Stewart v. Dollar Loan Center, LLC

Filing 37

ORDER Denying 32 Motion for Attorney Fees. Signed by Judge James C. Mahan on 2/6/2014. (Copies have been distributed pursuant to the NEF - SLR)

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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DEMAURIO STEWART,

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2:13-CV-182 JCM (PAL)

Plaintiff(s),

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v.

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DOLLAR LOAN CENTER, LLC,

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Defendant(s).

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ORDER

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Presently before the court is defendant Dollar Loan Center, LLC’s, (“Dollar”) motion for

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attorney fees. Plaintiff DeMaurio Stewart has filed a response (doc. # 34) and defendant has filed

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a reply (#35).

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I.

Background

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This matter arises out of a loan transaction between Dollar and Stewart which contained

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mandatory arbitration language. Plaintiff filed the complaint on January 15, 2013, in Nevada state

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court. The matter was removed to this court and an offer of judgment was served on February 6,

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2013. Plaintiff did not accept the offer of judgment.

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Defendant thereafter filed a motion to enforce the alternative dispute resolution agreements

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(“ADRA”), which this court granted. (Doc. # 29). In its order, the court concluded that the subject

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loan agreements required arbitration before proceeding to court, and dismissed the matter without

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prejudice. (Id.).

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...

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James C. Mahan
U.S. District Judge

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II.

Discussion

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The defendant now moves for an award of fees in the amount of $24,223.00 and costs of

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$3,167.88. The court notes that costs in the amount of $3,167.88 have already been taxed against

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plaintiff. (Doc. # 36).

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Defendant offers two grounds upon which it contends it is entitled to fees. First, under 28

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U.S.C. § 1927, and second, because plaintiff did not obtain a judgment more favorable than the offer

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of judgment of $5,001.00.

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28 U.S.C. § 1927 permits a court to award attorney fees and costs if counsel “multiplies the

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proceedings in any case unreasonably and vexatiously. . .” Conduct that may warrant an award under

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that statute includes instances where an attorney knowingly or recklessly raises a frivolous argument

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or raises an argument only to harass an opponent. See Pratt v. California, 11 Fed.Appx. 833 (9th

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Cir. 2001). Defendant asserts that sanctions are warranted because plaintiff’s counsel “should have

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understood that any dispute should be in arbitration.”

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In its opposition to the motion to dismiss, plaintiff claimed that the arbitration clause did not

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cover the causes of action alleged in the complaint, that the arbitration agreement did not cover

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unrelated and independent torts, and that it was unconscionable for various reasons.

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In the order dismissing this case, the court noted that plaintiff’s arguments were “particularly

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unavailing” before ultimately concluding that the very loan agreements signed by plaintiff clearly

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provided that the parties must arbitrate before filing a lawsuit. (See order doc. # 29). That being

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said, the court did not find that the filing of the lawsuit was unreasonable or vexatious. The only

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mention of frivolousness was with respect to a specific evidentiary objection by the plaintiff. This

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observation did not automatically spill over to the entirety of the action. Although filing the

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complaint was ill-advised in hindsight, nothing in the court’s order indicated that counsel acted

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recklessly or was attempting to harass the defendant. The court declines to grant sanctions under

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section 1927.

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With respect to the offer of judgment, it remains to be seen whether plaintiff will obtain “a

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more favorable judgment.” The court has dismissed the matter without prejudice so that the parties

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James C. Mahan
U.S. District Judge

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may engage in the mandatory arbitration agreement. Because the court has not reached the merits

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of the claims, there has not been a final judgment as required by Rule 68.

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IV.

Conclusion

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The court did not find plaintiff acted in a manner unreasonable enough to warrant sanctions.

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Further, because the matter has been dismissed without prejudice, judgment is not final and

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enforcing the offer of judgment at this juncture would be premature.

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, and DECREED that defendant’s motion for

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attorney fees (doc. # 32) be, and the same hereby is, DENIED.
DATED February 6, 2014.

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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge

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