Who Knows Why Some Parties Appeal?

Sometimes a decision just makes no sense, at least to someone looking at it from the outside. Such is the case with Profit Concepts Management, Inc. v. Griffith, case no. G039077 (4th Dist. May 5, 2008).

Oh, the merits make sense. California-based Profit Concepts sued former employee Griffith in California under an employment agreement that contained an attorney fee provision. But Griffith lived in Oklahoma and successfully moved to quash service for lack of personal jurisdiction. The trial court awarded Griffith contractual attorney fees as the prevailing party.

Reasonable enough. The court rejects Profit Concept’s argument that because the lawsuit, which it had resumed in Oklahoma, left contract issues pending resolution, Griffith could not be considered the prevailing party under Civil Code section 1717. Griffith clearly prevailed on the claims in California, and that is all the award was concerned with.

The part that’s hard to understand is the reasoning employed by Profit Concepts in pursuing the appeal, both legally and practically.

Legally, it’s hard to understand why Profit Concepts cited case authority interpreting an older version of Civil Code section 1717 that had changed in a very material respect. Specifically, while the former statute defined a “prevailing party” in terms of obtaining a final judgment, the current version defines prevailing party as, among others, a party that obtains a dismissal. That’s a pretty clear and relevant distinction.

The practical part is just as hard, if not harder, to understand. The attorney fees awarded were barely $3400. What made this appeal practical?

2 Comments

  1. Two things may help explain this (and I’m just guessing here). First, we can assume that Profit Concepts knew what it was doing when it appealed. What it was looking for was to extend the pendency of its California dispute with Griffith for some reason — it needed time. Time to complete a deal with a third party that Griffith was now competing for, possibly. Or prolong the fight to require Griffith to pay his attorneys a bunch more money, to wear him down regardless of the merits. Second, we can discard the assumption that Profit Concepts knew what it was doing and instead that it acted either on the basis of uninformed legal advice or out of emotion.

  2. Transplanted,

    Well, that would seem to cover most of the bases! One other guess is that Profit Concepts might have been afraid that the fee determination would have preclusive effect on the Oklahoma action, i.e., that the Oklahoma court might dismiss on the ground that Griffith had already been determined to be the prevailing party. In fact, this “loss” might be exactly what they were looking for: an appellate opinion that explained the limited meaning of “prevailing,” so as to foreclose preclusive effect.

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