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2ND CIRCUIT VACATES $36.7M FEES AWARD NEW YORK — The undefined phrase “legal costs” as used in bond agreements guaranteeing the completion of naval projects in Brazil has led the Second Circuit U.S. Court of Appeals to vacate a $36.7 million award of attorneys fees to the prevailing party. Finding no compelling argument for an exception to the American rule that prevailing parties are not generally awarded attorneys fees, the court vacated the award ordered in United States Fidelity and Guaranty v. Braspetro Oil Services, 02-9185. The ruling came following the review of Southern District of New York Judge John Koeltl’s decision, after a bench trial, that U.S. Fidelity and its fellow sureties were obligated under performance bonds to pay $370 million, an amount that included the fee award. The genesis of the litigation was the bids for two contracts for large-scale naval construction projects in Brazil in 1994 and 1995. The winning bids for the project were submitted by a consortium that was required to obtain performance bonds that would guarantee the completion of the project. By December 1996, projected cost overruns for the two projects had reached $189 million. The consortium was ultimately declared in default on the two projects in May and June 1997. The sureties filed two actions in the Southern District, one seeking a declaratory judgment that they had no liability under the bonds and a second seeking indemnification from the individual members of the consortium and from Petrobras, the owner of Braspetro. Judge Koeltl found that the sureties had failed to meet their obligations under the performance bonds by refusing to take over the projects and leaving Braspetro to try to complete the project itself. — New York Law Journal SUIT AGAINST ANGELOU ALLOWED TO CONTINUE NEW YORK — A federal appeals court has reinstated a lawsuit alleging that poet Maya Angelou violated an agreement with boxing promoter Butch Lewis to sell greeting cards that included her poetry. A unanimous panel of the Second Circuit U.S. Court of Appeals ruled that the suit, filed by Lewis in 2001, should not have been dismissed by Southern District of New York Judge Michael Mukasey. Though the Second Circuit agreed that a letter of agreement between Lewis and Angelou lacked essential terms needed to create a joint venture between the parties, the court said Judge Mukasey should have considered whether the letter “formed a contract other than a formal joint venture or exclusive agency agreement.” “The New York courts, at least, have indicated in other contexts that parties are not limited by the label they used in describing their agreement,” the court wrote in B. Lewis Productions, Inc. v. Angelou, 03-7864. The court also reinstated Lewis’ claim for tortious interference against Hallmark, which eventually entered into an agreement with Angelou to sell cards that included her poetry. The court said Judge Mukasey was correct to dismiss Angelou’s countersuit against Lewis. — New York Law Journal EVEN PLAINTIFFS’ LAWYER SURPRISED AT VERDICT When the estate of a man who drove into the path of a truck won a $2.75 million award, even the plaintiffs’ lawyer was hard-pressed to explain the Coweta County, Ga., verdict. But one juror said the panel wanted to hand out an even bigger award. Justin Brooks, 19, was driving to work on Dec. 27, 1999, when he made a left turn into traffic and pulled in front of an oncoming pickup truck in Gwinnett County, Ga. Brooks was killed instantly in the collision. His mother brought a wrongful death suit against the driver and the driver’s employer, but even her lawyer, Eric Hertz, acknowledged the case had problems. The truck had the right of way, and the autopsy revealed evidence of marijuana in Brooks’ system. The trial in last month stretched over parts of three days. When the jury came back after just 45 minutes of deliberation, lawyers on both sides thought the defense had won. The defense lawyer, William Harrison of Mozley, Finlayson & Loggins, said the result — a $2.75 million award — was the biggest surprise in his 27 years of practice. Brooks v. Hancock, 02SV351. The sting of the verdict was softened by a high-low agreement that led to a confidential settlement considerably less than the verdict. Neither side would reveal the settlement, but Hertz said he had offered to accept $125,000 before trial. The defense had countered with an offer of $100,000. — The National Law Journal

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