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Cross Marine Projects, Inc. v. Morton Salt, Inc.

United States District Court, D. Utah

June 28, 2019

CROSS MARINE PROJECTS, INC. Plaintiff,
v.
MORTON SALT, INC. Defendant.

          MEMORANDUM DECISION AND ORDER ORDER GRANTING PLAINTIFF'S REQUEST FOR COSTS AND PREJUDGMENT INTEREST AND DENYING PLAINTIFF'S AND DEFENDANT'S REQUESTS FOR ATTORNEY FEES

          Clark Waddoups Judge.

         Before the court are Plaintiff Cross Marine Project, Inc.'s Motion for Attorney Fees (ECF No. 108), Motion for Prejudgment Interest (ECF No. 111), and Amended Memorandum of Costs (ECF No. 127), as well as Defendant Morton Salt, Inc.'s Cross Motion for Attorney Fees (ECF No. 113). For the reasons stated herein, the court GRANTS Plaintiff's Motion for Prejudgment Interest and Amended Memorandum of Costs (ECF Nos. 111 & 127) and DENIES both parties' motions for attorney fees (ECF Nos. 108 & 113).

         I. Neither party is entitled to attorney fees.

         A. Plaintiff is not entitled to attorney fees under Utah Code § 13-8-5.

         It is well settled under Utah law that “attorney fees are awardable only if authorized by statute or by contract.” Dixie State Bank v. Bracken, 764 P.2d 985, 988 (Utah 1988) (citations omitted). Plaintiff argues that it is entitled to an award of attorney fees under Utah Code § 13-8-5, which provides that the successful party in “any action for the collection of retained proceeds withheld and retained in violation of this section” is “entitled to attorney fees and other allowable costs.” Utah Code § 13-8-5(10)(a) (emphasis added). Under that section, “retention proceeds, ” which the court recognizes are synonymous with “retained proceeds, ” are defined as “money earned by a contractor or subcontractor but retained by the owner or public agency pursuant to the terms of a construction contract to guarantee payment or performance by the contractor or subcontractor of the construction contract.” Utah Code § 13-8-5(1)(i). The jury awarded Plaintiff damages for additional work it performed for stromatolite mitigation and relocation ($196, 700.00) and for increased costs it incurred as a result of delays caused by bad weather ($38, 160.00) and Defendant's failure to obtain permits and leases ($127, 200.00). (ECF No. 104.) Because none of these awards was for “money earned by [Plaintiff] but retained by [Defendant] pursuant to the terms of a construction contract to guarantee payment or performance by [Plaintiff] of the construction contract, ” Utah Code § 13-8-5(10)(a) does not apply and cannot be used as a basis for Plaintiff's claim for attorney fees.

         Plaintiff argues that this is too narrow a reading of § 13-8-5(10)(a), as Utah Code § 58-55-602 states that “[a]ll unpaid construction funds are payable to the contractor as provided in Section 13-8-5.” This argument reaches too far. While § 58-55-602 may make the terms, procedures, and logistics set forth in § 13-8-5 applicable to all unpaid construction funds, it does not erase § 13-8-5(10)(a)'s express and narrow application to only actions “for the collection of retained proceeds.” As discussed above, § 13-8-5 sets forth a specific definition of “retention proceeds, ” and that definition is part of, not excluded by, the incorporation of § 13-8-5 into § 58-55-602. The fact that § 58-55-602 makes § 13-8-5's provisions applicable to all construction funds has no effect on § 13-8-5(10)(a)'s expressly limited application to actions for retention proceeds. Because Plaintiff neither sought nor was awarded retention proceeds, § 13-8-5(10)(a) does not govern and does not provide a basis for Plaintiff to recover its attorney fees.

         B. Plaintiff is not entitled to attorney fees under Utah Code § 78B-5-826.

         Plaintiff next argues that it is entitled to recover its attorney fees under Utah's reciprocal attorney fee statute, Utah Code § 78B-5-826. Under § 78B-5-826, a court “may award costs and attorney fees to either party that prevails in a civil action based upon any . . . written contract . . . when the provisions of the . . . written contract . . . allow at least one party to recover attorney fees.” This “statutory trigger for fee shifting” is met “‘when the provisions' of a contract would have entitled at least one party to recover its fees had the party prevailed ‘in a civil action based upon' the contract.” Hooban v. Unicity Int'l, Inc., 2012 UT 40, ¶¶ 31-32, 285 P.3d 766, 772 (quoting Utah Code § 78B-5-826). Plaintiff argues that the parties' contract contained a provision which allowed Defendant to recover its attorney fees, so it should also be permitted to recover its fees. The provision of the parties' contract on which Plaintiff relies states, in relevant part, that Plaintiff:

“agrees to indemnify, defend, and hold harmless [Defendant] from and against any and all liability, claim, loss, damage, action, suit, cost or expense (including attorneys' fees) for injuries or death to persons or damage to property . . . resulting from . . . (i) any act or omission of [Plaintiff] in connection with this Contract; (ii) [Plaintiff's] performance or failure to perform . . . under this Contract; (iii) any claims, costs, or expenses arising under any Worker's Compensation laws; or (iv) any breach of warranty, breach of contract, misrepresentation of false certification, or failure to exercise due care by [Plaintiff], regardless of any active or passive negligence by [Defendant]. Def. Ex. 244

         This is an indemnification provision, and it is wholly irrelevant to the matters raised in this action-there are no allegations that this provision has been triggered, and there are no facts before the court to indicate that Defendant is entitled to, or has even requested, indemnification. Plaintiff, relying on a holding of the Utah Court of Appeals, argues that the fee shifting statute “does not require that the contract or its provisions actually be enforceable under the theory advanced in the lawsuit.” Hooban v. Unicity Int'l, Inc., 2009 UT App 287, ¶ 9, 220 P.3d 485, 488, aff'd, 2012 UT 40, ¶ 9, 285 P.3d 766. Plaintiff relies on the first part of this holding-that a provision need not be enforceable to trigger fee shifting-while it ignores the second-that the provision must be part of “the theory advanced in the lawsuit.”

         This requirement that the contractual provision allowing for attorney fees actually be a “theory advanced in the lawsuit” is supported by the Utah Court of Appeal's recognition that § 78B-5-826 “does not create an independent right to a fee award that the contract's attorney fee provision would not allow to either party simply because the fee provision is one-sided.” PC Crane Serv., LLC v. McQueen Masonry, Inc., 2012 UT App 61, ¶ 23, 273 P.3d 396, 408. The requirement was also reiterated and affirmed by the Utah Supreme Court. In upholding the Utah Court of Appeals' ruling that a defendant was entitled to fees under the reciprocal attorney fees statute, it explained that “[u]nder [the plaintiff's] theory of the case [he] was a party to an enforceable, written contract with [the defendant]. The contract contained an attorney fees provision that allowed ‘the prevailing party' to recover fees ‘[i]n the event of a dispute.' Had [the plaintiff] prevailed, the contractual provisions would have entitled at least one party- [him]-to attorney fees, and the statutory trigger for fee shifting is therefore met.” Hooban v. Unicity Int'l, Inc., 2012 UT 40, ¶ 31, 285 P.3d 766, 772. Here, the indemnity provision that allowed Defendant to recover its attorney fees was not a theory that Plaintiff advanced in its action. Thus, even if Plaintiff had prevailed on each of its claims, the contractual provision would not have entitled it, or Defendant, to attorney fees. The statutory trigger for fee shifting is therefore not met, and Plaintiff is not entitled to attorney fees under § 78B-5-826.

         C. Defendant is not entitled to attorney fees.

         Defendant argues that if there is to be an award of attorney fees under the contract, it should go to it, not Plaintiff. As discussed, the indemnity provision was the only term of the contract that allowed for attorney fees, and it was neither triggered by, nor even tangentially relevant to, this action. The provision gives Defendant no more of a claim for attorney fees than it gave to Plaintiff. Defendant is not entitled to an award of attorney fees under the contract.

         II. Plaintiff is entitled recover its costs under 28 ...


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