Grolsche Bierbrouwerij Nederland, B.V. v. Dovebid, Inc. et al

Filing 43

ORDER by Judge Samuel Conti granting 33 Motion for Attorney Fees (sclc1, COURT STAFF) (Filed on 10/26/2011)

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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 9 GROLSCHE BIERBROUWERIJ NEDERLAND, B.V., Plaintiff, For the Northern District of California United States District Court 10 v. 11 12 13 DOVEBID, INC.; GOINDUSTRY USA, INC., DOES 1 THROUGH 50, inclusive, 14 Defendants. 15 ) Case No. C 11-00763 SC ) ) ORDER GRANTING MOTION FOR ) ATTORNEY'S FEES AND COSTS ) ) ) ) ) ) ) ) ) 16 17 I. INTRODUCTION 18 Defendants Dovebid, Inc. ("Dovebid") and GoIndustry USA, Inc. 19 ("GoIndustry") (collectively, "Defendants'") move the Court for an 20 order awarding them attorney's fees and costs as the prevailing 21 party in this matter following the dismissal of Plaintiff Grolsche 22 Bierbrouwerij Nederland, B.V.'s ("Plaintiff") First Amended 23 Complaint ("FAC"). 24 briefed. 25 Costs"); 39 ("Resp. to Obj. to Bill of Costs"). 26 set forth below, the Court GRANTS Defendants' Motion. 27 /// 28 /// ECF No. 33 ("Mot."). The Motion is fully ECF Nos. 36 ("Opp'n"), 37 ("Reply"), 38 ("Obj. to Bill of For the reasons 1 II. BACKGROUND On or about July 10, 2003, Plaintiff entered into a written 2 3 agreement ("the Agreement")1 with Hamerbod B.V. f/k/a Dovebid 4 Netherlands B.V. ("Hamerbod"), a United Kingdom corporation. 5 No. 19 ("FAC") ¶ 9. 6 number of Plaintiff's assets on Plaintiff's behalf and to pay 7 Plaintiff a minimum of four million Euros if certain conditions 8 were met. 9 or in equity is brought to enforce the terms of this Agreement, the Id. Under the Agreement, Hamerbod agreed to sell a The Agreement also provided: "If any action at law 10 United States District Court For the Northern District of California ECF prevailing party shall be entitled to recover its reasonable 11 attorney's fees and costs from the other party." Agreement § 14. Also on or about July 10, 2003, Plaintiff entered into a 12 13 separate agreement ("the Guarantee")2 with Dovebid, a Delaware 14 corporation doing business in the Northern District of California. 15 Id. ¶¶ 3, 10. 16 company and that, as of December 31, 2010, Dovebid was merged into 17 GoIndustry, with GoIndustry assuming all legal obligations of 18 Dovebid. 19 and unconditionally" guaranteed performance of Hamerbod's 20 obligations under the Agreement. 21 contain a provision for the recovery of reasonable attorney's fees 22 for actions brought to enforce its terms. Plaintiff alleges that Dovebid is Hamerbod's parent Id. ¶¶ 4, 10. Under the Guarantee, Dovebid "irrevocably Id. ¶ 11. The Guarantee does not In November 2010, Plaintiff filed a Complaint against Dovebid 23 24 and GoIndustry for breach of the Guarantee in state court. 25 1 ("Not. of Removal") Ex A. ("Compl."). 26 1 27 28 Defendants later removed Plaintiff attached the Agreement to its FAC. ("Agreement"). 2 FAC Ex. A Plaintiff also attached the Guarantee to its FAC. ("Guarantee"). 2 ECF No. FAC Ex. B 1 the action to federal court. 2 dismiss the Complaint on March 14, 2011, but, a few days later, 3 Plaintiff filed its FAC. 4 FAC. 5 Court granted on August 2, 2011 on the grounds that Plaintiff's 6 claim was time-barred. 7 ("Aug. 2, 2011 Order"). 8 9 Not. of Removal. Defendants moved to ECF No. 13 ("Mot. to Dismiss Compl."); Defendant then filed a motion to dismiss the FAC, which the ECF Nos. 23 ("Mot. to Dismiss FAC"), 31 Now Defendants seek reimbursement for attorney's fees and costs expended in prosecuting this action. Mot. at 1. Defendants United States District Court For the Northern District of California 10 bring the Motion pursuant to Rule 11 of the Federal Rules of Civil 11 Procedure on the grounds that Plaintiff's action was frivolous 12 because it was barred by the statute of limitations. 13 Defendants also bring the Motion pursuant to California Civil Code 14 Section 1717 and California Code of Civil Procedure Section 1021 on 15 the grounds that Section 14 of the Agreement is enforceable against 16 Plaintiff. Id. at 8. Id. at 1. 17 18 III. DISCUSSION 19 A. Rule 11 Sanctions 20 Under Rule 11 of the Federal Rules of Civil Procedure, the 21 Court may impose sanctions against a party or attorney when a 22 pleading is filed for an improper purpose, when the legal 23 contentions are not warranted by existing law or a nonfrivolous 24 argument for the extension of existing law, or when the factual 25 contentions lack evidentiary support. 26 "The rule provides two independent bases for the imposition of 27 sanctions: one if a pleading is frivolous and another if it has 28 been filed for an improper purpose." 3 Fed. R. Civ. P. 11(b)-(c). Westlake North Property 1 Owners Ass'n v. City of Thousand Oaks, 915 F.2d 1301, 1305 (9th 2 Cir. 1990). 3 whether a complaint states an arguable claim -- not whether the 4 pleader is correct in his perception of the law." 5 Bus. Forms, Inc., 836 F.2d 1156, 1159 (9th Cir. 1987). "The key question in assessing frivolousness is Hudson v. Moore Defendants argue that they are entitled to Rule 11 sanctions 6 7 because, on various occasions, they "informed [Plaintiff] that its 8 action was frivolous as it was barred by the statute of 9 limitations, and otherwise improper, but [Plaintiff] refused to United States District Court For the Northern District of California 10 dismiss the action voluntarily." Mot. at 8. However, Defendants 11 do not explain why Plaintiff's action failed to state an "arguable 12 claim," nor do they contend that the action was filed for an 13 improper purpose. 14 filed the instant action based on the reasonable belief that it was 15 timely in light of the language in the Guarantee and authority 16 regarding the accrual of actions under guarantees. In its Opposition, Plaintiff contends that it Opp'n at 5. The Court finds that Plaintiff's arguments, while ultimately 17 18 unsuccessful, were not legally baseless or frivolous. The 19 circumstances of this case are not so unusual as to warrant an 20 award of Rule 11 sanctions. 21 "arguable claim," even if it was ultimately unsuccessful. 22 Hudson, 836 F.2d at 1159. 23 Plaintiff's claims were brought for an improper purpose. 24 of Rule 11 sanctions would merely serve to chill zealous advocacy. 25 Accordingly, the Court finds that such sanctions are not 26 appropriate in this case. 27 /// 28 /// Plaintiff's FAC sets forth an See Further, there is no indication that 4 An award 1 B. The Agreement and Guarantee 2 Defendants also argue that they are entitled to attorney's 3 fees as the prevailing party in the action pursuant to Section 14 4 of the Agreement between Hamerbod and Plaintiff. 5 Agreement provides that: 6 brought to enforce the terms of this Agreement, the prevailing 7 party shall be entitled to recover its reasonable attorney's fees 8 and costs from the other party." 9 that the Agreement should be interpreted together with the Section 14 of the "If any action at law or in equity is Id. at 3. Defendants contend United States District Court For the Northern District of California 10 Guarantee, as the two documents were executed contemporaneously, 11 Plaintiff was a party to both, and Dovebid is Hamerbod's parent 12 company. 13 Agreement against Plaintiff because Defendants were not a party to 14 the Agreement. 15 Guarantee alone should govern the rights and remedies between the 16 parties. 17 both Plaintiff and Defendants were a party and the Guarantee does 18 not contain an attorney's fees clause, Plaintiff contends that 19 Defendants are not entitled to attorney's fees and costs. 20 Plaintiff argues that Defendants cannot enforce the Id. Opp'n at 2. Plaintiff also argues that the As the Guarantee is the only agreement to which Id. The parties agree that California law governs the dispute over 21 the Agreement and Guarantee. 22 ("Section 1717") provides: 23 24 25 26 27 California Civil Code Section 1717 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. 28 5 1 Cal. Civ. Code § 1717(a). California courts have interpreted 2 Section 1717 to "provide a reciprocal remedy for a nonsignatory 3 defendant, sued on a contract as if he were a party to it, when a 4 plaintiff would clearly be entitled to attorney's fees should he 5 prevail in enforcing the contractual obligation against the 6 defendant." 7 (Cal. 1979); see also Dell Merk, Inc. v. Franzia, 132 Cal. App. 4th 8 443, 451 (Cal. Ct. App. 2005). Reynolds Metals Co. v. Alperson, 25 Cal. 3d 124, 128 United States District Court Thus, the pertinent question is not whether Defendants Dovebid 10 For the Northern District of California 9 and GoIndustry were a party to the Agreement, but whether Plaintiff 11 would have been entitled to attorney's fees were it the prevailing 12 party. 13 unconditionally guarantees" to Plaintiff that Hamerbod "will 14 properly perform the [Agreement] and will comply with all of its 15 terms and conditions." 16 provides that Dovebid "will itself perform the payment obligations 17 of [Hamberbod] under the [Agreement]." 18 that Defendants would have been liable for attorney's fees had 19 Plaintiff been the prevailing party. 20 Cal. App. 3d 1485, 1506 (Cal. Ct. App. 1987) (guarantor liable for 21 attorney's fees where "the guaranty does, in essence, provide the 22 guarantors will 'perform' the underlying contract or make payment 23 on the note . . . in the event of default" and the underlying 24 contract provided for attorney's fees). Under the Guarantee, Dovebid "irrevocably and Guarantee at 1. The Guarantee also Id. These terms indicate See Niederer v. Ferreira, 189 25 Accordingly, the Court finds that Defendants are entitled to 26 attorney's fees pursuant to the Agreement and Guarantee under the 27 reciprocal remedy provisions of California Civil Code Section 1717. 28 /// 6 1 C. Reasonable Attorney's Fees and Costs 2 Defendants seek $41,023 in attorney's fees and $1,053 in 3 costs. Plaintiff has not challenged the amount of Defendants' 4 attorney's fees, but did object to Defendants' Bill of Costs, ECF 5 No. 36, on the grounds that Defendants failed to attach supporting 6 documentation justifying the costs claimed. 7 at 1. 8 attaching supporting documentation for some of their costs. 9 Capobianco Costs Decl.3 Obj. to Bill of Costs Defendants subsequently filed a declaration explaining and Defendants also filed an amended Bill of United States District Court For the Northern District of California 10 Costs, which excluded some of the costs initially claimed. ECF No. 11 41 ("Bill of Costs"). 12 finds that Defendants are entitled to $41,023 in attorney's fees 13 and $703 in costs. For the reasons set forth below, the Court "It is well established that the determination of what 14 15 constitutes reasonable attorney fees is committed to the discretion 16 of the trial court . . . . [Citations.] 17 services performed in a case is a matter in which the trial court 18 has its own expertise. 19 own determination of the value of the services contrary to, or 20 without the necessity for, expert testimony. 21 trial court makes its determination after consideration of a number 22 of factors, including the nature of the litigation, its difficulty, 23 the amount involved, the skill required in its handling, the skill 24 employed, the attention given, the success or failure, and other 25 circumstances in the case." [Citation.] The value of legal The trial court may make its [Citations.] The PLCM Group, Inc. v. Drexler, 22 Cal. 26 27 28 3 Plaintiff's attorney, Anthony Capobianco ("Capobianco"), submitted a declaration in opposition to Plaintiff's Objection to Defendants' Bill of Costs. ECF No. 39 ("Capobianco Costs Decl."). 7 1 4th 1084, 1096 (Cal. 2000) (quoting Melnyk v. Robledo, 64 Cal. App. 2 3d 618, 623 (Cal. App. Ct. 1976)). 3 ordinarily begins with the lodestar, i.e., "the number of hours 4 reasonably expended multiplied by the reasonable hourly rate." 5 "The reasonable hourly rate is that prevailing in the community for 6 similar work." The fee setting determination Id. Id. at 1095. In the instant action, Defendants’ attorneys, paralegals, and 7 8 case clerks spent a total of 111.10 hours on this case. 9 Decl. in Supp. of Mot.4 ¶ 9. Capobianco These hours were expended for initial United States District Court For the Northern District of California 10 settlement offers, compliance with local rule pretrial 11 requirements, drafting Defendants' two motions to dismiss, 12 reviewing relevant documents, and drafting the instant Motion. 13 Attorneys' hourly rates for this matter ranged from $300 to $395 14 and the hourly rates for support staff ranged from $110 to $220. 15 Id. ¶¶ 12-14. 16 are consistent with the prevailing market rate. 17 light of these facts declared in the Capobianco Declaration and the 18 fact that Plaintiff has not challenged the amount of Defendants' 19 attorney's fees, the Court finds Defendants' attorney's fees to be 20 reasonable. Id. Defendants' attorney has declared that these rates Id. ¶ 15. In 21 With respect to Defendants' Bill of Costs, the Civil Local 22 Rules provide: "the bill must state separately and specifically 23 each item of taxable costs claimed. 24 affidavit, pursuant to 28 U.S.C. §1924, that the costs are 25 correctly stated, were necessarily incurred, and are allowable by 26 law. 27 4 28 It must be supported by an Appropriate documentation to support each item claimed must Capobianco also submitted a declaration in support of Defendants' Motion. ECF No. 34 ("Capobianco Decl. in Supp. of Mot."). 8 1 be attached to the bill of costs." N.D. L.R. 54-1(a). Defendants submitted a declaration supporting some, but not 2 3 all of the costs listed in their Bill of Costs.5 4 Defendants' Bill of Costs appears to contain inconsistencies and 5 arithmetic errors.6 6 Court finds that Defendants are only entitled to costs of $703. 7 Specifically, Defendants are entitled to $634 for translation 8 services7 and $69 for removal fees. 9 are listed in Defendants' Bill of Costs, explained in the Additionally, In light of these errors and omissions, the These are the only costs which United States District Court For the Northern District of California 10 Capobianco Costs Declaration, and supported by invoices submitted 11 to the Court. 12 /// 13 /// 14 /// 15 /// 16 /// 17 /// 18 /// 19 /// 20 21 22 23 24 25 26 27 28 5 For example, Capobianco's Costs Declaration does not refer to or provide documentation for the $350 filing fee listed in Defendants' Bill of Costs. 6 Certain items listed in the itemized Bill of Costs, which was attached to the Bill of Costs, and the Capobianco Costs Declaration do not appear in the Bill of Costs. Additionally, the itemized Bill of Costs attached to the Bill of Costs mistakenly states the sum of $69, $97, and $120 (the fees for document filings) as $186. ECF No. 41 ("Bill of Costs"). 7 In its Aug. 2, 2011 Order, the Court took judicial notice of various documents that Plaintiff filed in its pending Dutch action. Capobianco Costs Decl. ¶ 3. Because the documents were written in Dutch, Defendants retained a certified translator to translate these documents. Id. 9 1 2 IV. CONCLUSION For the foregoing reasons, the Court GRANTS Defendants' Motion 3 for Attorney's fees. Plaintiff Grolsche Bierbrouwerij Nederland, 4 B.V. is ORDERED to pay Defendants Dovebid, Inc. and GoIndustry USA, 5 Inc. $41,023 in attorney's fees and $703 in costs. 6 7 IT IS SO ORDERED. 8 9 United States District Court For the Northern District of California 10 Dated: October 25, 2011 UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10

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