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Geotechnical News • September 2013
www.geotechnicalnews.com
ASFE NEWS
multiple parties, only one of which
was successful as to Qore, the district
court’s fee award should be vacated
because Wal-Mart failed to present
competent evidence by which to allo-
cate its legal fees among successful
and unsuccessful claims as required
by Mississippi law. Specifically, Qore
complains that the district court’s
$810,000 fee award erroneously reim-
burses Wal-Mart for its attorney’s fees
incurred in pursuit of claims:
• against SSW and Sain (which
the jury found not liable on any
claim),
• for damages that the jury later
attributed to Wal-Mart’s own
negligence (on the damage-to-the-
parking-lot claim),
• on the damage-to-the-parking-lot
and diminution-in-building-value
claims (for which the jury found
Qore not liable), and
• for negligent design under the geo-
technical services contract (which
explicitly barred the recovery of
attorney’s fees).
Qore maintains that Wal-Mart’s recov-
ery is limited to those fees incurred
in prosecuting the single claim upon
which it prevailed against Qore.
Here, the attorney’s fee provision in
the testing and inspection contract
entitled Wal-Mart to reimbursement
for those attorney’s fees “caused by
any negligent act or omission” on the
part of Qore in performing work under
the contract. Qore’s duty to reimburse
Wal-Mart for its reasonable attorney’s
fees was limited accordingly to those
fees proximately and legally “caused
by” Qore’s negligence, and the matter
of causation could only be addressed
once the jury made findings on the
issue of Qore’s negligence. Until
then, Qore’s legal liability remained
latent for indemnification purposes.
Because Wal-Mart’s indemnifica-
tion rights were derivative of Qore’s
negligent acts or omissions, i.e., the
fault allocated to Qore on the building-
repair claim, Qore is only liable for the
reasonable attorney’s fees Wal-Mart
incurred in enforcing those rights. All
other fees were not “caused by” Qore
within the meaning of the testing and
inspection contract, and could not be
awarded thereunder. Wal-Mart’s recov-
ery should have been limited to those
attorney’s fees incurred in proving
Qore’s liability on the building-repair
claim.
In ruling on Wal-Mart’s motion for
attorney’s fees, the district court
opined that “[o]n the surface it
appeared Wal-Mart had overreached
in bringing so many claims against
three different parties. However,
deeper reflection shows that a small
claim against Qore could not have
been brought without this larger
production.” The court then explained
why, under our decision in
Cobb v.
Miller,
a reduction in fees on account
of Wal-Mart’s several unsuccessful
claims was not required. This case
differs from
Cobb
in meaningful ways,
however.
First, Qore was found not liable on
two of three claims submitted to the
jury. Therefore, the relevant question
is whether these claims were inextri-
cably tied to the one claim for which
Qore was found liable, such that the
district court was within its discre-
tion in choosing not to partition. We
find that Wal-Mart’s attorney’s fees
could have been easily segregated
along two lines: those fees incurred in
proving liability relating to planning
and design, and those fees dedicated
to proving liability relating to con-
struction. Only Sain and Qore were
involved in planning and designing
the Starkville store. The jury found
Sain not liable on any claim in this
case, and Qore’s work at the planning
and design stage was performed under
the geotechnical services contract, for
which the jury also found no fault.
By comparison, the jury’s liability
findings related to the store’s construc-
tion, where SSW and Qore were the
only two defendants involved. Qore’s
work at this stage of the project was,
of course, governed by the testing and
inspection contract.
Second,
Cobb
involved a fee award
under the Civil Rights Attorney’s Fees
Awards Act, which authorizes courts
to award reasonable attorney’s fees
to prevailing parties in any action to
enforce provisions of the federal civil
rights laws.
Cobb
has no application in
this private claim for attorney’s fees.
The district court’s reliance on
Cobb
was error; the court’s award cannot
stand.
Having found that the testing and
inspection contract was the only basis
for an award of attorney’s fees, we
conclude that the district court’s fee
award was an abuse of discretion. We
VACATE the award of attorney’s fees
and REMAND for further proceedings
consistent with this opinion.
Observations:
“Qore won. The appro-
priateness of its indemnity language
was vindicated.”
Wrong
. Qore lost.
We can only guess at the amount of
money it had to spend in defense and
appeal, and the value of the billable
time lost to discovery and related ele-
ments of litigation, including aggra-
vation, frustration, and anxiety. And
as for the wording of its indemnity,
hindsight (always 20/20) reveals it
was not sufficient to discourage a chal-
lenge. Once again, it may come down
to a failure to define terms, either by
virtue of a separate contract section
conveying definitions (long an ASFE
recommendation) or by virtue of a par-
enthetical definition, as of “attorney’s
fees,” to define what they do and do
not comprise.
How well do you define such terms
in the agreements you offer and
accept? You might want to have them
reviewed and, possibly, revised. As
this case demonstrates so well, the
devil is in the details. It also dem-
onstrates something else ASFE has
warned about repeatedly over the
years: Always assume that a contract’s
harshest provisions will be enforced.