W.G. Barr Mgmt. v. Contekpro LLC

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W.G. BARR MANAGEMENT, LLC, Plaintiff, v. CONTEKPRO LLC, Defendant.

No. 23-cv-02257-TSH

United States District Court, N.D. California

August 15, 2024

ORDER GRANTING MOTION FOR ATTORNEYS' FEES; ORDER RE: BILL OF COSTS

RE: DKT. NO. 65

THOMAS S. HIXSON, UNITED STATES MAGISTRATE JUDGE

I. INTRODUCTION

Pending before the Court is Defendant ContekPro, LLC's motion for attorneys' fees. ECF No. 65. Plaintiff W.G. Barr Beverage Co. (d/b/a Two Pitchers Brewing Co., “Two Pitchers”) filed an Opposition (ECF No. 67) and ContekPro filed a Reply (ECF No. 71). ContekPro has also filed a bill of costs (ECF No. 66), to which Two Pitchers has filed objections (ECF No. 68). The Court finds these matters suitable for disposition without oral argument and VACATES the August 22, 2024 hearing. See Civ. L.R. 7-1(b). For the reasons stated below the Court GRANTS ContekPro's motion for attorneys' fees and bill of costs.^[1]

II. BACKGROUND

Two Pitchers is located in Oakland, California. First Am. Compl. ¶ 8, ECF No. 11. ContekPro is located in Tigard, Oregon. Attahri Decl. ¶ 3, ECF No. 48-2. In its complaint, Two Pitchers alleged ContekPro breached their agreement for ContekPro to build and deliver a preinspected, finished Kitchen Container to Two Pitchers' taproom in Oakland. It alleged three causes of action: (1) Breach of Contract; (2) Promissory Estoppel; and (3) Breach of Implied Duty of Good Faith and Fair Dealing. On June 5, 2024, the Court denied Two Pitchers' motion for summary judgment and granted ContekPro's cross-motion for summary judgment. ECF No. 62 (“MSJ Order”); W.G. Barr Mgmt., LLC v. ContekPro LLC, 2024 WL 2868146, at *1 (N.D. Cal. June 5, 2024). ContekPro filed the present motion and bill of costs on June 19, 2024.

III. LEGAL STANDARD

The first issue in assessing any fee application is to determine the governing law. When the action is based on diversity, state law governs a party's entitlement to fees. Alaska Rent-A-Car, Inc. v. Avis Budget Grp., Inc., 738 F.3d 960, 973 (9th Cir. 2013) (“[S]tate law on attorney's fees is substantive, so state law applies in diversity cases.”). Here, the parties agree, and the Court has already found, that “Oregon law governs this dispute,” as the parties' contract provides for the application of Oregon law. MSJ Order at 7; see also O'Hare Decl., Ex. A (Contract) at 2, ECF No. 65-4 (“These terms and conditions shall be construed, interpreted and performed exclusively according to the laws, excluding conflict of law rules, of the State of Oregon. United States of America.”).

In Oregon, “a court awards attorney fees to a litigant only if a statute or contract authorizes such an award.” Swett v. Bradbury, 335 Or. 378, 381 (2003). Here, ContekPro seeks attorney's fees under Oregon Revised Statutes (“ORS”) section 20.096, which provides:

(1) In any action or suit in which a claim is made based on a contract that specifically provides that attorney fees and costs incurred to enforce the provisions of the contract shall be awarded to one of the parties, the party that prevails on the claim shall be entitled to reasonable attorney fees in addition to costs and disbursements, without regard to whether the prevailing party is the party specified in the contract and without regard to whether the prevailing party is a party to the contract.

(3) As used in this section . . ., “contract” includes any instrument or document evidencing a debt.

ORS § 20.096. “Courts' allowance of such fees is mandatory.” Cape Haze Invs., Ltd. v. Eilers, 2009 WL 991003, at *1 (W.D. Wash. Apr. 13, 2009) (citing McConnell v. Sutherland, 135 Or.App. 477, 484 (1995)).

“In considering a party's request for attorney fees, the trial court looks, first, to whether the party is entitled to attorney fees and, second, to the reasonableness of the requested fees.” Bennett v. Baugh, 164 Or.App. 243, 246 (2000). “The fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates.” Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). “The party opposing the fee application has a burden of rebuttal that requires submission of evidence to the district court challenging the accuracy and reasonableness of the hours charged or the facts asserted by the prevailing party in its submitted affidavits.” Gates v. Deukmejian, 987 F.2d 1392, 1397-98 (9th Cir. 1992). However, “the district court [is] required to independently review plaintiffs' fee request even absent defense objections[.]” Id.

IV. DISCUSSION

A. Rule 59(e) Motion

Two Pitchers' first argument is that ContekPro's motion for attorneys' fees should be denied based on its pending motion to alter or amend judgment, arguing the Court's judgment is based on manifest errors. Opp'n at 1. However, that motion has been denied, see ECF No. 73, and this argument is therefore moot.

B. ContekPro is Entitled to Attorneys' Fees Under Oregon Law

The Dispute Resolution clause of the parties' contract contains a provision that provides for an award of attorney's fees to ContekPro for any fees incurred due to Two Pitcher's breach of the agreement or to pursue any remedies that it may have under the agreement:

Should ContekPro incur legal expenses or costs, including attorneys' fees, due to Buyer's breach of any aspect of these Terms and Conditions, or to pursue ContekPro's remedies against Buyer hereunder, Buyer shall be responsible to ContekPro for all such expenses, costs and fees.

Contract at 3. The agreement also contains a reciprocal provision providing for an award of attorneys' fees to Two Pitchers for any fees that Two Pitcher's might incur:

Should Buyer/end user incur legal expenses or costs, including attorneys' fees, due to ContekPro's breach of any aspect of these Terms and Conditions, or to pursue Buyer/end user's remedies against ContekPro hereunder, ContekPro shall be responsible to Buyer/end user for all such expenses, costs, and fees.

Id.

As the Court noted in its MSJ Order, Two Pitchers was required to bring its claims within one year after any cause of action occurred, but it failed to do so. MSJ Order at 8-9; see also Contract at 2 (“Any legal action with respect to any business transaction between ContekPro and its buyer /end users must commence within one year after the cause of action occurs.”). There is no dispute that, had Two Pitchers been successful in its action to enforce provisions of the contract, it would have been entitled to recover its attorneys' fees. See Mot. at 5. As ContekPro incurred legal expenses and costs because of this failure, its expenses are a direct and proximate result of Two Pitcher's breach of this term of the agreement. Thus, since Two Pitchers would have been entitled to recover its attorneys' fees had it prevailed in this action, section 20.096(1) provides that ContekPro is also entitled to recover its attorneys' fees as the prevailing party. See ORS § 20.096(1) (“[T]he party that prevails on the claim shall be entitled to reasonable attorney fees in addition to costs and disbursements, without regard to whether the prevailing party is the party specified in the contract and without regard to whether the prevailing party is a party to the contract.”). Accordingly, under the reciprocity provision of section 20.096(1), the Court finds ContekPro is entitled to an award of attorneys' fees.

1. ORS § 20.096

Two Pitchers argues section 20.096(1) only applies where a contract provides that attorneys' fees shall be awarded to one of the parties. Opp'n at 3 (“[T]he statute does not apply where, as here, the contract specifies that both buyer and seller have the right to the recovery of attorneys' fees in specified circumstances.”). In support of its argument, Two Pitchers cites Jewell v Triple B. Enterprises, in which the Oregon Supreme Court explained: “The statute requires reciprocity of recovery of attorneys' fees,” with the purpose of “allow[ing] the buyer and the seller the same right to collect attorney fees despite onesided contractual provisions.” 290 Or. 885, 88788 (1981). Thus, section 20.096 serves a “remedial and reciprocal purpose” by preventing an outcome whereby through “skillful drafting the seller in a contract has the security of attorney fees if he prevails in an action to enforce the primary contractual obligation of the buyer, but the buyer is not allowed fees if he wins in an action to enforce the reciprocal primary contractual obligation of the seller.” Id. at 888. However, in applying Jewell, subsequent cases have made clear that “whenever a party to a contract that includes an attorney-fee provision brings ‘the kind of action' that the attorney-fee provision contemplates, attorney fees are available to the prevailing party under ORS 20.096 and Jewell, regardless of who brought the action.” Awbrey Towers, LLC v. W. Radio Servs., Inc., 249 Or.App. 500, 513 (2012); see id. at 513 n.5 (“The contract in this case, unlike the Jewell contract, is not ‘one sided' in the traditional sense; that is, the contract states that attorney fees will be awarded to whichever party prevails in a contract-enforcement dispute initiated by a member of the LLC. That distinction between the two contracts does not affect our analysis. The Supreme Court consistently has held that ORS 20.096 applies even to contractual attorney-fee provisions that, by their terms, already are reciprocal in some respects.”) (citing Carlson v. Blumenstein, 293 Or. 494, 500 n. 3 (1982)); Benchmark Nw., Inc. v. Sambhi, 191 Or.App. 520, 524 (2004) (“The inference we draw is that ORS 20.096(1) is, as it is always called, a reciprocity statute, and it should be broadly construed.... Thus, the scope of defendants' attorney fees in this case should mirror the scope of plaintiff's fees, had it prevailed.”...