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HOSTCENTRIC TECHNOLOGIES, INC. v. REPUBLIC THUNDERBOLT

June 9, 2005.

HOSTCENTRIC TECHNOLOGIES, INC., Plaintiff,
v.
REPUBLIC THUNDERBOLT, LLC, Defendant.



The opinion of the court was delivered by: ANDREW PECK, Magistrate Judge

REPORT AND RECOMMENDATION

To the Honorable Kimba M. Wood, United States District Judge:

Presently before this Court is the motion by plaintiff Hostcentric Technologies, Inc. ("Hostcentric") to enforce a settlement agreement documented in an email offer and acceptance, and for attorneys' fees against defendant Republic Thunderbolt, LLC ("Republic").

  For the reasons set forth below, Hostcentric's motion (Dkt. No. 21) to enforce the settlement should be GRANTED, but its request for attorneys' fees should be DENIED.

  FACTS

  The relevant facts are undisputed.

  Hostcentric, as tenant, and Republic (at that time known as Warthog, Inc.), as landlord, entered into a ten year commercial lease agreement in January 2001. (Dkt. No. 23: Hostcentric Br. at 2; Dkt. No. 26: Republic Br. at 2; Dkt. No. 1: Compl. Ex. A: Lease.) On December 12, 2003, Hostcentric purported to terminate the lease agreement and it has not paid rent pursuant to the lease since December 1, 2003. (Hostcentric Br. at 2; Republic Br. at 2.)

  Hostcentric filed suit in this Court against Republic seeking a declaratory judgement that Republic had acquiesced in the lease termination by accepting Hostcentric's surrender of the premises. (Compl.; see Hostcentric Br. at 2; Republic Br. at 2.) Republic counterclaimed for rent due to it from Hostcentric under the lease, and both parties engaged in discovery including depositions. (Dkt. No. 5: Answer & Counterclaim; see Hostcentric Br. at 2; Republic Br. at 3.)

  In August 2004, the parties engaged in settlement negotiations. (Hostcentric Br. at 2; Republic Br. at 3.) According to Hostcentric, on September 15, 2004, the parties reached an oral settlement agreement in which Hostcentric agreed to pay $785,000 to Republic, less a credit to Hostcentric of $59,793 for the rent deposit held by Republic, and both parties would dismiss their respective claims with prejudice and execute full and mutual releases. (Hostcentric Br. at 2; see Dkt. No. 22: French Aff. ¶ 3.) According to Hostcentric, Republic reneged on the oral settlement, claiming that the settlement required Hostcentric to pay $785,000 while allowing Republic to retain the $59,793 deposit. (Hostcentric Br. at 3; French Aff. ¶ 4.)

  The September 21, 2004 Settlement Emails

  On September 21, 2004, Hostcentric requested a conference with Judge Wood to discuss enforcement of the oral agreement. (Dkt. No. 23: Hostcentric Br. at 3.) Later that day, Republic's counsel Anton Borovina called Hostcentric's counsel Michael French to propose new settlement terms. (Hostcentric Br. at 3; Dkt. No. 22: French Aff. ¶ 6-7.) French replied that Hostcentric would not respond to any further settlement offers from Republic "unless they were binding offers made in writing." (Hostcentric Br. at 3; French Aff. ¶ 7.) That evening at approximately 6:07 p.m., Borovina (Republic) sent French (Hostcentric) the following email:
Michael,
This is to confirm my client's final settlement counter-proposal:
Fairchild will accept payment from your client in the amount of $755,000.00 with my client retaining the security deposit. The pending action would be dismissed with prejudice and all parties would exchange mutual general releases. The payment is due my client within 10 days from today's date.
I must have your answer before the deposition of Robert Sanchez takes place tomorrow. This counter-proposal expires by 9:30 AM tomorrow unless accepted by you before that time.
Your client will be required to remove its property from the premises within 21 days and at its own expense.
Anton
(French Aff. Ex. A, emphasis added; see French Aff. ¶ 8; Hostcentric Br. at 3; Dkt. No. 26: Republic Br. at 3.) At 9:41 p.m., French (Hostcentric) emailed Borovina (Republic) to accept the offer, as follows:
Anton,
My client picked up my voicemail message and called me back.
I am writing to formally accept your settlement offer as set forth by you in your message from earlier this evening below. This matter is now conclusively settled. Please let me know how you would like to communicate this fact to the Court.
MSF
(French Aff. Ex. B, emphasis added; see French Aff. ¶ 11; Hostcentric Br. at 4; Republic Br. at 3-4.) At 10:02 p.m., French (Hostcentric) sent Borovina (Republic) a follow-up email:
Anton,
Now that the parties have agreed on a settlement, please let me know if you still want to draft the necessary papers. If so, please send us a draft as soon as possible. We need to finalize these docs, including the dismissal papers and release, prior to the agreed date of payment.
MSF
(Dkt. No. 28: Borovina Aff. Ex. A.)

  The next morning, September 22, 2004, French (Hostcentric) sent Borovina (Republic) a letter by fax, attaching the above emails and again formally accepting Republic's offer, stating that "[t]his matter is now settled and concluded." (French Aff. Ex. C; see also French Aff. ¶ 11; Hostcentric Br. at 4.)

 
On September 23, 2004, Borovina (Republic) sent a letter to Judge Wood stating:
Counsel for all parties in the above referenced matter are pleased to advise the court that this action has been settled. The parties are preparing the appropriate paperwork which will include a stipulation of discontinuance with prejudice.
(French Aff. Ex. D; accord, Borovina Aff. Ex. B; see French Aff. ¶ 12; Hostcentric Br. at 4-5; Republic Br. at 4.) Judge Wood dismissed the action but provided that the case could be reinstated to the docket ...

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