National Surety Corp. v. Cadet Manufacturing Co.

MEMORANDUM *

Appellants CNA Commercial Insurance Company (CNA), Design Perfect Catering, Inc., and Farmers Insurance Exchange appeal from the district court’s order denying their motion for an award of attorney fees after they accepted Rule 68 offers of judgment made by appellee Cadet Manufacturing Company (Cadet). CNA also appeals from the district court’s denial of its motion for reconsideration.

Appellants contend that because the statute underlying their state law Consumer Protection Act (CPA) claims defines “costs” to include attorney fees, see Wash. Rev.Code § 19.86.090, and because the Rule 68 offers did not expressly indicate that they were inclusive of all costs and fees, they are automatically entitled to fee awards.

In opposition, Cadet argues that only fees which are “properly awardable” pursuant to the CPA may be included in a Rule 68 cost award. See Marek v. Chesny, 473 U.S. 1, 9 , 105 S.Ct. 3012 , 87 L.Ed.2d 1 (1985); Champion Produce, Inc. v. Ruby Robinson Co., 342 F.3d 1016, 1029 (9th Cir.2003). Because fees may only be awarded under that statute to prevailing plaintiffs, see Travis v. Wash. Horse Breeders Ass’n, 111 Wash.2d 396 , 759 P.2d 418 , 424 (1988),…

concurring.

I agree that the case must be reversed and remanded, but for a different reason. The plaintiffs are entitled to attorney’s fees only if they are deemed to be the prevailing party on their Washington Consumer Protection Act claim. The plaintiffs asserted various claims, only one of which — the WCPA claim — would entitle them to attorney’s fees as a species of costs. The district court, therefore, was on the right track when it sought to follow Sea Coast Foods, Inc. v. Lu-Mar Lobster & Shrimp, Inc., 260 F.3d 1054 (9th Cir.2001) and determine, whether in accepting the offer of judgment, the plaintiffs had prevailed on their Washington Consumer Protection Act claim.

However, in my opinion, the district court went astray when it ruled that the plaintiffs could not possibly have prevailed on the WCPA claim due to a bankruptcy court stipulation that only insured claims could be pursued. In deciding that the WCPA was not an insured claim, the district court relied solely on a self-serving letter from an insurance company’s lawyer denying coverage of that claim. The letter is an expression of the insurance company’s position, nothing more. It does not, in and of itself, prove…