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Port-A-Pour, Inc. v. Peak Innovations, Inc.

United States District Court, D. Colorado

January 20, 2015

PORT-A-POUR, INC., a Colorado corporation, Plaintiff,
v.
PEAK INNOVATIONS, INC., a Colorado corporation, and MARK E. NELSON, an individual Defendants and Counter Claim Plaintiffs
v.
PORT-A-POUR, INC. a Colorado corporation; Counter Claim Defendant.

ORDER

WILEY Y. DANIEL, Senior District Judge.

I. INTRODUCTION

THIS MATTER is before the Court on three motions: (1) Defendants' Motion for Judgment on the Pleadings as to Attorney Fees Prayer for Relief in First Amended Complaint filed June 20, 2014, (2) Plaintiff's Motion for Order to Take Judicial Notice and Affirm Standing Port-a-Pour to Enforce Patents filed August 27, 2014, and (3) Plaintiff's Motion for Rule 11 Sanctions Against Peak Innovations, Inc., Mark Nelson and Their Counsel of Record filed September 29, 2014. These motions are fully briefed. I now turn to the merits of the motions.

II. ANALYSIS

A. Defendants' Motion for Judgment on the Pleadings

I first address Defendants' Motion for Judgment on the Pleadings as to Attorney Fees Prayer for Relief in First Amended Complaint. Defendants argue that Plaintiff's request for attorneys' fees should be stricken either based on Plaintiff's failure to plead law or facts supporting such a claim or because the underlying fee agreement is unconscionable and unenforceable.

Turning to my analysis, a motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) is treated as a motion to dismiss under Fed.R.Civ.P. 12(b)(6). Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1160 (10th Cir. 2000). In reviewing a Rule 12(b)(6) motion, the court must "accept all well-pleaded facts as true and view them in the light most favorable to the plaintiff." Jordan-Arapahoe, LLP v. Bd. of Cnty. Comm'rs of Cnty. of Arapahoe, 633 F.3d 1022, 1025 (10th Cir. 2011). To survive such a motion, "a plaintiff must allege that enough factual matter, taken as true, [makes] his claim for relief... plausible on its face.'" Id. (quotation and internal quotation marks omitted).

I first address Defendants' argument that Plaintiff failed to plead law or facts supporting such a claim. They assert that a request for attorneys' fees stated only in a prayer for relief, as in this case, is insufficient to trigger fee shifting or an abrogation of the American Rule on attorneys' fees. The prayer in paragraph "O" of the First Amended Complaint is, according to Defendants, merely surplusage and must be stricken because it is not supported by any facts alleged. Defendants rely on, among other cases, Daniels v. Thomas, 225 F.2d 795, 797 (10th Cir. 1955). I reject this argument.

The Tenth Circuit in Daniels stated that "the prayer for relief is no part of the cause of action." Thus, the parties are only "entitled to such relief and to such judgment as the complaint... makes out." Id .; see also Coll v. First Am. Title Ins. Co., 642 F.3d 876, 901 (10th Cir. 2011). In interpreting Daniels, Judge Babcock of this Court noted:

While a plaintiff is charged with a duty of giving a short and plain statement of the asserted claims and a demand for judgment and relief, Fed.R.Civ.P. 8, the test of a complaint pursuant to a motion to dismiss lies in the claim, not in the demand. Thus, the only issue on a motion [to] dismiss is whether the claim as stated would give the plaintiff a right to any relief, rather than to the particular relief demanded.

Cassidy v. Millers Cas. Ins. Co. of Texas, 1 F.Supp.2d 1200, 1214 (D. Colo. 1998) (emphasis added).

In this case, Defendants' Motion for Judgment on the Pleadings does not challenge the claims brought by Plaintiff, which include patent infringement, trademark infringement, and violations of the Cyberpiracy Prevention Section and the Colorado Uniform Trade Secrets Act. Whether attorney fees are recoverable in connection with these claims is not a proper subject for adjudication under Rule 12 "as the prayer for relief is no part of the cause of action." Douglas v. Miller, 864 F.Supp.2d 1205, 1220 (W.D. Okla. 2012) (citing Hardeman v. Stewart, 195 F.Appx. 706, 707 (10th Cir. 2006)).

I also reject Defendants' argument that attorneys fees cannot be awarded because the underlying fee agreement itself is unenforceable and unconscionable. Defendants argue that there is no cap or ceiling on the percentage of fees awarded to counsel in the fee agreement. Thus, they assert that the award of fees could be 100 percent of a settlement or judgment, or that in some cases, Plaintiff would owe its counsel more than what it receives in any settlement or judgment. Defendants also argue that the fee agreement is unenforceable because the attorney failed to disclose properly alternative fee arrangements or to explain adequately the fee agreement to the client. Again, I find that this argument is not properly the subject of a Rule 12(c) motion, as Defendants are not seeking judgment on a claim, as discussed in the previous section. Moreover, resolution of this issue is fact based and would require that I rely on pleadings outside the materials. This is inappropriate as to a Rule 12(c) motion, which is evaluated under the standards of Rule 12(b)(6).

Based on the foregoing, Defendants' Motion for Judgment on the Pleadings as to Attorney Fees Prayer for Relief in ...


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