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Rexel, Inc. v. Hubzone Corp.

United States District Court, E.D. California

July 8, 2019

REXEL, INC., Plaintiff,
v.
HUBZONE CORP., et al., Defendants. Attorney Rate Requested Rate Awarded Hours Awarded Total Awarded

          ORDER GRANTING IN PART AND DENYING IN PART COUNTERCLAIMANT'S MOTION FOR ATTORNEYS' FEES

          JOHN A. MENDEZ UNITED STATES DISTRICT JUDGE

         Counterclaimant, American Contractors Indemnity Company (“ACIC”) moves the Court to award $15, 795.50 in attorney fees resulting from the granting of default judgment on its breach of contract claim. Mot., ECF No., 39. No opposition has been filed. For the reasons stated below, the Court GRANTS IN PART and DENIES IN PART ACIC's motion.[1]

         I. OPINION

         A. Factual and Procedural Background

         Plaintiff Rexel brought a complaint to recover under the Miller Act, 40 U.S.C. § 3133, in February 2016. Compl., ECF No. 1. ACIC filed its answer and cross-claim in August 2016, asserting that the Court has supplemental subject matter jurisdiction over its pendent state law claims. Answer, ECF No. 9; see also Am. Cross-Claim, ECF No. 18. ACIC sought default judgment against cross-defendants Hubzone Corporation, Charmiane Burnett, and Larry Deon Lofton in June 2018. ECF No. 24. The Court adopted the Magistrate Judge's findings and recommendations, ECF No. 30, on March 29, 2019 and awarded ACIC damages of $528, 574.44 and prejudgment interest. Default Order, ECF No. 34. The Court directed the Clerk “to enter judgment in ACIC's favor and against Hubzone, Charmiane Burnett, and Larry Lofton on ACIC's breach of contract claim.” Id. at 2. A day earlier, the Plaintiff and ACIC stipulated to dismiss the case with prejudice. Dismissal Order, ECF No. 33. On April 11, 2019, ACIC moved to stay proceedings against Charmaine Burnett due to an automatic stay caused by a filing in another court. Notice Stay, ECF No. 36. ACIC timely moved for an award of attorney's fees under state law on April 19, 2019. See Mot.

         B. Legal Standard

         Generally, parties bear their own attorneys' fees, absent contractual or statutory authorization. Sheet Metal Workers' Int'l Ass'n Local Union No. 359 v. Madison Indus., Inc. of Arizona, 84 F.3d 1186, 1192 (9th Cir. 1996). While Federal Rule of Civil Procedure 54(d)(2) sets the procedure for claiming attorney's fees, there must be an independent source of authority for an attorney fee award. See MRO Commc'ns, Inc. v. Am. Tel. & Tel. Co., 197 F.3d 1276, 1281 (9th Cir. 1999).

         District courts follow the forum state's law for awarding attorney fees when exercising their subject matter jurisdiction over supplemental state-law claims. See Id. Although California law ordinarily does not allow for recovery of attorneys' fees, Farmers Ins. Exch. v. Law Offices of Conrado Joe Sayas, Jr., 250 F.3d 1234, 1237 (9th Cir. 2001), there are exceptions. One exception occurs in an action to enforce the liability on a bond. Cal. Civ. Code § 9564.

         C. Discussion

         1. Section 9564 Requires an Attorney Fee Award to ACIC

         ACIC asserts that it is entitled to an award of attorney's fees as the prevailing party in this case. See Mot. “In an action to enforce the liability on the bond, ” California Civil Code mandates that the Court award the prevailing party a reasonable attorney's fee. Cal. Civ. Code § 9564. The section does not define “prevailing party, ” so the Court looks to how California courts interpret the term. California courts have found that a party has prevailed in this context where it receives a final judgment that provides all the relief that the party requested. Winick Corp. v. Safeco Ins. Co., 232 Cal.Rptr. 479, 482 (Ct. App. 1986) (interpreting “prevailing party” as to Cal. Civ. Code § 3250, which was repealed in 2010 and reinstated in 2012 as Cal. Civ. Code § 9564).

         Here, Plaintiff Rexel, Inc. brought a single claim under the Miller Act against defendants Hubzone and ACIC. See Compl. ACIC answered and filed five cross-claims against Hubzone; its president, Charmaine Burnett; and its secretary, Larry Lofton. See Answer. The Court granted ACIC's Motion for Default Judgment, in which ACIC prevailed on its breach of contract claim against Hubzone, Burnett, and Lofton and was awarded damages. See Default Order. Thus, under the prevailing legal standards, ACIC can be considered the prevailing party in its cross-claims against Hubzone, Burnett, and Lofton.

         Accordingly, the Court finds that the provisions of Section 9564 are satisfied. ACIC is the prevailing party against Hubzone, Burnett, and Lofton in an action to enforce the liability on the bond. The Court next determines what constitutes a reasonable attorney fee in this case.

         2. An Award of $14, ...


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