Case ID: f-appx_132/html/0711-01.html
Source: Caselaw Access Project
Author: {"author": "SILVERMAN, Circuit Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

NATIONAL SURETY CORPORATION, an Illinois corporation; Farmers Insurance Exchange, a California entity; Hartford Fire Insurance Company, a Connecticut Corporation, Plaintiffs, v. CADET MANUFACTURING COMPANY, a Washington corporation, Defendant-Appellee, v. CNA Commercial Insurance Co, Plaintiff-intervenor-Appellant, Design Perfect Catering, Inc, Plaintiff-fourth-party-plaintiff. National Surety Corporation, an Illinois corporation, Plaintiff, and Farmers Insurance Exchange, a California entity, Plaintiff-Appellant, v. Cadet Manufacturing Company, a Washington corporation, Defendant-Appellee, DESIGN PERFECT CATERING, INC, Plaintiff-fourth-party-plaintiff. National Surety Corporation, an Illinois corporation; Farmers Insurance Exchange, a California entity, Plaintiffs, v. Cadet Manufacturing Company, a Washington corporation, Defendant-Appellee, v. CNA COMMERCIAL INSURANCE CO, Plaintiff-intervenor, DESIGN PERFECT CATERING, INC, Plaintiff-fourth-party-plaintiff-Appellant.
    No. 03-36004, 03-36016, 03-36019.
    D.C. No. CV-01-01184-JCC.
    United States Court of Appeals, Ninth Circuit.
    Argued and Submitted May 2, 2005.
    Decided May 20, 2005.
    
      Kenneth G. Yalowitz, Green and Yalowitz, William E. Pierson, Jr., Bullivant Houser Bailey, PC, Seattle, WA, John Forrest Mottram, Modkur & Mottram PC, Portland, OR, for Plaintiffs.
    Stephen P. Ryder, Peery, Hiscock, Pier-son and Ryder, Inc., P.S., Seattle, WA, Stephen L. Madkour, Esq., Madkour & Mottram, PC, Portland, OR, for Defendants-Appellees.
    James E. Horne, Esq., Kingman Peabody Pierson & Fitzharris, P.S., Marc C. Rosenberg, Lee, Smart, Cook, Martin & Patterson, Seattle, WA, for Plaintiffs-Intervenors-Appellants.
    John Patrick Hayes, Esq., Forsberg & Umlauf, PS, David W. Bever, Esq., John R. McDowall, Esq., Carney Badley Spell-man, P.S., Seattle, WA, for Plaintiffs-Fourth-Party-Plaintiffs.
    Before: WALLACE, SILVERMAN, and PAEZ, Circuit Judges.
   MEMORANDUM

Appellants CNA Commercial Insurance Company (CNA), Design Perfect Catering, Inc., and Farmers Insurance Exchange appeal from the district court’s order denying their motion for an award of attorney fees after they accepted Rule 68 offers of judgment made by appellee Cadet Manufacturing Company (Cadet). CNA also appeals from the district court’s denial of its motion for reconsideration.

Appellants contend that because the statute underlying their state law Consumer Protection Act (CPA) claims defines “costs” to include attorney fees, see Wash. Rev.Code § 19.86.090, and because the Rule 68 offers did not expressly indicate that they were inclusive of all costs and fees, they are automatically entitled to fee awards.

In opposition, Cadet argues that only fees which are “properly awardable” pursuant to the CPA may be included in a Rule 68 cost award. See Marek v. Chesny, 473 U.S. 1, 9, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985); Champion Produce, Inc. v. Ruby Robinson Co., 342 F.3d 1016, 1029 (9th Cir.2003). Because fees may only be awarded under that statute to prevailing plaintiffs, see Travis v. Wash. Horse Breeders Ass’n, 111 Wash.2d 396, 759 P.2d 418, 424 (1988), Cadet asserts that the district court properly considered whether appellants had prevailed on their CPA claims, rather than automatically awarding fees.

Yet, even if Cadet’s argument is accepted and we look to those fees which are “properly awardable” under the CPA, appellants are entitled to fees. The Washington Supreme Court has indicated that “a prevailing party is one who receives an affirmative judgment in his or her favor.” Riss v. Angel, 131 Wash.2d 612, 934 P.2d 669, 681 (1997), citing Schmidt v. Cornerstone Invs., Inc., 115 Wash.2d 148, 795 P.2d 1143, 1151 (1990). Furthermore, a fee award is mandatory for plaintiffs who prevail on their CPA claims. See State v. Black, 99 Wash.2d 1005, 676 P.2d 963, 970 (1984). Because the district court entered judgment in favor of appellants pursuant to the Rule 68 offers, they “prevailed” for purposes of the CPA and fees were “properly awardable.”

Although we adopted a different approach to prevailing party analysis in Sea Coast Foods, Inc. v. Lu-Mar Lobster & Shrimp, Inc., 260 F.3d 1054, 1059-60 (9th Cir.2001), that case involved a Florida civil theft law which did not define costs to include attorney fees. Id. at 1058-59. As a result, fees could not be included in the Rule 68 costs award. See id. at 1059 (“Rule 68’s provision for costs does not encompass attorneys’ fees where those are not defined as part of the costs by the. underlying statute.”). Here, by contrast, the Washington CPA defines costs to include fees, and we therefore look to Washington law to conclude that fees are “properly awardable” under that statute. As a result, appellants are entitled to fees as part of their Rule 68 costs awards. See Marek, 473 U.S. at 9.

We therefore REVERSE the district court’s denial of appellants’ motion for attorney fees and its denial of CNA’s motion for reconsideration, and we REMAND for determination of a reasonable fee award.

SILVERMAN, Circuit Judge,

concurring.

I agree that the case must be reversed and remanded, but for a different reason. The plaintiffs are entitled to attorney’s fees only if they are deemed to be the prevailing party on their Washington Consumer Protection Act claim. The plaintiffs asserted various claims, only one of which — the WCPA claim — would entitle them to attorney’s fees as a species of costs. The district court, therefore, was on the right track when it sought to follow Sea Coast Foods, Inc. v. Lu-Mar Lobster & Shrimp, Inc., 260 F.3d 1054 (9th Cir.2001) and determine, whether in accepting the offer of judgment, the plaintiffs had prevailed on their Washington Consumer Protection Act claim.

However, in my opinion, the district court went astray when it ruled that the plaintiffs could not possibly have prevailed on the WCPA claim due to a bankruptcy court stipulation that only insured claims could be pursued. In deciding that the WCPA was not an insured claim, the district court relied solely on a self-serving letter from an insurance company’s lawyer denying coverage of that claim. The letter is an expression of the insurance company’s position, nothing more. It does not, in and of itself, prove that the WPCA claim was barred by the bankruptcy court stipulation. A fuller, disinterested examination of the policy and the claim was required before it could be determined that the WPCA claim was not authorized by the bankruptcy court stipulation. I would remand the case to the district court to make a such a determination. 
      
       This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3.