Charlotte B Milliner v. Mutual Securities, Inc.

Background

Charlotte B. Milliner and Joann Brem filed a putative class action based on their brokerage agreement with Mutual Securities, Inc. The parties signed a written settlement agreement on June 1, 2018, and the case was dismissed on September 11, 2018.

In April 2019, Mutual Securities moved to enforce the settlement agreement and a protective order. It argued that Milliner, Brem, and their lawyer, David Sturgeon-Garcia, had breached the settlement agreement in three ways: by attaching confidential case materials to a Financial Industry Regulatory Authority claim filed for another client; by attaching the settlement agreement to that claim; and by failing to dismiss Milliner's own claim against Mutual Securities.

The court previously ruled that using the case materials did not violate the settlement agreement's confidentiality provision. It later ruled that Mutual Securities had not shown that Milliner or Brem personally breached the settlement agreement, or that Sturgeon-Garcia was bound by its confidentiality provision. But the court had ordered Sturgeon-Garcia to withdraw the settlement agreement from the other client's claim and had ordered Milliner to dismiss her claim against Mutual Securities.

Fee Motions and Legal Standard

The settlement agreement provided for reasonable attorneys' fees and costs incurred in enforcing it to the party that prevailed. The parties also relied on California Civil Code section 1717. Under that statute, a prevailing party generally is the party that obtained greater relief on the contract. A court may find that neither party prevailed when both sides achieved some success and neither obtained a simple, complete victory.

The plaintiffs argued that Mutual Securities had lost the enforcement motion and that they therefore were entitled to fees. Mutual Securities argued that it was the prevailing party because it obtained the two orders requiring withdrawal of the settlement agreement and dismissal of Milliner's claim.

Court's Analysis

The court found that the results were mixed. The plaintiffs prevailed on the first issue because the court found that submitting the case materials did not violate the settlement agreement. On the second issue, Mutual Securities did not establish a breach by the plaintiffs or Sturgeon-Garcia, but it did obtain the order requiring Sturgeon-Garcia to withdraw the settlement agreement. On the third issue, the court found that Milliner's failure to dismiss her claim did not violate the exact wording of the settlement agreement, but it nonetheless ordered her to dismiss the claim. The court concluded that Mutual Securities achieved its litigation objective on that issue.

Because each side achieved some results and neither side obtained a simple, unqualified win, the court found that there was no prevailing party under section 1717(b)(1). It therefore declined to award attorneys' fees to either side.

Disposition

The court denied the plaintiffs' motion for attorneys' fees and denied Mutual Securities' motion for attorneys' fees. The opinion's signature block is not sufficiently clear to identify the judge by name.