Money Mailer, LLC v. Wade Brewer

[5] UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE [7] MONEY MAILER, LLC, [8] Cause No. C15-1215RSL Plaintiff, [9] v. ORDER DENYING BREWER’S [10] MOTION FOR ATTORNEY’S FEES WADE G. BREWER., [11] Defendant. [14] This matter comes before the Court on “Wade Brewer’s Petition for Reasonable [15] Attorneys’ Fees, Expenses, and Costs.” Dkt. # 316. Money Mailer filed this lawsuit in 2015 [16] 17 seeking payments allegedly due and owing under its franchise agreement with Brewer. In order 18 to defend himself against those claims, Brewer attempted to invalidate the franchise agreement [19] by arguing that it violated the Franchise Investment Protection Act and the Consumer Protection [20] Act. In addition, Brewer asserted a number of additional counterclaims sounding in tort and [21] contract.1 Each party successfully defended against the other’s claims. Brewer’s thirteen [22] 23 counterclaims were abandoned and/or dismissed on summary judgment. Money Mailer’s breach [24] 1 Brewer asserted non-statutory claims for declaratory judgment; breach of the purchase [25] agreement; conversion; breach of a March 2013 agreement; breach of the franchise agreement; breach of 26 a consulting fee agreement; intentional misrepresentation; negligent misrepresentation; civil conspiracy; aiding and abetting; unjust enrichment; and breach of the duty of good faith and fair dealing. [27] ORDER DENYING BREWER’S 1 of contract and moneys due and owing claims were voluntarily withdrawn when the Court found [2] that Money Mailer no longer held the right to pursue the claims it had asserted in this action and [3] the transferee opted not to appear. The Court ordered that, after five years of litigation, Money [4] Mailer’s claims would be dismissed with prejudice. [5] Brewer seeks an award of attorney’s fees and costs under a provision of the franchise [6] 7 agreement which states: 8 16.4 Attorneys’ Fees. If either party commences any action or proceeding related to this Agreement, then the prevailing party will be reimbursed by the losing party [9] for all costs and expenses incurred in connection with the action, including . . . 10 reasonable attorneys’ fees (including reasonable reimbursement for in-house attorneys). [11] Dkt. # 268 at 21. Brewer argues that he is entitled to $820,417.50 in attorney’s fees and [12] $72,438.21 in costs/expenses under this provision. [13] 14 The primary issue raised by Brewer’s motion is whether Brewer can be considered the 15 prevailing party “In general, a prevailing party is one who receives an affirmative judgment in its [16] favor.” Marassi v. Lau, Wn. App. 912, 915 (1993), overruled on other grounds by Wachoria [17] SBA Lending, Inc. v. Kraft, 165 Wn.2d 481, 490-92 (2009), (citing Schmidt v. Cornerstone Invs., [18] Inc., 115 Wn.2d 148, 164 (1990)). “If neither wholly prevails, then the determination of who is a [19] 20 prevailing party depends upon who is the substantially prevailing party, and this question 21 depends upon the extent of the relief afforded the parties.” Riss v. Angel, 131 Wn.2d 612 , 633 22 (1997). If “both parties have prevailed on major issues, neither qualifies as the prevailing party [23] under the contract.” Am. Nursery Prod., Inc. v. Indian Wells Orchards, 115 Wn.2d 217 , 234-35 [27] ORDER DENYING BREWER’S 1 (1990).2 [2] As a preliminary matter, the Court agrees with Brewer that his counterclaims arose out of [3] and are related to the franchise agreement for purposes of the attorney’s fee provision. Seattle [4] First Nat. Bank v. Washington Ins. Guar. Ass’n, 116 Wn.2d 398, 413 (1991) (“[A]n action is on [5] a contract if the action arose out of the contract and if the contract is central to the dispute.”). [6] 7 The Court therefore considers all of the claims and counterclaims at issue when determining 8 whether Brewer obtained affirmative relief and/or substantially prevailed. He did not. Of the [9] fifteen causes of action at issue, Brewer prevailed on only two. He obtained none of the [10] affirmative relief he requested, nor did he defeat Money Mailer’s claims on the merits. While he [11] was not held liable for breach of contract, he did not substantively prevail on those claims, [12] either. Rather, Money Mailer’s breach of contract and moneys due and owing claims were [13] 14 dismissed because it had transferred the right to pursue the claims and the transferee abandoned 15 the claims. In these circumstances, Brewer does not qualify as a prevailing party under [16] Washington law. [18] // [22] 2After reviewing the case law described in the text, Division 1 of the Washington Court of 23 Appeals found that the general principles did not fairly address situations where a defendant has not made a counterclaim for affirmative relief (and therefore could not obtain an affirmative judgment in his 24 or her favor), but successfully defended a number of distinct and severable claims put forth by the plaintiff. Marassi, 71 Wn. App. at 915-17. The Court declines to apply Marassi’s proportional approach [25] in this litigation: Brewer asserted counterclaims, but did not prevail on any of them or obtain the 26 affirmative relief requested. The Washington Supreme Court’s general prevailing party principles therefore apply. [27] ORDER DENYING BREWER’S 1 For all of the foregoing reasons, Brewer’s motion for attorney’s fees (Dkt. # 316) is [2] DENIED. [4] Dated this 12th day of April, 2021. [6] Robert S. Lasnik 7 United States District Judge [27] ORDER DENYING BREWER’S