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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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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GROLSCHE BIERBROUWERIJ NEDERLAND,
B.V.,
Plaintiff,

For the Northern District of California

United States District Court

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v.

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DOVEBID, INC.; GOINDUSTRY USA,
INC., DOES 1 THROUGH 50,
inclusive,

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Defendants.
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) Case No. C 11-00763 SC
)
) ORDER GRANTING MOTION FOR
) ATTORNEY'S FEES AND COSTS
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I.

INTRODUCTION

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Defendants Dovebid, Inc. ("Dovebid") and GoIndustry USA, Inc.

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("GoIndustry") (collectively, "Defendants'") move the Court for an

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order awarding them attorney's fees and costs as the prevailing

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party in this matter following the dismissal of Plaintiff Grolsche

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Bierbrouwerij Nederland, B.V.'s ("Plaintiff") First Amended

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Complaint ("FAC").

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briefed.

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Costs"); 39 ("Resp. to Obj. to Bill of Costs").

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set forth below, the Court GRANTS Defendants' Motion.

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ECF No. 33 ("Mot.").

The Motion is fully

ECF Nos. 36 ("Opp'n"), 37 ("Reply"), 38 ("Obj. to Bill of
For the reasons

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II.

BACKGROUND
On or about July 10, 2003, Plaintiff entered into a written

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agreement ("the Agreement")1 with Hamerbod B.V. f/k/a Dovebid

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Netherlands B.V. ("Hamerbod"), a United Kingdom corporation.

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No. 19 ("FAC") ¶ 9.

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number of Plaintiff's assets on Plaintiff's behalf and to pay

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Plaintiff a minimum of four million Euros if certain conditions

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were met.

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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

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United States District Court

For the Northern District of California

ECF

prevailing party shall be entitled to recover its reasonable

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attorney's fees and costs from the other party."

Agreement § 14.

Also on or about July 10, 2003, Plaintiff entered into a

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separate agreement ("the Guarantee")2 with Dovebid, a Delaware

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corporation doing business in the Northern District of California.

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Id. ¶¶ 3, 10.

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company and that, as of December 31, 2010, Dovebid was merged into

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GoIndustry, with GoIndustry assuming all legal obligations of

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Dovebid.

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and unconditionally" guaranteed performance of Hamerbod's

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obligations under the Agreement.

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contain a provision for the recovery of reasonable attorney's fees

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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

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and GoIndustry for breach of the Guarantee in state court.

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1 ("Not. of Removal") Ex A. ("Compl.").

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Defendants later removed

Plaintiff attached the Agreement to its FAC.
("Agreement").
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FAC Ex. A

Plaintiff also attached the Guarantee to its FAC.
("Guarantee").
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ECF No.

FAC Ex. B

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the action to federal court.

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dismiss the Complaint on March 14, 2011, but, a few days later,

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Plaintiff filed its FAC.

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FAC.

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Court granted on August 2, 2011 on the grounds that Plaintiff's

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claim was time-barred.

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("Aug. 2, 2011 Order").

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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

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bring the Motion pursuant to Rule 11 of the Federal Rules of Civil

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Procedure on the grounds that Plaintiff's action was frivolous

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because it was barred by the statute of limitations.

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Defendants also bring the Motion pursuant to California Civil Code

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Section 1717 and California Code of Civil Procedure Section 1021 on

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the grounds that Section 14 of the Agreement is enforceable against

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Plaintiff.

Id. at 8.

Id. at 1.

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III. DISCUSSION

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A.

Rule 11 Sanctions

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Under Rule 11 of the Federal Rules of Civil Procedure, the

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Court may impose sanctions against a party or attorney when a

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pleading is filed for an improper purpose, when the legal

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contentions are not warranted by existing law or a nonfrivolous

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argument for the extension of existing law, or when the factual

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contentions lack evidentiary support.

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"The rule provides two independent bases for the imposition of

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sanctions: one if a pleading is frivolous and another if it has

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been filed for an improper purpose."

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Fed. R. Civ. P. 11(b)-(c).

Westlake North Property

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Owners Ass'n v. City of Thousand Oaks, 915 F.2d 1301, 1305 (9th

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Cir. 1990).

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whether a complaint states an arguable claim -- not whether the

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pleader is correct in his perception of the law."

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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

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because, on various occasions, they "informed [Plaintiff] that its

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action was frivolous as it was barred by the statute of

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limitations, and otherwise improper, but [Plaintiff] refused to

United States District Court

For the Northern District of California

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dismiss the action voluntarily."

Mot. at 8.

However, Defendants

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do not explain why Plaintiff's action failed to state an "arguable

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claim," nor do they contend that the action was filed for an

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improper purpose.

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filed the instant action based on the reasonable belief that it was

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timely in light of the language in the Guarantee and authority

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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

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unsuccessful, were not legally baseless or frivolous.

The

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circumstances of this case are not so unusual as to warrant an

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award of Rule 11 sanctions.

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"arguable claim," even if it was ultimately unsuccessful.

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Hudson, 836 F.2d at 1159.

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Plaintiff's claims were brought for an improper purpose.

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of Rule 11 sanctions would merely serve to chill zealous advocacy.

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Accordingly, the Court finds that such sanctions are not

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appropriate in this case.

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Plaintiff's FAC sets forth an
See

Further, there is no indication that

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An award

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B.

The Agreement and Guarantee

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Defendants also argue that they are entitled to attorney's

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fees as the prevailing party in the action pursuant to Section 14

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of the Agreement between Hamerbod and Plaintiff.

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Agreement provides that:

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brought to enforce the terms of this Agreement, the prevailing

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party shall be entitled to recover its reasonable attorney's fees

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and costs from the other party."

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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

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Guarantee, as the two documents were executed contemporaneously,

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Plaintiff was a party to both, and Dovebid is Hamerbod's parent

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company.

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Agreement against Plaintiff because Defendants were not a party to

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the Agreement.

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Guarantee alone should govern the rights and remedies between the

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parties.

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both Plaintiff and Defendants were a party and the Guarantee does

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not contain an attorney's fees clause, Plaintiff contends that

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Defendants are not entitled to attorney's fees and costs.

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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

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the Agreement and Guarantee.

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("Section 1717") provides:

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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.

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Cal. Civ. Code § 1717(a).

California courts have interpreted

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Section 1717 to "provide a reciprocal remedy for a nonsignatory

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defendant, sued on a contract as if he were a party to it, when a

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plaintiff would clearly be entitled to attorney's fees should he

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prevail in enforcing the contractual obligation against the

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defendant."

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(Cal. 1979); see also Dell Merk, Inc. v. Franzia, 132 Cal. App. 4th

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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

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For the Northern District of California

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and GoIndustry were a party to the Agreement, but whether Plaintiff

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would have been entitled to attorney's fees were it the prevailing

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party.

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unconditionally guarantees" to Plaintiff that Hamerbod "will

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properly perform the [Agreement] and will comply with all of its

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terms and conditions."

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provides that Dovebid "will itself perform the payment obligations

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of [Hamberbod] under the [Agreement]."

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that Defendants would have been liable for attorney's fees had

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Plaintiff been the prevailing party.

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Cal. App. 3d 1485, 1506 (Cal. Ct. App. 1987) (guarantor liable for

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attorney's fees where "the guaranty does, in essence, provide the

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guarantors will 'perform' the underlying contract or make payment

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on the note . . . in the event of default" and the underlying

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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

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Accordingly, the Court finds that Defendants are entitled to

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attorney's fees pursuant to the Agreement and Guarantee under the

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reciprocal remedy provisions of California Civil Code Section 1717.

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C.

Reasonable Attorney's Fees and Costs

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Defendants seek $41,023 in attorney's fees and $1,053 in

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costs.

Plaintiff has not challenged the amount of Defendants'

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attorney's fees, but did object to Defendants' Bill of Costs, ECF

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No. 36, on the grounds that Defendants failed to attach supporting

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documentation justifying the costs claimed.

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at 1.

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attaching supporting documentation for some of their costs.

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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

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Costs, which excluded some of the costs initially claimed.

ECF No.

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41 ("Bill of Costs").

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finds that Defendants are entitled to $41,023 in attorney's fees

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and $703 in costs.

For the reasons set forth below, the Court

"It is well established that the determination of what

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constitutes reasonable attorney fees is committed to the discretion

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of the trial court . . . . [Citations.]

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services performed in a case is a matter in which the trial court

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has its own expertise.

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own determination of the value of the services contrary to, or

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without the necessity for, expert testimony.

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trial court makes its determination after consideration of a number

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of factors, including the nature of the litigation, its difficulty,

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the amount involved, the skill required in its handling, the skill

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employed, the attention given, the success or failure, and other

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circumstances in the case."

[Citation.]

The value of legal

The trial court may make its

[Citations.]

The

PLCM Group, Inc. v. Drexler, 22 Cal.

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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.").

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4th 1084, 1096 (Cal. 2000) (quoting Melnyk v. Robledo, 64 Cal. App.

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3d 618, 623 (Cal. App. Ct. 1976)).

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ordinarily begins with the lodestar, i.e., "the number of hours

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reasonably expended multiplied by the reasonable hourly rate."

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"The reasonable hourly rate is that prevailing in the community for

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similar work."

The fee setting determination

Id.

Id. at 1095.

In the instant action, Defendants’ attorneys, paralegals, and

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case clerks spent a total of 111.10 hours on this case.

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Decl. in Supp. of Mot.4 ¶ 9.

Capobianco

These hours were expended for initial

United States District Court

For the Northern District of California

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settlement offers, compliance with local rule pretrial

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requirements, drafting Defendants' two motions to dismiss,

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reviewing relevant documents, and drafting the instant Motion.

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Attorneys' hourly rates for this matter ranged from $300 to $395

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and the hourly rates for support staff ranged from $110 to $220.

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Id. ¶¶ 12-14.

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are consistent with the prevailing market rate.

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light of these facts declared in the Capobianco Declaration and the

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fact that Plaintiff has not challenged the amount of Defendants'

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attorney's fees, the Court finds Defendants' attorney's fees to be

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reasonable.

Id.

Defendants' attorney has declared that these rates
Id. ¶ 15.

In

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With respect to Defendants' Bill of Costs, the Civil Local

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Rules provide: "the bill must state separately and specifically

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each item of taxable costs claimed.

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affidavit, pursuant to 28 U.S.C. §1924, that the costs are

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correctly stated, were necessarily incurred, and are allowable by

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law.

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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.").

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be attached to the bill of costs."

N.D. L.R. 54-1(a).

Defendants submitted a declaration supporting some, but not

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all of the costs listed in their Bill of Costs.5

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Defendants' Bill of Costs appears to contain inconsistencies and

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arithmetic errors.6

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Court finds that Defendants are only entitled to costs of $703.

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Specifically, Defendants are entitled to $634 for translation

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services7 and $69 for removal fees.

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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

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Capobianco Costs Declaration, and supported by invoices submitted

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to the Court.

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For example, Capobianco's Costs Declaration does not refer to or
provide documentation for the $350 filing fee listed in Defendants'
Bill of Costs.
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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").
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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.
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IV.

CONCLUSION
For the foregoing reasons, the Court GRANTS Defendants' Motion

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for Attorney's fees.

Plaintiff Grolsche Bierbrouwerij Nederland,

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B.V. is ORDERED to pay Defendants Dovebid, Inc. and GoIndustry USA,

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Inc. $41,023 in attorney's fees and $703 in costs.

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IT IS SO ORDERED.

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United States District Court

For the Northern District of California

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Dated:

October 25, 2011
UNITED STATES DISTRICT JUDGE

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