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United States of America For the Use and Benefit of Ymc, Inc., An v. Insurance Company of the West

July 9, 2011

UNITED STATES OF AMERICA FOR THE USE AND BENEFIT OF YMC, INC., AN
IDAHO CORPORATION, PLAINTIFF,
v.
INSURANCE COMPANY OF THE WEST, A CALIFORNIA CORPORATION; AND
EAGLE ROCK TIMBER, INC., AN IDAHO CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Honorable B. Lynn Winmill Chief U. S. District Judge

MEMORANDUM DECISION AND ORDER

INTRODUCTION

The Court has before it YMC's motion for post-judgment attorneys' fees and costs. (Dkt. 75). For the reasons stated herein, the motion is denied.

FACTUAL AND PROCEDURAL BACKGROUND

YMC's initial complaint in this matter, filed on October 23, 2009 against Insurance Company of the West ("ICW"), alleged that ICW, as provider of a surety bond under the Miller Act (40 U.S.C. §§ 3131 et seq.), owed YMC $711,419.00 for labor, materials, and services, resulting from Eagle Rock Timber's breach of a subcontract with YMC. Complaint, Dkt. 1 at ¶¶ 5-15. YMC also sought attorneys' fees under Idaho Code §§ 12-120 and 12-123. Id. at ¶ 15. After Eagle Rock intervened, YMC filed its First Amended Complaint ("FAC"), adding a breach of contract claim against Eagle Rock. First Amended Complaint, Dkt. 31 at ¶ 6-11. YMC reiterated its claim for attorneys' fees under Idaho law.

After mediation, YMC accepted the defendants' offer of judgment for the full amount sought. The Court entered judgment on February 18, 2011. Dkt. 68. YMC then moved for post-judgment attorneys' fees from Eagle Rock in the amount of $13.757.16, and post-judgment costs from both parties in the amount of $307.65. Dkt. 75.

DISCUSSION

Federal Rule of Civil Procedure 69(a) governs the procedure that applies to the enforcement of a money judgment in federal court. Carnes v. Zamani, 488 F.3d 1057, 1059 (9th Cir. 2007). Rule 69(a) applies to a motion for post-judgment attorneys' fees. Id. Rule 69(a) requires a federal court to apply state law to "proceedings supplementary to and in aid of a judgment" unless there is a federal statute that applies. Id. at 1060. Because there is no applicable federal statute granting fees, Idaho law applies. Id. Under Idaho law, a party who is entitled to reasonable attorney's fees and costs in the underlying action is also entitled to reasonable post-judgment attorneys' fees and costs incurred in attempting to collect on the judgment. I.C. § 12-120(5).

YMC asserts two causes of action in the FAC: (1) a breach of contract claim against Eagle Rock, and (2) a Miller Act surety claim against ICW. This Court had original jurisdiction over the Miller Act claim, 28 U.S.C. § 1331, and YMC asserts that the Court exercised supplemental jurisdiction, under 28 U.S.C. § 1367, over what it argues was a state law breach of contract claim. The Defendants assert that because YMC never pleaded supplemental jurisdiction in its pleadings, choosing to rely solely upon the Miller Act to assert jurisdiction, it did not raise a state law claim independent of the Miller Act claim. This distinction is significant because the Miller Act generally does not allow for recovery of attorneys' fees, United States ex rel. Reed v. Callahan, 884 F.2d 1180, 1185 (9th Cir. 1989), cert. denied, 493 U.S. 1094 (1990), and YMC does not seek attorneys' fees from ICW on its Miller Act claim.

In the FAC, YMC explicitly asserted jurisdiction on the basis of the Miller Act alone. The question is thus whether YMC's breach of contract claim against Eagle Rock should be presumed by this Court to have implicitly arisen under state law and not the Miller Act.

Eagle Rock argues that YMC cannot rely on its facial characterization of its breach of contract claim as one of state law and cites United States ex rel. Leno v. Summit Construction Co., 892 F.2d 788 (9th Cir. 1989), in support. In Leno, a subcontractor asserted breach of contract and quantum meruit claims against a general contractor. Both claims were "brought pursuant to the Miller Act." Id. at 791. Stymied by the Miller Act's prohibition against attorneys' fees, Leno argued on appeal that the claims were based on pendant state jurisdiction and not the Miller Act. Id. The Ninth Circuit affirmed the district court's denial of attorneys' fees, finding that "Leno's claims arose under the Miller Act." Id. "[U]nless there is a separate state claim at the trial level attorneys' fees are not available in a Miller Act suit even when state law provides for such an award."

Id.

YMC argues that two factors distinguish the present matter from Leno: (1) the Leno plaintiff affirmatively asserted that both claims were brought pursuant to the Miller Act and the Leno court erred in holding that breach of contract and quantum meruit claims may be brought under the Miller Act, and (2) the Leno plaintiff, as noted by the Ninth Circuit, failed to mention Idaho Code ...


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