McAllister et al v. Pacific Maritime Association, eta l, No. 2:2007cv00700 - Document 115 (W.D. Wash. 2009)
Court Description: ORDER denying 97 Dft's Motion for Attorney's Fees, by Judge James P. Donohue.(VP)
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McAllister et al v. Pacific Maritime Association, eta l Doc. 115 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 10 ROSALIE A. MCALLISTER (f.k.a. ROSALIE A. REICHL), 11 13 14 ORDER DENYING DEFENDANTS’ MOTION FOR ATTORNEYS’ FEES Plaintiff, 12 Case No. C07-0700-JPD v. PACIFIC MARITIME ASSOCIATION, et al., 15 Defendants. 16 17 I. 18 19 INTRODUCTION AND SUMMARY CONCLUSION This matter comes before the Court on Defendants’ Motion for Attorneys’ Fees. Dkt. 20 No. 97. Plaintiff Rosalie McAllister has filed a response opposing the motion, Dkt. No. 111, to 21 which Defendants have replied, Dkt. No. 114. After careful consideration of the motion, 22 Plaintiff’s opposition and the reply brief, the governing law, and the balance of the record, 23 Defendants’ Motion for Attorneys’ Fees, Dkt. No. 97, is DENIED. 24 25 26 ORDER PAGE - 1 Dockets.Justia.com 1 II. BACKGROUND 2 A. The Prior Actions and the Attorneys’ Fees Provision 3 Plaintiff has been a longshore worker at the Port of Tacoma since 1988. In May 1996, 4 Plaintiff (along with three other female longshore workers) filed a federal lawsuit in Tacoma 5 alleging discriminatory denial of job opportunities and promotions in the longshore industry 6 (the “Thompson action”). In June 1997, the Thompson action was settled along with a parallel 7 sex discrimination class action (the “Scott action”) that was brought by female longshore 8 workers Ronalyn Scott and Gail Ross. There was a Thompson settlement agreement, Dkt. No. 9 9, Exh. A, and a settlement agreement that applied to both the Thompson action and the Scott 10 11 action (the “Scott/Thompson settlement agreement”), Dkt. No. 9, Exh. B. The Scott/Thompson settlement agreement included a female foreman registration and 12 promotion clause that stated at least one out of every five foremen registered in Tacoma (20%) 13 would be female (the “affirmative action plan”). Dkt. No. 9, Exh. B, ¶ 8(A). The Thompson 14 settlement agreement also incorporated by reference “all provisions” of the Scott/Thompson 15 settlement agreement. Dkt. No. 9, Exh. A, ¶ 2. The Scott/Thompson settlement agreement, 16 containing the affirmative action plan (along with the Thompson agreement by incorporation), 17 was contingent upon district court approval of a modification of the consent decree in a third 18 federal lawsuit, Blanchfield v. I.L.W.U., whose male plaintiffs had intervened in the Scott 19 action and objected to the Scott/Thompson settlement agreement’s affirmative action plan for 20 female longshore workers. 21 The Scott/Thompson settlement agreement included an attorneys’ fees provision that 22 provided as follows: “In any action to enforce any term of the agreement, the prevailing party 23 shall recover its reasonable attorneys fees and such other relief as deemed appropriate.” Dkt. 24 No. 9, Exh. B, ¶ 18. This provision is the basis for Defendants’ instant motion for attorneys’ 25 fees. See Dkt. No. 97. 26 ORDER PAGE - 2 1 By Order dated January 8, 1998, the Honorable Franklin D. Burgess approved the 2 modification of the Blanchfield consent decree and the Scott/Thompson settlement agreement, 3 including its affirmative action plan. Dkt. No. 9, Exh. C. Paragraph 14 of the Order provides 4 that “[t]he Court will retain jurisdiction of this matter for purposes of overseeing 5 implementation of the Scott settlement agreement.” Id. The Court was referring to what has 6 been referred to herein as the Scott/Thompson settlement agreement. That Order is the basis 7 for this Court’s jurisdiction over the instant action. See Dkt. No. 83. 8 B. The Instant Action 9 In April 2006, eight years after Judge Burgess approved the Scott/Thompson settlement 10 agreement, Plaintiff filed the instant lawsuit in King County Superior Court, alleging that she 11 was retaliated against because of her participation in the prior Thompson and Scott actions and 12 was denied promotion to registered foreman because of Defendants’ discrimination on the 13 basis of sex in violation of state law. Dkt. No. 9, Exh. D. In May 2007, Plaintiff filed a second 14 amended complaint that added a claim entitled “Breach of Contract,” which alleged that 15 Defendants breached her “1997 Settlement Agreement (i.e. the Thompson Settlement 16 Agreement) by failing to promote and register McAllister as a foreman from 2002 to 2006.” 17 Dkt. No. 9, Exh. F, ¶ 3.11. Defendants removed the case to federal court on the basis of the 18 breach of contract claim because the claim was based on the Scott/Thompson settlement 19 agreement and the court-approved affirmative action plan. 20 C. 21 During the course of the instant action, the parties disputed the terms and meaning of 22 Paragraph 8(A) of the Scott/Thompson settlement agreement, which concerns the affirmative 23 action plan’s female foreman promotion requirement. Therefore, on August 30, 2007, the 24 Honorable Thomas S. Zilly ordered that the issue of the parties’ disputes over the terms and 25 meaning of Paragraph 8(A) be referred to the Honorable J. Kelley Arnold. Dkt. No. 23. The 26 Scott/Thompson settlement agreement provided that Judge Arnold, who had presided over the ORDER PAGE - 3 The Parties’ Dispute Regarding the Affirmative Action Plan 1 mediation that resulted in the settlement, would decide “[a]ny disputes or disagreements as to 2 the terms or meaning of this agreement, or any of its provisions.” See Dkt. No. 9, Exh. B, ¶ 17. 3 Judge Zilly also ordered that this case be reassigned to the undersigned judge based on the 4 consent of the parties. Dkt. No. 25. 5 On July 17, 2008, Judge Arnold ruled that Scott/Thompson settlement agreement’s 6 affirmative action plan began on January 8, 1998 and expired on January 8, 2003, and that 7 among the candidates promoted to registered foremen during that five-year period, 20% (or 8 one out of every five) must be female. Dkt. No. 60. Judge Arnold also found that because 15 9 individuals were promoted to registered foreman from January 8, 1998 to January 8, 2003, but 10 that only two of the 15 individuals were female, Defendants did not comply with the 11 Scott/Thompson settlement agreement’s affirmative action plan. Dkt. No. 50. In other words, 12 Defendants breached the agreement. Had Defendants promoted just one additional female 13 among the 15 individuals promoted to foreman from January 8, 1998 to January 8, 2003, 14 Defendants would have complied with the affirmative action plan, because 20% of the 15 individuals promoted to foreman during that period would have been female. See Dkt. No. 50. 16 D. Defendants’ Motions for Summary Judgment 17 On August 18, 2008, Defendants filed two motions for summary judgment. See Dkt. 18 Nos. 64, 71. This Court granted Defendants’ motions for summary judgment and dismissed all 19 of Plaintiff’s claims by Order dated December 30, 2008. See Dkt. No. 95. With regard to 20 Plaintiff’s breach of contract claim—the only claim that implicates the Scott/Thompson 21 settlement agreement’s attorneys’ fees provision—the Court noted that, as Judge Arnold ruled, 22 Defendants did not comply with the agreed-upon affirmative action plan and therefore had 23 breached the Scott/Thompson settlement agreement. However, the Court held that Plaintiff 24 failed to adduce any competent evidence showing that, even if a foreman registration process 25 had taken place between December 18, 2002 and January 8, 2003, Plaintiff would have been 26 the female applicant selected. Dkt. No. 95 at 23. The Court found that all the evidence was to ORDER PAGE - 4 1 the contrary. Id. Accordingly, Plaintiff’s breach of contract claim was dismissed. Id. The 2 Court entered judgment for Defendants on December 30, 2008, and awarded costs to 3 Defendants. Dkt. No. 96. The instant motion for attorneys’ fees followed. See Dkt. No. 97. 4 5 III. DISCUSSION Defendants’ motion for attorneys’ fees is based upon Paragraph 18 of the 6 Scott/Thompson settlement agreement, which provides: “In any action to enforce any term of 7 the agreement, the prevailing party shall recover its reasonable attorneys fees and such other 8 relief as deemed appropriate.” Dkt. No. 9, Exh. B, ¶ 18. A federal court must apply state law 9 in interpreting an attorneys’ fees provision of a contract. See, e.g., Franklin Financial v. 10 Resolution Trust Corp., 53 F.3d 268, 273 (9th Cir. 1995) (applying state law in interpreting an 11 attorneys’ fees provision in a contract). Accordingly, the Court must look to state law for 12 guidance as to whether Defendants are the “prevailing party” for the purposes of awarding 13 attorneys’ fees pursuant to the Scott/Thompson settlement agreement. 14 Defendants assert that the Court should rely upon RCW 4.84.330 for the definition of 15 “prevailing party,” which provides that the term “means the party in whose favor final 16 judgment is rendered.” WASH. REV. CODE § 4.84.330. Defendants contend that since 17 judgment was entered in their favor, see Dkt. No. 96, they are the “prevailing party” as defined 18 by RCW 4.84.330 and should therefore be awarded the requested portion of their attorneys’ 19 fees. However, the Washington Supreme Court has recently clarified that the purpose of 20 RCW 4.84.330 is to make unilateral contract provisions regarding attorneys’ fees bilateral; that 21 is, “[t]he statute ensures that no party will be deterred from bringing an action on a contract . . . 22 for fear of triggering a one-sided fee provision.” Wachovia SBA Lending, Inc. v. Kraft, 2009 23 Wash. LEXIS 1, *9 (Wash. Jan. 15, 2009). The language of RCW 4.84.330 must be read into 24 unilateral contracts that award attorneys’ fees to one party any time an action occurs, 25 regardless of whether that party prevails or whether there is a final judgment. Id. Therefore, 26 the statutory definition of “prevailing party” under RCW 4.84.330 should not be imposed ORDER PAGE - 5 1 where, as here, there was already a bilateral contract providing for attorneys’ fees to the 2 prevailing party. See id. at *10-11; see also Walji v. Candyco, Inc., 57 Wn. App. 284, 287-288 3 (Wash. App. 1990) (rejecting statutory definition of “prevailing party” in interpreting a 4 bilateral attorneys’ fees provision). In view of the foregoing, it would not be appropriate to 5 rule that Defendants are the “prevailing party” under the Scott/Thompson settlement 6 agreement’s bilateral attorneys’ fees provision simply because judgment was ultimately 7 entered in their favor on Plaintiff’s contract claim. Indeed, to do so would be to ignore that 8 Plaintiff prevailed on a key issue in this action: that Defendants breached the Scott/Thompson 9 settlement agreement’s affirmative action plan. 10 Washington case law also supports a more nuanced approach to determining who is the 11 prevailing party in a lawsuit. The case law holds that if both parties prevail on a “major issue” 12 in the litigation, neither party is deemed the prevailing party for the purpose of awarding 13 attorneys’ fees. See, e.g., American Nursery Products, Inc. v. Indian Wells Orchards, 115 14 Wn.2d 217, 234-35 (Wash. 1990) (holding that “because both parties have prevailed on major 15 issues, neither qualifies as the prevailing party under the contract”); Morrell v. Wedbush 16 Morgan Securities, Inc., 143 Wn. App. 473, 488 (Wash. Ct. App. 2008) (same); Hertz v. Riebe, 17 86 Wn. App. 102, 105 (Wash. Ct. App. 1997) (same); Marassi v. Lau, 71 Wn. App. 912, 916 18 (Wash. Ct. App. 1993) (same); Sardam v. Morford, 51 Wn. App. 908, 911 (Wash. Ct. App. 19 1988) (same). Importantly, the cases generally refer to prevailing on “major issues,” and not to 20 “claims” or “causes of action.” 21 Here, both parties prevailed on “major issues,” at least with respect to Plaintiff’s breach 22 of contract claim, which is the basis for Defendants’ attorneys’ fees motion. A significant and 23 hard-fought segment of this litigation prior to Defendants’ motions for summary judgment 24 concerned whether or not Defendants complied with the affirmative action plan. On that 25 central point, Defendants were not the prevailing party: Judge Arnold ruled that Defendants 26 breached the Scott/Thompson settlement agreement by not promoting one additional female ORDER PAGE - 6 1 among the 15 individuals promoted to foreman from January 8, 1998 to January 8, 2003. See 2 Dkt. No. 50. Therefore, it would not be appropriate to award Defendants their attorneys’ fees 3 for the portion of the litigation surrounding Judge Arnold’s determination that Defendants did 4 not comply with the affirmative action plan. In effect, Defendants would be awarded their 5 attorneys’ fees under a provision of a contract that they were found to have breached. 6 However, while Plaintiff may have won the proverbial battle, she lost the war: the 7 Court found that she had not adduced any competent evidence that she was the aggrieved 8 female longshore worker because of Defendants’ breach. Dkt. No. 95 at 23. Nancy Glaser and 9 Karen Walton each consistently scored ahead of Plaintiff during the relevant period. 10 Therefore, Plaintiff failed to create a triable issue of fact as to whether she would have been the 11 female applicant selected even if a foreman registration process had taken place in late 2002. 12 Accordingly, the Court granted Defendants’ motions for summary judgment and Plaintiff’s 13 breach of contract claim was dismissed. Dkt. No. 95. Given that Plaintiff and Defendants each 14 prevailed on “major issues” with respect to Plaintiff’s breach of contract claim, neither party 15 qualifies as the prevailing party under the Scott/Thompson settlement agreement’s attorneys’ 16 fees provision and, consequently, neither party is entitled to attorneys’ fees. See, e.g., 17 American Nursery Products, 115 Wn.2d at 234-35; Morrell, 143 Wn. App. at 488. 18 Defendants assert in their reply that while the Washington courts refer to both parties 19 prevailing on “major issues” when declining to award attorneys’ fees, the courts are really 20 talking about both parties prevailing on claims, and since Plaintiff did not prevail on any 21 “claim,” Defendants should be awarded their attorneys’ fees. Put differently, Defendants 22 suggest that the Washington courts meant something different than what they said, and the 23 Court declines Defendants’ invitation to read “claims” from “major issues.” At least in the 24 legal context, “issue” is a more general and inclusive term than “claim.” An “issue” is defined 25 broadly by Black’s Law Dictionary as “[a] point in dispute between two or more parties,” 26 whereas a “claim” is defined more narrowly as “[t]he aggregate of operative facts giving rise to ORDER PAGE - 7 1 a right enforceable by a court,” and “[a]n interest or remedy recognized at law.” BLACK’S LAW 2 DICTIONARY (7th ed. 2000). The Washington courts very likely opted for use of the term 3 “issue” as opposed to “claim” so as to provide other courts assessing attorneys’ fee awards 4 under Washington law greater discretion in determining which party, if any, is the “prevailing 5 party.” Given the parry and thrust of litigation, it is not always clear who the prevailing party 6 is in the end: it can be more complex than simply comparing claims won and lost. 7 For example, a party may prevail on a “claim,” but lose on another front, such as the 8 damages allowed. In American Nursery Products, the Washington Supreme Court upheld an 9 award of certain damages to the defendant/counter-claimant but found for the plaintiff on a 10 provision of the parties’ contract precluding incidental and consequential damages. The 11 Supreme Court held that since both parties prevailed on “major issues,” neither party qualified 12 as the prevailing party, and the Supreme Court declined to award attorneys’ fees. See 13 American Nursery Products, 115 Wn.2d at 234-35. Turning to the instant case, since both 14 parties have prevailed on “major issues” with respect to the contract claim—plaintiff 15 demonstrated a breach but failed to establish that she was the injured party—the Court declines 16 to award either party their attorneys’ fees. 17 18 19 20 IV. CONCLUSION For the foregoing reasons, the Court ORDERS that Defendants’ Motion for Attorneys’ Fees, Dkt. No. 97, is DENIED. DATED this 17th day of February, 2009. A 21 22 JAMES P. DONOHUE United States Magistrate Judge 23 24 25 26 ORDER PAGE - 8
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