Employers Mutual Casualty Company v. MK Weeden Construction, Inc.
1:24-cv-00112
D. Mont.May 20, 2025Check TreatmentDocket
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BILLINGS DIVISION
EMPLOYERS MUTUAL
CASUALTY COMPANY, an Iowa CV 24-112-BLG-SPW
corporation
Plaintiff, ORDER
MK WEEDEN CONSTRUCTION,
INC., a Montana corporation; MK
EQUIPMENT CO., LLC, a Montana
limited liability company; WEEDEN
CONSTRUCTION, LLC, a Montana
limited liability company; MONTE K.
WEEDEN, individually, and JULIE A.
WEEDEN, individually
Defendants.
After the Court issued judgment on April 17, 2025, Defendants MK Weeden
Construction, Inc., MK Equipment Co., LLC, Weeden Construction, LLC, and Julie
A. Weeden (collectively, the “Defendants”)' timely filed a Motion to Amend
Judgment pursuant to Federal Rule of Civil Procedure 59(e). (Doc. 44). Plaintiff
Employers Mutual Casualty Company (“EMC”) opposes the motion. (Doc. 45).
' Plaintiff has agreed to settle with all Defendants except Monte K. Weeden, individually.
Therefore, this Order addresses Judgment as to all Defendants, except Mr. Weeden. The instant
case is stayed as to Mr. Weeden while his bankruptcy proceedings are pending. (Doc. 37).
The motion is fully briefed and ripe for the Court’s review. (See Doc. 46). For the
following reasons, the Court grants the Defendants’ Motion.
I. Background
On April 5, 2025, this Court entered an Order and Judgment (Doc. 41) after
the parties filed a Stipulated Motion for Confession of Judgment (Doc. 39). In the
Order and Judgment, the Court granted attorneys’ fees and costs to EMC and
required EMC to verify the amount by filing an Unopposed Motion for Attorneys’
Fees and Costs (the “Fees Motion”). (Doc. 41 at 2). The Court directed entry of
final judgment as to all claims against Defendants except for Monte Weeden. (Jd. at
3).
On April 16, EMC timely filed the Fees Motion. (Doc. 42). As ordered, EMC
placed the word “unopposed” in the Motion’s title. EMC included a “certificate of
conferral” representing that (1) counsel conferral was unnecessary because the Court
required the parties to file an “unopposed” motion and (2) regardless, EMC’s
counsel conferred with Defendants’ counsel regarding the proposed fees. (/d. at 2).
According to EMC, Defendants’ counsel was “unable to provide their position
[regarding the fees] prior to review of the ‘time and description of services.’” (/d.).
The Fees Motion included no other information as to Defendants’ counsel’s position.
Ultimately, the Court granted the Fees Motion and awarded attorneys’ fees in the
amount of $144,968.50 to EMC. (Doc. 43 at 2). Now, the parties dispute the fees.
Specifically, the Defendants object to $1991 in fees, which Defendants allege
EMC incurred during Monte Weeden’s bankruptcy proceedings. The Defendants
further allege that EMC misrepresented the Fees Motion as “unopposed” when it
was not. (Doc. 44 at 3). The Defendants state that EMC “knew that [they were] not
prepared to consent because its counsel did not have the time and billing records
documenting the requested attorneys’ fees and costs [.]” (Doc. 42 at 2). Thus,
Defendants seek to amend the judgment and reduce attorneys’ fees by $1991. The
Defendants further seek an award of $1350 for bringing the instant motion due to
EMC’s factual misrepresentation to the Court.
EMC disagrees that it “misstyled” the Fees Motion as “unopposed” because
it made the filing pursuant to the parties’ Settlement Agreement and as a courtesy,
provided an “accurate representation of the status of conferral between the parties.”
(Doc. 45 at 4-7). As to the Defendants’ $1991 objection, EMC argues it is entitled
to those fees pursuant to the parties’ written indemnity agreement, the Settlement
Agreement, and relevant caselaw.
II. Legal Standard
A Rule 59(e) motion to amend the judgment may be granted only if “(1) the
motion is necessary to correct manifest errors of law or fact upon which the judgment
is based; (2) the moving party presents newly discovered or previously unavailable
evidence; (3) the motion is necessary to prevent manifest injustice; or (4) there is an
intervening change in controlling law.” Turner v. Burlington N. Santa Fe. R.R. Co.,
338 F.3d 1058, 1063 (9th Cir. 2003) (cleaned up). Even if one of these conditions
is present, the district court has considerable discretion to deny the motion. See id.
Defendants argue their motion under the first condition—manifest errors of fact.
Ill. Discussion
A. EMC’ Representation to the Court
As a threshold matter, the Court finds that EMC did not accurately represent
the parties’ stipulation to the Fees Motion when it titled the Motion “unopposed.”
Consequently, the final judgment was based on a manifest error of fact. Further, the
misrepresentation is exacerbated by the fact that EMC’s counsel failed to provide
Defendants’ counsel with detailed billing descriptions prior to filing.
Though the Court ordered the parties to file an unopposed motion, it was not
the Court’s intention for the parties to disregard the purpose and underlying
principles of filing a motion unopposed.
An unopposed motion expedites judicial efficiency and promotes judicial
economy by allowing the Court to consider an agreed upon issue without argument
or delay. It encourages conferral, stipulation, and resolution between the parties.
Absent a clerical mistake, the process is for naught when a party misrepresents
opposition, even in the title of the motion.
If there are issues in stipulating to an unopposed motion—as it appears there
was here—either counsel could have filed a motion to extend the deadline to resolve
the issues before filing with the Court. This was not done here.
Consequently, the Court is compelled to reconsider the attorneys’ fees award
due to Defendants’ representations that (1) they opposed the Fees Motion at the time
of filing and (2) they did not receive EMC’s billing descriptions before EMC filed
the Fees Motion.
B. Defendants’ Objection to the Judgment
Turning to the merits of the parties’ arguments, the Court considers whether
Defendants should bear the cost of the $1991 bill for EMC’s work on Monte
Weeden’s Adversary Proceeding (or, the “Proceeding”) in bankruptcy court.
On November 17, 2020, the Defendants, including Mr. Weeden, entered into
a General Application and Agreement of Indemnity (the “GAI”) with EMC for
surety bonds. On August 22, 2024, EMC filed a Complaint alleging multiple counts
including breach of contract and indemnification under the GAI. (Doc. 1).
Eventually, EMC agreed to settle with Defendants while Mr. Weeden, individually,
filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. (Docs.
28, 40).
On December 23, 2024, EMC brought an Adversary Proceeding in
bankruptcy court against Mr. Weeden, objecting to his debt discharge owed to EMC.
(Case No. 4:24-ap-04005-BPH (Doc. 1)). When EMC sought to recover attorneys’
fees from Defendants in this case, EMC included fees incurred from the Adversary
Proceeding against Mr. Weeden.
The parties agree that EMC may collect fees incurred from the Adversary
Proceeding. However, the Defendants argue that EMC may collect once the
Proceeding is adjudicated and one of the parties prevails. In opposition, EMC argues
it is presently entitled to the fees because Defendants are contractually obligated to
pay attorney’s fees pursuant to a default provision under the GAI.
The parties separately rely on the holding in Travelers Casualty and Surety
Company of American v. Pacific Gas and Electric Company, 549 U.S. 443 (2007),
to support their positions. In Travelers, the Supreme Court held that a creditor is not
precluded from seeking contract-based attorney’s fees even if those fees were
incurred during bankruptcy proceedings. /d. at 445. Thus, the Court agrees with the
parties that EMC may seek to recover attorneys’ fees under the GAI even though
they were incurred during the Adversary Proceeding. However, the Court must
determine when EMC may seek to recover the attorneys’ fees incurred in the
Adversary Proceeding.
The Supreme Court has “long recognized that the ‘basic federal rule in
bankruptcy is that state law governs the substance of claims.” Jd. at 450 (internal
quotations omitted). “[W]hen the Bankruptcy Code uses the word ‘claim’ . . . it is
usually referring to a right to payment recognized under state law.” Jd. at 451. It
follows then, that the Court turn to state law to determine how attorney’s fees are
awarded for a contractual claim.
In Montana, contractual rights to attorney fees are reciprocal. Mont. Code
Ann. § 28-3-704. This means that either party can recover fees from a contract action
depending on who prevails and regardless of whether the contract contains a
unilateral fee provision. Montana’s reciprocal fee statute entitles the prevailing party
in “any action on the contract” “to recover reasonable attorney fees from the losing
party.” Id.; In re Shoot The Moon, LLC, 635 B.R. 797, 833 (Bankr. Mont. 2021). In
other words, there must be a winner.
The Court agrees with Defendants that attorneys’ fees as to the unsettled
Adversary Claim may not be awarded until either EMC or Mr. Weeden prevails on
the claims. This conclusion respects both the Travelers decision and Montana law.
It is further supported by the GAI. Under the GAI, EMC is authorized to settle with
one or more of the Defendants and Mr. Weeden. (Doc. 45-1 at 4). “[SJuch
settlement or composition shall not affect the liability of any other parties.” (Doc.
45-1 at 4). Under this provision, EMC may hold Mr. Weeden accountable under the
GAI even though it is settling with the Defendants. However, under Montana law,
it cannot seek to recover fees for the Adversary Proceeding until there is a prevailing
party.
Furthermore, the Court agrees with Defendants that EMC may only recover
“reasonable attorney’s fees” pursuant to the GAI and Montana law. (Doc. 45-1 at
2). Using the lodestar method, Montana courts have identified seven guiding factors
to determine the number of hours counsel reasonably expended when calculating
attorney’s fees. Gendron v. Mont. Univ. Sys., 461 P.3d 115, 119-20 (Mont. 2020).
Among those factors include “the results secured by the services of the attorneys.”
Id. The results, a final determination, and a prevailing party as to the Adversary
Proceeding have yet to be determined.
Therefore, in the interest of awarding reasonable attorneys’ fees to EMC in
the instant case against Defendants, EMC may not seek fees incurred from litigating
the Adversary Proceeding. EMC may eventually choose to seek those fees against
Mr. Weeden pursuant to the GAI, but only if it prevails.
C. Defendants’ Request for Attorneys Fees
The Defendants request that the Court award them attorney’s fees incurred in
bringing the Motion to Amend Judgment. Defendants seek $1350. The Defendants
cite no legal grounds warranting this award and thus, the Court will not award the
fees sought.
IV. Conclusion
IT IS ORDERED that the Defendants’ Motion to Amend Judgment (Doc. 44)
is GRANTED.
IT IS FURTHER ORDERED that EMC shall file a Proposed Second
Amended Judgment within 14 days of this Order reflecting a $1991 reduction in
attorneys’ fees.
Y~A_
DATED thiso@ day of May, 2025.
Loree. = pb tem.
SUSAN P. WATTERS
United States District Judge