# United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 96-1118 No. 96-1119

___________ Farmland Industries, Inc., * * Appellant - Cross Appellee,* * v. * * Frazier-Parrott Commodities, * also known as Parrott * Corporation, doing business as * Appeals from the United States Parrott Corporation, Inc.; * District Court for the Heinold Commodities, Inc.; * Western District of Missouri. DeKalb Agresearch, Inc.; * Christopher R. Parrott; Horace * Seixas; John Dunn, * * Defendants, * * Heinold Holdings, Inc., * * Appellee - Cross Appellant.*

___________ Submitted: September 13, 1996 Filed: April 15, 1997

___________ Before BEAM, HEANEY, and JOHN R. GIBSON, Circuit Judges.

___________ JOHN R. GIBSON, Circuit Judge.

Farmland Industries, Inc. brings before us another, and perhaps the final chapter in its litigation against Frazier-Parrott

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Commodities, Inc. and others. The district court awarded Heinold Holdings , Inc
. attorneys' fees pursuant to Farmland's contract with Heinol d Commodities, Inc. Farmland argues that the attorneys' fees provision in the contract is unenforceable under Missouri law and that a party to the contract did not incu r the attorneys' fees awarded. Farmland also argues that the district court used the wrong standard to determine the amount of the attorneys' fees award. Heinold Holdings cross-appeals, arguing that the di strict court should have awarded prejudgment interest on it s attor neys' fees award. We reverse the district court's denial o f prejudgment interest and affirm in all other respects.

In 1985 Farmland entered into a cont ract with Heinold Commodities in which H einold Commodities agreed to facilitate commodities trades fo r Farmla nd, and Farmland agreed to pay Heinold Commodities' "costs an d attorn eys' fees incurred in defending against any claim brought b y [Farml and] in any suit, arbitration or reparations proceeding in whic h Heinold [Commodities] is the substantially prevailing party."

In 1986 F armland sued Heinold Commodities and others, accusing them of defrauding Farmland by manipulating Farmland's commodities trades

. Durin g Farmland's lawsuit, Heinold Holdings, which owned Heinol d Commo dities, agreed to pay Heinold Commodities' attorneys' fees

. Thereafter Heinold Commodities' attorneys direct ly billed Heinold Holdings for all services rendered on behalf of Heinold Commodities. Heinol d Commodities assigned its attorneys' fees claim a gainst Farmland to Heinold Holdings. Farmland's lawsuit proceeded to trial, and the district cour t directed a verdict in favor of Heinold Commodities at the close of th e evidence. The jury returned a verdict in favor of the other defendants on all of Farmland's claims. We affirmed. Farmland

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Indus. v. Frazier-Parrott Commodities, Inc. , 871 F.2d 1402 (8th Cir. 1989)

.
Af ter prevailing against Farmland, Heinold Commodities moved fo r summary judgment on its claim for attorneys' fees based on its contrac t with Farmland. At the same time, it asked the district court to substitut e Heinold Holdings for Heinold Commodities in the claim for attorneys' fees because of the assignment. Heinold Holdings ass erted that it was entitled to recover $748,288.38 for attorneys' fees incur red by Heinold Commodities in defending against Farmland's lawsuit.

The district court substituted Heinold Holdings for Heinol d Commodities, but denied the motion for summary j udgment. After a hearing, the dis trict court reduced the amount of attorneys' fees requested b y Heinold Ho ldings because it determined that part of the fees were no t incurred by Heinold Commodities. Relying on United States ex. rel. C.J.C. , Inc. v. Western States Mechanical Contractors, Inc. , 834 F.2d 1533 (10th Cir. 1987), the court further reduced the attorneys' fees claimed b y Heinold H oldings to an amount that it considered to be reasonable. Th e court awarded Heinold Holdings $516,359.30 in attorneys' fees, but denied Heinold Holdings' request for prejudgment interest on that award.

I.
Farmland argues that the district co urt erred in awarding attorneys' fees u nder the contract because no reasonable interpretation of th e contract permits an award in this case. It argues that we should us e Mis souri law to interpret the contract, even though the contract state s that Il linois law governs its interpretation. We will assume withou t deciding that Missouri law

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governs our interpretation of the contract.

Under Missouri law we must enforce a contract as written an d accord ing to the plain meaning of the words in the contract when th e contract is clear and unambiguous. See Cross v. Ladue Supply, Inc. , 424 S.W.2d 108, 110 (Mo. Ct. App. 1967). An ambiguity exists when a contract is susceptible to more than one reasonable inter pretation. See Coughenour v. Bates , 785 S.W.2d 291, 297 (Mo. Ct. App. 1990). Whether a contract is ambiguous is a question of law which we review de novo. See Jim Carlson Constr., Inc. v. Bail ey , 769 S.W.2d 480, 482 (Mo. Ct. App. 1989); Slotkin v. Willmering , 464 F.2d 418, 422 (8th Cir. 1972).

Farmland acknowledges that the plain language of the contrac t requires an attorneys' fees award when Farmland brings any claim against He inold Commodities and Heinold Commodities prevails. Nevertheless , Farmland argues that it is unreasonable to allow attorneys' fees in this case because its claims against Heinold Commodit ies had nothing to do with its contract with Heinold Commodities.
We conclude that the clear language of the contract rebuts Farm land's argument. The attorneys' fees provision is unam biguous. It gives Heinold Commodities a contractual right to recover its attorneys' fees "incurred in defending against any claim brought by [Farmland] in any suit . . . in which Heinold [Commodities] is the substantially prevailing party. " (Emphasis added). This plain language of the contract is broad enough to cove r Farmland's claims against Heinold Commodities resulting from its actions facilitating the commodities trades. To hold otherwise would contradict the plain language of the contract. See Slotkin , 464 F.2d at 421-22.

### Farmland contends that Missouri's public policy of ope n 1 

### access to courts is found in section 14 of article I of th e Missouri Constitution, which provides:

Open courts--certain remedies--justice without sale , denial or delay. That the courts of justice shall b e open to every person, and certain remedy afforded fo r every injury to person, property or character, and that righ t and justice shall be administered without sale , denial or delay. -5- We also reject Farmland's argument t hat following the plain language of the contract leads to an unreasonable result. Although Farmland' s claims were not based on its contract with Heino ld Commodities, they arose out of trades facilitated by Heinold Commodities for Farmland under th e contr act. The plain language of the attorneys' fees provision made i t reasonably foreseeable at the time of contractin g that the provision would apply in this type of case.

II.
Farmland argues that the attorneys' fees provision violates Missouri public policy and is unenforceable. Farmland asserts that Missouri has a public policy of open access to court s and that requiring Farmland to pay 1 attorneys' fees impedes its access to the courts and penalizes it for goin g to court.

Missou ri law permits an award of attorneys' fees in a variety o f circumstan ces, see Skyles v. Burge , 830 S.W.2d 497, 499 (Mo. Ct. App
. 1992), including when a contract provides for such an award, see JackesEvans Mfg. Co. v. Christen , 848 S.W.2d 553, 557 (Mo. Ct. App. 1993); Gibso n
v. Gibson , 687 S.W.2d 274, 277 (Mo. Ct. App. 1985). Despite thi s preced ent, Farmland argues that it violates Missouri's public policy o f open access to courts to enforce a

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contractual attorneys' fees provision in a lawsuit unrelated to enforcemen t of the contract containing the provision.
We reject Farmland's argument. Farmland has not cited, nor have we found, an y case which denies an award of attorneys' fees because i t violates Missouri's public policy of open access to its courts. Indeed, such an action would be contrary to Missouri cas es which have long allowed attorneys' fees awards without concern for imped ing access to courts. Cf. McPherson Redev. Corp. v. Shelton , 807 S.W.2d 203, 206 (Mo. Ct. App. 1991)
. Granting an award of attorneys' fees to a successful party does not prevent any party fro m asserting its rights in court. Such an award does not bar t he door to the courthouse, but simply makes the losing party' s trip to the courthouse more expensive. Missouri law allows parties t o provide for attorneys' fees in their contracts. See Skyles , 830 S.W.2d at 499; Gibson , 687 S.W. 2d at 277. We hold that an attorneys' fees award in this case does not violate Missouri public policy.

We also hold that the attorneys' fees provision is not a n imperm issible penalty. It is but part of Farmland's consideratio n supporting its contract with Heinold Commodities . In exchange for Heinold Commodities' promise to facilitate trades for Farmland, Farmland promised to pay Heinold Commodities' attorneys' fees in the event Farmlan d unsuccessfully sued Heinold Commodities. By enf orcing the attorneys' fees pro vision, we are giving Heinold Commodities the benefit of its bargai n with Farmland.

### -7- III.
Farmland argues that it is not liable for some of the attorneys ' fees awarded b y the district court because some of the fees awarded were no t incurred by Heinold Commodities. Under Farmland's contract with Heinold Commod ities, Farmland is liable only for attorneys' fees incurred b y Heinold Commodities. Farmland contends that the Heinold Commodities ' attorneys directly billed Heinold Holdings for m ost of their fees and that Heinold Holdings, not Heinold Commodities, paid those bills and incurred those fees.
The facts of this case do not suppor t Farmland's argument. Farmland sued H einold Commodities, and it hired attorneys to defend Farmland' s lawsuit. The district court awarded fees only f or the attorneys' services rendered on behalf of Heinold Commodities. Alth ough Heinold Holdings paid
some of Heinold Commodities' attorneys' fees during the course of th e lawsuit , this does not change the fact that the attorneys represente d Heinold Commodities and that Heinold Commodities was liable for their fees

. Thus, Heinold Commodities incurred the fees awar ded by the district court. See Morse/ Diesel, Inc. v. Trinity Indus., Inc. , 875 F. Supp. 165, 17 9 (S.D.N.Y. 1994).

IV.

Farmland argues that the district court erred in relying on Unite d States ex rel. C.J.C., Inc. v. Western States Mechanical Contractors, Inc. , 834 F.2d 1533 (10th Cir. 1987), to determine the amount of Heinol d Holdings' attorneys' fees award.

In Wes tern States the Tenth Circuit Court of Appeals held that a court should deferentially review a claim for attorneys' fees

### Farmland has not argued that the district court should have 2 

### used state law to determine th e amount of attorneys' fees to award under the contract. -8- under a contract in order to give the party contractually entitled to thos e fees the f ull benefit of his bargain and to ensure that the fees ar e reasonable and equitable. Id. at 1548-49. The district court carefully analyzed Western States , adopted its reasoning, and granted attorneys' fee s that fell within a range that it considered reasonable and equitable.

Farmland asserts that the district court should not have followe d Western States . Farmland contends that Western States should apply only to those cases in which a party seeks fees under a contract because o f another party's breac h of that contract. Farmland argues that because it did not breach its contract with Heinold Commodities, the district court erred in following Western States
. 2

We see no thing in Western States that supports Farmland's argument. Western States involved claims brought by subcon tractors against the prime contractor and its bonding company under the Miller Act. Id. at 1536
. While Western States refers to the situation where contracting parties hav e agreed that a breachi ng party will be liable for attorneys' fees, it goes
on to state that the purpose of the award is to give the parties th e benefit of the bargain and that the court's responsibility is to enforce tha t bargain. Id. at 1547-49. We do not see anything in the Wester n Sta tes opinion that limits attorneys' fees claims to breach of contrac t
cases. Certainly, there is nothing in Western States that limits the awar d of attorneys' fees in a case such as this, where the contract clearl y refers to any claim a nd any suit, and Farmland's suit arose from the work that Heinold Commodities

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contracted to do. We reject Farmland's attempt to limit Western States to only attorneys' fees claims that are a result of a breach of contract.

V.

Heinol d Holdings cross-appeals the district court's denial o f prejudgment interest on its attorneys' fees award. Heinold Holdings argue s that Missouri law requires prejudgment interest in this case.
The parties agree that Missouri law governs whether Heinold Holdings is entitled to prejudgment interest on its contractual claim for attorneys ' fees. Under Missouri law "[c]reditors shall be allowed to receive interes t at the rate of nine p ercent per annum, when no other rate is agreed upon, for all moneys after they become due and payable, on written contracts .

. . ." Mo. Rev. Stat. § 408.020 (1994). A court must award prejudgment interest when section 408.020 applies. See Slay Warehousing Co. v

. Relianc e Ins. Co. , 489 F.2d 214, 215 (8th Cir. 1974) (per curiam). Th e gen eral rule is that section 408.020 applies when the amount due on a party's co ntract claim is liquidated, that is, fixed or certain. Se e Cat ron v. Columbia Mut. Ins. Co. , 723 S.W.2d 5, 6 (Mo. 1987); Dierke r Assocs. v. Gillis , 85 9 S.W.2d 737, 746 (Mo. Ct. App. 1993). This general rule is based on the idea that a party should be liable for prejudgmen t interes t only when that party knows the exact amount owed. See Fohn v
. Title Ins. Corp. , 529 S.W.2d 1, 5 (Mo. 1975).
Missouri courts, however, have subjected this general rule to v arious interpretations and exceptions. See Catron , 723 S.W.2d at 6; Vogel v. A.G
. Edwards & Sons, Inc. , 801 S.W.2d 746, 757 (Mo. Ct.

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App. 1990)("[A]s has been pointed out and demonstrated, the exceptions to the liq uidation rule are legion.")(quotation omitted). One exceptio n requires prejudgment interest on unliquidated claims for the reasonabl e value of s ervices rendered. See Denton Constr. Co. v. Missouri Stat e Highway Comm'n , 454 S.W.2d 44, 59-60 (Mo. 1970). When a party is liable for the reasonable value of services, he is under a legal duty to liquidat e the s um due and must pay interest from the time he should have paid th e claim. See id. at 60 . This exception applies when a party is liable for the reasonable value of services rendered by an attorney. See Laughlin v. Boatmen's Nat'l Bank , 189 S.W.2d 974, 979 (Mo. 1945). Even though th e claimis unliquidated in the sense that the amount due is to be measured and determined by the standard of the reasonable value of the attorney's services, a court must grant prejudgment interes t on that claim. See id. ;
see also C atron , 723 S.W.2d at 7 (discussing Laughlin ). The Missour i Supreme Court has carved out this exception because prejudgment interest has traditionally bee n used to compensate a party for the loss of the use of money to which the party was entitled. See Catron , 723 S.W.2d at 7. We conclude that this case falls within this exception to the g eneral rul e and requires an award of prejudgment interest on Heinold Holdings ' claim for attorneys' fees. The contract in this case gives Heinol d Holdings a claim for the reasonable value of the services rendered b y Heinold Commodities' attorneys. Indeed, the district court reduced Heinol d Holdings' claim for a ttorneys' fees to a reasonable amount. The Missouri Supreme Court has held that a party is entitled to prejudgment interest on an unliquidated claim for the reasonable value of services rendered. See Denton , 454 S.W.2d at 59-60; Laughlin , 189 S.W.2d at 979-80. Therefore, we must grant Heinold Holdings prejudgment inter est on its attorneys' fees award.We reverse the district court's denial of prejudgment interest o n

Heinold Holdings' award of attorneys' fees and remand to the district cour t for calculation of He inold Holdings' prejudgment interest. We affirm the judgment of the district court in all other respects.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.