Procedural Posture

Procedural Posture

Plaintiff company sued defendant former employee for breach of contract. The employment contract provided that in any litigation involving the contract, the prevailing party would be entitled to recover attorney fees and costs. The Orange County Superior Court, California, granted the former employee’s motion to quash service of summons for lack of personal jurisdiction and awarded attorney fees to the former employee. The company appealed.

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Overview

The company was based in California. The former employee was an Oklahoma resident. The instant court concluded that the former employee was the party prevailing on the contract under Civ. Code, § 1717, because the trial court granted the former employee’s motion to quash service for lack of personal jurisdiction. The complaint was dismissed in its entirety and the company obtained nothing. Therefore, the former employee was entitled to recover his reasonable attorney fees as costs. Although the company, which had also initiated an action against the former employee in Oklahoma, argued that a determination on the merits of the contract claim was necessary before attorney fees could be awarded under § 1717, the only claims before the trial court were contained in the company’s complaint. The case in California was resolved. The instant court found nothing in the language of the statute or in case law that required resolution in another state on the merits of a contract claim first asserted in California before a prevailing party could be determined when the matter had been completely resolved vis-a-vis the California courts.

Outcome

The judgment was affirmed.

 

May 8th, 2021 by