McNeil v. Symmetricom, Inc. CA6

Filed 4/12/16 McNeil v. Symmetricom, Inc. CA6 NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

MICHAEL E. MCNEIL et al., H041067 (Santa Cruz County Plaintiffs and Appellants, Super. Ct. No. CV165643)

v.

SYMMETRICOM, INC.,

Defendant and Respondent.

Plaintiffs Michael E. McNeil and Todd S. Glassey challenge the superior court’s order awarding defendant Symmetricom, Inc. $124,113 in attorney’s fees as the prevailing party on tort causes of action under a contractual attorney’s fees clause after plaintiffs voluntarily dismissed their action against defendant. Plaintiffs contend that the superior court’s order must be reversed because the court (1) failed “to give proper reasons” for the award, (2) found defendant to be the prevailing party even though plaintiffs had filed a new action against defendant in federal court, and (3) failed to consider plaintiffs’ financial condition. We reject plaintiffs’ contentions and affirm the court’s order.

I. Background In January 2011, plaintiffs filed a second amended complaint against defendant purporting to allege causes of action for rescission or reformation of a settlement agreement, breach of contract, conversion, and unjust enrichment. The settlement agreement, which was attached to the second amended complaint, contained a broad attorney’s fees clause providing that the “prevailing party” in any dispute arising out of the agreement would “be entitled to recover reasonable attorneys’ fees and other costs . . . .” Defendant filed an answer in July 2011. In October 2013, plaintiffs voluntarily dismissed their action without prejudice. At the same time, they filed an action in federal court against defendant purporting to allege causes of action for breach of a settlement agreement, unjust enrichment, tortious interference with prospective economic advantage, and declaratory relief. In December 2013, defendant filed a noticed motion seeking attorney’s fees of over $600,000, which it claimed it was entitled to as the prevailing party. Plaintiffs opposed the motion on the grounds that defendant was not the prevailing party and was seeking an unreasonable amount of fees. They asserted that they had dismissed this action and immediately filed an action in federal court making some of the same claims because these claims involved patents and therefore only the federal courts had jurisdiction to resolve these claims. Plaintiffs claimed that defendant’s fees motion was “premature.” Defendant responded that the tort claims in the dismissed action were not the same as the tort claims in the federal action and therefore it had prevailed on the tort claims in the dismissed action. It also asserted that state tort claims that were not renewed in the federal action were “the bulk of the tort claims.” The court found that defendant was the prevailing party on the tort causes of action in the second amended complaint. It rejected plaintiffs’ argument concerning the federal action. “I don’t agree that this Federal action would swallow up this State action.” The court expressly acknowledged that plaintiffs were asking it to consider their