Brown v. Brown-Thill

• Decision Date: 19 August 2014
• Docket Number: No. WD 76778.,WD 76778.
• Citation: 437 S.W.3d 344
• Parties: Richard BROWN, et al., Respondents, v. Susan BROWN–THILL, Appellant.
• Court: Missouri Court of Appeals

437 S.W.3d 344

Richard BROWN, et al., Respondents,

v.Susan BROWN–THILL, Appellant.

No. WD 76778.

Missouri Court of Appeals,

Western District.

April 29, 2014.

Motion for Rehearing and/or Transfer to Supreme Court Denied June 24, 2014.

Application for Transfer Denied Aug. 19, 2014.

Joel B. Laner, Kansas City, MO, for appellant.

Catherine R. McLeod and George A. Barton, Kansas City, MO, for respondent.

Before Division Two: VICTOR C. HOWARD, P.J., and ALOK AHUJA and ANTHONY REX GABBERT, JJ.

ALOK AHUJA, Judge.

Susan Brown–Thill appeals the circuit court's denial of her request to recover the attorney's fees and costs she incurred in defending against Respondent Richard Brown's claims in this litigation. Because we conclude that Brown–Thill was entitled to recover her attorney's fees from Brown under a contract between the parties, we reverse, and remand to the circuit court to determine the amount of Brown–Thill's recoverable fees.

Factual Background

Brown–Thill and Brown are the only two children of Eugene D. Brown and Saurine L. Brown, both of whom are deceased. Brown and Brown–Thill received a substantial inheritance from their parents. As a result, Brown and Brown–Thill are jointly involved in the management of a number of trusts and business entities.

Brown and Brown–Thill have had ongoing difficulties interacting in connection with financial and business matters. They entered into an Arbitration Agreement on March 3, 2010, to resolve pending litigation and facilitate the resolution of their present and future disputes. Under the Arbitration Agreement, Brown and Brown–Thill agreed to confidential, binding arbitration of

[a]ll existing and future disputes and controversies between the parties, whether in their individual capacities, their capacities as co-beneficiaries and/or co-trustees of the Eugene D. Brown Trust and the Saurine L. Brown Trust (and/or sub-trusts thereunder), or in their capacities as co-owners, partners, or members of any business entity, ... which arise out of or relate to the administration and investment of the trusts, partnerships and assets of the Eugene D. Brown and Saurine L. Brown estates, the payment of estate taxes of such estates, or the division of assets of such estates ....

The Arbitration Agreement provides that “[t]he arbitrator's decision shall be final and binding on the parties,” and that “[j]udgment may be entered upon any award rendered by the arbitrator.” The Agreement also provides, in ¶ E, that

[t]he provisions of this Agreement shall be a complete bar and defense to any suit, action or proceeding instituted in any court or before any administrative tribunal with respect to any dispute or controversy arising out of or in connection with this Agreement. If either party pursues any claim, dispute, or controversy against the other in a proceeding other than the arbitration provided herein, the responding party shall be entitled to dismissal or injunctive relief regarding such action and recovery of all costs, losses, and attorneys' fees relating to such action.

(Emphasis added.)

In April 2010 the parties executed an amendment to the Arbitration Agreement, which selected Richard McLeod as their presumptive arbitrator. The April 2010 amendment gave Arbitrator McLeod “full and complete binding authority to resolve any and all issues submitted to him for arbitration.”

The parties arbitrated several disputes before Arbitrator McLeod. Ultimately, based on their continuing inability to work together in a productive fashion, Brown–Thill requested that Arbitrator McLeod remove Brown as a co-trustee of the Eugene D. Brown Trust. Before the issue could be arbitrated, however, Brown resigned as co-trustee on October 10, 2011, conditioned on his unilateral appointment of his friend John Rubenstein as his successor.

Brown–Thill disputed Brown's authority to unilaterally appoint Rubenstein as successor co-trustee. On October 25, 2011, Brown–Thill's attorney sent a letter to Brown's attorney, stating that Brown–Thill intended to move forward with arbitration of her application for removal of Brown as co-trustee of the Eugene D. Brown Trust. The letter also indicated that Brown–Thill would seek a determination that Brown's conditional resignation as co-trustee of the Trust, and his unilateral appointment of Rubenstein as his successor, were invalid.

The parties set the issues for arbitration on December 5, 2011. On October 26, 2011, however, Brown filed this lawsuit in the Circuit Court of Jackson County, seeking a declaration that his appointment of Rubenstein as successor co-trustee was valid and effective. Brown–Thill was served on November 30, 2011.

On December 1, 2011, Brown moved to dismiss the arbitration, alleging that Arbitrator McLeod lacked jurisdiction because Rubenstein and Brown's children (who were potential beneficiaries of the Trust) were necessary parties, and were not subject to the Arbitration Agreement. On December 2, McLeod denied Brown's motion to dismiss.

Brown–Thill and Brown appeared at Arbitrator McLeod's offices on December 5, 2011, for the arbitration. Brown's counsel informed McLeod that Brown would not participate in the arbitration, and Brown left without presenting evidence. Brown–Thill presented her case in Brown's absence.

On December 12, 2011, McLeod issued his award. The award found that Brown's attempt to unilaterally appoint Rubenstein as successor co-trustee of the Eugene D. Brown Trust was invalid. This conclusion had the effect of also invalidating Brown's conditional resignation as co-trustee. Arbitrator McLeod then ruled, however, that grounds existed to remove Brown as co-trustee for cause, based on his persistent failure to cooperate with Brown–Thill in the administration of the Trust.

On the same day that Arbitrator McLeod issued his award, Brown–Thill filed an action to confirm the arbitration award in the United States District Court for the Western District of Missouri. The federal case (No. 4:11–cv–01245–W–SOW) was assigned to Senior Judge Scott O. Wright.

In the meantime, Brown–Thill filed an answer and counterclaim in this action. Her counterclaim alleged that the issues Brown sought to litigate were subject to arbitration under the Arbitration Agreement. Brown–Thill accordingly sought to recover her costs and attorney's fees for defending this action pursuant to ¶ E of the Agreement.

In September 2012 Brown–Thill filed a motion to dismiss Brown's claims, arguing among other things that the same issues were pending in her federal-court action, and were better resolved there. Brown–Thill's motion to dismiss requested an award of her attorney's fees and costs pursuant to ¶ E of the Arbitration Agreement.

On October 29, 2012, the circuit court entered an order cancelling a scheduled trial date, and staying the litigation pending a ruling on summary-judgment motions which had been filed in the federal lawsuit.

On March 8, 2013, Judge Wright entered an order in the federal litigation which granted Brown–Thill's motion for summary judgment and for confirmation of Arbitrator McLeod's December 12, 2011 award. Among other things, the federal-court order found that Arbitrator McLeod had jurisdiction over Brown's removal as co-trustee, and over the validity of Brown's attempted appointment of Rubenstein as successor co-trustee, and that it was unnecessary to join Rubenstein, or Brown's children, in the arbitration proceeding.

After being informed of the federal order, the circuit court entered a final judgment on May 2, 2013. The circuit court's judgment dismissed all claims in this case without prejudice, on the basis that the federal-court judgment “address[es] and resolve[s] the same issues and claims raised in the case currently before this Court.”

Brown–Thill filed a timely motion to amend the judgment, in which she contended that the trial court should modify its dismissal to award her the costs and attorney's fees requested in her counterclaim. The circuit court denied Brown–Thill's motion to amend, and she appeals.

Standard of Review

We review the dismissal of claims in a civil action de novo. See, e.g., Session v. Dir. of Revenue, 417 S.W.3d 898, 901 (Mo.App.W.D.2014) (quoting In re Est. of Austin, 389 S.W.3d 168, 171 (Mo. banc 2013)). While we generally “review the denial of a request for attorneys' fees for an abuse of discretion,” Kopp v. Home Furnishing Center., LLC, 210 S.W.3d 319, 329 (Mo.App.W.D.2006), “if a contract provides for the payment of attorney fees and expenses incurred in enforcing rights under the contract, the trial court must award those fees.” Hoag v. McBride & Son Inv. Co., 967 S.W.2d 157, 175 (Mo.App.E.D.1998). We review issues of contract interpretation de novo. Kelly v. State Farm Mut. Auto. Ins. Co., 218 S.W.3d 517, 522 (Mo.App.W.D.2007).

Discussion

Brown–Thill contends that, under the express terms of the Arbitration Agreement, she is entitled to her costs and attorney's fees in this action, and that the trial court therefore erred in dismissing her counterclaim and refusing to award her fees and litigation costs. We agree.¹

“While in most circumstances the trial court is granted broad discretion to award attorney's fees, if a claim for attorney's fees is made under a provision of the contract, the trial court must comply with the terms set forth therein.” J & M Secs., LLC v. Brown, 388 S.W.3d 566, 570 (Mo.App.E.D.2012) (citing Schottel–Lehde v. Schottel, 75 S.W.3d 359, 365 (Mo.App.W.D.2002)). “Thus, a trial court's has no discretion whether to award attorneys' fees where they are recoverable by contract, and its failure to do so is erroneous.” Midland Prop. Partners, LLC v. Watkins, 416 S.W.3d 805, 817 (Mo.App.W.D.2013). See also, e.g., Lee v. Investors Title Co., 241 S.W.3d 366, 368 (Mo.App.E.D.2007); Bechtle v. Tandy Corp., 77 S.W.3d 689, 696 (Mo.App.E.D.2002); Miller v. Gammon & Sons, Inc., 67 S.W.3d 613, 625 (Mo.App.W.D.2001).

“An essential principle of contract interpretation is to...