Ryan Companies US, Inc. v. FDP WTC, LLC

• Court: Court of Appeals of Iowa
• Decided: August 30, 2023
• Docket: 22-0925
• Status: Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 22-0925 Filed August 30, 2023

RYAN COMPANIES US, INC., Plaintiff-Appellee,

vs.

FDP WTC, LLC, Defendant-Appellant. ________________________________________________________________

Appeal from the Iowa District Court for Black Hawk County,

David P. Odekirk, Judge.

A defendant challenges the district court’s award of attorney fees and costs

on remand. AFFIRMED.

Philip S. Bubb, Brandon R. Underwood, and Sarah B. Golwitzer of

Fredrickson & Byron, P.A., Des Moines, for appellant.

Bradley D. Fisher and Brian D. Steffes of Fisher Bren & Sheridan, LLP,

Minneapolis, Minnesota, and Stephen D. Marso and Anna E. Mallen of Whitfield &

Eddy, P.L.C., Des Moines, for appellee.

Considered by Bower, C.J., and Badding and Buller, JJ. 2

BADDING, Judge.

In its third go-around on appeal, FDP WTC, LLC challenges the district

court’s award of attorney fees and costs on remand. We find no abuse of discretion

and affirm.

I. Background Facts and Proceedings

Beginning in 2016, FDP entered into a series of three contracts with Ryan

Companies US, Inc., a general contractor, to renovate a factory building into a

hotel. The parties called the first contract the “Courtyard Contract”; the second

was the “Sitework Contract”; and the third was the “John Deere Contract.”

Two years later, Ryan petitioned to foreclose its mechanic’s liens against

FDP for the project and claimed FDP breached the Courtyard and Sitework

contracts. An amended petition broadened Ryan’s claims to include the John

Deere Contract, as well as claims based on implied-in-fact and implied-in-law

contracts. FDP counterclaimed for breach of all three contracts. Ryan

successfully moved for partial summary judgment on the John Deere Contract and

was awarded $340,238.16. We affirmed that award on appeal. See Ryan Co. US,

Inc. v. FDP WTC, LLC, No. 19-1698, 2021 WL 211156, at *2 (Iowa Ct. App.

Jan. 21, 2021).

Following a bench trial on the other two contracts, the district court entered

judgment in September 2020 for Ryan on its breach-of-contract and mechanic’s

lien foreclosure claims, denied its implied-in-fact and implied-in-law contract

claims, and dismissed FDP’s counterclaims. The court awarded Ryan

$452,817.00 in damages for the Courtyard Contract and $224,086.00 for the 3

Sitework Contract, for a total of $676,903.00, plus interest, costs, and $116,876.43

in attorney fees.

On FDP’s appeal from this ruling, we reversed the district court’s decision

to award Ryan damages for work it performed without valid change orders that

was above the two contracts’ guaranteed maximum prices. See Ryan Co. US, Inc.

v. FDP WTC, LLC, No. 20-1366, 2022 WL 469336, at *4 (Iowa Ct. App.

Jan. 12, 2022). This reduced Ryan’s total judgment on the Courtyard and Sitework

contracts from $676,903.00 to $427,319.00—a difference of $249,584.00. We

otherwise affirmed the court’s judgment for Ryan, including its dismissal of FDP’s

counterclaims. Id. at *4–5.

Because Ryan prevailed on the breach-of-contract and mechanic’s lien

foreclosure claims, we found the company was “entitled to recover attorney fees

by statute and contract.” Id. at *5 (discussing the contracts’ provision requiring

FDP to pay Ryan “all costs reasonably incurred by [Ryan] in the collection of

amounts payable to Contractor hereunder, including reasonable attorney’s fees”);

see also Iowa Code § 572.32(1) (2018) (allowing “a prevailing plaintiff” to recover

“reasonable attorney fees”). But our court recognized

that the district court’s award of attorney fees was based on its ruling that Ryan succeeded on all of its claims. As this opinion modifies the district court’s ruling to vacate part of Ryan’s judgment, we believe reconsideration of the attorney fee award is appropriate to take into account Ryan’s only partial success. As a result, we vacate the attorney fee award and remand to the district court to determine an appropriate attorney fee award in light of the partial success and partial lack of success by Ryan in this suit. 4

Ryan, 2022 WL 469336, at *5. We did not include the court’s award of costs in the

scope of our remand, and we assessed costs on appeal “two-thirds against Ryan

and one-third against FDP.” Id.

Back before the district court on remand, Ryan requested an additional

$78,106.00 in attorney fees and $872.15 in costs that it incurred after the court’s

judgment entry in September 2020, plus the full amount of attorney fees that it had

originally been awarded—$116,876.43. Ryan referred to the initial award of

attorney fees as “prejudgment fees,” the fees incurred after the judgment as “post-

judgment fees,” and the costs incurred after the judgment as “post-judgment

costs.”

In a thorough ruling, the court found that the

case involved three separate, complicated construction contracts. Ryan’s petition, as amended, set out 13 separate counts addressing numerous construction issues and bringing claims against FDP on the three contracts for damages totaling $1,017,141.16: Courtyard— $452,817; Sitework—$224,086; and John Deere—$340,238.16. FDP’s answer and counterclaims, as amended, alleged numerous affirmative defenses together with a counterclaim alleging three separate counts of breach of contract—one count for each of the aforementioned contracts also involving numerous issues—for damages totaling $1,387,476. Ultimately, the combined claims/counterclaims of both parties concerning all three contracts involved alleged damages totaling $2,404,617.16.

Examining the case “as a whole in light of Ryan’s success and/or failure,”

rather than “sift[ing] out specific minutes and hours billed as they relate[d]” to that

success or failure, the court found the “combined value of the claims and

counterclaims Ryan prevailed on or successfully defended” against totaled

$2,155,033.16—an approximate ninety-percent success rate. The court

accordingly found “a reduction of 10% should be made to both the pre-judgment 5

fees and post-judgment fees requested by Ryan to reflect its partial success.” That

resulted in an award of $105,188.79 in prejudgment attorney fees and $69,911.00

in post-judgment attorney fees. The court made the same ten-percent reduction

to the requested amount of post-judgment costs, for an award of $785.31, although

it did not disturb the prejudgment costs, which it found were left “unchanged by the

appellate decision” and “final as the law of the case for the purposes of remand.”

FDP appeals, claiming the district court abused its discretion in reducing

Ryan’s award of prejudgment attorney fees, post-judgment attorney fees, and

costs by only ten percent.

II. Standard of Review

“We review the district court’s award of attorney fees for an abuse of

discretion.” GreatAm. Leasing Corp. v. Cool Comfort Air Conditioning &

Refrigeration, Inc., 691 N.W.2d 730, 732 (Iowa 2005); accord Baumhoefener

Nursery, Inc. v. A & D P’ship, II, 618 N.W.2d 363, 368 (Iowa 2000) (reviewing an

award of attorney fees in a mechanic’s lien case for abuse of discretion). “Reversal

is warranted only when the court rests its discretionary ruling on grounds that are

clearly unreasonable or untenable.” GreatAm. Leasing Corp., 691 N.W.2d at 732

(citation omitted).

III. Analysis

A. Attorney fees

In a sliding-scale attack on the district court’s attorney fee awards, FDP

argues that (1) Ryan should not have been awarded any attorney fees, pre- or

post-judgment, because FDP is “equitably entitled to” a $249,584.00 credit against

those fees—the amount Ryan’s damages were reduced in the second 6

appeal; (2) Ryan should have only been awarded one-third of its requested post-

judgment attorney fees because, “[b]ased upon the division of appellate court

costs, Ryan [was] only . . . one-third successful on appeal”; (3) Ryan’s

prejudgment attorney fees should have been reduced by thirty-seven percent,

which is the percentage its damages were reduced on appeal; and (4) the total fee

award should have been reduced in an unspecified amount because of “duplicative

invoices, duplicative hours, and inappropriate time entries.”

FDP’s first three arguments are a challenge to the method the district court

used to determine Ryan’s attorney fees on remand and seek to tie those fees, in

some manner, to the damages or costs Ryan was awarded in the second appeal.

But, as our supreme court has repeatedly recognized,

[t]here is no precise rule or formula for making these determinations. The district court may attempt to identify specific hours that should be eliminated, or it may simply reduce the award to account for the limited success. The court necessarily has discretion in making this equitable judgment.

Vaughan v. Must, Inc., 542 N.W.2d 533, 541 (Iowa 1996); accord Lee v. State, 874

N.W.2d 631, 649 (Iowa 2016) (“[T]here is no precise methodology the district court

must employ to calculate an appropriate award of attorney fees.”).

“The proportionality of the award to the amount of attorney fees is one factor

to consider, but it cannot be the sole factor in determining the amount of attorney

fees.” Standard Water Control Sys., Inc. v. Jones, No. 17-0854, 2018 WL 739330,

at *2 (Iowa Ct. App. Feb. 7, 2018); accord Lynch v. City of Des Moines, 464

N.W.2d 236, 239 (Iowa 1990) (“[P]roportioning the fees on the basis of the size of

the award ignores all of the other factors,” like the “difficulty of the issues,

experience of the lawyer, and customary charges.”). Those other factors include: 7

[T]he time necessarily spent, the nature and extent of the service, the amount involved, the difficulty of handling and importance of the issues, the responsibility assumed and results obtained, the standing and experience of the attorney in the profession, and the customary charges for similar service.

Schaffer v. Frank Moyer Constr., Inc., 628 N.W.2d 11, 24 (Iowa 2001) (citation

omitted). Although reductions may be made for partial success, see Boyle v. Alum-

Line, Inc., 773 N.W.2d 829, 832 (Iowa 2009), “the court ultimately must consider

the reasonableness of the hours expended on the litigation as a whole in light of

the degree of success actually obtained.” Lee, 874 N.W.2d at 649.

The district court addressed the Schaffer factors at length:

This case has now spanned approximately four years with extensive written discovery, depositions, as well as the exchange and review of over 15,000 pages in documents. Ryan’s attorneys also prepared and argued a motion for summary judgment which resolved one contract claim. Ryan’s counsel then prepared for and attended the four-day non-jury trial on the remaining two claims. Further, the case involved post-trial motions and two separate appeals before reaching its current procedural status. . . . The Court finds a very high degree of diligence and preparation was required of Ryan’s counsel to manage the complexity of the many moving parts of not only Ryan’s claims, but also FDP’s counterclaims. . . .

Despite FDP’s attempts to confine Ryan’s success to the result of the

second appeal, the court properly considered the whole picture before concluding:

Although there is an argument that Ryan was only successful on two-thirds of its claims, the Court finds this would fail to account for the successful work performed by Ryan’s attorneys on the case as a whole. The Court finds upon review of the whole case, an award of attorney fees should be made in light of Ryan’s success rate on the claims it brought, as well as its success rate in defending against FDP’s counterclaims. To do otherwise would result in a misleading and patently unfair view of the work required of Ryan’s attorneys to obtain the overall result in this matter. Therefore, in view of the record as a whole and overall result Ryan’s counsel achieved, the Court finds the percentage rate that best reflects Ryan’s overall success in this case is 90%. 8

See Lee v. State, 906 N.W.2d 186, 199 (Iowa 2018) (“The district court did not

abuse its discretion by adopting the percentage method as opposed to another

method.”). We find no abuse of discretion in this determination. See

Vaughan, 542 N.W.2d at 541–42 (affirming district court’s decision to award

seventy-five percent of the attorney fees requested after the court “examined the

case as a whole and the success (and failures) of the plaintiff”).

As for FDP’s fourth argument about “duplicative or inappropriate billing

entries,” which was based in part on Ryan’s use of in-state and out-of-state

counsel, we also find no abuse of discretion in the court’s conclusion that

Ryan was justified in hiring local counsel to ensure compliance with Iowa law and that both parties utilized multiple attorneys, both during pretrial litigation and at trial. Ryan’s attorneys were experienced trial attorneys with specific knowledge and experience in the area of construction litigation, and the Court finds the hourly rates reflected in the itemizations and invoices are commensurate with the professional standing and experience of Ryan’s attorneys and the work performed.

See GreatAm. Leasing Corp., 691 N.W.2d at 733 (“The district court is considered

an expert in what constitutes a reasonable attorney fee, and we afford it wide

discretion in making its decision.”). To the extent that FDP claims the court

“abused its discretion when it did not specifically address the duplicative invoices”

FDP highlighted, it was FDP’s duty to call that oversight to the court’s attention to

preserve error for appeal. See Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa

2002) (“When a district court fails to rule on an issue properly raised by a party,

the party who raised the issue must file a motion requesting a ruling in order to

preserve error for appeal.”). Because FDP did not do so, we conclude error was

not preserved on that issue. See id. 9

B. Costs

This leaves us with FDP’s ill-defined challenge to the pre- and post-

judgment costs awarded to Ryan. The sum total of FDP’s argument is: “For the

same reasons stated above concerning the reduction of the award of attorney fees

to Ryan, FDP is entitled to further reduction of the pre- and post-judgment costs

awarded to Ryan.” Because we rejected FDP’s attorney fee claims, its piggy-

backed challenge to the court’s assessment of costs fails as well.

AFFIRMED.