Court: Court of Civil Appeals of Alabama; January 22, 2015; Alabama; State Appellate Court
George Nick Autrey II filed a lawsuit against Yon Memory in the Lee Circuit Court, where the court granted summary judgment in favor of Memory on July 23, 2013. Autrey appealed this decision to the Alabama Supreme Court, which affirmed the judgment without providing an opinion. Following the appellate proceedings, Memory sought $44,080.07 in costs, supported by his attorney's affidavit. Autrey opposed this request, arguing that the costs were unnecessary and had already been covered by Memory's malpractice insurer. He also sought to depose Memory’s attorney regarding the costs, but the trial court denied this request both initially and upon reconsideration.
After reviewing submissions from both parties regarding the entitlement to recover costs, the trial court awarded Memory $14,953.22 in costs. Autrey appealed this order, claiming it constituted a 'windfall' to Memory since the insurer had covered the costs. Autrey did not provide legal authority supporting his argument that a prevailing party represented by an insurer is ineligible for costs under Rule 54(d) of the Alabama Rules of Civil Procedure. In contrast, Memory cited relevant precedent indicating the insurer's payment of costs does not affect the entitlement to an award under Rule 54(d).
The court noted that Rule 54(d) allows costs to the prevailing party unless the court states otherwise and that the prevailing party is generally entitled to costs. It also referenced the Alabama Supreme Court's guidance that the Federal Rules of Civil Procedure inform Alabama's rules, suggesting that federal case law could be persuasive. The court indicated it would consider the Eleventh Circuit’s interpretation of Rule 54(d) in determining Memory’s entitlement to costs despite the insurer's payment.
The court has not previously ruled on whether a prevailing party in a lawsuit can recover costs paid by a non-party. The Florida Supreme Court addressed this in Aspen v. Bayless, holding that recovering costs is permissible regardless of who paid them. The court emphasized that determining the source of funds for costs is unnecessary for awarding them to the winning party. Although Florida Supreme Court decisions are not binding, their reasoning is persuasive. The city, as the prevailing party, argued that if Manor had won, the city’s insurer would be liable for Manor's costs under their insurance contract, suggesting that the insurer can be considered a party for the purposes of cost recovery under Rule 54(d). Denying the city its costs would undermine the presumption of cost recovery for prevailing parties and allow plaintiffs to sue insured defendants without bearing costs if they lose. The city paid insurance premiums; thus, Manor, as the losing party, should not benefit from this insurance. The court concluded that the district court did not abuse its discretion in awarding costs to the city. The Florida Supreme Court reaffirmed this principle in Pine Island Lumber, indicating that costs can be awarded even if a third party, like an insurer, paid them. Autrey's argument that awarding costs to Memory is a "windfall" is countered by the precedent that denying such awards to insured prevailing parties would unfairly benefit the nonprevailing party. The court affirmed the trial court’s decision to award costs to Memory, noting that Rule 54(d) does not require the prevailing party to have personally paid costs, and the Eleventh Circuit supports this interpretation.
The Court of Civil Appeals has exclusive appellate jurisdiction over civil cases with amounts not exceeding $50,000, as outlined in Section 12-3-10. In the case discussed, Autrey's complaint regarding the trial court's refusal to allow him to depose Memory's attorney is considered undeveloped, lacking citation of relevant authority, and thus not addressed. Autrey does not contest the reasonableness of the awarded costs or Memory's proof of incurred costs. The document references changes to Rule 54(d) of the Federal Rules of Civil Procedure, emphasizing that costs are generally awarded to the prevailing party unless stated otherwise. It cites the Ninth Circuit's ruling that an insurer covering litigation costs does not preclude cost awards to the insured party. It critiques the implication that a prevailing party could be penalized for having insurance, which contradicts Rule 54(d). The court establishes that Kan Pacific is entitled to seek costs despite insurer coverage. Autrey also notes that Aspen does not interpret Rule 54(d) but involves different Florida procedural rules regarding settlement offers, yet the Eleventh Circuit has used Aspen's reasoning in its application of Rule 54(d), making it relevant to the current discussion.
