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Ostermeier v. Prime Properties Investments Inc.

Court of Appeals of Missouri, Western District, Third Division

December 10, 2019


          Appeal from the Circuit Court of Cass County, Missouri The Honorable R. Michael Wagner, Judge

          Before: Alok Ahuja, Presiding Judge, Gary D. Witt, Judge, Anthony Rex Gabbert, Judge


         Tracie Ostermeier and Samantha Rice ("Appellants" collectively) appeal the circuit court's denial of their motion to amend the court's judgment to award attorney fees on their Missouri Merchandising Practices Act (MMPA) claims against Prime Properties Investments, Inc. /Robb Steinbeck ("Respondents" collectively). They also appeal the exclusion of evidence during trial that they contend was relevant to their claim for punitive damages. We affirm in part, reverse in part, and remand for further proceedings consistent with this Opinion.

         Background and Procedural Information

         On September 17, 2015, Appellants filed a petition alleging they had been harmed by a bedbug infestation in apartments owned and leased by Respondents. Appellants filed an amended petition on December 23, 2015, and a second amended petition on March 31, 2016. The second amended petition alleged that, 1) Respondents negligently failed to provide habitable and sanitary living conditions to Appellants, free of bedbug infestation, and failed to eradicate the same during the course of Appellants' tenancy, 2) that Respondents violated the MMPA by continuing to demand rent monies from Appellants despite the harmful bedbug infestation, 3) that Respondents' intentional placement of Appellants in an apartment infested with bedbugs which bite humans and feed exclusively on blood constituted battery, 4) Respondents breached the implied warranty of habitability by leasing an uninhabitable apartment to Appellants, 5) Respondents breached their promise of quiet enjoyment of the leased premises, and 6) Respondents' conduct interfered with Appellants' possessory interest in the property and constituted trespass.

         Trial on Appellants' claims began August 28, 2018, and ended August 30, 2018. Two claims were ultimately submitted to the jury - negligence and the alleged MMPA violations. The jury returned a verdict in favor of Appellants on both claims, awarding actual damages in the amount of $17, 480 to Tracie Ostermeier and $2, 520 to Samantha Rice. The jury did not find Respondents liable for punitive damages. The circuit court entered Judgment on the jury's verdict on September 5, 2018.

         On September 19, 2018, Appellants moved to amend the judgment to add reasonable attorneys' fees pursuant to Section 407.025.1, RSMo 2016. Appellants requested fees in the amount of $184, 555.69. On October 5, 2018, Appellants moved for a new trial on the issue of punitive damages only. On December 13, 2018, the court denied Appellants' motion for new trial on punitive damages, and on December 27, 2018, denied Appellants' motion to amend the judgment to add attorneys' fees. The court entered final Judgment on December 30, 2018. This appeal follows.

         Standard of Review

         Our standard of review is set forth in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). Schollmeyer v. Schollmeyer, 393 S.W.3d 120, 122 (Mo. App. 2013). We will affirm the circuit court's judgment unless it is unsupported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Id. at 122-123.

         Point I

         In their first point on appeal, Appellants contend the trial court erred as a matter of law in denying their motion to amend the judgment to add an award of reasonable attorneys' fees under Section 407.025.1. Appellants argue the court misapplied the standard set forth in Section 407.025.1 by allowing Appellants' representation by Legal Aid and pro bono attorneys to be the primary factor in denying fees. Further, Appellants argue that Section 407.025.1 requires a fee award based on the reasonable time spent by Appellants' counsel regardless of whether Appellants paid fees to their counsel. Appellants also contend that the court abused its discretion in denying attorneys' fees.[1]

         '"Missouri courts adhere to the 'American Rule' which states that, ordinarily, litigants must bear the expense of their own attorney's fees."' Arcese v. Daniel Schmitt & Co., 504 S.W.3d 772, 787 (Mo. App. 2016) (quoting Lett v. City of St. Louis, 24 S.W.3d 157, 162 (Mo. App. 2000)). One common exception to the American Rule is where a statute authorizes a trial court to award attorney's fees. Williams v. Fin. Plaza, Inc., 78 S.W.3d 175, 184 (Mo. App. W.D. 2002). Here, Section 407.025.1 provides that, "The court may, in its discretion … award to the prevailing party attorney's fees, based on the amount of time reasonably expended[.]"

         In denying Appellants' motion for attorneys' fees the circuit court stated:

Court takes up Motion to Amend the Judgment to Add Award of Reasonable Attorneys Fess [sic]. Court after hearing oral argument, conducting research, considering the amount of time reasonably expended by the prevailing party's attorneys, and all other relevant facts including, but not limited to, the fact that plaintiff did not incur any legal fees in that plaintiff was represented by a legal aid attorney and an attorney working on a pro bono basis, DENIES motion.

         We note that the trial court did not deny fees on the grounds that Section 407.025.1 disallows an award in this case; the court acknowledged Section 407.025.1's provision that fees are to be based on time reasonably expended.[2] Because the court denied fees after considering several factors, including that Appellants had Legal Aid/pro bono representation, we review the court's attorney fee ruling for an abuse of discretion. Hill v. City of St. Louis, 371 S.W.3d 66, 81 (Mo. App. 2012). Judicial discretion is abused when the court's ruling is against the logic of the circumstances and is so unreasonable and arbitrary that it shocks the sense of justice. Id. We deem the trial court an expert on attorney fees in a given case due its familiarity with all issues in the case and the character of the legal services rendered. See Essex Contracting, Inc. v. Jefferson Cty., 277 S.W.3d 647, 656-57 (Mo. banc 2009) (quoting Nelson v. Hotchkiss, 601 S.W.2d 14, 21 (Mo. banc 1980)). The trial court may determine attorney fees without the aid of evidence. Id. "We presume an award of attorney's fees to be correct, and the complaining party has the burden to prove otherwise." Hill, 371 S.W.3d at 81 (internal citation omitted). We will only reverse if it is shown that the award of attorney fees was against the logic of the circumstances and so arbitrary and unreasonable as to shock one's sense of justice. Id.

         Appellate courts have identified several factors trial courts should consider when making a determination as to reasonable attorney fees. Gilliland v. Missouri Athletic Club, 273 S.W.3d 516, 523 (Mo. banc 2009). These include: (1) the rates customarily charged by the representing attorneys and local attorneys who handle similar work; (2) the number of hours reasonably spent on the litigation; (3) the nature of the services provided; (4) the degree of necessary professional expertise; (5) the nature and importance of the subject matter; (6) the amount involved or the result obtained; and (7) "the vigor of the opposition." Id.

         In O'Brien v. B.L.C. Ins. Co. a trial court awarded $1, 000, without a hearing, for attorneys' fees pursuant to Section 407.546 (an MMPA statute) after a jury returned a verdict against the defendant for odometer fraud. 768 S.W.2d 64, 71 (Mo. banc 1989). On appeal, the plaintiff argued that the appropriate fee award should have been $28, 000 based on the regular hourly rate of the participating attorneys. Id. Our Missouri Supreme Court discussed the factors necessary for consideration in awarding fees, and rejected the defendant's argument that client/attorney contingent-fee contracts should control such a determination stating, "Counsel are entitled to a reasonable fee, and are not limited to their agreed share of the client's recovery." Id. Significantly, in reversing the fee award and remanding to the circuit court with directions to determine an appropriate fee, the Court opined that, where the sense of the statute is that private litigants aid public authorities in enforcing the statutes by authorizing an award of attorney fees, fees must be determined with consideration of the legislative intent that the cost of litigation not stand in the way of statutory enforcement. Id. at 72.

         In Berry v. Volkswagen Group of America, Inc., our Missouri Supreme Court affirmed an attorney fee award of over three million dollars in a class action suit brought under the MMPA, also affirming the trial court's addition of a multiplier which brought the total award to over six million dollars. 397 S.W.3d 425 (Mo. banc 2013). The Court found the record supported "that a multiplier was necessary to ensure a market fee that compensated class counsel for taking this case in lieu of working less ...

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