United States District Court, S.D. California
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR ATTORNEY FEES [Dkt. No. 28.]
GONZALO P. CURIEL, District Judge.
Before the Court is Defendant's motion for attorney fees. (Dkt. No. 28.) Plaintiff filed a response on January 10, 2014. (Dkt. No. 31.) Defendant filed a reply on January 28, 2014. (Dkt. No. 34.) Based on a review of the briefs, supporting documents, and the applicable law, the Court GRANTS in part and DENIES in part Defendant's motion for attorney fees.
On September 19, 2013, Plaintiff NWS Corporation ("NWS") filed a complaint against Dish Network, LLC ("Dish"). (Dkt. No. 1.) Plaintiff alleged causes of action for intentional interference with contractual relations, tortious interference of business, intentional interference with prospective economic advantage, refusal to furnish service in violation of 47 U.S.C. § 201(A), and unfair business practices. (Id.) It also sought preliminary injunctive relief. (Id.) On September 20, 2013, Plaintiff filed an ex parte motion for temporary restraining order. (Dkt. No. 4.) After briefing and hearing oral argument, the Court denied Plaintiff's motion for a temporary restraining order on September 30, 2013. (Dkt. No. 16.)
On October 4, 2013, the parties filed a joint motion for extension of time to respond to the Complaint. (Dkt. No. 20.) On October 24, 2013, Defendant filed a motion to dismiss. (Dkt. No. 23.) On November 21, 2013, Plaintiff filed a notice of voluntary dismissal without prejudice. (Dkt. No. 25.)
Defendant seeks attorney fees in the amount of $125, 840.65 consisting of $112, 111.15 for time spent prior to the reply to the motion for attorney fees and $13, 729.50 in fees related to the reply. Dish contends it is the prevailing party and is entitled to attorney fees pursuant to the attorney fee provision in the Dish Network Retailer Agreement ("Retailer Agreement" or "Agreement") between Dish and NWS. Defendant opposes and presents numerous arguments that Dish is not entitled to attorney fees.
A. Whether Attorney Fee Shifting Provision in the Retailer Agreement Applies
NWS argues that the attorney fee provision in the Retailer Agreement does not apply to the instant case. Dish contends that the broad attorney fee provision applies.
First, NWS argues that Dish cannot recover fees on an expired, inadmissible, blank and unsigned form contract. NWS challenges Brianna Andersen's qualifications to authenticate the Retailer Agreement because she was not employed by Dish in her present capacity when the parties allegedly entered into the Agreement in 2010. Moreover, the agreement attached to the motion is blank, unsigned and does not reference NWS. Therefore, NWS contends that there is no evidence that the parties entered into the Retailer Agreement. In reply, Dish asserts that it properly authenticated the Agreement not only by Andersen, who is Corporate Counsel, but also in its reply, it supplements its authentication of the Retailer Agreement by providing a declaration of Melissa Van Vorst, who is Operations Manager for Dish and has been employed by Dish since 2002. (Dkt. No. 37.)
Under Federal Rule of Civil Procedure 901, the "proponent must produce evidence sufficient to support a finding that the item is what the proponent claim it is." Fed.R.Civ.P. 901(a). As to testimony of a witness with knowledge, the proponent must present "testimony that an item is what it claimed to be." Fed.R.Civ.P. 901(b)(1).
Here, Van Vorst has personal knowledge concerning the Sales Operations Division that supports Dish's indirect sales partners in 2010. (Dkt. No. 37, Van Vorst Decl. ¶ 3.) She also has personal knowledge regarding the procedures on Siebel which is "a system-partner relationship manager systems that houses the account information and contracts of all of Dish's indirect sales partners, including NWS Corporation." (Id. ¶ 2.) The Court concludes that Van Vorst declaration is sufficient to authenticate the Retailer Agreement signed by the parties in December 2010. Whether or not Andersen's declaration properly authenticates the Retailer Agreement, the declaration of Van Vorst cures any alleged defect with Anderson's original authentication of the Retailer Agreement.
In her declaration, Van Vorst explains the procedure on how a retailer enters into an electronic Retailer Agreement with Dish. (Id. ¶¶ 4-10.) The records indicate that NWS entered into the Retailer Agreement and agreed to be bound by its terms and conditions when Dish's software auto-populated the information put in by NWS onto the Agreement. (Id. ¶ 8.) The electronically-signed, auto-populated version of the Agreement would have been available to Douglas De Leo, NWS's VP at the time, and now CEO, for as long as the account existed. ( Id., Ex. C.) Attached to the Van Vorst declaration, is a Retailer Agreement which lists NWS as a party to the contract. ( Id., Ex. B (under SEAL).) Lastly, Dish attaches a screenshot from its software confirming that the agreement was signed in December 2010 by Douglas De Leo. ( Id., Ex. D.)
Moreover, although the Agreement's initial term expired in December 2012, the attorney fee provision concerning disputes as to any provision in the agreement survives termination or expiration. (Dkt. No. 39, Van Vorst Decl., Ex. B at 31 (under SEAL).)
Therefore, NWS's argument that Dish provided an expired, inadmissible, blank and unsigned form contract is without merit. The Court also finds NWS's argument disingenuous as the Complaint alleges that NWS and Dish entered into a retailer agreement with an Effective Date as of December 31, 2010...." (Dkt. No. 1, Compl. ¶ 12.) Moreover, as Dish points out, NWS did not dispute the authenticity of the Retailer Agreement in its ex parte application for temporary restraining order. NWS's attempt to dispute the existence of the Retailer Agreement fails.
NWS also argues that the claims alleged in the Complaint do not arise from the Agreement, and therefore, the attorney fee provision is inapplicable. It alleges that the claims in the Complaint "do not arise out of any contractual agreement with Dish" and asserts that there "is no interrelationship between the claims arising from Dish interference with NWS's contracts with the Navy and 4Com, on the one hand, and the alleged agreement between NWS and Dish, which expired in 2012." (Dkt. No. 31 at 19, 20 (emphasis in original).) Defendant argues that the claims fall within the broad scope of the parties' attorney fee shifting provision.
Contrary to NWS's assertions, the allegations in the Complaint arise out of the Dish Retailer Agreement. For example, according to the Complaint, NWS and Dish entered into a retailer agreement with an effective date of December 31, 2010. (Dkt. No. 1, Compl. ¶ 12.) The Complaint cites or restates relevant provisions of the Retailer Agreement. (Id. ¶¶ 12, 13.) The Complaint also states that since the Dish Agreement is confidential, it is not attached to the Complaint implicating that if it were not confidential, the Agreement would have been attached to the Complaint. (Id. ¶ 12.) Headings in the Complaint include: "Dish Refuses to Perform under the Dish Contract" (id. at 7; see also ¶ 37); and "Dish Terminates Service at the Naval Installation." (Id. at 8). The Complaint further alleges that "Dish thus breached the Dish Contract by failing to provide service through the 90-day transition period following the conclusion of the Bridge Contract." (Id. ¶ 34.)
While Plaintiff disclaims that the Dish Retailer Agreement has any bearing on the Complaint and is not being sued on, the allegations concerning Dish's actions are based on its failure to abide by the terms of the Retailer Agreement and are asserted throughout the Complaint. Moreover, the attorney fee provision in the Agreement is broad covering disputes as to any provision in the Agreement. Therefore, Plaintiff's argument that the claims in the Complaint do not arise from the Agreement is not persuasive.
Lastly, Plaintiff argues that the Retailer Agreement is unconscionable, procedurally and substantively. Defendant opposes. Unconscionability has a procedural and a substantive element. A & M Produce Co. v. FMC Corp. , 135 Cal.App.3d 473, 486 (1982). The procedural component focuses on oppression, unequal bargaining power, and surprise. Stirlen v. Supercuts, Inc. , 51 Cal.App.4th 1519, 1532 (1997). The substantive element "has to do with the effects of the contractual terms and whether they are unreasonable." Marin Storage & Trucking, Inc. v. Benco Contracting and Eng'g, Inc. , 89 Cal.App.4th 1042, 1053 (2001). This element must be evaluated at the time the contract was made. Stirlen , 51 Cal.App.4th at 1532. "To be unenforceable, a contract must be ...