United States District Court, D. South Carolina, Charleston Division
KEITH F. KRAEMER, Plaintiff,
MASSACHUSETTS MUTUAL LIFE, INSURANCE COMPANY, Defendant.
C. NORTON UNITED STATES DISTRICT JUDGE.
matter is before the court on both parties' proposed Bill
of Costs. For the reasons stated below, the court grants
Massachusetts Mutual Life Insurance Company's
(“MassMutual”) proposed Bill of Costs, ECF No.
79, and denies Keith Kraemer's (“Kraemer”)
proposed Bill of Costs, ECF No. 80.
2002, Kraemer purchased two disability income insurance
policies from MassMutual: Radius DI Policy #8348070
(“Radius Policy”) and Retireguard DI Policy
#8351026 (“Retireguard Policy”) (collectively,
“the policies”). ECF No. 1-1, ¶ 8-10. The
Radius Policy was issued on May 4, 2002 and was set to expire
on May 4, 2015. Id. The Retireguard Policy was
issued on July 1, 2002 and was set to expire on July 1, 2015.
Id. To summarize the lengthy facts that are not
directly relevant to the issues currently before the
court-Kraemer alleged that MassMutual's modification of
its payment date reduced the amount he received under the
policies, and that MassMutual prematurely terminated his
benefits when he reached age 65. Id. ¶¶
16, 17, 25-35.
October 1, 2015, Kraemer filed his complaint in the South
Carolina Court of Common Pleas for Berkeley County, advancing
the following causes of action: (1) breach of contract; (2)
negligence; (3) negligent misrepresentation; (4) constructive
fraud; (5) fraud; (6) insurance bad faith; and (7) violation
of the South Carolina Unfair Trade Practices Act
(“SCUTPA”). Id. ¶¶ 83-137. On
November 11, 2015, MassMutual removed the case. ECF No. 1. A
jury trial was held on May 2-3, 2017, at which Kraemer
prevailed on his breach of contract claim, while MassMutual
prevailed on the remaining causes of action. ECF Nos. 69-72.
On May 15, 2017, MassMutual filed its Bill of Costs with the
court. ECF No. 79. On May 30, 2017, Kraemer filed his
objections to MassMutual's Bill of Costs, ECF No. 88, to
which MassMutual replied on June 7, 2017, ECF No. 89, and
Kraemer responded on June 13, 2017, ECF No. 90. On May 16,
2017, Kraemer filed his Bill of Costs, ECF No. 80, and
MassMutual objected on May 30, 2017, ECF No. 87. The court
held a hearing on the issue on January 29, 2018. ECF No. 94.
The motions have been fully briefed and are ripe for the
first argues that he should receive costs because he is a
prevailing party along with MassMutual. ECF No. 88 at 1. He
then argues that MassMutual should not receive costs because
of its own misconduct. Id. at 3. The court addresses
each argument in turn.
parties request costs under Federal Rule of Civil Procedure
54(d), which states that “[u]nless a federal statute,
these rules, or a court order provides otherwise, costs-other
than attorney's fees-should be allowed to the
prevailing party.” (emphasis added). A
prevailing party is one in whose favor a judgment is
rendered, materially altering the legal relationship between
the parties. Buckhannon Bd. & Care Home, Inc. v. W.
Virginia Dep't of Health & Human Res., 532 U.S.
598, 603 (2001). While parties need not prevail on every
cause of action to be a “prevailing party, ”
Shum v. Intel Corp., 629 F.3d 1360, 1367 (Fed. Circ.
2010), the issue here is whether or not there can be two
prevailing parties. MassMutual is clearly a prevailing party,
having prevailed on six out of seven causes of action.
Kraemer argues that he too can be considered a prevailing
party, because he prevailed on his breach of contract claim.
ECF No. 88 at 2.
Federal Circuit has unequivocally found that there can be
only one prevailing party. Shum, 629 F.3d at
1367-69. The Fourth Circuit has yet to rule directly on the
issue. However, this district, as well as other districts
within the Fourth Circuit, have followed the lead of the
Federal Circuit in finding that there may only be one
prevailing party. See, e.g., Ethox
Chem., LLC v. Coca-Cola Co., 2016 WL 7053351, at *2
(D.S.C. Feb. 29, 2016) (“There can be, however, only
one ‘prevailing party, ' even in cases involving
mixed judgments.”) (quoting Intellectual Ventures I
LLC v. Capital One Fin. Corp, 2015 WL 7283108, at *2
(E.D. Va. Nov. 17, 2015)).
cites cases from other circuits in support of his position
that there can be more than one prevailing party for the
purpose of costs. ECF No. 90 at 1-2. The court does not find
Kraemer's reliance on these cases to be persuasive enough
to convince it to stray from prior case law in this district
holding that there may be only one prevailing party. While
the cases cited by Kraemer vaguely allude to the idea that
there could possibly be multiple prevailing parties, they
also found the “prevailing party” to be the party
that prevailed on a majority or substantial amount of their
claims. For example, in one cited case, Roberts v.
Madigan, 921 F.2d 1047, 1058 (10th Cir. 1990), the Tenth
Circuit held that “the district court in this case did
not abuse its discretion when it awarded full costs to the
party prevailing on the majority of claims and the central
claims at issue.” Kraemer also cites Testa v. Vill.
of Mundelein, Ill., 89 F.3d 443, 444 (7th Cir. 1996), in
which the plaintiff argued on appeal that the jury's
award of $1, 500 on a single claim entitled him to costs as
the prevailing party, after the jury found for the defendant
with the remaining claims. The Seventh Circuit responded that
“the ‘prevailing party' is the party who
prevails as to the substantial part of the
litigation, ” and declined to award Testa costs.
Id. (emphasis added); see also Intellectual
Ventures, 2015 WL 7283108, at *2 (“In determining
which of these two parties should be deemed the
‘prevailing party, ' the court must consider (1)
whether the success of one party surpasses the other, and (2)
whether that success aligns itself with the central issue of
MassMutual has prevailed on six claims, while Kraemer has
only prevailed on one. Because the court declines to depart
from the rule that there may not be more than one prevailing
party, and because MassMutual's success in the trial
clearly surpasses that of Kraemer, the court grants
MassMutual's Bill of Costs and denies Kraemer's Bill
next argues that, even if the court does not grant him his
requested costs, the court should not grant MassMutual its
costs because it would create an injustice. ECF No. 88 at 3.
“[C]osts may be denied to the prevailing party only
when there would be an element of injustice in a presumptive
cost award.” Cherry v. Champion Int'l
Corp., 186 F.3d 442, 446 (4th Cir. 1999). The Fourth
Circuit has articulated the following factors to consider in
determining whether there would be an element of injustice in
awarding costs to the prevailing party: (1) misconduct by the
prevailing party; (2) the non-prevailing party's
inability to pay the costs; (3) excessiveness of the costs;
(4) the limited value of the prevailing party's victory;
or (5) the closeness and difficulty of the issues decided.
Id. Kraemer only alleges one of these factors is
present-misconduct by the prevailing party. Kraemer contends
that the jury's finding that MassMutual breached the
contract establishes the requisite level of misconduct by
MassMutual. ECF No. 88 at 4. However, courts do not define
“misconduct” for these purposes based on a
jury's finding that a party breached the contract that is
the subject of the litigation. Rather, misconduct refers to
the types of actions that take place during litigation that
might otherwise warrant a sanction or other punishment.
See Cherry, 186 F.3d at 446 (“[O]nly
misconduct of by the prevailing party worthy of a
penalty . . . will suffice to justify denying
costs.”) (emphasis added), Congregation of the
Passion, Holy ...