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Ninth Circuit:
$250,000 Verdict Insufficient to Justify Fee Award
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals, applying California law, has affirmed a District Court ruling that a plaintiff who obtained a $250,000 award on his claim for intentional misrepresentation of the value of a business he bought was not the prevailing party for the purpose of a fee-shifting provision of the sales contract because the jury’s verdict was for a considerably smaller sum than that sought.
Friday’s decision came in a memorandum opinion. It finds that Chief Magistrate Judge Joseph C. Spero of the Northern District of California did not abuse his discretion in denying attorney fees to plaintiff Christopher Cardinal who purchased a kitchen remodeling business.
The contract between him and defendant John Lupo specified:
“If any action or proceeding shall be commenced to interpret or enforce this Agreement or any right arising in connection with this Agreement, the prevailing party in such action or proceeding shall be entitled to recover from the others the reasonable attorneys’ fees, costs and expenses incurred by such prevailing party in connection with such action or proceeding or negotiation to avoid such action or proceeding.” Spero held that under California law, Cardinal was not entitled to recover his attorney fees because, while awarded damages, his litigation objective was not satisfied.
Agreeing, a three-judge panel—comprised of Circuit Judge Johnnie Rawlinson, Senior Circuit Judge Jay S. Bybee, and District Court Judge Kathleen Cardone of the Western District of Texas, sitting by designation—said:
“Although the jury awarded Cardinal $250,000 on his tort claim, that is less than one-sixth of the $1,580,297.53 that Cardinal claimed he is entitled to in his motion for a new trial on damages. This $250,000 award was also only one-seventh of Cardinal’s $1,750,000 settlement demand, a shortfall of $1.5 million. It was thus reasonable for the trial court to find that Cardinal is not a prevailing party since he failed to substantially achieve his litigation objectives.”
The opinion also says Spero was justified in denying costs to Cardinal because “as the trial court pointed out,” $250,000 “can reasonably be characterized as ‘minimal’ because it is less than one-sixth of the $1,580,297.53 that Cardinal sought from Lupo.”
The case is Cardinal v. Lupo, 20-16364.
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