It has been the longstanding rule in Missouri that a litigant may recover his attorneys’ fees and costs from the losing party if the underlying contract expressly authorizes the award of attorneys’ fees. But Missouri courts take very seriously the requirement that attorneys’ fees be expressly authorized. The Missouri Western District Court of Appeals recently reinforced this in their opinion Midland Property Partners, LLC v. Richard Watkins, WD76027.
The case stemmed from appellant Richard Watkins’ failure to make payments of $79,500 in promissory notes he executed in favor of the other members of commercial real estate management company MCI Partners, LLC. The members each sued Watkins for breach of the promissory notes and requested their attorneys’ fees.
The Circuit Court of Jackson County ruled in favor of MCI Partners’ members and awarded them fees based on a provision in the promissory notes. The provision required Watkins to pay “all reasonable costs incurred by [MCI Partners’ members] in collecting or enforcing payment [of the Notes].”
On appeal, Watkins argued that the term “costs” did not clearly encompass attorneys’ fees, and that the Circuit Court’s award of attorneys’ fees was in error. The Appellate Court agreed, reversing the Circuit Court and holding that the allowance for recovery of “costs” in the notes was insufficient to expressly authorize an award of attorneys’ fees.
The lesson to litigants who hope to recover fees? Make sure your contract specifically provides for an award of “attorneys’ fees” rather than simply allowing for the recovery of costs and expenses.
In a post next week, we’ll examine another interesting outcome of this case related to the enforceability of jury waiver provisions in contracts.
Jill Johnson is an associate in Thompson Coburn’s Business Litigation group.