United States District Court, E.D. Missouri, Eastern Division
OPINION, MEMORANDUM AND ORDER
HENRY EDWARD AUTREY, District Judge.
This matter is before the Court on Plaintiff's Motion for Attorneys' Fees and Expenses, [Doc. No. 98], Plaintiff's Motion for Recoupment of Advance Payments, [Doc. No. 100], Plaintiff's Motion for Relief from the Court's August 18, 2014 and September 25, 2014 Orders, [Doc. No. 103], and Defendants' Motion for New Trial, [Doc. No. 103]. Defendants have not responded to Plaintiff's Motions.
Plaintiff filed this declaratory judgment action seeking a determination of whether Defendants were entitled to insurance coverage under a fire loss policy issued by Plaintiff. Following a jury trial, judgment was entered in favor of Plaintiff.
Attorney's Fees and Costs
Plaintiff seeks attorney's fees incurred over the course of this litigation. Under the American Rule, "parties are required to pay their own attorney's fees unless an award of fees is authorized by statute." Kelly v. Golden, 352 F.3d 344, 352 (8th Cir.2003). Under the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, there is no provision for the award of attorney's fees. However, "attorney's fees may be awarded under 28 U.S.C. § 2202 where such an award is authorized by applicable state law for comparable actions." Cedar Hill Hardware and Const. Supply, Inc. v. Insurance Corp. of Hannover, 4:04CV743 DJS, 2006 WL 2862145, at * 3 (E.D.Mo. Oct. 4, 2006) (quoting Am. Family Ins. Co. v. Dewald, 597 F.2d 1148, 1151 (8th Cir.1979).
In declaratory judgment proceedings under Missouri law, "the court may make such award of costs as may seem equitable and just." Section 527.100 RSMo. An award of costs under this provision, however, does not automatically include attorney's fees. Smith v. City of St. Louis, 395 S.W.3d 20, 26 (Mo. banc 2013). Instead, attorney's fees may be awarded as costs in a declaratory judgment proceeding where special circumstances exist. Id. The special circumstances "exception is narrow, strictly applied, and does not apply every time two litigants maintain inconsistent positions." Goellner v. Goellner Printing, 226 S.W.3d 176, 179 (Mo.App.E.D.2007).
Plaintiff contends that intentional misconduct by a party is a special circumstance justifying an award of attorney's fees. The Court has reviewed numerous cases addressing this issue and finds that this case is properly aligned with the ruling in Allstate Ins. Co. v. Estes, 118 F.Supp.2d 968 (E.D. Mo 2000), in which the Court awarded attorney's fees to the insurer in a declaratory judgment action in connection with a fraudulent fire damage claim. Estes, 118 F.Supp.2d at 974. In that case, the Court ruled that there was no coverage under the insurance policy because the insured was found to be responsible for the fire. Id. Based on the fraud, the Court held that special circumstances existed justifying the award of attorney's fees. Id.
Based on the facts of this case, this Court finds special circumstances are present to justify an award of attorney's fees. In finding for Plaintiff, the jurors specifically found intentional misconduct by Defendants with regard to their claim.
This intentional misconduct necessitated Plaintiff bringing this declaratory judgment action to protect itself from the fraudulent claim. As a result, the intentional misconduct on behalf of the insureds directly caused Plaintiff to incur the claimed attorney's fees. This Court finds that these facts constitute special circumstances justifying an award of attorney's fees.
Section 527.100 RSMo does not specify what costs are permitted and at this point, the Court cannot ascertain what costs Plaintiff seeks. As such, the Court will grant the motion with regard to costs, as well as attorney's fees, with the amount of such costs and fees to be determined subsequent to Plaintiff's submission of amounts and documentation of attorney's fees and costs incurred.
Recoupment of Advance Payments
When an insured's intentional concealment or material misrepresentations have voided an insurance policy, "the property insurer is entitled to recoupment and restitution of the amount it paid to the insured or to the insured's mortgagees." Cedar Hill Hardware v. Insurance Corp of Hannover, 2006 WL 2862145, at *1 (E.D. Mo 2006), aff'd, 563 F.3d 329 (8th Cir. 2009). Because there is no dispute concerning the amount of the advancement, Plaintiff is entitled to recoup its advance payment of $40, 000 from Defendants. Although Plaintiff also seeks interest on the advance payments, Plaintiff presents no clear authority to do so, and the Court is of the opinion that interest is not warranted herein. The Motion is granted as to the advance payments and denied as to interest.
Relief from the Court's August 18, 2014 and September 25, 2014 Orders
Plaintiff seeks relief from the Court's Orders of August 18 and September 25, 2014 which relate to production of the Agent, Mike Ehrlich's file. At the time of the entry of the Orders, the Court reasoned that production of the file was appropriate and Plaintiff's failure to produce the file warranted the sanctions the Court imposed. Plaintiff now urges relief due to the outcome of the trial and the finding of misrepresentations by Defendants. The finding of misrepresentation does not, a fortiori, require relief from the Orders. Production of the file was proper through discovery and the fact that Defendants ...