United States District Court, W.D. Missouri, Western Division
ORDER HOLDING DEFENDANT LIABLE FOR CERTAIN
KAYS, CHIEF JUDGE
case involves a franchise agreement between Defendant Dr.
Vinyl & Associates, Ltd. (“Dr. Vinyl”), and
Plaintiff Restored Images Consulting, LLC (“Restored
Images”), the sole member of which is Third-Party
Defendant Christopher Collins (“Collins”). The
parties tried their claims to the Court on January 12 and 13,
2016. The Court found in favor of Restored Images on one
count of breach of contract, and found no party proved any
the Court is Restored Images and Collins’s motion for
attorneys’ fees (Doc. 149). As explained below, the
Court finds Dr. Vinyl liable to Restored Images and Collins
for their reasonable attorneys’ fees related to the
breach of contract claims. The motion is GRANTED.
Vinyl breached a Master Franchise Agreement that read,
“If a claim for amounts owed by [Dr. Vinyl] to
[Restored Images] is asserted in any legal proceeding before
a court of competent jurisdiction . . ., the party prevailing
in that proceeding is entitled to reimbursement of its costs
and expenses incurred, including reasonable accounting and
legal fees.” (Ex. 2 ¶ 17(E)). Similarly, Dr. Vinyl
sued Collins under his Franchise Agreement, which entitled
“the party prevailing” to reimbursement of
reasonable attorneys’ fees. (Ex. 1 ¶ 16(F)).
Claiming to be prevailing parties, Restored Images and
Collins seek attorneys’ fees under these contracts.
contractually permitted, a prevailing party may recoup
attorneys’ fees incurred enforcing the contract.
DocMagic, Inc. v. Mortg. P ’ship of Am.,
L.L.C., 729 F.3d 808, 812 (8th Cir. 2013) (applying
Missouri law). If the contract does not define what it means
to be a prevailing party, then the court applies the default
definition under Missouri law. Id. Neither the MFA
nor the Franchise Agreement define “the party
prevailing, ” so the Court consults Missouri law to
decide whether Restored Images and Collins are entitled to
has “two different analytical approaches for
determining a prevailing party.” Id. at 813;
see Id. at 814 (discussing “the tension in
Missouri cases between the [two] approaches” but
affirming a fee award to a party which prevailed under each
approach). The first is called main-issue analysis.
Id. at 813. Under that approach, a party
“prevails” if it succeeded on “the main
issue in dispute.” Id. (quoting Ken Cucchi
Constr., Inc. v. O’Keefe, 973 S.W.2d 520, 528
(Mo.Ct.App. 1998)). A court must decide which issue is the
“main [one] in dispute” from the perspective of
the party seeking fees, a case-specific inquiry. Martin
Underground LLC v. Trinity Excavating & Constr.,
Inc., 308 P.3d 31, 2013 WL 5188533, at *7 (Kan.Ct.App.
2013) (table decision) (compiling Missouri cases). A party
must prevail on the main issue in dispute, though it need not
recover all relief it originally asked for. Ken Cucchi
Constr., 973 S.W.2d at 528.
Court starts with Restored Images. Restored Images claimed
Dr. Vinyl breached the MFA in three ways: failing to pay a
$10, 000 franchise-sale bonus (Count I); failing to pay
royalties (also Count I); and failing to give Dr. Vinyl a
disclosure document to give to prospective franchisees (Count
III). The main issue in this case, from Restored
Images’s perspective and given the parties’
emphasis on it at trial, was Dr. Vinyl’s alleged
failure to pay Restored Images the monetary benefits due to
it as a master franchisee. See also Martin Underground
LLC, 2013 WL 5188533, at *8. This encompasses Restored
Images’s first two claims, one of which it won: the
franchise-sale bonus. It is therefore the prevailing party
under the main-issue approach. Although Restored Images lost
on its royalties claim, a party need not run the table to be
a prevailing party. See Ken Cucchi Constr., 973
S.W.2d at 528.
comes Collins. Dr. Vinyl sued Collins for breaching the
Franchise Agreement in a single way. That issue is
necessarily the main issue. Because Dr. Vinyl failed to prove
a breach, Collins prevails under the main-issue analysis.
Missouri courts determine the prevailing party by something
called a net-prevailing-party analysis. DocMagic,
Inc., 729 F.3d at 813. Under the net-prevailing-party
approach, the court “essentially arithmetically
calculates which party received ‘the most points’
. . . ‘at the end of the contest.’”
Id. at 813 (citing Ozias v. Haley, 125 S.W.
556, 557 (Mo.Ct.App. 1910)). “Points” may be
dollars awarded, or it may be the number of claims that the
party won and successfully defended against. Id. at
Images prevailed if the metric is monetary: Restored Images
recovered $10, 000 from Dr. Vinyl, and Dr. Vinyl recovered
nothing. Restored Images also prevailed if the metric is how
many claims it won versus Dr. Vinyl. Restored Images and Dr.
Vinyl brought eight claims against each other. Restored
Images won one and successfully defended against five. Dr.
Vinyl won none and successfully defended against only two. By
a score of 6-2, Restored Images is the net prevailing party.
See Id. at 814.
Collins, neither he nor Dr. Vinyl recovered money on the sole
Franchise Agreement claim. Nonetheless, Collins successfully
defended against that one claim. Collins is therefore the net
prevailing party on the third-party complaint. See
Id. (crowning a litigant the prevailing party even
though it recovered less money, because it won more claims).
Images and Collins were the prevailing parties in their
respective contracts. Dr. Vinyl is thus liable for fees ...