Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-00429/USCOURTS-cand-4_04-cv-00429-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

JAMES D. DURHAM,

Plaintiff,

v.

QUADRAMED CORPORATION and DOES 1

through 10,

Defendants.

 /

No. C 04-0429 CW

ORDER GRANTING

PLAINTIFF'S

MOTION FOR

ATTORNEYS' FEES

AND COSTS AND

FOR ENTRY OF

JUDGMENT

Plaintiff James D. Durham moves for attorneys' fees and

costs and for entry of judgment. Defendant Quadramed

Corporation opposes the motion for attorneys' fees and costs and

contends that the Court should award Plaintiff no more than onehalf of the amount of attorneys' fees that Plaintiff requests. 

The matter was taken under submission on the papers. Having

considered the parties' papers and the evidence cited therein,

the Court GRANTS Plaintiff's motion for attorneys' fees and

Case 4:04-cv-00429-CW Document 127 Filed 05/06/05 Page 1 of 7
United States District Court

For the Northern District of California

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costs and for entry of judgment.

BACKGROUND

On January 30, 2004, Defendant removed this action from the

Marin County Superior Court. On the same day, in this Court,

Plaintiff filed his first amended complaint. That complaint

contained two causes of action for breach of contract and breach

of the covenant of good faith and fair dealing arising from a

contract for a retirement benefits plan. Also on January 30,

2004, Defendant filed a counter-claim for declaratory relief. 

On March 23, 2004, the parties entered into a stipulated

agreement that Plaintiff would file a second amended complaint,

which he did on April 2. Plaintiff's second amended complaint

contained a single cause of action for breach of contract.

On December 6, 2004, the Court issued an order that, inter

alia, granted Plaintiff's motion for summary judgment on his

claim for liability under the contract. The Court also granted

Plaintiff summary judgment on Defendant's counter-claim. On

February 6, 2005, the Court issued an order describing the

appropriate methodology for calculating Plaintiff's damages

award under the retirement plan. The parties now agree that the

damages award, including interest, will be $4,703,293 on May 6,

2005.

The retirement benefits plan at issue in this action

contains a fee-shifting clause which provides that the

prevailing party in any action arising from enforcement of the

plan is entitled to reasonable attorneys' fees. On March 30,

2005, Plaintiff filed this motion for $320,490.39 in attorneys'

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United States District Court

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fees, $43,346.43 in costs, and entry of judgment in the amount

of $5,067,129.82.

DISCUSSION

“In a diversity action the question of attorney's fees is

governed by state law.” Klopfenstein v. Pargeter, 597 F.2d 150,

152 (9th Cir. 1979). “A federal court sitting in diversity

applies state law in deciding whether to allow attorney's fees

when those fees are connected to the substance of the case.” 

Price v. Seydel, 961 F.2d 1470, 1475 (9th Cir. 1992).

“In any action on a contract, where the contract

specifically provides that attorney's fees and costs, which are

incurred to enforce that contract, shall be awarded either to

one of the parties or to the prevailing party, then the party

who is determined to be the party prevailing on the contract,

whether he or she is the party specified in the contract or not,

shall be entitled to reasonable attorney's fees in addition to

other costs.” Cal. Civ. Code § 1717(a). “[T]he party

prevailing on the contract shall be the party who recovered a

greater relief in the action on the contract. The court may

also determine that there is no party prevailing on the contract

for purposes of this section.” Cal. Civ. Code § 1717(b)(1).

“[T]he party who obtains a favorable judgment is deemed to

be the prevailing party even though he did not successfully

obtain all the relief which he sought in the action.” In re

Sparkman, 703 F.2d 1097, 1100 (9th Cir. 1983) (citing Epstein v.

Frank, 125 Cal. App. 3d 111, 124-125 (1981)). In deciding

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whether there is a prevailing party, the Court compares the

relief awarded with the parties' demands and their litigation

objectives. Hsu v. Abbara, 9 Cal. 4th 863, 876 (1995). “[W]hen

the results of the litigation on the contract claims are not

mixed -- that is, when the decision on the litigated contract

claims is purely good news for one party and bad news for the

other . . . a trial court has no discretion to deny attorney

fees to the successful litigant.” Id. 875-876.

Plaintiff maintains that he is entitled to reasonable

attorneys' fees because he is the prevailing party; the Court

granted him summary judgment on the only claim for relief in his

second amended complaint and on Defendant's sole counterclaim. 

Moreover, the parties agree that Plaintiff is entitled to more

than $4 million in damages for breach of contract. Defendant,

however, argues that Plaintiff's requested attorneys' fees

should be discounted by at least fifty percent because he did

not prevail on the following issues and claims: (1) Plaintiff's

claim for breach of the covenant of good faith and fair dealing

in the first amended complaint, (2) Plaintiff's contention that

a higher multiplier should have been used to calculate damages,

and (3) a motion to compel filed by Plaintiff during the course

of litigation. Defendant also argues that Plaintiff did not

recover substantially more than Defendant's offer of judgment.

Defendant contends that it prevailed on Plaintiff's claim

that Defendant breached the covenant of good faith and fair

dealing, arguing that Plaintiff stipulated to amend his

complaint only after Defendant filed a motion to dismiss. 

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However, as Plaintiff notes, Defendant moved to dismiss the

second cause of action on the ground that it was superfluous;

Plaintiff could not recover any damages under that claim that he

would not otherwise have been entitled to under the breach of

contract claim. In short, dropping the second claim for relief

did not affect the amount of damages to which Plaintiff was

entitled from a favorable judgment. Thus, this issue does not

alter the Court's prevailing party analysis.

Defendant also argues that Plaintiff did not prevail in

securing a higher multiplier than the .50 that was ultimately

used. However, as Defendant acknowledges in its opposition

papers, Plaintiff, in both his first and second amended

complaints, stated that either a .50 or a .65 multiplier could

be used in calculated the damages award, depending on the

interpretation of the contract by the Court. Moreover,

Defendant further acknowledges that, in Plaintiff's motion for

summary judgment of liability under the contract, he argued that

he was entitled only to the .50 multiplier. Plaintiff also

asserted the .50 multiplier in his motion for partial summary

judgment on the methodology for calculating damages. Defendant

has not shown that Plaintiff is not the prevailing party as a

result of failing to secure a higher multiplier.

Defendant's third argument, that Plaintiff failed to

prevail completely in his motion to compel discovery, is also

not well-taken. On September 10, 2004, Magistrate Judge Joseph

Spero granted in part and denied in part a motion to compel

discovery filed by Plaintiff. Defendant provides no legal

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authority, and the Court knows of none, holding that the

granting in part of an interlocutory discovery request justifies

the reduction of reasonable attorneys' fees for the moving

party.

Defendant's fourth argument, that Plaintiff did not recover

substantially more than Defendant's offer of judgment, is not

persuasive. Defendant argues that it offered Plaintiff just

over $1.5 million in cash and forgiveness of an unrelated debt

in the amount of approximately $2.6 million. Thus, according to

Defendant, its offer of judgment amounted to about $4.1 million. 

However, Defendant acknowledges that the $2.6 million offset

does not relate to any debt that Plaintiff owes to Defendant,

but rather to a claim against a trust that is not a subject of

this litigation. Thus, Defendant's offer of judgment was

substantially less than Plaintiff's damages award in this

action. Again, Defendant has failed to show that Plaintiff is

not the prevailing party.

Under the law of the State of California, where a contract

so provides, the prevailing party is entitled to reasonable

attorneys' fees. Cal. Civ. Code § 1717(a). Here, Plaintiff is

the prevailing party, having been granted summary judgment on

his claim for liability against Defendant and on Defendant's

counterclaim against him. Because Defendant has not shown that

Plaintiff was not the prevailing party in this action, and

because the amount of attorneys' fees and costs that Plaintiff

requests is reasonable (Defendant has made no argument that they

are not), the Court must grant Plaintiff's motion for attorneys'

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fees and costs and for entry of judgment.

CONCLUSION

For the foregoing reasons, the Court GRANTS Plaintiff's

motion for attorneys' fees and costs and for entry of judgment

(Docket No. 114). Plaintiff is entitled to $4,703,293 in

damages, $320,490.39 in attorneys' fees, and $43,346.43 in

costs, a sum that will total $5,067,129.82 on May 6, 2005. The

Clerk shall enter judgment and close the file.

IT IS SO ORDERED.

Dated: 5/6/05 /s/ CLAUDIA WILKEN 

CLAUDIA WILKEN

United States District Judge

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