United States District Court, N.D. California
ORDER GRANTING DEFENDANTS' MOTION FOR VOLUNTARY
DISMISSAL OF COUNTERCLAIM AND DENYING RELATOR'S MOTION
FOR ATTORNEYS' FEES AND COSTS RE: DKT. NOS. 157,
C. SPERO UNITED STATES MAGISTRATE JUDGE.
the Court is Defendants Association of Behavior
Consultants' (“ABC”) and William J.
Palyo's (“Palyo” and together,
“Defendants”) motion for voluntary dismissal of
their counterclaim in this action pursuant to Rule 41(a)(2)
of the Federal Rules of Civil Procedure and Relator Deborah
Cullen's (“Relator”) amended motion for
attorneys' fees. Having reviewed the parties'
submissions, the Court concludes that these matters are
suitable for decision without a hearing. The Court GRANTS
Defendants' motion for voluntary dismissal and DENIES
Relator's amended motion for attorneys' fees.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
filed her complaint in this False Claims Act case on March
12, 2015 (the “Federal Complaint”). Several days
later, Relator filed a separate complaint against Defendants
in the Superior Court of California, County of Sonoma, No.
SCV-256863 alleging: (1) wrongful termination in violation of
public policy; (2) whistleblower retaliation in violation of
Cal. Lab. Code § 1102.5; (3) whistleblower retaliation
in violation of Cal. Gov't Code § 12653; and (4)
failure to pay wages owed in violation of California Lab.
Code §§ 201 and 203 (the “State
Complaint”). On February 5, 2016, the United States of
America declined to intervene, and on August 5, 2016, the
State of California also declined to intervene in this
about March 4, 2016, the parties entered into a settlement
agreement that partially resolved Relator's State
Complaint (the “First Settlement Agreement”). On
September 14, 2016, the parties entered into another
settlement that fully settled the remaining disputes that
gave rise to the State Complaint (the “Second
Settlement Agreement”). Dkt. No. 99-1, Declaration of
Bryan L. Malone in support of Defendants' Motion for
Summary Judgment, Ex. C. The Second Settlement Agreement
contained a full release of claims Relator had or would have
in the future against Defendants that “in any way
gr[ew] out of events . . . identified in [the State
Complaint].” Id., § 1.1. Relator
“expressly waive[d] all rights she has, or may have,
under Section 1542 of the Civil Code of California . . .
” Id., § 1.5. The Second Settlement
Agreement expressly applied to “any individual and/or
representative claims of whistleblower retaliation pursuant
to the Federal False Claims Act (31 U.S.C. §§ [sic]
3730(h) and the California False Claims Act (Cal. Gov. Code
§ 12653).” Id., § 1.6. The release
did “not extend to any claim or action, known or
unknown, by the United States or the State of California, or
to any reward paid by the United States or the State of
California, pursuant to the Federal False Claims Act (31
U.S.C. §§ 3729 et seq.), the California False
Claims Act (Cal. Gov. Code §§ [sic] 12650), or any
other federal or state statute or regulation whereby a
government entity claims entitlement to recover funds and
pays to anyone a reward for such recovery.”
Id. The Second Settlement Agreement contained an
indemnification provision whereby
[P]laintiff agrees to defend, indemnify, protect and hold the
released parties harmless from any and all liens, rights of
subrogation, indemnification claims, contribution claims,
defense claims, losses, liability, actions, damages, causes
of action, judgments, costs and expenses, including
attorney's fees, whatsoever made by or sustained by or
arising from any person, corporation, partnership, state or
federal government, governmental agency, hospital, or any
other medical provider, health care provider, disability or
insurance benefits provider, workers compensation carrier,
Medicare, Medicaid, Medi-Cal or any other entity arising in
whole or in part out of the incident(s), or in any way
connected to the allegations in this action.
Id., § 4.3. After the parties entered into the
Second Settlement Agreement, Relator requested dismissal with
prejudice of the state court case, which the clerk of court
entered on November 7, 2016.
Court lifted the seal on December 7, 2016 and ordered Relator
to serve the Federal Complaint on Defendants. On March 3,
2017, Defendants answered the Federal Complaint and asserted
the following counterclaims against Relator: (1) breach of
contract; (2) express indemnity; (3) implied indemnity; (4)
contribution; and (5) a request for declaratory relief.
Defendants' counterclaim is based upon the
previously-executed settlement agreement. Defendants argued
that the release provision contained in the Second Settlement
Agreement applies to individual and/or representative claims
of whistleblower retaliation pursuant to the Federal False
Claims Act (31 U.S.C.§§3730(h)) and the California
False Claims Act (California Government Code § 12653).
In addition, Defendants argued that Relator agreed to
indemnify and hold harmless Defendants from any and all
losses, liability, damages, causes of action, costs and
expenses, including attorney's fees, asserted from any
person, government or agency arising out of the incidents set
forth in the allegations of the Federal Complaint.
March 23, 2017, Relator moved to strike Defendants'
counterclaim under California's anti-SLAPP statute. On
May 18, 2017, the Court denied Relator's motion to strike
Defendants' counterclaim. On June 13, 2017 and June 16,
2017, respectively, Relator filed a motion for relief from
the order denying Relator's motion to strike
Defendants' counterclaim and a motion to dismiss
Defendants' counterclaim. The Court denied both motions
in an order dated September 1, 2017. Relator also filed a
motion for summary judgment on Defendants' counterclaim
on August 1, 2017 but Relator later withdrew her motion for
summary judgment on August 29, 2017. Dkt. No. 83. Relator
moved for Rule 11 sanctions against Defendants on the grounds
that their counterclaims were frivolous. The Court denied
that motion on September 11, 2017.
9, 2019, the Court granted Defendants' motion for summary
judgment on the Federal Complaint but denied Defendants'
motion for summary judgment on the counterclaim. The Court
recognized that the parties dispute the meaning of the
release and indemnification provisions of the Second
Settlement Agreement. Dkt. No. 133 at 25-30. The Court denied
summary judgment on the interpretation of the provisions,
finding that Relator had raised, at a minimum, a real dispute
over how to properly interpret these provisions of the Second
Settlement Agreement, if not made the stronger argument. Dkt.
No. 133 at 30. However, because Relator did not move for
summary judgment on the counterclaim, the Court could only
deny Defendants' motion.
6, 2019, Relator filed a motion for partial new trial or in
the alternative, to alter or amend the judgment set forth in
the Court's May 9, 2019 Order. On July 18, 2019, the
Court denied Relator's motion for partial new trial or in
the alternative, to alter or amend the judgment set forth in
the Court's May 9, 2019 Order. As a result of the
Court's order, Defendants' counterclaim is the only
remaining claim in this action.
November 19, 2019, Defendants filed a motion for voluntary
dismissal of their counterclaim without prejudice. On
December 9, 2019, Relator filed an amended motion for
attorneys' fees incident to the dismissal of the