Court Opinion

ID: 2655968
Source: CourtListenerOpinion
Date Created: 2014-03-07 21:09:06.339126+00
Date Added: 2024-06-11T09:12:19.478997
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                MAR 07 2014

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

JAMES RAY JOHNSON; TERRENCE                      No. 12-16428
SIMS; HEATHER SIMS; JOSLYN
JOHNSON-BENNING; WILLIE                          D.C. No. 3:11-cv-00092-WHA
BENNING; RICHARD GADDES;
ROBERT HARTENSTEIN; TODD D.
SEVERIN; HANS P. SCHROEDER;                      MEMORANDUM*
MICHAEL BILICH; DEB
HARTENSTEIN; LANCE GODDARD;
JOAN GODDARD; MICHAEL
MOFFETT; MARIAN MOFFETT;
JAMES M. ROSS; WILLIAM
SCHNEIDER; VALERIE SCHNEIDER;
STEPHEN SCHNEIDER,

              Plaintiffs - Appellees,

  v.

STEVEN L. MYERS, DBA Myers
Engineering International, Inc.; MYERS
ENGINEERING INTERNATIONAL INC,

              Defendants - Appellants.

                   Appeal from the United States District Court
                     for the Northern District of California
                    William Alsup, District Judge, Presiding

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                     Argued and Submitted February 13, 2014
                            San Francisco, California

Before: KOZINSKI, Chief Judge, and O’SCANNLAIN and MURGUIA, Circuit
Judges.

      James Johnson and eighteen other plaintiffs (collectively, “Johnson”) sued

Steven Myers and Myers Engineering International, Inc. (collectively, “Myers”)

for, among other things, breach of contract. The district court dismissed the

original complaint and denied leave to file an amended complaint. Myers moved

for an award of attorneys’ fees pursuant to California Civil Code § 1717, but the

district court denied the motion on the ground that Myers was not the prevailing

party. Myers appealed.

      Under California law, the prevailing party is “the party who recovered a

greater relief in the action on the contract.” Cal. Civil Code § 1717(b)(1).

“[W]hen a defendant defeats recovery by the plaintiff on the only contract claim in

the action, the defendant is the party prevailing on the contract under section 1717

as a matter of law.” Hsu v. Abbara, 891 P.2d 804, 812 (Cal. 1995). Because

Myers ensured that Johnson would not recover on the breach of contract claim, the

district court erred in refusing to rule that Myers was the prevailing party.

      That the suit was dismissed based on pre-trial motions rather than litigated

on the merits is irrelevant. See Profit Concepts Mgmt., Inc. v. Griffith, 76 Cal.

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Rptr. 3d 396, 400 (Ct. App. 2008); Elms v. Builders Disbursements, Inc., 283 Cal.

Rptr. 515, 518 (Ct. App. 1991). California case law does not suggest that, for these

purposes, shareholder derivative suits are materially distinguishable from other

cases. See Donner Mgmt. Co. v. Schaffer, 48 Cal. Rptr. 3d 534, 543 (Ct. App.

2006).

      REVERSED and REMANDED.

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