Disputesuite, LLC v. Scoreinc.com
216 Cal. Rptr. 3d 109
| Cal. | 2017Background
- DisputeSuite.com licensed credit-repair software and referred customers to Scoreinc for services; parties had multiple written agreements governing commissions, exclusivity, sublicensing, and confidentiality.
- Two written agreements (Master Re-Seller and Cross‑Marketing) contained Florida forum‑selection clauses; DisputeSuite contended a separate End‑User Agreement provided Los Angeles forum, which Score disputed.
- DisputeSuite sued in Los Angeles for breach of contract, fraud, etc.; the trial court entered a preliminary injunction in DisputeSuite's favor.
- Score moved to dismiss for forum non conveniens based on the Florida forum clauses; the court granted the motion, stayed then dismissed the California action, and DisputeSuite refiled in Florida.
- Score moved for $84,640 in attorney fees under Civil Code § 1717 and a contractual fee clause; the trial court denied fees, finding no prevailing party because the contract claims remained unresolved and had been refiled in Florida.
- The Court of Appeal affirmed; the California Supreme Court granted review and affirmed, holding the trial court did not abuse its discretion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a defendant who obtains dismissal under a contractual forum‑selection clause is the "prevailing party" for § 1717 fee shifting | Denial: DisputeSuite argued the dismissal did not resolve contract claims and thus no prevailing party exists yet | Score argued a procedural victory (dismissal) in California makes it the prevailing party entitled to fees under § 1717 and the contract | The court held the dismissal that merely moves the dispute to another forum (and where plaintiff refiled) does not make defendant the prevailing party; trial court did not abuse discretion in denying fees |
| Whether § 1717 prevailing‑party determination must ignore continuation of litigation in another forum | DisputeSuite: the court may consider that litigation continues elsewhere when deciding if a party prevailed | Score: prevailing‑party determination should be made without considering possible refiling; a dismissal in California is a final California victory | The court held the trial court may consider continuation in another forum; it disapproved cases to the extent they required ignoring refiling possibilities |
| Whether a purely procedural win can ever justify § 1717 fees | DisputeSuite: procedural wins that do not dispose of contract claims should not warrant fees | Score: procedural victories (e.g., dismissal) can justify fees even if merits unresolved | The court clarified a procedural victory that finally disposes of the contract claims (e.g., dismissal with prejudice or refiling impossible) can support fees; but not here where claims continued in Florida |
| Whether equitable considerations can bar fees when party achieves unqualified contract victory | N/A | N/A (issue addressed via precedent) | The court reiterated Hsu: when a party obtains an unqualified victory on contract claims, equitable considerations unrelated to litigation success cannot be used to deny § 1717 fees |
Key Cases Cited
- Hsu v. Abbara, 9 Cal.4th 863 (trial court must compare parties' success on contract claims and determine prevailing party upon final resolution)
- Scott Co. v. Blount, Inc., 20 Cal.4th 1103 (trial court has discretion to award fees or find no prevailing party when results are mixed)
- Estate of Drummond, 149 Cal.App.4th 46 (interim forum victory does not constitute prevailing party where contract claims remain and refiling occurs)
- Frog Creek Partners, LLC v. Vance Brown, Inc., 206 Cal.App.4th 515 (fees go to the party who ultimately prevails on the contract, not to an opponent of an interim procedural step)
- Profit Concepts Management, Inc. v. Griffith, 162 Cal.App.4th 950 (disapproved in part) (held fees may be awarded after quash for lack of personal jurisdiction even if refiling is possible)
- PNEC Corp. v. Meyer, 190 Cal.App.4th 66 (disapproved in part) (awarded fees after forum non conveniens dismissal where refiling was speculative)
- Christensen v. Dewor Developments, 33 Cal.3d 778 (discussed fee entitlement where arbitration/right‑to‑arbitrate issues and waiver occurred)
- Lachkar v. Lachkar, 182 Cal.App.3d 641 (under earlier § 1717, prevailing party determination requires final disposition; interim arbitration order not a fee-qualifying final victory)