In the United Stated District Court for the District of New Mexico, following proceedings before a magistrate, the court considered the parties’ opposing motions for attorney’s fees. The subcontract’s provision for attorneys’ fees provided as follows: “Should either party employ an attorney to institute suit or demand arbitration . . . the prevailing party shall be entitled to recover reasonable attorney’s fees, costs, charges and expenses expended and incurred therein.” The parties disputed which side was the prevailing party. The plaintiff had secured a judgment for $31,700, but the defendant had won on every issue at trial and successfully shown inconsistencies in the testimony of the plaintiff, undermining the plaintiff’s credibility. Thus, the issue presented to the court was how to determine, under the subcontract, which party actually prevailed at trial in order to properly allocate the award of attorney’s fees.
The court first ruled that the decision of both parties to cite only New Mexico law in their motions and briefs reflected their intent to modify the choice of law provision in the subcontract, which originally provided that Oklahoma law controlled interpretation of the subcontract. Considering the term “prevailing party” under New Mexico law, the court cited to Mayeux v. Winder, 131 P.3d 85, 96 (N.M. App. 2006) for the proposition that “the party who wins the lawsuit — that is, a plaintiff who recovers a judgment or a defendant who avoids an adverse judgment” is the “prevailing party.” The court noted, however, that designation of the “prevailing party” “need not be mechanic or formulaic” and “facts and circumstances of the case” should be considered when the designation is made, citing Hedicke v. Gunville, 62 P.3d 1217 (N.M. App. 2002).
Exercising the broad discretion accorded to the court under New Mexico law, the court determined that the defendant was the “prevailing party.” In reaching its decision, the court essentially conducted an analysis of the equities. The court’s opinion placed significance on the fact that the ultimate award of $31,700 was closer to the $30,000 defendant originally proposed to pay plaintiff under the subcontract than the amount sought by plaintiff at trial. The court noted that the defendant made efforts to pursue mediation prior to litigation, while the plaintiff rebuffed those efforts and was uncooperative with the defendant in resolving the matter before trial. Finally, the court emphasized that it found the plaintiff’s testimony to be “wholly lacking in credibility” and adopted many of the proposed findings of fact and conclusions of law offered by the defendant. For the court, these factors showed that the defendant had won on “the heart of the case,” even if the other side received a money judgment greater than the amount offered pre-trial. Consequently, the defendant received an award of the full amount of attorney’s fees requested. U.S. ex rel. Silva’s Excavation, Inc. v. Jim Cooley Const., Inc., 2008 WL 3919030 (D.N.M. Aug. 6, 2008).