Summary
The Ninth Circuit reviewed a district court's award of over $4 million in attorney's fees to G.P.P., Inc. under California Civil Code § 1717 in a long-running breach of contract dispute. The panel affirmed the district court's methodology for determining the prevailing party but reversed regarding certain abandoned claims against one defendant, remanding for further fee determination.
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Questions Presented
- Whether the district court used a permissible methodology under California Civil Code section 1717 to determine the prevailing party, including whether it separately evaluated Guardian and RPM.
- Whether the district court properly considered the parties' litigation objectives and equitable factors in determining that G.P.P. prevailed as against Guardian.
- Whether the district court properly awarded G.P.P. its attorney's fees without further apportionment.
- Whether G.P.P.'s failure to litigate five equitable claims constituted a voluntary dismissal under California Civil Code section 1717(b)(2), despite the absence of clear notice of intent to abandon those claims.
- What effect the abandoned claims had on RPM's prevailing-party status and entitlement to attorney's fees.
Holdings
- The district court used an appropriate methodology because it separately evaluated the claims and litigation results as to Guardian and RPM and then considered the parties' overall litigation objectives and equitable considerations.
- The district court did not abuse its discretion in considering the parties' litigation objectives and equitable circumstances and determining that G.P.P. was the prevailing party as against Guardian.
- The district court properly awarded G.P.P. its requested attorney's fees and was not required to further apportion fees involving claims sharing common issues with fee-bearing contract claims.
- For purposes of California Civil Code section 1717, voluntary abandonment of a claim operates as a voluntary dismissal only when supported by a clear, unequivocal, and express intent to abandon the claim. G.P.P.'s omission of claims from its trial materials and post-trial submissions, without affirmative notice, did not satisfy that standard.
Key quotations
“for purposes of § 1717, the voluntary abandonment of a claim may operate as a voluntary dismissal only where it is predicated upon a “clear, unequivocal and express intent to abandon” the claim.” (126 F.4th at 1388)
“These omissions, even if noticed, did not convey clear and unambiguous intent to abandon the claims.” (126 F.4th at 1390)
“Because GIS failed to provide notice of its intent to abandon these claims, they were not voluntarily dismissed for purposes of § 1717.” (126 F.4th at 1392)
Factual background
Between 1988 and 1998, Guardian and G.P.P., doing business as Guardian Innovative Solutions, entered into nine warehousing distributor agreements containing California choice-of-law clauses and attorney-fee provisions. Guardian later purported to terminate some agreements and threatened to terminate the others, prompting G.P.P. to sue Guardian and later RPM. After two trials, G.P.P. obtained a $6 million net damages award on claims submitted at the second trial, while five equitable claims were omitted from the proposed jury instructions and verdict form but were not expressly abandoned before trial.
Procedural history
G.P.P., Inc. sued Guardian for breach of contract and related claims and later added RPM based on an alter-ego theory. After an initial 2017 trial, the Ninth Circuit reversed as to certain claims and ordered a retrial. At the 2021 retrial, G.P.P. prevailed on its submitted claims and obtained a reduced damages award of $6 million. The district court awarded G.P.P. $4,353,283 in fees, denied Guardian's and RPM's fee motions, and denied reconsideration. The Ninth Circuit affirmed the fee award to G.P.P. as against Guardian but reversed the treatment of five abandoned claims relevant to RPM and remanded.
Remand instructions
Reevaluate the prevailing party with respect to the five abandoned claims and determine what effect, if any, that analysis has on the overall prevailing-party determination and resulting entitlement to attorney's fees as between G.P.P. and RPM.