Suenos LLC v. Diane Goldman
699 F. App'x 688
| 9th Cir. | 2017Background
- Suenos LLC sued Diane Goldman for breach of contract and tortious interference over a failed condominium sale; district court granted summary judgment for Suenos on breach and for Goldman on tortious interference.
- A jury awarded Suenos far less in damages than it sought based on failure to mitigate; district court nonetheless awarded Suenos most of its requested attorneys’ fees under a contract clause awarding “reasonable” fees to the prevailing party.
- This Court previously affirmed the damages judgment but remanded for further consideration of the fee award; on remand the district court reinstated the original fee award.
- Goldman appealed the reinstated fee award, arguing (1) Suenos was not the prevailing party, (2) Suenos had no genuine obligation to pay fees because its lawyer had an ownership interest, (3) the fee amount was unreasonable given limited damages, and (4) Suenos was not entitled to costs.
- The Ninth Circuit affirmed: it found Suenos the prevailing party, held the engagement created a genuine fee obligation despite counsel’s interest, found Goldman waived the reasonableness challenge (and would deny it on the merits), and affirmed both taxable and contractual non‑taxable costs awards.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who is the prevailing party for fee award? | Suenos: it established breach of contract and is the successful party. | Goldman: limited damages mean Suenos is not the prevailing party. | Court: Suenos is the prevailing party; success on liability suffices even if recovery was reduced. |
| Does counsel’s ownership interest bar Suenos from recovering fees? | Suenos: engagement agreement created a genuine financial obligation to pay fees. | Goldman: counsel’s LLC interest meant Suenos had no real obligation to pay fees. | Court: No bar; the written engagement created a genuine obligation. |
| Is the fee amount unreasonable given small damages? | Suenos: fees are reasonable and contract allows prevailing‑party fees. | Goldman: fee award disproportionate to damages; should be reduced. | Court: Argument waived for failure to raise below; even on merits, district court did not abuse discretion. |
| Are taxable and non‑taxable costs recoverable? | Suenos: entitled to taxable costs under Rule 54(d) and contractual non‑taxable costs. | Goldman: challenged entitlement to costs. | Court: Affirmed award of both taxable and contractual non‑taxable costs. |
Key Cases Cited
- Berry v. 352 E. Virginia, LLC, 261 P.3d 784 (Ariz. Ct. App. 2011) (trial court discretion to designate prevailing party)
- Lee v. ING Inv. Mgmt., LLC, 377 P.3d 355 (Ariz. Ct. App. 2016) (party can be successful despite reduced recovery)
- Lisa v. Strom, 904 P.2d 1239 (Ariz. Ct. App. 1995) (engagement agreement can create genuine fee obligation)
- In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988 (9th Cir. 2010) (issues not raised below may be waived)
- Smith v. Marsh, 194 F.3d 1045 (9th Cir. 1999) (district court need not consider arguments never presented to it)
- Nolan v. Starlight Pines Homeowners Ass’n, 167 P.3d 1277 (Ariz. Ct. App. 2007) (opponent must present specific objections to fee reasonableness)
- McDowell Mountain Ranch Cmty. Ass’n, Inc. v. Simons, 165 P.3d 667 (Ariz. Ct. App. 2007) (burden on opponent to show fee request excessive)
- Harris v. Reserve Life Ins. Co., 762 P.2d 1334 (Ariz. Ct. App. 1988) (amount alone does not show district court abused discretion in fee award)