Filed: Apr. 06, 2007
Latest Update: Feb. 21, 2020
Summary: [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS _ ELEVENTH CIRCUIT APRIL 6, 2007 No. 06-15014 THOMAS K. KAHN Non-Argument Calendar CLERK _ D. C. Docket No. 04-61127-CV-TEB SYSTEMS UNLIMITED, INC., a Florida Corporation, Plaintiff-Appellee, versus CISCO SYSTEMS, INC., a California corporation, CISCO SYSTEMS CAPITAL CORPORATION, a Nevada corporation, CAPITAL ACQUISITION CORPORATION, a Delaware corporation, ASSET ACQUISITION CORPORATION, a
Summary: [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS _ ELEVENTH CIRCUIT APRIL 6, 2007 No. 06-15014 THOMAS K. KAHN Non-Argument Calendar CLERK _ D. C. Docket No. 04-61127-CV-TEB SYSTEMS UNLIMITED, INC., a Florida Corporation, Plaintiff-Appellee, versus CISCO SYSTEMS, INC., a California corporation, CISCO SYSTEMS CAPITAL CORPORATION, a Nevada corporation, CAPITAL ACQUISITION CORPORATION, a Delaware corporation, ASSET ACQUISITION CORPORATION, a ..
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
APRIL 6, 2007
No. 06-15014 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 04-61127-CV-TEB
SYSTEMS UNLIMITED, INC.,
a Florida Corporation,
Plaintiff-Appellee,
versus
CISCO SYSTEMS, INC.,
a California corporation,
CISCO SYSTEMS CAPITAL CORPORATION,
a Nevada corporation,
CAPITAL ACQUISITION CORPORATION,
a Delaware corporation,
ASSET ACQUISITION CORPORATION,
a Delaware corporation,
Defendants-Appellants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(April 6, 2007)
Before BLACK, CARNES and MARCUS, Circuit Judges.
PER CURIAM:
This is the companion appeal to case number 06-12357. There, we affirmed
the denial of Systems Unlimited, Inc.’s motion for leave to amend its complaint
and the grant of summary judgment to Cisco Systems, Inc. on Systems’ claims that
Cisco breached the bill of sale contract.
In this appeal, Cisco challenges the district court’s order denying its motion
for attorneys’ fees. Cisco contends that while the bill of sale at issue in this
litigation did not contain an attorneys’ fees provision, a separate settlement
agreement between it and Systems did contain one. Cisco argues that the
settlement agreement should be read in conjunction with the bill of sale to require
that Systems pay attorneys’ fees as the losing party.
This is the same type of argument that Systems made in the 06-12357 appeal
from the summary judgment for Cisco. There, Systems argued that the settlement
agreement should be read into the bill of sale to impose an obligation on Cisco to
deliver certain software. We rejected that contention because: (1) the bill of sale
did not purport, either implicitly or explicitly, to incorporate the settlement
agreement; and (2) since the language of the bill of sale was clear, we would not
look to other contemporaneous documents to interpret the contract.
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We likewise conclude here that the settlement agreement cannot be used to
impose an attorneys’ fees obligation on Systems where no such obligation is
contained in the bill of sale, absent explicit incorporation of the settlement
agreement or some ambiguity in the bill of sale. Cisco argues that “two
instruments that relate to the same matter, are between the same parties, and are
executed or created as part of substantially one transaction are interpreted as a
single instrument.” (Blue Br. 11.) This proposition comes from the California
rules for interpreting contracts, which provide in part that “[s]everal contracts
relating to the same matters, between the same parties, and made as parts of
substantially one transaction, are to be taken together.” Cal. Civ. Code § 1642.
But, as Cisco itself pointed out in the 06-12357 appeal, “[t]his provision . . . only
applies where there is an ambiguity in a contract that requires explanation by
reference to contemporaneously executed agreements.” (06-12357 Red Br. 25)
(citing Sonoma Falls Developers, LLC v. Nev. Gold & Casino, Inc.,
272 F. Supp.
2d 919, 924 (N.D. Cal. 2003) (section 1642 “is applicable only if there is
ambiguity concerning the interpretation of a contract”)). Here, both parties agree
that the bill of sale is unambiguous.
Despite that, Cisco argues, “attorneys’ fee provisions in agreements also
become part of writings referenced by such agreements.” (Blue Br. 13.) Cisco’s
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argument, in other words, is that because the settlement agreement (which is not
the contract at issue here) incorporates the bill of sale, then the attorneys’ fee
provision is incorporated into the bill of sale.
However, the two decisions Cisco cites in support of this proposition make
clear that Cisco has this argument backwards. Only where the agreement at issue
explicitly incorporates a second contract with an attorneys fees provision will the
fees provision be enforced in a breach of contract action on the first contract. Cf.
Republic Bank v. Marine Nat’l Bank,
53 Cal. Rptr. 2d 90, 93 (Ct. App. 1996)
(“Under such circumstances, and in light of the incorporation by reference
language, whatever else the combined sublease/master-lease package may have
provided for, it certainly provided for attorney fees as delineated in the relevant
clause in the master lease.” (emphasis added)); Nevin v. Salk,
119 Cal. Rptr. 370,
374 (Ct. App. 1975) (“Inasmuch as the provisions of the notes and the security
instruments were incorporated in the agreement, and made a part thereof, and
inasmuch as the sale involved one piece of property and veterinary practice, the
trial court properly concluded all the instruments formed a single contract and the
fact the agreement itself contained no provision for payment of fees in the event of
a lawsuit is of no consequence.” (emphasis added)). Otherwise, the plain language
rule controls. See Cal. Civ. Code § 1638 (“The language of a contract is to govern
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its interpretation, if the language is clear and explicit, and does not involve an
absurdity.”).
Here, as the district court explained, “the terms of the settlement agreement
were not incorporated by reference in the bill of sale which was at issue in this
action.” (R3:177:2.) And “[t]he parties do not contest that the bill of sale itself
contains no provision for fee shifting or payment of expenses related to any
dispute.”
Id. Like the district court, we will not read an attorneys’ fee provision
into a contract where one plainly does not exist.
The district court’s order denying Cisco’s motion for attorneys’ fees is
affirmed.
AFFIRMED.
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