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Vito & Nick's, Inc. v. Barraco

October 10, 2008

VITO & NICK'S, INC., PLAINTIFF,
v.
NICHOLAS V. BARRACO AND VITO & NICK'S II, INC. AND JOHN DOES, DEFENDANTS.



The opinion of the court was delivered by: Judge Nan R. Nolan

MEMORANDUM OPINION AND ORDER

Plaintiff Vito & Nick's, Inc. filed suit against Defendants Nicholas V. Barraco, Vito & Nick's II, Inc. and certain John Does, alleging trademark infringement and unfair competition under 15 U.S.C. § 1125(a); violation of the Illinois Trademark Registration and Protection Act, 765 ILCS 1036/65; violation of the Illinois Deceptive Trade Practices Act, 815 ILCS 510/1 et seq.; unfair competition under common law; and unjust enrichment. Defendants denied all charges and filed a third-party complaint against Plaintiff's owner, Rosemary George, alleging unlawful conversion of assets. Following protracted and ultimately unsuccessful settlement negotiations, on March 6, 2008, Plaintiff's case was dismissed with prejudice for want of prosecution.*fn1 Defendants have moved for costs pursuant to FED. R. CIV. P. 54(d)(1) and 28 U.S.C. § 1920. They also seek attorneys' fees, arguing that Plaintiff filed an oppressive lawsuit in bad faith. See 15 U.S.C. § 1117(a). For the reasons set forth here, Defendants are awarded $7,980.32 in costs, but the motion for fees is denied.

BACKGROUND

Plaintiff is an Illinois corporation that operates Vito & Nick's pizza restaurants in Chicago and Lemont, Illinois. Nicholas A. Barraco ("Nick") started the business in 1947, and ran it until his death on December 30, 2002. This lawsuit arose out of a dispute between Nick's daughter, Rosemary George ("Rose"), who claims to be the sole owner of the original Vito & Nick's restaurants, and Rose's brother, Nicholas Barraco ("Nicholas"), who now operates Vito & Nick's II and has licensed his corresponding trademark to various John Doe franchisees. Rose alleged that Nicholas was engaging in the unauthorized use of the Vito & Nick's mark, and deceptively passing his restaurants off as an extension of the original Vito & Nick's business. Nicholas charged Rose with improperly re-distributing ownership of the shares of Vito & Nick's; converting business funds for her own use; and failing to preserve the assets of Nick's estate.

In September 2006, this court began working with the parties in an attempt to negotiate a settlement agreement. Discussions continued for six months, and the court invested substantial time and effort in trying to assist the parties in resolving their dispute. In early 2007, however, negotiations broke down and the court returned the case to the district court. (Minute Order of 2/9/07, Doc. 62.) Shortly thereafter, on March 1, 2007, the parties consented to the jurisdiction of this court and entered into an Agreed Scheduling Order for conducting and completing discovery. (Joint Consent, Doc. 66; Minute Order of 3/22/07, Doc. 70.) Defendants served Plaintiff with written discovery requests, and ultimately filed two motions to compel in order to secure the requested information. (Doc. 74, 81.) Defendants claim that Plaintiff nonetheless never responded fully to all of their outstanding requests.

On August 31, 2007, the parties participated in a day-long private mediation. They reached a tentative global settlement, conditioned on (1) all of the Barraco family siblings agreeing to the terms; and (2) Rose securing funds within 30 days to pay for the agreed-upon settlement amount. By November 2007, Rose still had not raised the settlement funds; she was refusing to sit for a deposition; and her counsel was seeking to withdraw. (Doc. 94.) On December 18, 2007, the court explained that a corporation cannot proceed pro se in federal court, and ordered Plaintiff to appear for a hearing on January 8, 2008 with newly retained counsel. (Minute Order of 12/18/07, Doc. 98.) On January 8 and February 7, 2008, Rose twice appeared before the court without new counsel, requesting continuances. (Doc. 99, 100.) Finally, on March 6, 2008, the court granted Defendants' motion to dismiss for want of prosecution "for Plaintiff's failure to obtain substitute counsel." (Minute Order of 3/6/08, Doc. 103.)

Defendants now seek to recover their costs of defending Plaintiff's lawsuit, as well as $703,506.49 in attorneys' fees.

DISCUSSION

I. Motion for Costs

Federal Rule of Civil Procedure 54(d)(1) provides that, except when express provision is made in a statute or federal rule of civil procedure, a prevailing party shall be allowed to recover costs, other than attorneys' fees, as a matter of course "unless the court otherwise directs." Rule 54(d) creates a "strong presumption" that the prevailing party will recover costs, and that presumption is difficult to overcome. Mother and Father v. Cassidy, 338 F.3d 704, 708 (7th Cir. 2003); Weeks v. Samsung Heavy Indus. Co., Ltd., 126 F.3d 926, 945 (7th Cir. 1997). Under 28 U.S.C. § 1920, a prevailing party may recover (1) fees of the clerk and marshal, (2) fees for transcripts, (3) fees for printing and witnesses, (4) fees for copies necessarily obtained for use in the case, (5) docket fees, and (6) compensation of court appointed experts and interpreters. In assessing a bill of costs, the court must determine whether the costs are allowable and, if so, whether they are both reasonable and necessary. Soler v. Waite, 989 F.2d 251, 255 (7th Cir. 1993); Ismail v. Potter, No. 05 C 409, 2006 WL 3754840, at *1 (N.D. Ill. Dec. 20, 2006). See also Barber v. Ruth, 7 F.3d 636, 644 (7th Cir. 1993) ("District courts may not . . . award costs not authorized by statute.") Plaintiff bears the burden of affirmatively showing that Defendants are not entitled to costs in this case. Rivera v. City of Chicago, 469 F.3d 631, 636 (7th Cir. 2006).

There is no dispute here that the court entered judgment in Defendants' favor on March 6, 2008, and that they are the "prevailing parties" in this lawsuit. (Judgment, Doc. 104.) See Republic Tobacco Co. v. North Atlantic Trading Co., 481 F.3d 442, 446 (7th Cir. 2007) (quoting Moore's Federal Practice § 54.101[3] (3d ed. 2006)) ("Courts and commentators have interpreted 'prevailing party' to mean 'the party in whose favor judgment has been entered.'") Defendants thus seek four categories of allowable costs, totaling $8,947.55: (1) $654 for service of summons and subpoena; (2) $5,314.22 for court reporter and transcript fees; (3) $205.43 for witness fees; and (4) $2,773.90 for copying expenses. (Def. Supp. Submission, Ex. A.) Plaintiff has not objected to these costs, but the court will nonetheless consider whether they are allowable and, if so, whether they are both reasonable and necessary. Soler, 989 F.2d at 255.

A. Service of Summons and Subpoena

Defendants are requesting $654 in fees for service of summons and subpoena, including (1) $85 for a deposition subpoena to Roland Jurgens; (2) $199 for a deposition subpoena to Maria Barraco; (3) $85 for a deposition subpoena to Larry George; (4) $120 for document subpoenas to US Bank, James Hosty and Harris NA; (5) $40 for a document subpoena to Evergreen Community Bank; and (6) $125 for service of the document subpoena on Evergreen Community Bank. (Def. Supp. Submission, Ex. A, at 2.) The court finds these amounts reasonable and awards Defendants $654 for these expenses.

B. Court Reporter and Transcript Fees

Defendants next seek $5,314.22 for copies of deposition transcripts and video recordings relating to three deponents: (1) Roland Jurgens; (2) Larry George; and (3) Maria Barraco. The Seventh Circuit recently held that Rule 30(b) "allow[s] the costs of both video-recording and stenographic transcription to be taxed to the losing party." Little v. Mitsubishi Motors N. Am., Inc., 514 F.3d 699, 702 (7th Cir. 2008). Defendants did not use the transcripts for summary judgment or trial, but that is only because Plaintiff abandoned its case. See Little, 514 F.3d at 702 (where the defendant used a "video-recorded deposition to support its motion for summary judgment, . . . the stenographic transcript of that deposition was necessarily obtained for use in the case.") To the extent Mr. Jurgens, Mr. George and Ms. Barraco were not parties to this lawsuit, the court agrees that both types of fees were reasonably necessary in this case. See Fairley v. Andrews, No. 03 C 5207, 2008 WL 961592, at *11 (N.D. Ill. Apr. 8, 2008) (awarding fees for video ...


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