United States District Court, D. Colorado
ORDER DENYING MOTION FOR ATTORNEY FEES AND COSTS,
TRANSFERRING CASE TO THE DISTRICT OF COLORADO RE: DKT. NOS.
WILLIAM H. ORRICK, UNITED STATES DISTRICT JUDGE.
October 10, 2018, I granted Innova Emergency Medical
Associates, P.C. (“Innova”) and Stephen
Sherick's motion to dismiss Kendall Allred's
complaint because it was filed in the wrong place: the
contract at issue contains a forum selection provision
requiring that any litigation occur in Denver, Colorado.
[Dkt. No. 26]. I gave Allred seven days to decide if he
preferred that his lawsuit be dismissed or transferred to the
United States District Court for the District of Colorado
sitting in Denver, Colorado. Allred opted for transfer.
Innova then filed an emergency notice and motion for attorney
fees and costs and requested that transfer be delayed. [Dkt.
Nos. 28, 29].
argues that the terms of the Physician Employment Agreement
(“PEA”), on which its motion to dismiss was
based, entitled it to attorney fees and costs. Motion for
Attorney Fees and Costs [Dkt. No. 29] 2-3. The PEA contains a
clause titled “Attorney Fees” which states:
“If suit is necessary to enforce any of the provisions
of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees and costs of suit.” PEA
attached as Exhibit A to Mot. [Dkt. 29-1] ¶ 14.
position in this litigation is that the PEA is void and
unenforceable. Opposition to Motion for Attorney Fees and
Costs (“Oppo.”) [Dkt. No. 32] 6-10; Complaint
attached as Exhibit 1 to the Notice of Removal [Dkt. No. 1];
Opposition to Motion to Dismiss [Dkt. No. 15]. In opposing
this motion, he also argues that awarding fees at this moment
would be premature under the terms of the PEA and in
accordance with California and Colorado law. Oppo. 6-10.
will still not consider Allred's argument regarding the
unenforceability of the contract, I agree with him that it
would be premature to award fees. Under California law, an
involuntary dismissal for improper venue does not operate as
an adjudication on the merits. Mitchell v. Wells Fargo
Bank, N.A., No. 13-4017-KAW, 2014 WL 1320295, at *2
(N.D. Cal. Apr. 1, 2014) (internal quotation omitted)
(granting fees after dismissal with prejudice on the merits).
California Civil Code section 1717 requires a decision on the
merits of a party's contract claims for a
“prevailing party” to be entitled to fees, even
where the contract contains a similar fee shifting provision
to the one contained in the PEA. Laurel Vill. Bakery, LLC
v. Glob. Payments Direct, Inc., No. C06-1332 MJJ, 2007
WL 4410396, at *4 (N.D. Cal. Dec. 14, 2007) (denying fees
related to a successful motion to dismiss based on a forum
selection clause). Determining which litigant is the
prevailing party requires a “comparison of the extent
to which each party ha[s] succeeded and failed to succeed in
its contentions.” Lafferty v. Wells Fargo
Bank, No. C074843, 2015 WL 1383659, at *4 (Cal.Ct.App.
Mar. 26, 2015) (internal citations and quotation marks
omitted) (denying fees for costs of appeal where the case was
remanded to await a trial on the merits). Colorado similarly
defines a “prevailing party” in a breach of
contract case as “the party in whose favor the decision
or verdict on liability is rendered[.]” Dennis I.
Spencer Contractor, Inc. v. City of Aurora, 884 P.2d
326, 332 (Colo. 1994) (awarding fees after plaintiff obtained
a jury verdict in its favor).
motion and reply, Innova cites three cases in support of its
argument that I should interpret the PEA's fee shifting
provision and grant its motion as the prevailing party now.
See Swartz v. Turner, No. 1:14-CV-597-CL, 2014 WL
6490515 (D. Or. Nov. 19, 2014); Jim Cooley Const., Inc.
v. N. Am. Const. Corp., 46 F.3d 1151 (10th Cir. 1995);
LesCare Kitchens, Inc. v. Home Depot U.S.A., Inc.,
No. 3:98CV1354 (GLG), 1998 WL 720536 (D. Conn. Sept. 29,
1998). These cases are not on point because the validity of
the underlying contracts is not at issue in any of them.
See Cooley Const., Inc., 46 F.3d at 1151
(“[Plaintiff] does not defend on the ground the
agreement is unenforceable.”). None of these cases is
controlling and none interprets California or Colorado law.
case, there has been no decision on the merits of
Allred's contract claims or Innova's liability. My
previous order dismissing his suit pursuant to the PEA's
forum selection clause is not an adjudication on the merits
as a matter of law. Moreover, awarding Innova fees and costs
now would require me to further interpret a contract whose
validity is the crux of this case. One of my colleagues in
federal district court in Denver, Colorado will determine the
PEA's validity. If that judge finds that the PEA is void
and unenforceable, that would likely preclude recovery by
Innova. If the PEA is valid, then defendants would likely be
entitled to their fees in litigating the case, including the
motion to dismiss over the forum selection clause. As the
PEA's validity is dispositive of this motion, it would be
premature for me to consider awarding fees.
motion for attorney fees and costs is denied. The clerk of
court is directed to transfer this case to the federal
district court sitting in Denver, Colorado.