Cline v. Rocky Mountain, Inc.

• Decision Date: 06 March 2000
• Docket Number: No. 99-39., No. 99-38
• Citation: 998 P.2d 946
• Parties: Mike CLINE and Brenda Cline, Appellants (Plaintiffs), v. ROCKY MOUNTAIN, INC., d/b/a Chinook Log Homes, Appellee (Defendant). ROCKY MOUNTAIN, INC., d/b/a Chinook Log Homes, Appellant (Defendant), v. Mike Cline and Brenda Cline, Appellees (Plaintiffs).
• Court: Wyoming Supreme Court

998 P.2d 946

Mike CLINE and Brenda Cline, Appellants (Plaintiffs), v. ROCKY MOUNTAIN, INC., d/b/a Chinook Log Homes, Appellee (Defendant).

ROCKY MOUNTAIN, INC., d/b/a Chinook Log Homes, Appellant (Defendant), v. Mike Cline and Brenda Cline, Appellees (Plaintiffs).

Nos. 99-38, 99-39.

Supreme Court of Wyoming.

March 6, 2000.

Representing Mike Cline and Brenda Cline: Andrea L. Richard of Rothgerber Johnson & Lyons LLP, Cheyenne, Wyoming.

Representing Rocky Mountain, Inc.: Stephen L. Simonton of Simonton & Simonton, Cody, Wyoming.

Before LEHMAN, C.J.; MACY, GOLDEN & HILL, JJ.; and JERE RYCKMAN, D.J.

MACY, Justice.

In Case No. 99-38, Mike Cline (Mike) and Brenda Cline (Brenda) appeal from the district court's order granting, in part, Rocky Mountain, Inc. d/b/a Chinook Log Homes' (Chinook) request for reimbursement of its attorneys' fees and costs. In Case No. 99-39, Chinook appeals from the portion of the district court's order which denied it part of its attorneys' fees and costs and from the order denying its motion for a new trial.

We affirm the district court's decisions in both cases.

ISSUES

The Clines phrase the issues in Case No. 99-38 as follows:

I. Did the District Court Err in Awarding Attorney's Fees to Chinook Without Any Legal Basis?

II. Even If the District Court Had Legal Authority to Award Attorney's Fees, Did it Err in Awarding Improper and Unreasonable Fees?

In Case No. 99-39, Chinook frames the issues on appeal as follows:

I. Does Wyoming law enforce contractual "fee shifting" provisions as written?

II. Alternatively, does Wyoming recognize the generally accepted rule that attorneys fees need not be apportioned between claims arising from a common core of facts or related legal theories?

FACTS

In 1992, the Clines decided to build a commercial log building in Cody to house a gift shop. They purchased drawings from a drafting company which depicted a proposed floor plan for the building. The parties refer to these drawings as the "Lankford drawings."

Subcontractors, who were not involved in this case, performed the excavation work and erected the foundation for the log building. The foundation actually constructed was significantly different from the foundation depicted in the Lankford drawings. Chinook erected a log shell over the foundation pursuant to a contract executed by it and Mike in March 1993. A second contract, which was dated November 17, 1993, called for Chinook to complete the building. In February 1994, Chinook finished the work that was contemplated by the second contract. Mike and Chinook entered into a third contract, dated February 20, 1994, under which Chinook constructed two lofts inside the building. On February 20, 1996, Mike filed a lawsuit against Chinook and its chief officer, J. Nichols Patrick, claiming, in relevant part, that the November 1993 contract incorporated the Lankford drawings and Chinook had not constructed the log building in accordance with those drawings. Chinook and Patrick employed the same law firm to represent them in the case. Brenda was subsequently joined as a party plaintiff in the case. The district court granted a summary judgment in favor of Patrick on September 10, 1997. The court subsequently granted a summary judgment in favor of Chinook on the grounds that the Clines could not prove they had suffered damages.

Chinook maintained that it was entitled to reimbursement from the Clines for its attorneys' fees and litigation expenses under the November 1993 contract's fee-shifting provision and requested that the district court award it over $93,000 in attorneys' fees and more than $14,000 in costs. The district court determined that, under the contract, Chinook was entitled to be awarded its attorneys' fees but Patrick was not entitled to be reimbursed for his attorneys' fees. The district court also found that Chinook could not be reimbursed for any fees it incurred prior to Patrick's dismissal from the lawsuit on September 10, 1997, because the attorneys had not separated the fees attributable to Patrick's defense from the fees attributable to Chinook's defense. The district court, therefore, awarded Chinook $62,535.13 to reimburse it for the attorneys' fees and costs it expended in defending the lawsuit after Patrick was dismissed.

The Clines appealed to the Wyoming Supreme Court. Chinook filed a cross-appeal after the district court denied its motion for a new trial on the portion of the court's order which denied it reimbursement for the attorneys' fees and costs it incurred prior to September 10, 1997.

DISCUSSION

CASE No. 99-38

The Clines maintain, in their first issue, that the district court erred when it awarded Chinook attorneys' fees and costs pursuant to the November 1993 contract. Chinook argues that the district court correctly determined that the contract entitled it to receive the award. We agree with Chinook.

Wyoming subscribes to the American rule regarding recovery of attorneys' fees. Board of County Commissioners of County of Platte v. State ex rel. Yeadon, 971 P.2d 129, 132 (Wyo.1998). Under the American rule, each party is generally responsible for his own attorneys' fees. 971 P.2d at 132-33. A prevailing party may, however, be reimbursed for his attorneys' fees when express statutory or contractual authorization exists for such an award. Id.

The district court determined that the November 1993 contract allowed for the award of attorneys' fees in this case. Paragraph 17 of the contract stated in pertinent part: "Except as otherwise provided in this agreement, in the event of any dispute concerning this agreement, the prevailing party shall be entitled to all reasonable costs and expenses incurred to settle the matter, including reasonable attorney's fees." The Clines insist that, because the district court repeatedly stated that the November 1993 contract did not apply to the dispute, it erred when it ruled that the fee-shifting provision set out in Paragraph 17 required the Clines to reimburse Chinook for its attorneys' fees and costs. We do not agree with the Clines' reading of the record or their interpretation of the contractual language.

This Court's role in interpreting contractual fee-shifting provisions is to discern the intent of the contracting parties. See DeWitt v. Balben, 718 P.2d 854, 863 (Wyo.1986). We utilize our traditional rules of contract interpretation to accomplish that result. Id. In discerning the meaning of a contract, our initial inquiry focuses on whether the language of the contract is clear or ambiguous. See Treemont, Inc. v. Hawley, 886 P.2d 589, 592 (Wyo.1994). "Courts make that determination as a matter of law." Wolter v. Equitable Resources Energy Company, Western Region, 979 P.2d 948, 951 (Wyo. 1999); see also Svalina v. Split Rock Land and Cattle Company, 816 P.2d 878, 881 (Wyo.1991). This Court looks at the plain meaning of the words expressed within the four corners of a clear and unambiguous contract to determine the parties' intent. Wolter, 979 P.2d at 951. Of course, we are always cognizant of the necessity of giving a reasonable construction to the contract language. Fremont Homes, Inc. v. Elmer, 974 P.2d 952, 956 (Wyo.1999).

The claims set out in the Clines' complaint against Chinook were based upon the November 1993 contract. Paragraph 17 allowed fee shifting for "any dispute concerning this agreement." The fee-shifting language was clear and unambiguous. The plain language of Paragraph 17 obligated the losing party in any dispute concerning the agreement to pay the attorneys' fees of the prevailing party.

The district court stated that the November 1993 contract was obviously intended to reduce a prior oral or implied agreement between the parties to writing because Chinook had performed significant work on the building before the contract was actually executed. Contrary to the Clines' assertion, the district court did not state that the November 1993 contract did not apply to the parties' dispute. Instead, it stated that the Clines could not prove their claims because they did not designate a witness who could testify as to their damages. Regardless of the fact that the district court found the Clines could not prevail on their claims under the contract, they were still obligated to pay Chinook's attorneys' fees pursuant to the plain language of Paragraph 17. The district court did not err by awarding attorneys' fees to Chinook under the November 1993 contract.

In their second issue, the Clines maintain that the district court abused its discretion when it awarded Chinook more than $62,000 in attorneys' fees and costs. Before we address the issue of the propriety of the amount of the attorneys' fees award, we must address two collateral matters.

The attorneys' fees award in this case included a substantial amount for paralegal expenses. This Court has never directly addressed the issue of whether or not paralegal expenses are properly included within an award of attorneys' fees. The parties did not discuss this issue in their briefs, apparently assuming that paralegal expenses may be included in an attorneys' fees award. We believe, however, that the issue should be discussed in this decision because it is a matter of first impression in this jurisdiction.

Our research has revealed a split of authority as to whether or not paralegal expenses should be included in an attorneys' fees award. For example, the Florida courts do not include paralegal expenses in attorneys' fees awards because they believe that such awards should include only fees for work actually performed by attorneys. See, e.g., ABD Management Corporation v. Robert L. Turchin, Inc., 490 So.2d 202 (Fla.Dist. Ct.App.1986) (per curiam); Bill Rivers Trailers, Inc. v. Miller, 489 So.2d 1139 (Fla.Dist. Ct.App.1986). Other states do allow paralegal fees to be included in attorneys' fees awards. See, e.g., Salton Bay Marina, Inc. v. Imperial Irrigation District, 172 Cal. App.3d 914, 218...