Thursday, November 18, 2010
C.A. Upholds Fee Award in Suit Dismissed for Inconvenient Forum
By SHERRI M. OKAMOTO, Staff Writer
The Fourth District Court of Appeal yesterday upheld a $21,000 attorney fee award to a Tacoma, Wash. woman for obtaining dismissal of an action filed against her in Orange County on the basis of forum non conveniens.
In a decision by Justice Raymond J. Ikola, Div. Three concluded that Gail Meyer was a prevailing party in a contract action and entitled to recover reasonable attorney fees pursuant to the terms of a guaranty agreement between her and the PNEC Corporation.
PNEC filed a complaint in Nov. 2008, alleging that it had provided “certain refined petroleum products” for which Meyer and other defendants had failed to pay. It asserted a claim for breach of guaranty against Meyer based on an agreement purportedly signed by her.
Meyer’s counsel made a special appearance to move to quash service of process for lack of personal jurisdiction or to stay or dismiss the action due to inconvenient forum.
Orange Superior Court Judge Gregory Munoz entered a judgment of dismissal without prejudice based on forum non conveniens in March 2009, and PNEC did not appeal this decision.
Meyer then filed a motion for attorney fees in the amount of $22,127.25. Munoz awarded her $21,667.25, after disallowing 1.5 hours spent researching Meyer’s corporate status after the motion for forum non conveniens was granted.
Munoz found that Meyer was the prevailing party for purposes of Civil Code Sec. 1717(a), which states:
“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.”
On appeal, PNEC contended a dismissal on forum non conveniens grounds did not provide an adequate basis for deeming a defendant to be a “party prevailing on the contract” under Sec. 1717, but Ikola was not persuaded.
Like Munoz, Ikola concluded the statutory analysis set forth in Profit Concepts Management, Inc. v. Griffith (2008) 162 Cal.App.4th 950 was applicable.
The court in Profit Concepts contrasted the dismissal of a contract claim for lack of personal jurisdiction with a situation where a plaintiff voluntarily dismisses its case and reasoned that a defendant who successfully moved to quash service was a prevailing party since Sec. 1717(b)(2) only provides there is no prevailing party in the later scenario.
Ikola also rejected PNEC’s contention that only a final judgment on the merits of the contract claim can result in attorney fees for a prevailing party since “nothing in the current version of the statute (as opposed to the pre-1981 version) indicates a final judgment is necessary.”
Although Ikola acknowledged PNEC could re-file its contract claims against Meyer in a different jurisdiction, he said “here, as in Profit Concepts, the ‘issue of final resolution should not depend on the plaintiff’s possible future conduct.’ ”
The justice further concluded that the attorney fee provision in the guaranty agreement did not limit fee shifting to cases in which a court makes a determination on the merits of the contract claim.
Ikola posited the contractual language requiring payment of the prevailing party’s “reasonable attorney’s fees and costs of collection” was “broad enough to encompass a fee award under the circumstances of this case.”
Joined by Justices Eileen C. Moore and Richard M. Aronson, Ikola concluded the trial court had not abused its discretion in awarding Meyer the amount of her attorney fee incurred prior to the dismissal of the action, even if some of those hours were billed for work that did not address the forum non conveniens issue.
The case is PNEC Corporation v. Meyer, 10 S.O.S. 6419.
Copyright 2010, Metropolitan News Company