United States District Court, D. South Dakota, Western Division
ORDER GRANTING MOTION FOR ATTORNEY FEES IN PART AND
DENYING IN PART
E. SCHREIER UNITED STATES DISTRICT JUDGE
Atmosphere Hospitality Management, LLC, moves the court to
award it attorney fees and costs incurred to enforce the
parties' settlement agreement. Docket 368. Atmosphere
asks for $27, 158 in attorney fees and $6, 750.54 in costs.
Docket 381-1. Defendants Shiba Investments, Inc., Karim
Merali, and Zeljka Curtollo oppose Atmosphere's motion.
Docket 379. Defendants also move the court for a hearing on
Atmosphere's motion for attorney fees. Docket 374. For
the reasons stated below, the court grants Atmosphere's
motion for attorney fees in part and denies defendants'
motion for a hearing.
20, 2013, Atmosphere filed its complaint against defendants
alleging several violations of law. Docket 1. After several
years of discovery and dispositive motions, the trial was set
to begin on September 26, 2016. Docket 294. On September 9,
2016, the parties informed the court that they had reached a
mediated settlement agreement. Docket 346-1. On September 27,
2016, the court entered an order and judgment of dismissal
without prejudice. Docket 329. The order stated that
“[t]he court will retain jurisdiction over this matter
until the settlement is completed and a joint motion for
dismissal with prejudice is filed.” Id. On
October 14, 2016, the parties entered into a settlement
agreement and mutual release. Docket 346. On August 30, 2017,
defendants filed a motion to reopen the case and enforce the
settlement agreement and a motion to dismiss with prejudice.
Docket 333; Docket 334. Defendants' brief in support of
their motion to dismiss argued that they had substantially
complied with the settlement agreement and asked the court to
enforce the settlement agreement and dismiss the case with
prejudice. Docket 336 at 7-8. Atmosphere did not oppose
reopening the case and enforcing the agreement, but it did
oppose dismissing the case with prejudice. Docket 344.
Atmosphere argued in its brief that defendants had not
complied with the terms set out in paragraph four of the
settlement agreement, so Atmosphere refused to agree to a
February 8, 2018, and March 8, 2018, the court held an
evidentiary hearing on defendants' motions. Docket 354;
Docket 360. As a result of the evidentiary hearing, the court
denied defendants' motion to dismiss and motion to
enforce the settlement agreement. Docket 367. After reviewing
the motions, briefs, exhibits, and testimony, the court
Plaintiff Atmosphere and the Defendants entered into a
written settlement agreement dated October 14, 2016. In
paragraph four of the settlement agreement, Defendants agreed
to remove from the Internet, including their web site and
social media, all references and links within their control
to their association, past or present, with Adoba hotels.
Paragraph four further required Defendants to do so within 30
days from the date of the settlement agreement.
The Court relies in part upon the testimony of Stacie Hull,
who testified that Merali met with her and instructed her to
remove references to Adoba on Shiba's hotel website.
Stacie Hull lacked the skill and training to remove
references to Adoba that were embedded in the HTML code.
While some or a majority of the public references to Adoba on
the website have been removed, Defendants did not take
sufficient action to ensure that all references to the Adoba
Hotel were removed from the website's HTML code. Such
requirement is clearly covered within paragraph four of the
settlement agreement. Even on the day of March 8, 2018
hearing, the website still contained Adoba references
embedded in its HTML code. Having Adoba references embedded
within the website's code drives up search responses for
Defendant's hotel when the public searches online for
Atmosphere gave notice in April of 2017 that Defendants had
not met the provisions of the settlement agreement. Such
notice was sufficient and adequately put Defendants on notice
that they needed to take further action to fully comply with
the settlement agreement. Defendants did not take such
Atmosphere was not required to hire an expert and inform
Defendants what they needed to do to fully comply with
removing all Adoba references from the internet. Such was
Defendants' responsibility and they were capable of doing
so and should have on their own.
Merali is experienced in the hotel industry and has rebranded
the hotel in the past a number of times. Rebranding is  not
a new concept for Merali.
With regard to third-party booking sites, the Court finds
that the third-party booking vendors were contacted in March
2016 with instructions to change the name of the hotel from
Adoba Eco-Hotel or Adoba Hotel to the The Rushmore Hotel and
Suites. There were, however, no instructions given that all
references to Adoba Eco-Hotel or Adoba Hotel should be
removed. Defendants only made such requests of some
third-party booking sites shortly before the February and
March 2018 hearings on this matter. Contacting third-party
vendors to instruct them to change the name of the hotel is
not sufficient to meet the requirements of paragraph four of
the settlement agreement.
now moves for an award of attorney fees and costs under
paragraph six of ...