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CKH Family Limited Partnership v. Holt Homes, Inc.

United States District Court, D. Oregon

March 29, 2018

CKH FAMILY LIMITED PARTNERSHIP, et al., Plaintiffs,
v.
HOLT HOMES, INC., et al., Defendants.

          Leslie S. Johnson, Samuels Yoelin Kantor LLP, Of Attorneys for Plaintiffs.

          Bradley W. Andersen and Phillip J. Haberthur, Landerholm, PS, Of Attorneys for Defendant.

          OPINION AND ORDER ON ATTORNEY'S FEES

          Michael H. Simon United States District Judge.

         In 2005, Plaintiffs Waldemar Maya, Van Shaw, and CKH Family Limited Partnership invested a total of $1.4 million in a real estate development plan orchestrated by Defendant Greg Kubicek. In 2017, Plaintiffs sued Kubicek and three entities associated with Kubicek for: (1) rescission under Oregon Revised Statutes (“ORS”) § 59.115(2); (2) misrepresentation; (3) breach of fiduciary duty by self-dealing; and (4) aiding and abetting an unlawful sale of securities in violation of ORS § 59.115(3). Plaintiffs and Defendants cross-moved for summary judgment. In its Opinion and Order on January 29, 2018 (ECF 34), the Court granted Defendants' motion for summary judgment and dismissed Plaintiffs' claims as untimely. Before the Court is Defendants' motion for attorney's fees and costs.

         STANDARDS

         “In an action where a federal district court exercises subject matter jurisdiction over a state law claim, so long as state law does not contradict a valid federal statute, state law denying the right to attorney's fees or giving a right thereto, which reflects a substantial policy of the state, should be followed.” Avery v. First Resolution Mgmt. Corp., 568 F.3d 1018, 1023 (9th Cir. 2009) (citation and quotation marks omitted).

         Plaintiffs brought claims under the Oregon Securities Laws, codified in Oregon Revised Statutes (“ORS”) § 59.115. The parties do not dispute that § 59.115(10), which provides that “the court may award reasonable attorney fees to the prevailing party in an action under [§ 59.115], ” gives the Court discretion to grant reasonable attorney's fees to Defendants in this case.

         In addition, Defendants Greg Kubicek, Clackamas Homes, Inc. (“CHI”), and MGD/CCP Acquisition LLC (“the Company”) are entitled to attorney's fees under the Operating Agreement at issue in this case. Under Oregon law, a prevailing party shall recover reasonable attorney's fees and costs incurred in enforcing the provisions of a contract when the contract so requires.

         ORS § 20.096(1). Oregon law provides:

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.

Id. The Operating Agreement provides:

In the event that any dispute between the Company and the Members or among the Members should result in litigation or arbitration, the prevailing party shall be entitled to recover from the other party all reasonable fees, costs and expenses of enforcing any right of the prevailing party, including without limitation, reasonable attorneys' fees and expenses.

ECF 17 at 152. Because Kubicek, CHI, and the Company were all parties to the agreement, they are entitled to reasonable fees, costs, and expenses. Defendants argue that it is impossible to separate time spent defending Holt Homes, Inc. (“Holt Homes”), the remaining defendant, from time spent defending the other three. The Court agrees. Further, Holt Homes is separately entitled to attorney's fees under ORS § 59.110(10).

         After concluding that a prevailing party shall recover reasonable attorney's fees, a court applying Oregon law must consider the specific factors set forth in ORS § 20.075 to determine the amount of attorney's fees to be awarded. The specific factors set forth in ORS § 20.075(1) are:

(a) The conduct of the parties in the transactions or occurrences that gave rise to the litigation, including any conduct of a party that was reckless, willful, malicious, in bad faith or illegal.
(b) The objective reasonableness of the claims and defenses asserted by the parties.
(c) The extent to which an award of an attorney fee in the case would deter others from asserting good faith claims or defenses in similar cases.
(d) The extent to which an award of an attorney fee in the case would deter others from asserting meritless claims and defenses.
(e) The objective reasonableness of the parties and the diligence of the parties and their attorneys during the proceedings.
(f) The objective reasonableness of the parties and the diligence of the parties in pursuing ...

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