Billeigh Riser, Plaintiff, Reco Security & Safety Consultants, Inc., Appellant, vs. Minneapolis Public Housing Authority, Respondent.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-11

 

Billeigh Riser,

Plaintiff,

 

Reco Security & Safety Consultants, Inc.,

Appellant,

 

vs.

 

Minneapolis Public Housing Authority,

Respondent.

 

Filed September 14, 2004

Affirmed Minge, Judge

 

Hennepin County District Court

File No. 01-9172

 

Damon L. Ward, Ward & Ward L.L.C., 2520 Park Avenue South, Carriage House, Minneapolis, MN  55404 (for appellant)

 

Carol A. Kubic, Minneapolis Public Housing Authority, 1001 Washington Avenue North, Minneapolis, MN  55401 (for respondent)

 

            Considered and decided by Randall, Presiding Judge; Willis, Judge; and Minge, Judge.

U N P U B L I S H E D   O P I N I O N

MINGE, Judge

            Appellant security company challenges the district court's denial of its motion for attorney fees, claiming that the court erred in determining which party prevailed, in interpreting the parties' contract, and in failing to consider the reasonableness of the requested fees.  Because the district court did not abuse its discretion in determining the prevailing party, we affirm. 

FACTS

            Respondent Minneapolis Public Housing Authority (MPHA) owns and manages 5,700 residential rental units.  In 1996, 1998, and 2000, MPHA signed two-year contracts with appellant Reco Security and Safety Consultants, Inc. (Reco) to provide unarmed security-guard services to several of MPHA's high-rise buildings.  In 2001, MPHA decided not to renew its contract with Reco and on May 4, 2001, published a request for proposals for security-guard services.  Reco sued MPHA on 15 counts, and sought more than $600,000 in general damages, undetermined special damages, undetermined damages under 42 U.S.C. §§ 1983 and 1988(b), treble damages under the Minnesota Human Rights Act, statutory and contract attorney fees, and pre- and post-judgment interest.

            MPHA counterclaimed, alleging breaches of the parties' contracts.  In 2002, Reco voluntarily dismissed 11 of its counts against MPHA.  Two of Reco's other counts were subsequently dismissed through summary judgment, as were MPHA's counterclaims.  Another count by Reco became moot when MPHA voluntarily paid sales tax in the amount of  $7,728.96 directly to the Minnesota Department of Revenue.

Reco's sole remaining claim, for breach of the 1996 contract, went to trial in June 2003.  Ultimately, judgment was entered in favor of MPHA, and it was awarded $9,324 in costs and disbursements.  After trial, Reco moved for more than $360,000 in attorney fees and costs.  The district court denied the motion in its entirety, concluding that Reco was not the prevailing party in the suit, that the contract did not allow attorney fees for defending against counterclaims, and that the billing records did not support the requested amount of fees.

D E C I S I O N

            Reco argues that the district court abused its discretion in failing to award Reco attorney fees under the parties' contracts.[1]  Attorney fees are not recoverable unless authorized by statute or contract, and we will not disturb a district court's decision regarding an award of attorney fees absent an abuse of discretion.  City of Savage v. Formanek, 459 N.W.2d 173, 177 (Minn. App. 1990), review denied (Minn. Oct. 25, 1990).  In determining the size of the fee, the district court must consider the "time and effort required, novelty or difficulty of the issues, skill and standing of the attorney, value of the interest involved, results secured at trial, loss of opportunity for other employment, taxed party's ability to pay, customary charges for similar services, and certainty of payment."  Jadwin v. Kasal, 318 N.W.2d 844, 848 (Minn. 1982).

            The threshold issue is whether the district court erred as a matter of law in determining the prevailing party in the lawsuit for purposes of recovering attorney fees under the contract.  The parties' contract provides:

E.  Attorney Fees

 

In the event either party is forced to bring an arbitration, suit or action to enforce the terms of this Agreement, the prevailing party shall be entitled to its costs and expenses, including, but not limited to reasonable attorney's fees, from the other party.[2]

 

The district court determined that Reco initiated the litigation, that there were 26 different counts alleged by the parties, and that MPHA was the prevailing party because it won on the only claim that went to trial, which was Reco's most substantial claim.

Reco argues that it was the prevailing party because it prevailed on its motion for summary judgment resulting in the dismissal of MPHA's three counterclaims alleging more than 30 breaches of the contracts and because MPHA, in response to the lawsuit, voluntarily paid sales tax.  Prevailing on a grant of summary judgment may be a basis for an award of attorney fees.  See Kjesbo v. Ricks, 517 N.W.2d 585, 591 (Minn. 1994).  But the district court has discretion in deciding who qualifies as a prevailing party.  Benigni v. County of St. Louis, 585 N.W.2d 51, 54-55 (Minn. 1998), review denied (Minn. May 20, 1997).  We have upheld a district court's determination that a party who prevailed on summary judgment did not qualify as a prevailing party and was not entitled to attorney fees.  See, e.g., Gross v. Running, 403 N.W.2d 243, 248 (Minn. App. 1987), review denied (Minn. May 20, 1987).  In determining who qualifies as the prevailing party, "the general result should be considered, and inquiry made as to who has, in the view of the law, succeeded in the action.  The prevailing party in any action is one in whose favor the decision or verdict is rendered and judgment entered."  Borchert v. Maloney, 581 N.W.2d 838, 840 (Minn. 1998) (quotation omitted). 

"Interpretation of a contract is a question of law, which this court reviews de novo."  Collins v. Minn. Sch. of Bus., Inc., 636 N.W.2d 816, 818 (Minn. App. 2001).  When interpreting contracts, certain principles apply: (1) language must be given its plain and ordinary meaning; (2) a contract term must be read in the context of the entire contract so as not to lead to a "harsh and absurd result"; and (3) a contract should be interpreted to give meaning to all its provisions.  Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 394 (Minn. 1998). 

Reco alleges that the district court abused its discretion in interpreting the parties' contract.  The district court determined that the language of the contract provision required that to recover attorney fees a party must establish it was "forced to bring an action to enforce the contract" and that the language did not include situations in which a party defended against a breach of contract claim.  Reco argues, however, that there is only one reasonable interpretation of the provision: that the fees are available to the prevailing party regardless of which party initiated the action. 

The language in the contract explicitly provides fees and costs to the prevailing party in the event either party is forced to bring an action.  Accepting the district court's interpretation would render the word "either" meaningless.  Further, under the district court's interpretation, only a plaintiff could recover attorney fees.  A defendant could never recover attorney fees, no matter how frivolous the claim asserted.  We decline to read the provision in such a way.  The better interpretation allows either party, regardless of who initiated the initial claim, to receive attorney fees if it prevails.  We agree with Reco that a successful defense against counterclaims may entitle the prevailing party to attorney fees in an appropriate case.  Reco's defense against the MPHA counterclaims alleging more than 30 breaches of the parties' contracts may have resulted in significant legal expenses to Reco.  The dismissal may have been a favorable result justifying attorney fees. 

But our disagreement with the district court does not require reversal of the court's denial of Reco's motion.  Under the parties' contract, Reco could not recover attorney fees unless it was the "prevailing party."  This can be reasonably understood as meaning the overall prevailing party in the litigation.  Here, the district court disagreed with Reco's claim that it prevailed on the summary judgment motion with respect to MPHA's counterclaims.  The court stated that it "dismissed [the claims] on [its] own motion on their merits, and explicitly did not reach [Reco's] arguments in the summary judgment motion."  Further, Reco alleged 15 counts and sought more than $600,000 in damages.  Although one count was resolved when MPHA paid $7,728.96 to the Minnesota Department of Revenue, MPHA claimed it made this payment only because the amount in controversy did not justify the cost of litigation.  The surviving claim that went to trial resulted in a verdict in MPHA's favor.  With numerous claims and counterclaims and with virtually all of them being dismissed, the litigation takes on a complexity and dynamic best understood by the district court.  The court is not obliged to determine the wins and losses count-by-count, claim-by-claim, total up each side's victories and losses, and award individual fees that either offset one another or survived as independent claims.  Rather, the district court has discretion to look at the entire litigation to determine whether a party was successful or unsuccessful overall.  The district court was in the best position to evaluate whether, overall, Reco should be characterized as the prevailing party.  In this case, the district court determined that Reco's basic position in the litigation was unsuccessful and rejected its claim of more than $360,000 in attorney fees.  Given this complex setting, we cannot say that the district court abused its discretion in determining that MPHA was the prevailing party and denying Reco attorney fees. 

Finally, Reco argues that the district court abused its discretion in failing to make a finding on the reasonableness of its claimed fees and in requiring Reco to allocate fees to specific claims and counterclaims.  Because we have decided that the district court did not abuse its discretion in finding that Reco was not the prevailing party and in concluding that Reco is not entitled to fees, we do not reach those questions dealing with the amount of fees.

Affirmed.

[1] In its initial brief, Reco additionally sought attorney fees under Minn. R. Civ. P. 11, but it withdrew the rule 11 claim in its reply brief, conceding that it failed to meet the requirements to make such a claim.

 

[2] This language comes from paragraph XXV E. of the 1998 agreement.  Since the parties did not assert that the attorney fee provisions in the various contracts differed, we assume all of the contracts had the same attorney fee clauses.