Opinion ID: 2567235
Heading Depth: 3
Heading Rank: 1

Heading: Subsection (1): Successful Party Determination

Text: ¶ 9 Utah law expressly requires a court to award attorney fees to the successful party in any mechanic's lien action. Utah Code Ann. § 38-1-18(1) (2001); A.K. & R. Whipple Plumbing & Heating v. Aspen Constr., 2004 UT 47, ¶ 7, 94 P.3d 270. Section 38-1-18(1) provides that in any action brought to enforce any lien under this chapter the successful party shall be entitled to recover a reasonable attorneys' fee, to be fixed by the court. Utah Code Ann. § 38-1-18(1). We most recently construed this statute in Whipple, 2004 UT 47, 94 P.3d 270. Whipple, much like the case now before us, involved a mechanics' lien foreclosure action and a counterclaim for damages. Id. at ¶ 2. Plaintiff Whipple filed a lien for $30,641, with defendant Aspen claiming an offset of $25,000 for Whipple's allegedly negligent work. Id. at ¶ 3. The trial court awarded Aspen $7000 in offsets and, [a]fter calculating the consequences of the parties' respective wins and losses on their competing claims, . . . awarded a net judgment to Aspen in the amount of $527. Id. Employing the flexible and reasoned approach first outlined in Mountain States Broadcasting Co. v. Neale, 783 P.2d 551, 556-57 (Utah Ct.App. 1989) (mem. decision on pet. for reh'g), the trial court found that, where one party received such a small net recovery, the case was essentially a draw, so neither party could be considered successful for purposes of section 38-1-18(1). Whipple, 2004 UT 47 at ¶ 4, 94 P.3d 270. We upheld both the trial court's use of the flexible and reasoned approach and its specific finding that there was no successful party. Id. at ¶¶ 31-32. ¶ 10 Here, Pochynok seeks to distinguish Whipple from the present case and urges us to hold that the net judgment rule and not the flexible and reasoned approach should apply in cases with general rather than specific jury verdicts. Under the net judgment rule, the party that receives the bigger judgment is the successful party. Since Pochynok received a net judgment of approximately $7000, it would be the successful party under this rule. Certainly it is more difficultalthough not impossibleto apply the flexible and reasoned approach where, as here, the jury verdict does not specify who won what. However, it does not follow that the net judgment rule automatically applies in such a case. As we stated in Whipple, rigid application of the net judgment rule can result in unreasonable awards of attorney fees, id. at ¶ 26, which would deprive trial courts of their power to apply their discretion and common sense to this issue, id. at ¶ 25. As in Whipple, we decline to require such a rule here. ¶ 11 At the same time, it is clear that the nature of the flexible and reasoned approach outlined in Mountain States and Whipple requires more information about the jury award for the parties' particular claims than is available in this case. In Mountain States, the court of appeals first considered which party received a net judgment and then discussed two additional factors relevant to its determination of which party was successful. 783 P.2d at 558. First, it focused on which party had attained a comparative victory, considering what total victory would have meant for each party and what a true draw would look like. Id. Second, it looked at which party obtained a greater percentage of the amount originally claimed. Id. Such an analysis in this case is impossible without more specific monetary figures. ¶ 12 Similarly, we stated in Whipple that [the flexible and reasoned] approach requires. . . looking at the amounts actually sought and then balancing them proportionally with what was recovered. 2004 UT 47 at ¶ 26, 94 P.3d 270 (internal quotation and citation omitted). In the present case, because the jury's verdict did not indicate specific awards and offsets, the trial court did not have the information necessary to undertake such a balancing. Nor did the court explain its reasoning in concluding that the Smedsruds were the successful party. The case before us is thus in contrast to Whipple, where we stated: Although lacking in detail, the trial court's explanation of its rationale is adequate because it demonstrates that the court correctly considered common sense factors in addition to the net judgment. It is apparent from the trial court's reasoning that it believed Aspen's net recovery of only two percent (2%) of its claimed damages was insufficient to make it the successful party. Id. at ¶ 28. In upholding the trial court's determination of the successful party, the court of appeals inappropriately relied on conjecture, surmising that, despite the nonspecific jury award, the trial court could have reasonably inferred . . . offsets and could have reasonably concluded that the jury in fact found in favor of the Smedsruds on their counterclaims and offset these damages. J. Pochynok Co. v. Smedsrud, 2003 UT App 375, ¶ 17, 80 P.3d 563. There is nothing in the record to indicate that the trial court actually made such inferences and conclusions. ¶ 13 Though this insufficiency of information requires that we direct the court of appeals to remand this case to the trial court for a determination of awards and offsets, it does not necessarily follow, as Pochynok contends, that Pochynok is the successful party. Our difficulty is with the trial court's process, not necessarily the outcome. After a determination of the awards and offsets likely considered and made by the jury, it is entirely possible that the trial court might once again conclude that the Smedsruds are the successful party.