Aquapower et al v. Yurth et al
Filing
99
MEMORANDUM DECISION AND ORDER granting 87 Motion for Attorney Fees; granting 89 Motion for Attorney Fees. The hearing set for Wednesday, June 8, 2011 is Stricken. Signed by Judge Ted Stewart on 6/2/2011. (las)
IN THE UNITED STATES COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION
AQUAPOWER, LC, a Utah Limited Liability
Company; and AQUAENERGY, LC, a Utah
Limited Liability Company,
Plaintiffs,
MEMORANDUM DECISION AND
ORDER GRANTING DEFENDANTS’
MOTIONS FOR ATTORNEYS’ FEES
AND COSTS
vs.
Case No. 2:10-CV-00568 TS
DAVID G. YURTH; NOVA INSTITUTE OF
TECHNOLOGY, LLC, a Utah limited
liability company; JEFFERY J. FRANDSEN;
SCOTT R. SCHREYER; MICHAEL S.
KRALIK; CRIT RANDALL KILLEN;
EDWARD G. PRICE; ENVIRONMENTAL
POTENTIALS, INC., a Nevada corporation;
LEONHARDT SCHROEDTER; ROGER L.
CAREFOOT; and JOHN DOES 1-10,
Defendants.
I. INTRODUCTION
This matter is before the Court on Defendants’ Randall Killen, Leonhardt Schroedter, and
Roger Carefoot (collectively “the Killen Defendants”) and Defendants’ David Yurth; Nova
Institute of Technology, LLC; Jeffery Frandsen, Scott R. Schreyer, and Michael S. Kralik
(collectively “the Yurth Defendants”) Renewed Motions for Attorneys’ Fees and Costs.1 Both
1
Docket Nos. 87 & 89.
1
Defendants previously filed Motions for Attorneys’ Fees and Costs,2 which were denied without
prejudice for being premature.3 For the reasons discussed below, the Court will grant the
Motions.
II. BACKGROUND
The Killen Defendants move for attorney fees and costs under Section 8.11 of their
Consulting Agreements, which state that fees and costs should be awarded the prevailing party in
any litigation. The Yurth Defendants join in the Killen Defendants’ Motion as to the prevailing
party claim. Section 8.11 of the Killen Defendants’ Consulting Agreement states:
Litigation Expenses: If a dispute requiring formal resolution in the form of
arbitration or litigation arises, the prevailing party shall recover from the nonprevailing party all reasonable costs associated with such litigation or arbitration,
including (but not limited to) attorney fees, arbitration fees, expert witness fees
and all costs incidental thereto.
Section 10 of the Confidentiality Agreement signed by Yurth on Nova’s behalf states: “In any
action to enforce this Agreement, the prevailing party shall be entitled to its attorney’s fees in
addition to any other recovery awarded.”
The parties do not dispute that the various agreements are binding and that pursuant to
the agreements the prevailing party should be awarded attorneys’ fees. Instead, the parties
dispute whether Defendants are the prevailing parties and thus entitled to recovery under the
agreements.
III. DISCUSSION
“Under the American Rule, absent a statute or enforceable contract, a prevailing litigant
is ordinarily not entitled to collect reasonable attorney fees from the loser.”4 “[W]here
contracting parties have agreed that a breaching party will be liable for attorneys’ fees, the
purpose of the award is to give the parties the benefit of that bargain, and the court’s
2
Docket Nos. 61 & 73.
3
See Docket No. 86.
4
Aguinaga v. United Food and Commercial Workers, Int’l Union, 933 F.2d 1480, 1481
(10th Cir. 1993) (citing Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 247
(1975)).
2
responsibility is to enforce that bargain.”5 “Normally where the court is merely enforcing a
contractual provision authorizing attorneys’ fees, the fees are routinely awarded and the contract
is enforced according to its terms.”6
Because this question involves the application of clauses contained in the agreements
between the parties, the Court applies Utah law to determine whether Defendants qualify as a
prevailing party.7
The Utah Supreme Court has held that “to be a prevailing party, a party ‘must obtain at
least some relief on the merits of the party’s claim or claims.”8 However, in State v. One Lot of
Personal Property, the Utah Supreme Court further determined that a defendant is entitled to
attorney fees when the plaintiff voluntarily dismisses its action before the court has a chance to
consider it.9
Here, the Court was only unable to reach the merits of Plaintiffs’ claims because
Plaintiffs failed to file an amended complaint. Plaintiffs’ failure to file an amended complaint
within the time allotted by the Court is equivalent to a voluntary dismissal of their claims. Based
on the logic of One Lot, Defendants are the prevailing party. Plaintiffs’ recognition of the
apparent weakness of their claims, indicated by their decision not to file an amended complaint,
should not relieve Plaintiffs of their contractual obligation to reimburse Defendants for their
attorneys’ fees.
5
U.S. for Use of C.J.C., Inc. v. W. States Mech. Contractors, Inc., 834 F.2d 1533, 1548
(10th Cir. 1987).
6
Id.
7
Am. Nat. Fire Ins. Co. v. Farmers Ins. Exchange, 927 P.2d 186, 188 (Utah 1996).
8
Ault v. Holden, 44 P.3d 781, 793 (Utah 2002) (quoting Crank v. State Judicial Council,
20 P.3d 307, 318 (Utah 2001)).
9
See 90 P.3d 639, 643 (Utah 2004) (“The fact that the State recognized the apparent
weakness of its claim and voluntarily dismissed it before the district court had an opportunity to
do likewise does not relieve the State of its obligation to reimburse the McKinleys for their
attorney fees. Any other rule would be fundamentally unfair to those defendants who are
required to incur substantial fees defending a plaintiffs non-meritorious claims up to the point of
the plaintiff’s voluntary dismissal.”)
3
Because the Court finds that Defendants are the prevailing party and entitled to recover
under the terms of the agreements, the Court need not address the parties’ other arguments.
IV. CONCLUSION
It is therefore
ORDERED that the Killen Defendants’ Motion for Attorneys’ Fees and Costs (Docket
No. 87) and the Yurth Defendants’ Motion for Attorneys’ Fees and Costs (Docket No. 89) are
GRANTED. The hearing set for Wednesday, June 8, 2011 is STRICKEN.
DATED June 2, 2011.
BY THE COURT:
_______________________________
TED STEWART
United States District Judge
4
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