The opinion of the court was delivered by: Lawrence J. O'Neill United States District Judge
MEMORANDUM DECISION AND ORDER DENYING DEFENDANT THE EXPLORER INSURANCE COMPANY'S MOTION FOR ATTORNEY FEES PURSUANT TO FRCP 68 (DOC. 68)
This is a contract dispute concerning construction of a duplex in Yosemite National Park (the "Park"). Defendant Braswell Construction, Inc., ("Braswell") operated as general contractor on the project under a prime contract with the Park. Doc. 61, Ex. A at 1. Braswell entered into a subcontract with Plaintiff Greg Opinski Construction, Inc., ("Opinski") to perform most of the work on the duplex. Compl. ¶ 15 & Ex. A (see Doc. 65). The Explorer Insurance Company ("Explorer") issued a Miller Act surety bond to guarantee completion of the project. Compl., ¶ 21 & Ex. B (see Doc. 65).
Before the court for decision is Explorer's motion to recover $7,113.00 in attorney's fees from Opinski pursuant to Federal Rule of Civil Procedure 68. Doc. 68. Opinski opposes the award. Doc. 70. Explorer replied. Doc. 72. The motion was originally set for hearing January 5, 2012, but the hearing was vacated and the matter submitted for decision on the papers. See Doc. 71.
A number of disputes arose between Braswell and Opinski during the construction of the duplex, ending in Braswell's termination of Opinski in early 2009. Opinski filed the instant lawsuit on April 9, 2009, alleging Braswell breached the subcontract by failing to pay sums due Plaintiff under the contract and by improperly terminating the contract. See Compl. at ¶¶ 13-18.
On November 10, 2009, Magistrate Judge Gary S. Austin stayed the case and ordered the parties to arbitration. Doc. 29. Only Braswell and Opinski participated in the arbitration. See Doc. 66 at 2-3. The Arbitrator determined Braswell owed Opinski $120,294.74 under the contract; $108,194.00 in attorney's fees and costs incurred during the course of the arbitration; interest on the contract and attorney's fees awards at the rate of 10% from the date of the Arbitration Award; $47,121.00 in prompt payment penalties; and continuing prompt payment penalties on $47,040.00 of unpaid progress payments at the rate of 2% per month from May 27, 2001 until paid. Doc. 61, Ex. A.
On July 6, 2001, Opinski sent a demand letter to Explorer, seeking $295,799.78 from the surety under the Miller Act bond. See Doc. 62 & Doc. 61, Ex. F.
On August 15, 2011, Explorer issued a check for $268,392.88, representing the bulk of the demand. Along with the $268,392.88 check, Explorer sent Opinski a Rule 68 Offer of Judgment in the amount of $3,500.00. Doc. 68-2, Ex. A. The Offer stated in its entirety:
Defendant Explorer Insurance Company hereby offers to allow entry of judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure as follows: Judgment in favor of plaintiff Greg Opinski Construction, Inc. against defendant Explorer Insurance Company in the sum of THREE THOUSAND FIVE HUNDRED DOLLARS AND NO CENTS ($3,500.00), which sum shall include all costs, prejudgment interest, prompt payment penalties, expert witness fees, and attorney's fees otherwise recoverable in this action, so that the sum offered is the total amount to be paid to Greg Opinski Construction, Inc.
The Offer of Judgment was not accepted. Instead, Opinski filed a motion to reduce the Arbitrator's Award to judgment against Braswell and Explorer in the amount of $41,253.84, representing Opinski's interpretation of the amounts still owing under the terms of the Arbitration
Award and related sources of liability. Docs. 59 & 60. A November 17, 2011 Memorandum Decision and Order directed Judgment should be entered against Braswell "for the full amount of the remaining demand, $295,799.78, plus $8,877.50 in attorney's fees associated with filing this motion for a total judgment of $304,677.28," which was to be "offset by amounts already paid and to be paid by Explorer." Doc. 66 at 16. The Order also directed Judgment to be entered against Explorer "for the full amount of the remaining demand, $295,799.78 plus $8,877.50 in attorney's fees associated with filing this motion, less $34,526.36 (the difference between the $47,121.00 pre-award prompt payment penalties awarded by the Arbitrator plus $1,536.64 post- award prompt payment penalties calculated per the Arbitrator's instructions under California law, less the $14,131.28 Explorer agreed to pay under federal law), for a total judgment of $270,150.92," which was to be "offset by ...