The opinion of the court was delivered by: Will, Senior District Judge.
A.G. Becker-Kipnis & Co. (Becker-Kipnis) brings this action
for breach of a commodities brokerage account agreement (the
agreement) against Letterman Commodities, Inc. (Letterman
Commodities) and against Letterman Commodities' parent
corporation, Letterman Transaction Services, Inc. (Letterman
Transaction). Our jurisdiction rests upon diversity of
Becker-Kipnis seeks compensation for damages which allegedly
resulted from a breach of the agreement, and for its costs and
attorneys' fees incurred in prosecuting this action.
Becker-Kipnis timely demanded a jury trial, and the defendants
now argue that any claim for costs and attorneys' fees (to
which Becker-Kipnis may be entitled) is one for the jury.
Becker-Kipnis opposes the motion, and contends that the only
questions for the jury are liability and the claim for damages
which resulted from the alleged breach of the agreement.
Becker-Kipnis argues that an assessment of costs and
attorneys' fees is a determination for the Court in the event
that the jury decides in Becker-Kipnis' favor on the question
of compensatory damages. For the reasons stated below, we
agree with Becker-Kipnis that a jury trial is not available
for the determination of costs and attorneys' fees.
Familiarity with the underlying facts will be helpful to an
understanding of the remainder of this opinion. We have taken
the following description of the facts from the parties'
Stipulation of Uncontested Facts.
On July 3, 1980, Dan Osborn obtained the necessary signed
forms from a customer, Dennis Sciotto, to open a commodity
futures trading account with Becker-Kipnis, and, on July 7,
1980, Dan Osborn approved the opening of Sciotto's account.
Thereafter, Dan Osborn and Ron Rooy transmitted orders to
Becker-Kipnis for Sciotto's account and Becker-Kipnis executed
trades in Sciotto's account every business day from July 8
through July 28, 1980.
On July 24, 1980, Dan Osborn or Ron Rooy transmitted orders
to Becker-Kipnis for, and Becker-Kipnis purchased, 50 soybean
futures contracts on the Chicago Board of Trade for Sciotto's
account. As a result of these purchases, Sciotto was required
under the schedule instituted at Letterman Commodities'
request to make an initial margin deposit of $112,500.00 with
On the afternoon of July 24, 1980, after the purchase of the
50 soybean futures contracts for Sciotto's account, Dan Osborn
advised Larry Zemkewicz, an employee of Becker-Kipnis, that
Sciotto had told him that $150,000.00 was being wired to
Becker-Kipnis to satisfy the margin requirement on Sciotto's
account. On the morning of July 25, 1980, Dan Osborn of
Letterman Commodities advised Mark Aleksiewicz and Bill
Figiel, employees of Becker-Kipnis, that Sciotto had told him
that a wire transfer in the amount of $150,000.00 was being
sent to Becker-Kipnis to satisfy the margin requirement for
Sciotto's account. Also on the morning of July 25, 1980, Dan
Osborn or Ron Rooy transmitted orders to Becker-Kipnis for,
and Becker-Kipnis purchased, an additional 40 soybean futures
contracts on the Chicago Board of Trade for Sciotto's account.
Becker-Kipnis did not receive any funds to satisfy the
margin requirement for Sciotto's account. On July 25, 1980,
the 40 soybean futures contracts purchased earlier that day
were sold at a loss of $27,500.00. On July 28, 1980, the 50
soybean futures contracts purchased on July 24, 1980, were
sold at a loss of $61,625.00. The deficit in Sciotto's
account, after applying the equity in the account against the
losses incurred on the soybean futures contracts, is
$83,563.60. Letterman Commodities has sued Sciotto, but has
not recovered anything from him. Under the arrangements
between Becker-Kipnis and Letterman Commodities, from time to
time Becker-Kipnis would make payments to Letterman
Commodities of commissions and interest. Becker-Kipnis retains
$10,151.90 in such commissions and interest.
We deal first with a preliminary question which is raised
(but not discussed at any length) in the parties' memoranda.
That question is whether Becker-Kipnis is entitled to recover
from the defendants its costs and attorneys' fees at all, if
it prevails on its underlying damages claim. Obviously, if we
answer that question in the negative, the issue whether
recovery of costs and attorneys' fees presents a jury question
will be moot.
The general rule in American litigation is that the
prevailing party is not entitled to collect reasonable
attorneys' fees from the loser, absent either a statutory or
a contractual provision for recovery of attorneys' fees.
Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 247,
95 S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975); Smoot v. Fox,
353 F.2d 830, 832 (6th Cir. 1965); D. Dobbs, Remedies § 3.8 at 194
(1973); but see Empire State Ins. Co. v. Chafetz, 302 F.2d 828
(5th Cir. 1962) (noting that a Florida statute which made the
setting of attorneys' fees a decision for the trial judge had
superseded an earlier statute which allowed the jury to assess
a reasonable sum for attorneys' fees in common law actions, and
upholding the newer statute against a Seventh Amendment
challenge). In their initial brief, the defendants assert that
bases its claim for attorneys' fees and costs upon Paragraph
14 of the agreement between Becker-Kipnis and Letterman
Commodities. The defendants quote that provision as stating:
We agree to fully indemnify you and to hold you
harmless for all losses, claims, actions and
expenses, including your attorneys' fees and
costs, which you may incur by reason of . . . the
failure of any Customer promptly ...