Rip van Acker wakes up – new Order in Renfroe v Rigsby

Before we take a look at Judge Acker’s latest order, we need to pick up two briefs filed by the Rigsby sisters in reply to Renfroe’s OMG Amended Response as we continue to hunt the Snark, this time with the Bellman’s Speech leading our way through the documents.

“Other maps are such shapes, with their islands and capes!
But we’ve got our brave Captain to thank:
(So the crew would protest) “that he’s bought us the best–
A perfect and absolute blank!”

Judging by the Defendant’s Reply to Renfroe’s Amended Response to the Court’s Question, the Rigsby sisters felt the Joint Stipulations had “filled in the blank,” so to speak, until they read Renfroe’s Amended Response. (all emphasis added)

In this document, Renfroe, among other things, referred to its original response as “imprecise,” “inaccurate,” and “confus[ing].” This filing also indicated that its previous response may have left the Court with a “misperception of Renfroe’s intentions,” and “unintentionally led the Court to believe that it would be conducting a trial by affidavit on the question of its attorneys’ fees,” and that its response “expect[ed] the Court to read [Renfroe’s counsel’s] minds.” Given Renfroe’s Amended Response, the Defendants believe that they too may have fallen prey to an incorrect interpretation of Renfroe’s original response and are likewise now unclear as to Renfroe’s intentions in connection with the Joint Stipulations of the Parties (“Joint Stipulation”) that was filed on January 14, 2009…and the briefing the Court ordered on January 28, 2009… As such, the Defendants submit this reply.

In its Amended Response, Renfroe represents that it is not seeking attorneys’ fees as damages for breach of contract. This acknowledgement should narrow the remaining issues to be resolved. However, in its Amended Response, Renfroe also indicated that it intends to go beyond the scope of the Court’s January 28, 2009 Order and brief its entitlement to attorneys’ fees as some sort of equitable relief that has never been asserted. This request is inconsistent with Renfroe’s pleadings, inconsistent with the Court’s orders and inconsistent with what Defendants understood the parties were trying to accomplish with the Joint Stipulation – namely to submit the issue of damages sought for breach of contract on papers instead of a trial.

He was thoughtful and grave–but the orders he gave
Were enough to bewilder a crew.
When he cried “Steer to starboard, but keep her head larboard!”
What on earth was the helmsman to do?

In light of what seems to be universal confusion, at least among the parties and their counsel, and at the risk of being verbose, a brief recitation of how we got here may be warranted. Renfroe asserted two causes of action for damages in this lawsuit: Count 1: Breach of Contract; and Count 2: Violation of Alabama Trade Secrets Act…

After substantial and thorough briefing on summary judgment motions and cross summary judgment motions on both of these claims, the Court entered an Order on October 29, 2008…which (1) granted Defendants’ Motion for Summary Judgment as to Renfroe’s claim under the Alabama Trade Secrets Act; (2) granted Renfroe’s Motion for Summary Judgment as to liability on its breach of contract claim; and (3) ordered a trial to permit Renfroe to “prove damages proximately caused by the said breach [of contract].” Based on the Court’s Order…and accompanying Memorandum Opinion…the Defendants understood that the sole remaining issue to be resolved at trial was whether Renfroe could carry its burden of proof that it was entitled to damages for breach of contract under Alabama law.

Then the bowsprit got mixed with the rudder sometimes:
A thing, as the Bellman remarked,
That frequently happens in tropical climes,
When a vessel is, so to speak, “snarked.”

In their motions for summary judgment, the Defendants argued that the types of damages sought by Renfroe were not the types of damages that are recoverable for breach of contract under Alabama law. In its Order and Memorandum Opinion, the Court did not address the merits of these arguments and instead stated that they did not need to be determined at that time.

Subsequently, counsel for the parties had conversations regarding the damages Renfroe was seeking. Ultimately, counsel for Renfroe represented to the Defendants’ counsel that it was limiting the damages it sought to two categories: (1) the consulting fees paid to the Defendants by Scruggs; and (2) the attorneys’ fees paid by Renfroe to its own attorneys in connection with the prosecution of the breach of contract claim. Based upon this understanding, the Defendants agreed that, if the parties could come to certain agreements regarding evidentiary issues, that the case could be decided on motions, stipulations and documentary evidence, including declarations, if necessary.

Subsequently, Renfroe advised that the only damages it intended to prove initially were damages in the form of the consulting fees. Renfroe stated that it would wait until after a decision was made on consulting fees before addressing its entitlement to attorneys’ fees, as is traditionally done in cases where attorneys’ fees are sought. As such, at the time the Joint Stipulation was filed with the Court, the only category of damages the parties proposed to address in the initial briefing schedule was whether Renfroe could recover the consulting fees as damages.

But the principal failing occurred in the sailing,
And the Bellman, perplexed and distressed,
Said he had hoped, at least, when the wind blew due East,
That the ship would not travel due West!

Following the filing of the Joint Stipulation, the Court entered its Order asking three questions. Subsequently, counsel for the parties discussed again the issue of litigating the remaining damage issues without a trial. In these discussions, Renfroe changed its position from earlier discussions and expressed its desire to have the attorneys’ fee issue submitted to the Court at the same time as the consulting fees issue. The Defendants were still agreeable to this so long as certain documents would be produced and a stipulation could be reached regarding evidentiary issues.

Renfroe’s counsel stated that they would prepare a new stipulation for review and provide the requested attorneys’ fees documents. The Defendants were waiting for these documents and a new proposed stipulation to be provided by Renfroe when it received Renfroe’s Amended Response (and Defendants are still waiting for these documents as of the time of this filing).

But the danger was past–they had landed at last,
With their boxes, portmanteaus, and bags:
Yet at first sight the crew were not pleased with the view,
Which consisted to chasms and crags.

Given Renfroe’s Amended Response, the Defendants are unclear how the Court wishes the parties to proceed. Indeed, while the Court’s Order of January 28, 2009…permits Renfroe to prove its entitlement to attorneys’ fees as a result of Defendants’ breach of contract, the only stipulation between the parties that has been filed relates only to consulting fees. Defendants’ willingness to submit the attorneys’ fee issue on paper was conditioned upon reaching an agreement on evidentiary issues and receiving certain requested documents. Such an agreement has not been formalized nor have any documents been produced.

Moreover, by its Amended Response, Renfroe appears to have changed the scope of the briefing ordered by the Court to include claims that were not contemplated by the Court’s Order of October 29, 2008, were not provided for in the Court’s Order of January 28, 2009, and were not set to be tried. In fact, in its Amended Response, Renfroe acknowledges that it is not seeking attorneys’ fees as damages for breach of contract. Rather, Renfroe appears to seek leave to prove an entitlement to “damages” for certain equitable claims that have never been asserted. If Renfroe is no longer seeking its own attorneys’ fees as damages for breach of contract, which is what it says, then the only remaining damage issue relates to the consulting fees and the portion of the Court’s Order of January 28, 2009 dealing with attorneys’ fees appears to be moot.

“Friends, Romans, and countrymen, lend me your ears!”
(They were all of them fond of quotations)…
“We have sailed many months, we have sailed many weeks,
(Four weeks to the month you may mark),
But never as yet (’tis your Captain who speaks)
Have we caught the least glimpse of a Snark!

As the Defendants have previously asserted to this Court and as the Defendants advised Renfroe’s counsel previously, the Defendants believe that, as a matter of law, Renfroe is not entitled to recover the consulting fees damages it represented it was seeking for breach of contract. If the Defendants are correct in this assertion, all other issues are moot.

As such, contemporaneously with the filing of this reply, the Defendants are filing a Motion to Strike Damages. Given Renfroe’s Amended Response, and to streamline what is now developing into a much more complex process than initially envisioned, Defendants believe that the pure legal issue of whether the consulting fees damages sought by Renfroe for its breach of contract claim are recoverable under Alabama law should be addressed by the Court prior to Renfroe being put to proof on other issues, like whether the consulting fees were proximately caused by the breach.

The Rigsbys’ Motion to Strike Damages is a must read for those of you interested in the case law; but, otherwise, their position is well summarized in these excerpts from the Motion:

…Renfroe filed its Amended Response that acknowledged that it was not seeking its own attorneys’ fees as damages for breach of contract. Consequently, the only remaining damages sought by Renfroe as damages for breach of contract are the consulting fees. However, because such an award of those damages would place Renfroe in a better position than it would have been in had the breach not occurred, these damages are not recoverable under Alabama law and should be stricken.

The Rigsbys made this argument previously in their Motion for Summary Judgment for Lack of Subject Matter Jurisdiction…their Response to Renfroe’s Motion to Compel Discovery Responses…and in their Supplemental Brief in Support of Motion for Summary Judgment on Plaintiff’s Claim for Breach of Contract… The Court indicated in its Memorandum Opinion…in connection with the summary judgment motions and Order…that it would address the merits of this argument at a later time.

As resolution of the damage issue in favor of the Rigsbys would dispose of the case, the Rigsbys submit that the issue should be resolved before a trial or submission on papers.

Under Alabama law, damages for a claim of breach of contract: should return the injured party to the position he would have been in had the contract been fully performed. . . . However, the injured party is not to be put in a better position by a recovery of damages for the breach than he would have been in if there had been performance…

This concept is further recognized in Alabama’s Pattern Jury Instruction on breach of contract damages:

Damages for breach of a contract is that sum which would place the injured party in the same condition he would have occupied if the contract had not been breach.

In sum, not one case previously cited by Renfroe in its three briefs addressing this issue support its argument, namely that it can be placed in a better position than it would have been had the alleged breach of contract not occurred. In fact, Alabama law is to the contrary. Consequently, the Court should strike Renfroe’s claim for damages in the form of consulting fees.

“We have sailed many weeks, we have sailed many days,
(Seven days to the week I allow),
But a Snark, on the which we might lovingly gaze,
We have never beheld till now!

This brings us to Judge’s Acker’s Memorandum Opinion and Order and our first glimpse of Acker as a Yale man – Yale Law ’52 to be exact and well schooled, no doubt, in the impropriety of appearing too eager to profit from litigation. Indeed, Renfroe’s amended Response appears to have been the wakeup call for (Rip van) Acker.

It is obvious from the filing by plaintiff on January 30, 2009, and the two filings by defendants on February 6, 2009, that there has been, and still is, a major misunderstanding between the court and the parties. Whether that misunderstanding is justifiable, whether it can be blamed on one or more parties or the court, and whether or not the misunderstanding can be ironed out at this late date, are questions to be resolved.

“Come, listen, my men, while I tell you again
The five unmistakable marks
By which you may know, wheresoever you go,
The warranted genuine Snarks.

The court has never seriously contemplated an award of attorneys’ fees to plaintiff for those fees it incurred in prosecuting this case, as a form of equitable relief. Plaintiff has already received reimbursement for all of the attorneys’ fees it incurred in this case and which it can recover in this case. If this were not so there would have been no reason to differentiate between the attorneys’ fees already recovered as a contempt sanction and any other attorneys’ fees incurred by plaintiff in this case.

Once the injunction had been enforced, and plaintiff compensated for attaining that enforcement, this case became simply an action for the recovery of compensatory damages for breach of contract. There is a complete distinction, one under which this court has always operated, between attorneys’ fees that are provided by statute or by contract, and those attorneys’ fees that are barred by the American Rule, and attorneys’ fees incurred by a contracting party in separate, collateral litigation and that are, or may be, the proximate consequence of a breach of the contract.

It is obvious at this juncture that plaintiff is unprepared to prove, and apparently does not claim, compensatory damages of the kind this court erroneously thought it was claiming. Plaintiff should not waste its time, or that of this court, undertaking to prove the amount of, or the reasonableness of, the attorneys’ fees it incurred in prosecuting this case.

“For, although common Snarks do no manner of harm,
Yet, I feel it my duty to say,
Some are Boojums–” The Bellman broke off in alarm,
For the Baker had fainted away.

The court will be glad to provide a 28 U.S.C. § 1292(b) opportunity for plaintiff to undertake an interlocutory appeal if it makes such a request within seven (7) calendar days. The vehicle would be the deeming of defendants’ motion to strike damages as a motion for partial summary judgment.

DONE this 9th day of February, 2009.

I do believe he is – done!

One thought on “Rip van Acker wakes up – new Order in Renfroe v Rigsby”

  1. At the end of the day, this lawsuit, which never should have been allowed to proceed independent of the False Claims Act case against State Farm, will end with Renfroe taking nothing in damages. Acker meantime has done everything he could to hurt the related False Claims Act case, from his ill advised criminal contempt proceedings right etc etc etc.

    An unbiased judge in Judge Vinson saw through little Billy Acker inside a minute. Renfroe v Rigsby is at its end game, it seems everyone gets that except Team Renfroe.

    Down the line when this story is done the heel/dupe will be Mr and Mrs Renfroe. The folks at State Farm are very smart stringing the Renfroe’s out to the bitter end before curbing them. Damaged goods, just like Tim Marshall.

    sop

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