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Zelpro Assembly Solutions LLC v. Stingl Products LLC

United States District Court, D. Oregon, Portland Division

February 20, 2014

ZELPRO ASSEMBLY SOLUTIONS LLC, an Oregon limited liability company, CIRCUIT MANUFACTURING, INC., an Oregon corporation, and CALVIN RASMUSSEN, an individual, Plaintiffs,
v.
STINGL PRODUCTS LLC, a Virginia limited liability company, DAVID STINGL, an individual, and TONY SIRIANNI, an individual. Defendants, NAC GROUP, INC., a Florida corporation, Defendant-intervenor.

OPINION AND ORDER

MICHAEL W. MOSMAN, District Judge.

Having prevailed on their motion for summary judgment [142], Defendants David Stingl and Tony Sirianni (collectively, the "Individual Defendants") now move this Court for $40, 088.25 in attorney fees pursuant to Oregon law and the terms of a 2005 contract. (Mot. Att'y Fees [157] at 2.) Plaintiffs Zelpro Assembly Solutions ("Zelpro") and Calvin Rasmussen (collectively, "Plaintiffs") object to the motion, contending that the 2005 contract does not govern the present dispute. (Pls.' Obj. [160].) Because I find that the 2005 contract was not the contract at issue in the underlying dispute, and no other contractual provision in the record provides for an award of attorney fees to the prevailing party on a breach of contract claim, Defendants' Motion for Attorney Fees [157] is DENIED.

BACKGROUND

In January 2012, Plaintiffs filed an amended complaint against Stingl Products ("Stingl") and the Individual Defendants, advancing four claims for relief: breach of contract, goods sold and delivered, account stated, and fraud and misrepresentation. (Third Am. Compl. [60].) Magistrate Judge Stewart recommended granting Plaintiffs' partial motion for summary judgment against Stingl on the first three claims. (F&R [83].) I adopted Judge Stewart's Findings and Recommendation, finding Stingl liable for breach of contract, goods sold and delivered, and account stated. (Op. and Order [87].) Plaintiffs continued to press their claims against the Individual Defendants, but on December 17, 2013, I granted the Individual Defendants' motion for summary judgment on all of Plaintiffs' claims, finding that Plaintiffs had failed to present a genuine issue of fact that could support piercing the corporate veil. (J. [156].)

LEGAL STANDARD

In diversity cases, attorney fees are governed by state law. See Oregon Realty Co. v. Greenwich Ins. Co., No. 12-200, 2013 WL 3287092, at *1 (D. Or. June 28, 2013). The Individual Defendants seek attorney fees pursuant to Or. Rev. Stat. §§ 20.083 and 20.096. (Mot. Att'y Fees [157] at 2; Mem. in Support [158] at 3-4.)

Or. Rev. Stat. § 20.083 provides, in relevant part: "A prevailing party in a civil action relating to an express or implied contract is entitled to an award of attorney fees that is authorized by the terms of the contract or by statute[.]" Further:

In any action or suit in which a claim is made based on a contract that specifically provides that attorney fees and costs incurred to enforce the provisions of the contract shall be awarded to one of the parties, the party that prevails on the claim shall be entitled to reasonable attorney fees in addition to costs and disbursements, without regard to whether the prevailing party is the party specified in the contract and without regard to whether the prevailing party is a party to the contract.

Or. Rev. Stat. § 20.096(1) (emphasis added).

DISCUSSION

I. Individual Defendants' Motion for Attorney Fees

The Individual Defendants argue that, as contemplated by Or. Rev. Stat. §§ 20.083 and 20.096, a dispute resolution clause[1] in the 2005 contract between the parties specifically provided for attorney fees to the prevailing party in a dispute. Thus, as the prevailing party in the lawsuit, they are "entitled to reasonable attorney fees." (Mem. in Support [158] at 2.)

Plaintiffs contend that the two purchase orders underlying the instant lawsuit were made long after the 2005 contract was completed, making the terms of that contract inoperable. (Pls.' Obj. [160] at 2.) Plaintiffs point to a letter, dated January 11, 2007, which states that any future purchase orders would require the cancellation of the then-operative contract. [ Id. at 3; Rasmussen Decl. [162-1] at 10.) Stingl then made two purchase orders in the next two years (the orders at issue in the suit), evidencing their agreement with the cancellation of the 2005 contract. Id. Plaintiffs represent that these later purchase orders were made without a formal contract, because Defendant Tony Sirianni "tried to avoid signing contracts and or [ sic ] communicate in writing." (Rasmussen Decl. [162] at 2.) Thus, "the shipment of these shipments [ sic ] was not subject to a contract having an attorney fees provision, " and any award of attorney fees to the Individual Defendants is improper. (Pls.' Obj. [160] at 4.)

The Individual Defendants counter that the 2005 contract governed all subsequent purchase orders, and the contract was never cancelled. (Defs.' Reply [163] at 2.) Finally, the Individual Defendants declare that Stingl's insurance carrier required the company to maintain a production contract with its suppliers (such as Zelpro), and the business relationship between the Plaintiffs and Stingl could not have been based on ...


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