712 F.3d 397
8th Cir.2013Background
- Mountain Valley and Southern contested contract disputes; Southern won $819,000 plus $42,000; Mountain Valley won $183,000 on its counterclaim.
- Southern sought approximately $2.7 million in attorney’s fees and costs; Mountain Valley sought $1.3 million defensively.
- District court denied fees to both sides, finding no prevailing party.
- Southern appeals the denial; Mountain Valley protects its own fee denial appeal.
- Court reviews for abuse of discretion; Nevada law governs contract-fee interpretation; Arkansas 16-22-308 is argued as alternative.
- Issue centers on whether the implied covenant claim is a 'term' of the contract and whether either party can be deemed prevailing for fee-shifting.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Nevada § 10.7 apply to a breach of the implied covenant claim? | Southern: implied covenant not a contract term; 10.7 not applicable. | Mountain Valley: implied covenant is a contract term; 10.7 applies. | Implied covenant is a contract term; 10.7 applies. |
| Is the implied covenant claim separable from contract for fee purposes? | Southern: separate claim; not necessarily a contract term. | Mountain Valley: continues to be a term; admissible under 10.7. | Implied covenant constitutes a contract term; permissible under 10.7. |
| Did district court abuse its discretion in not designating a prevailing party under Nevada law? | Southern: prevailed on most issues; should be prevailing party. | Mountain Valley: mixed results; no prevailing party under Nevada law. | District court did not abuse discretion; no prevailing party. |
| Whether Arkansas § 16-22-308 compels fee awards when contract provides otherwise? | Southern: Arkansas statute applies to fee shifting. | Mountain Valley: contractual clause governs; statute not mandatory here. | Arkansas statute is not mandatory where contract governs; no fee award. |
| Is discussion of Mountain Valley’s protective fee claim necessary? | Southern: not necessary to resolve. | Mountain Valley: protective portion potentially relevant if fees awarded. | Not necessary to discuss Mountain Valley’s protective claim. |
Key Cases Cited
- A.C. Shaw Constr., Inc. v. Washoe Cnty., 784 P.2d 9 (Nev. 1989) (implied covenant as contract term; duty of good faith and fair dealing)
- Dickenson v. Nev. Dep’t of Wildlife, 877 P.2d 1059 (Nev. 1994) (interpretation of contract terms and implied terms)
- Frantz v. Johnson, 999 P.2d 351 (Nev. 2000) (implied covenant breach as contractual remedy)
- Morris v. Bank of Am. Nev., 886 P.2d 454 (Nev. 1994) (separate pleading not required to plead implied covenant)
- Hilton Hotels Corp. v. Butch Lewis Prods., Inc., 808 P.2d 919 (Nev. 1991) (implied covenant as independent obligation)
- Glenbrook Homeowners Ass’n v. Glenbrook Co., 901 P.2d 132 (Nev. 1995) (no prevailing party designation required when both win/lose on issues)
- Rowland v. Lepire, 662 P.2d 1332 (Nev. 1983) (contractual fees enforcing terms; enforceability of fee provisions)
- Angelo Iafrate Constr., LLC v. Potashnick Constr., Inc., 370 F.3d 715 (8th Cir. 2004) (fee-shifting under contract and discretionary nature of fees)
- v. FABCO of Ashdown, Inc., 847 S.W.2d 13 (Ark. 1993) (attorney’s fees under Ark. § 16-22-308 when allowed)