Court Opinion

ID: 9782467
Source: CourtListenerOpinion
Date Created: 2023-08-30 18:49:59.522949+00
Date Added: 2024-06-11T07:35:02.636285
License: Public Domain

GOLDEN, J.,
dissenting.
[T51] I respectfully dissent from the majority opinion's conclusions regarding the reporting penalties and attorney's fees.
Reporting Penalties
[152] I believe the majority opinion misses the primary mark on this issue. Despite the majority opinion's statement to the contrary, CMS expressly challenges the factual bases for the award of reporting penalties. In its appeal against the award for reporting penalties (S-08-0104), CMS argues the award of reporting penalties was purely speculative because Morris failed to prove with any specificity that any reporting penalties were due:
Plaintiff did not atfempt to prove the months when CMS allegedly failed to report or that it reported improperly in any specific month. The undisputed evidence is that CMS paid Plaintiff throughout the time period in question and that the check detail provided by CMS to Plaintiff provided all the information required by Wyo. Stat. Ann. § 30-5-805.
[158] In order to determine if Morris presented adequate proof to substantiate an award of penalties for lack of reporting for 29 months, it first must be determined when reports were due. Wyoming Statute § 30-5-805(b) unambiguously answers this question. Section 805(b) requires a report "[wlhenever payment is made." My review of the record reflects that attached to every payment made is a check detail containing the requisite statutory information. Indeed, the disputes between Morris and CMS began with Morris *338questioning some of the information contained in the check details. Finding no contrary evidence, I would hold that the district court's ruling that CMS failed to properly report clearly erroneous and reverse the same.
Award of Attorney's Fees and Costs
[T54] On this issue, I believe Morris was not the prevailing party for any purpose. The key to the resolution of this issue is the definition of "prevailing party." As the majority opinion correctly states, this Court has defined "prevailing party" as one who improves her position through litigation. The open question concerns the circumstances under which a party can be said to have improved her position through litigation. The obvious situation is where a judgment has been entered. This is what happened in both Veile and Schaub. The judgment was adverse to the appellants in both cases so it was obvious neither improved their position through litigation. The opposite is also true. A party that is awarded judgment in their favor clearly has improved her position through litigation.
[T55] The less obvious situation is where a party has achieved success outside the courtroom. Under the so-called "catalyst theory," this party can also be deemed the prevailing party. The catalyst theory provides that parties are entitled to reasonable fees by demonstrating that their litigation was the catalyst for obtaining the relief sought, albeit in another venue such as through the defendant's voluntary change in conduct or via a private, non-judicial settlement agreement. When the district court in this case awarded Morris limited attorneys' fees because it determined Morris would not have received payment from CMS absent the filing of the instant legal action, it was relying on the catalyst theory.
[T56] This Court has never expressly commented on the catalyst theory. Now that it is squarely before us, I would reject the catalyst theory because it runs contrary to the language and intent of Wyo. Stat. Ann. § 30-5-308(b). The American Rule reflects the common law rule. "When statutes are in derogation of the common law, they must be strictly construed and carefully adhered to." State By and Through Dept. of Family Services v. Jennings, 818 P.2d 1149, 1150 (Wyo.1991). See also KAC v. SR, 771 P.2d 811, 813 (Wyo.1989); State v. Stovall, 648 P.2d 543, 547-48 (Wyo.1982); Mahaney v. Hunter Enterprises, Inc., 426 P.2d 442, 444 (Wyo.1967). Thus, statutes are not to be understood as effecting any change in the common law beyond that which is clearly indicated either by express terms or by necessary implication from the language used. Because § 30-5-308(b) is a fee-shifting statute, it must be narrowly construed.
[T57]) The statute provides for the award of reasonable attorney's fees to a prevailing party in any proceeding brought under the WRPA. The United States Supreme Court discussed the definition of "prevailing party" at length in Buckhannon Board & Care Home, Inc. v. West Virginia Dep't of Health & Human Resources, 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001). In discussing statutory language, the Court said:
In designating those parties eligible for an award of litigation costs, Congress employed the term "prevailing party," a legal term of art. Black's Law Dictionary 1145 (7th ed.1999) defines "prevailing party" as "(a) party in whose favor a judgment is rendered, regardless of the amount of damages awarded in certain cases, the court will award attorney's fees to the prevailing party.-Also termed successful party."
582 U.S. at 603, 121 S.Ct. at 1839. In a specially concurring opinion, Justice Scalia, joined by Justice Thomas, offered a thorough discussion as to the definition of the term "prevailing party:"
[When "prevailing party" is used by courts or legislatures in the context of a lawsuit, it is a term of art. It has traditionally-and to my knowledge, prior to enactment of the first of the statutes at issue here, invariably-meant the party that wins the suit or obtains a finding (or an admission) of liability. Not the party that ultimately gets his way because his adversary dies before the suit comes to judgment; not the party that gets his way because cireumstances so change that a *339victory on the legal point for the other side turns out to be a practical victory for him; and not the party that gets his way because the other side ceases (for whatever reason) its offensive conduct. If a nuisance suit is mooted because the defendant asphalt plant has gone bankrupt and ceased operations, one would not normally call the plaintiff the prevailing party. And it would make no difference, as far as the propriety of that characterization is concerned, if the plant did not go bankrupt but moved to a new location to avoid the expense of litigation. In one sense the plaintiff would have "prevailed"; but he would not be the prevailing party in the lawsuit. Words that have acquired a specialized meaning in the legal context must be accorded their legal meaning.
Id. at 616, 121 S.Ct. at 1846 (Scalia, J., concurring).
[158] Given the definition of "prevailing party," the Buckhannon Court held that, in order to be deemed a prevailing party, there must be a material modification in the legal relationship of the parties. Id. at 604, 121 S.Ct. at 1840. The Buckhannon Court rejected the catalyst theory because it "allows an award where there is no judicially sanctioned change in the legal relationship of the parties." Id. at 605, 121 S.Ct. at 1840. Accordingly, the Court determined a defendant's voluntary change in conduct, absent judicial imprimatur, is insufficient to support an award of attorney's fees under a "prevailing party" statute. Id.
[159] I find the United States Supreme Court's argument rejecting the catalyst theory sound for the narrow construction we must give § 30-5-308(b). I do not believe the Wyoming Legislature intended, by the statutory language used, to abrogate the common law to the extent that reasonable attorney's fees should be awarded if some important outcome favorable to the plaintiff is reached during the period of time a legal action is pending, even though the plaintiff did not, in any judicial sense, prevail. I would hold that, based on the plain language of § 30-5-308(b), a party can only be considered a "prevailing party" in a juridical action if the party receives some form of juridical relief.4
[160] Returning, then, to the underlying action, this Court should reverse the district court's award of limited attorney's fees to Morris. The underlying action was comprised of two distinct claims: one for unpaid royalties pursuant to § 30-5-308(a); and one for failure to provide appropriate reports pursuant to § 80-5-805(b). As for unpaid royalties, the district court determined that, under the evidence presented, CMS paid Morris the royalties she was due. CMS, 'therefore, received the ultimate favorable judgment. The majority opinion has upheld, and rightly so, the district court's ultimate ruling in favor of CMS on the unpaid royalty claim. Certainly some payments to Morris by CMS occurred during the pendency of the legal proceedings, but the payments occurred outside the proceedings, involving no judicial action.. For purposes of attorney's fees then, CMS was the prevailing party with regard to the claim for unpaid royalties. Since I would also hold that Morris failed to prove lack of reporting, CMS would also be the prevailing party on that issue.
[T61] There is another important consideration supporting the rejection of the catalyst theory. Practically, adoption of the catalyst theory results in the necessity for extensive collateral litigation. .Returning to Buckhannon, the United States Supreme Court expressed its concern that the catalyst theory "is clearly not a formula for 'ready administrability,'" 532 U.S. at 610, 121 S.Ct. at 1843 (quoting Burlington v. Dague, 505 U.S. 557, 566, 112 S.Ct. 2638, 120 L.Ed.2d 449 (1992)), as a "catalyst theory hearing would require analysis ... that will likely depend on a highly factbound inquiry and may turn on reasonable inferences from the nature and timing of the defendant's change in conduct." 532 U.S. at 609, 121 S.Ct. at 1843 (internal quotation marks omitted).
[162] The instant case provides a good example of the necessity for secondary litiga*340tion under the catalyst theory. The question for determination as to whether Morris was a prevailing party under the catalyst theory is CMS's motivation for payment. The district court provided no specific factual findings supporting its determination that CMS would not have paid Morris if she had not filed the instant legal action. My review of the record evidence reveals this determination to be clearly erroneous. CMS worked extensively with Morris from the beginning of their dispute to help her resolve her title problems so it could pay her the legally appropriate amount. When she resolved the initial problems, CMS paid her royalties due. New title problems arose, prompting CMS to once again suspend payment. Once again CMS worked extensively, including involving its own attorney, to assist Morris in resolving the new title problems. A few days before Morris filed the instant legal action, CMS established an escrow account, funding it shortly after the action was filed. CMS continued to work with Morris to resolve her title problems. Title in Morris eventually was cleared to CMS's satisfaction, at which time CMS paid Morris the escrowed funds, as her interest appeared.
[163] I find no evidence that CMS, at any time, withheld payment of royalties to Morris for any reason other than title problems. The obvious corollary is that the institution of the instant legal action in no way prompted CMS to make payment. Rather, payment was made because title was cleared. The only apparent change in CMS's actions possibly motivated by the institution of the instant legal action is its transferring withheld payments from a suspension account to an escrow account. This action does not reflect on its willingness to pay royalties due. While I would thus dissent from the majority opinion's conclusion that the ruling of the district court on the matter is correct, I have a larger point to make. Engaging in the above type of factual analysis into the motivation of a party can only decrease the efficiency of our courts.
[1 64] -I would follow the lead of the United States Supreme Court and adopt a bright-line rule defining a person who improves her position through litigation as a person who receives relief sought by means of some form of juridical action. Only juridical action can change the legal relationship between parties, the proper function of any legal action.
[165] I understand the frustration caused by the avoidance by CMS of any damages and penalties in a civil action under the WRPA despite its infractions of WRPA provisions. The WRPA, however, does not create strict liability. Proof of damages resulting from violations is required. Morris failed in her burden of proof. If she had proven the amount of payments owed from production in specific months, she would have been entitled to the money plus 18% interest from the time owed. If she had proven payments unaccompanied by a report containing the statutory requisite information, she would have been entitled to a $100 penalty.5 It is her failure to provide such proof that has brought about the result I believe is required.

. Juridical relief would include not only judgment on the merits, but also such things as a court ordered consent decree or a courl-ap-proved settlement agreement.

. I agree with the majority opinion's method of calculation of the imposition of the $100 penalty.