Wal-Mart Stores, Inc. v. Qore, Inc.
2011 U.S. App. LEXIS 14701
| 5th Cir. | 2011Background
- Wal-Mart hired Qore (geotechnical) to study expansive clay and design a subsurface base; the goal was a 20-year design life for buildings and pavement.
- Wal-Mart also retained Sain Associates to critically appraise Qore's design and prepare final site plans if Sain approved the design.
- SSW was contracted as general contractor to construct per Sain's plans.
- Qore also served as testing/inspection firm during construction under a separate contract.
- After construction, Wal-Mart observed stress and damage; Wal-Mart sued Qore, Sain, and SSW for breaches of contract and negligence seeking over $11.8 million in damages.
- Two contracts governed attorney’s fees: geotechnical services contract—each party bears own litigation costs; testing and inspection contract—indemnity clause requiring Qore to indemnify Wal-Mart for attorney’s fees caused by Qore’s negligence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the indemnity provision covers first-party fee recovery | Wal-Mart argues the clause covers attorney’s fees incurred due to Qore’s negligence. | Qore contends the clause only covers third-party claims against Wal-Mart. | Yes; the indemnity provision applies to first-party claims. |
| Whether Mississippi law requires segregation of fees or allows a global award | Wal-Mart argues the district court properly treated fees as a single award. | Qore contends fees should be narrowed to amounts tied to liability proven against Qore. | Fees must be limited to amounts causally and legally caused by Qore’s negligence; not all fees. |
| Whether the district court properly awarded $810,000 or abused discretion | Wal-Mart contends the award reflects correct proportionality under contract. | Qore argues the Cobb framework and improper aggregation were misapplied. | The award was an abuse of discretion; remand for proper allocation under Mississippi contract law. |
| Whether Cobb v. Miller applies to a private Mississippi contract fee dispute | Wal-Mart relies on Cobb to justify broader fee recovery. | Qore argues Cobb is inapplicable to private contract claims under Mississippi law. | Cobb does not apply; the fee award must be determined under Mississippi contract law. |
| Whether Wal-Mart’s fees could include time spent pursuing non-monetary or unsuccessful claims | Wal-Mart argues all incurred fees were recoverable under the indemnity. | Qore argues non-recoverable fees must be excluded under contract law. | Fees not caused by Qore’s negligence or not within the contract scope must be excluded; overall award vacated. |
Key Cases Cited
- Hopton Building Maintenance, Inc. v. United Parcel Service, Inc., 559 So.2d 1012 (Miss. 1990) (indemnity requires actual legal liability before indemnity arises)
- A & F Properties, LLC v. Lake Caroline, Inc., 775 So.2d 1276 (Miss. Ct. App. 2000) (fees limited to enforcing the specific contract provisions prevailed)
- Industrial and Mechanical Contractors of Memphis, Inc. v. Tim Mote Plumbing, LLC, 962 So.2d 632 (Miss. Ct. App. 2007) (recoverable fees must be shown to relate to the claim prevailed upon)
- Cobb v. Miller, 818 F.2d 1227 (5th Cir. 1987) (analysis under §1988; distinguish civil rights context from contract fee disputes)
- Shelak v. White Motor Co., 636 F.2d 1069 (5th Cir. 1981) (fee awards must be grounded in applicable law and evidence)
- Romney v. Barbetta, 881 So.2d 958 (Miss. Ct. App. 2004) (adequacy of proof required for fee awards under contract)
- Turner v. Terry, 799 So.2d 25 (Miss. 2001) (case addressing first-party indemnity and attorney’s fees under Mississippi law)
- Morgan v. U.S. Fid. & Guar. Co., 191 So.2d 917 (Miss. 1966) (contractual attorney’s fee provisions and enforceability)
- Cain v. Cain, 967 So.2d 654 (Miss. Ct. App. 2007) (case on ambiguity and fee allocation under contract)