The opinion of the court was delivered by: Honorable David O. Carter, Judge
PRESENT: THE HONORABLE DAVID O. CARTER, JUDGE
Julie Barrera N/A Courtroom Clerk Court Reporter ATTORNEYS PRESENT FOR PLAINTIFF: ATTORNEYS PRESENT FOR DEFENDANT: None Present None Present PROCEEDINGS: (IN CHAMBERS): ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR ATTORNEY'S FEES AND COSTS
Before the Court is a Motion for Attorneys' Fees and Costs filed by Wolfgang Kormann and Kormann Rockster Recycler, GmbH (collectively "Defendants Kormann and KRR"). After reviewing the motions, opposition, and reply, the Court GRANTS IN PART and DENIES IN PART Defendants Kormann and KRR's Motion for Attorneys' Fees and Costs.*fn1
Both parties and the Court are intimately familiar with the alleged facts of this case after several orders, motions to dismiss, and amended complaints. Thus, a brief summary of the complaint underlying this Motion for Attorneys' Fees and Costs is sufficient.
Plaintiff Richard B. Holt ("Plaintiff") filed a complaint alleging that Stephane Guerchon ("Guerchon"), acting as a purported agent that handled North American sales for Defendant Kormann Rockster Recylcer, GmbH ("KRR"), fraudulently made representations that caused Plaintiff to transfer a deposit sum to Defendants Kormann and KRR via Geurchon for a product that was not actually for sale. Plaintiff was attempting to purchase a rock crusher priced at over $500,000. Mot. (Dkt. 62) at 16. Plaintiff alleged that he later requested a return of the deposit and Defendant Wolfgang Kormann ("Kormann"), acting as an officer of KRR, denied Plaintiff's request.
A.Plaintiff's 2009 Lawsuit: Holt I
Prior to Plaintiff's underlying complaint in this action, Plaintiff filed a lawsuit ("Holt I") against Guerchon (a Canadian citizen), KRR (an Austrian corporation) and Rockster North America ("RNA") (a Canadian corporation owned by Guerchon) in the Superior Court of Orange County in November 2009. RJN (Dkt. 64) Ex. 1.
Plaintiff attempted to serve Guerchon, KRR, and RNA through the Hague Service Convention by serving Guerchon at his home in Canada, RJN (Dkt. 64) Ex. 15 at 2. In July 2010, Plaintiff obtained a default judgment against KRR after KRR failed to respond to the complaint. RJN (Dkt. 64) Ex. 8. Plaintiff continued to pursue his complaint against Guerchon and RNA. In November 2010, Plaintiff's CLRA claim survived summary judgment. RJN (Dkt. 70) Ex. 3.
In February 2011, KRR filed a motion to quash and set aside the judgment due to improper service. RJN (Dkt. 64) Ex. 9. On March 30, 2011, the Superior Court granted the motion to quash on the grounds that KRR was not properly served. RJN (Dkt. 64) Ex.
2. Plaintiff appealed the decision and on March 28, 2012, the California Court of Appeal affirmed. RJN (Dkt. 64) Ex. 15. The Court of Appeal held that the "default judgment was void on its face because the summons did not comply with [California Code of Civil Procedure Section] 412.30, which requires in an action against a corporation that the summons notify the person being served that he or she is being served on behalf on the identified corporation."Id. at 2. The court held that Plaintiff's service on Guerchon "did not provide information and did not impart actual notice that Guerchon was being served on behalf of [KRR]." Id. Therefore, the court affirmed the order vacating the default judgment and the motion to quash due to Plaintiff's improper service of KRR. Id. at 13.
In April 2012, Plaintiff filed a notice of settlement with Guerchon and RNA. RJN (Dkt. 64) Ex. 3. On April 17, 2012 , the Superior Court issued a minute order scheduling an order to show cause regarding the dismissal of the settled case for June 18, 2012. After no response, on June 18, 2012 the Superior Court issued a minute order dismissing the entire action without prejudice. RJN (Dkt. 64) Ex. 5.
B.Plaintiff's Present Lawsuit Before this Court: Holt II
On March 21, 2011, Plaintiff filed a second complaint ("Holt II") in the Superior Court of Orange County against KRR and included Kormann. RJN (Dkt. 64) Ex. 11. In July 2011, Defendants Kormann and KRR removed the case to this Court. Notice (Dkt. 1). In this Court, Defendants Kormann and KRR filed a motion to dismiss, which the Court granted in part and denied in part. Mot. (Dkt. 19).
Plaintiff then filed his First Amended Complaint ("FAC") in October 2011. FAC (Dkt. 21). The Court granted Defendants Kormann and KRR's second motion to dismiss and gave Plaintiff leave to amend. Order (Dkt. 33).
Plaintiff filed his Second Amended Complaint ("SAC") in January 2012. SAC (Dkt. 37). On June 12, 2012, the Court then granted in part and denied in part Defendants Kormann and KRR's third motion to dismiss. Order (Dkt. 51).
On June 18, 2012, Plaintiff filed a motion to dismiss voluntarily with prejudice. Mot. (Dkt. 52). The Court granted the motion to dismiss on June 25, 2012. Order (Dkt. 59). Defendants Kormann and KRR then filed the present Motion for Attorneys' Fees and Costs on July 19, 2012. Mot. (Dkt. 62).
The Motion for Attorneys' Fees and Costs is based on the following theories: (1) Plaintiff previously dismissed an action against KRR, therefore Plaintiff owes fees and costs for the previous Holt I case pursuant to Federal Rules of Civil Procedure 41(d); (2) Plaintiff filed a bad faith CLRA claim in the present case; (3) Plaintiff's counsel acted recklessly or in bad faith and owes fees and costs in the present case pursuant to Section 1927 of Title 28 of the United States Code; and (4) Plaintiff owes costs because Defendants Kormann and KRR are the "prevailing party" pursuant to Federal Rules of Civil Procedure 54(d). This Court considers each in turn.
A.Plaintiff is Required to Pay Defendants' Costs Under Rule 41(d)
Rule 41(d) provides that a court "may order the plaintiff to pay all or part of the costs of [a] previous action" if the plaintiff: (1) is a "plaintiff who previously dismissed an action in any court"; (2) filed a second "action based on or including the same claim" as in the first action; (3) the second action is "against the same defendant" as the first action. Fed. R. Civ. P. 41(d). It is appropriate for a court to exercise its discretion and award costs where doing so is warranted to prevent prejudice to the defendant. Esquivel v. Arau, 913 F.Supp. 1382, 1387 (C.D. Cal. 1996). The purpose of Rule 41(d) is "to protect defendants from the harassment of repeated lawsuits by the same plaintiff on the same claims." Jurin v. Google Inc., 695 F. Supp. 2d 1117, 1123 (E.D. Cal. 2010); Hacopian v. United States Dept. of Labor, 709 F.2d 1295, 1297 (9th Cir. 1983) (describing the "dangers of harassment and vexatious litigation . . . in cases covered by Rule 41(d)").
The parties only dispute whether the first and third elements are satisfied, namely whether Plaintiff previously dismissed the first action-Holt I-and whether that first action was against the same defendant-KRR-as in the present case. The Court concludes that the Superior Court's June 18, 2012, minute order in Holt I dismissing the entire action without prejudice after receiving a ...