United States District Court, N.D. Iowa, Western Division
R. READE JUDGE UNITED STATES DISTRICT COURT NORTHERN DISTRICT
matter before the court is Counter Defendant Farmers
Cooperative Society, Sioux Center, Iowa's
(“FCS”) Application for Attorneys' Fees and
Costs (“Application”) (docket no. 95).
RELEVANT PROCEDURAL BACKGROUND
20, 2017, the court entered summary judgment in FCS's
favor on its breach of contract claim, but denied summary
judgment as to the total amount of damages-specifically,
FCS's recovery of contractual finance charges and
collection costs, which include attorney's fees.
See July 20, 2017 Order (docket no. 90) at 28. In
its order, the court stated that the amount of “damages
relating to the assessment of finance charges and
attorney's fees . . . . must be proven to the jury at
trial.” Id. at 25. On August 3, 2017, FCS
filed the Application. In the Application, FCS argues that
its recovery of attorney's fees must be determined by the
court, rather than the jury. Memorandum in Support of
Application (“FCS Brief”) (docket no. 95-8) at 2.
On August 3, 2017, the court ordered expedited briefing on
the issue of whether the court or the jury should determine
the extent of FCS's recovery of attorney's fees,
where such fees are recoverable as collection costs in the
contract. See August 3, 2017 Order (docket no. 96).
On August 9, 2017, Counter Claimants Leading Edge Pork LLC
and Brent Legred (collectively, “Leading Edge”)
filed a Response (docket no. 97). On August 11, 2017, FCS
filed a Reply (docket no. 105). The matter is fully submitted
and ready for decision.
argues that its recovery of attorney's fees must be
determined by the court, rather than the jury, pursuant to
Federal Rule of Civil Procedure 54(d)(2) and Iowa Code §
625.22. See, e.g., Application at 3-4; FCS Brief at
2; FCS Objections to Jury Instructions (docket no. 99) at
54(d)(2) provides that “[a] claim for attorney's
fees and related nontaxable expenses must be made by motion
unless the substantive law requires those fees to be proved
at trial as an element of damages.” Fed.R.Civ.P.
54(d)(2)(A). As Rule 54(d)(2) makes clear, the issue of
attorney's fees is submitted to a jury only if they must
be proven as substantive damages. Therefore, whether the
court or the jury must determine the amount of recoverable
attorney's fees depends on whether such fees are
this issue, the Eighth Circuit has stated that
under Rule 54(d)(2)(A), “a party seeking legal fees
among the items of damages, for example, fees that were
incurred by the plaintiff before the litigation begins,
” must raise its claim before trial, i.e., in
a pleading. However, “fees for work done during the
case should be sought after decision, when the prevailing
party has been identified and it is possible to quantify the
Wiley v. Mitchell, 106 F.App'x 517, 522-23 (8th
Cir. 2004) (per curiam) (internal citations and alterations
omitted) (quoting Rissman v. Rissman, 229 F.3d 586,
588 (7th Cir. 2000)). In other words, Wiley stands
for the proposition that where “attorney's fees
[are] to be awarded to the prevailing party, ” they
must be submitted by motion at the conclusion of the case,
when the prevailing party can be identified. Nat'l
Union Fir. Ins. Co. of Pittsburgh v. Donaldson Co., Civ.
No. 10-4948, 2016 WL 4186930, at *4 (D. Minn. Aug. 8, 2016)
(discussing Wiley); see also Nelson v. Frana
Cos., No. 13-CV-2219, 2017 WL 2683957, at *1 (D. Minn.
Jun. 21, 2017) (stating that, in Wiley, “the
Eighth Circuit explained that when fees are incurred for work
done during the case and their recoverability is contingent
on the outcome of the case, they are not considered
damages”). Other courts have similarly upheld the
distinction between fees recoverable by a prevailing party
(which are not substantive damages) and fees recoverable from
the time of breach, independent of the commencement or
outcome of any litigation (which are substantive damages).
When a party seeks attorney's fees pursuant to a
prevailing party provision, the condition precedent to
recovery is “the successful litigation of a
claim.” Conversely, when a party seeks attorney's
fees as a result of a breach “the condition precedent
to recovering legal costs is a breach of contract by a
Rockland Trust Co. v. Comput. Associated Int'l,
Inc., No. 95-11683, 2008 WL 3824791, at *6 (D. Mass.
Aug. 1, 2008) (internal citations and alterations omitted)
(quoting Carolina Power & Light Co. v.
Dynegy Mktg. & Trade, 415 F.3d 354, 359 (4th Cir.
2005), abrogated on other grounds by Ray Haluch Gravel
Co. v. Cent. Pension Fund of Int'l Union of
Operating Eng'rs & Participating Emp'rs, __
U.S. __, 134 S.Ct. 773 (2014)).
operative contract provision in this case reads as follows:
“If [Leading Edge] defaults and FCS refers [Leading
Edge] to an attorney for collection, FCS may, to the extent
permitted by applicable law, charge [Leading Edge] or collect
from [Leading Edge], FCS's collection costs, including
court costs and attorney fees.” FCS Appendix in Support
of Motion for Summary Judgment (docket no. 53-3) at 9. As the
court identified in a previous order, the language of the
provision provides that collection costs are due upon Leading
Edge's default and FCS's retention of an attorney.
See July 20, 2017 Order at 27 (addressing Leading
Edge's Motion to Vacate Prejudgment Attachment Lien
(docket no. 70)). Accordingly, the provision is not a
“prevailing party provision” that permits
recovery of collection costs only upon FCS's successful
litigation of a ...