DES Dev., LLC v. Revhoney, Inc.
| Decision Date | 30 June 2021 |
| Docket Number | Case No. 6:19-cv-03379-MDH |
| Parties | DES DEVELOPMENT, LLC, Plaintiff, v. REVHONEY, INC., et al., Defendants. |
| Court | U.S. District Court — Western District of Missouri |
Before the Court is Plaintiff DES Development, LLC's ("DES") Motion for Attorneys' Fees, Taxable Costs, Determination of Pre- and Post-Judgment Interest, and Motion for Entry of Judgment. (Doc. 109). For the reasons set forth herein, the Motion is GRANTED and Final Judgment is entered.
This Court granted Plaintiff's Motion for Summary Judgment in full on May 11, 2021. (Doc. 105). The Court found that Defendants had breached its contracts with Plaintiff with respect to both the Equipment Rental Agreement ("ERA") and the Mediated Settlement Agreement ("MSA"). Id. Pursuant to the terms of the Equipment Rental Agreement and the MSA, Plaintiff moves the Court to award it its reasonable and necessary attorneys' fees and expenses taxed against Defendants RevHoney, Inc. ("RevHoney"), Jerry Brown, and Debra Brown.
Both the ERA and the MSA between Plaintiff and Defendants expressly entitle Plaintiff to all reasonable attorneys' fees and other associated legal costs. (See Doc. 102 at 11-12). The Court found that Defendant RevHoney breached the ERA, and Defendants RevHoney, Jerry Brown, and Debra Brown breached the MSA. (Doc. 105 at 1). The Court additionally found that Plaintiff is entitled to recover its attorneys' fees from Defendants. (Doc. 105 at 2).
Rule 54(d) of the Federal Rules of Civil Procedure states, in relevant part, "unless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney's fees—should be allowed to the prevailing party." Fed. R. Civ. P. 54(d)(1). Additionally, "a claim for attorney's fees and related nontaxable expenses must be made by motion." Fed. R. Civ. P. 54(d)(2)(A). "Unless a statute or a court order provides otherwise, the motion must (1) be filed no later than 14 days after the entry of judgment; (2) specify the judgment and the statute, rule, or other grounds entitling the movant to the award; (3) state the amount sought or provide a fair estimate of it; and (4) disclose, if the court so orders, the terms of any agreement about fees for the services for which the claim is made." Fed. R. Civ. P. 54(d)(2)(B).
Pursuant to the express terms of the ERA signed by Plaintiff and RevHoney, Plaintiff is entitled to recover its attorneys' fees from RevHoney as the prevailing party. Specifically, Section 10 of the Equipment Rental Agreement provides that "the RENTER shall pay all reasonable attorney and other fees, the expenses and costs incurred by OWNER in protection [of] its rights under this rental agreement and for any action taken [by] OWNER to collect any amounts due the OWNER under this rental agreement." This action was brought in part to protect Plaintiff's rights under the ERA, and therefore the Court is entitled to award Plaintiff "all reasonable attorney and other fees [and] the expenses and costs incurred by [Plaintiff]."
Plaintiff asks for pre-judgment interest for RevHoney's breach of the ERA. Pre-judgment interest on contract claims such as this, are governed by Mo. Rev. Stat. § 408.020. Barber & Sons Co. v. Nachtigal Farms, Inc. and Gary Nachtigal, Case No. 16-0404-CV-W-BP, 2017 WL 7725247, at *4, (W.D. Mo. Nov. 08, 2017). Section 408.020 allows for a plaintiff to recover "pre-judgment interest for liquidated claims after a demand for payment is made." Id. Indeed, "under Missouri law, where the statute applies, the award of prejudgment interest is mandatory; it is not a matter submitted to the Court's discretion." Commercial Union Assurance Co. of Australia, G.R.E. Insurance Ltd., Melbourne, and Associated Marine Insurers Agents Pty., Ltd. v. Hartford Fire Insurance Co., 86 F.Supp.2d 921, 931 (E.D. Mo. 2000). This statute provides that a plaintiff is entitled "to receive interest at the rate of nine percent per annum, when no other rate is agreed upon, for all moneys after they become due and payable, on written contracts, and on accounts after they become due and demand of payment is made." Mo. Rev. Stat. § 408.020. Here, because neither the ERA nor MSA provided for an applicable interest rate under the contracts' terms, this statute and the applicable nine percent interest rate applies.
RevHoney ceased making contractually obligated payments on June 1, 2019 without notice or justification. DES made a written demand for payment of amounts due under the ERA on June 17, 2019, to Jerry Brown (Doc. 89, Ex. 6). This demand requested payment of the June 2019 rental obligation. Id. The express terms of the North Star leases provide that should Defendants cease payments DES "shall be entitled to...an amount equal to the unpaid balance of the total rent for the initial term together with reasonable attorney's fees and court costs for collection." (See Doc. 89, Ex. B at 4) (emphasis added). This Court's summary judgment order on all claims was entered on May 11, 2021. The length of time between these two dates is 695 days. The total award ofdamages was $296,165.99. (Doc. 105). The simple interest calculated at 9% on $296,165.99 comes to $50,753.93.
Plaintiff asserts it is entitled to post-judgment interest as well under 28 U.S.C. § 1961. The statute provides that a prevailing plaintiff is allowed to recover post-judgment interest on any money judgment in a civil case decided in district court. § 1961(a). This section calculates post-judgment interest "from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding [ ] the date of the judgment." Id. Accordingly, Plaintiff is entitled to recover post-judgment interest at the rate prescribed by 28 U.S.C. § 1961 on the amount owed by Defendants at any given time until judgment is satisfied.
Defendants argue that Plaintiff failed to prove that Defendants Jerry Brown and Debra Brown agreed to be responsible for its attorneys' fees related to enforcing the ERA. "Generally, Missouri courts follow the American Rule, which requires each litigant to bear the expense of his or her own attorneys' fees." Fannie Mae v. University Village Apartments, 479 S.W.3d 706, 718 (Mo. App. 2015). "An exception to this rule exists where attorney's fees are provided for by contract." Id. Courts must, "therefore, turn [ ] to established principles of contract interpretation, keeping in mind that [the] primary goal is to determine the parties' intent and give effect to it." Id. (internal quotes and citations omitted). The Court must "further recognize, consistent with the American rule, that Missouri courts have favored the award of attorneys' fees only where a contract expressly authorizes their recovery." Id. (internal quotes and citations omitted) (emphasis added). The rules governing construction of contracts similarly apply to a guarantee of indebtedness. Id."[T]he liability of a guarantor is to be strictly construed according to the terms of the guaranty agreement and may not be extended by implication beyond the strict letter of the obligation." Id. at 718-19.
Defendants acknowledge that Jerry and Debra Brown, according to the Court's order, are "liable for any amounts RevHoney is ultimately found due to DES for the breach of the ERA" based on their failure to execute personal guaranties as required by the MSA. (Doc. 102 at 9). The MSA required Jerry and Debra Brown to "execute personal guaranties for the indebtedness contemplated in the Equipment Rental Agreement[.]" Defendants argue that nowhere does the MSA provide that the parties intended "indebtedness" to include attorneys' fees incurred for enforcing the ERA.
This Court previously found that the ERA incorporated the terms of the North Star Leases by virtue of its express terms, which Defendants never disputed. (Doc. 102 at 5-6). The Court also found that Jerry and Debra Brown executed personal guaranties for two of the three North Star Leases. Id. at 6. By executing this guaranty, Jerry and Debra Brown expressly agreed to pay all costs of enforcement, including attorneys' fees. (Doc. 89, Ex. 2, 4). The attorneys' fees provision of the ERA itself states, "The RENTER shall pay all reasonable attorney and other fees, the expenses and costs incurred by OWNER in protection its rights under this rental agreement and for any action taken OWNER to collect any amounts due the OWNER under this rental agreement." Id., Ex. 1.
The end result is that, under the attorneys' fees provision of the ERA, RevHoney agreed—and Jerry and Debra Brown agreed by incorporation—to pay all DES' reasonable attorneys' fees, expenses, and costs in protecting its rights under the ERA "for any action taken." Therefore, theCourt rejects Defendants' argument and finds that RevHoney, Jerry Brown, and Debra Brown are jointly and severally responsible for Plaintiff's attorneys' fees incurred in this action.
Pursuant to the express terms of the MSA signed by all parties, Plaintiff is entitled to recover its attorneys' fees from all defendants. Specifically, Section 6 under "Terms and Conditions" provides that "in the event that any action or proceeding is brought to interpret or enforce any of the terms and conditions of this Agreement, the prevailing Party shall be entitled to have and recover from the other Party all costs and reasonable attorneys' fees incurred in connection therewith." Plaintiff brought this action in part to enforce the terms and conditions of the MSA.
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