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RESULTS ByIQ LLC v. NETCAPITAL.COM LLC, C 11-0550 SC. (2013)

Court: District Court, N.D. California Number: infdco20130912728 Visitors: 5
Filed: Sep. 11, 2013
Latest Update: Sep. 11, 2013
Summary: ORDER GRANTING ATTORNEY FEES AND COSTS SAMUEL CONTI, District Judge. I. INTRODUCTION Now before the Court is Plaintiff Results ByIQ LLC's ("Plaintiff") motion for attorney fees and costs. ECF No. 134 ("Mot."). Defendants Netcapital.com LLC, Netwire Inc., and Netmovies LLC ("Defendants") oppose the motion. ECF No. 144 ("Opp'n"). The motion is fully briefed, ECF No. 149 ("Reply"), and appropriate for decision without oral argument, Civ. L.R. 7-1(b). For the reasons explained below, the Cour
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ORDER GRANTING ATTORNEY FEES AND COSTS

SAMUEL CONTI, District Judge.

I. INTRODUCTION

Now before the Court is Plaintiff Results ByIQ LLC's ("Plaintiff") motion for attorney fees and costs. ECF No. 134 ("Mot."). Defendants Netcapital.com LLC, Netwire Inc., and Netmovies LLC ("Defendants") oppose the motion. ECF No. 144 ("Opp'n"). The motion is fully briefed, ECF No. 149 ("Reply"), and appropriate for decision without oral argument, Civ. L.R. 7-1(b). For the reasons explained below, the Court GRANTS Plaintiff's motion and AWARDS Plaintiff fees of $207,712.50 and additional costs of $1,037.80.

II. DISCUSSION

Plaintiff's counsel took over this case four months prior to trial. At trial, Plaintiff established that it was the successor-in-interest to a predecessor company, ByIQ LLC, and that ByIQ LLC had assigned to Plaintiff its rights under a Consulting Agreement with Defendants. See ECF No. 139 ("Battista Decl.") Exs. 1 ("Verdict Form"), 2 ("Consulting Agreement"). The Consulting Agreement provides in relevant part: "In any action or proceeding to enforce rights under this Agreement, the prevailing party will be entitled to recover costs and attorney fees." Plaintiff sued Defendants for false promise and breach of contract, and the jury found that Plaintiff prevailed on both claims. The jury awarded Plaintiff $167,050 in compensatory damages for its false promise claim, and $334,100 in punitive damages based on that claim. Defendants had counterclaimed for a breach of contract, but the jury found against them.

Plaintiff's counsel relies on California Civil Code section 1717(a) as their basis for fees:

In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs.

Actions "on a contract" are not just breach of contract actions. "On a contract" extends to any action involving a contract under which one of the parties could recover fees after prevailing in a lawsuit. See In re Tobacco Cases I, 193 Cal.App.4th 1591, 1601 (Cal. Ct. App. 2011).

Defendants have two main arguments why Plaintiff is not entitled to fees. First, Defendants claim that Plaintiff did not prevail in an action "on a contract" because the jury found for Plaintiff, and awarded damages, on a fraudulent inducement claim — a claim that sounds in tort. Opp'n at 3. According to Defendants, the Consulting Agreement is just a backdrop to the case. Id. at 3-4. Second, Defendants contend that Plaintiff is not entitled to fees based on its breach of contract claim, because the jury did not award Plaintiff damages on its contract claim. Id. at 4-5. Defendants state that since Plaintiff technically won nothing on its contract claim, it cannot be the "prevailing party" on a contract. Id. at 4-6.

Alternatively, Defendants claim that Plaintiff's fees should be reduced significantly because they are not apportioned and are unreasonable. Id. at 7. As to apportionment, Defendants claim that Plaintiff was supposed to apportion the fees it requests between the fraud claim, on which the jury awarded it damages, and the contract claim, on which the jury did not award damages. Id. at 7-8. Defendants therefore state that Plaintiff should only be able to obtain fees directly related to their work on the fraud claim. Id. at 8. Finally, with respect to the unreasonableness of the fees, Defendants state that Plaintiff's fee requests and affidavits make it impossible for the Court to determine whether Plaintiff's fee requests are reasonable. Id. at 8-9. In any event, Defendants argue that Plaintiff expended too much time on a "relatively simple" case, that one attorney's fees were incurred before the action was filed (and are therefore not fees related to an action on a contract), and that Plaintiff's travel time was excessive. Opp'n at 9-10.

First, under California law, "[i]f a cause of action is `on a contract,' and the contract provides that the prevailing party shall recover attorney fees incurred to enforce the contract, then attorney fees must be awarded on the contract claim in accordance with Civil Code section 1717." Gil v. Mansano, 121 Cal.App.4th 739, 742 (Cal. Ct. App. 2004) (quoting Exxess Electronixx v. Heger Realty Corp., 64 Cal.App.4th 698, 706 (Cal. Ct. App. 1998)). "A broadly phrased contractual attorney fee provision may support an award to the prevailing party in a tort action. [P]arties may validly agree that the prevailing party will be awarded attorney fees incurred in any litigation between themselves, whether such litigation sounds in tort or in contract." Id. at 743 (quotation marks and citations omitted).

The Court finds that this was an action "on a contract," given the broad phrasing of the Consulting Agreement. The Consulting Agreement undisputedly contained a fee provision related to actions undertaken to enforce rights under the contract. It also required Defendants to pay Plaintiff for the work they hired it to do. Defendants did not pay Plaintiff, so it sued them to get its money back, and, moreover, the jury found that Defendants had entered the Consulting Agreement with Plaintiff without ever intending to pay it. Plaintiff accordingly prevailed on both its contract and tort claims. The two theories are essentially intertwined in this case, and to hold that Plaintiff's counsel is not entitled to fees simply because the jury awarded damages on a tort claim — even though it found that Plaintiff prevailed on both a contract and a tort claim — would be needless formalism. Cf. Reynolds Metals Co. v. Alperson, 25 Cal.3d 124, 129-30 (Cal. 1979) ("Attorney's fees need not be apportioned when incurred for representation on an issue common to both a cause of action in which fees are proper and one in which they are not allowed."). Plaintiff's attorneys deserve to be paid for the work they did, and they need not apportion their fees given the near-identity of the facts supporting both causes of action on which Plaintiff prevailed. Id.

Finally, the Court has carefully reviewed all of Plaintiff's moving papers and supporting documents. The Court finds Plaintiff's fee request reasonable. Plaintiff's counsel was able to join this case on relatively short notice, prepare for trial, and win. Defendants claim that their own counsel did not expend as many hours on the case, rendering Plaintiff's bills unreasonable, but that argument is misplaced. Plaintiff's counsel did the work and won. They deserve fees. However, the Court declines Plaintiff's request for additional fees incurred post-trial. Accordingly, the Court AWARDS Plaintiff's counsel their original fee request of $190,672.50. Further, the Court finds Plaintiff's request for travel costs related to the deposition of John Fanning reasonable and appropriate under the terms of the Consulting Agreement. The Court AWARDS Plaintiff's counsel costs of $1,037.80. The Court declines to revisit the Clerk of Court's reduction of costs, ECF No. 148, finding the reductions appropriate.

III. CONCLUSION

As explained above, Plaintiff Results ByIQ LLC's motion for attorney fees and costs is GRANTED. The Court AWARDS Plaintiff $190,672.50 in fees and $1,037.80 in costs.

IT IS SO ORDERED.

Source:  Leagle

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