Opinion
Civil No. 1:03-CV-92 BSJ.
April 26, 2005
MEMORANDUM DECISION AND ORDER RE: ATTORNEY'S FEES
FACTUAL PROCEDURAL BACKGROUND
On August 15, 2003, an action between the above-captioned parties was removed from Second Judicial District Court, Weber County, State of Utah to the United States District Court for the District of Utah in an effort to collect money relating to an independent contractor agreement. ( See Notice of Removal, dated August 15, 2003 (dkt. no. 1).)
On November 24, 2004, the Court filed its Order and Judgment for Plaintiffs in the amount of $77,088.43 plus pre-judgment interest from February 15, 2003 as each payment became due, post-judgment interest and costs, in effect, terminating the case (dkt. no. 58). The Defendant appealed the Judgment to the Tenth Circuit, where it is now pending. ( See Sunset Mortgage Co.'s Notice of Appeal, dated 12/17/04 (dkt. no 62).)
Before the Court filed its Order and Judgment, the parties objected to each other's version of a proposed summary judgment order, partly as to the issue of attorney's fees. ( See Objections, dated 11/4/04, 11/15/04, and Response, dated 11/22/04 (dkt. nos. 54, 55, and 56), respectively.) Consequently, in a separate Order filed November 24, 2004, the Court alerted the parties that it had not yet considered an application for fees from the Plaintiffs. ( See Order, dated 12/24/04 (dkt. no. 59).) The Court further ordered Plaintiffs to file a "responsive memorandum" as to attorney's fees by Friday, December 10, 2004. ( See id.) Plaintiffs filed a memorandum dated Thursday, December 9, 2004, and filed Monday, December 13, 2004 (dkt. no. 60) ("Plaintiffs' Memo for Fees") without an accompanying motion. Plaintiffs eventually submitted a formal motion for attorney's fees on January 19, 2005 (dkt. no. 73), to which Defendant filed its opposition. ( See "Def.'s Opp. to Pl.'s Memo for Fees" dated 02/03/05 (dkt. no. 74).) Defendant argues that Plaintiffs' motion for fees must be denied as untimely and not conforming to local rules. Although it is true, that the Court "may" order sanctions when dealing with a motion that fails to comply with the requirements set forth in Local Rule 7-1, see DUCivR 7-1(a), the Court is not inclined to do so in this case.
ANALYSIS
In Mountain States Broadcasting Co. v. Neale, 783 P.2d 551 (Utah Ct.App. 1989), the court held that under the particular facts of that case, "the party in whose favor the `net' judgment is entered must be considered the `prevailing party' and is entitled to an award of its fees." Id. at 556. However, Mountain States Broadcasting noted "the need for a flexible and reasoned approach to deciding in particular cases who actually is the prevailing party." Id., at 556 n. 7; see also Occidental/Nebraska Federal Savings Bank v. Mehr, 791 P.2d 217 (Utah Ct.App. 1990). In Occidental, the court "reject[s] a blanket adoption of the `net judgment' rule except as a good starting point in making determinations of which party prevailed." 791 P.2d., at 221. Here, Plaintiffs clearly prevailed, obtaining a judgment against the Defendant in the amount of $77,088.43 plus pre-judgment interest from February 15, 2003 as each payment became due, post-judgment interest and costs. ( See Judgment, (dkt. no. 58).)Generally, attorney's fees are awardable only if provided for by statute or contract. Dixie State Bank v. Bracken, 764 P.2d 985, 988 (Utah 1988). There are two independent contractor agreements in this case. The first, dated May 22, 2000 ("ICA 2000") is signed by Roy Leonard and Samuel Morelli, the President and COO of Sunset Mortgage Co. ( See ICA 2000, attached as Exhibit A to Plaintiffs' Memo for Fees.) The second, dated June 24, 2002 ("ICA 2002"), contemplated as a replacement agreement, is not signed by Roy Leonard or Mr. Morelli. ( See ICA 2002, attached as Exhibit B to Plaintiffs' Memo for Fees.) Within the ICA 2000, the parties agreed to the following:
11. The parties hereto, recognizing that irreparable damage will result to Sunset in the event of the breach of any of the covenants by Provider [Roy Leonard], and that said contract was granted and continues primarily in reliance upon the covenants herein, agree that in the event of such breach or danger thereof, Sunset shall be entitled to an injunction to restrain the violation by Provider [Roy Leonard] of such covenants, in addition to any other remedies and damages available, and to such reasonable attorneys' fees and court costs as shall be fixed by the proper Court with respect to enforcement of this Agreement.
(ICA 2000 at 8 ¶ 11 (emphasis added).) ICA 2002, unlike ICA 2000, includes a provision for attorney's fees to the "prevailing party" in the event any dispute or disagreement arises in connection with an interpretation of the contract. ( See ICA 2002, at 6.)
But because ICA 2000 is the contract signed by both parties, and because ICA 2000 also contains an integration clause which states, "[t]his agreement constitutes the entire understanding between parties and may not be changed in any manner except by writing signed by the parties hereto" (ICA 2000 ¶ 16, at 8) (emphasis added), the Court cannot find that ICA 2002 defines the relationship between the parties or that the reciprocal attorney's fees provision in ICA 2002 applies.
Attorney's fees authorized by contract are awardable only in accordance with the explicit terms of the contract. Parties seeking an award for attorney's fees must establish that the agreement anticipated such an award. Maynard v. Wharton, 912 P.2d 446, 451 (Utah Ct.App. 1996). Although the ICA 2000 clearly anticipates attorney's fees if a court finds that Plaintiff breached the agreement, it is silent as to attorney's fees if a court finds that Defendant breached the agreement, which is the case here.
Utah law provides for the reciprocal right to recover attorney's fees:
A court may award costs and attorney's fees to either party that prevails in a civil action based upon any promissory note, written contract, or other writing executed after April 28, 1986, when the provisions of the promissory note, written contract, or other writing allow at least one party to recover attorney's fees.
Utah Code Ann. § 78-27-56.5 (2002).
Defendant argues that because paragraph 14 of ICA 2000 states "[t]his Agreement shall be interpreted under the laws of the Commonwealth of Pennsylvania[,]" the Utah statute providing for reciprocal attorney's fees does not apply. (ICA 2000 ¶ 14, at 9.)
Plaintiffs argue that the Utah statute does apply, and assert that Defendant acquiesced the application of Utah law to interpret the contract by citing to Utah law in their previous dispositive briefs. ( See Plaintiffs' Memo for Fees, at 6.) Plaintiffs alternatively argue that even if the Court finds that the Utah statute does not apply, they are entitled to fees under the Pennsylvania Code because of 42 Pa. Cons. Stat. Ann. § 2503(9), which states that "any participant who is awarded counsel fees because the conduct of another party in commencing the matter or otherwise was arbitrary, vexacious or in bad faith" is entitled to a reasonable counsel fee as part of the taxable costs of the matter. 42 Pa. Cons. Stat. Ann. § 2503(9) (2004).
However, the question before the Court is not one of interpreting the contract, therefore it is irrelevant whether Pennsylvania law ought to be applied as to attorney's fees. The Court is awarding a judicial remedy under Utah law. The agreement anticipates attorney's fees in the event of breach of contract by Leonard; it is just silent as to its application if Leonard prevails in establishing a breach by Sunset Mortgage Company. Thus, under the terms of the ICA 2000 and pursuant to Utah law, Plaintiffs are entitled to an award of attorney's fees because they were the "prevailing party" on their breach of contract claim.
Calculation of reasonable attorney's fees is within the sound discretion of the trial court. See Baldwin v. Burton, 850 P.2d 1188, 1199 (Utah 1999). Sunset Mortgage did not contest the reasonableness of Plaintiffs' counsel's rates or hours. Their primary concern was that Plaintiffs' counsel billed his client by the hour (as opposed to defense counsel's practice of billing every six minutes) and that hourly billing is inevitably inaccurate. ( See Def.'s Opp. to Pl.'s Memo for Fees, at 3-5.) Plaintiffs' counsel explained his hourly billing by asserting that he simply does not charge his client for any work done under an hour, because Plaintiff Mrs. Leonard is a friend of his. Plaintiffs' counsel billed his clients for two hundred and eighty-three (283) hours at a rate of $140.00 per hour. Plaintiffs' counsel provided a log detailing the work he accomplished during those 283 hours. ( See Pl.'s Memo for Fees, Exhibit H, at 1-7.)
The Court is persuaded that Plaintiffs have adequately justified the amount of $39,620.00 in attorney's fees.
Therefore, the Court hereby adjudges that Plaintiffs Angela M. Leonard and Aetna Mortgage Consultants, Inc. are the prevailing parties entitled to attorney's fees in accordance with the terms of the ICA 2000 and Utah Code Ann. § 78-27-56.5.
SO ORDERED.