April 6, 2017

Prevailing-party attorney fees not required for dismissal based on being in the wrong forum

In DisputeSuite.com, LLC v. Scoreinc.com, the Supreme Court today holds that a defendant who obtains a dismissal of an action based on contract forum selection clauses is not necessarily a prevailing party for purposes of collecting attorney fees under the contract’s attorney fee clause.  The court’s unanimous opinion by Justice Kathryn Werdegar concludes that because “the action had already been refiled in the chosen jurisdiction [Florida] and the parties’ substantive disputes remained unresolved, the court could reasonably conclude neither party had yet achieved its litigation objectives to an extent warranting an award of fees.”  The underlying dispute concerns commissions for referrals to credit repair software.

The court assures that a procedural dismissal doesn’t necessarily preclude an attorney fees recovery, but the dismissal must “finally dispose[ ] of the parties’ contractual dispute.”  The court says that the problem with the defendant’s fee claim “is not that its victory in the California trial court was procedural but that it was not dispositive of the contractual dispute.”

The court does not discuss and distinguish its recent opinion holding that attorney fees are recoverable by a defendant who obtains a dismissal under the anti-SLAPP statute on grounds the case was “filed in a tribunal that lacks the power to hear it.”  That case — Barry v. State Bar of California — seems enough in the ballpark to merit a mention in today’s decision.

The court affirms the Second District, Division Two, Court of Appeal.  It disapproves of statements in 2010 and 2008 opinions by the Fourth District, Division Three.


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