Home -> Law Blog Directory -> State Law Blogs -> Showmeblawgs

State Law

: Showmeblawgs

By stan_sipple

Missouri Court of Appeals Eastern District reverses $348K attorney fee judgment against apartment complex owner arising from lawsuits between the owner and his insurance companies for hail storm damages. Goralnik, Goralnik Realty Company, LLC and Goralnik Holding Company, LLC, Appellants v. United Fire & Casualty Company, Respondent. Case Number: ED88138 Handdown Date: 12/11/2007
Appeal From: Circuit Court of St. Louis County, Hon. Gary M. Gaertner, Jr.
The apartment owner sued his property insurer for failing to pay for hail damage to his buildings. The Insurer counterclaimed for fraud and for the owners failure to comply with claims conditions. The jury found against the owner on its damages claims and for the insurer on its claim the owner failed to follow procedures but awarded no damages. Still the trial court awarded the insurer over $348K in attorney fees because it determined the owner had made false statements after the storm to a bank from which he sought a loan. Missouri Court of Appeals reverses, finding this was not collateral litigation that would justify an attorney fee award. The trial court erred in awarding United its attorneys' fees and expenses. The American Rule provides that a party is responsible for its own attorneys' fees absent certain limited exceptions, and none of the recognized exceptions applied in this case. (3) A false statement in a loan application to an unrelated third party that did not directly or indirectly damage Insurer or result in increased litigation expenses to United does not constitute "special circumstances" that would justify awarding attorneys' fees and expenses. (4) The "collateral litigation" exception to the American Rule is inapplicable as a basis for awarding attorneys' fees and expenses in the same lawsuit between the same parties.

Full post as published by Showmeblawgs on December 16, 2007 (boomark / email).