Vicari v. Lake Havasu City (CA1 8/4/09)

The issue here is whether a defendant can get attorney’s fees when a plaintiff voluntarily dismisses a case. The opinion says “yes,” though for reasons less than entirely convincing and based on a situation clouded a bit by being messed up in the trial court.

Vicari was a landscaping subcontractor on a project for the City. The general contractor allegedly didn’t pay it, whereupon it sued the City. The City filed a motion called Motion to Dismiss, citing the case that says you can’t do that, though it contained matters outside the pleadings and also requested attorneys fees. Vicari responded with a notice of voluntary dismissal under Rule 41(a). The court sent out a minute entry acknowledging the notice and saying that it would sign a written order “upon presentation.”

About a week later (someone at the court having perhaps in the interim actually read the Rule, thereby gaining that ever-dangerous little knowledge) the trial court decided that the Motion to Dismiss was properly for summary judgment and therefore the case couldn’t be dismissed voluntarily (that’s the rule – no voluntary dismissal after an Answer or Motion for Summary Judgment). The court then sent out what sounds like one of those plaintive, what-do-you-want-me-to-do minute entries (almost always a mistake), asking the City whether it wanted to accept the withdrawal or get a ruling on its motion. The City, with typical government grace, said that it wanted both — the dismissal Vicari wanted and the fees it wanted. Vicari, equally gracefully but less logically, responded by asking for dismissal and his own attorney’s fees.

The court ruled on the motion as one for summary judgment and granted the City attorney’s fees. When Vicari moved for reconsideration, the trial judge decided that maybe it wasn’t a motion for summary judgment after all and that Vicari’s dismissal had been timely and it let the City file a response. The next minute entry basically said “whatever”: the City had to file a motion and so should get costs and fees regardless of what the motion was.

Vicari appealed the award of attorney’s fees ($1,000), arguing that the court had no “jurisdiction” to award fees, which is two mistakes in one.

The Court of Appeals first explained that the issue is not jurisdictional.

The court next agreed with Vicari and earlier cases that the filing of a Rule 41(a) notice is self-executing; no further order was necessary. What about the motion? The court ruled, though it didn’t put it this way, that that portion of Rule 12(b) is not self-executing. Because the court has the power to disregard matters outside the pleadings, until it considers them a motion to dismiss is not “converted” into a motion for summary judgment. So, since only a motion to dismiss was pending at the time of the Rule 41 notice, the case was dismissed then.

And so, halfway through the opinion, the court finally reached the issue. Rule 41 doesn’t mention attorneys fees, so the court looked at the federal rule, which is essentially identical, which also doesn’t mention attorney’s fees, and which has been held in different cases both to allow and to prohibit them. The court put great weight on the fact that the federal rule was designed to restrict the common-law rule allowing voluntary dismissal until the jury retired, even though had the intent of the drafters been to permit fees then they could easily have said so. In any event, based on that rock-solid foundation the court summarily concluded that Vicari’s voluntary dismissal did not prevent the court from awarding fees.

The court then reviewed the appropriateness of the award. This took some time because the trial court didn’t bother to document the basis for it except to say that the City should not have had to incur them. The court first ruled that fees could not be awarded under 12-349 – harassment, groundless, and not made in good faith –  because such an award must be based on a specific finding of those things. But the action arose out of contract and under the facts the court couldn’t “say that the superior court erred” by awarding fees.

The court denied the City’s request for fees on appeal.

We have to wonder how much it cost both sides to argue about $1000 in attorneys fees.