James Ray Johnson v. STEVEN L. MYERS, DBA Myers Engineering International, Inc.

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JAMES RAY JOHNSON; TERRENCE
SIMS; HEATHER SIMS; JOSLYN
JOHNSON-BENNING; WILLIE
BENNING; RICHARD GADDES;
ROBERT HARTENSTEIN; TODD D.
SEVERIN; HANS P. SCHROEDER;
MICHAEL BILICH; DEB
HARTENSTEIN; LANCE GODDARD;
JOAN GODDARD; MICHAEL
MOFFETT; MARIAN MOFFETT;
JAMES M. ROSS; WILLIAM
SCHNEIDER; VALERIE SCHNEIDER;
STEPHEN SCHNEIDER,
Plaintiffs - Appellees,
v.
STEVEN L. MYERS, DBA Myers
Engineering International, Inc.; MYERS
ENGINEERING INTERNATIONAL INC,
Defendants - Appellants.
No. 12-16428
D.C. No. 3:11-cv-00092-WHA
MEMORANDUM*
Appeal from the United States District Court
for the Northern District of California
William Alsup, District Judge, Presiding
FILED
MAR 07 2014
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.

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Argued and Submitted February 13, 2014
San Francisco, California
Before: KOZINSKI, Chief Judge, and O’SCANNLAIN and MURGUIA, Circuit
Judges.
James Johnson and eighteen other plaintiffs (collectively, “Johnson”) sued
Steven Myers and Myers Engineering International, Inc. (collectively, “Myers”)
for, among other things, breach of contract. The district court dismissed the
original complaint and denied leave to file an amended complaint. Myers moved
for an award of attorneys’ fees pursuant to California Civil Code § 1717, but the
district court denied the motion on the ground that Myers was not the prevailing
party. Myers appealed.
Under California law, the prevailing party is “the party who recovered a
greater relief in the action on the contract.” Cal. Civil Code § 1717(b)(1).
“[W]hen a defendant defeats recovery by the plaintiff on the only contract claim in
the action, the defendant is the party prevailing on the contract under section 1717
as a matter of law.” Hsu v. Abbara, 891 P.2d 804, 812 (Cal. 1995). Because
Myers ensured that Johnson would not recover on the breach of contract claim, the
district court erred in refusing to rule that Myers was the prevailing party.
That the suit was dismissed based on pre-trial motions rather than litigated
on the merits is irrelevant. See Profit Concepts Mgmt., Inc. v. Griffith, 76 Cal.
2

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Rptr. 3d 396, 400 (Ct. App. 2008); Elms v. Builders Disbursements, Inc., 283 Cal.
Rptr. 515, 518 (Ct. App. 1991). California case law does not suggest that, for these
purposes, shareholder derivative suits are materially distinguishable from other
cases. See Donner Mgmt. Co. v. Schaffer, 48 Cal. Rptr. 3d 534, 543 (Ct. App.
2006).
REVERSED and REMANDED.
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