Opinion ID: 2575840
Heading Depth: 2
Heading Rank: 1

Heading: The Lease Agreement Provides Authority for the Recovery of DFS' Attorneys' Fees Incurred on Appeal.

Text: In TSA International, Ltd. v. Shimizu Corp., 92 Hawai`i 243, 263, 990 P.2d 713, 733 (1999) (citations omitted) (emphasis added), we set forth the following general principles related to the recovery of attorneys' fees: Generally, under the `American Rule,' each party is responsible for paying his or her own litigation expenses. A notable exception to the `American Rule,' however, is the rule that attorneys' fees may be awarded to the prevailing party where such an award is provided for by statute, stipulation, or agreement. In the present case, the statutory exception to the American Rule is HRS § 607-14 (Supp.1997) (emphasis added), [3] which provides that: [i]n all courts, in all actions in the nature of assumpsit and in all actions on a promissory note or other contract in writing that provides for an attorney's fee, there shall be taxed as attorneys' fees, to be paid by the losing party and to be included in the sum for which execution may issue, a fee that the court determines to be reasonable. Therefore, inasmuch as the lease constitutes a contract in writing that provides for an attorney's fee, the determinative issue is whether the language of the lease authorizes the recovery of attorneys' fees in the present case. We conclude that it does. The lease provides, in relevant part, that: [i]n the event of any action or proceeding brought by either party against the other based upon or arising out of any breach of the terms and conditions [thereof], the prevailing party shall be entitled to recover all reasonable costs, including reasonable attorneys' fees, from the other. Invoking the foregoing provision, DFS asserts that it is entitled to recover attorneys' fees inasmuch as: (1) the lease provided specific procedures for an arbitration proceeding to resolve disputes over the determination of the prevailing rent; (2) Paiea refused to abide by the arbitrator's award; and (3) this court affirmed the circuit court's order granting summary judgment in favor of DFS on all claims, thereby establishing DFS as the prevailing party. To the contrary, Paiea contends that the language of the lease authorizes the recovery of attorneys' fees only in actions brought for a breach of contract. Paiea thus appears to argue that because the complaint did not delineate a specific breach of contract cause of action, the clause authorizing the recovery of attorneys' fees was not triggered. However, Paiea's interpretation construes the language of the lease too narrowly. The plain language of the lease authorizes the recovery of attorneys' fees by the prevailing party in  any action or proceeding so long as the claim is based upon or arising out of any breach of the terms and conditions [of the lease]. (Emphasis added.) In the present case, DFS alleged that the genesis of the dispute was Paiea's rejection of Hastings' determination of the prevailing rent, despite Exhibit E, section (1)(f), in the lease, which states that [t]he appraiser's decision shall be final, conclusive, and binding. Accordingly, the present action is clearly based upon or arising out of a breach of the terms and conditions of the lease, [4] and DFS is authorized to recover reasonable attorneys' fees incurred in the underlying appeal, pursuant to section 19.06 of the lease.