Premier Floor Care, Inc. v. Albertsons Companies, Inc.

Background

Premier Floor Care, Inc. sued Albertsons Companies, Inc. and Safeway, Inc., which the opinion collectively calls “Safeway.” Safeway had hired Premier to clean floors in certain Northern California stores for many years, but ended that relationship after Premier was not selected through Safeway’s 2017 request-for-proposal process. Premier alleged that a local union pressured Safeway to use another vendor, King.

Premier’s original complaint asserted fraud, breach of contract and the implied covenant, civil conspiracy, and a claim under California Business and Professions Code section 17200. Premier later dropped the fraud claim but continued pursuing the other claims based on the same factual allegations. In July 2024, the court granted Safeway’s motion for summary judgment in its entirety and dismissed Premier’s claims. Premier appealed that judgment to the U.S. Court of Appeals for the Ninth Circuit.

This order addressed only Safeway’s separate motion for attorney fees under the 2015 Master Services Agreement and California law. The court expressly did not decide Safeway’s separate sanctions motion.

Contract’s Fee Provision

The 2015 Master Services Agreement provided that the prevailing party in an arbitration or court action or proceeding would receive reasonable attorney fees, costs, and expert-witness fees. The court interpreted the provision as applying only to a case or claim “arising under” that agreement, an interpretation accepted by both parties.

Breach-of-Contract Claim

The court held that Premier’s breach-of-contract claim arose under the 2015 agreement. Premier had expressly alleged that Safeway breached that agreement by terminating it. The court rejected Premier’s argument that the claim was really about Premier’s failure to obtain a new contract through the 2017 bidding process. The court explained that Premier had pleaded a claim based on termination of the 2015 agreement, and that Safeway’s reason for the alleged breach did not determine whether the claim arose under that agreement.

Because Safeway prevailed on the breach-of-contract claim at summary judgment, the court held that Safeway was entitled to attorney fees related to that claim.

Fraud and Civil-Conspiracy Claims

The court held that the fraud and civil-conspiracy claims did not arise under the 2015 agreement. Those claims concerned the fairness of the 2017 bidding process, which the court found was independent of the services relationship governed by the 2015 agreement. The 2017 process was open to vendors that were not parties to the 2015 agreement, and the court found that the agreement’s connection to the bidding process was insufficient to bring the tort claims within the fee provision.

The court also rejected Safeway’s argument that the tort claims were inseparably connected to the contract claim. Safeway did not need to defend the fairness of the bidding process to defeat the contract claim; it only needed to rely on the 2017 request-for-proposal provision allowing it to terminate the 2015 agreement after Premier responded to the proposal.

Amount of Fees and Disposition

Safeway requested $578,077 for fees incurred litigating the entire case, but it did not separately identify the fees attributable to the breach-of-contract claim. Premier estimated that Safeway incurred about $8,815 defending that claim. The court accepted that calculation and awarded Safeway $8,815.

Judge Edward Chen therefore granted in part and denied in part Safeway’s motion for attorney fees. Safeway received fees only for Premier’s breach-of-contract claim; the court awarded no fees for the other claims. The order disposed of Docket No. 88. The separate sanctions motion remained pending, with a hearing set for January 16, 2025.