Opinion ID: 2547977
Heading Depth: 2
Heading Rank: 1

Heading: mountain states ii

Text: ¶ 9 Mountain States II involved a dispute over the purchase of radio stations. Mountain States I, 776 P.2d at 645. The contract governing the purchase included an attorney fees provision providing, in pertinent part: In the event of commencement of suit by either party to enforce the provisions of this Agreement, the prevailing party shall be entitled to receive attorneys' fees and costs as a court may adjudge reasonable in addition to any other relief granted. Id. at 648. The Mountain States trial court found that both sides had prevailed to some extent, so it awarded both sides their full attorney fees. Id. at 645. Both sides argued before the court of appeals, however, that the attorney fees provision in the purchase contract contemplated only one prevailing party, and, predictably, each side claimed to be the prevailing party. Id. at 648. ¶ 10 In Mountain States I, the court of appeals found that there could be only one prevailing party, despite the fact that the trial judge had awarded both parties money damages for claims arising from the same transaction. Id. Furthermore, the court of appeals held that prevailing party status was determined by the identity of the party receiving the net judgment. Id. at 649. The court acknowledged, however, that [t]he determination of a prevailing party becomes even more complicated in cases involving multiple claims and parties... and where the ultimate award of money damages does not adequately represent the actual success of the parties under the peculiar posture of the case. These cases demonstrate the need for a flexible and reasoned approach to deciding in particular cases who actually is the prevailing party. Id. at 649 n. 7 (citations omitted). ¶ 11 Mountain States II was the court of appeals' memorandum decision on a petition for rehearing filed by Mountain States. 783 P.2d at 557. Mountain States had not received a net judgment in Mountain States I, and it was therefore not the prevailing party under the court's initial application of the net judgment rule. Mountain States argued that it was nevertheless the real prevailing party because throughout the trial it had claimed that it was entitled to an offset, and it ultimately did prove its entitlement to the offset. Id. Furthermore, Mountain States argued that its opponent  a party named NBA  was the non-prevailing party, because NBA had contended Mountain States deserved no offset, but an offset was nonetheless awarded. Id. The appellate court cogently explained why a strict application of an unmodified net judgment rule could create absurd results: Mountain States suggests that the absurdity of our reliance on the net judgment rule in a case like this is shown by the fact that if it had proven offsets totaling even $1.00 less than the amount otherwise due under the note, despite a near-total victory for Mountain States the net judgment would still be in favor of NBA and strict application of the net judgment rule would leave NBA the prevailing party. Mountain States' point is well-taken. On the other hand, carrying its own position to an equivalent extreme works an equally untenable result: If Mountain States had shown its entitlement to an offset of only $1.00, under its view it would be the prevailing party since it had claimed an offset in an amount to be proved and proved one. Id. Having thus explained why a simplistic, mechanical application of either the net judgment rule or Mountain States' approach could create absurd results, the Mountain States II court emphasized the need for a flexible and reasoned approach to deciding in particular cases who actually is the prevailing party.... [N]othing in our opinion should be taken to suggest that the net judgment rule can be mechanically applied in all cases, although it will usually be at least a good starting point. Id. (internal quotation omitted). Implicit in this ruling is the notion that courts should not ignore common sense when deciding which party prevailed. The court therefore used the net judgment rule as a starting point, and considered the question of which party had prevailed from two additional perspectives. Id. at 558. ¶ 12 The two additional perspectives the court considered both focused on determining comparative victory rather than simply which party won the net judgment. Id. The court explained that the main dispute between the parties centered on a $30,000 payment. Id. NBA argued that Mountain States owed NBA the entire $30,000, while Mountain States argued that it was entitled to at least $30,000 in offsets, and therefore owed NBA nothing. Id. Total victory for Mountain States would have been its proving entitlement to all $30,000. Total victory for NBA would have been its proving Mountain States was entitled to nothing. A `draw' would have been a decision dividing the $30,000 equally. Id. As it turned out, however, NBA won four times the amount that Mountain States won. Id. ¶ 13 The other perspective the court used to determine which party prevailed focused on the party that won a greater percentage of the amount it had claimed in damages or offsets. Thus, the court explained that depending on how NBA's punitive damage claim was calculated, NBA recovered between thirty-three percent (33%) and sixty percent (60%) of the damages it had sought. Id. Mountain States, on the other hand, won only nine percent (9%) of what it had sought. Id. Viewing the outcome of the trial from these two vantage points, the court found that NBA won an overall victory, and was therefore the prevailing party. Id. ¶ 14 We believe that Mountain States II's common sense flexible and reasoned approach was correctly applied to the interpretation of contractual prevailing party language. Occidental/Nebraska strongly supports this conclusion. That case, unlike Mountain States II, involved a statutory prevailing party attorney fees provision. See 791 P.2d at 221 (citing Utah Code Ann. § 57-1-32 (1986)). The plaintiff claimed $600,000 in damages, but only recovered $7,300  a sum that the defendants had stipulated to owing early in the litigation. Id. at 222. Based on the flexible and reasoned approach, the court was able to find that the defendants, not the plaintiff, were the prevailing party. Id. ¶ 15 The instant case involves the term successful party as used in the context of a mechanic's lien action, rather than the prevailing party language construed in Mountain States II. We therefore examine whether Mountain States II's flexible and reasoned approach should be applied to cases involving the successful party term in section 38-1-18 of the Utah Code.