adonai. The law is clear that “attorney's fees sought to be recovered as damages must be reasonable and necessary.” American Home Assurance Co. v. United Space Alliance, LLC, 378 F.3d 482, 490 (5th Cir. 2004) (citations omitted). It is not ...


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