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Widman v. Keene

United States District Court, D. Utah, Central Division

February 15, 2017

KAREN WIDMAN, Plaintiff,
v.
MARILEE E. KEENE and DAVID SHELL, Defendants.

          MEMORANDUM DECISION AND ORDER

          CLARK WADDOUPS UNITED STATES DISTRICT COURT JUDGE.

         INTRODUCTION

         This case is before the court on defendant Marilee Keene's Objection to Amended Order or in the Alternative Request to Amend Amended Order (Dkt. No. 202) and defendant David Shell's Motion to Amend and Objection to Amended Order. (Dkt. No. 205.) Both defendants challenge this court's Amended Order dated October 29, 2015, which further analyzed its prior conclusion that plaintiff Karen Widman was the prevailing party in this litigation and made an award of attorney's fees. (Dkt. No. 199.) After carefully considering the parties' submissions, the relevant legal authorities including the Tenth Circuit's Mandate in this matter, and otherwise being fully advised, the court DENIES defendants' motions and objections, incorporates by reference the October 29, 2015 Amended Order as to Widman being the prevailing party in this litigation, and reaffirms its award of attorney's fees to Widman.

         BACKGROUND

         This court conducted a bench trial from April 23 through April 25, 2014 and subsequently rendered a Memorandum Decision and Order setting forth its findings of fact and conclusions of law on Widman's Complaint, Keene's Counterclaim, and Shell's Amended Complaint. (Dkt. No. 167). In that decision, the court concluded that Widman was the prevailing party in the litigation, and because attorney fees and costs were “contemplated not only under the Marital Settlement Agreement, but also the Notes that were assigned to Keene” that Keene and Shell were jointly and severally liable for reasonable attorney's fees and costs. (Am. Mem. Decision p. 50; Dkt. No. 167.)

         Subsequently, the parties submitted additional briefing on Widman's motions for attorney's fees and on defendants' motion for a new trial. The court initially granted Widman's motion for attorney fees and denied defendants' request for a new trial. (Dkt. No. 174.) After defendants objected on the grounds that they had not been afforded an opportunity to oppose Widman's motion or file a reply to their motion for a new trial, the court entered an order affirming its denial of the defendants' motion for a new trial, but allowing defendants an opportunity to file an objection to Widman's attorney's fees motion. (Id.) Although defendants were specifically admonished not to reargue the prevailing party designation, the defendants' objection argued that this court lacked jurisdiction to enter an award of attorney fees, that Widman was not the prevailing party, that certain fees were not recoverable, and that offset had been waived and was unavailable, or was limited to amounts awarded in this suit. (Dkt. No. 175.) Widman then filed a second motion for attorney fees incurred in responding to the motion for a new trial, (Dkt. No. 177), which defendants also opposed. (Dkt. No. 182.)

         While these motions were pending, defendants also filed a Notice of Appeal of the underlying decision, including the prevailing party determination, to the Tenth Circuit Court of Appeals. (Dkt. No. 186.) After the appeal had been pending for nearly a year, on October 9, 2015 this court ruled on the parties' pending briefing on attorney's fees. (Order, Dkt. No. 196.) In that order, this court declined to address defendants' prevailing party arguments, having twice previously concluded that Widman was the prevailing party. (Id. at p. 3.) Four days later, on October 13, 2015, the Tenth Circuit issued its decision on defendants' appeal. The Tenth Circuit affirmed this court's judgment on all issues except for its determination that Widman was the prevailing party, because the court “did not provide any rationale for its prevailing-party determination.” Widman v. Keene, 628 Fed.Appx. 579, 583 (10th Cir. 2015). Accordingly, on October 29, 2015, the court issued an Amended Order, specifically to address the Tenth Circuit's request that the court provide its rationale for determining that Widman was the prevailing party in this litigation. (Dkt. No. 199.)

         In the Amended Order, this court explained that a prevailing party for purposes of a contractual attorney fee award is governed by California Civil Code § 1717, whereas a prevailing party for purposes of a costs award, which may include attorney's fees, is governed by California Code of Civil Procedure § 1032, necessitating the court's consideration of both provisions. After analyzing these provisions, relevant case law, and considering the parties' arguments, the court again concluded that Widman was the prevailing party and awarded her attorney's fees. (Id.) Coincidentally, six days later on November 4, 2015, the Tenth Circuit's Mandate was filed on the docket of this case. (Dkt. No. 200.)

         Defendants now argue that the court's October 29, 2015 prevailing party determination is vacated because the Amended Order was issued prior to the appearance of the Tenth Circuit's Mandate on the docket, notwithstanding that the Amended Order was issued subsequent to and in response to the Tenth Circuit's October 13, 2015 decision. This decision, entered on the docket subsequent to the Mandate and incorporating the Amended Order by reference, resolves that issue as well as defendants' other arguments without changing the court's original conclusion that Widman is the prevailing party.

         DISCUSSION

         Defendants' objections and arguments raise essentially three issues: That the court failed to correctly analyze California Code of Civil Procedure § 1032(a)(4) in making its prevailing party determination; that California Civil Code § 1717 is not applicable to the court's prevailing party determination; and that Widman did not prevail on any contract claim that entitled her to attorney's fees. The court will begin by analyzing the relevance of each statute, and then apply the relevant standards to the two contracts and the litigation outcome to explain its prevailing party determination.

         1. California Code of Civil Procedure § 1032(a)(4)

         Under California law, “[u]nless authorized by either statute or agreement, attorney's fees ordinarily are not recoverable as costs.” Reynolds Metals Co. v. Alperson, 25 Cal.3d 124, 127 (Cal. 1979) (referencing Cal. Code Civ. Proc. § 1021). California Code of Civil Procedure § 1032 provides for recovery of costs by a prevailing party as a matter of right, and § 1033.5 further provides that “costs” can include attorney's fees when authorized by contract. See Cal. Code Civ. Proc. § 1033.5; Scott Co. v. Blount, Inc., 979 P.2d 974, 977 (Cal. 1999). Cost recovery under § 1032, therefore, first requires the court to make a determination of the prevailing party in the litigation. For those costs to include attorney's fees, the court must then analyze whether they are provided for by contract. The court previously determined, however, that § 1032 is not the only statute that requires the court to consider an award of attorney's fees in this case. “A prevailing party for purposes of costs under Code of Civil Procedure section 1032 is not necessarily a prevailing party for an award of attorney fees under Civil Code section 1717.” David S. Karton, A Law Corp. v. Dougherty, 180 Cal.Rptr.3d 55, 59 (Cal.App. 2d Dist. 2014). Thus, the court must consider both statutes.

         Defendants argue that because the parties argued and agreed before the Tenth Circuit that the prevailing party definitions contained in California Code of Civil Procedure § 1032(a)(4) apply to the court's prevailing party determination, the court is required to limit its analysis of the prevailing party in this litigation solely to that provision.[1] A careful reading of the Tenth Circuit's decision does not support this argument. Rather, the Tenth Circuit stated that “[s]tate law governs the question of whether Ms. Widman is the prevailing party and therefore entitled to an award of attorney's fees.” Widman, 628 Fed.Appx. at 583. While noting that the parties “agree that California law applies” and that the parties had referred to section § 1032(a)(4) for the definition of “prevailing party” in their arguments to the Tenth Circuit, the Tenth Circuit noted that the district court had not referred to that section or any other rationale for its prevailing party determination. Id. Without directing this court to any requirement other than to follow the ...


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