United States District Court, E.D. Missouri, Eastern Division
In re PEABODY ENERGY CORPORATION, et al., Debtors.
PEABODY ENERGY CORPORATION, et al., Appellees. DMS CONTRACTING, INC., Appellant,
MEMORANDUM AND ORDER
STEPHEN R. CLARK UNITED STATES DISTRICT JUDGE.
matter comes before the Court on DMS Contracting, Inc.'s
appeal of the Bankruptcy Court's award of attorneys'
fees to Peabody Energy Corporation. After reviewing the briefs
and the record and conducting a hearing in this matter, the
Court finds the Bankruptcy Court clearly erred in determining
that Peabody's fee request was timely during the
bankruptcy proceedings. As a result, the Court vacates the
award of fees and expenses and remands the matter for further
proceedings consistent with this order.
Bankruptcy Court's record and orders clearly and
extensively record the events underlying this appeal. An
abbreviated version of events taken from those orders and the
record before the Bankruptcy Court establishes the following:
April 23, 2015, DMS entered into a construction Agreement
Between Owner and Design-Builder (the
“Contract”) with Peabody Gateway North Mining,
LLC (“Gateway North”). Bankr. Doc.
3500. Gateway North operates an underground coal
mine in Coulterville, Illinois. Id. DMS and Gateway
North contracted to build a new refuse cell for waste
disposal. Id. On April 13, 2016, Peabody, including
Gateway North, filed for Chapter 11 bankruptcy. Bankr. Doc.
1. DMS completed construction of the cell in July 2016.
August 19, 2016, DMS filed proof of claim no. 6144 against
Gateway, in the amount of $3, 467, 836.60, for services DMS
claimed it performed after the petition date due to
unforeseen conditions at the construction site. ECF Claim
23-1. On December 27, 2016, Peabody first
objected to the claim but then later withdrew its objection.
Bankr. Docs. 1847, 2094. On March 17, 2017, the Bankruptcy
Court confirmed Peabody's Chapter 11 plan, and it became
effective on April 3, 2017. Bankr. Doc. 2763. On April 14,
2017, Peabody again objected to the DMS claim. Bankr. Doc.
2910. After briefing and a hearing on the claim, the
Bankruptcy Court disallowed DMS's claim along with 105
other claims. Bankr. Doc. 3027.
7, 2017, the Bankruptcy Court granted DMS's motion to
reconsider the claim. Bankr. Doc. 3225. After a limited scope
evidentiary hearing on August 31, 2017, the Bankruptcy Court
again disallowed DMS's claim on October 12, 2017. Bankr.
Doc. 3501. Thirty-five days later, on November 16, 2017,
Peabody filed a motion for attorneys' fees and expenses
pursuant to a fee-shifting provision in the Contract. Bankr.
Doc. 3557. Peabody did not seek, and the Bankruptcy Court did
not grant, any extension of time to file its motion. After
briefing and an evidentiary hearing held on January 9, 2018,
the Bankruptcy Court granted the fee motion and awarded
Peabody $433, 102.78 in attorneys' fees and expenses.
Bankr. Docs. 3668, 3669. DMS appealed and this Court remanded
for further development of the Bankruptcy Court's
findings of fact and conclusions of law in support of the
January 2018 Order and Judgment. See Case No.
4:18-cv-00306 RLW, 2019 WL 1367769 (E.D. Mo. Mar. 26, 2019).
On April 11, 2019, the Bankruptcy Court made additional
findings of fact and again awarded Peabody $433, 102.78 in
fees and expenses. Bankr. Doc. 3871. DMS timely filed an
JURISDICTION AND STANDARD
Court has jurisdiction over the appeal pursuant to 28 U.S.C.
§ 158(a)(1). “When a Bankruptcy Court's
judgment is appealed to the district court, the district
court acts as an appellate court and reviews the Bankruptcy
Court's legal determinations de novo and findings of fact
for clear error.” Fix v. First State Bank of
Roscoe, 559 F.3d 803, 808 (8th Cir. 2009) (internal
quotation and citation omitted). Issues committed to the
Bankruptcy Court's discretion are reviewed for an abuse
of that discretion. In re Zahn, 526 F.3d 1140, 1142
(8th Cir. 2008). An abuse of discretion occurs when the
Bankruptcy Court fails to apply the proper legal standard or
bases its order on findings of fact that are clearly
raises four issues in its appeal: (1) whether the Bankruptcy
Court erred in its application of federal and Missouri law in
determining that Peabody's fee request was timely; (2)
whether the Bankruptcy Court erred in determining that
Peabody could not have sufficiently pleaded or provided
notice of its request for fees in the DMS claim proceedings;
(3) whether the Bankruptcy Court abused its discretion in
determining that Peabody's fees and expenses were
reasonable; (4) whether the Bankruptcy Court erred in
determining that Peabody was not required to assume or reject
the Contract at issue in the DMS claim; and (5) whether the
Bankruptcy Court erred in determining that the fee provision
in the Contract was enforceable against DMS post-confirmation
if the Contract was rejected.
Application of Federal Rule of Civil Procedure Rule
argues that Federal Rule of Civil Procedure
(“FRCP”) 54(d)(2) required Peabody to file its
motion for attorneys' fees within 14 days of the entry of
judgment unless Missouri law required those fees to be proved
at trial as an element of damages. DMS states Peabody did not
file its motion for attorneys' fees within fourteen days
of the entry of judgment nor did it include a request for
attorneys' fees in any pleading, as required by Missouri
law. Therefore, according to DMS, Peabody filed an untimely
request for attorneys' fees.
Bankruptcy Court held that Peabody was exempt from Rule
54's 14-day time period for filing a motion for
attorneys' fees because Missouri law makes attorneys'
fees sought pursuant to a contract an element of damages to
be proven at trial. Bankr. Doc. 3870. Further, the Bankruptcy
Court found that Peabody did not need to request
attorneys' fees in a pleading because of the unique
nature of the proceedings in Bankruptcy Court and that
Peabody satisfied the ...