Full opinion text
HOLLOWAY, Chief Judge. U.S. Industries, Inc. (USI) brought this suit against numerous defendants asserting claims under the 1933 and 1934 Securities Acts and a variety of pendent state law claims. The Utah case arose out of a series of transactions relating to sales of health club memberships, and of interests in companies engaged in this business and its financing. Five defendants found liable have appealed, and defendant Touche Ross & Co. (Touche), found not liable, has appealed the denial of its motion for attorneys’ fees and costs. USI has cross-appealed several rulings, including the grant of credit to the defendants for settlement amounts received by USI. A general overview of the complicated facts follows. I. FACTS A. 1968-1969 — The Sale of Kennibec In 1968, a group of health spa owners— all of whom were defendants at one time or another in the present case — decided to go public.. Rather than go through the process of preparing a registration statement for the Securities and Exchange Commission the spa owners decided to acquire a public corporation and transfer the assets of the spas to the public corporation in exchange for stock. Through this process, the non-public spas would be transformed into a public corporation. As a result, any subsequent public offering of stock would be greatly expedited by the fact that the business was already a public company. The corporation chosen for this purpose was a shell corporation named Kennibec Mining Company. Based on a predetermined allocation, six million shares of Ken-nibec stock were distributed to. the owners of the various health spas, and the assets of the spas were transferred to Kennibec. When Kennibec’s directors investigated the prospect of a public offering of Kenni-bec the result of their initial inquiries was not encouraging. Investment bankers that were approached indicated reluctance to underwrite a public offering of Kennibec. In particular, two objections appear to have been advanced. First, a general concern existed that a health spa organization would not be an attractive investment vehicle for public shareholders. Second, the accounting method that had been and was still being used by the various spas — specifically the fact that their books were kept on a cash basis rather than on an accrual basis — made it impossible to prepare a financial statement for submission to the SEC. In an effort to resolve the second objection, Kennibec’s directors began searching for an accounting firm to audit Kennibec. Joseph Bond, Kennibec’s secretary-treasurer, contacted three accountants: Lorin Burr, an accountant with Ernst & Ernst; J. Robert Thomas, an accountant at Birrell, Zimmerman & Thomas; and Joseph Burns, an accountant with Touche. Eventually, Bond hired either Birrell, Zimmerman & Thomas or Touche to audit Kennibec. Soon after, the firm of Birrell, Zimmerman & Thomas merged with Touche. In a memorandum drafted on June 11, 1968, Joseph Burns, the Touche accountant, outlined his view of the appropriate accounting method for auditing Kennibec. In brief, Burns advocated a method under which an amount of income equivalent to the costs associated with acquiring memberships — advertising cost, commissions, and other incentive compensation costs— would be immediately recognized as income at the time the memberships were sold. All other income would be amortized on a decelerating basis over the life of the membership. . In July 1968, Touche attempted to audit Kennibec for a nine month period ending June 30, 1968. In October 1968, however, Touche refused to complete the audit and instead issued a Disclaimer of Opinion report. According to the report, Kennibec’s use of the cash basis method of accounting for the health spas “may [have] resulted] in a significant overstatement of retained earnings.” 262 R. 2403. As a result, Touche concluded, “we have reason to believe that the combined balance sheet does not fairly present the company’s financial position in conformity with generally accepted accounting principles.” 262 R. 2403-04. In late September or early October, 1968, Touche again undertook to audit Kennibec, this time for the fiscal year ending September 30, 1968. In that audit, completed in March 1969, Burns rejected the accounting method he had previously endorsed on the grounds that it was “exceptionally conservative,” and failed to reflect “the economic facts of the company’s operations.” 263 R. 2825. Instead, Burns utilized an approach known as the “front-end” method. Under it “all revenue [was] recognized at the time of sale [of the membership contracts] except that an amount equivalent to the total cost of providing member services over the life of the contract [was] deferred.” 263 R. 2827. The amount deferred — somewhere between twelve and fifteen percent of the income — was then amortized on a straight line basis. In the spring of 1969, in preparation for an S-l Registration Statement to be filed with the SEC, Touche performed a subper-iod audit of Kennibec covering the period from September 30, 1968 to April 30, 1969. Before any registration statement was filed, however, the directors of Kennibec began discussing the possibility of merging with another company rather than going public. One of the companies that had indicated an interest in acquiring Kennibec was USI. On October 20, 1969, USI and Kennibec entered into an Exchange Agreement under which USI would acquire eighty percent of Kennibec’s stock in exchange for shares of USI preferred and common stock. The Exchange Agreement provided that Kennibec’s executive officers — Rice, Melby and Bond — would remain as the president, vice-president and secretary-treasurer of Kennibec respectively. It also contained a number of warranties and representations including (1) that the financial condition of Kennibec was accurately reported in the company’s financial statements according to generally accepted accounting principles consistently applied; (2) that Kennibec had good title and the right to use or lease Kennibec properties as set out in the schedules attached to the Exchange Agreement; (3) that all conflicts of interest, related-party transactions and acts of self-dealing had been fully and fairly disclosed; and (4) that the proceeds from the four million dollar loan from USI to Kennibec would not be used by any of the selling shareholders to satisfy personal obligations. • Finally, the sale was expressly conditioned on an unqualified favorable opinion by Touche on the financial condition of Kennibec. On December 2, 1969, the Exchange Agreement between Kennibec and USI was closed and shortly thereafter Kennibec was renamed Health Industries, Inc. (HI). B. 1971-1973 — The Creation of FEA In 1971, several officers of HI submitted a plan to USI’s management to create a subsidiary finance company that would purchase membership contracts from HI. When USI rejected the proposal Bond and Lee Schoonmaker, an accountant for Continental Alliance Company, began discussing the possibility of establishing a finance company that would purchase paper from HI. In September 1971, these discussions culminated in the creation of Financial Enterprises of America, Inc. (FEA). FEA was in turn divided into numerous subsidiaries — Financial Enterprises of Florida, Financial Enterprises of Minnesota, Financial Enterprises of Delaware, and the like — whose purpose was to purchase contracts from Hi’s spas for their individual states. In addition, FEA acquired two corporations — Preferred Discount Corporation, in New York; and National Discount Corporation, in Pennsylvania — from HI for the price of one dollar each. With one exception, these finance companies purchased paper only from spas owned by HI. Although much of the initial capital for FEA was obtained from passive investors, the list of shareholders quickly expanded to include seventeen directors, officers or employees of HI, including the president, vice-president and secretary-treasurer of HI. 295-A R. 10144-45; 9 R. 1947-50. Because of the need for secrecy, however, the shares were generally registered to a nominee. In 1971 and 1972, FEA purchased membership contracts from HI. In addition, FEA developed an incentive program to encourage HI regional directors to increase the amount and quality of the contracts sold to FEA. In September 1972, however, USI’s management became concerned that the relationship between HI and FEA was not in Hi’s best interest. 293 R. 9224. USI’s management became aware of rumors of possible conflicts of interest between FEA and HI. 293 R. 9224. In December 1972, USI’s board of directors ordered that Hi’s relationship with FEA be terminated. 293 R. 9225. Despite this directive, FEA continued to purchase HI membership paper through February 1973. 295-A R. 10205-08. Between December 7, 1982 and February 1983, approximately $2.7 million worth of membership paper was transmitted to FEA. 291 R. 8831-32. In addition, FEA also held approximately $6,000,000 worth of HI membership contracts, all purchased on a full-recourse basis. 291 R. 8833. When USI attempted to receive payment for the contracts which had been sent to FEA after December 7, 1982, however, Schoonmaker refused either to pay for the paper or to return it. In addition, Schoonmaker implied that he might no longer service the other six million dollars worth of HI paper he currently held. As a consequence, USI’s management began negotiations to acquire FEA. On June 8, 1973, HI entered into an agreement with FEA to acquire virtually all its assets for approximately $1.2 million. 296 R. 10,386. For tax purposes HI did not acquire FEA’s assets directly. Rather, FEA transferred its principal assets to a wholly owned subsidiary, Financial Enterprises of Kentucky (FEK), and HI then purchased all of FEK’s stock. As part of the purchase agreement, HI sought — and received — a warranty from FEA and its officers that “none of the present or past officers, directors or shareholders of FEA or its subsidiaries, [was] or at anytime ha[d] been an officer, director, or managing agent of [HI], or any of its subsidiaries.” 291 R. 8915. In addition, FEA and its officers represented that “no portion of the purchase price ... [would] be paid, either directly or indirectly, to any present or past director, officer or managing agent of [HI], or any of its subsidiaries.” 291 R. 8916. Finally, FEA and its officers warranted that “to the best of their knowledge and information no officer, director or managing agent of [HI] or any of its subsidiaries [was] or at anytime ha[d] been a shareholder, either directly or equitably, of FEA.” 291 R. 8916. All of the warranties were admittedly false. 296 R. 10,392-93. II. COURT PROCEEDINGS On May 30, 1975, USI and HI filed a complaint against Bond, FEA and the directors of FEA — Lee Schoonmaker, Connie Schoonmaker and Howard Soloway — alleging violations of the 1933 and 1934 Securities Acts, as well as a variety of pendent state law claims. By May 1, 1979, the plaintiffs had amended their complaint four times and had increased the number of defendants to thirty-five. Although the Fourth Amended Complaint stated eleven separate causes of action, the plaintiffs’ allegations can be divided conceptually into three categories. First, the plaintiffs asserted the existence of a conspiracy, beginning in 1969 and involving employees of Touche and the shareholders of Kennibec, to inflate the value of Kennibec — and consequently its selling price — through the use of an improper and inaccurate accounting method. Second, the plaintiffs alleged a series of violations of federal and common law arising out of the formation and operation of FEA, and the eventual sale of its assets to USI. Finally, the plaintiffs contended that a number of activities by various defendants, acting either in concert or individually — including the creation and operation of such entities as Health Equipment, Colorado Development Company, and the Banyan Tree Plaza, to name just three — were in violation of the common law. In January 1981, Touche filed a Motion for Partial Summary Judgment “on those claims which allege that the front end method of income recognition-... was improper,” 7 R. 1316, on the ground that the claims were barred by statutes of limitations. The trial court granted Touche’s motion, ruling that the plaintiffs’ claims against Touche were barred “insofar as they are based upon Touche’s use and approval of the ‘front-end’ accounting method as a means for recognizing income from sales of Health Industries club member-ships_” 8 R. 1574. Despite its resolution of Touche’s motion, however, the trial court concluded that “the ruling sought by Touche [did] not dispose of any single claim in its entirety_” 8 R. 1565. In May 1982, Touche filed a Motion for Summary Judgment, asserting three grounds. First, Touche argued that the plaintiffs’ claims “relating to the alleged failure of Touche to disclose certain facts in connection with the 1969 acquisition and the FEA acquisition [were] barred by the statutes of limitations.” 11 R. 2162. Second, Touche asserted that the plaintiffs could not have relied on any representations Touche had made because they had “actual knowledge of the undisclosed facts which [USI] claims Touche concealed from it.” 8 R. 3802. Third, Touche contended that any securities law violations arising out of the 1973 sale of FEK required dismissal on the ground that the FEK stocks were not securities covered by the 1933 and 1934 Securities Acts. The trial court denied Touche’s motion. It reiterated its earlier decision that the sale of FEK involved a sale of securities under the 1933 and 1934 Securities Acts; and it concluded that Touche failed to show that the undisputed facts would not support plaintiffs’ claim of reliance on Touche’s representations. Finally, the trial court ruled that two issues concerning the statutes of limitations remained in dispute: First, Touche’s continued employment by USI, as Health Industries’ “independent” auditor until 1978, three years after USI’s initial suit, is a fact from which a jury could draw an inference that USI did not have notice of Touche’s involvement in the alleged fraud until 1978, and 2) the extensive investigation [by] USI in 1972-73, the results of which are in dispute, with Touche claiming that USI discovered enough to bring suit and USI claiming the investigation to be inconclusive as to suit, appears to the court to possibly justify an inference of due diligence on the part of USI to obtain such notice. The court is of the opinion that Touche has not conclusively disposed of these facts and the inference against notice of Touche’s involvement in the fraud that might be drawn therefrom. It should, therefore, be left to the jury to “determine by a preponderance of the evidence whether the action occurred too remotely.” 18 R. 3803 (citation omitted). The court recognized that its resolution of the limitations question could be construed as contrary to the spirit of the earlier Order Granting Interlocutory Summary Adjudication in favor of Touche. 18 R. 3804. The court undertook to clarify its earlier order. That ruling, the court explained, merely held “that plaintiff was barred from asserting that the ‘front-end’ method was a fraudulent device in and of itself.” 18 R. 3804. It did not prevent USI from introducing evidence “relating to the ‘front-end’ method, where that evidence was introduced with other admissible evidence to establish Touche’s fraud.” 18 R. 3804. “To the extent the prior order can be read to the contrary,” the court concluded, “it is amended.” 18 R. 3804. Trial began against the eleven remaining defendants: Touche, Percy Sanders, John Dewberry, Rey Arnold, Leonard Rice, John Runyan, George Peterson, Joseph Bond, James Barlow, Four Seasons, and Brent Rice. The case was submitted to the jury on April 1, 1983 on extensive special interrogatories. The jury returned its responses seven days later. It found no liability on the part of Touche, Sanders, Dewberry, and Arnold, but found the remaining defendants liable to USI on the 1973 transaction. The jury found no defendants liable on the 1969 transaction. Arising out of the 1973 sale of FEK to HI, the jury found: (1) that Bond and Leonard were liable for violations of Rule 10b-5, conspiracy to violate Rule 10b-5, aiding and abetting a conspiracy to violate Rule 10b-5, common law fraud, breach of fiduciary duty, and conspiracy to breach a fiduciary duty; (2) that Four Seasons was the alter-ego of Bond, and was guilty of common law fraud, conspiracy to violate Rule 10b-5 and aiding and abetting a conspiracy to violate Rule 10b — 5; and (3) that Brent Rice, Barlow and Peterson were liable for conspiracy to violate Rule 10b-5 and conspiracy to breach a fiduciary duty. In addition, Bond and Runyan were found liable for breach of fiduciary duty and conspiracy to breach a fiduciary duty arising out of the formation and operation of Colorado Development Company; Bond and Leonard Rice were held liable for breach of fiduciary duty with respect to Health Equipment; and Bond, Leonard Rice and Runyan were held liable for conspiracy to breach a fiduciary duty with respect to Health Equipment. The jury awarded punitive damages against Peterson, Barlow, Brent Rice and Bond. When the special verdicts were examined it became apparent that the jury had improperly calculated damages. In particular, for both the 10b-5 violations and the breach of fiduciary duty violations, different amounts of damages were assessed to defendants who were jointly and severally liable. Consequently, the court submitted supplemental special verdict forms to the jury, requiring them to determine the total loss arising out of the various statutory and common law violations. After recalculating the damages, the jury found that (1) Bond, Leonard Rice, Four Seasons, Brent Rice, Barlow and Peterson were jointly and severally liable for $550,000 in damages for the 10b-5 violations arising out of the 1973 sale of FEK to USI; (2) Bond, Leonard Rice, Brent Rice, Barlow and Peterson were jointly and severally liable for $614,-000 for the breach of fiduciary duty claims relating to the 1973 sale of FEK to USI; (3) Bond, Four Seasons, and Leonard Rice were severally liable for common law fraud arising from the sale of FEK to USI, in the amounts of $300,000, $100,000 and $100,000 respectively; (4) Bond and Runyan were jointly and severally liable for $11,000 for breach of fiduciary duty claims arising out the creation and operation of Colorado Development Company; (5) Bond, Leonard Rice and Runyan were jointly and severally liable in the amount of $45,000 for breach of fiduciary violations with respect to Health Equipment; and (6) Bond was liable for $180,000 in damages arising out of breach of his employment contract with USI. The jury assessed punitive damages of $5000 each against Peterson, Barlow and Brent Rice and $267,500 against Bond. Despite the jury’s recalculation of damages, the defendants asserted that the $550,000 in damages assessed by the jury for the violation of Rule 10b-5 duplicated the jury’s award of $614,000 arising out of the fiduciary duty claims. The trial court agreed. In its Memorandum Opinion Regarding Entry of Judgment the court concluded that the jury, in arriving at the “total damages suffered by HI as a result of the conspiracy to breach fiduciary duties,” simply added the amount of $550,000, which they had just arrived at as being the “total loss plaintiffs suffered as a result of the 1973 [securities] FEK transaction,” to the $64,000 breach of fiduciary duties damages, representing the individual gains of defendants Bond and L. Rice, to arrive at the $614,000. 36 R. 7346. Consequently, the trial court reduced the total award by $550,000. In its Memorandum Opinion the court addressed several additional damages issues. First, the court awarded costs to USI against Bond, Brent Rice, Leonard Rice, Runyan, Peterson, Four Seasons and Barlow and awarded costs against USI to Sanders, Dewberry, Arnold and Touche. Second, the court denied USI's motion for prejudgment interest. Next, the court rejected motions of the defendants and USI to award attorneys’ fees. Finally, the court gave the defendants partial credit— amounting to $544,719 — for money received by USI in settlements. The jury’s verdict, as modified by the court, was entered as judgment. Bond, Peterson, Run-yan, Four Seasons, Barlow, and Touche timely appealed and USI cross-appealed. Defendants present six issues on appeal: (A) Whether the sale of FEK’s stock to USI constituted the sale of securities within the meaning of the Securities and Exchange Act of 1934; (B) Whether the assignment provision contained in the 1973 Exchange Agreement between FEA and HI precluded USI from asserting Hi’s claims against the defendants; (C) Whether the defendants were entitled to receive full credit for settlement amounts received by USI from defendants who settled prior to trial; (D) Whether the trial court erred in resubmitting the question of damages to the jury; (E) Whether the court erred in denying Touche’s motion for attorneys’ fees; and (F) Whether the court erred in refusing to award Touche certain costs it incurred in defending the case. In addition, USI raises five issues in its cross appeal: (G) Whether the trial court erred in granting partial summary judgment in favor of Touche concerning the “front-end” accounting method; (H) Whether the court erred when it instructed the jury that for USI to prevail on its conspiracy claims, it must prove the existence of a conspiracy among those who were defendants at the time of trial; (I) Whether the court erred in denying USI’s motion for prejudgment interest; (J) Whether the court erred in concluding that the jury’s award of damages for USI’s 10b-5 claim was duplicated by the award for the fiduciary duty claims; and (K) Whether the trial court erred in allowing the defendants credit for money received by USI in settlement. III. ISSUES A. The Sale of a Business Doctrine We first address the argument — advanced by Bond, Four Seasons, Barlow and Peterson — that the trial court was without jurisdiction to consider USI’s claim that the 1973 sale of one hundred percent of FEK’s stock to HI violated federal securities law. According to the defendants, the sale of FEK’s stock “involved the acquisition of a business intended to be operated and managed by HI, and not the purchase of a security as an investment by HI with the expectation of deriving profit from the efforts of others.” Brief of Appellants Joseph A. Bond and Four Seasons Management Company, at 16. As a consequence, defendants contend, “the transaction did not involve a ‘security,’ and thus is beyond the scope of the federal securities laws and the jurisdiction of the District Court.” Id. We do not agree. The position advocated by defendants, commonly known as the sale of a business doctrine, was specifically rejected by the Supreme Court in the companion cases of Landreth Timber Co. v. Landreth, 471 U.S. 681, 105 S.Ct. 2297, 85 L.Ed.2d 692 (1985), and Gould v. Ruefenacht, 471 U.S. 701, 105 S.Ct. 2308, 85 L.Ed.2d 708 (1985). See Schaafsma v. Morin Vermont Corp., 802 F.2d 629, 636 (2d Cir.1986); Penturelli v. Spector, Cohen, Gadon & Rosen, 779 F.2d 160, 164 (3d Cir.1985); St. Philip Towing & Transp. Co. v. Pavers, Inc., 768 F.2d 1233, 1234 (11th Cir.1985). In Landreth and Gould, the Court noted that “where an instrument bears the label ‘stock’ and possesses all the characteristics typically associated with stock, ... a court will not be required to look beyond the character of the instrument to the economic substance of the transaction to determine whether the stock is a ‘security’ within the meaning of the [Securities] Acts.” Gould, 471 U.S. at 704, 105 S.Ct. at 2810. Because it is undisputed that the shares purchased by HI in the present case bear all the indicia of stock, we conclude that they are securities within the meaning of the federal securities laws. Consequently, the trial court properly exercised its jurisdiction. B. The Assignment Provision On appeal, Bond, Four Seasons and Barlow contend that the trial court erred in refusing to dismiss USI’s claims arising out of the 1973 sale of FEK to HI on the ground that USI did not have proper standing to assert the claims. According to these defendants, the 1973 Purchase Agreement prohibited HI from assigning its rights “under and in connection with” the 1973 Agreement without the express written consent of FEA. HI neither sought nor received FEA’s written consent to assign its claims to USI. Therefore, the attempted assignment of Hi’s claims to USI was ineffectual, USI lacked standing to assert Hi’s claims, and the trial court erred in not dismissing them. We cannot agree. A contract term prohibiting assignment of rights under the contract, unless a different intention is manifested, does not forbid assignment of a right to money damages for breach of the contract. Restatement (Second) of Contracts § 322(2)(b)(1981). See also Fuller v. Favorite Theaters Co. of Salt Lake, 119 Utah 570, 230 P.2d 335, 336 (1951); Trubowitch v. Riverbank Canning Co., 30 Cal.2d 335, 182 P.2d 182, 185-86 (1947) and cases cited therein. Consequently, the assignment clause does not prevent USI from pursuing Hi’s claim. In the present case, however, defendants argue that the language of the assignment provision indicates not merely an intent to prevent the assignment of the rights and privileges contained in the contract, but also prohibits the assignment of a cause of action. The provision in question, defendants note, prohibits assignment of the “right of HI under and in connection with” the Agreement. This language, defendants assert, “should not be restricted to apply only to Hi’s contract rights under the Agreement, but should ... apply to all Hi’s rights, including choses in action, since it is presumed that all Hi’s rights were intended to fall within the scope of the consent requirement_” Brief of Appellant Joseph A. Bond and Four Seasons Management Company, at 23-24. We have been unable to locate any cases involving exactly the same language as that contained in the present assignment clause. Nonetheless, we do not perceive its terminology as demonstrating an intent to prohibit the assignment of a claim for money damages. In our view, the critical language of the assignment provision for our purposes is its prohibition against the assignment of “[t]he right of HI_” A clause which “forbids only the assignment of a party’s ‘rights’ under a contract simply does not preclude the assignment of an accrued claim for damages arising from its breach.” Cordis Corp. v. Sonics Int’l, Inc., 427 So.2d 782, 783 (Fla.App.1983). See also Paley v. Cocoa Masonry, Inc., 433 So.2d 70, 70 (Fla.App.1983) (same). Moreover, despite defendants’ assertions to the contrary, we do not believe that the entire assignment provision on “the right of HI under and in connection with” can be read as requiring a different interpretation. In our view, that phrase, by defining the acts that fall within a party’s right to performance, merely specifies the contractual right that cannot be assigned by HI; it does not show an intent to vary from the general rule allowing assignment of a right to damages. Since the ability to assign a claim for damages is generally not prohibited by an assignment clause, we decline to read the phrase “the right ... under and in connection with” as altering a party’s ability to assign a claim for money damages. See, e.g., Rosecrans v. William S. Lozier, Inc., 142 F.2d 118, 124 (8th Cir.1944) (“The prohibition of the contract against assignment is against an assignment of the rights and privileges under the contract. The prohibition of an assignment does not, however, prohibit the assignment of a claim for damages on account of breach of the contract.”) (emphasis added). Accord Paley v. Cocoa Masonry, Inc., 433 So.2d 70, 71 (Fla.App.1983). In sum, we conclude that the trial court was correct in its determination that the language of the 1973 Purchase Agreement did not act to prevent Hi’s assignment of its cause of action to USI. C. Credit for Settlements The next issue, raised by Runyan, Peterson and Barlow, is whether the trial court erred in denying credit to the defendants for the full amounts received by USI in settlement from parties originally named as defendants. Before trial USI and HI recovered at least $3.08 million in settlement from 21 parties to the litigation. When the defendants moved after trial to receive credit for the settlement amounts, however, the district court allowed them to set off only $544,719, representing the value of Schoonmaker’s consulting services and the amounts allocated by USI to the FEA related claims. The court said that USI’s allocation of the various settlement amounts to the other claims [has] too many other variables that militate against credit. For example, credit should not be given for that amount allocated to the 1969 Exchange claims, since we do not know if plaintiff might have succeeded on those claims if defendants Robert Rice and Melby had been parties at the time of trial. In addition, no credit should be given to the amounts allocated to the non-FEA breach of fiduciary duty claims, the misappropriation of corporate opportunities claims, or the unallocated amounts, since it is not clear enough that the amounts were for injuries to plaintiff that went to the jury, e.g. whether the amounts were for HE or for some claim that never went to the jury. 36 R. 7354. As a result, the trial court declined to give the defendants full credit for the amounts received in settlement. On appeal, the defendants have mounted a two-pronged attack against the trial court’s refusal to allow full credit for the settlement amounts: first, they object generally to the district court’s analysis of the credit issue; and second, they question USI’s allocation of the settlement amounts among the various claims. Defendants’ challenge to the trial court’s analysis of the credit issue involves the use of a syllogism. First, the defendants characterize the plaintiff’s case as “a giant single conspiracy within which many factors came together to produce the ... claimed single injury.” Brief of Appellant George S. Peterson, Jr., at 26. Next, they note that under the “one satisfaction rule,” a party may only recover once for an injury. Finally, for the conclusion, the defendants contend that since USI claimed only one injury, and since it may recover only once for that injury, any settlements made before trial were in satisfaction of that injury. Thus the settlements “should be credited to the trial [defendants also claimed to be a part of the overall conspiracy.” Id. at 29. Defendants’ characterization of the “one satisfaction rule” cannot be disputed. It is a fundamental legal principle that an injured party is ordinarily entitled to only one satisfaction for each injury. Harris v. Union Elec. Co., 846 F.2d 482, 485 (8th Cir.1988). When a plaintiff receives an amount from a settling defendant, therefore, it is normally applied as a credit against the amount recovered by the plaintiff from a non-settling defendant, provided both the settlement and the judgment represent common damages. Howard v. General Cable Corp., 674 F.2d 851, 358 (5th Cir.1982). Accord Hendrix v. Raybestos-Manhattan, Inc., 776 F.2d 1492, 1508 (11th Cir.1985); Ratner, 719 F.2d at 803-04; Harrington v. Texaco, Inc., 339 F.2d 814, 820 (5th Cir.1964), cert. denied, 381 U.S. 915, 85 S.Ct. 1538, 14 L.Ed.2d 435 (1965). See also Restatement (Second) of Torts § 885(3) and comments e and f (1977). Nonetheless, we do not believe that the one satisfaction rule controls here. The purpose of the rule is to prevent a plaintiff from receiving double compensation for an injury. Marcus, Stowell, 797 F.2d at 233; Howard, 674 F.2d at 358. Consequently, the rule applies only where the defendants’ conduct resulted in a single injury. By contrast, where two or more defendants are responsible for separate injuries, an amount received in settlement from one defendant for one of the injuries may not be used to reduce the liability of the other defendant for the other injury. See, e.g., Hendrix, 776 F.2d at 1509 (amount received by spouse who settled claim for loss of consortium should not be set off against damages received at trial because “the damages sustained by a spouse are exclusive of those suffered by her husband”); Baughman v. Cooper-Jarrett, Inc., 391 F.Supp. 671 (W.D.Pa.1975), affd in part, vacated in part on other grounds, 530 F.2d 529 (3d Cir.1976) (where amount of settlement with one defendant included items of damage that were not part of judgment, non-settling defendant was entitled to credit only for the amount of settlement duplicated in the verdict); Carr v. Cove, 33 Cal.App.3d 851, 109 Cal.Rptr. 449 (1973) (where plaintiff sued two defendants for injuries sustained in separate automobile accidents occurring more than two months apart, non-settling defendant was not entitled to credit for the amount received by plaintiff in settlement with other defendant). The critical issue is whether the jury awarded damages to USI for a single indivisible injury, or whether the jury found that USI suffered separate and distinct injuries, some or all of which may have been uncompensated by the settlements. We agree with the trial court that USI’s cause of action cannot be correctly characterized as “a single case of a single injury.” 36 R. 7353. Indeed, from our reading of the record, it seems clear that USI alleged two alternative theories of recovery. First, USI alleged a series of injuries arising from a single overriding conspiracy; second, USI contended that it received several injuries as a result of a number of discrete individual acts and conspiracies. As the trial court noted in its Memorandum Opinion Regarding Entry of Judgment, “[i]t is true that plaintiff was primarily concerned with making out the existence of one large all-encompasing conspiracy throughout much of the litigation. It developed, however, that plaintiff was also pursuing the claims of a number of smaller conspiracies and individual violations of law.” 36 R. 7353. More importantly, the trial court did not charge the jury on USI’s theory of a single conspiracy. Instead, the court expressly instructed the jury that the plaintiff had “alleged a number of separate conspiracies.” 324 R. 16,969. “In this situation,” the court continued, you are not to consider any acts or declarations against the defendant unless you find from a preponderance of the evidence that the person doing the act or making the declaration was a member of the same conspiracy as was that defendant. When the evidence distinctly shows, therefore, more than one conspiracy which does not involve a particular defendant, then you cannot consider evidence of a separate conspiracy in which that defendant was not a party. 324 R. 16,969. As a result, we believe that the jury must have perceived USI's claims as involving several conspiracies and individual violations rather than one all-encom-pasing conspiracy. Finally, we believe that the form in which the case was sent to the jury effectively precluded it from finding that the plaintiff had suffered a single injury arising from one conspiracy. The special verdict forms divided USI’s claims into a series of discrete conspiracies: the 1969 acquisition of HI by USI; the 1973 sale of FEK to HI; the Colorado Development Company transactions; and the creation and operation of HE. For each separate conspiracy, the jury was required to find the parties who had engaged in the conspiracy, the amount of damages suffered by USI arising from the conspiracy, and, if applicable, the misrepresentations or omissions that were committed in furtherance of the conspiracy. In light of the detail and specificity of the special verdict forms, therefore, the jury could have considered USI’s grand conspiracy claim only by ignoring the forms themselves. We cannot believe that the jury rejected the special verdict forms. In our view, it seems indisputable that the jury found that USI suffered several separate and distinct injuries rather than one single injury. As a result, the trial court did not err in refusing to give the defendants full credit for the amounts received in settlement. This conclusion does not dispose of all the defendants’ arguments. Defendants also contend that the trial court erred in accepting the allocations made by USI because they were “gerrymander[ed] ... to make them applicable to causes of action which had little likelihood of success.... ” Id. at 34. Defendants cite the facts that “Kenneth Melby allocated one dollar (out of settlement payments of nearly $709,-000.00) and Robert Rice allocated one dollar to the FEA claims out of a total settlement of nearly 1.4 million dollars.” Brief of Appellant George S. Peterson, Jr., at 37-38. These unfair apportionments, the defendants conclude, are undeniable proof that USI “stack[ed] the deck” against the non-settling defendants, in “contravenftion of] equity and public policy.” Id. at 38. We find the defendants’ arguments unpersuasive. The defendants’ examples of unfairness in the settlement allocations have been effectively refuted by USI. “While Robert Rice paid USI $1.00 in settlement of FEA-related claims,” USI points out, “Rice also paid HI $150,000.00 in settlement of FEA-related claims.” Brief of Appellee and Cross-Appellant U.S. Industries, at 68. USI explains that “under the present judgment Peterson has received credit for that [$150,000] sum.” Id. at 69. Furthermore, USI justifies its allocation of the nominal sum of one dollar to Melby’s settlement of the FEA claim on the grounds that “discovery failed to establish that Melby was a participant in FEA, and because Melby represented as a condition of his settlement that he was not involved with FEA.” Id. See also Transcript of Hearing on July 13, 1983, at 70. We agree that the allocations were fair. Clearly, in dollar amounts the greatest potential liability to the settling defendants arose from the 1969 sale of Kennibec to USI. Thus, it seems reasonable that the greatest portion of the money received in settlement would be allocated to the claims arising from that sale. Finally, we note that the trial court accepted the allocations made between USI and the settling defendants only after “carefully reviewpng] the memoranda in the file, the arguments presented on July 13, 1983, and its own knowledge of the litigation from its beginning_” 36 R. 7353. In light of the trial judge’s intimate knowledge of the entire proceedings, we uphold his acceptance of the allocations. We are not “left with the definite and firm conviction that a mistake has been committed.” Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948)). Thus, we hold that the trial court did not err in accepting the allocations among the various claims made between USI and the settling defendants, and we affirm the trial court’s resolution of the credit issue. > D. Resubmitting the Damage Awards The fourth issue on appeal, raised by Runyan, is whether the trial court erred in resubmitting the question of damages to the jury. After the jury returned its verdict, the trial court noted that some of the damage awards appeared to be inconsistent with his instructions. In particular, although the jury was instructed by the court on joint and several liability, see, e.g., 324 R. 16,970, and despite the fact that the verdict forms themselves required the jury to find identical damages for all of the defendants who were held liable on certain claims, see, e.g., 33 R. 6745, the jury nonetheless returned different verdict amounts against defendants for claims on which they were jointly and severally liable. See, e.g., 33 R. 6745; 33 R. 6751; 33 R. 6756; 33 R. 6762; 33 R. 6768; 33 R. 6774. For example, with respect to USI’s claim for breach of fiduciary duty arising out of the creation and operation of HE, the jury assessed damages of $2500 against Leonard Rice and $5000 against Bond. At the same time, however, the jury also assessed damages of $30,000, $5000 and $2500 respectively against Runyan, Bond and Leonard Rice for the HE-related claim of conspiracy to breach a fiduciary duty. See 33 R. 6781-82; 33 R. 6786-87; 33 R. 6798-99. Since Runyan, Bond and Leonard Rice were jointly and severally liable for the HE-related fiduciary duty claims — regardless whether for breach or for conspiracy to breach — the jury’s verdict seemed clearly to have been the result of confusion concerning joint and several liability. As a consequence, the court reinstructed the jury on joint and several liability, 329 R. 91-95, and submitted the following supplemental special verdict to them: What amount do you find by clear and convincing evidence constitutes the total damages suffered by Health Industries as a result of the conspiracy to breach fiduciary duties that you have found in connection with each of the following, considered separately? Financial Enterprises of America, Inc. Health Equipment, Inc. Colorado Development Company. 329 R. 99; 33 R. 6776. After a brief deliberation, the jury returned with its answer to the supplemental special verdict. The jury assessed the total damages caused by the conspiracies to breach fiduciary duties at $614,000 with respect to FEA, $45,000 with respect to HE, and $11,000 for CDC. On appeal, Runyan argues that “the special verdict was complete and unambiguous on [its] face.” Appellant Runyan’s Brief, at 3. Therefore, Runyan contends, the trial court should have accepted the jury’s verdict, and the court’s decision to resubmit some of the damages issues to the jury was an abuse of discretion. We do not agree. Even a cursory examination of the special verdict forms conclusively demonstrates that the jury failed to properly apportion damages among defendants who were jointly and severally liable for the various fiduciary duty claims. Moreover, as a result of the jury’s confusion, its award of damages was inconsistent with the court’s instructions. Under such circumstances, we believe that “the trial court had the authority to request the jury to correct its verdict.” University Computing Co. v. Lykes-Youngstown Corp., 504 F.2d 518, 547 (5th Cir.1974). Consequently, we hold that the trial court did not abuse its discretion when it resubmitted the fiduciary duty damage awards to the jury. E. Attorneys’ Fees The Bad Faith Exception Touche claims that the district court erred in denying an award of attorneys’ fees on the grounds that the record reveals that USI conducted the litigation in bad faith by wilfully making misrepresentations of fact and by intentionally shifting and disguising its contentions to circumvent the rulings of the district court. According to Touche, USI’s conduct concealed from the court and Touche the plaintiff’s intimate understanding of the accounting method which was the core of the plaintiff’s claim. Touche concludes that this conduct was “tantamount to fraud on the judicial system”, which imposed “extraordinary cost” upon Touche, and thereby justifies the award of attorneys’ fees. Brief of Appellant Touche Ross & Co. at 23, 24. There is no explicit contractual or statutory authorization for attorneys’ fees for prevailing parties in litigation encompassing the issues in this suit. Touche urges that the proper use of the courts’ discretionary power should result in an award for attorney fees. An award for attorneys’ fees is authorized by the court’s inherent power to award fees in cases where the litigants’ conduct constitutes bad faith as well as specific federal rules and statutes which provide discretionary power to the court for such awards. Specifically, Touche relies upon Fed.R.Civ.P. 56(g), authorizing the award of costs, including attorneys’ fees, when affidavits are presented in bad faith or solely for the purpose of delay in conjunction with the filing of a motion for summary judgment; Fed.R.Civ.P. 11, authorizing the sanction of the reasonable costs incurred, including attorneys’ fees, where a pleading, motion, or other paper is filed for any improper purpose, including one to harass or impose unnecessary delay or a needless increase in the cost of litigation; and 28 U.S.C. § 1927 (1982) which allows recovery against an attorney personally who multiplies the proceedings in any case unreasonably and vexatiously so as to make the attorney liable for the excess costs, expenses, and attorneys’ fees reasonably incurred. Touche also contends that this appeal is frivolous and thereby warrants an award for damages and costs pursuant to Fed.R.App.P. 38 and 28 U.S.C. § 1912 (1982). Touche argues that USI’s conduct of this action constitutes bad faith and therefore qualifies as one of the narrowly defined exceptions to the American rule that parties pay their own counsel fees and other litigation expenses, absent statutory or contractual authority so providing. F.D. Rich Co., Inc. v. Industrial Lumber Co., Inc., 417 U.S. 116, 126, 129, 94 S.Ct. 2157, 2163, 2165, 40 L.Ed.2d 703 (1974); Fleischmann Distilling Corporation v. Maier Brewing, 386 U.S. 714, 717, 718, 87 S.Ct. 1404, 1406, 1407, 18 L.Ed.2d 475 (1967); Lipsig v. National Student Marketing Corporation, 663 F.2d 178, 180-81 (D.C.Cir.1980). “It is unquestioned that a federal court may award counsel fees to a successful party when his opponent has acted ‘in bad faith, vexatiously, wantonly, or for oppressive reasons.’ ” Hall v. Cole, 412 U.S. 1, 5, 93 S.Ct. 1943, 1946, 36 L.Ed.2d 702 (1973). Awarding attorneys’ fees under the bad faith exception is within the trial court’s discretion and the ruling is reversed only for an abuse of that discretion. Sterling Energy Limited v. Friendly National Bank, 744 F.2d 1433, 1435-36 (10th Cir.1984); see Stewart v. RCA Corporation, 790 F.2d 624, 633 (7th Cir.1986) (abuse of discretion standard for Rule 56(g)); In re Hunt, 754 F.2d 1290, 1294 (5th Cir.1985) (abuse of discretion standard for § 1927). Because an award of attorneys’ fees under the bad faith exception is punitive, a court can impose the penalty “only in exceptional cases and for dominating reasons of justice.” Cornwall, 654 F.2d at 687 (citing United States v. Standard Oil Co., 603 F.2d 100, 103 (9th Cir.1979) and quoting 6 J. Moore, Federal Practice ¶ 54.77[2] at 1709-10 (2d ed. 1972)); see also Sterling, 744 F.2d at 1437; Lipsig, 663 F.2d at 180. The standard for bad faith awards is stringent, for “[ojtherwise those with colorable, albeit novel, legal claims would be deterred from testing those claims in a federal court.” Sterling, 744 F.2d at 1435 (quoting Browning Debenture Holders’ Committee v. DASA Corporation, 560 F.2d 1078, 1088 (2d Cir.1977)); accord Roadway Express, 447 U.S. at 764, 100 S.Ct. at 2463 (“Because inherent powers are shielded from direct democratic controls, they must be exercised with restraint and discretion.”). The defendant seeking fees must not only prevail on the merits, but must also “show plaintiff pursued the litigation in bad faith or brought a frivolous, unreasonable, or groundless action.” Autorama Corporation v. Stewart, 802 F.2d 1284, 1287 (10th Cir.1986) (quoting Glass v. Pfeffer, 657 F.2d 252, 255 (10th Cir.1981); Can-Am Petroleum v. Beck, 331 F.2d 371, 374 (10th Cir.1964)). Simply because the facts are found against a party “does not by itself prove that threshold of irresponsible conduct for which a penalty assessment would be justified.” Runyan v. McCrary, 427 U.S. 160, 183, 96 S.Ct. 2586, 2601, 49 L.Ed.2d 415 (1976); Autorama, 802 F.2d at 1288; Lipsig, 663 F.2d at 181; Can-Am Petroleum, 331 F.2d at 374. A nonprevailing party should not be penalized for merely prosecuting or defending a lawsuit. Rich, 417 U.S. at 129, 94 S.Ct. at 2165; Lipsig, 663 F.2d at 181. However, assuming good faith in the filing of a claim or defense, a party can still be sanctioned for its misconduct in the conduct of the litigation. Id. at 182. Touche having met the first prong of the test as a prevailing defendant, we initially consider whether the district court erred in refusing to find that the plaintiff conducted its prosecution of the suit in bad faith. The District Court’s Denial of Attorneys’ Fees The district court denied all claims for attorneys' fees of the plaintiff and the defendants. Earlier the court had issued a Memorandum Opinion Regarding Entry of Judgment. It also conducted a hearing on claims for attorneys’ fees and costs. In the Judgment, Memorandum and transcript of the hearing the court articulated its views on the claims for fees. Touche argues that after the first order of summary adjudication in 1981, USI conducted its litigation so as to circumvent that order and to keep alive its claims through the use of false declarations. According to Touche, an affidavit by USI Vice President, Singer and a declaration by USI’s counsel, Mr. Rooker, were proven false at trial as were charges that Touche was responsible for false entries in accounting procedures. With regard to false entries in the accounting records of HI/Kennibec, the record does not show that this issue was argued by USI in the manner in which Touche claims. The complaint and hearing record on Touche’s motion for summary judgment on all claims reveals selective parsing by Touche on this issue. The colloquy between the court and the counsel for USI makes clear that the falsity or misrepresentation raised by USI was not derived from false information which was deliberately entered in the accounting records, e.g., a fact, figure or numerical statement with a prexisting verifiable or quantifiable quality which was falsely entered. A claim based on such false entries, with a promise of evidence to substantiate, was not used by USI to defeat Touche’s motion for summary judgment. From that hearing record, we consider more than the narrow excerpt upon which Touche argues that to defeat its motion USI “invented the story that false entries did exist.” Brief of Appellant Touche Ross. The context of the plaintiff’s claims, as discussed in the hearing on Touche’s second motion for summary judgment, must be considered. At the hearing on September 7, 1982 the court was unambiguously concerned that, as with any accounting method, the one at issue in this action appropriately reflect the allocation of income and costs. 239 R. 80-81. USI’s counsel stated its claim: the accounting method and its application “underestimate the future expense and overestimate the current revenue.” Id. at 81. The court replied, “All right. That’s the kind of thing I’m trying to get at.” Id. Thereafter occurred the exchange upon which Touche relies: The Court: Do you have evidence that those records were false? Mr. Rooker: Yes. The Court: In that they did not represent the actual cost that would be incurred in servicing a particular contract and arriving at an income? Mr. Rooker: Yes. We will have expert testimony to that effect. Id. at 82. This particular exchange did not conclude the matter nor direct the discussion toward what the court characterized as “figures [which] were false.” Id. In the continuing discussion USI’s counsel asserted that Touche failed to audit the HI/Kennibec management estimates and allocation of current income and the costs of future services used for the accounting records. Id. at 82-84. According to USI, the failure to audit the allocations underlying the accounting records made them misleading. Id. at 85. At this time the court further identified the nature of USI’s claim: The Court: Is that part of the allegation of facts you have in your complaint against Touche is that they have falsified with respect to certified audit? Mr. Rooker: Yes. We have not gone into the detail with respect to the allocation of the cost. That is, however, in our statement of claims against them. The Court: Okay. Id. at 85. The discussion on this issue was then concluded. The court’s inquiry and USI’s responses distinguish the nature of the court’s and the plaintiff’s focus from that directed to a deliberate falsification of facts or figures. The court was properly concerned with the result of the accounting method used to prepare the accounting records at issue. In the partial summary judgment previously granted to Touche, the court had reserved this issue for the jury, to be considered in the context of the facts and circumstances surrounding the parties’ transactions. Touche has misconstrued the claim raised in the complaint and at the hearing on the motion for summary judgment. The narrow slice of hearing colloquy, supra, does not support a finding that USI made a false accusation which constitutes bad faith. Of concern here is the charge that the two affiants used by USI made “blatant misrepresentations” of fact to the court. Brief for Appellant Touche Ross, at 27-28; Consolidated Brief for Touche Ross, at 41-43. Touche claims that the “first untruth” was Rooker’s claim that USI was not aware of the use or effects of the front-end method. Brief for Appellant Touche Ross at 28. The second misrepresentation was Singer’s statement that USI was unaware of the methods by which the costs of future services were determined. Id. Each of these misrepresentations, Touche contends, had a significant part in persuading the district court that USI should proceed to a trial on its claims. Id. As Touche interprets the evidence at trial, the falsity of these two declarations was conclusively established through the testimony of Messrs. Kuscsik and Wright, former USI officials. If such falsity was intentionally inflicted upon the court and it were so established in the trial record, then a sanction would be appropriate. This would be derived not just from Rule 56(g) which focuses on affidavits presented in bad faith or solely to cause delay, but also from Rule 11, § 1927, and the court’s inherent power to punish those who abuse the judicial process. In its memorandum regarding other defendants’ claims for attorneys’ fees in connection with claims for which the jury found no liability, the court stated: [T]he court is of the opinion that plaintiff’s claims did not border on the frivolous and, consequently, it would be inappropriate to award attorneys’ fees. Plaintiff’s unsuccessful claims survived numerous motions for summary judgment and for directed verdicts before failing with the jury. 36 R. 7351. Subsequently, in the proceeding to hear Touche’s claims for attorneys fees, based on the grounds previously stated, the court acknowledged that there was “much confusion” in the plaintiff’s articulation and pursuit of its case. Transcript for December 2, 1983, at 52. After consideration of Touche’s argument, the court concluded: And it is my considered judgment that the case was fairly tried; that there was an issue to present to the jury; that the defendants were not put upon in terms of there being a legitimate cause to be presented so far as plaintiffs were concerned. And there is no justification, under these circumstances to award attorney’s fees. So that attorney’s fees are denied. Id. The court’s ruling was made after the judge conducted the trial; heard the disputed declarations and the testimony which contradicted or differed; and considered the Touche memorandum and arguments for the award. We are not persuaded that the court improperly denied the award of attorneys’ fees as there is no convincing proof that the plaintiff vexatiously pursued its suit through misconduct which included falsified declarations. Touche's claims of false or deliberate misrepresentations were not established by unchallenged testimony or evidence offered by Touche’s witnesses, Kuscsik and Wright, and other parts of the trial record do not demonstrate intentional misconduct by USI. “Clearly, courts are quite hesitant to find claims were pursued in bad faith unless the evidence is remarkably supportive of such a proposition.” Autorama, 802 F.2d at 1287, 1288. Here, the district court did not find that bad faith was shown. There were sufficient legal claims, all of which survived Touche’s two motions for summary judgment, and disputed material facts which warranted a trial and determinations by a jury. Our review fails to show that the judge erred in refusing to allow fees under § 1927 or under Rules 11 and 56(g), or the bad faith exception to the American rule. Stewart, 790 F.2d at 632, (citing Wisconsin Real Estate Investment Trust v. Weinstein, 781 F.2d 589, 597 (7th Cir.1986), and In re TCI Ltd., 769 F.2d 441, 448 (7th Cir.1985); Autorama, 802 F.2d at 1287, 1288). Touche also requests an award of the attorneys’ fees necessitated by USI’s appeal of the district court judgment. Rule 38, Fed.R.App.P. Insofar as Touche is a prevailing party whose district court judgment is affirmed by this court, Touche also asks for damages for delay under 28 U.S.C. § 1912. Both Rule 38 and § 1912 allow for single or double damages if the court determines that an appeal is frivolous or brought for purposes of delay. Clark v. Commissioner of Internal Revenue, 744 F.2d 1447, 1448 (10th Cir.1984). To warrant an award of attorneys' fees arising from an appeal the movant must be the prevailing party and must show that the appeal was undertaken in bad faith or as a frivolous, unreasonable, or groundless action. Autorama, 802 F.2d at 1287. “An appeal is termed frivolous if the result is obvious, or the arguments of error are wholly without merit.” Id. (citing DeWitt v. Western Pacific R.R. Co., 719 F.2d 1448, 1451 (9th Cir.1983)); Braley, 832 F.2d at 1510; McConnell v. Critchlow, 661 F.2d 116, 118 (9th Cir.1981). As with the district court awards for bad faith, the attorney’s conduct is evaluated by an objective standard and “fees are imposable against an attorney personally for conduct that, viewed objectively, manifests either intentional or reckless disregard of the attorney’s duties to the court.” Braley, 832 F.2d at 1512. Here USI’s appeal did not lack any legal or factual basis, but instead “contained legitimate disputes whose outcomes reasonable persons could differ upon.” Autorama, 802 F.2d at 1288. The mere failure of USI to prevail at trial does not necessarily imply that its conduct in appealing was vexatious or that the grounds for appeal were wholly unreasonable and without proper foundation. Id.; Overnite Transportation Co. v. Chicago Industrial Tire Co., 697 F.2d 789, 795 (7th Cir.1983); accord Lipsig, 663 F.2d at 181; Can-Am Petroleum, 331 F.2d at 374. The record and the arguments made fail to convince us that the standards for awards under Rule 38 or § 1912 have been met. Accordingly, we hold that an award of attorneys’ fees pursuant to Rule 38 and for damages pursuant to 28 U.S.C. § 1912 should be denied. F. Costs 28 U.S.C. § 1920 and the Standard of Review Touche seeks the award of certain costs denied by the district court and urges that these costs qualify for remuneration under 28 U.S.C. § 1920. According to Touche, costs for document discovery and reproduction and computerized analysis of documents produced in the case should be awarded under the terms of § 1920(4) providing reimbursement for “[f]ees for exemplification and copies of papers necessarily obtained for use in the case.” Touche says that the cost of daily transcript similarly qualifies under § 1920(2) covering reimbursement “for all or any part of the stenographic transcript necessarily obtained for use in the case.” The amounts requested are: $93,000.00 for document discovery and reproduction; $247,000.00 expended for computerized document analysis; and $26,-000.00 for the daily trial transcri