Implied Covenant Counterclaim Found to be “a Term” Under Contract for Fee Clause Purposes.
Two beverage bottling companies won something on their dueling claims: plaintiff won $861,000 on a contract claim while counterclaimant won $183,000 on an implied covenant counterclaim. However, as we have frequently blogged about, the attorney’s fees contest is often the real “game, set and match,” with plaintiff requesting a $2.7 million fee award and counterclaimant asking for a $1.3 million fee recovery. (BLOG NOTE: All this over a dispute involving a little over a $1 million total–yikes!) The district judge found no one prevailed because both sides won sizable awards in litigation involving claims which presented significant issues for resolution.
The Eighth Circuit Court of Appeals, in Southern Wine and Spirits of Nevada v. Mountain Valley Spring Co., LLC, Nos. 12-1857/12-1915 (8th Cir. Apr. 5, 2013) (published), affirmed the “no prevailing party” determinations. After finding that an implied covenant counterclaim was “on the term” of the contract for fee clause purposes, the appellate panel then agreed that a fee award was not automatic such that the district court did have discretion to find no prevailing party (as it did).
“Bottle House”, an artist’s home made largely out of bottles near Beaumont, Texas. Carol M. Highsmith Collection. Library of Congress.