Can a party obtain attorney fees after winning a forum selection motion? Innerlight, Inc. v. The Matrix Group, LLC Explained

The Utah Court of Appeals recently addressed whether a party that successfully obtains dismissal based on a forum selection clause can recover attorney fees under a contractual provision in Innerlight, Inc. v. The Matrix Group, LLC.

Background and Facts
Innerlight and Matrix entered into an agreement containing both a forum selection clause requiring Florida venue and an attorney fees provision stating that the prevailing party in “any action” would be entitled to recover costs and fees. Despite this clause, Innerlight filed a declaratory judgment action in Utah seeking to invalidate the agreement. Matrix moved to dismiss for improper venue, but the district court denied the motion and granted Innerlight summary judgment. The Utah Supreme Court reversed, holding the agreement and forum selection clause were enforceable, and remanded for further proceedings.

Key Legal Issues
The central question was whether Matrix qualified as the “prevailing party” entitled to attorney fees after obtaining dismissal on forum selection grounds, even though the dismissal did not resolve the underlying dispute on the merits. The district court denied Matrix’s fee motion, concluding it lacked jurisdiction to award fees given the Florida venue requirement.

Court’s Analysis and Holding
The Court of Appeals reversed, emphasizing that contractual attorney fee provisions must be enforced according to their plain terms. The provision entitled the prevailing party to fees in “any action,” without limiting recovery to merits-based victories. Since Matrix successfully obtained dismissal of the Utah action through appeal, it prevailed in “this action” within the contract’s meaning. The court rejected any attempt to rewrite the provision to require resolution on the merits.

Practice Implications
This decision demonstrates the importance of precise drafting in attorney fee clauses. Parties seeking to limit fee recovery to merits-based victories must include such limitations explicitly. The concurring opinion noted that Florida law might require a final determination on the merits for fee awards, highlighting the significance of choice of law provisions in multi-jurisdictional disputes.