United States District Court, D. Montana, Billings Division
BANJOSA HOSPITALITY, LLC, a Colorado limited liability company, Plaintiff,
HISCOX, INC., Defendant.
TIMOTHY J. CAVAN UNITED STATES MAGISTRATE JUDGE
the Court is Defendant Hiscox Insurance Company, Inc.'s
(“HICI”) Rule 54 motion for attorneys' fees
and costs. (Doc. 41.) For the reasons explained below,
HICI's request for attorneys' fees is DENIED, and
HICI's request for costs is GRANTED.
September 26, 2018, this Court issued an Order on the
parties' cross motions for summary judgment regarding
HICI's duty to defend under a Professional Liability
Insurance Policy. (Doc. 38.) The Court granted HICI's
motion, and found that the Policy unambiguously excluded
coverage and the duty to defend was not triggered.
prevailing party, HICI now requests attorneys' fees and
costs associated with its defense of this action. HICI argues
it is entitled to attorneys' fees and costs under
Montana's Uniform Declaratory Judgments Act
(“UDJA”), and under Montana's reciprocal
attorney fees statute. See, Mont. Code Ann.
§§ 27-8-313, 28-3-704. HICI acknowledges that
Montana has not addressed whether an insurer is reciprocally
entitled to attorneys' fees under a conjunctive reading
of these statutes. (Doc. 42 at 3-4.) Nevertheless, HICI
argues this is a case of extraordinary circumstances, where
it was “forced to litigate clear and unambiguous
provisions where there is unequivocally no coverage, ”
and therefore it is entitled to relief. Id. at 6-7.
Defendant Banjosa Hospitality, LLC (“Banjosa”)
counters that HICI's theory fails because no contractual
right to attorneys' fees exists to trigger §
28-3-704, and HICI cannot meet the requirements for a
supplemental award of attorneys' fees under the UDJA.
follows the American Rule that “a party in a civil
action generally may not recover attorney's fees absent a
specific contractual or statutory provision that allows for
those fees.” Horace Mann Ins. Co v. Hanke, 312
P.3d 429, 435 (Mont. 2013). Although the UDJA does not
specifically provide for an award of attorney fees, the
Montana Supreme Court has interpreted § 27-8-313 to
authorize courts to grant supplemental relief when equitable
and “necessary and proper.” Trustees of Ind.
Univ. v. Buxbaum, 69 P.3d 663, 673 (Mont. 2003);
United Nat. Ins. Co. v. St. Paul Fire & Marine Ins.
Co., 214 P.3d 1260, 1271 (Mont. 2009). The Court must
determine whether “equitable considerations support the
award” before considering whether relief is necessary
and proper. United Nat. Ins. Co., 214 P.3d at 1271.
If equity is found, only then should the Court conduct a
necessary and proper inquiry. Id. See also,
Horace Mann Ins. Co., 312 P.3d at 436.
§ 28-3-704 provides that a contractual right to attorney
fees in favor of one party is treated as reciprocal,
providing the other party to the action with the same right
to relief. See, e.g., Mont. Health Network, Inc. v. Great
Falls Orthopedic Assoc., 353 P.3d 483, 487
(Mont. 2015) (discussing a contract provision requiring
payment of attorney's fees and stating “[i]n
Montana, provisions granting attorney's fees to one party
are reciprocal by statute.”); McDonald v.
Washington, 862 P.2d 1150, 1159 (Mont. 1993) (abrogated
on other grounds) (“Section 28-3-704, MCA, requires
that the losing party pay reasonable attorneys' fees
if there is an express right to recover
attorneys' fees in the contract”) (emphasis in
original). In relevant part, the statute provides:
whenever, by virtue of the provisions of any contract or
obligation in the nature of a contract made and entered into
. . . one party to the contract or obligation has an express
right to recover attorney fees from any other party to the
contract or obligation in the event the party having that
right brings an action upon the contract or obligation, then
in any action on the contract or obligation all parties to
the contract or obligation are considered to have the same
right to recover attorney fees and the prevailing party in
any action, whether by virtue of the express contractual
right or by virtue of this section, is entitled to recover
reasonable attorney fees from the losing party or parties.
Code Ann. § 28-3-704.
of relying on each statute independently, HICI integrates the
statutes to argue “[u]nder Montana law, entitlement to
attorneys' fees arising either out of a contractual
provision or statute is reciprocal.” (Doc. 49 at 2.)
HICI argues that because attorneys' fees may have been
recoverable by Banjosa under the UDJA had it prevailed, then
attorneys' fees are available to HICI by means of the
reciprocity statute. Id. HICI's argument fails
for the following reasons.
HICI fails to support its statement that attorneys' fees
arising out of either a contractual provision or a
statute are reciprocal. HICI has failed to provide, and the
Court has not found, any Montana case where a statute
providing for attorneys' fees was reciprocally awarded to
the prevailing party under § 28-3-704. Instead, the
Montana Supreme Court has exclusively applied the reciprocity
statute to contracts containing an attorney fees provision.
See Mont. Health Network, Inc., 353 P.3d 483
(applying § 28-3-704 after identifying a contractual
provision for recovery of attorney fees); Compton v.
Alcorn, 557 P.2d 292 (Mont. 1976) (applying the
reciprocity provision where a contract provided for attorney
fees); Lussy v. Bennett, 692 P.2d 1232 (Mont. 1984)
(“if the respondents were entitled to attorney fees in
this case by virtue of contract, [Plaintiff] would be
entitled to attorney fees on a reciprocal basis under section
28-3-704”) (Colo. Nat. Bank of Denver v.
Story, 862 P.2d 1120, 1122 (Mont. 1993) (noting that
§ 28-3-704 “provides that a contractual right to
attorney's fees will be treated as reciprocal, ”
and then refusing to award attorney fees because no written
contract exists, and no statutory provision would otherwise
authorize relief); McDonald, 862 P.2d at 1159;
Valeo v. Tabish, 983 P.2d 334, 338-39 (Mont. 1999)
(discussing the Montana Supreme Court's application of
§ 28-3-704, and finding “[n]owhere . . . did we
equate a unilateral statutory right to attorney's fees as
analogous to the express right to recover pursuant to a
contract or other obligation so as to trigger the application
of § 28-3-704 . . . there [is] no provision in the
contract . . . that provides one party the express right to
recover attorney's fees from the other party which would
then require us to apply the reciprocity requirement of
it is undisputed that the contract between Banjosa and HICI
did not include an attorneys' fees provision. (Docs. 44
at 4 & 49 at 3.) Therefore, HICI's argument for fees
under the reciprocity statute fails.
HICI has not shown that it is entitled to attorneys' fees
as supplemental relief under the UDJA. The Montana Supreme
Court has explained such fees will be awarded in limited
circumstances, and the court has only once “upheld an
award of attorney's fees in a declaratory relief action
under [the UDJA].” Horace Mann Ins. Co, 312
P.3d at 358-59 (citing Renville v. Farmers Ins.
Exch., 105 P.3d 280 (Mont. 2004) (awarded attorney fees
to Plaintiff because she would have otherwise “been
better off had she never brought the claim.”)).
HICI has not shown equitable considerations entitle it to
attorneys' fees. There is no indication that Banjosa
brought this action to recover its damages under an improper
motive, or by setting forth specious arguments.
this is a case involving “two similarly situated
parties disputing the interpretation of a contract.”
United Nat. Ins. Co., 214 P.3d at 1271. The Montana
Supreme Court has determined such a ...